GORDON BROWN RESHUFFLES CABINET TO FOCUS ON ECONOMIC DIFFICULTIES

C O N F I D E N T I A L SECTION 01 OF 02 LONDON 002525



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E.O. 12958: DECL: 10/03/2018

TAGS: PGOV, PREL, PINR, UK

SUBJECT: GORDON BROWN RESHUFFLES CABINET TO FOCUS ON

ECONOMIC DIFFICULTIES



LONDON 00002525 001.2 OF 002





Classified By: PolMinCouns Gregory L. Berry, reasons 1.4 b, d



1. (C/NF) Summary and comment. PM Gordon Brown announced

October 3 a new cabinet line up designed to deal with the

economic challenges facing Britain, including the rise in oil

and food prices. The PM also announced the formation of a

new National Economic Council, which will meet twice a week

to focus on Britain's economic problems. Brown's appointment

of EU Commissioner Peter Mandelson as Secretary for Business,

Enterprise and Regulatory Reform was the major surprise of

the reshuffle; Mandelson resigned twice from cabinet

positions under Tony Blair, and his relations with Gordon

Brown have been described as "poisonous." The other major

change in the reshuffle is Des Browne, who stepped down as

Secretary for Defence and Secretary for Scotland. The reason

behind Browne's ouster is unclear, but one Cabinet office

official told us Browne may return to the cabinet in another

position at some point. In focusing so heavily on the

economy in his reshuffle, Brown has reinforced his image as

an experienced economist that the British public can rely on

in times of crisis. The fact that he was willing to bring

Mandelson back into the cabinet is, at least for now, being

represented as a show of his willingness to put his personal

feelings aside for the good of the country. End summary and

comment.



Who's Staying

--------------



2. (SBU) Most of the cabinet stays put, including Chancellor

Alistair Darling, Foreign Secretary David Miliband, Home

Secretary Jacqui Smith, Justice Secretary Jack Straw,

Children's Secretary Ed Balls, Secretary for International

Development Douglas Alexander, and Environment Secretary

Hilary Benn.



Who's In

--------------



3. (SBU) Below are the major new faces in the cabinet:



-- EU Commissioner Peter Mandelson takes over from John

Hutton as Secretary of State for Business, Enterprise, and

Regulatory Reform. This is the biggest surprise of the

reshuffle: Mandelson resigned twice from cabinet positions

under Tony Blair, and his relations with Gordon Brown have

been described as "poisonous." Nonetheless, he is

unquestionably a heavy hitter on the economy. In announcing

Mandelson's appointment, Brown said Mandelson has "invaluable

experience." The British business community has

overwhelmingly applauded Mandelson's return, while several

union leaders have raised concerns about Mandelson's

perceived too-close ties to business.



-- Margaret Beckett returns to the cabinet as Housing

Minister. Beckett lost her cabinet position in July 2007,

when David Miliband replaced her as Foreign Secretary.

Although Housing Minister is not a cabinet-level position,

Beckett will have the right to attend cabinet meetings.



-- Deputy Whip Nick Brown succeeds Geoff Hoon as Chief Whip,

even though some Blairites, who believe Nick Brown played a

role in undermining Tony Blair, briefed the press anonymously

that they opposed this appointment.



-- Baroness Royall of Blaisdon replaces Baroness Ashton as

Leader of the House of Lords.



Who's Out

--------------



4. (SBU) Three major cabinet members have lost their jobs:



-- Defense Secretary Des Browne: The reason for Browne's

ouster is unclear: he is well-liked by his Cabinet

colleagues and within the MOD, and rumors of health problems

appear to be just that. When Gordon Brown asked Browne to

step down as Defence Secretary, he reportedly offered that

Browne keep his portfolio as Secretary for Scottish Affairs

and take over the Northern Ireland and Wales portfolio as

well. Browne decided to resign from the cabinet altogether.



-- Transport Secretary Ruth Kelly: As previously reported,

Kelly is leaving the Cabinet to spend more time with her

family, which includes four children under the age of 12.

Kelly announced today she will not seek reelection when her

current term as MP comes to an end.



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-- Lord Digby Jones: Lord Jones announced October 2 that he

would leave his position as Trade Minister, emphasizing that

he always meant to leave at the first major reshuffle and

that his leaving was not a reflection on Gordon Brown's

premiership.



Who's Moved

--------------



5. (SBU) Below are the some of the major changes among

existing cabinet members:



-- Leader of the House of Lords Baroness Ashton takes over

from Peter Mandelson as EU Commissioner. Although Geoff Hoon

had been the odds-on favorite for the job, he would have had

to resign as an MP to take the job, leading to a by-election

that Labour can ill afford to lose. Brown gets around this

by appointing Ashton, a life peer, to the position.



-- Cabinet Office Minister Ed Miliband becomes Secretary for

Energy and Climate Change (a new department).



-- Chief Whip Geoff Hoon takes over from Ruth Kelly as

Transport Secretary.



-- Business Secretary John Hutton replaces Des Browne as

Secretary of Defence



-- FCO Minister for Europe Jim Murphy becomes Secretary for

Scotland. This is seen as a reward for his work on the

Lisbon Treaty.



-- Housing Minister Caroline Flint replaces Murphy as FCO

Minister for Europe.



-- Steven Carter, Director of Communications at No. 10,

becomes Minister for Communications, Technology and

Broadcasting in the House of Lords.



6. (C/NF) Although this was not announced publicly, a Labour

insider tells us that New York Post Editor David Yelland is

being brought in to No. 10 as a chief spin doctor.





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