Clarke gets tough with rebels

Kenneth Clarke last night rallied spectacularly behind John Major with a stark warning to Tory rebels that the entire Cabinet and not just the Prime Minister would fall if the European Finance Bill was defeated on Monday.

Undeterred by having to reveal that the cost of Britain's EU membership next year would be pounds 732m more than forecast, the Chancellor raised the stakes for Monday's vote even higher by disabusing backbenchers of the notion that he or another of Mr Major's colleagues would form a government if the Bill was defeated. ``No member of the present Cabinet could honourably take such a course. The entire Cabinet agreed to this proposal,'' he said.

Mr Clarke used his full authority both as the promoter of the Bill and Mr Major's strongest leadership rival to reinforce the threat of a general election - which it emerged last night had been originally agreed at a weekend supper meeting of six senior Cabinet members at Downing Street.

As senior ministers insisted that the Queen would have no alternative but to grant a dissolution if the Bill raising EU contributions were defeated, Mr Clarke told reporters in Westminster: ``If anything silly did happen on Monday the inevitable consequence is the Government would fall.''

Mr Clarke's salvo against the Euro-rebels still trying to hold out against the Bill intensified the frenetic atmosphere in Westminster as MPs sought to absorb the shockwaves of two earlier developments which exacerbated divisions over Europe in the party.

Patrick Nicholls, a party vice-chairman, was forced to resign after a xenophobic newspaper article in which he not only said he wished Britain was outside the EU but suggested Germany's contribution to Europe had been two world wars and France was a ``nation of collaborators''.

Mr Nicholls' outburst had drawn immediate denunciations from a leading rebel, Sir Teddy Taylor, and from Sir Nicholas Bonsor, the Euro-sceptic senior MP who is challenging Sir Marcus Fox for the backbench 1922 Committee chairmanship today.

But the rebels seized eagerly on new figures from Mr Clarke showing that revised forecasts put the total UK contributions to the EU for the financial year 1994/95 at pounds 2,446m rather than the pounds 1,714m forecast in last year's Treasury Red Book. The revised figures suggest the total contributions will rise by pounds 1bn by the end of the century.

The revisions were said by the Treasury to result partly from the difficulty of predicting the scale of Britain's rebate as well as the payments under the Common Agricultural Policy. Mr Clarke emphasised they did not involve the

percentage increases which were agreed at the Edinburgh summit two years ago and are at issue in Monday's debate.

These mean that the ceiling on member state contributions will rise from 1.2 per cent to 1.27 per cent of gross domestic product by 1999 - for Britain an estimated increase from pounds 75m next year to pounds 250m by the end of the century.

Nicholas Budgen, a prominent Euro-rebel, tried last night to challenge the view that the Queen would dissolve Parliament in the event of a defeat for the Bill, saying on Channel 4 News that she did not have ``an absolute right to do so''.

But Mr Clarke was emphatic that the Cabinet believed this was not one of those rare cases - such as the possibility of a minority or coalition government in a hung Parliament - in which constitutional experts would expect the Queen to refuse a dissolution.

Although Cabinet ministers and senior Whitehall sources were swift to deny it last night, the Sunday supper meeting on the weekend before the Queen's Speech is bound to excite speculation that an ``inner Cabinet'' is now guiding political strategy. Although ministers have already indicated that the idea of treating the European Bill as a confidence issue - dubbed a ``collective suicide pact'' by one rebel last night - was orginally floated by Douglas Hurd the previous Thursday, it was at the Sunday evening Downing Street meeting that the first collective decision seek approval from other ministers for the tactic was taken. At the supper were Mr Major, Mr Hurd, Michael Heseltine, Michael Howard, Malcolm Rifkind and Mr Clarke. Richard Ryder, the Chief Whip, was present for some of the discussion.

Ministers remain confident that they will win the vote and there were signs last night that even some hardline rebels were impressed by threats of the whip being removed. MPs were suggesting last night that rebels might even find their local parties under irresistible pressure to deselect them - on pain of being disaffiliated if they did not do so. The erring Mr Nicholls was warned on Mr Major's orders that if he did not resign immediately with an apology he would be summarily sacked.

The Shadow Cabinet agreed yesterday to put down an amendment linking farm price and anti-fraud measures to Monday's motion. But if defeated, they would abstain on Monday while the Liberal Democrats would oppose the Government.

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