British Finance Chief Ousted in Cabinet Shake-Up

Prime Minister John Major, acting Thursday to “refresh” his embattled government, removed Chancellor of the Exchequer Norman Lamont, who has taken much of the blame for Britain’s long-running recession.

In a shake-up of senior Cabinet ranks, Home Secretary Kenneth Clarke replaced Lamont as the equivalent of finance minister, and Clarke was succeeded by Environment Secretary Michael Howard. Howard, a protege of former Prime Minister Margaret Thatcher, is considered one of the most conservative members of the government.

Lamont, 51, a close friend and political confidant of Major, was fired because of a loss of confidence in him on the part of the financial community. His career had also been plagued by a succession of errors.

Lamont was blamed for the failure of the economy to snap out of the longest recession since World War II and for a series of overly hopeful announcements that economic recovery was on the way. He also had personal problems, among them overdrawing his credit card accounts.

But Lamont, who believes he has been unfairly blamed for the recession, said his policies can only have a positive impact 15 months after their introduction. He reportedly was offered Howard’s old post as environment secretary but decided to resign, leaving in a bitter mood.

A Cabinet shake-up has been a certainty since the Conservatives lost a safe parliamentary seat in a by-election May 6 and were soundly trounced in local council elections the same day.

“I sometimes feel disappointed,” Lamont said Thursday, “but it is human nature to think that there are terribly easy answers to these things, that somehow I personally caused the recession.”

Lamont’s worst week occurred last September during a run on the pound sterling, when the chancellor reversed himself, first raising and then lowering interest rates--and then taking Britain out of the European Community’s currency exchange rate system.

Clarke, 52, the new chancellor, is considered a hard-headed, thick-skinned member of the moderate, pro-European wing of the Conservative Party. He was previously head of the health and education departments.

He is unafraid of controversy--and will face his share of it as he tries to reduce a budget deficit without cutting welfare benefits or raising taxes.

Howard, his successor, is expected to continue the government’s hard line on law and order from the Home Office, which controls police and security forces in the country.