Parkinson to oversee party reforms

New Tories new men: Hague brings four leadership challengers into his Shadow Cabinet

The ghost of Margaret Thatcher hung over William Hague's shoulder last night as he announced that Cecil Parkinson was to be the new chairman of the Conservative Party.

The appointment of Lord Parkinson, a close associate of the former prime minister, led to speculation that he had played a part in securing Baroness Thatcher's endorsement for Mr Hague's campaign.

The new Conservative leader, elected on Thursday after a battle to the finish with the former chancellor Kenneth Clarke, spent the day persuading the four other contenders to serve in his Shadow Cabinet.

Mr Clarke had already said he did not want a post after Mr Hague announced his shadow ministers would have to stick to his policy of keeping Britain out of the single currency for at least five years.

Late yesterday afternoon a spokesman for Mr Hague announced that the Euro-sceptic Peter Lilley, the former social security secretary, would be his shadow Chancellor.

Michael Howard, the former home secretary, will be shadow foreign secretary and John Redwood, the former Welsh secretary who resigned in 1995 to challenge John Major, will be shadow secretary of state for trade and industry.

Stephen Dorrell, former health secretary, will shadow David Blunkett at the Department of Education and Employment. Conservative sources said it was "not envisaged" that Mr Hague would choose a deputy leader.

All the former candidates had accepted the first jobs they were offered, he added: "We are delighted that after the result last night all the contenders are prepared to serve and to be seen to do so with some relish."

The biggest surprise came with the appointment of Lord Parkinson earlier in the day. The 66-year-old former energy secretary will hold the job for two years and take on the task of rebuilding the party after its disastrous election defeat. As well as being known for resigning over an affair with his secretary Sara Keays, he is remembered for running the successful 1983 election campaign for the Conservatives during a previous two-year spell as chairman.

He announced his backing for Mr Hague early in the former Welsh secretary's leadership campaign. Although it was reported that Lady Thatcher, a close associate of Lord Parkinson, had met Mr Hague she did not publicly endorse him until Wednesday, after Mr Clarke formed a united campaign with Mr Redwood.

Despite claims that the appointment indicated he was still looking over his shoulder at the Thatcher years, Mr Hague said his Shadow Cabinet would include all wings of the party.

He told a crowd of reporters outside Conservative Central Office that his new chairman had "agreed to return to the front line for a couple of years to preside over the changes we need to make in the party".

"He is going to be taking on this role to put the party into new fighting shape. He has great enthusiasm for it. I am looking forward immensely to working with him and I think he will combine the youth of the new leadership with the experience of politics for many years and bring great heart to the Conservative Party across the country." Lord Parkinson said he looked forward to the job.

"If you're surprised, that makes two of us," he joked. "It certainly was never my intention to come back to Central Office, although I enjoyed my time here. I'm delighted to be here.

"We have found ourselves an excellent new leader. He was endorsed yesterday with a very good vote and I'm looking forward to working with him."

Last night Mr Hague took a train to Scotland to meet senior party figures. There would be no "no-go" areas for the Conservative source said: "He said in the course of the campaign, `If I am elected leader, day one I go to Scotland.' This is day one."