Tory Crisis: A Norman conquest?: Once the Maastricht Bill is passed, there may be no good reason for the party to hang on to its leader

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WHAT IS probably the most memorable phrase in Norman Lamont's resignation statement last Wednesday had first been uttered by him a month earlier. As he walked out of the weekly Cabinet meeting at No 10, in full view of the television crews, he muttered to a colleague: 'We're in office but we're not in power.' 'Careful, Norman,' came the reply. 'The television cameras may be able to read your lips.'

The incident gives the lie to any suggestion that the former Chancellor did not write his statement himself. It was the least expected, least trailed, Commons personal statement in recent history. And it was certainly all his own work. Lamont had sketched out the main form in his mind during the weekend after his sacking while he took walks round the lawns of Dorneywood - the country home that went with his job. But he had not then decided whether to deliver it.

Like all successful assaults, it was all the more deadly because of the element of surprise. As Parliament resumed last Monday, the Major circle had little reason to fear Lamont. That day's issue of the London Evening Standard had carried a piece headlined 'Why Lamont won't take his revenge'. The article was written by David Mellor, his former cabinet colleague.

Mellor believed he knew what he was talking about. Six days earlier the two men had met in Tante Claire, in Chelsea's Royal Hospital Road, for lunch. Mellor had issued the invitation for a number of reasons. First, they had got on well when they had worked together at the Treasury. Second, Mellor, who had to resign after a series of disclosures about his personal life, had an understandable empathy for a colleague facing the sudden and unwanted loss of office. And third, Mellor, who remains in regular contact with John Major, undoubtedly wanted to conduct some working repairs on the ruptured relationship between the Prime Minister and his former Chancellor. Lamont had not only broken with convention by refusing to send the customary loyal resignation letter, telling friends later that he did not feel up to the 'humbug and hypocrisy' of it. He also gave a curt 'no' when an intermediary asked if he would appreciate a consolatory post-sacking phone call from Major.

Over lunch, pate de foie gras, duck and a bottle of champagne, the former colleagues talked frankly. Mellor heard Lamont out as he embarked on a strong defence of his Chancellorship. Mellor replied bluntly that, in his judgement, Major had had no choice but to part with him, but he conceded readily the unfairness of the criticism of Lamont's performance in office. When the possibility of a resignation statement came up, Mellor strongly argued that Lamont should keep quiet. He left the lunch with the clear impression that the former Chancellor would accept the advice. Before writing his Evening Standard article, Mellor checked with Lamont that nothing had changed. Jonathan Aitken, a defence minister and one of Lamont's closest political friends, was also convinced after talking to him during the Whitsun recess that he had managed to 'talk Norman out it'.

But, last Sunday night, after Mellor had completed his article, Lamont took his final decision. (He rang Mellor apologetically to explain this on Friday morning.) He did so alone, and in the teeth of advice to the contrary from every politician he consulted. Nor did his wife Rosemary, bitter over the way her husband had been treated, or his close friend Lord Wyatt, 'put him up to it'. It was perhaps the most personal decision Lamont had ever taken. So why did he do it? And how much damage has he done the Prime Minister?

SINCE Wednesday's dramatic speech, Lamont has remained silent, agreeing to what amounts to an uneasy truce between himself and the party establishment. He did, through ministerial intermediaries, warn Downing Street on Thursday that he would speak out again if 'provoked' by further attacks like those launched on him by Sir Norman Fowler, the party chairman, in a series of television interviews on Thursday morning - attacks from which No 10 has been careful to distance itself. But he has so far refused all requests for interviews.

It is nevertheless possible to piece together, from enquiries among those MPs and friends who have spoken to him privately since Wednesday, an account of his rationale - and his mood.

