Rift Between Brown And Mandelson Threatens Labour Revival

(Telegraph) – A RIFT BETWEEN GORDON BROWN AND PETER MANDELSON is threatening to derail Labour’s plans for a New Year fight-back, the Daily Telegraph has disclosed.

A series of disagreements have strained the close political relationship between Mr Brown and Lord Mandelson that helped the Prime Minister survive as leader earlier this year.

It is thought it could lead to more uncertainty over the Labour leadership with the election just months away.

Lord Mandelson has been credited with ensuring that Mr Brown survived as Prime Minister when he successfully rallied cabinet colleagues behind Mr Brown when a series of resignations in June threatened to force him from office.

However, he has grown increasingly disenchanted with Mr Brown and in recent weeks the relationship has deteriorated further.

Last night, one close friend of Lord Mandelson told The Daily Telegraph: “Peter thinks that Gordon has used him to stay in place and has now just disposed of him. He clearly thinks he has served his purpose and Peter is upset about that.”

Disputes over policy have stretched the relationship between the two men to breaking point. A source claims that Lord Mandelson feels he has been “ganged up on” on various issues.

This month’s pre-Budget report, which attacked the bankers and failed to offer a more credible route for paying off the deficit further, infuriated the Business Secretary.

He made it clear he did not agree with “banker-bashing” but was over-ruled by Mr Brown.

He also felt slighted when Mr Brown did not push him for the European Union foreign affairs job when that was in his gift last month. Instead it went to the largely unheard of Cathy Ashton, Britain’s trade commissioner.

But also central to the falling out is Mr Brown’s decision to stubbornly refuse to change his plan to fight the election on “investment versus cuts”.

A senior Labour MP said: “Peter and Alistair (Darling) dragged Gordon to a place over the summer where he had to be more realistic about possible cuts. The result was the TUC speech.

“However, he regressed very quickly in his own conference speech and since into trying to ignore what needs to be done to deal with the deficit. Both Peter and Alistair felt he needed to be far less crude and more realistic.”

Meanwhile, Ed Balls, the Schools Secretary, has returned to a key role alongside the Prime Minister.

Lord Mandelson and Mr Brown only put a 14 year rift behind them when the Prime Minister shocked Westminster by recalling Lord Mandelson to his Cabinet.

The close relationship the two men enjoyed before 1994 was rekindled and Lord Mandelson’s role has been vital to Mr Brown in terms of survival over such a tumultuous political and economic period.

But that is now under threat. Those working in Number 10 have reported that while he still has some control over the Downing Street “war room” Lord Mandelson seems unprepared to use it.

One ally of the Prime Minister said: “He’s got the influence still in some ways but he does not seem interested in using it. He has become disengaged.”

It has been noticeable how little media Lord Mandelson has done in recent weeks having previously been a key spokesman for Mr Brown across all issues.

The danger for Mr Brown in having a “disengaged” Lord Mandelson, who would be expected to play a key role in Labour’s election strategy in the New Year, is that it could create uncertainty and provoke a leadership challenge.

Yesterday Labour MP John Hutton admitted that he was the Cabinet minister responsible for saying that Gordon Brown would be a “disaster” as Prime Minister.

Mr Hutton had previously denied long-running rumours that he was the high-placed Labour source who said in 2006 that Mr Brown would be a “f****** disaster” in the role.

But the former defence secretary finally came clean while speaking on BBC Radio 4’s PM programme. He told the programme: “I did say it, yes, I did, let’s get it over with.”

Some Labour insiders have revealed that David Miliband, the Foreign Secretary, is now considering whether he should approach the Prime Minister, backed with Cabinet support, and urge him to stand down.

Mr Miliband last year toyed with challenging Mr Brown. This year it is widely accepted that if he had followed James Purnell, a fellow Blairite, out of the Cabinet then Mr Brown would have had to resign.

But his decision to stay, a strong party conference speech and what one friend describes as “a new inner steel and determination” could see him again emerge as a contender if Mr Brown’s position again comes under pressure.

An ally of Mr Miliband said: “David has always thought the job is his for the taking and he has had a much better year and re-established himself as a front runner. But there maintains a problem about being the one who alone puts his head up and takes the gunfire.”

As long as Lord Mandelson was fully behind Mr Brown then the chances of a Blairite – most of whom still revere Lord Mandelson – challenging Mr Brown were very slim. But that has now changed.

The Telegraph has learned that there is increasingly a mood of desperation among Labour MPs who believe Number 10 is kidding itself about any revival in the polls. A narrowing of the gap has given Mr Brown renewed confidence but one MP said that reality had to bite soon.

He added: “All we have done is recover some of the ground when our ratings fell off a cliff during the expenses scandal when the main beneficiaries were the small parties.”