The chancellor of the exchequer, Gordon Brown, is due to deliver his ninth annual budget in a row next Tuesday, and in the process hopes to come to the rescue of a rather disorganised Labour party election campaign.

Officially the date of the general election has not been declared, but everyone knows that several months ago Tony Blair fixed on Thursday May 5 for the big day.

However, around the same time it was announced that his chancellor would not, as has been customary, be in charge of the formal election campaign. Instead, Alan Milburn, a trusted Blairite and former health secretary was brought back to head the campaign.

Milburn had earlier resigned on the pretext that he needed to spend more time with his family, but evidently missed the No 10 Downing Street family. Milburn had earlier engaged in battle with Brown over the issue of introducing a greater role for markets in the health service, and in particular with regard to plans for giving certain favoured hospitals, known as foundation hospitals, freedom to borrow in the financial markets.

Brown, who wanted to retain Treasury control, won the battle. The pair are not the greatest of friends. Almost every day now there are press articles taking the Brown line and arguing that "enough is enough" with regard to the extension of markets and the profit motive to public services, at the expense of the traditional emphasis on the ethic of public service.

At the same time, the Milburn unofficial election campaign has not been going well. Blair and his colleagues have been surprise by the degree of public anger over Iraq, and by the publicity given to isolated incidents where the health service is not "delivering" (Blair's favourite word) in the way it should.

Enter, stage left, the longest serving chancellor since Nicholas Vansittart (1812 to 1823). Fresh ( yes, the man has amazing stamina) from his recent tours of Africa and China, Brown is now back at the Labour forefront to remind the electorate that he is the man responsible for the policies that have brought a combination of continual economic growth, low inflation and high employment.

For a while towards the end of 2004 and earlier this year, there was a growing band of observers arguing that the gloss was coming off the Brownian paintwork of a successful economy. They suggested he was in danger of breaking the self-imposed fiscal rules (that current spending should be met by taxes over the cycle and he should only borrow to invest) to which he has pinned his reputation.

But he and the Treasury stuck to their guns, pointing out that they and the Inland Revenue knew more about what was happening to the pattern of receipts and payments than outside analysts and institutions, and maintaining that the revenue was about to roll in.

And so it has. Recent statistics have painted a happier picture of revenue, not least thanks to taxes on bumper profits from the financial and oil sectors. Brown can boast next week that he has met his rules, and that "stability" (his favourite word) rules.

But he faces greater difficulties in future years. He has already budgeted for large increases in public spending for the next few years. There are, to the best of my knowledge, no analysts to be found - either in the City or in organisations such as the Organisation for Economic Development and the International Monetary Fund which have privileged access to official Treasury thinking - who believe he (or a successor) can meet the fiscal rules in future years without a further tax rise.

But that is for the future. Next week, Brown is in a position to boast that all is for the best in the best of possible fiscal worlds. Moreover, given his and the Treasury's ingenuity, while producing a fairly "neutral" budget overall, he will almost certainly have some electoral sweeteners up his sleeve. These will not only include his traditional emphasis on helping families and the poor.

I should not be at all surprised if he stole some of the Conservatives' thunder by easing the burden of inheritance tax on all those middle income families who have been dragged up the scale by the boom in house prices.

· William Keegan is the Observer's senior economics commentator.

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