Clarke spurns tax cuts to buy election

Kenneth Clarke, the Chancellor, forcefully held the line yesterday against increasingly strident calls from the Tory right for a giveaway budget in a move which overshadowed urgent attempts by John Major to pacify his 1995 leadership challenger John Redwood.

Mr Clarke, obliged to announce a much higher-than-forecast pounds 32.2bn borrowing figure, said that in the November Budget: "It would be wholly wrong to attempt to buy the next election by irresponsible tax cuts and we have no intention of doing so."

Mr Clarke's tough warning that his "main aim" was not just tax cutting shows every sign of being fully supported by the Prime Minister, who has regularly let it be known in recent weeks that the demand for tax cuts must be balanced by the need for quality public services.

Mr Major never the less went out of his way to reassure Mr Redwood - one of those most strongly advocating tax cuts among other policy goals - that remarks he had made to reporters on his flight to Kiev about "reckless and silly" policies had not been a reference to Mr Redwood.

In an unusual move, Norman Blackwell, head of the Downing Street Policy Unit, was authorised to tell Mr Redwood personally that the Prime Minister not only had not been referring to him, but - according to Redwood aides - had also read a weekend newspaper article by the former Secretary of State for Wales and had agreed with much of it.

The latest developments were fresh evidence of tensions between Mr Major and sections of the party which a leading article in yesterday's Daily Telegraph did little to dispel. The pro-Tory newspaper declared the Government a "disaster" and demanded an outright declaration that it would not join a single European currency.

This provoked a characteristically forthright response from the pro- European Chancellor who said: "There are parts of the Tory press which believe that Reaganomics and Euro-scepticism are the answers to everything. Well, they're not."

In the Commons yesterday, Michael Heseltine, the Deputy Prime Minister, backed the Chancellor's insistence that tax cuts would only take place when it was prudent to make them and insisted: "The conditions are now in place to secure a fifth Conservative victory. With excellent economic forecasts and with improving standards in education we shall see the present Prime Minister back in his present job after the next election."

But right-winger, Edward Leigh, MP for Gainsborough and Horncastle, told BBC Radio 4's World at One: "Kenneth Clarke won't admit now that his priority is tax cuts because that would give the impression that he was thinking politically, and he mustn't do that.

"But of course we must have tax cuts. I know there will be tax cuts, there must be tax cuts, because that is the way in which we can make it in our supporters' interests to vote Conservative."