Brown is good at Budgets. For the party's sake, he must stick to them

Many in the Labour Party are tempted by the prospect of a velvet revolution, a bloodless transfer of power to Gordon Brown. It would refresh the Government. It would allow everyone to move on from the Iraq war. It would let them focus on the good news of public services.

On Wednesday, therefore, many Labour MPs will be listening to the Chancellor's Budget speech with more interest than is strictly justified by macro-economic stability, the golden rule and tax relief for motherhood, fatherhood and low-calorie apple pie. Brown is good at Budgets. Each one is greeted with the kind of modified rapture of which past chancellors of the exchequer could only dream - even the one, two years ago, that raised National Insurance contributions by £8bn a year.

More than that, Brown is good at being Chancellor. Even before he overtakes David Lloyd George's record for longevity in the job in June this year, he has some claim to equal his great predecessor in stature. His record of sound stewardship of the British economy, combined with that of social justice, is outstanding. Simply lasting seven years in the post without making a mess of things is a huge achievement in itself; but Brown has done better than that.

William Keegan's excellent new book, The Prudence of Mr Gordon Brown, pays the Chancellor the compliment of taking his record seriously, rather than simply as soap opera. (Mind you, the soap opera is important and real. Journalists do not make it up. A conversation with anyone in No 10 or the Treasury is peppered with unprompted references to the internal civil war. It is so much part of the landscape it colours everything. Everyone at the heart of government is either "Blair" or "Brown"; every news story is seen as part of that same struggle.)

Yet even Keegan, despite being sympathetic, does not give Brown as much credit as he deserves. He criticises Brown for his timidity in redistributing from rich to poor, only to spend several pages citing experts saying how dramatic the transfer from rich to poor has been. There will be more of that this week, and Labour MPs will lap it up. But that is as far as Brown-worship should go.

The idea that all the party's problems - or all the country's - will be solved simply by a change of leader is foolish. Part of the argument for change is that made mischievously last week by the New Statesman, owned by Brown's friend Geoffrey Robinson. Under the headline, "The case for a revolving leader", it argues that any politician who stays at the top for seven years becomes "too fixed". Brown must wish that we had a two-term limit on prime ministers, as the Americans have a two-term limit on presidents.

But I have never been convinced by the argument for term limits. Maybe they are necessary in state-level, low-turnout politics in America as a protection against corruption. But for the presidency? I do not see the problem. On the contrary, the last presidential election was a tragic example of where the rule defeated the democratic will of the people. Had Bill Clinton been allowed to stand again, he would have walked it. And then history would have been different because it is inconceivable that he would have taken America to war in Iraq.

The principle of Buggins' turn has never been a good way to allocate top jobs. Surely what matters is who would be best at it? And I think Blair is still - for all his faults that we know better now than we did when he became Labour leader 10 years ago - a far better prime minister than Brown would be. This is not primarily a matter of communication skills, or the way Brown does internal Labour politics, faction-boss style. Ultimately, this is about policy, not personality. The reason Blair is the right choice to lead the country is because his approach to reforming the public services is the right one. He understands that the best way to defend the principle of taxpayer-funded public services is to loosen state control of the NHS and schools, and to put the power of choice in the hands of the people.

What Blair has always said is that it does not matter who provides a service; what matters is that it is free at the point of use. Brown, in his Social Market Foundation speech a year ago, flatly disagreed. He argued that, because patients do not know as much about medicine as doctors do, they cannot make fully informed choices. This requires health services to be provided by the public sector: "Equality of access can best be guaranteed not just by public funding of health care but by public provision."

Ed Balls, his chief economic adviser, warned that going down the "marketising route" in health and education would lead to "two-tierism in public service delivery". But Blair pointed out, in a recent speech that was a surprisingly direct counter to the Brown-Balls argument, that the public services are already unequal. The question is how to raise standards across the board, and the answer he gave is partly by higher public spending, "but it is also the knowledge that the consumer can go elsewhere". This is not, as he said, a market in the sense that the rich buy a better service; it is choice based on "equal status" as citizens.

This is a live issue now in Downing Street, in the discussions leading to the manifesto for the next election. It is also a live issue because the Conservatives are, rather late in the day, beginning to develop their plans for "passports" in health and education. These are voucher systems that put spending power in the hands of patients and parents, but the extent to which they can be "topped up" to buy private-sector services has yet to be fully decided. It is important that the Labour Party gets this right. If it goes down the Brown route, it will lay itself open to the charge that it is pouring public money into essentially unreformed services. It has to accept that choice is not only popular, it is the only credible mechanism for empowering people and forcing value-for-money out of growing health and education budgets.

It would be all too easy for Labour MPs to sink back into the comfortable certainties of yesteryear, that their job is simply to secure higher public spending on the institutions of the Attlee welfare state. They may be tempted to believe that, now that the Iraq war has undermined the electorate's trust in Blair, it would be in the party's interest, or even the national interest, to change leader. The Labour Party has never felt comfortable with Blair. But that was the coded message of his speech in Manchester yesterday: this Government has done many things of which the party finds it easy to be proud, he said. But New Labour also owes its success to policies the party finds, as he gently put it, "surprising". It must ask itself whether it wants to be comfortable, or whether it wants to be right.