Brown gets knives out

Gordon Brown has marked himself out as Labour's leader-in-waiting in an extraordinary Conference speech.

A cheering Labour rank and file heard him expose significant differences from Tony Blair.

He also promised to spend billions more on key public services over the next five years - raising the spectre of tax increases.

More importantly, Mr Brown also pledged, repeatedly, to uphold "Labour values" - the very values which many of the faithful in the hall accuse Mr Blair of having betrayed.

Straying far beyond his Treasury brief, he offered a vision of a Labour government leading the fight to ease poverty, famine

and disease in Africa and across the world.

To cap it all, the Chancellor ended his speech with a cheeky gesture of defiance, taking a classic Blair phrase, "we are at our best when we are boldest" but delivering his own notably different version.

All of those there, he said, should throw their weight behind the party, "best when we are boldest, best when we are united - best when we are Labour".

The message was not lost on the activists who rewarded Mr Brown with a two-minute standing ovation. The unions were quick to hail the speech.

Kevin Curran, general secretary of the GMB, welcomed it as "a Labour speech by a Labour chancellor with socialism at its base for the agenda at home and abroad".

Within minutes bookmaker William Hill had shortened the odds on a Brown takeover, making him evens favourite to inherit.

A close Brown aide, asked afterwards why there had been no new policy announcements, replied: "It wasn't a speech attempting to go for eyecatching initiatives."

That barbed aside was an echo of Mr Blair's demand not so long ago for just such initiatives to boost his premiership. Mr Blair, unusually, was not on the platform for the speech. He was attending the funeral of former leader of the House of Lords, Lord Williams of Mostyn.

Mr Brown, in a speech that pressed all the right Labour buttons, pledged to give priority to tackling child poverty and the plight of pensioners and others in need. In another passage likely to sting the Prime Minister's allies, he spoke of the need to deal with the moments when "things look difficult, times seem hard, pressures great, when some may feel that complacency has crept in, momentum lost, or the vision dimmed".

He mentioned Mr Blair three times, only briefly. He pointed out Mr Blair had led the moves to war in Iraq and paid tribute, not to the Prime Minister, but the courage of Britain's armed forces. His speech mentioned "highlighted values" a dozen times, "Britain" or "British" 54 times and "Labour" 56 times.

In his first substantial look ahead to next year's government spending round, Mr Brown promised to "lock in" the extra money committed to the health service, schools and other targets.

And he added that, provided the Government can stick to the path of reform, "the next spending round will not only lock in the higher spending we have been delivering but go further, with further increases in spending and investment for our priorities in the years to come".

Mr Brown insisted there must be " reform before resources" and steered clear of hard figures. But his pledge nonetheless marks a major new gamble which could eventually pave the way for hefty tax rises. Voices in the City and elsewhere have warned he is losing his reputation for prudence and risking severe problems on existing spending plans.

They say Treasury forecasts of continuing, strong economic growth are too rosy and if the forecasts are not met, spending will have to be slashed or borrowing and taxes will have to climb. But Mr Brown, in interviews today, maintained the economy was strong enough to carry the cost.

He said: "The British economy, unlike America, unlike Europe, unlike Japan, has continued to grow every year during this world downturn."

At the same time he admitted that the Government's problems were about more than mere presentation, and stemmed partly from the fact that promised improvements to public services were taking time to come through.

His aides afterwards played down the possibility of tax rises, saying there was leeway to borrow up to £60billion more without breaking his rules on prudence or coming near the borrowing levels of France, Germany, the US and Japan.

They suggested several billions more could be found fromsavings in Whitehall and shifting thousands of Civil Service jobs to the regions.