Osborne safe after UK cabinet reshuffle

2012-09-04 15:00

London  - British Prime Minister David Cameron kept his unpopular finance minister George Osborne in a reshuffle of his cabinet on Tuesday that he hopes will revive the Conservative-led government’s fortunes in the middle of a term dominated by recession.

Cameron’s office has billed the rejig as a game changer but heavyweights such as Foreign Secretary William Hague are seen staying put and few changes are expected in policy.

The prime minister’s scope for a sweeping overhaul is limited by the constraints of life in coalition with the left-leaning Liberal Democrats and the danger of creating powerful enemies in his Conservatives at a delicate time for the party.

Osborne, a close Cameron ally, was booed by crowds before he presented medals to Paralympics winners on Monday night, highlighting discontent with budget cuts that have repeatedly missed the government’s targets and the general economic gloom.

“He’s definitely staying put,” a source familiar with the reshuffle discussions told Reuters.

Polls show many Britons think Osborne should be sacked but replacing too many senior ministers could be interpreted as an admission of policy failure, particularly on the economy.

Cameron is expected instead to beef up his economic team by giving Justice Secretary Ken Clarke - a former finance minister - a new role with an economics brief. Lib Dem David Laws, another respected economic brain, was also likely to be given a ministerial role.

Internal discipline

The reshuffle is expected to be more of an exercise in improving Cameron’s relationship with his party, with positions for high flyers from the Conservative populist right and even its “eurosceptic” wing which demands a tougher line on Brussels.

Government officials argue that shifting Osborne from his post would raise questions on financial markets about Cameron’s resolve in tackling Britain’s large budget deficit.

Cameron, who has seen his party’s popularity fall as the economy sours, has stuck to his guns with austerity, hoping that growth will return before the next parliamentary election in 2015.

Osborne’s March budget cut taxes for the richest while raising levies on the elderly, leading to criticism the coalition was out of touch with those at the bottom of the ladder struggling in the downturn.

In one of two early confirmed changes, Cameron moved International Development Secretary Andrew Mitchell to take charge of internal party discipline in parliament. 

Mitchell, a former UN peace keeper, will become “Chief Whip,” tasked with keeping in line restive Conservative backbench politicians who have already forced a U-turn over constitutional reform and want to rewrite Britain’s relationship with the European Union.  

Theresa Villiers was appointed as Northern Ireland minister.

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