Sept. 26 (Bloomberg) -- U.K. Chancellor of the Exchequer Gordon Brown vowed to safeguard the legacy of Prime Minister Tony Blair, staking his claim to the premiership when Blair stands down within the next five years.

Brown told the Labour Party's annual conference in Brighton to ``begin to plan ahead,'' and said the renewal of ``New Labour, the brand Blair gave the party when he became leader in 1994 to break from its socialist past, is as ``profound a challenge'' as was winning power in 1997 after 18 years in opposition.

Brown takes control of Labour's agenda as the unchallenged prime minister-in-waiting after receiving endorsements from Pensions Secretary David Blunkett, Culture Secretary Tessa Jowell, Northern Ireland Secretary Peter Hain and Communities Minister David Miliband in the past week. Blair, who led Labour to a record third straight term on May 5 on pledges to step up efforts to improve public services, says he will stand down before the next election, which must be held no later than 2010.

``Barring some economic disaster, Gordon Brown will become the next prime minister,'' said Andrew Cooper, co-founder of the pollster Populus Ltd.

``The only thing missing from the retirement party for Blair was a gold clock,'' said Paul Kenny, acting general secretary of the GMB union, Britain's fourth-largest union. ``It's quite clear that there's an orderly handover taking place. What we saw is the new leader.''

Collision Course

Brown's speech sets him on collision course with labor unions and others on the left of the party, who had seen the chancellor as their best hope of shoring up workers' rights and reversing Blair's policy of increasing the role of private companies in managing schools and hospitals.

Brown said today that raising skills was the answer to increasing competition from India and China, not retreating into protectionism.

``I'm very disappointed that the chancellor is going to be following the reform agenda,'' said Dave Prentice, general secretary of Unison, Britain's biggest union. ``In the past, he said there must be limits to the market in the National Health Service. We want to go forward to reform the public services, not back to Thatcherite policies,'' a reference to the free-market policies of former Conservative Prime Minister Margaret Thatcher.

Brown faces the task of boosting support for the Labour Party, which had its majority in the 646-seat lower house of Parliament slashed to 65 seats in the May 5 election from 166.

`Deserves Credit'

Brown said Blair deserves credit for leading the party through ``difficult and challenging years'' and for ``now asking us and challenging us as a party to begin to plan ahead.'' By continuing with efforts to improve public services Labour can ``dominate the center-ground'' for years, he said.

Bookmaker William Hill Plc expects Blair to stand down as leader in 2008, offering six pounds ($10.65) for every four bet. Brown is the clear favorite to succeed him, on odds of 1-6. His nearest rival Home Secretary Charles Clarke is given odds of 8-1 with third-placed Blunkett on 12-1.

Brown today denied he had reached a succession accord with Blair. ``There are no deals in this at all,'' he told Sky News today. ``I'm making the speech I want to make, because it's the right future for Britain.''

Slower Growth

Brown is facing the strongest test of his eight-year term as chancellor, as record oil prices subdue economic growth and spur inflation.

On Sept. 21, the International Monetary Fund cut its U.K. growth forecast for this year to 1.9 percent from 2.6 percent, well below the 3 percent to 3.5 percent growth Brown forecast in the March budget.

The IMF said Brown may be forced to raise taxes or scale back plans to increase spending by 100 billion pounds ($180 billion pounds) over the next three years if he's to meet his pledge to borrow only for investment over the economic cycle. Brown insists his plans are affordable.

High oil prices, which have risen 47 percent in New York this year, are the biggest test for the global economy, according to Brown, who has called for oil-producing nations to boost output.

The price of crude rose to a record $70.85 per barrel on Aug. 30 after Hurricane Katrina damaged refineries in the U.S. It was worth $62.65 on the New York Mercantile Exchange at 1:30 p.m. London time today.

In his speech today, Brown said he wants to create a ``home- owning, share-owning, asset-owning, wealth-owning democracy.'' He said his policies as chancellor helped make the economy resilient to shocks including house prices, oil and slower growth abroad.

``It is because with Bank of England independence, cutting debt, fiscal discipline and the New Deal this Labour government has shown the strength to take the tough long-term decisions that inflation is low, interest rates are low, growth has been sustained in every year and we are closer that ever to the goal which drives us forward, the goal of full employment,'' Brown said.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net.

Last Updated: September 26, 2005 09:50 EDT