Budget `97: Scrooge has become Father Christmas

Remember the shock when Gordon Brown first promised to keep within the Tories' deliberately wrecking spending plans? The alarm deepened when Brown said it again and again after the election. Why after the landslide was over should he keep to any such impossibilist budget? Quietly, off the record, MPs sucked their lips and tried to keep their nerve but often shook their heads in anxiety.

So yesterday afternoon there stood Brown at the dispatch box, darkly brooding, stern brow furrowed, the Scottish dominie with cane in hand, warning his wayward pupils that there would indeed be no more spending. Every department would have to stay within its budget - and that was that. No, there would be no spending round this year. A frisson of panic. Did he mean it, really? Breath was held, knuckles whitened. Surely he had a clever plan? The NHS would never get through the winter. Classrooms with their dripping roofs would swell not shrink in pupil numbers. All those who danced in the streets on 2 May, because they voted for better public services, would sink back to that pre-election "they're-all-the- same" disillusion with politics. Had he lost the plot?

But wait, no. It was all just a school-master's little joke. Yes, children, you must each stay within your miserly departmental pocket-money allocations. But ... and here he reached into his back pocket and from underneath his beak's gown, and out came a handful of gobstoppers from his "Contingency Fund". But a gobstopper tastes just as good whether it comes from a pocket marked "spending" or a back pocket marked "contingency".

The NHS has been saved from a calamity that would very probably have led to its collapse; pounds 1.2bn extra to current plans for next year will not improve it but it will save it. After a rough year this year, it will come in as a nearly 2 per cent increase next year, still well below the average 2.6 per cent the NHS has been used to over the past 18 years. But it will manage. Disaster is averted, and there are undoubtedly some savings to be made.

As for education, this is his wisest move. Brown has taken a fine pounds 2.3bn slice of the windfall tax money to give directly to schools to attack the causes of youth unemployment. One in three of the long-term unemployed is illiterate. Plugging the flow of uneducated people out of school and on to the dole is the best investment he could make. Pushing unemployed people into welfare-to-work schemes is fine as a stop-gap, but if more and more of them keep pouring out of schools, it is a never-ending task.

There was increasing disquiet in recent weeks about how well the welfare- to-work money would be spent. Would many young people have got jobs anyway, in a rapidly booming economy? Would employers abuse the subsidy, and sack others in order to take up the Government's offer of pounds 60 a head? To be sure it would help many, but it might not be the best way to spend the whole windfall tax. Among the experts in the field, there was a growing ground-swell of opinion that education was where the money was really needed, in order to take a long-term view and not just a quick fix.

The promise to single parents marks the most radical new departure. There had been concern that the Government might want to put all its resources into lowering the official figures of the registered unemployed - driven by mechanistic Treasury targets. The one million single mothers, with their two million children, appear on no register, meet no targets. Time and again the value of helping to get them back to work fell upon the deaf ears of the last government; pounds 200m is not much money, but it is enough to provide a complete national programme for every lone mother to be invited in to an interview and to establish a panel of advisers to help them to find work, training, childcare - whatever they need. What's more it will be up and running by the end of this month, long before the young people's welfare-to-work scheme starts next year.

For the first time ever there is a chance that this will really work, because what Brown called a National Childcare Strategy runs alongside it. The reason fewer single parents work in Britain than in the rest of Europe is our chronic lack of any government support for childcare. The first step in the Strategy will come with the announcement shortly of lottery money for after-school clubs - rumoured to be close to the pounds 50m the Kids' Club Network says it needs in order to provide after-school schemes for one million children. If so, it will transform the landscape for families everywhere.

As well as that, the lone parent advisers will be able to show mothers on income support how much they could increase their income if they work. They will now get a disregard of pounds 100, instead of pounds 60, on childcare costs. That means that when they take, perhaps, a low-paid job topped up with Family Credit, pounds 100 worth of childcare expenses will not be taken into account when calculating how much family credit or housing benefit they are are due. That means women with two children can now afford to work.

But listen to the language - how extraordinary to hear a chancellor at last speaking these words: "Childcare is no longer an afterthought, but an integral part of our economic policy." He went on to explain what countless women's organisations have tried to din into Tory ministers' heads for years, to no avail. The new after-school clubs will be a double hit, employing some 50,000 unemployed young people as childcare assistants, thus also helping the welfare-to-work policy. They will get themselves NVQs and end up qualified to work in childcare, which will now be one of the fastest- growing employment sectors. And this, he said, was just the first modest step in the new National Childcare Strategy.

We all have our own wish lists for the getting and spending of what the Chancellor called "the people's money". Maybe when the defence review reports we shall see some getting from the extravagant defence budget and some spending on a gleaming new public transport system - transforming the Eurofighter into buses and tube trains. Maybe we shall get money for creative community projects and crime-prevention measures, the schemes to rescue delinquent children when they first cause trouble. But there is time. Gordon Brown prepared us for the worst but Scrooge has become Father Christmas. And we still have Christmases Yet to Come.