Mandelson’s return is bound to get the whisperers going again

Peter Mandelson’s stunning return from Brussels to the Cabinet table as Business Secretary sent shockwaves through Westminster today. When the Mole broke the news to one Labour MP, his reply was: “Yeah, yeah, very funny.”

The return of the uber-Blairite is extraordinary on several levels. The loathing between Gordon Brown and Mandelson dates back to 1994, when ‘the Prince of Darkness’ championed Tony Blair’s leadership campaign, and has shown little sign of abating since then. Every time a damaging anti-Brown story appeared in the papers during the Blair years, his aides’ instinctive response was to blame Mandelson and whenever Brown loyalists read reports of Cabinet whispers from now on, they will suspect their old foe is responsible.

Also, how will the unions react to the arrival of the fiercely pro-business Mandelson in the department?

It is a further gamble to bring back a man who has twice had to resign from the Cabinet in disgrace. For all his ability – his intellect is prodigious and he was a widely respected Trade and Industry Secretary – there are fears he could still prove a political liability.

Mandy’s return gave cover to Brown to return his namesake, Nick, to the Chief Whip’s Office. He also inspires respect and loathing in equal measure: his occasionally bullying style has alienated many MPs, particularly women.

The other big winner is Ed Miliband who moves from the Cabinet Office to head a new Department of Energy and Climate Change. It is a high-profile appointment and a reward for the best speech of the Labour Party conference. The clever money could now be on the younger Miliband as the next Labour leader.

Conversely, the political fortunes of Hilary Benn - who loses the climate change element of his brief at the Department for the Environment, Food and Rural Affairs – appear to be fading.

John Hutton’s switch to the Ministry of Defence makes perfect sense given the number of defence jobs in his Barrow constituency and his genuine interest in the subject. Geoff Hoon’s limpet-like qualities are underlined by his move to the Transport Department. At least Hoon, who has been in the Cabinet for almost a decade, is a railwayman’s son.

The return of Margaret Beckett, probably as Housing Minister, is a skilful move, bringing some experience and gravitas to a youthful Cabinet line-up.

The new team has formidable challenges ahead in turning round a large Tory opinion poll lead. But there is a palpable sense of optimism in Government circles today that they might, just might, have turned the corner.

The Mole: Cabinet reshuffle

FIRST POSTED OCTOBER 3, 2008