May 3 (Bloomberg) -- Gordon Brown, the U.K. chancellor of the exchequer, is more liked by voters than the man they'll probably pick for a third term as prime minister: Tony Blair.

If history is a guide, Brown will need more than popularity to take the top job. Only three of the 20 chancellors since World War II have gone on to the premiership: John Major in 1990, James Callaghan in 1976 and Harold Macmillan in 1957.

Brown, 54, who has presided over Britain's longest period of uninterrupted economic growth in more than 200 years, chose not to challenge Blair for the leadership of the Labour Party in 1994. Blair, 51, will have five years to return the favor; he has promised to step aside after a third term if Labour wins May 5.

In the meantime, consumer spending is slowing, interest rates are at a three-year high and inflation is accelerating at the fastest pace in almost seven years.

``An economic wobble could undermine his reputation as the `Iron Chancellor' with a steady hand,'' says Matthew Worley, a political historian and author of the 2005 book ``Labour Inside the Gate.'' ``Everything depends on timing.''

Labour commands 42 percent of voter support compared with 29 percent for the opposition Conservative Party, according to a poll of 1,424 adults by ICM Ltd. from April 27 to April 30.

Brown's Popularity

If Brown were party leader, Labour would win 48 percent of the vote, according to a poll conducted April 15-17 by NOP Ltd. for the Independent. That would give Labour 234 seats more than any other party in the House of Commons compared with a majority of 122 under Blair. Both polls had margins of error of 3 percent.

Blair named Brown as chancellor of the exchequer when Labour won the 1997 election in a landslide. After three years of budget surpluses, Brown's Treasury has run deficits for the past four years and expects shortfalls for at least five more years.

Brown's 2005 budget depends on economic growth of at least 3 percent to generate enough revenue to keep the deficit from increasing. That's above the 2.5 percent average prediction of 41 economists surveyed by the Treasury in April.

Brown and Blair won another election victory in 2001, and they have campaigned together almost daily for this election.

`Foundation of the Government'

Blair gave his most explicit backing of Brown last week.

``Gordon will make an excellent prime minister,'' Blair said in an April 29 interview with the Times of London. He said his relationship with Brown was ``the foundation of the government.''

They have had their differences, though. In the past, Brown has spoken of the difficulty of enacting such Blair-championed measures as giving Britons a choice of which hospital and school services to use. He almost never uses the term ``New Labour'' with which Blair rebaptized the party.

Derek Scott's 2004 book ``Off Whitehall'' describes how Brown has excluded Blair from economic-policy planning. A month before presenting his second budget, in 1998, Blair summoned Brown to his office in Downing Street to ask for details of what would be announced, wrote Scott, Blair's former chief economic adviser, who was at the meeting.

Brown pulled his paper toward his chest and replied, ``I haven't made up my mind yet,'' wrote Scott, who stopped working for Blair in 2003. Blair replied: ``Give us a hint, Gordon.''

John Major

Major, 62, and Callaghan, who died in March at the age of 92, both owed their jobs to the support of their predecessors.

Two years before taking over from Margaret Thatcher, Major was a junior Treasury minister, overshadowed by Chancellor Nigel Lawson and Foreign Secretary Geoffrey Howe. The ``Iron Lady,'' as she was known, promoted him to foreign secretary for 94 days and then chancellor after Lawson resigned over differences with her.

When Thatcher, now 79, was ousted by members of her own party, Major emerged as a compromise candidate in November 1990.

``She had been making it known privately for two years that she saw John Major as her successor,'' Hugo Young, Thatcher's biographer, wrote in his 1989 book ``One of Us'' (Macmillan London Ltd.).

Prime Minister Harold Wilson backed Callaghan, who as chancellor had presided over a current account deficit of 800 million pounds ($1.5 billion now) that forced the U.K. to devalue the pound. Wilson talked Callaghan out of resigning from the government in 1967 and made him home secretary.

James Callaghan

After his defeat in the 1970 election, Wilson still received Callaghan's support as leader of the party. So, when Wilson returned to office in 1974, he named Callaghan foreign secretary. In that role, Callaghan campaigned to keep Britain in the European Economic Community, the forerunner of the European Union, according to books by Wilson's biographer, Ben Pimlott, who died last year.

When Wilson stepped down in 1976, he privately endorsed Callaghan over then Chancellor Denis Healey and Michael Foot, who was secretary of state for employment at the time, Pimlott wrote.

Since January, Brown has publicly presented a united front with Blair. Traveling in South Africa that month, Brown characterized differences with Blair as ``personality issues'' that aren't very important, saying he was focused on his job.

