Heseltine steers Tory rhetoric to centre

DONALD MACINTYRE

Political Editor

Michael Heseltine, the Deputy Prime Minister, yesterday led a concerted effort to retake the centre ground of British politics, amid a series of warnings from senior left-wing Tory backbenchers that a surrender to the right could cost the party the next election.

Mr Heseltine rejected Labour claims of a "lurch to the right" by the Tories, with a declaration that "all my life I have fought for 'one-nation' Conservatism. I work for a prime minister whose every instinct is for 'one-nation' Conservatism. Nothing will shake our passionate advocacy of the political priorities which are in the interests of our nation at large."

His intervention came as the Government announced that it had settled the 1996-97 spending round, at a level thought to be comfortably short - possibly by around pounds 3bn - of the pounds 263bn ceiling set in last year's expenditure statement and would not therefore need an extra Cabinet meeting today.

Weekend contacts between the Treasury and the remaining spending departments holding out - including National Heritage, the Scottish Office and the Welsh Office - succeeding in securing agreement. The Budget is expected to reveal tough curbs on capital projects which are not privately financed and overall cuts in running costs.

Mr Heseltine's uncompromisingly centrist remarks came amid signs of alarm among left-wing Tory backbenchers that last week's Gallup poll, showing Labour at 61 per cent, with its third highest lead ever over the Tories, appeared to vindicate Labour's claim that it was drifting away from one- nation policies. Of the 36 new Tory candidates, a survey for BBC TV's On the Record identified 18 as clear right-wingers, only seven are said to be "one-nation" Tories and 11 are unaffiliated.

David Hunt, a Cabinet minister until the July reshuffle, went out of his way to warn that if the Government listened to the "siren voices" of the more "extreme right wing" it would also "move away from an election- winning strategy". And Sir Edward Heath, in terms which were outspoken, even by his standards, said that the party conference speech by Michael Portillo, the Secretary of State for Defence, had been "disgraceful", and that if he and Peter Lilley, the Secretary of State for Social Security, did not want a return to one-nation policies they "could get out".

Mr Hunt also exposed divisions on the party's "Christian Democratic" left wing by rejecting the central implications of a recent speech by Chris Patten, the former Conservative party chairman and now Governor of Hong Kong. Mr Patten suggested that a "shrinking" of the state was needed to match the competitiveness of the Asian "tiger" economies.

But John Redwood, the former Secretary of State for Wales, let it be known that he would be pressing Mr Major to stand firmly by policies calculated to appeal to the Conservatives' key supporters. Fears on the right that room for tax cuts could be limited were fuelled yesterday by a warning from the former Chancellor, Lord Howe.

He said: "We've only just been through two or three years of putting taxes up to reduce the deficit, so any room for tax cuts would be very small and the temptation is to believe that such room exists when it doesn't."