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Suddenly a new guise: actor and showman. Signs of Stalinism? Certainly not comrades

This was that rarest piece of theatre - an overture dressed up as a finale. Officially Gordon Brown was at the despatch box to deliver his last budget, the 11th and final performance of an act that has played for a decade. In reality, this was a warm-up for the next show, the one that will see him take centre stage at long, long last.

And what a showman he proved to be. Standing tall and confident - not the arms-folded, slumped figure in the right of your TV picture during Prime Minister's Questions we've grown used to - the chancellor showed he had learned from the great thespian next door.

How to fend off a potentially damaging attack? Dismiss it with a joke, of course. That's what Tony Blair did last autumn when he quipped that at least Cherie would never run off with the man next door. Now it was the man next door's turn. Rocked by Lord Turnbull's claim that he was a Stalinist, he paid tribute to his senior civil servants, "or should I say comrades?" It raised a genuine laugh - and the poison was drained.

But nothing was more theatrical than his final flourish. Winding up and preparing to sit down, he dropped Labour's tax bombshell: a 2p cut in the basic rate of income tax.

The house was agog; David Cameron and the Tories opposite utterly wrong-footed. There had been no advanced briefing, no spin. Brown had remembered the political power of surprise.

First, though, he had to close out the role he has played for longer than anybody since the 1820s. He did that by rattling off statistics of economic growth, prosperity and public spending designed to show what a wealthy nirvana Britain is today compared with the desert he inherited in 1997. Essentially, Brown the prime minister was thanking Brown the chancellor for dealing him such a good hand.

But the rest was all overture, a taste of the key themes to come. Ever since last September, when Blair announced he would be gone within a year, Labour MPs have grown restless, desperate to know how their next leader would lead them. Yesterday Brown gave a sneak preview.

His first move was simply to spike the Conservatives' guns. They have called for a cut in corporation tax; Brown delivered it. They want a simpler tax system; he simplified it. They brand Brown a tax-raiser; yesterday, and with Nigel Lawson-style brio, he announced a cut in income tax.

The Tories say the cut's not real, since other changes will cancel out the 2p drop. Brown agrees that his budget leaves the overall tax burden unchanged, but boasts that the load on personal taxation will now be up to £3bn lighter, with that sum raised from environmental taxes instead. What's more, he says that those earning the average salary of £34,000 will be better off - and that includes nurses, teachers and police.

Besides, he's gambling that the basic rate of income tax retains a sacred political status. That, whatever the small print, it will be a little harder for Cameron to brand Brown as the tax-grabber now.

Was this a panic measure? Did Brown see the polls showing him trailing and yank forward a treat he had been saving up for the election of 2009? Those in the know refute that entirely, insisting this was planned long ago, by a chancellor who believes "you can't jump just before an election and be credible. It has to be bedded down, otherwise it looks like a gimmick."

By way of proof, Brown's allies point to the absence of any commitment in Labour's 2005 manifesto to retaining the 10p bottom rate of tax, abolished yesterday to facilitate that 2p cut: that's because Gordon Brown knew he was going to make this move at least three years ago - if not earlier. If that degree of forward planning is striking, note what Brown tells friends: "I've thought through the next stage and the stage after that." If we thought yesterday was a surprise, he smiles, we ain't seen nothing yet.

This is what the Tories are up against, a Brown battle plan, nurtured over a decade, which seeks to shape the political terrain for several years ahead. The chancellor believes that yesterday's budget has now defined the terms of engagement with the Conservatives. Labour can say, "We've set out our spending plans, what are yours? Are you going to spend more, less or the same?" If the Tories plan to lower, say, corporation tax further, then Labour will ask what public services they'll cut to pay for it. The formula which has won success in the past three elections - investment in public services vs overall tax cuts - will be deployed once more.

Cameron spoke well in response yesterday, firing off a series of pre-cooked Stalin gags. But he also had to watch as the Brown steamroller flattened several of his signature policies. A tax on aviation? It wouldn't do in a year what Brown's preferred policy does in a week. Tax help for married couples? Brown had crunched the numbers and Cameron's plan would penalise most married couples and exclude 11 million children. Accordingly, said Brown, he had rejected these "representations" - dismissing the opposition as if they were just another pressure group.

Cameron had a warning yesterday. In Gordon Brown he may not face a TV natural like himself or Tony Blair. But as a political operator, there are few more formidable.


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