The BBC's Political Correspondent, Huw Edwards

Not bad, really...

The moment the Chancellor sits down, there's an outbreak of euphoria on the government backbenches. There was even an outbreak (of the smaller variety) when Norman Lamont (remember him?) introduced massive tax rises after the '92 election. Contents aside, it seems, the Chancellor must always be cheered for a superb effort. Sometimes, the cheering is genuine. Nigel Lawson's last few Budgets were all greeted with sustained (sincere) cheering. Gordon Brown's first foray was similarly applauded by colleagues.

It sometimes takes a few hours for the true political position to sink in. This has to do either with the complexity of the Budget itself, or the ability of MPs to digest its contents without too much effort. More often, it takes days and weeks for the Budget's real thrust to become apparent.

"The Iron Chancellor" by Les Gibbard © BBC

The City of London is no guide to political events. The ladies and gentlemen of the financial markets (with some notable exceptions) are guided by the profits of the next day or so. Shares are soaring after Mr Brown's first Budget. There are serious concerns that he has not done nearly enough to dampen consumer demand, but the City is nonetheless thrilled. Yes, interest rates might have to go up, hitting homeowners even harder. But the City is thrilled. The pound might well soar to 3 DM, making life very difficult for exporters. But the City is thrilled. Record share levels abound. No proper political analysis of the Budget should pay too much attention to the City.

The Budget was aimed above all at making a public show of keeping election promises. The privatised utilities would be hit to the tune of nearly £5 billion to fund a welfare-to-work programme. (Quite a sting, £5 billion, you might think. But shares in the privatised utilities -- predicted to "crash", "slump", "implode" and generally die -- are holding up very well, thank you very much. Yet another reason for being wary of predicted market reaction!). The welfare-to-work scheme is at the top of Labour's list. Promise Number One. It was delivered, as was cutting VAT on domestic fuel. More money for schools and hospitals (albeit from next year's reserves) is hardly a risky move in the popularity stakes.

This was a Budget about restoring faith in the democratic process, or at least in the ability of politicians to keep their word. It was meant to contrast sharply with John Major's broken promise not to raise or widen the scope of VAT. So far, so good. But Mr Brown also announced some measures which could yet rebound on him.

The greatest of these, and the one unsettling Labour MPs a little more now that they've had a few days to sleep on it, is the attack on pension funds. The potential for extra income is enormous, running into billions. It is true that there are evident surpluses as we speak, and that the move can be defended in this way. But in the longer term, this might prove a very misguided tactic. It has already given the Tories a propaganda gift. The allusions to Bob Maxwell's fraudulent practices with pension funds are damaging. The Tory front bench looked singularly unimpressive on Budget Day, but the Maxwell line was seen at Westminster as a potential direct hit. It's a line the tabloids might revive with glee if things start to go wrong.

There is a fundamental truth about our economy which was not directly tackled by Gordon Brown's Budget. It was not tackled for purely political reasons. The most effective way of damping down consumer pressure is to increase direct (or in some cases indirect) taxation. This was impossible in view of Mr Blair's election pledges on income tax.

The importance of the transfer of interest-rate powers to the Bank of England a few weeks ago become ever more clear. Responsibility for the real clamping down now rests with steady Eddie George and his committee. This is where the screw will be turned. And not an iota of blame will rest on Gordon Brown's shoulders. We can ask plenty of questions about the proper nature of the Chancellor's Budget responsibilities. But we cannot deny that we have witnessed some very classy political moves.