Britain: Where Now? Walking Over the Viper Pit: Donald Macintyre and Stephen Castle on a week when Tory venom stood politics on its head

ON WEDNESDAY morning, returning from a meeting in London's Piccadilly, Lord Tebbit, once the Tory the trade unions most loved to hate, walked into the miners' demonstration against pit closures. A miner rushed up and demanded to shake his hand. 'You're dead right about Germany,' the miner said. 'We should be looking after our own industry.'

The encounter symbolised a week in which politics turned upside-down. In which the Government staged the biggest industrial U-turn since Edward Heath, faced with the Upper Clyde Shipbuilders occupation in 1972, reversed his policy of abandoning industrial 'lame ducks'. In which ministers became so nervous about their Commons majority that they indulged in what can only be described as pork-barrel politics. In which the Prime Minister - apparently without the prior knowledge of most senior Treasury officials - announced yet another about-turn on economic policy. In which he sharply raised the stakes over the Maastricht Bill, apparently threatening first his resignation and then a general election if Tory backbenchers pulled off their threat to defeat it.

No wonder that Cabinet ministers were moved to colourful metaphors. One, talking about negotiations on Maastricht, said he felt like a 'man walking over hot coals covering a deep pit filled with vipers'.

BY last Sunday morning, it was clear that the backbench vipers were capable of inflicting a humiliating defeat on the Government over the proposals to close 31 pits. The scale of public reaction to the announcement by Michael Heseltine, President of the Board of Trade, had been faster and more furious than anything provoked by the poll tax. John Biffen, the former Cabinet minister, had known nothing like it in more than 30 years in Parliament. One new Tory MP found that eight of his constituency branch chairmen had resigned. MPs were getting letters by the hundred and, according to one, these were 'proper letters, type-written, correctly spelt, predominantly from natural Tories, businessmen who had voted Conservative'.

Richard Ryder, the Chief Whip, warned that the line could not be held. An informal meeting of senior Cabinet ministers, including Mr Heseltine, agreed on Sunday night that concessions would be made. The full Cabinet met in emergency session the following morning to thrash out a retreat.

Afterwards, John Major went to the Carlton Club for lunch with the executive of the backbench 1922 Committee - an occasion which assumed far greater significance than could have been imagined when it was organised in July. Europe was discussed over the salmon mousse, the economy over the lamb chops and coal over the chocolate dessert. Mr Major listened sympathetically, assuring those present that their concerns over coal would be met. The top echelons of the 1922 Committee went away in good heart.

Then things began to go wrong. Mr Heseltine's Cabinet colleagues say they were convinced that they had agreed a full-scale review - though not its fine details - at Sunday night's meeting and on Monday morning. The 1922 executive believed that a review was what the Prime Minister had promised. But Mr Heseltine, in the charged atmosphere of the Commons that afternoon, was, by turns, nervous and aggressive. Ten loss-making pits would still be closed after statutory consultation. The other 21 were granted a three-month 'moratorium' for 'widespread consultation'. Only in reply to questions did Mr Heseltine use the word 'review'. No mention was made of a detailed inquiry, still less an investigation by the Trade and Industry Select Committee. Many backbenchers came away with the impression that the moratorium was merely to allow the Government to set out a more convincing case for the decision it had already made.

That was not enough to quell the Tory mutiny. And, when the 1922 executive met Mr Heseltine on Tuesday morning, they called for a commitment to a thorough review that could take energy policy into account. Within hours, Mr Major was telling MPs at Question Time that Mr Heseltine would aid a Select Committee inquiry and look at the mining issue 'in the context of the Government's energy policy'. Lord Wakeham, leader of the House of Lords, announced that the review would be 'full and open', including the question of the electricity companies' switch to gas and the level of coal imports. In committee room 14 of the Commons, Mr Heseltine gave backbenchers a similar message. Occasionally, he showed exasperation over the revolt. He brandished the front page of the Independent on Sunday business section of 30 August, headlined 'British Coal to axe 25,000 in closure of 30 collieries'. How, he asked MPs, could they claim to be oblivious of the impending announcement? But, he assured them, they would have another opportunity to vote against his plans in three months' time if his revised proposals proved unacceptable. Now, he said, was not the time to vote against the Government. Most of those present were impressed by his performance.

