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

C O R R E C T E D C O P Y - FINAL PARAGRAPH RENUMBERED

NOFORN
SIPDIS

STATE FOR EU/WE, NSC FOR BRADLEY

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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