Fowler rallies support for Major

THE CONSERVATIVE chairman, Sir Norman Fowler, sought to shore up the Prime Minister's standing yesterday as rows over public spending and a looming clash on Europe threatened to engulf his jittery party.

'There is no doubt in my mind that John Major will be leading us into the next election,' he told journalists before the Conservative Women's Conference in London. Mr Major had suffered from public 'dissatisfaction in terms of coming out of recession', he said, adding: 'The whole economic recovery needs to progress and organisation needs to be reformed and improved.'

Sir Norman later told the conference that it 'is not a time to lose our nerve', adding: 'John Major is at his very best precisely when the pressure is greatest, precisely when our fair-weather friends have deserted us.'

His comments come as the Government braces for an onslaught from Lady Thatcher tomorrow and Lord Tebbit on Tuesday as the Maastricht Bill goes to the House of Lords. More than 110 peers, including many opponents of the Bill, have asked to speak, although no important votes are likely this week.

Mr Major's declaration on Friday that he is 'staying' failed to defuse the air of crisis surrounding the Government. One of his backbench critics said that a challenge to Mr Major's leadership this autumn - considered highly unlikely until the recent Cabinet reshuffle - could not be ruled out.

The Conservatives received a double rebuff from polls in today's papers. An NOP poll in the Mail on Sunday shows the Government on course for defeat in the Christchurch by-election, with the Conservatives on 38 per cent, the Liberal Democrats on 53 and Labour on 7. A survey in the Sunday Times, conducted after Mr Major's speech, showed that nearly one-third of 52 constituency chairmen, the backbone of the Tory Party, want him replaced as Prime Minister.

Yesterday, ministers sought to dismiss as 'scaremongering' a claim by the shadow Chancellor, Gordon Brown, that the Government was exploring cuts in the pounds 15bn budget for housing, invalidity and sickness benefit. Mr Brown said the Government was considering taxing invalidity benefit, reducing the upper age limit of eligibility, lowering the level of average payment or creating a replacement benefit.

He backed his allegations by releasing a leaked letter from Peter Lilley, Secretary of State for Social Security, to the Financial Secretary to the Treasury, Stephen Dorrell, dated September last year, which argues that the 'taxation of invalidity benefit has been a long-standing policy objective which it has not yet been possible to bring about for operational reasons'. Accompanying notes and briefing papers from officials indicate that the Government was then also considering the impact should benefits be 'frozen or under-indexed'.

In a speech accusing Labour of scare stories 'to frighten the old and the sick', Michael Portillo, Chief Secretary to the Treasury, promised 'extra help for the less well-off in the autumn'.

He said that 'income support, family credit, disability working allowance, housing benefit, council tax benefit and cold-weather payments will all be increased', but pointedly did not rule out tighter targeting of benefits and spoke of 'waste and abuse' in the system. Government borrowing had to be reduced.

Outside the conference hall Mr Portillo said: 'I think we are all very tired of Gordon Brown and his scare stories. It is not serious politics to go around scaring people. I think Gordon Brown should be ashamed of himself.'

But ministers received a reminder of worries from the party's right about the need to control the Budget deficit, with senior figures arguing that tax increases might be necessary.

Lord Tebbit, the former party chairman, said: 'The fortunes of Mr Major are now inextricably linked with those of Kenneth Clarke (the Chancellor). They sink or swim together depending on how effective Mr Clarke is in axeing the deficit and accelerating the recovery.'