The Sterling Crisis: Angry Tory MPs demand Lamont's resignation: Political reaction

Conservative MPs were stunned and angered by the speed and severity of the financial crisis, bringing the first public demands for Norman Lamont's resignation and even prompting speculation that John Major might face a challenge for the party leadership.

Andrew Hunter, Conservative MP for Basingstoke, and John Carlisle, MP for Luton North, both called for Mr Lamont to go.

Mr Carlisle said: 'If this was UK plc the finance director would have to resign. We need a fresh start, a new policy, out of the ERM, out of Maastricht'. The impact of the interest rate rise, if sustained, would be 'terrible'.

The Chancellor, he said, had 'derided his critics and yet this has happened. We have to see some confidence returning to the markets and this Chancellor does not inspire it'.

Even the Prime Minister might face a challenge this autumn, Mr Carlisle said, though he opposed the idea. 'Unless the Prime Minster changes direction or inspires some sort of confidence in his colleagues, it might be considered. I think it is very unlikely and personally that it is undesirable. But some might feel that if the damage is going to be done, it is better to do it sooner rather than later'.

Mr Hunter said that while the decision was for him, the Chancellor should go. 'He has presided over a failed policy. He lacks all credibility.' The interest rate rise was 'a tragedy of the gravest order'.

Tory alarm reached well into the ranks of the executive of the key 1922 backbench committee. Sir Michael Neubert, MP for Romford, said he was simply appalled. 'We are back to where we were two years ago. Nemesis has finally overtaken us. The Government has to re-think its whole economic strategy. The present policy is simply unsustainable.'

Sir Rhodes Boyson, MP for Brent North, said: 'I am concerned for the future of the country.'

Staunch defence of the Government and Chancellor came, however, from Sir Geoffrey Johnson Smith, vice-chair of the 1922 committee, who turned his anger on the Bundesbank. 'One is upset that this should be necessary,' he said. But it was 'sheer lunacy that we should have all this speculation about the currency'.

The comments that had been attributed to the President of the Bundesbank were 'wholly irresponsible', he said. The pound was 'not a weak currency against all the others in Europe, with the exception of the Deutschmark where it is only marginally out of line. There is no real reason for devaluation'.

Sir Geoffrey said he 'admired very much the strength of determination of the Government and the Chancellor. The Chancellor is doing the right thing, even if it is uncomfortable'. The Government should not let itself be 'rolled over' by the markets when there was no justification.

Some other members of the 1922 executive said privately, however, that Mr Lamont had to go. One declared: 'The fiscal policy is in ruins; it's in bloody tatters. It's time to change the Chancellor. If Norman went, it would take some of the heat off the Prime Minister.'

John Watts, the Tory chairman of the Treasury select committee, said: 'We will only have got it wrong if the end result was a devaluation. But if we can win through this particular turbulence and remove the suspicion from the market that a British government will always devalue . . . then we will have won a major prize'.

But Conservative MPs opposed to Maastricht said the crisis only proved their case for Britain to reject the treaty and leave the ERM. Even some not noted as opponents said hostility to the treaty would rise.

John Townend, chairman of the Tory backbench finance committee, said: 'If these rates continue for a number of weeks we will be heading for the biggest slump since the 1930s. The ERM and monetary union have failed'.

Nicholas Winterton, MP for Macclesfield, said: 'This is a disembowelling of the little life that is left in the British economy.'

Lord Ridley, one of Margaret Thatcher's most loyal supporters, said he felt 'extremely sorry for the people of Britain'. It would be disaster for business and extremely serious for mortgage-payers. Yet it was all unnecessary.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
i100
News
Budapest, 1989. Sleepware and panties.
newsDavid Hlynsky's images of Soviet Union shop windows shine a light on our consumerist culture
Arts and Entertainment
Eleanor Catton has hit back after being accused of 'treachery' for criticising the government.
books
News
In humans, the ability to regulate the expression of genes through thoughts alone could open up an entirely new avenue for medicine.
science
News
Williams says: 'The reason I got jobs was because they would blow the budget on the big guys - but they only had to pay me the price of a cup of tea'
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Corporate Tax Associate - London

Excellent Package: Austen Lloyd: CITY - HIGHEST QUALITY INTERNATIONAL FIRM - A...

Austen Lloyd: Senior Law Costs - London City

Excellent Package: Austen Lloyd: CITY - EXCELLENT FIRM - We have an outstandin...

Austen Lloyd: In-House Solicitor / Company Secretary - London

Excellent Package: Austen Lloyd: IN-HOUSE - NATIONAL CHARITY - An exciting and...

Austen Lloyd: Commercial Property Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - A great new opportunity with real pot...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee