(SBU) BLAIR, BROWN BOTH STRONGER AFTER LABOUR

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SUBJECT: (SBU) BLAIR, BROWN BOTH STRONGER AFTER LABOUR
CONFERENCE

REF: LONDON 6491


1. (SBU) SUMMARY: Prime Minister Tony Blair and
Chancellor Gordon Brown both emerged stronger from the Labour
Party's annual conference (September 24-28) in Manchester.
It was Blair's last as Prime Minister and party leader and
his speech was a "magnificent valedictory," as guest-speaker
former President Clinton called it. Brown gave a solid - if
not particularly inspiring - speech that consolidated his
position as front-runner to succeed Blair but did not
preclude his facing a serious challenge for the top job. His
performance was overshadowed by press reports that the PM's
wife Cherie Blair had been overheard saying he lied when he
characterized working for Blair as a "privilege." She denied
it, and her husband defused that issue with an effective
joke.


2. (SBU) SUMMARY CONTINUED: By the end of the conference,
Deputy Prime Minister John Prescott had endorsed Brown for
leader, as had Foreign Secretary Margaret Beckett and the
Blairite Environment Secretary David Miliband. Prescott also
made clear he will stand down when his boss does. Three
candidates have announced their intention to run for Deputy
Leader: Northern Ireland and Wales Secretary Peter Hain,
Constitutional Affairs Minister Harriet Harman, and Jon
Cruddas MP. The only declared challenger to Brown for the
top job is John McDonnell MP, a left-winger who may be able
to garner the necessary support of at least 44 MPs in order
to run, but is seen as having no chance of winning. If a
Cabinet heavyweight decides to take on Brown, current
thinking is that it will most likely be Home Secretary John
Reid or Education Secretary Alan Johnson. Controversial
issues not addressed at the conference include replacement of
the Trident nuclear deterrent and a specific date for the
departure of Blair, who has said he will go by early
September 2007 at the latest (reftel). END SUMMARY.

(U) Blair Leaves Them Wanting More
--------------


3. (U) Prime Minister Tony Blair gave a brilliant
performance September 26 in his final speech to the annual
Labour Party conference. He thanked the party, recalling its
achievements in power since 1997 which, he said, had made
"progressive" politics the norm in the UK. He stressed that
Labour must focus on the priorities of all the British
people, even those who are already prosperous. Above all, he
urged the party to show it has the courage to govern and not
go back to the "ridiculous dilemma between principle and
power" that led it to "revel in its irrelevance" in the
1980's. The only legacy he ever cared about was for Labour
to win the next general election. He wanted to be the
"first" Labour leader to win three elections in a row, not
the only one. While leadership is difficult, he said the
British people will sometimes forgive wrong decisions but
they will not forgive failing to decide. "They will lose
faith in us only if we lose faith in ourselves." Blair urged
the party to "get after" the opposition Conservatives,
drawing a roar when he said "if we can't take this lot apart"
we do not belong in politics.


4. (U) The PM sought "to heal" the divisions in the party
sparked by last month's attempt to force him to set a date
for departure from office, saying New Labour and the three
successive terms would not have been possible without Gordon
Brown, "a remarkable man and a remarkable servant of this
country." But he stopped short of endorsing Brown as his
successor. Blair warned that today's challenges of
globalization "dwarf" the problems of 1997. The goal must be
to reconcile openness and liberty with security. Praising
British troops in Iraq and Afghanistan, he said withdrawing
them would be a "craven surrender" that would "put our future
in deepest peril." Accusations that terrorism is a result of
faulty foreign policy are a "wretched capitulation to the
enemy." The war on terror cannot be won by force alone,
Blair acknowledged, and he pledged to dedicate himself until
he leaves office to "advancing peace between Israel and
Palestine." He said it can be "hard to be America's
strongest ally" and Europe can be a "headache," but big
problems cannot be solved without America and Europe. He
also said the crisis in Sudan cannot stand. His parting
words: "You're the future now, make the most of it."

(SBU) Brown Helps Himself
--------------


5. (SBU) Gordon Brown helped himself with a solid speech
September 25 that ticked a lot of boxes even if it failed to
inspire. He praised Tony Blair, expressed regret for the

differences they have had, mentioned virtually all his
Cabinet colleagues by name, highlighted his record of
devolving governmental authority, and said Parliament should
have the final say on such issues as war and peace. He
denounced anti-Americanism, affirmed the need for global
cooperation against terrorism, indicated willingness to
consider extending the period of detention without charge for
terrorism suspects "if necessary," and stressed individual
responsibility and the need to obey the rules. He pledged to
raise the minimum wage and enforce it, double investment in
public housing and raise spending on students in state
schools. He urged creation of a GBS20 billion global fund to
help developing countries implement cleaner energy. Knowing
that he needed to give the public a clearer sense of who he
is, the Chancellor spoke of the profound influence his
parents had on him, depicting himself as "quite a private
person" committed to performance rather than image. He was
"proud to be Scottish and British" and "would relish the
opportunity to take on David Cameron and the Conservative
Party." Brown's solid but not particularly inspiring
performance may not preclude a leadership challenge by a
party heavyweight, because many in the Labour rank and file
and the UK public would welcome a mature airing of competing
visions for the post-Blair future. As of now, Brown is the
clear favorite even if challenged.


