UP TO now Gordon Brown's fiscal policy has been, in effect, written for him by his predecessor as Labour's election tax pledges tie the government to the Tories' spending plans for two years.

But yesterday the Chancellor signalled his intentions to keep the brake pressed just as hard all the way to the next election.

The upshot is an immediate howl - from the public sector unions waiting release of their pay from the straitjacket and, less noisily, from ministers in the big spending departments preparing their bids.

But what is Mr Brown up to, pencilling in a further three years of austerity and public pay restraint while declaring his intention to chalk up a budget surplus in each of the next three years?

Is it that he intends to squirrel all those spare bawbies into an election war chest?

Or is it the kind of prudence to be expected of a Chancellor who looks beyond today's rosy economy and - perhaps looking at the plunge in export sales - sees potential downturn and falling tax revenues ahead and decides that money must be put away for rainy days, not poured into public employees' pay packets now?

Either way, Mr Brown is set for plenty of pressure. It will come from Labour's disappointed trade union friends, from its MPs unable to resist their old-style tax and spend instincts, and from Cabinet colleagues with spending plans that may be made out as cases for special treatment.

For what of the government's need - and pledge - to cut hospital waiting lists?

Behind him in the queue is education supremo David Blunkett who is seeking an extra £10billion for school repairs, smaller class sizes, nursery places and so forth.

Then there is John Prescott wanting billions more to commence his big transport reforms.

Special cases also exist on the pay front - not least the teachers, whose profession's shortages are recognised even by prime ministerial support for a new recruitment campaign, and the nurses, to whose thinned and demoralised ranks Mr Dobson has already had to apologise for their staged pay award.

Mr Brown, if he is to manage well while sustaining Labour's pledges on health and education in particular and avoiding public sector industrial unrest, may have a hard time over the next three years sticking to the austere path he has marked out today.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.