Cabinet reshuffle: David Cameron moves right in bid to assert authority

The shake-up was billed by the Prime Minister as a bid to get Britain working again, but came after months of growing anger and discontent on the Tory back-benches over government policies.

As predicted, there were no changes at the top, with Chancellor George Osborne, Home Secretary Theresa May and Foreign Secretary William Hague all staying in place.

But the changes throughout the day quickly led to controversy and claims that the Conservatives are preparing for a major U-turn over a pledge not to build a third runway at Heathrow Airport.

An early indicator of the Prime Minister’s inability to get his own way was the refusal of Iain Duncan Smith to leave his post as Welfare Secretary to take up the role of Justice Secretary.

It is understood that Mr Osborne, who many wanted to see moved, had lobbied for Mr Duncan Smith to be shifted to make it easier to bring in another

£10 billion of welfare cuts which the Work and Pensions Secretary opposes.

Friends of Mr Duncan Smith told The Scotsman he had considered the offer from the Prime Minister but “had only joined the government because he wants to see through his welfare reforms”.

But Mr Cameron did get his way over the position of Transport Secretary, shifting Justine Greening, who had only been in post for ten months, to International Development Secretary.

Ms Greening was in Downing Street for two hours in what are understood to have been “difficult” talks and left looking grim. Her replacement with former chief whip Patrick McLoughlin clears the way for Tory U-turns – to ditch the High Speed 2 rail link, unpopular in key Tory constituencies in its path, and agree to a third runway at Heathrow.

A senior Tory insider said: “McLoughlin understands the unhappiness in the shires with HS2 and unlike Greening his constituency is not near London so he will not be deterred from doing the right thing and reversing the policy on Heathrow.”

But the appointment saw Mr Cameron come under fire from the man many tip to become his replacement as leader, London mayor Boris Johnson.

Mr Johnson said: “There can be only one reason to move her and that is to expand Heathrow Airport. Now it is clear that the government wants to ditch its promises and send yet more planes over central London.”

In a bid to deal with growing discontent on his back-benches and in the party across the country Mr Cameron yesterday appeared to ditch his modernising policies of “hug a hoodie” while also taking a strong line on climate change by promoting right-wingers to key positions in his Cabinet.

A pro-fox hunting, climate-change sceptic, Owen Paterson, was promoted to run the Department of Environment, Food and Rural Affairs (Defra).

A hardliner on crime, Chris Grayling becomes Justice Secretary, replacing Ken Clarke, who has questioned the value of sending people to prison.

Other appointments that delighted the Tory right wing included the rising star Grant Shapps replacing Baroness Warsi as party chairman, Theresa Villiers going to Northern Ireland and Maria Miller becoming Culture Secretary, as well as being in charge of equalities issues.

Many believe Ms Miller to be a “sceptic” on gay marriage, a proposal which some constituency chairmen believe has lost the party members.

Other high-profile moves included the surprise appointment of Jeremy Hunt as Health Secretary, replacing the architect of controversial NHS reforms Andrew Lansley, who is demoted to Leader of the Commons.

Mr Hunt’s promotion, despite controversy over his handling of the BSkyB takeover bid as Culture Secretary and the Liberal Democrats’ refusal to back him in parliament, was seen as a reward for the successful delivery of the London Olympics.

And the former banker credited with helping bring the Games in on budget and on time, Locog chief executive Paul Deighton, was brought into the government as Treasury minister for infrastructure and economic delivery.

Mr Clarke remains in the government as Minister Without Portfolio and will sit on key Cabinet committees, including economic affairs and the national security Council.

But senior Tory backbencher Peter Lilley warned that giving the former Chancellor this wide-ranging role risked sowing “confusion” over economic policy if he disagrees with Mr Osborne.

Last night, it was being briefed that Mr Clarke could end up as “Deputy Chancellor promoting growth”.

Michael Gove has held on to his job as Education Secretary and will be joined by David Laws, the Liberal Democrat MP who was forced to resign early in the government over his expenses claims but now becomes an education minister.

The Lib Dem leadership made it clear how happy Mr Clegg was to have a key ally back in the government and Mr Laws will be given a roving economic brief. However he will not be allowed to sit in Cabinet meetings.

Other Lib Dem promotions included East Dunbartonshire MP Jo Swinson to the Department of Business, Innovation and Skills after impressing the party leadership.

But her promotion came on a bad day for female representation in the government with the number of female Cabinet ministers reduced from five to four with the sackings of Welsh Secretary Cheryl Gillan and Environment Secretary Caroline Spelman and the demotion of Baroness Warsi. Lib Dem Sarah Teather also lost her job as an education minister.

Baroness Warsi also held out for a better job before accepting her demotion from the Prime Minister and is still allowed to sit at Cabinet, with the role of deputy to Mr Hague at the Foreign Office and minister for faith and communities. Her deputy, Michael Fallon, who had expected her job, moved to Vince Cable’s Business Department, where Number 10 said he would act as “a voice for business”.

Mr Cameron’s spokesman said the shake-up reflected a shift in focus as the government moves into “the delivery phase” after two years of legislating for reform.

In a surprise move the Lib Dems also gave up representation in the Ministry of Defence with the departure of armed forces minister Nick Harvey.

There were no changes to Lib Dem members of the Cabinet, with Michael Moore staying as Scottish Secretary, Danny Alexander remaining Chief Treasury Secretary and Vince Cable still heading up the Department for Business, Innovation and Skills.

Labour front-bencher Michael Dugher branded the shake-up a “no-change reshuffle”.

He said: “On Sunday, David Cameron promised to ‘cut through the dither’, but today he was too weak to move Iain Duncan Smith from the Department of Work and Pensions and was forced to back down.

“Jeremy Hunt, the man who broke the ministerial code and failed to stand up to News Corporation, is now in charge of the NHS, our most cherished national institution.

“This reshuffle isn’t a fresh start– it’s more of the same from an out-of-touch and failing government that stands up for the wrong people.”