6. (SBU) The Chancellor's address was upstaged by a
reporter's claim to have overheard Cherie Blair remark
"that's a lie" when Brown said in his speech that it had been
a "privilege" to work with her husband. She flatly denied
making the remark, but the media made hay of it given her
poor relations with Brown over the years. The Prime Minister
cleverly defused this issue in his speech the next day by
joking "at least I don't have to worry about her running off
with the bloke next door." (NOTE: The Browns live next door
to the Blairs on Downing Street. END NOTE.)

(U) Clinton Praises Blair and Brown
--------------


7. (U) Former President Bill Clinton was the featured guest
speaker at the conference. In his September 27 address, he
said the Labour government had been a "stunning success" for
Britain and the world. As expected, he had warm words for
Blair, whose moving speech he called a "magnificent
valedictory." He also praised Gordon Brown's "brilliant
economic leadership." He noted that the UK has shown it is
possible to implement Kyoto environmental commitments in a
way that does not damage the economy but actually creates new
sources of employment. The former President urged his
audience to be proud of Labour's achievements in office, not
allow them to be taken for granted, and always embrace
change, making clear to the British public that the
"progressive" party is the natural "agent of change" in the
UK.

(U) Support for Brown Grows
--------------


8. (U) Closing the conference, Deputy Prime Minister and
Deputy Party Leader John Prescott endorsed Brown as the next
leader. Foreign Secretary Margaret Beckett had done so
earlier in the week. Environment Secretary David Miliband -
a staunch Blairite who calls himself part of the "second
generation of New Labour" and is seen as a potential future
Prime Minister - came out for Brown even before the
conference. Prescott also made clear he intends to stand
down when Blair resigns, so the party will hold elections for
both Leader and Deputy Leader.

(U) Candidates, Actual and Potential
--------------


9. (SBU) So far, only Brown and John McDonnell MP have
declared their intention to run for the leadership when Blair
steps down. When there is a vacancy, a valid nomination
requires the support of 12.5 percent of Labour MPs; that
currently puts the magic number at either 44 or 45, depending
on rounding. McDonnell, a left-winger, may be able to muster
that many signatures but is given no chance of actually
winning. A more serious challenge to Brown could come from a
Cabinet heavyweight. The most mentioned possibilities are
Home Secretary John Reid, a staunch Blairite, and Education
Secretary Alan Johnson, a rising star with strong union

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roots. Both are keeping their options open.


10. (SBU) The field contending for Deputy Leader is more
crowded: Secretary of State for Northern Ireland and for
Wales Peter Hain has announced he will stand; so have

Constitutional Affairs minister Harriet Harman and Jon
Cruddas MP. Cruddas, a former Blair aide, wants to abolish
the post of Deputy Prime Minister and combine the jobs of
Deputy Leader and Party Chairman. Johnson said earlier this
year that he intended to run for Deputy Leader when the job
became vacant. Leader of the House of Commons Jack Straw is
also believed to be interested.

(U) Controversies Avoided
--------------


11. (U) Some in the party were irked that the Conference
Arrangements Committee rejected attempts to place on the
agenda debates about the timing of Blair's departure and
about whether or not to replace the UK's Trident nuclear
deterrent. On Trident, Blair has promised a decision by the
end of this year. The committee ruled that the matter was
not suitable for the conference agenda because it had already
been discussed fully by the national policy forum. Three
senior figures, Hain, Harman and Secretary of State for
International Development Hilary Benn, however, all said
there still needs to be a full public debate - in the
country, if not at the conference.


12. (SBU) COMMENT: We assess that Blair's masterful speech
will help him retain authority despite the knowledge that his
days in office are numbered. Some find it hard to imagine
him reprising this performance at the spring conference in
February, but we do not find that argument compelling: as
long as he remains Prime Minister, he will be prominently in
the public eye and will continue to make eloquent speeches;
his final farewell may be even more emotional than this one.
Blair has said he will go by early September 2007, but May is
seen as a key time: he will reach the ten-year mark in
office on May 2; elections will be held in Scotland and Wales
on May 3 for devolved legislatures and in England for local
councils. Labour is likely to get hammered no matter who
leads the party; there is much to be said for letting the
outgoing leader remain in power until after the elections to
take the blame rather than spoiling his successor's start.

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