Major raises speculation over introduction of identity cards

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John Major yesterday heightened expectations that the Government will introduce identity cards and ruled out the possibility of dividend controls as a 'non-starter'.

In an interview with the Daily Telegraph Mr Major acknowledged the unpopularity which is expected to cost the Tories dear in tomorrow's European elections. 'We are not a short-term government. We are a long-term government. We are unpopular because we have taken unpopular decisions that will prove to be right in the long term.'

Mr Major moved to quash speculation about possible dividend controls to promote investment in the wake of a speech by Stephen Dorrell, Financial Secretary to the Treasury, in which he floated the idea of possible changes to the pension fund tax regime aimed at discouraging 'short- termism' in the City.

He said he was against the legalisation of soft drugs and on ID cards, the Prime Minister repeated earlier statements in the Commons that the possibility of national identity cards was being actively examined. But he promised that there would be full consultation before 'final decisions' were taken.

He rejected suggestions that Peter Lilley, Secretary of State for Social Security, had been deliberately made 'invisible' during the Euro-campaign by going on holiday in France - a trip first disclosed by the Independent.

He insisted that the Downing Street declaration had helped to isolate the IRA. 'Areas where they could have expected support in the past have drained away from them,' he said.

He was bullish about the economy, adding: 'By instinct we are tax cutters. If it is practical and prudent to cut taxes we will, but I cannot forecast when that will be.' He said public spending was still too high and would have to come down.

In a fighting speech which may be a precursor to a personal leadership campaign, Margaret Beckett, Labour's current leader, invoked the spirit of Labour's 1945 election victory and even the allied invasion of France. She said: 'Just as in 1944 we stood side by side with our allies so today we must stand side by side in the battle against mass unemployment.'