Clear the sleaze or lose the trust

SHOULD Conservatives gathered at Bournemouth this morning be concerned about the Mark Thatcher story? Not concerned, no: they should be livid. Here is a party composed mostly of older people without great means, who believe in honour, propriety and high public standards. And they look around them and they find their beloved party being regarded as a source of sleaze. The mockery rises but their leaders pretend not to hear. They must be beginning to wonder, these everyday Tories, if they are being taken for fools.

Their representative at the top table, Jeremy Hanley, is asked about the allegations and responds with a desperate grin, saying nothing. He is too busy with real stuff, such as his exciting conference agenda, he suggests, to bother with trivia. It is hard not to feel some sympathy for him. But if he or his leader thinks this story is unimportant, they need to hear a few home truths from their supporters.

The story is important because, although no one knows whether Mr Thatcher did indeed pocket pounds 12m by trading on his mother's name, most people will assume he did. There is a feeling in the country that Conservatives are likely to behave badly, a hunger to believe the worst. This is deeply damaging to the party's authority and, indeed, to the authority of the state.

The last time senior Tories were looking at the state from outside, standing in the street, as it were, was during the Wilson-Callaghan regime, when the power of the trade union bosses undermined its claim to speak for the whole country. In 1976 Margaret Thatcher and her advisers published their rather lengthier version of Clause IV, The Right Approach: a Statement of Conservative Aims, which told the country that the state should be 'the trustee of the whole community . . . holding the balance between different interests'. And now?

In a Gallup poll in yesterday's Daily Telegraph, 61 per cent agreed that the Tories 'these days give the impression of being very sleazy and disreputable'. This genuinely puzzles many ministers. They do not leave office rich. True, some go on to the boards of companies they have dealt with as ministers. But in most cases the payola isn't enormous, they seem to work quite hard for the money - and anyway, the market price for a former minister is plummeting.

There has been not one authenticated case of bribery of a government minister in the past 15 years. No senior civil servant has been charged with corruption. So where does the sleaze factor come from? Not from journalistic malice, although malice is part of the story. It comes from people looking at the state from outside and feeling it is not run for them. It comes from the huge sums made by people on the fringes of power, the whirring grubs from the City, the greedy Granada-drivers running privatised utilities, the construction firms that sit in on overseas aid decision-making and profit from it. It comes from the feeling that there is one law for those who are connected and another for those who are not. It comes from all those shady and unpleasant characters who turn out to have paid the Conservative Party money before skipping off abroad.

I was recently told by one board member of a publicly owned enterprise about being taken out for lunch by eminent merchant banks and being urged to support the privatisation of her outfit. After the guff, the basic pitch was basic indeed: 'Do you realise how much money you could make?' The same executive then found the Treasury was also being lobbied by the same fee-hungry banks, for the same reason. And it has happened so often already. People are not stupid. People can smell that sickly-sweet scent.

As in the Seventies, there is a feeling abroad of a corporate state, of a closed world operating quietly and playing by different rules. Unless corrective action is taken, this belief will spread.

There are three particular sources of concern. The first follows inescapably from Britain's relative economic weakness. As we trade more and more with rich Asian and Middle Eastern countries whose political cultures are undemocratic or seamy, or both, ethical dilemmas will cross ministerial desks ever more frequently.

How far should we bend our rules to buy jobs? These buyers, after all, are powerful and easily offended. The British politicians and officials dealing with them are in place to represent workers and managers who desperately need the contracts. Should our political culture demean itself to buy work for the rest of the community? These are hard questions, although it is fatuous to suppose Mark Thatcher was part of the answer.

The second source of worry is more general, the mixing of business ethics with Whitehall ethics. There is now ample evidence that they do not mix, they curdle. The short and now famous Public Accounts Committee report into 'The Proper Conduct of Public Business' at the beginning of this year listed 26 examples of waste and dubious conduct that 'represent a departure from the standards of public conduct which have mainly been established during the past 140 years'.

But there are plenty of other examples of the difficulty of mingling private-sector thinking, focused on profits, and public business. For instance, 'market testing', the bringing-in of private companies to do what was once the state's work, is already causing a minor constitutional row at Westminster: the number of legitimate political questions by MPs that are unanswered by Whitehall because the information is deemed to be 'commercial: in confidence' is growing fast.

The third area is the problem, already mentioned, of Conservative funding. With falling membership and a ferocious fight with Labour looming on the horizon, this will become more controversial, not less.

These assertions are neither trivia nor muck-raking. They do not arraign individual ministers as morally dubious, never mind corrupt. But they do challenge the notion that the Conservatives can still act as trustees for the whole country or be trusted to hold the balance between competing interests. It is not that the Mark Thatcher allegations are a shock - it is that they are not a shock.

That is what should worry the Prime Minister. But does it? John Major is a man whose own decency is widely accepted and who has paid any debt to his predecessor. But there is little sign that he or his most senior officials have taken seriously enough public resentment and worry about the decline of standards in government.

Stories such as the Mark Thatcher one are brushed aside as passing clouds, though the sky is dark with them. Mandarins affect irritation if 'sleaze' is mentioned. They are out of touch. Even if it is embarrassing with Lady Thatcher arriving at Bournemouth, it is time for Mr Major to state clearly that if such a thing has happened, it is monstrous. And if he will not, it is time for the Tory grassroots to make their feelings known.