Tory right remains wary of Chancellor

THE CHANCELLOR'S plan for 'growth without tears' did little to quell the fears of Tory right-wingers, and their suspicion of Kenneth Clarke was fed by his repeated assertion that tax increases had to kept as a reserve option.

However, Mr Clarke went out of his way to reassure his Tory critics when he told Channel Four News, before the speech had been delivered: 'I very much am against increasing taxation in order to pay for higher public spending than we ought to engage in.'

The Chancellor also emphasised in interviews during the day that there was abundant spare flesh in spending budgets - arguing there were 'areas of public spending where there's plenty of room for downward pressure', and 'there's a lot that can be restrained'.

The scope for that restraint will be carved out at tomorrow's annual cabinet review of overall spending control totals.

John Major took pains to illustrate his determination to cut into public spending after a meeting on disability benefit yesterday. The Prime Minister told the Commons that in the past decade spending on the benefit had increased from pounds 1.5bn to pounds 6bn-plus, while recipients had doubled to more than 1.5 million. 'Frankly, it beggars belief that so many more people have suddenly become invalid, especially . . . when the health of the population has improved,' he said.

Labour's Shadow Cabinet decided to intensify its efforts to exploit perceived Tory weakness - arguing ordinary families would be paying extra value-added tax to foot the bill for government incompetence and broken promises. Gordon Brown, the shadow spokesman, said Mr Clarke's speech marked no change from Norman Lamont's Autumn Statement - when he, too, had gone for growth.

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