Ministers in effort to display Tory unity

(First Edition)

CABINET ministers yesterday attempted to paper over the cracks that divided the Tory party over taxation and a single European currency on the eve of the Conservatives' annual conference in Bournemouth.

As the Prime Minister's leadership was put to the test, Lord Tebbit, the former party chairman, led right-wing demands for John Major to give the party a lead. He warned the Cabinet to stop appearing to 'face two ways' on a range of issues from European union to law and order.

Reinforcing that message, the Thatcherite Conservative Way Forward group defied Kenneth Clarke, the Chancellor, by demanding a 2p cut in income tax in his November Budget, which he had ruled out. Every effort had to be devoted to winning back the traditional, middle-class Tory voters, said Sir George Gardiner, Tory MP for Reigate, in the group's conference magazine, Forward.

There was growing pressure on Mr Major from right-wing ministers and backbenchers to abandon the Government's neutrality about the single European currency and commit Britain to opposing it.

But Lord Howe, the former Foreign Secretary, and Sir Edward Heath, the former Prime Minister, led the anti-Thatcherite charge in warning against a shift to the right.

Lord Howe, in an interview for the Tory Reform Group, expressed disappointment about Mr Major's failure to give a stronger lead in fulfilling his pledge to keep 'Britain at the heart of Europe'.

'The central thrust of our policy has to be devoted to participation in the European Union,' Lord Howe said. 'I think we have to recognise that a point may come when the threat of a veto will not serve to prevent the emergence of a more committed group of member states going ahead on their own.'

John Redwood, the Secretary of State for Wales, who will be guest of honour at a Conservative Way Forward dinner on Wednesday, was cooler on the prospect of European union while sticking to the Government's line of neutrality in the ITV Walden programme. Simultaneously, Virginia Bottomley, on BBC radio, and Stephen Dorrell, on BBC television, were denying splits in the Government.

The conference could prove decisive in the direction that the Tory party goes in its response to the appeal of Tony Blair and the Labour Party to middle-class voters.

A Conservative Party adviser, Danny Finkelstein, also warned against the Tories reacting to Mr Blair by swinging to the right.

He said: 'A shift to the right would be very dangerous. The Conservative Party must not allow Tony Blair's claim that Labour are the mainstream party to push the Conservative Party out of the mainstream. The party must set its own agenda.'

Mr Finkelstein, a former SDP member, who was brought into Central Office at the last election, said: 'The first step is to recognise two things about Tony Blair's speech: that it was politically brilliant; and that it does represent a real change in the Labour Party. No Conservative response can avoid these two facts . . .

'The critical thing for the Conservative Party is they have to speak to the electorate, not internally to the party. Part of the strength of Blair's speech is he was able to speak over the heads of the Labour Party.'