Major defiant as turmoil grows

PM scorns talk of leadership battle

John Major last night called on Tory MPs to unite ''in the national interest'' and defiantly dismissed claims that he was under threat as Ministers fought to contain the shock-waves of the Government's crushing Commons defeat.

The Prime Minister compared putative leadership challenges to ''Bunter's postal order - widely talked about but it never actually arrives.''

As Kenneth Clarke, the Chancellor, put the finishing touches to today's new fiscal package to make up the pounds 1bn shortfall left by the humiliating loss of the second stage increase in VAT on domestic fuel to 17.5 per cent, Mr Major told a meeting of business people in London that Tuesday night's Commons decision had been a ''mistaken vote''. Cabinet ministers - some of whom met last night to hear Mr Clarke's recommendations - expected the package to be a mix of indirect tax increases and cuts in capital spending.

Meanwhile Mr Clarke sanctioned a 1/2 per cent interest rate rise to calm the markets after to Tuesday night's defeat.

Mr Major told his City audience he knew of ''no tax that has been misrepresented in such lurid and emotional terms as the tax upon which we lost the vote last evening''.

In an interview with Channel 4 News last night Mr Major went farther than before in leaving the door open for a referendum on British membership of a European single currency - the demand of a growing chorus on the right of the party. Mr Major said it was far too early say if the 1996 conference on the EU's future would merit a referendum, but he acknowledged that the question - ''even further away'' - of a single currency was a ''very significant decision.'' He added: ''I haven't ruled out a referendum.''

But amid signs of Cabinet divisions over whether the rebel MPs who have lost the whip for revolting against the European Finance Bill should be reinstated, the Prime Minister was tough in warning that their return to the fold depended on their attitude to the ''votes that lie ahead''.

The Government accelerated the progress of the European Bill by offering Eurosceptics a modest concession, agreeing to strengthen the powers of the Public Accounts Committee to scrutinise EU spending in the UK. In an unexpected bonus for the Government, the Bill reached its Third Reading - earlier confirmed as a confidence issue - in the early hours of today, completing its Commons stages 24 hours ahead of schedule. With Labour expected to abstain, the Government was set to win the vote overwhelmingly.

Amid renewed rumblings about the leadership, some Tory MPs compared Tuesday's defeat to 1976, when Denis Healey, the Labour Chancellor, suffered five defeats on the Finance Bill. ''Major is a great survivor; he'll struggle on, but we may lose the election,'' said one minister.

Tory MPs were hoping the vote, halting the VAT rise, would bring relief in their constituencies. But the threat of renewed revolt was raised by Nicholas Winterton, the maverick Tory MP for Macclesfield, this time over the Chancellor's cut in protection for the mortgages of the unemployed. Mr Winterton said the party appeared to be in the grip of a ''death wish''. One senior member of the Tory backbench 1922 Committee said: ''We are heading for the rocks. We have got to change tack, and very fast.''

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Sport
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
football
News
Lars Andersen took up archery in his mid thirties
video
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Warehouse Operations & Logistics Manager

£38000 - £42000 per annum: Recruitment Genius: One of the UK's best performing...

Recruitment Genius: GeoDatabase Specialist - Hazard Modelling

£35000 - £43000 per annum: Recruitment Genius: Our award-winning client is one...

Recruitment Genius: Compressed Air Pipework Installation Engineer

£15000 - £21000 per annum: Recruitment Genius: This leading provider of Atlas ...

Recruitment Genius: Operations Coordinator - Pallet Network

£18000 - £20000 per annum: Recruitment Genius: Opportunity to join established...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea