London ? Prime Minister Tony Blair unveiled his Cabinet on Friday, changing leadership in defense and health but keeping mostly familiar faces as he put his Labor government back in business after a third term victory dampened by a reduced majority in Parliament caused by the antiwar vote.

Britain’s Conservative chief Michael Howard, who led his once-mighty party to its third successive defeat, announced his imminent resignation after failing to overcome the perception that his party represented outdated values.

As expected, Blair kept his powerful Treasury chief Gordon Brown by his side as Chancellor of the Exchequer. Brown’s strong stewardship of the economy played a key role in securing the government’s re-election, and he is widely viewed as Blair’s likely successor should the prime minister not serve the full term.

Foreign Secretary Jack Straw, a steadfast ally who has repeatedly defended the government’s decision to back the U.S.-led offensive in Iraq, also kept his job.

Blair’s friend and ally, David Blunkett, a blind man who was forced to quit as home secretary last year after he was embroiled in a messy affair with a married American publisher, was brought back as Work and Pensions Secretary — a key role as the government tries to cope with Britain’s looming pensions crisis.

John Reid, Blair’s gritty, tough-talking health minister, was moved to defense, replacing Geoff Hoon, who becomes the government’s leader in the House of Commons.