Andrew Grice: Belt-tightening will happen later

It was the most inevitable political U-turn in recent years. Yesterday, Gordon Brown finally bowed to pressure from Cabinet ministers led by the Chancellor Alistair Darling to admit that public spending cuts were coming.

Before his summer break, the Prime Minister stubbornly refused to erase his favourite dividing line, "Labour investment versus Tory cuts". After all, it had won Labour the last two general elections. But Mr Brown was damaged as David Cameron rang rings round him in three successive sessions of Prime Minister's Questions.

Mr Darling twisted Mr Brown's arm when the two men met for lunch at the Chancellor's Edinburgh home last month. Lord Mandelson nagged him too over the summer. The trio agreed that hints about "tough choices" would not be enough and that "new language" was needed: Labour would have to explicitly acknowledge the need for cuts before it could take the fight to the Tories. It also had to reassure the financial markets it would eventually bring down the public deficit.

In the end, Mr Brown probably used the C-word rather earlier than he originally intended. The Tories were goading him and didn't believe he could say "cuts" without the word "Tory" in front of it. The media joined the game with relish and it eclipsed Labour's new dividing line – between Labour's investment now and cuts later that do not hit frontline services, and the Tories' immediate cuts in a recession (putting them outside the international consensus) followed by indiscriminate cuts to frontline services.

There was relief around the Cabinet table on Monday when the new election battleground was mapped out. "We have finally cleared away the undergrowth," one minister said yesterday. Arguably, it should have happened months ago. Mr Brown's critics say he has a habit of seeing the light when it is too late.

They might just be wrong this time. The two main parties can now go head-to-head on the question that will dominate the election campaign. Labour can test its theory that David Cameron's popularity is not as rock solid as it seems. Ministers believe the Tories are vulnerable to two lines of attack: "wrecking the recovery" by cutting now and "reverting to [Thatcherite] type" by swinging the axe with relish, undermining Mr Cameron's moderate image.

It won't be easy. The polls show that voters want cuts and trust the Tories more than Labour to make them. Nor will Mr Brown's grudging conversion to cuts necessarily transform the election into the "big choice" he wants, rather than a referendum on 13 years of Labour rule.

The differences between Labour and the Tories on when to start cutting is real but the debate over what to cut may remain murky. Both parties will want to avoid spelling out too many "hard choices" before the election, for fear of handing ammunition to their opponents. Both will promise to safeguard frontline services. Both will have a secret list of post-election cuts.

They will shy away from the other half of the equation. Senior figures in both parties admit privately that the next government will have to raise taxes as well as cut spending. They are reluctant to give the voters a "big choice" on that.