The most resonant of the charges which Lamont made on Wednesday was that of 'short-termism'. 'Pollsters and party managers', he implied, were dictating policy. The widespread assumption has been that Lamont was simply angry about the role played by Richard Ryder, the Chief Whip, and Sir Norman Fowler in his downfall. Lamont asked to see Sir Norman shortly after the Tories' disastrous defeat in the Newbury by-election last month. It was a relatively amiable meeting. Was there anything, Lamont asked, that he should do about the Newbury result? Fowler's only suggestion was that the Chancellor's special adviser, David Cameron, should visit Central Office and discuss the co-ordination of ministerial television appearances. Later, by all accounts, Fowler told the Prime Minister what he saw as the unpalatable truth: that, if the Tories were to recover from Newbury, Lamont would have to go. Lamont's anger is that Fowler did not say this to his face.

There is a further irony about Fowler's being the hand that brought down Lamont. Lamont had tried to persuade him - in November 1990 - to run Major's leadership campaign. Lamont eventually took on the job himself. Fowler, meanwhile, voted in the second ballot for Michael Heseltine. What may also have irritated Lamont was that Richard Ryder - who also helped to persuade Major that he should part with his Chancellor - had been his personal recommendation for the post of Chief Whip.

But such personal considerations were probably not the main reason for Lamont's decision to make his speech. For all his faults, Lamont is an ideological politician, significantly more so than Major. (Not surprisingly, perhaps, Lady Thatcher has let it be known within her circle her admiration for the Wednesday statement.) The gibe about 'party managers' involved policy as well as mere personalities.

Lamont, so his friends on the party's right wing say, was weary of meetings in which fear of parliamentary defeat dominated. Consultations with Ryder, or with the Leader of the Commons, Tony Newton, or with Lord Wakeham, his counterpart in the Lords, determined policy. Typically, so the Lamont camp claims, Major would say, 'What does the Chief Whip think?' Ryder would then reply: 'Well the Chancellor's made a good case but . . .' And the issue would be shelved, or at least postponed.

One example was Post Office privatisation - for which the (also sacked) Edward Leigh, junior trade and industry minister, had made an eloquent case. Lamont saw it as a potential source of revenue which could be made attractive through an employee share scheme and an enhanced role for rural sub-post offices. Another example was the proposal to equalise men's and women's retirement ages by raising the latter to 65. Though it would not save money in the short term, it was a piece of long-term planning, in Lamont's view; and even some Labour spokesmen believe privately that it may have to happen sooner or later.

Both post office privatisation and a higher female retirement age would have carried political risks, and in any case the pension equalisation may yet be announced next year. But both proposals were dropped from this year's Queen's Speech. Lamont's speech - and his friends' subsequent elaborations - help to explain why the Government so often seems to lack direction, taking up and dropping ideas almost capriciously.

On public spending, for example, Lamont had been arguing before he left that unpalatable proposals - such as some of the now continuously leaked ones on social security - should be put before the Commons even at the risk of a parliamentary revolt. And he was no enthusiast for current levels of defence spending. Senior Treasury officials shared his exasperation at the way proposals to cut public expenditure were shelved for fear of parliamentary defeat. And Lamont had, his friends insist, made all these points to the Prime Minister long before being sacked.

All this can easily be seen as special pleading. First the Whips can hardly be blamed for pointing out the dangers of potentially unpopular policies, especially after a year which had seen the energies of the Government sapped by the Euro-rebels revolting night after night on Maastricht. Second, the problems of driving unpopular legislation through Parliament would have been complicated by the collapse in the former Chancellor's own credibility. Such is Kenneth Clarke's super-abundant store of political capital that the new Chancellor is likely to find it significantly easier to push through unpopular measures. Clarke said with some menace in the Commons on Wednesday that he would be looking to colleagues to support him when he did so. Minutes after his wind-up speech that night, Clarke dived into the Strangers' Bar - probably the scruffiest of all Westminster watering holes - for a drink, flanked by Treasury officials who looked distinctly wide-eyed to find themselves in such raffish surroundings. It marked a distinct change in style that may yet ease Major's problems.

