IRON Chancellor Gordon Brown was living up to his name today as he delivered his first pre-Budget Report, with snubs all round for demands for a let-up on public spending and pay.

But why, when Britain has the best-performing economy in Europe, falling unemployment and public finances in a healthy state is the grip being maintained?

There are, after all, plenty of cases for a softer line as hospitals and schools seek extra resources to head off potential crises.

And, as mounting back-bench Labour revolt suggests, the necessity for welfare cuts - for single parents and disabled people - is also being questioned.

Mr Brown, of course, is to some extent hemmed in by Labour's election pledge to stick to Tory spending plans for two years.

But since today he was also making a looking-ahead statement - beyond that period - why was he not signalling at least some let-up of his tight fiscal grip?

One influence is his fear that loosening the purse strings will trigger a repeat of the boom in the late 1980s which was followed by a plunge into recession after the Conservative government eased up. Another is that the Chancellor needs more scope yet for delivering a new bottom rate of income tax of 10p at a future date.

Nor does he want a pay surge to jeopardise his inflation targets and, in turn, generate more interest and mortgage rates rises.

But there is scope for more spending on health and education in particular.

Yet, it seems, only seven months in office, Mr Brown is playing a long game - looking ahead to the next election, nearer which he may loosen his iron grip, with that 10p income tax rate among the goodies.

But if today Mr Brown was delivering a message, it was that while Old Labour may be growling on the back benches - in harmony with Lib-Dems' tax and spend tune - its ethics have been buried by the New Labour leadership which is quite ready to put the screw on schools, hospitals and welfare in order to deliver long-term prosperity and achieve lasting power.

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