Cameron Keeps Clarke in Cabinet; Spelman, Gillan Fired

Prime Minister David Cameron
With Britain mired in a second recession since 2009 and the opposition Labour Party ahead in opinion polls, Prime Minister David Cameron has come under pressure for a change of course from traditionalists within the Tory party disenchanted with his focus on narrowing the budget deficit. Photographer: Scott Eells/Bloomberg

U.K. Prime Minister David Cameron promoted Jeremy Hunt to health secretary, replacing Andrew Lansley, and also demoted Justice Secretary Kenneth Clarke in a Cabinet revamp that kept the top ministers in their posts.

The premier dismissed underperformers and gave Cabinet jobs to junior ministers as he sought to quell discontent in his Tory party at a time when the coalition with the Liberal Democrats is struggling amid a double-dip recession. It’s Cameron’s first large-scale overhaul of his team since he came to power in 2010.

“This reshuffle represents an attempt to regain the political initiative without fundamentally altering the government’s economic strategy,” Mark Wickham-Jones, professor of politics at Bristol University, said in a telephone interview. “At the same time it is an attempt to satisfy the disparate and difficult elements in the coalition. Whether it succeeds is another question altogether.”

With Britain mired in a second recession since 2009 and the opposition Labour Party ahead in opinion polls, Cameron has come under pressure for a change of course from traditionalists within the Tory party disenchanted with his focus on narrowing the budget deficit. Dissidents are demanding that their low-tax, low-spending views be better reflected to counter the influence of their Liberal Democrat coalition partners.

NHS Revamp

Hunt was promoted from culture secretary after overseeing the London Olympics. Lansley was made leader of the House of Commons, managing the government’s legislative agenda, after widespread opposition to his revamp of the National Health Service. Chancellor of the Exchequer George Osborne, Foreign Secretary William Hague, Home Secretary Theresa May and Business Secretary Vince Cable remain in their jobs.

Cameron is trying to maintain his deficit-cutting course as Bank of England bond purchases shield him from the debt crisis engulfing the 17-nation euro region. The 10-year U.K. government bond is at 1.64 percent. That compares with 2.20 percent on French debt of a similar maturity and 5.68 percent on Italian bonds. The U.K. economy shrank 0.5 percent in the second quarter, leaving gross domestic product no higher than when Cameron took office.

Heathrow Expansion

Cameron fired Environment Secretary Caroline Spelman and made Clarke a Cabinet minister without portfolio. Justine Greening was moved aside as transport secretary, in a move that signals Cameron may push ahead with controversial plans to expand London’s Heathrow airport. Patrick McLoughlin, who unlike Greening represents a district that isn’t under the Heathrow flight path, takes her job. London Mayor Boris Johnson, a Tory who opposes the expansion of Heathrow, condemned the switch.

Hunt, who’s 45, has overcome a furor over his handling of News Corp.’s 2010 takeover bid for British Sky Broadcasting Group Plc that saw the opposition Labour Party demand his resignation over his alleged favoring of the offer.

Lansley, 55, replaces George Young, 71, the second-oldest member of the Cabinet, as leader of the Commons. Lansley’s move to hand over NHS management to consortia of family doctors provoked demonstrations and condemnation from health workers alongside censure from the Liberal Democrats.

‘Heavy Role’

Clarke, 72, has been handed a brief including aspects of the economy and a role on the ministerial team that discusses national security, he told reporters outside his home today. “At my age you do occasionally have to step down from a heavy departmental role before you suddenly realize you can’t handle it,” Clarke said.

Cameron also dismissed Wales Secretary Cheryl Gillan. Conservative Party Chairwoman Sayeeda Warsi leaves that job, though will still attend Cabinet meetings as a junior Foreign Office minister.

Theresa Villiers, 44, who was a junior transport minister, replaces Owen Paterson as Northern Ireland secretary. Chris Grayling, 50, the employment minister, takes Clarke’s justice job while Paterson becomes environment secretary.

Warsi, 42, of Pakistani origin, was the first female Muslim to hold a Cabinet-level post in Britain. Cameron appointed her as a lawmaker in the upper, unelected House of Lords in 2007 after she failed to win a seat in the 2005 election in her home town of Dewsbury, northern England.

In March, the London Evening Standard newspaper reported that she faced calls for her resignation after her handling of the defection of a Conservative European Parliament lawmaker to the U.K. Independence Party. Tory lawmakers accused her of being out of her depth, the Standard said.

Chief Whip

International Development Secretary Andrew Mitchell will become chief whip in charge of enforcing discipline among Conservative Party lawmakers. Grant Shapps, who was housing minister, is promoted to Conservative chairman and Maria Miller, a junior minister for disabled people, takes over as culture secretary from Hunt.

Mitchell, 56, takes over as chief whip from Patrick McLoughlin.

Gillan, 60, had threatened to resign over government plans for the HS2 high-speed rail link that is planned to run through her parliamentary district. After concessions, including further tunneling to protect the beauty of the Chiltern Hills, the Conservative Party lawmaker said she would not quit. David Jones becomes Welsh secretary.

Spelman, 54, presided over an early government U-turn when she was forced in February 2011 to abandon plans to sell of hundreds of thousands of acres of state-owned woodland amid opposition from environmentalists and the head of the Church of England.

Satisfying Egos

While ministerial “reshuffles” are supposed to allow the premier to reassert his authority, they’re fraught with traps. The prime minister must seek to please disparate groups of lawmakers and satisfy egos. Ministers may refuse to quit and lawmakers who are fired or not promoted become potential rebels, waiting to block the government’s legislative agenda or becoming more vocal in their criticism.

Cameron, 45, had gone nearly 2 1/2 years without a wholesale reorganization of his government, longer than his two immediate predecessors.

“It’s really a reshuffle at the margins. Given that the main high-profile ministers have remained in their posts, does this mean we are going to get a big shift in the direction of policy? Probably not,” Philip Shaw, an economist at Investec Securities in London, said in an interview. “Growth policies and how the government presses forward is what is more important.”

During the 13 years Labour was in power under Tony Blair and then Gordon Brown, the government went through six defense secretaries. In one four-year period, three different people were home secretary, overseeing policing and security. Under Blair, John Reid held seven Cabinet-level posts in eight years, including health, defense and the Home Office.

Liberal Democrats

Clegg’s Liberal Democrats hold five Cabinet positions and 18 other ministerial roles, a fifth of all government positions. None of the Liberal Democrat Cabinet members changed jobs, though David Laws, a party lawmaker who resigned as a minister in May 2010 over his expenses, returned to the government. Laws becomes a junior education minister with a role in the Cabinet Office, according to a person familiar with the matter who refused to be identified because the announcement has not yet been made public.

Laws, 46, resigned as chief secretary to the Treasury 19 days after the formation of the Conservative-led government when the Daily Telegraph newspaper disclosed he had claimed taxpayer funded allowances to pay rent to his partner, James Lundie.

Cameron did “not face an easy equation,” Tim Bale, a professor of politics at Sussex University, said in an interview. He questioned how much difference reshuffles make to the direction of government, citing the Blair era.

“Under Blair every reshuffle was announced as a new direction, a new energy, and it very rarely happened,” Bale said. “How much difference can a minister make in a government department?”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE