Chief Political Correspondent
A new agenda to revive the Conservative Party will be set out today by the Prime Minister in an attempt to win back disillusioned middle- class voters from the Labour Party.
John Major will respond to Tony Blair's modernisation of his party by telling Conservative supporters at a conference in Birmingham that the worst is over, and that the Tory party is embarking on a new phase of Conservatism to take it into the next century.
In spite of the fiasco over "back to basics", Mr Major will return to the core Tory values on law and order, low taxation and public service. He is hoping his crusade will kill off any lasting threat to his leadership.
He will set out plans to revive voluntary service in the community, reform the benefits system to limit payments to unmarried mothers, and tackle juvenile crime with secure training centres for young offenders.
Michael Howard, the Home Secretary, in a foretaste of the Prime Minister's speech, told the conference: "It is our party and our party alone which understands the concerns of Middle England ..."
Many grassroots Tory supporters at the Conservative Central Council were seething with anger at the media and the Tory Euro-rebels, but they were stoical about Mr Major's leadership. One association chairman said: "Can't these fellows understand what they are doing - they are handing things on a plate to the Labour Party."
Mr Major, in a series of interviews aimed at soothing Tory nerves, said: "Something has profoundly changed over the past few weeks." Several of the things the Government had been doing for a long time were beginning to come together.
"Although people don't yet feel better there is not a serious economic commentator who does not realise there has been a sea change in the economy and that we are better placed than we have been for 30 or 40 years for prosperity and growth ..."
He added: "We have done unpopular things. We are now in a position where we can let the country see the fruits of the things coming through in improving living standards. A good part of the agenda is in many ways complete. We are setting out the strands of a new agenda."
The Government faces renewed criticism today over the final stage of past Budget tax increases, amounting to £1.10 a week for the average family, as a result of the 20 to 15 per cent cut in the married couple's allowance and mortgage tax relief. Kenneth Clarke, the Chancellor, dismissed the increase as no more than the cost of a lottery ticket and gave the clearest hint so far that he will resume cuts in income tax in his next Budget in November.
Mr Major will seek to recapture some of the rhetoric from the Labour leader by insisting that public service, community, and duty were traditional Conservative values. He will tell the conference today: "We Conservatives have not changed our fundamental values for 250 years. Our ambitions and hopes have moved forward but our values have been constant. In 1979 we promised to get Britain off its knees and on its feet, to end hyper-inflation, curb old-style union power, turn around loss-making nationalised industry and begin to spread choice and ownership to everyone.
"We've done that. Now we must turn to the future."
In a counter-attack today at the Labour women's conference in Derby, Mr Blair will say that the Conservatives are "on the run and panicking". Middle- income Britain had been "lied to, cheated and betrayed".
Rebels under fire, page 7