The Week In Westminster: So now we know, Lilley is for turning after all earns the wrath of Tory faithful

THE DEPUTY leader of the Conservative Party, Peter Lilley, has faced a barrage of almost universal criticism and ridicule from Tory backbenchers and several members of the Shadow Cabinet for his change of tone towards health and other public services.

His speech, given earlier this week for true believers to celebrate (slightly early) the 20th anniversary of Baroness Thatcher being elected prime minister, was certainly ill-timed. Emphasising that there is more to life than defending and extending the free market he declared: "There are distinct limits to applying the free-market paradigm in the public services."

The speech had the full approval of William Hague but harsh criticism of it came from Eric Forth and Edward Leigh of the No Turning Back Group, who led the attacks on him at the 1922 Committee.

Mr Lilley is still a member of the group, of which he was a founder member in 1983, but he failed to attend its monthly dinner two days after the speech and members were angry that he was kicking away the Thatcherite ladder, up which he had climbed to prominence. Even Alan Duncan, a close friend of Mr Hague, was furious that Mr Lilley had cut the ground from under his feet.

Only three weeks ago, Mr Duncan, a health spokesman, issued a Central Office press release of a much-praised speech on health care he had given to the Social Market Foundation.

In it he said: "The NHS cannot do everything, so there will always be more to be done. This requires us to define a Conservative philosophy of health care ... we need to add a thriving personal sector to the public sector NHS we already have."

Mr Lilley himself has a mass of words for eating, not least in the lecture he gave in 1989 just before he secured his cabinet place. Speaking on "Thatcherism - The Next Generation" he dealt with market forces in the public sector services. He said: "Every individual is a market force. It is true that the principles of choice, reward for quality and devolution of responsibilities have not been allowed to operate within the state health and education systems. But it is not clear why these principles should be anathema."

Tuesday's pounds 125-a-head dinner at the London Hilton Hotel for 1,000 of the faithful was like a revivalist rally for the ancien regime but only included 22 Tory MPs.

The meal was held to mark (two weeks early) theanniversary of the Conservatives coming to power in 1979 and everyone, including Sir Edward Heath, was on their best behaviour.

Revealing that she could never have made it to the top without her husband, Sir Denis Thatcher, "let alone go on and on and on", Lady Thatcher described his reaction when she told him she intended to seek the party leadership. "He said, `Good Lord! You must be mad, but I'll support you all the way'." Lady Thatcher continued: "I suspect that Ted Heath would agree with at least half that statement."

There was something for everyone in a speech that recalled the glory days but offered strong support to the Government on the Balkan war. Both John Major and Lord Hurd of Westwell, who were absent, faced strong implied criticism.

"Appeasement has failed in the Nineties as it failed in the Thirties," she said. "For eight years I have called for Serbia to be stopped. The West could have stopped Milosevic in Slovenia or Croatia in 1991 or in Bosnia in 1992."

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ATTEMPTS BY this column to obtain speeches, lectures and articles, written by Peter Lilley during his Eighties days as an unreconstructed Thatcherite, drew a blank at Conservative Central Office.

Presumably, to rewrite history and erase all memories of his past policies and speeches, the party bookshop, which was once housed in the reception area at Smith Square, has been abolished. Frantic searches for old No Turning Back Group pamphlets and Centre for Policy Studies lectures given by Mr Lilley ended, finally, with a single phone call to Labour's Millbank headquarters.

Within minutes a thick wad of such publications landed, with a thud, at The Independent's nook in the Press Gallery. All carefully indexed with the Labour Party Library stamp, they are now more likely to be read by Labour ministers, as old Tory favourites such as the Private Finance Initiative for Hospital Building, stalled under the Tories, gain fresh momentum under this Government. Students of free market economics are now beating a path to Millbank, which has one of the best libraries of past Conservative Party publications.

Labour Party officials refuse to be drawn, however, on whether copies of the old Labour constitution - complete with Clause Four - were also still available.

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