BOLTON MP Ruth Kelly was this week full of praise for Chancellor Gordon Brown's confident announcement of his draft Budget proposals in the Commons.

She hailed his courage in sticking to the Government's proposals to spend an extra £40 billion over the next three years on schools and hospitals.

Mrs Kelly, a former Bank of England economist and financial journalist, is confident Mr Brown's figures add up.

However, the Bolton West MP's optimism is not shared by many other experts.

Damages

While Mr Brown's Tory Shadow, Francis Maude, was probably going over the top when he characterised the statement as coming from "a complacent and arrogant Chancellor locked into fantasy forecasts and Peter Pan economics", influential City figures have their doubts.

For despite the Chancellor's promises that he was trying to "steer a course of stability amid a world economic downturn", there is little doubt he has taken a gamble.

Mr Maude's claims of a £36 billion black hole in his figures are an exaggeration, but the fact is that halving the prediction of growth for the economy severely damages tax revenues.

But Mr Brown knows that the Government has been deliberately underestimating the natural growth in tax in the pipeline which it inherited from the Tories. Originally intended to be a war chest for the next election, this secret surplus comes in pretty handy for filling in the tax gap.

Even so Mr Brown will be required to borrow extra and the Tories believe that this would mean at least 0.25pc on interest rates to cover the £10 or £11 billion needed.

Mr Brown is gambling that interest rates have become artificially high because of the Bank of England's caution over the battle against inflation and that this overkill will mean the extra 0.25pc will be hidden by a series of reductions in the cost of borrowing in the coming months. Mr Brown's confidence that he has a £33 billion surplus for the next five years to cushion Britain from global economic turbulence and that the domestic economy will bounce back fast was impressive.

But it shows once again that the dour Scottish exterior hides something of a gambler.

If the economy, and Labour's election chances, are nose-diving in two years time it could well cost Mr Brown his Chancellorship.

And while Mrs Kelly's faith in Mr Brown is touching, her future rides on the success of this gamble anyway.

Promotion

One of the rising stars of the new intake, she is just one of two newcomers to the Commons to be put on the first rung of the Government ladder by being made Parliamentary Private Secretary to Agriculture Minister Nick Brown.

The betting is that she will be the first of the new Labour MPs to make it into ministerial office. A re-shuffle in two years' time is the predicted date for her promotion.

However, as one of Mr Brown's most faithful supporters, like her mentor she must be crossing her fingers that his gamble pays off.

For if it does not and her patron falls from grace, Mrs Kelly's currently rosy career prospects will bite the dust at the same time as the Chancellor's.

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