Lady Thatcher denies sleaze: Allegations about Mark Thatcher and Saudi arms deal overshadow Conservative conference

BARONESS THATCHER last night firmly denied any impropriety in the pounds 20bn Yamamah arms contract she negotiated with Saudi Arabia, as the eve of the Tory conference was overshadowed by allegations that her son, Mark, had received pounds 12m in commissions from the deal.

Lady Thatcher, who arrives in Bournemouth today for what would in any event be a high-profile one-day visit to the conference, broke her silence on the allegations to declare she was 'satisfied that the Al-Yamamah contract was properly negotiated between Saudi Arabia and the UK.'

The Tory chairman, Jeremy Hanley, sought to deflect attention and rebut suggestions of further evidence of government 'sleaze'. Lady Thatcher's statement made no mention of her son or his alleged role in the deal. It added: 'She is proud that after a great deal of hard work by ministers and officials (the contract) brought thousands of jobs and billions of pounds of exports to this country.'

Despite a concerted effort by Mr Hanley to refocus interest, Kenneth Clarke, the Chancellor, said he would try to 'improve his factual knowledge' of what lay behind the allegations. And the Tory chairman accepted they might be a suitable subject for inquiry by Sir Robin Butler, the Cabinet Secretary.

Mr Hanley told a news conference: 'If anyone has accusations, if anyone has evidence, they can take them to the appropriate authorities.'

Pressed on whether Sir Robin would be an 'appropriate authority' if there had been a breach of normal standards but no illegality, Mr Hanley acknowledged that 'the Cabinet Secretary would be a proper person'.

Earlier, on BBC radio's The World at One, Mr Clarke said: 'I've read the newspaper reports and I will try to improve my factual knowledge of what lies behind them, how far they are accurate, how far people give explanations. . . I intend to discover as much as I can about the truth of it all.'

The Chancellor said that any 'suggestion of scandal' should be 'stamped out of British politics', but he added: 'It is a bit of a joke to go on from that to say that any political party in Britain is following standards that can really be described as sleaze.'

Lady Thatcher is expected to attend today's local government debate and be on the platform with John Major for Mr Hanley's speech, in what some party leaders are seeing as a fresh endorsement of his premiership.

Mr Clarke, again refusing tax cuts this year, declared in Brussels that he also had no intention of going back 'on our election commitments to the great public services' and start making cuts going beyond eliminating waste.

In a tough speech to party agents last night, Mr Major staked out the ground on which he appears to be planning to fight the next election. Responding to Labour's successful conference last week, he painted the Conservatives as the 'national' party - against constitutional change and believing in a united kingdom and independent within Europe.

Saudi report secret, page 2

Conference reports, page 8

Leading article, page 15

Andrew Marr, page 17

Dear Carol, page 19

(Photograph omitted)