Brown set to fight back over discontent

By Sumeet Desai Reuters - Tuesday, August 19 06:21 pm

LONDON (Reuters) - Prime Minister Gordon Brown will start his political fightback this week after a month of speculation that he could be ousted as leader of the flagging Labour Party.

Officials say Brown will return from his summer break refreshed and full of ideas to revive his party's fortunes that could include plans to help families with their fuel bills and kickstart the slumping housing market.

"Everything is on the table right now," said one official.

Ministers have been considering plans for cash handouts to families finding it hard to cope with high utility bills -- home heating bills could rise by another 30 percent this September.

They have also been looking at ways to help first-time homebuyers who have been frozen out of the mortgage market because of the credit crunch. These could include easing taxes on house purchases or getting banks to lend more money by giving them easier funding.

Brown will also try to galvanise his fractious parliamentarians by encouraging them to turn their attack on the increasingly popular opposition Conservatives, currently ahead in the opinion polls by as much as 20 points, and to accuse them of lacking substance.

RESHUFFLE TALK

Talk of an imminent leadership bid has died down after reaching a crescendo at the end of last month when Foreign Secretary David Miliband penned a newspaper article widely interpreted as a personal manifesto to become prime minister.

But Brown may still choose to reshuffle his team to reassert his grip on the party. There has been talk of neutralising the Miliband threat by moving him to the Treasury to replace Alistair Darling as Chancellor.

Treasury officials, however, are not expecting their master to change and Brown aides have given little indication that Darling could be moved so soon before the pre-budget statement, expected in early October.

If anything, Brown will need his Chancellor on side as Labour prepares for its annual conference and the semi-annual report on the state of the ailing economy, the source of much of Labour's current malaise.

With consumer confidence hitting record lows as the economy reels from the global credit crunch and sky-high energy prices, Brown must be hoping that Britain's best showing in the Olympics in a century will put a smile back on people's lips.

He is flying to Beijing this weekend to attend the closing ceremony.

But the economic news remains grim and fears are growing that Britain could soon enter its first recession since the early 1990s as house prices, already down more than 10 percent in a year, keep sliding.

Allies say Brown is counting on economic recovery next year which would give the party enough time to regain support before an election that must take place by May 2010.

But they say he is also conscious of the need to help people who are being hard hit by the economic slowdown.

Speaking on Tuesday, Culture Secretary Andy Burnham said the party had to avoid "introspection" and "respond in the way that the public want us to -- which is to come up with a policy programme that reflects the pressures people are facing."

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