Michael Brown: Punch, Judy and the shape of things to come

Parliament got a foretaste of life after the eventual demise of Tony Blair yesterday with the first clash between Gordon Brown and David Cameron since the latter became Tory leader. By common agreement the immediate response by any opposition leader to a Budget is the most difficult parliamentary task of the year. Mr Cameron must have been dreading the occasion, especially since Mr Brown's Budget speeches often turn out to bear little relation to the facts buried in the myriad of documents that subsequently emerge. For this reason, and against his once-stated instincts, Mr Cameron decided to call upon the services of Punch and Judy, and confined himself to overall generalities before sitting down after less than ten minutes.

It was nevertheless a cocky, confident, totally over-the-top performance, complete with pre-cooked jokes such as "an analogue Chancellor for the digital age". His case was that Mr Brown has taxed and borrowed too much. It was not bad but I hope it was not his best. Most important of all, however, he appeared to please his Tory backbenchers. Mr Cameron may prefer consensus politics but Mr Brown intends to leave him no space for soft options. The Chancellor is determined to put confrontation at the heart of all his future dealings with Mr Cameron.

For Mr Brown, the Budget was all about politics, and the crafting of the Budget speech was designed to give us a glimpse of a future Brown premiership. Whether this was his last Budget, however, is still an open question. Insofar as it is ever in his power to repeat his Education Bill tactics, Mr Cameron would be advised to do all he can to keep a wounded Blair in Downing Street for as long as possible.

Many Tories are convinced Mr Cameron should relish the opportunity to face Mr Brown as Prime Minister at the earliest opportunity. Yesterday suggests that, even though Mr Brown may well have been up to his usual smoke and mirrors act, he is still a formidably reassuring presence on the Labour stage. Polls are divided on whether a Cameron/Brown scrap, compared to a Cameron/Blair battle, benefits the Tory leader. But the current damaging internal Labour rows suggest that once Mr Blair is gone Mr Brown will initially preside over a rejuvenated, united party.

For Mr Cameron the gauntlet on future levels of public expenditure was thrown down in yesterday's budget. Mr Brown intends to pose the same questions to him as he has done to Michael Howard, Iain Duncan Smith and William Hague: if you think Government spending is out of control and too high will you make cuts and how could you possibly lower taxes? In the past Tories have tried to have it all ways with consequent damage to their economic credibility. At some point it will be necessary to appeal to voters on the basis that public expenditure cuts in some departments will be unavoidable. Indeed, even by the time Mr Brown finds himself in Number 10 it may be that Labour, never mind the Tories, will have to face up to such dilemmas. Even yesterday's flourishes of the Treasury wand over future education spending increases suggested that other departments would be in for budgetary shocks when next year's three-year comprehensive spending plans are announced.

Mr Cameron's central case was that Mr Brown is stuck in the past and is a "roadblock to reform". Actually we glimpsed a Brown future that will be as electorally formidable as ever - until, one day, the money runs out. In which case, spending cuts will be inevitable, either from a Brown or a Cameron government.

* Treasury Budget site

* Chancellor's Statement in full