The rat, the minister and the facts

IT HAD to happen eventually. The Scott inquiry is no longer simply a process of investigation, but has become invaded by rough-house politics at the highest level. Careers and perhaps the future shape of the Conservative government now depend on it: Whitehall is agog as the manoeuvring goes on.

This week Michael Heseltine has sent a ripple through the system, which should remind us that much more hangs on this than simply the career of Sir Nicholas Lyell, the Attorney-General.

Let us, however, start with Sir Nicholas, who was so badly damaged by Mr Heseltine's evidence on Monday. By complaining of 'incredible' advice from government lawyers, and making clear his anger at the Attorney-General's failure to pass on his misgivings to the trial judge in the Matrix-Churchill case, Mr Heseltine has pointed a firm finger of accusation at Sir Nicholas.

This has been a terrible 12 months for the Attorney-General, who, among other problems, was at the centre of a serious parliamentary controversy about legal advice on the Maastricht treaty, and had to apologise for misleading the House of Commons over the Asil Nadir affair.

In his evidence to Lord Justice Scott, Mr Heseltine cheerfully raised the unconnected Nadir affair, reminding the judge and the wider world of Sir Nicholas's role in that, too. Was he twisting the knife? Michael Mates, the former Northern Ireland minister who was forced to resign during the Nadir controversy (which also touched Mr Heseltine), is one of Mr Heseltine's closest political friends.

Nemesis arrives in many forms. Sir Nicholas fears he is being left to swing in the wind by ministers, before being cut down as the ritual sacrifice if the Scott report is hostile. (He is.) His efforts to put his side of the story have been uncharacteristically frantic, and he is determined to defend himself forcefully when he goes before the inquiry later this month.

But he is a lame duck minister until then, and perhaps until the summer. One senior Conservative said yesterday: 'He has received the Prime Minister's full support - in other words, he's finished.'

In the meantime, one wonders how he and Mr Heseltine will be able to sit round the same cabinet table without making eye contact.

The implications of Mr Heseltine's evidence only start with Sir Nicholas, who has few supporters in the Cabinet or the party. Much more serious is what it could do to the others who signed the so-called 'gagging orders' or public interest immunity certificates, including the current Chancellor, Kenneth Clarke. Mr Heseltine was lucky in having been particularly well briefed by an alert civil servant in the Department of Trade and Industry, Michael Coolican, and noticed serious problems with the government case. In particular, he was said to have been shocked by the revelation that the defendants had been working for the British security services. Hence his protests and revolt.

It has not escaped notice in Whitehall that Mr Clarke, then Home Secretary, was the minister whose public interest immunity papers contained most about the security role of the charged businessmen. In other words, if Mr Heseltine smelt a rat, why didn't Mr Clarke? The Chancellor, a shrewd judge of such matters, feels he is on solid ground, because he thought there was a public interest in keeping the role of the secret services secret, one the court would have to consider.

Some of those close to the process agree that Mr Clarke's position was logical and well thought out. But Mr Clarke has said publicly, and perhaps rashly, during the BBC's Question Time, that he would resign if criticised by the Scott inquiry. It is hard to avoid the conclusion that Mr Heseltine's evidence makes it somewhat more likely that Lord Justice Scott will criticise Mr Clarke.

Am I suggesting that Mr Heseltine was trying to cause difficulties for a colleague? Certainly not: the President of the Board of Trade has an absolute right to defend himself in his own words. He cannot be held responsible for how things fall out. He merely laid out a few facts.

But, following his lead, let us lay out some more. If the Scott inquiry goes badly for the Government, it just so happens that that would be a catastrophe for the Tory left, and produce a political bonanza for the right. Among the MPs at the head of the firing line are all the big figures of the centre- left: Mr Clarke, Douglas Hurd, Malcolm Rifkind, William Waldegrave, Tristan Garel- Jones and Sir Nicholas himself. Which, if any, will be seriously damaged remains to be seen. But if the inquiry rakes the Major administration with criticism, it is the left which will suffer the worst wounds and casualties.

Among the ministers who have distanced themselves most effectively from the decisions at the heart of this matter are Peter Lilley, a right winger - and, of course, Mr Heseltine, whose performance put him in such a good light that the Daily Mail cartooned him wearing a halo and virtually declared him to be leader-in- waiting.

It may seem odd to put Mr Heseltine on the right of the party. He was, after all, a bit of an economic interventionist in his day, and is still remembered by the Thatcherites for his central role in her fall. But he has been winning admirers for his stance on a variety of issues, ranging from his enthusiasm for deregulation to his hostility to lowering the homosexual age of consent (he voted for retaining the age of 21, and takes what may be called an old-fashioned view of these matters). His friends argue that the old populist has always been well to the right of John Major. These days, surprisingly, right-wing ministers are singing his praises.

And, unavoidably, one is reminded that should anything unfortunate happen to Mr Major, the right of the Conservative Party has no really plausible candidate to stand against Mr Clarke. Could Mr Heseltine become their man? The best politicians are those who barely seem to act, but for whom things happen to turn out well. Might the parliamentary party rally to Mr Heseltine, particularly if other possible successors had been tarnished?

There are plenty of conditionals in all that. We have come a long way from the slow sifting of the Scott inquiry, and journeyed far into the land of wild surmise. But that, after all, is a place where politicians live, too.