Nevertheless, Mr Heseltine, knowing that a defeat in Wednesday night's Commons debate could finish his career, was leaving nothing to chance. Throughout Tuesday, he worked relentlessly on his fellow MPs. This was not the dazzling Heseltine of public fame but a man playing, as one MP put it, 'a Geoffrey Boycott innings of sheer graft'. Spencer Batiste, MP for Elmet, for example, was granted several meetings with Mr Heseltine. The Prince of Wales pit in Castleford - just outside his constituency - was one of those covered by the moratorium. But development work had been stopped, Mr Elmet told Mr Heseltine, and this threatened the pit's viability. From his office at the Commons, Mr Heseltine rang his officials and ordered them to investigate. Within two hours, development work resumed.

At least one MP was bought off by promises that the Government would look sympathetically at a building project in his constituency that had nothing to do with mining. 'What can you do,' asked one backbencher who originally had been determined to defy the Government, 'when you have a shopping list of 12 items and you're offered 14?'

By now, the joke circulating in the members' lobby was that Mr Major had hoisted the grey flag.

BUT the day was not over and Mr Major had a surprise up his sleeve. He called the television cameras to his temporary offices at Admiralty House and gave live interviews to the Nine O'Clock News and News at Ten. He used them, not only to defend the Government's new position on coal, but to announce an unexpected shift in economic policy - unexpected not just to backbenchers and journalists but, it seems, to most Cabinet ministers, too.

Since Black Wednesday, when Britain left the European exchange rate mechanism, there had been tension within the Cabinet. The Euro-sceptics, led most prominently by Michael Howard, Secretary of State for the Environment, preferred to keep out of the ERM indefinitely and cut interest rates sharply in the hope of boosting the economy. The pro-Europeans, led by Mr Heseltine and Kenneth Clarke, the Home Secretary, argued that interest rate policy should allow an early return.

Until the furore over coal, it seemed that the advantage lay with the pro-Europeans. Despite his own Euro-scepticism, Norman Lamont, the Chancellor, had made it clear to the Tory Party conference and to the Treasury select committee that the conquest of inflation remained the priority. Interest rates, therefore, had been cut by only 1 percentage point since Black Wednesday.

A week last Friday, as the coal rebellion gathered strength, interest rates were cut by a further point. It was becoming clear that the pit closures were the catalyst for deeper worries about the economic situation. One backbencher said that a typical letter on the closures 'would say in the third or fourth paragraph 'how could you do this when unemployment is so high and there are no jobs to go to?' or complain about a void in economic policy'.

Sarah Hogg, the head of the Downing Street policy unit, had already put the need for a change of emphasis to the Prime Minister. According to one account, Gillian Shephard, Secretary of State for Employment, made a strong case for relaxation of economic policy at Sunday night's meeting of ministers. The following day, the emergency Cabinet discussed the need for growth in the broadest terms. But ministers - even those in the economic departments - did not feel, as they left the meeting, that they had approved a fundamental redirection of policy.

Nevertheless, neither industry nor the Tory party was in any doubt that, by announcing a 'strategy for growth' on Tuesday night, Mr Major was giving the green light for steady interest rate cuts. Further, at a briefing that evening, a senior Downing Street source said that, though exchange rates would be taken into account if the pound went into free fall, there would be no exchange rate 'target'. Mr Major had, in effect, ruled out an early return to the ERM.

Newspapers hurriedly changed their headlines for the following morning, replacing 'new pits U-turn' with 'Major comes out fighting'. Downing Street took pride in its success.

