Mon, May 08, 2006 - Page 7 News List

Blair loyalist resigns over cuts

JUMPED NOT PUSHED A minister thought to have been sacked in a Cabinet reshuffle last week in fact quit her job in protest at government policy on children's hospitals

THE OBSERVER , LONDON

British Prime Minister Tony Blair's relaunch of his beleaguered government was thrown off course on Saturday night after it was revealed that a senior minister had quit over controversial reforms of the publicly-funded National Health Service (NHS) -- and that a second came close to resigning.

Jane Kennedy, a long-standing loyalist who was thought to have been sacked from the government in Friday's dramatic reshuffle, disclosed that she left the Department of Health on grounds of conscience following fears about the impact on children's hospitals of changes to NHS finances.

And it emerged that Geoff Hoon, the former Leader of the Commons, threatened to resign after discovering the job he believed he had been promised in the reshuffle had been downgraded. He accepted the post of Europe Minister only late on Saturday, more than 24 hours after the reshuffle began.

Friends of former foreign secretary Jack Straw have also criticized what one said was an "unjustified" demotion to Leader of the Commons.

"There is genuine perplexity in his case," said one ally, while another well-placed party figure said the reshuffle had appeared to punish "anyone not in a permanent state of war with [Chancellor of the Exchequer] Gordon Brown."

Brown is now expected to open discussions with Blair on how to recover from the crisis engulfing the government, talks thought to include the explosive issue of a handover of power.

Despite insistence in Downing Street that conversations between the two are purely routine, it is understood Blair is prepared to discuss the transition in what will be seen as an attempt to calm rebel members of parliament (MPs), who have given Blair a week to publish a timetable for his departure.

Rebel MPs have finalized the text of a letter to be circulated among MPs for signing this week if the prime minister does not agree to name the day, calling for Labour's ruling body to step in and organize a transition.

There is no sign that the move is formally endorsed by Brown, without whom no leadership contest could realistically be staged.

However, it raises the pressure on the prime minister significantly following Labour's drubbing in the local elections.

The first blow came as Kennedy, who was deputy in the Commons to Health Secretary Patricia Hewitt, revealed she had offered her resignation last Thursday.

"For some time I have had disagreements with the way in which certain aspects of health reforms were being dealt with: and it obviously led to some disputes with fellow ministers and some at Number 10," she said.

"I had been asked to do a job and bring political judgment to the job. When you try to apply that judgment and you are told you shouldn't be expressing your opinions you realize the government needs to get somebody else," Kennedy said.

Her constituency in Liverpool includes Alder Hey hospital, one of several children's hospitals which had warned that the new NHS system of payment by results -- where money follows the patient -- could damage their ability to provide treatment.

She said she had struggled with the "uncomfortable question" about why payment by results had been applied if hospitals were not ready and had also objected to an appointment to her local health authority. Kennedy's intervention will be seized on by Labour MPs already anxious about the NHS debt crisis and the impact of further reforms.

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