She will become deputy to new chancellor of the Duchy of Lancaster, Alan Milburn, the former health minister who takes charge of developing the Labour government’s policy for the next General Election.
Kelly will also take on Douglas Alexander’s responsibilities at the Cabinet Office.
As a close ally of chancellor Gordon Brown her move in the government reshuffle should ease his worries about losing total control of the manifesto to Milburn, considered an arch-Blairite.
Her job at the Treasury goes to Stephen Timms and his job as e-commerce, energy and competiveness minister is given to Mike O’Brien.
O’Brien’s post as minister of trade at the Foriegn Office and Department of Trade and Industry goes to Alexander.
Transport minister Kim Howells gets Alan Johnson’s job as higher education minister after his promotion to Work and Pensions secretary, replacing Andrew Smith who resigned earlier this week.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements