The Crisis: Would the real Norman Lamont please stand up?: Stephen Castle attempts to pin down the principles of a nimble politician who is a self-confessed 'sceptic about everything'

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IT HAS been another bad week for Norman Lamont. As the Treasury embarked on an unseemly public row with the Bundesbank, the Daily Mail called him the 'devalued Chancellor' and the Sun described him simply as 'failed'. In the Daily Telegraph's view, 'the antics of the Chancellor of the Exchequer in his efforts to cling to office have provided one of the most distasteful spectacles of the past fortnight'. And these were just the Tory papers. The Financial Times, which advised a Labour vote at the last election, wrote: 'Mr Lamont must go . . . (He) is simply not the man to articulate a new economic policy with conviction . . . why should the country trust him?'

For Mr Lamont, now nearly two years into his Chancellorship, press attacks are nothing new. As one parliamentary friend put it: 'People have speculated about him being moved or sacked for almost his whole time as Chancellor. He was never going to survive the election, he was going to be an instant casualty.' But his Budget cleverly finessed John Smith's shadow budget; the Tories believed that it contributed to their election victory and he stayed.

Nevertheless, Mr Lamont's departure from office seemed a formality two weeks ago when the pound left the European exchange rate mechanism in ignominy. A spirited parliamentary speech helped him survive. But more important, perhaps, were the nudges and winks to backbenchers, reminding them of his scepticism over Europe. If they wanted to stay out of the ERM, it was hinted, perhaps they should not be too hard on Mr Lamont; the alternative could be a true believer. The footwork impressed rivals such as Kenneth Clarke, the Home Secretary.

But does this make him, in the Daily Telegraph's words, 'the unbelievable Norman Lamont'? On 10 July he told the European Policy Forum that the ERM was 'not an optional extra, an add-on to be jettisoned at the first hint of trouble'. Outside it, 'the credibility of our anti-inflationary strategy with businesses and employees would be in tatters'. Those who wanted to come out of the ERM were pleading for 'a free lunch'. Yet, over the past two weeks, Mr Lamont has seemed to be enjoying a lunch of some sort. He would now pursue a 'British policy in British interests', he said, as if to admit that he had not been doing so previously.

What, then, does Mr Lamont really think? Is he, as the Telegraph suggested, a Vicar of Bray? Or has there been a Eurosceptic struggling to get out all along?

EVEN before the recent turbulence, people have seen mysteries in Norman Lamont. The Sunday Telegraph described him as 'a man of paradoxes'. The Scotsman was intrigued not only by his Southern accent but by the anglified pronunciation of his name. He was born in Lerwick, Shetland, in 1942; his mother was a Shetlander, his father, originally from Argyll, was the island's surgeon. After attending the local primary school, he went, aged 10, to Loretto public school in Edinburgh on a scholarship. From there, he went to Fitzwilliam College, Cambridge, becoming part of what is now known as the Cambridge mafia: other aspiring politicians, prominent in the Cambridge Union and in the university Conservative Association at the time, included Kenneth Clarke, Michael Howard, John Gummer, Leon Brittan and Norman Fowler.

By the age of 29, Mr Lamont was MP for Kingston-upon-Thames. For the young chairman of the leftish Bow Group, Europe was not a dirty word. Noman St John Stevas (now Lord St John of Fawsley), who later gave Mr Lamont a job as a Parliamentary Private Secretary, remembers him as 'very pro-European'.

The evening before the Commons narrowly backed the European Communities Bill in February 1972, Mr Lamont hosted a Bow Group dinner for Mr Heath, the Prime Minister, and gave him, as Lord St John recalls, 'tremendous backing'. 'It was such a crucial vote and the dinner was the political equivalent of the Duchess of Richmond's ball before the Battle of Waterloo, although probably not as enjoyable.'

In his maiden Commons speech, Mr Lamont described himself as 'strongly European', but he also stressed the 'ultimate sovereignty of Parliament and therefore the ultimate sovereignty of the British people'.

The crucial moment in the Lamont career came in 1975 when he showed, for the first time, considerable political nous: he abandoned the beleaguered Heath, who was standing for re-election. According to Lord St John, his earlier politics had been not so much Heathite as 'Lamontite'. 'He is a political person and an opportunist. When he sees an opportunity he takes it.' With Norman Fowler, Mr Lamont appealed to Sir Keith Joseph to stand for the leadership. After Sir Keith declined, Lamont wrote to the Times extolling Margaret Thatcher's leadership merits.

With the Tories' return to power in 1979, Mr Lamont began a decade of steady but unspectacular promotion, starting with a junior ministerial job in the Department of Energy, moving through Trade and Industry and Defence, to the Treasury. By the end of the Eighties, he was in the Cabinet as Chief Secretary.

