Major rallies Tory troops for election push

DONALD MACINTYRE

Political Editor

John Major last night sought to consolidate his leadership victory in an impassioned call for "every backbencher, every party activist" to do everything in their power to rebuild support between now and the general election.

In an end of term speech to more than 80 members of the 1922 committee, he declared: "There are 94 weeks before we must call the general election, 94 weeks to re-establish our support, 94 weeks to expose the dangers of Labour, 94 weeks to safeguard the work of 16 years."

In a speech which laid strong emphasis on policy to reinforce the family as the "core economic and social building block", and on measures to make Britain the "enterprise economy of Europe", Mr Major issued what amounted as a call to arms against the "dangerous naivety" of Labour policy.

Unruffled by apparent Cabinet tensions over the development of ideas for tax cuts, Mr Major once again went out of his way to stress his long- term commitment to ending inheritance and capital gains tax.

Kenneth Clarke, the Chancellor, yesterday dismissed suggestions that John Major and Michael Heseltine were trying to seize control of taxation policy as Labour gleefully sought to exploit what they saw as a Downing Street-Treasury split over Mr Major's views on inheritance and capital gains tax.

The Chancellor told the Commons firmly: "I do not see the faintest difference. I remain in charge of economic and taxation policy with the full support of the Prime Minister." But Gordon Brown, the shadow Chancellor, insisted later that Mr Clarke had failed to add his own personal endorsement to his rehearsal of what the Prime Minister had said in speeches about eventually abolishing inheritance tax.

Mr Brown said that 2,000 inherited estates would enjoy 50 per cent of the benefit (around pounds 700m) of abolishing inheritance tax, and that 2,500 individuals and trusts would enjoy 55 per cent of the benefit of abolishing capital gains tax - at a rate of over pounds 250,000 each.

He also pointed out that last year Sir Terence Burns, the Permanent Secretary at the Treasury had warned "if there was a different tax regime for capital than for income, a good deal of money which is currently being declared as income would find its way into capital. You generate a loophole."

Mr Major's speech made only brisk reference to the leadership contest saying it was now behind the Tories. He said of Labour: "The rhetoric may have changed" but the "gut instinct" of the Labour Party had not.

And in an apparently deliberate effort to suggest that Britain would not regard itself as a merely European trading nation Mr Major said that he wanted to see the UK as "a globally competitive trading nation in which companies and industries are able to compete in markets all over the world".

Mr Major was specially warmly received when he promised that Britain would use its veto to maintain border controls, and when he told the MPs that, while it was not for politicians to interfere in personal morality, "we need to explore practical ways of reinforcing the family as the core economic and social building block".

Mr Major singled out Peter Lilley, Secretary of State for Social Security, for his work in tackling benefit fraud. And he promised a continuing drive to cut public expenditure.