Lamont says Major will lead Tories to election victory: Former Chancellor pledges loyalty and denies personal ambition

JOHN MAJOR will lead the Tories into the next election, Norman Lamont, the former Chancellor, said yesterday.

At his first public engagement since allegedly describing the Prime Minister as 'hopeless' in a Times interview, Mr Lamont also said the Tories would win the next election after further tax-cutting budgets.

'I do support John Major. He has the support of the Conservative Party. He will lead us into the next election and he will win it,' he told foreign correspondents in London.

Mr Lamont made his appearance at a press conference before lunching with the Foreign Press Association. He said he wanted 'everything to be on the record' and had 'no criticism whatsoever' of the Prime Minister's back-to-basics campaign. 'What I was alleged to have said I did not say.'

He denied any ambitions to replace Mr Major. 'I have no intention of running for the leadership of the Conservative Party. I have made that clear, again and again. I rule it out.' Would you rule it out forever? he was asked by the Sun. 'I rule it out.' But would you rule it out forever? 'I rule it out,' he said.

Told that did not sound categorical, he said: 'It is categorical. I have ruled it out . . . Ask me in another 10 years.'

With his Kingston-upon-Thames seat disappearing in boundary changes, Mr Lamont said: 'My first priority must be to retain my seat in Parliament. That is my main aim and my main wish. I enjoy being an MP, I have views and intend to contribute to the debate on issues.'

The former Chancellor emphasised the importance of producing further savings in public spending through the fundamental reviews of departmental budgets by Michael Portillo, the Chief Secretary to the Treasury, which he had set in train.

'We have to look at the fundamental reviews of public spending, look at the functions of government, and use that exercise to find ways of removing things from public spending,' Mr Lamont said. 'There will be an opportunity for tax cuts before the next election. How much will depend on the amount of tax revenues and on growth. I would be surprised if there is not an opportunity for at least one tax-cutting budget before the election. There might even be scope for reductions in income tax in more than one Budget. There are substantial opportunities for changes in tax as well,' he said.

His call for deeper spending cuts would please the right, but he did not support the 92 Group in demanding a right-wing reshuffle. 'I think the important thing is to have the right policies. I don't believe shuffling personalities is necessarily going to achieve anything . . .'

'I wholly support John Major. I have no regrets about having supported him. I believe he was the best choice as Prime Minister. He remains leader of the party. He remains Prime Minister. I am not going to answer any more questions about the leadership.'

Meanwhile, ministerial outpourings to limit the damage inflicted by Labour over broken tax promises continued, with Stephen Dorrell, Financial Secretary, insisting: 'It isn't just a question of how much you tax. It's also a question of how you tax.'

Mr Dorrell said the tax system the Thatcher government inherited from Labour gave priority to redistribution of wealth, not creating it. 'That is to miss the key point. Higher marginal rates damage the whole community because they blunt incentives and weaken the drive to wealth creation,' he told the Conservative Bow Group.

In a speech designed to highlight differences from Labour tax policy, Mr Dorrell ruled out industrial investment for its own sake, saying it was 'more important for the corporate tax system to encourage and stimulate the generation of profits. Investment is important - but only if it produces a return'.

(Photograph omitted)