`Shared Ambition'

``Right now, Blair and Brown have a shared ambition to put forward a show of unity,'' says Sunder Katwala, general secretary of the Fabian Society, a London research institute whose ideas helped establish the Labour Party in 1900. ``If Blair steps aside in the next 18 months, it's hard to see anyone but Brown taking the job. But things can change very quickly.''

Under Britain's parliamentary system, Blair can hand over power at any point during his five-year term and be replaced by another Labour member without an election. Party members choose their leader, and the party with the most seats in the nation's 646 constituencies picks the government.

Blair told the British Broadcasting Corp. on Sept. 30, 2004, that he would serve a ``full'' third term if re-elected.

Brown would most likely win if the leadership election were held tomorrow, says Justin Fisher, head of politics and history at Brunel University in London. ``But quite a bit could change,'' he adds, citing Foreign Secretary Jack Straw, a vocal supporter of the war in Iraq, and Home Secretary Charles Clarke as other strong contenders to lead Labour.

War Politics

Of all Labour's members of Parliament, Brown is most likely to succeed Blair as party leader, according to William Hill Ltd., a London-based bookmaker. Brown's odds of 1-to-6 lead Clarke at 13- to-2, cabinet minister Alan Milburn at 12-to-1, Straw at 16-to-1, Health Secretary John Reid at 20-to-1 and former Home Secretary David Blunkett at 20-to-1.

If Major and Callaghan show the importance of endorsement, Macmillan's promotion provides another lesson for Brown: Don't get caught up in a war.

Macmillan told his biographer, Alistair Horne, that he had no desire to become prime minister when Anthony Eden appointed him as foreign secretary in 1955. Macmillan was 61 at the time, two years older than Eden and eight more than Rab Butler, then chancellor and heir apparent. Butler stepped aside as chancellor when he and Eden were engulfed in controversy over the prime minister's decision to invade Egypt in the Suez Crisis of 1956.

A supporter of the war before fighting broke out, Macmillan was one of the first in Eden's cabinet to call for an end to hostilities once financing faltered. Then Macmillan kept quiet, allowing Butler to take questions in Parliament, according to Horne's two-volume biography ``Macmillan.''(Macmillan London Ltd.)

`Very Shrewd'

Brown was similarly silent before the U.S.-led invasion of Iraq. His comments were largely confined to setting money aside in his budgets, while Blair debated the issue almost daily in Parliament and on television in the four months leading up to the March 2003 war.

Brown's first major comments on the subject came on Feb. 9, 2003, when he said in an interview with British Broadcasting Corp. that Blair's participation in the war ``absolutely right.''

``Brown is very shrewd,'' says Paul Lewis, a lecturer in politics at Cambridge University whose book ``Postwar British Politics'' will be published next year. ``He made the money available, but he was never too closely associated with Iraq. He's always keeping his eye on the long-term goal.''

Brown's model chancellor-turned-prime-minister dates back even longer, to David Lloyd George, whose controversial 1909 People's Budget taxed the country's land-owning classes to help pensioners and the poor.

The Lloyd George Link

A year ago, a Treasury study paid tribute to Lloyd George's promise to build ``homes fit for heroes'' in 1918 and considered his case for a tax on land that benefited from public works. In July, Brown noted Lloyd George's efforts to combat poverty, one of his own priorities, at a lecture to the Joseph Rowntree Foundation, a charity.

``There was nobody as powerful or as eloquent in mainstream politics talking about these things,'' says Howard Glennerster, a professor emeritus of social policy at the London School of Economics. ``By mentioning his name, Brown is drawing attention to the fact he hopes to do the same thing.''

After Britain suffered setbacks in World War I, Lloyd George pushed aside Liberal leader Herbert Asquith to become prime minister in 1916.

``Lloyd George was a more expansive force on the attack,'' says Samuel Beer, 93, a professor emeritus of government at Harvard University and author of ``Modern British Politics.''(W. W. Norton & Co.) ``Brown doesn't have the quickness.''

Plenty of other qualified chancellors who had their eyes set on 10 Downing Street failed to make the leap.

Healey, who served from 1974 to 1979, made enemies on the left wing of the Labour Party by cutting spending and wage inflation. Hugh Gaitskell was chancellor in the year before Labour lost power in 1951 and served as party leader for eight years until he died in 1963, a year before Labour regained power.

Labour's Roy Jenkins, who served from 1967 to 1970, and Conservatives Howe (1979-1983) and Kenneth Clarke (1993-1997) all alienated their parties by supporting tighter political links with the rest of Europe.

``There's a small number of cases where you've got people who are qualified and interested in the job at the right time,'' says Wyn Grant, author of ``Business and Politics in Britain''(MacMillan Publishing Co.) and professor of politics at the University of Warwick.

To contact the reporter on this story: Reed Landberg in London landberg@bloomberg.net.

Last Updated: May 2, 2005 19:08 EDT