'Liberated' Lamont offers broad vision of taxation: As the Tory party conference opens today, the former Chancellor talks to Donald MacIntyre about loyalty, leadership and policy differences leadership challenges

NORMAN LAMONT makes no bones about wanting, one day, to return to high office. Ask him if he sees himself as a Cabinet member sometime in the future, and he says he has never thought of being a minister as 'the only thing in life' or that to be an MP is not as important as holding office.

He adds: 'I enjoy being part of the House of Commons. I've always regarded that as just as important as holding office. Yes, I would like to hold office in a Cabinet again, but I am quite enjoying the interval.'

And so it would appear. After a weekend in which he has received nearly as much publicity as if he were still Chancellor, and during which he was obliged to deny a Sunday newspaper report that he might trigger a leadership contest next year, he appears remarkably relaxed.

He certainly is not miserable out of office and quotes Shakespeare: 'Life's a jest/ and all things show it./ I thought so once/and now I know it.' He has more time for his family and friends.

He admits to 'a sense of liberation' after his dismissal as Chancellor. He did not take the Environment post John Major offered him instead 'because I was doing the job I wished to do and I didn't wish to do any other job'.

And after 14 years with a ministerial car, he even says he likes travelling on the Tube. He says he gets a 'very warm welcome' from the travelling public. 'The British people are very fair. They may criticise someone in office but once you're out of office, they couldn't be kinder or nicer.'

The same is unlikely to be true of former colleagues. The Tory high command is waiting with frayed nerves for the speech he plans to make to the Bow Group on the same day that his successor, Kenneth Clarke, addresses the Tory conference in Blackpool.

Every intervention he makes, given the turmoil in the party, is radioactive. So how does he see his role? He is not, he insists, the 'crabbed and bitter' figure he keeps reading about in the papers.

'I certainly have no intention of griping or whingeing, but equally I think I have a perfect right to speak out on issues of the day as I see them.'

He does not, he says, want to make personal attacks. But does he now see himself as the leader of the backbench right? To this he will say only that loyalty is 'very important - loyalty to one's party and to the principles of the party too. I have strong views about issues and given the freedom of the back benches I certainly intend to address them.'

Mr Lamont is firm in opposing Baroness Thatcher's idea of a further rule change for leadership challenges. Going out of his way to stress that he did not want a leadership election, that he expected Mr Major to lead the Tory party in the next general election, he pointed out that, if Lady Thatcher had her way, Neville Chamberlain could not have been replaced by Winston Churchill. 'I remember Margaret Thatcher's reluctance to change the rules when she was prime minister and, ironically, if the rules that existed then had been changed to what they are now - and they are very different - there might never have been a leadership challenge against her.'

He had urged that, he says, 'but she and her office were not very interested in that argument at the time'. Again he emphasises this is 'academic and irrelevant' at present because there is 'no vacancy'.

On Thursday he will repeat that any further deficit-reducing measures should be by spending cuts and not by more tax increases.

'I have already announced increases in taxation of pounds 6bn and pounds 10bn the following year. Those are very considerable increases bearing in mind our pledges and our aims. I think we should think very carefully before going beyond that.'

But was not the spending ceiling of pounds 253bn fully endorsed by him and the Cabinet when he was Chancellor? He adds: 'These totals are not set in stone for ever. They are reviewed each year and they can be adjusted.'

Where would further cuts come from? 'Well I certainly think we must get to grips with the problems of social security, which is an area which accounts for a high proportion of total spending, and I believe the area of disability entitlement is one in particular.' What about defence? 'Well, nothing is immune.'

He is unrepentant about causing what will be probably the biggest grievance among grassroots delegates this week - the imposition of value- added tax on fuel. The case for it, he says, was 'overwhelming'. Britain was the only country in Europe without it; the CO2 emission level had to be brought down to 1990 levels by 2000; and the deficit had to be attacked.

The biggest political problem stemmed from deferring it, but he had done that so as not to jeopardise 'an economic recovery which did not look as firm or clear then as it does now'. But he is against accelerating the two-stage imposition now as some have suggested because of the 'overwhelming' need to control inflation.

In principle, he confirms, he believes 'everything should be taxed'. But to extend VAT to other goods like food, children's clothes or transport now would be to go 'from one political storm to another'. He adds: 'Having chosen one alternative, one would be well advised to stick to that chosen one.'

So has he more to say about Black Wednesday? 'I've written my article on that and that's that.' For ever? 'I may, as people know, write a book that will obviously cover my whole period as Chancellor.' And when would that come out? 'I really don't know.'

He says he has made it 'absolutely clear publicly' that he has no intention of standing for the leadership. 'I made it publicly clear that I expect John Major to lead us into the next election and I don't think people in the Conservative Party wish us to go on having these weekly stories and speculation.

The Prime Minister, he adds, 'will, I am sure, have a very successful conference. He will get a good welcome. There is a tremendous thirst for unity and some exhaustion after the Maastricht divisions. What the Prime Minister, I am sure, will want to do is not make a personal appeal, but to spell out the policies and strategy and show we have firm leadership. I am sure he will succeed in that.'

But if there is such a thirst for unity, why is he saying things directly at odds with Mr Clarke on tax and spending. 'I suspect in the end the Government will agree with me, and I certainly hope so.'

On Europe, he now says that Mr Major has shifted his stance since he called on him to repudiate monetary union last month. 'I interpreted (the Prime Minister's) article in the Economist as a shift, as I also interpreted other speeches by Cabinet ministers.'

He found, he says, Mr Major's article 'very sensible and congenial'. He adds: 'The truth is that the Maastricht rebels have had a very considerable impact on the Conservative Party, and it would be impossible for any Conservative leader to move along the path toward monetary union with a united Conservative Party. I think that was what the Prime Minister was saying in a roundabout way.'

Yes, he acknowledges, there are differences on Europe, for example, between him and Mr Clarke. But he adds: 'The reality is that the ERM has virtually imploded on itself.'

He notes that Mr Major has talked about reviving the idea of the 'hard Ecu' and adds, on Europe: 'Events often bring people of different views together. The old incantations and formulas are now out of date. It all has to be rethought. We have to go back to the drawing board. I don't believe it will be easy to proceed on the Maastricht timetable and the Prime Minister has made it crystal clear he agrees with that.'

He has been reading a biography of Charles James Fox. 'I don't know why the British like failures so much.' He is on the second volume of Robert Skidelsky's life of Keynes, which has reminded him that 'the gold standard is as misrepresented and as misunderstood as the ERM' and that Winston Churchill was a better Chancellor than he was given credit for, 'but then history is written by Whigs'.

He is delighted to be back at N M Rothschild, expecting to deal with foreign governments and to work on asset management and eastern Europe. 'I am very serious about it and I want to make a success of it.' He misses the Treasury but, if there is an institution like the Treasury, it is a British merchant bank; 'plenty of first-class minds and a great variety of things to do'.

Mr Lamont is clearly anxious - at least until Thursday - not to make more waves than he has already. But did he not have Mr Major in mind when he said this was a Government in office rather than in power?

'I've no intention of going over things I've said in the past. I would add just this one comment: that whatever I may or may not have said, if anyone thinks I'm devoid of any affection for the Prime Minister, then they're mistaken. After all, I did help to create him.'

(Photograph omitted)

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