Mr Brown is right to spend more, but he must also spend wisely

Well underspun, Mr Brown. The Chancellor's statement was low in hype and gimmickry, so we could see more clearly the strengths and flaws of his plans.

Well underspun, Mr Brown. The Chancellor's statement was low in hype and gimmickry, so we could see more clearly the strengths and flaws of his plans.

First, the strengths. The substantial, sustained increases in health and education spending are vital to Britain's future as a civilised and economically efficient nation. The really striking boost to spending on transport - the percentage figure is high because spending starts from a much lower base - is also long overdue. Decades of underinvestment in road and rail are holding back both our economic effectiveness and our quality of life.

There are a number of other welcome spending increases. On defence, it is time to declare that the peace dividend from the end of the Cold War has now been cashed. We have to recognise that a foreign policy in defence of human rights wherever Britain has a responsibility is going to be expensive - and the parallel increase in the international-development budget is part of that. Small things such as the extra money allocated for the BBC World Service and for the Food Standards Agency should also be applauded.

But the weaknesses were glaring, too. The overall picture was one of alarming advance on all fronts. It simply cannot be the case that, in all main areas of public spending, more money is needed. Of course, because of the demands of health, education, transport and defence, there will have to be what the Chancellor called a "step change" upward in total spending. But the only cut Mr Brown offered yesterday was £1bn in savings on fraud and errors in social security. And there, we suspect, we are back in the land of funny money and double counting.

There is a terrible political danger in such across-the-board generosity. It sends the wrong signals about the Government's determination to target money where it can do most good. It almost invites voters to return to the bad old pre-Thatcher ways of assuming that the Government should simply throw taxpayers' money at every problem. Yes, transport needs a big increase, in capital spending especially; but in the long run, we, as drivers and commuters, have to recognise that, if we want less-congested roads or faster public transport, then we, as users, are going to have to pay for them.

Michael Portillo, the shadow Chancellor, mocked New Labour politicians for having claimed that they were going to be wise spenders, not big spenders. But Tony Blair and Gordon Brown have in fact put such spin behind them: the point is that they will be praised for being bigger spenders, but only if they can also prove themselves to be wise spenders.

That is what Mr Brown failed to do. Some excellent innovations were built on, such as the diversion of education funds directly to schools. But where were similar radical ideas for the health service? What about giving patients the right to spend their tax money on going private if the NHS cannot treat them quickly?

Mr Brown spoke a lot of targets, public-service agreements, penalties and inspections - all the old devices of state bureaucracies. Without convincing new mechanisms to ensure that the extra money really is "tied to output and performance", there is a danger that, by the middle of the next parliament, he will be remembered as a good old-fashioned Labour splurge-and-spend Chancellor.

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