Christchurch By-Election: Fowler takes firm line over VAT on fuel: Tory party chairman rules out taxation U-turn on eve of polling day, despite pensioners' fears

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A U-TURN on the imposition of VAT on fuel bills was ruled out by Sir Norman Fowler, the chairman of the Conservative Party, on the eve of the Christchurch by-election today, where the Tories are heading for a humiliating defeat.

The decision in the last Budget by Norman Lamont to impose 8 per cent VAT on domestic fuel bills from next April, with an increase to 17.5 per cent in future years, has been one of the main reasons why the Tories are in danger of losing one of their safest seats in the country.

Mr Lamont's successor as Chancellor, Kenneth Clarke, is understood to be reviewing the decision to increase the VAT level next year. But Sir Norman yesterday said there would be no change in policy. 'No - the policy has been set out and that is the policy,' he said.

Diana Maddock, the Liberal Democrat candidate, finished the campaign as she started by attacking VAT on fuel. Her campaign is promising to shift the tax burden on to income tax, which does not worry the constituency's many pensioners.

In Ferndown, the contrast between the two campaigns became clear: the Conservative Party chairman gave a pep talk to a baffled squad of grey-haired party workers in a shop-cum-office, while Mrs Maddock was out of on the street, consolidating support among the shoppers.

The Tories have been on the defensive from the outset and avoided bringing to the campaign two ministers reviewing welfare spending, Peter Lilley, the Secretary of State for Social Services, and Michael Portillo, Chief Secretary to the Treasury.

Support was still swinging in Mrs Maddock's favour yesterday. The Rev Alastair Menzes, a retired vicar, told her that he had voted Conservative at the general election but was thinking of voting for her today in protest at falling interest rates, which have cut pensioners' incomes.

However, there was a ray of hope for the Conservatives about the next election. 'My fear is that if the Conservatives fell flat, Labour would get in. The thought of the Labour Party in power in this country is driving me up the wall,' he said.

The fear of 'letting Labour in' will have little effect on the hordes of Tories threatening to vote against the Tories today. Sir Norman sought to absolve the Prime Minister and the Tory candidate, Rob Hayward, from blame for the mass protest vote.

The party chairman said the Prime Minister had kept his nerve during the general election and had been proved right, against the opinion polls. He had also shown courageous leadership last week in tabling the confidence vote, Sir Norman said.

In Christchurch, Mr Hayward is being made the scapegoat and risks being dropped before being given the chance of winning it back at the general election. The party chairman gave the clearest message to the local party workers yesterday that he does not want Mr Hayward dropped, if, as expected, there is a Liberal Democrat landslide tonight.

Some within the party have continued to criticise him behind his back, saying he was not right for the seat, because he was divorced and too much of an 'urban' Tory.

They would have preferred Barbara Ashford, a local Tory. There were also suggestions that the speed of selection stopped other strong candidates, such as ministers who lost their seats at the general election, from being considered. Party officials strongly deny this, and say privately ex-ministers refused to stand because they knew the protest vote could lose the Tories the seat.

1992 election result: R Adley (Con) 36,627; Rev D Bussey (LD) 13,612; A Lloyd (Lab) 6,997; J Barratt (NLP) 243; A Wareham (CRA) 175. C Maj 23,015. Electorate 71.438. Turnout 80.7 per cent.

(Photograph omitted)