During these years, his views were, for Tories of his generation, fairly conventional. On social issues he was relatively liberal, opposing, for example, capital punishment. On the economy, he was ultra-dry, firmly bound to the flagship Thatcherite policies of privatisation, tax reduction and the share-owning democracy. He was enthusiastically involved in the privatisation of British Shipbuilders, British Leyland and the water boards.

At no stage did Mr Lamont look like a resigner. In 1986, when his boss, Michael Heseltine, stormed out of the Cabinet over Westland, he stayed in office. When Nigel Lawson left the government three years later over Mrs Thatcher's retention of Sir Alan Walters as an adviser, Mr Lamont, then Financial Secretary, spent several hours urging him to stay and fight. In a handwritten letter, he said: 'A resignation would be widely misunderstood and no doubt unkindly it would be noted you had left when there were problems.' He emphasised their mutual beliefs and added: 'There are not many true believers left'.

The final year of Mrs Thatcher's government was dominated by furious internal debate over ERM entry. Mr Lamont's friends claim that he was, in the now-familiar term, a sceptic. But, with John Major (then the Chancellor) pressing for entry, there is no evidence that Mr Lamont opposed it.

Then, in November 1990, came the second pivotal moment of Mr Lamont's career. In the first ballot of the Tory leadership contest, Mr Lamont campaigned vigorously for Mrs Thatcher. He had already turned down Mr Heseltine in a casual, low-key conversation held, rather inauspiciously, outside the gentlemen's lavatories. After Mrs Thatcher stood down, he organised Mr Major's victory with great skill.

Like other Cabinet ministers from the party's right, Mr Lamont was accused of treachery by Thatcherite loyalists, a charge he disputed in an interview with this newspaper: 'Anyone who knows my views knows I would have wanted Mrs Thatcher to carry on.' Baroness Thatcher herself does not seem to regard him as a villain - she has had several meetings with Mr Lamont since her overthrow.

When Mr Major became Prime Minister, nobody was quite sure of his stance on Europe. He asked Mr Lamont whether he was a Eurosceptic and, after brief hesitation, Mr Lamont replied in the affirmative. He became Chancellor. However, Mr Major, according to one version, made it clear that the appointment involved a continuing commitment to the ERM. And, once in the job, Mr Lamont never gave the slightest hint of wavering; indeed, it is said that, at one stage, the Chancellor wanted to keep interest rates higher than Mr Major did. Even when Britain was forced to suspend its membership on Black Wednesday, Mr Lamont at first argued forcefully, in private, for an early re-entry.

SINCE Black Wednesday, Mr Lamont's allies have been arguing that he has never seen the ERM as a point of principle but - like Mr Lawson - as a tool of economic management for controlling inflation. It should be used if the external conditions are right. In the coded language of Tory politics that means no re-entry in the forseeable future and makes Mr Lamont the best Chancellor the Tory right can hope to get.

Undoubtedly the Eurosceptics are right in detecting in Mr Lamont a distate for the culture of European institutions. The Chancellor often returns from ministerial meetings in Brussels fired with scepticism about the great Euro-enterprise. He sees some Brussels activity as humbug. Recently he has taken to quoting complaints from the Danes about a Euro-edict stipulating the maximum size of a Scandinavian apple named the Ingrid Maria. But when one close colleague labelled the Chancellor a Eurosceptic, the answer was enlightening: 'I am a sceptic about everything'.

There is a certain Scottish dourness about him and it casts a long shadow over his television performances. The melancholy image is perplexing to those who know Mr Lamont well and attest, with suprising consistency, to his sense of humour. He is a skilled internal party politician, not a television or conference platform performer. The result, with the notable exception of his recent Commons triumph, is a politician who rarely looks convincing.

But it would be unfair to label him as a man entirely without convictions. In the pre-Major Cabinet he was probably closer to Mrs Thatcher than to her Chancellor. Since then, he has carried the burden of being the most senior Thatcherite minister in a post-Thatcher Cabinet which has a powerful pro-European majority. One of the penalties of being Chancellor is that you must guard your private opinions for fear of affecting the markets.

Can he survive the undoubted tensions of this position? In the short term, the answer is yes. For Mr Major to sack his Chancellor now would be a sign of weakness and panic. Moreover the flak currently directed at Number 11 Downing Street might well be diverted next door to Number 10.

A replacement would be difficult to appoint in the present highly-charged circumstances. Mr Clarke or Mr Heseltine would enrage the Eurosceptic right, Mr Howard would anger the left.

But the long term is another matter. The odds are on a reshuffle next year, perhaps with a switch to the Home Office, although the Chancellor might try to hold out for the Foreign Office when Mr Hurd retires. In the meantime the likelihood is that Mr Lamont's political nous will keep him in the Cabinet.

(Photographs omitted)

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