Yet, as a potential critic on the backbenches, Lamont himself may have more credibility than he enjoyed as Chancellor, at least since the election. Though he could fade away, as Kenneth Baker did after his flirtation with the Euro-rebels immediately after he left office, Major clearly thought it best to keep him in the Cabinet. He asked him three times during their 15-minute meeting last month to take the Environment job, which is not, after all, a negligible one. At one point he invited Lamont to take half an hour to think about it. As an added inducement, he offered Lamont the right to go on using the country house at Dorneywood and a grace and favour flat in the Admiralty to replace No 11. Lamont said practically nothing, beyond repeatedly declining. If he had been offered a job in the parliamentary cockpit, like Leader of the House, he might have been tempted to accept.

But, by all accounts, he is now rather relieved that he wasn't. Apparently he is positively relishing backbench freedom, telling one MP that it has been 'nice to travel on the Tube again' for the first time since he became a minister 14 years ago.

'He will be a Michael Heseltine rather than a Nigel Lawson,' said one MP. At one level this is absurd; he is nowhere near being a credible pretender to the premiership. But it means that he will play a continuing role in politics from the backbenches, that he has probably not banished all thought of resuming office under a different leader, that he is determined to find another seat after the loss of his Kingston constituency in the boundary changes.

In short he is not going to leave politics to make money. He may not need to. The bids are already being made for the book he plans to write about his Chancellorship - a book which some ministers fear could inflict more damage. He could even become the focus of right-wing discontent within the party. There was more than a touch of menace in his promise, in the last paragraph of his Wednesday statement, that 'I look forward to the great parliamentary events and battles that lie ahead'.

BUT it is not Norman Lamont who holds Major's future in his hands. Shortly after Wednesday's speech, a senior Tory, borrowing the language of modern warfare, described it as 'non-nuclear but heavy conventional'. And so it proved.

It did not contain, as Sir Geoffrey Howe's resignation speech from the Thatcher Cabinet did, a call to arms, and, in any case, there is no Michael Heseltine waiting in the wings to answer one. John Smith, the Labour leader, produced a brilliant parliamentary performance on Wednesday, only to throw it away the following afternoon when Major got the better of him at Question Time by ridiculing his call for a general election. Moreover, Major's decision to adopt a more informal style in his speech on Friday to the Welsh Tory conference - a decision taken after a notably successful private chat to exporters earlier in the week - appears to have worked. It was ostentatiously well-received. Any hopes among his critics that he will simply get fed up and stand down are nothing more than wishful thinking.

Yet the parliamentary party remains in febrile condition. After last Thursday's meeting of the 1922 Committee the official line from Sir Marcus Fox, the chairman, was that it had demonstrated 100 per cent support for the leadership. But Nicholas Budgen the right-wing MP for Wolverhampton North East was in acid form. His counter-attack on Fowler's onslaught on Lamont was warmly applauded by some of those present. Sir Norman - whose attack on the former Chancellor was described as 'hysterical' by one senior Tory backbencher - appears to be taking on the role of 'lightning conductor' so recently vacated by Lamont himself. There is much talk even among loyalist MPs of the need for new 'advisers', possibly a powerful new Chief of Staff on the United States model to bolster Mr Major.

So is the end of John Major any nearer now than it was a week ago? Lamont's speech damaged him. But the equations remain broadly unchanged. A recovery in the economy would help the Prime Minister. Equally, disastrous results in the London borough and European elections next year could bring him down.

Major's greatest strength remains on the international stage. Maastricht helped to prove his negotiating abilities. Moreover, it may be that he was the only Prime Minister who could take the Maastricht Bill through a divided Commons without fatally inflaming either the right or left of the party. But according to the darkest analysis circulating in the torrid corridors of Westminster, that task is now nearly complete. In other words his raison d'etre as leader may be running out.

The proponents of this analysis - who cruelly ignore Major's almost single-handed general election triumph - point gleefully to the single adverb in Lamont's resignation speech on Wednesday, in the passage about his own role in helping Major to become leader: 'I have always believed and still believe that in supporting him then I made the right choice.'

Lamont has an impressive track record of seeing where the political wind is blowing. He jumped on to the Thatcher bandwagon in 1975; he perceived earlier than most of his colleagues on the right that Thatcher was fatally damaged and that Major could be the next leader. Mr Major and his closest supporters will be fervently hoping that Lamont has not got it right again.

(Photographs omitted)