The Treasury, however, at first played down the shift in emphasis. Mr Lamont's allies insist that there had been telephone discussions between the Chancellor and the Prime Minister on economic policy over the previous weekend. But Mr Lamont had certainly not alerted his officials. On Wednesday morning Mrs Shephard's office asked the Treasury for a briefing on the policy change, to be told there was none. Mrs Shephard had to make do with a transcript of Mr Major's TV interviews.

The economic policy shift may have been short on detail but it allowed ministers to face Wednesday's Commons debate on the pit closures in a better atmosphere. By now, the Whips were confident that they had done enough to ensure a government majority. At first, Mr Heseltine seemed to be faltering again. 'It looked', one former minister said, 'as if he was reading a straight departmental brief which he had not had time to work on.' But, when he ditched most of his speech and began a shameless attack on one Labour council for importing foreign coal, it was the old, swashbuckling Heseltine. He sat down to Tory cheers.

The Government still needed to be absolutely sure. In the wind-up debate David Hunt, the Secretary of State for Wales, promised that Ulster would get what Northern Ireland MPs have urgently sought - an energy interconnector with Scotland. The official version was that the decision had been agreed in Cabinet but few at Westminster doubted that a deal had been struck through the 'usual channels' to ensure eight Ulster Unionist abstentions. The Government's majority was cut to 13.

THERE were no victors on the government benches, only survivors. Mr Heseltine's future, inevitably, is being questioned. Some MPs believe that, if he has to reprieve significant numbers of threatened pits in the new year, he will not be able to remain in his present post. But, whatever happens, there can be no question of his leaving the Cabinet. Even a weakened Mr Heseltine is too formidable a figure for Mr Major to risk on the back benches. Mr Lamont, who played no public part in last week's shift of economic policy, remains a good deal more vulnerable in a reshuffle.

Mr Major's future remains the subject of fascination and speculation. On Friday, a Mori poll for the European found that he had the lowest public popularity of any prime minister since polling began. Yet, if anything, he looks stronger after the events of the past 10 days, partly because the pit closures have weakened one of the few alternative prime ministers. His mood as he flew to Egypt on Friday night was upbeat and relaxed.

From his point of view, last week's debate had the merit of releasing pent- up Tory frustrations over the economy. But the 'strategy for growth' is far from clear. Mr Major has said that job- creating capital projects will have a new priority. How much of a priority will depend on whether he can persuade the Treasury to relax the rules on private funding of public projects.

Whatever the outcome, the months ahead are fraught with hazards: if the Chancellor's autumn statement gives priority to job-creating projects, Mr Major may have to risk further parliamentary trouble over public sector pay freezes or social security cuts. The council tax, too, is a huge potential hazard, particularly if the spending round limits central government's capacity to cushion its impact.

And above all there is Maastricht. Here, the shift on economic policy may help, according to some ministers, because it will allay backbenchers' fears that Maastricht is a back-door route for a return to the ERM.

But, in other respects, the stakes were raised last week. First, Mr Major talked of how, if the party did not trust him on Europe, it would have to find somebody else to lead it. Then the 1922 committee executive, the smell of blood fresh in its nostrils after the pit closure climb-down, indicated that it wanted the Maastricht Bill delayed until the new year. This is a point on which Mr Major will not compromise because he believes that, when he goes to the Edinburgh EC summit in December, he must be seen to have begun the ratification process.

By Friday, as the sounds of the pits battle faded away, the Maastricht drama was gathering pace. Lord Tebbit said in a radio interview that if Mr Major wanted to resign over Europe the Tories would find a new prime minister. Within hours, the message from Downing Street sources was that, if Mr Major were defeated on the Bill, it might not be a matter of resignation but of a dissolution of Parliament and a general election. Any such suggestion could well persuade even the pro-Europeans on the Labour front bench that they should find some way of voting down the Bill.

Like rival nuclear powers, Mr Major and the Tory rebels were moving towards a balance of mutually assured destruction. Britain's future, as well as the Prime Minister's, may depend on whose nerve cracks first.

(Photographs omitted)