Brown learns to sing a new tune

In the gothic surroundings of his office in the Commons cloisters, Gordon Brown, the Shadow Chancellor, has been putting the finishing touches to a party conference speech designed to underline Labour's readiness for power. His opponents may be interested to learn that Mr Brown's rooms have form as a political power base; Oliver Cromwell reputedly signed Charles I's death warrant there.

Mr Brown will be at the heart of this week's ideological battle. His determination to curb spending lies behind Labour's resistance to the uprating of pensions in line with earnings. And it was his initiative to stop Child Benefit for the parents of some 16- to 18-year-olds.

But from Mr Brown there is no talk of retreat. On the eve of a conference vulnerable to left-wing disruption, he sounds more like a Conservative chancellor than a Labour shadow. Looking ahead to government, his edict to ministers will be one of toughness on public spending: "Save first. Save before you spend. There has to be a rigorous examination of the priorities of public expenditure."

Mr Brown argues the Tories have frittered away billions and that Labour's priorities will be different, including job creation funded by a windfall tax on privatised utilities.

But he delivered his toughest warning yet to colleagues that Treasury discipline will apply at least as much to them as to John Major's Cabinet. He went further: "Over the cycle, we will follow the golden rule that consumption must be covered by revenue." This means "departmental ministers taking their budgets and having to justify any additional spending they may want to make by savings they can make elsewhere".

Nor will he rule out future moves to take the rest of Child Benefit into tax, saying "we have no proposals in this area". Paradoxically, the Tories may enter the election with firmer pledges on Child Benefit than Labour.

If Mr Brown sings a Tory tune on spending, he is more coy on tax. The biggest question mark over Labour's manifesto - its plans for top rate tax-payers - has, he insisted, not yet been decided. He brushed aside reports that a new, upper 50p tax band will be set at pounds 100,000, or that he thinks people earning that sum are not rich. "The only reference I have made recently to the 100,000 figure," he joked, "is the number of new members recruited since the last conference."

Old Labour, however, has not gone away. At this week's Tribune rally, Mr Brown will debate pensions with Lady Castle, champion of the earnings link. "I have tremendous admiration for Barbara Castle," Mr Brown said. "She has been a tremendous influence on people in the Labour Party."

Mr Brown may have brokered a deal to avert defeat on the issue but he knows Lady Castle still presents a powerful symbolic threat. A new party commission to look at the pensions issue may consider some low-cost palliatives for pensioners, including improvements to the speed with which cold weather payments are granted. Mr Brown said the system, whereby cash is paid only after seven days of sub-zero temperatures, has drawbacks.

While attacking Tory divisions on Europe, Shadow Cabinet ministers accept privately that their own position on monetary union may be refined. One possibility is a manifesto pledge allowing a Labour government to claim public endorsement of entry into the single currency after the election. Mr Brown seemed to rule this controversial step in: "We have been clear about the desirability of consent. That could come in a general election or a referendum."