Brown Faces Mutiny as His Cabinet Members Jostle

By Mark Deen and Gonzalo Vina

Sept. 19 (Bloomberg) -- As U.K. Prime Minister Gordon Brown tries to put down a mutiny, 15,000 Labour Party activists and lawmakers gather in Manchester tomorrow with their eyes on potential successors.

Calls by more than a dozen Labour lawmakers this week for a vote to replace Brown have put Cabinet newcomers David Miliband and Ed Balls on the spot as they jostle with Jack Straw, Alan Johnson and other leadership elders for backing should Brown be forced out.

``These relatively young ministers are well regarded by their colleagues, though the public find it quite hard to pick out any of them from the pack,'' said Andrew Cooper, chief executive officer of pollster Populus Ltd. ``They need to start changing that now because time will rapidly catch up with them.''

At the five-day annual conference, the ministers will walk a tightrope. They have to display loyalty to Brown, 57, while signaling readiness to take his job as David Cameron's Conservative Party enjoys its highest popularity ratings since Margaret Thatcher's third term 20 years ago.

Ministers who stray from their assigned policy areas to articulate a wider vision in speeches and back-room wrangling may be seen as challenging Brown.

``There are huge dangers,'' said Andrew Hawkins of pollster ComRes. ``We know what happens to the person who wields the knife.''

Heseltine's Lesson

In 1990, after Conservative minister Michael Heseltine orchestrated Thatcher's exit, he was portrayed as a hatchet man in the press, and the Conservatives picked John Major to replace her.

Rising unemployment, collapsing home prices and this month's worldwide market turmoil have complicated things for successor hopefuls. Brown helped broker the takeover of HBOS Plc by Lloyds TSB Plc to avert the collapse of Britain's largest mortgage lender in the wake of Lehman Brothers Holdings Inc.'s bankruptcy.

Brown says his decade as finance minister makes him the best person to lead Britain through the slump, and today pledged to coordinate action with other countries to restore stability to world markets.

``The government appears to be imploding just when bold leadership is needed,'' said Ben Read, senior economist at the Centre for Economics and Business Research in London. ``Any talk of replacing the prime minister will be taken very badly.''

Labour Concerns

Cabinet members are under pressure from lawmakers who are concerned that they'll lose their seats in the next election, which must be called by 2010, unless Brown is replaced. Brown this week fired three lawmakers from government posts after they called for a leadership vote.

A survey published in today's Independent newspaper showed 54 percent of 788 Labour members want Brown to quit, and 45 percent said a change of leader would improve the party's chances.

Striking the right tone will be trickiest for Foreign Secretary Miliband, 43, because he wrote in the Guardian newspaper July 30 that the Labour Party must offer ``real change.'' The piece, which didn't mention Brown, was interpreted by lawmakers as an attempt to test the waters for a leadership bid.

``Miliband has got to be very careful,'' said Wyn Grant, a professor of politics at Warwick University. ``Anyone who wants to be prime minister will have to appear very loyal at the conference and not rock the boat.''

Miliband's Rise

The son of an academic who started his career in a research institute, Miliband obtained his degree at Oxford University. He served as an adviser to Tony Blair when he was prime minister and Miliband joined his Cabinet in 2006. Brown appointed him to his current position last year, making him Britain's youngest foreign secretary since the 1970s.

Miliband has said he doesn't favor a leadership contest, though he didn't rule out running if there is one. The minister was favored by the biggest percentage of adults surveyed by the Independent, 24.6 percent, in the event that Brown stands down.

A premiership bid by Miliband would expose divisions between Labour's old guard -- including the unions that provide most of its funding and are pushing to raise taxes on the wealthy -- and its intellectuals, who want to keep Britain attractive for investors.

`Crazy, Destructive'

``Why should we elect a young fresh face when we have already got one in Cameron with policies that are not dissimilar,'' Derek Simpson, joint general secretary of Unite, Britain's largest union, said Sept. 7.

Balls, 41, another potential successor, last year became schools secretary. Also an Oxford graduate, he wrote for the Financial Times' before entering politics. On Sept. 1, he said ousting Brown would be ``crazy, destructive and divisive.''

A divided party could turn to Health Secretary Johnson, 58, or to Justice Secretary Straw, 62, who has been in politics since the 1970s.

``Straw is seen as a safe pair of hands,'' said Mark Wichham-Jones, a Bristol University professor and author of a book on the Labour Party. ``Johnson is an old union man.''

The potential successors barely register on the public's radar. Among the 2,144 voters surveyed by YouGov Plc, Straw was seen as the best next leader, with 14 percent support. Miliband got 12 percent.

``A large minority of people have a vague sense of the name David Miliband,'' Cooper said. ``Do they have an informed view of what he's like? No, let alone the more remote figures.''

To contact the reporters on this story: Mark Deen in London at markdeen@bloomberg.net; Gonzalo Vina in London at gvina@bloomberg.net