Tory calls for rail 'pact' with Labour

COLIN BROWN

Chief Political Correspondent

A leading backbench Tory MP has committed "heresy" by calling on John Major to agree a deal with Labour and the Liberal Democrats to scupper the privatisation of British Rail.

In a letter in today's Independent, Hugh Dykes, MP for Harrow East, suggests the deal as part of a trade-off with the Opposition parties who would be asked to help the Government overcome resistance to a single currency by Euro-rebels in his party.

Mr Dykes says a trade-off with Labour and the Liberal Democrats on British Rail privatisation would enable the Prime Minister, faced with a dwindling majority in the Commons, to overcome the opposition of his Euro-sceptic wing for European Monetary Union.

"There is a large majority of MPs of all parties in favour of ... EMU. Any far-sighted national leader or Prime Minister must acknowledge that fact. It may mean trade-offs with the Labour Party and the Liberal Democrats. But that too could be in the true national interest. Why not postpone BR privatisation to get Labour support on EMU?" he says.

It will infuriate the Government and Euro-sceptic Tory MPs still bristling with anger at the defection of Emma Nicholson to the Liberal Democrats. It will also fuel fears that more Tory MPs on the One Nation wing of the party could follow Ms Nicholson's defection.

But in a separate move, Edwina Currie, another supporter of closer European integration, is planning to appear on a platform with Labour MPs Giles Radice and Peter Mandelson on Monday to support wider understanding of the single currency.

Mr Dykes said his proposal for a cross-party alliance was regarded as "heretical" by the Government, but he believed it would be in the national interest. He said he would not defect from the Tory ranks, but made clear he was totally opposed to the privatisation of British Rail and may abstain in the vote.

"It is regarded as heretical to consider trade-offs with other parties, but it happens all the time in other Parliaments. I was in the Bundestag when the privatisation of Lufthansa was announced after six months of talks and all-party agreement," Mr Dykes said last night.

The MP for Harrow East, regarded as a Europhile by his colleagues, said a cross-party trade-off to achieve progress on Europe would show political maturity in Britain. He attacked the rail privatisation plans as "a terrific mess".

Labour's deputy leader, John Prescott, will announce Labour plans on Monday to campaign in Tory marginal seats in an attempt to swing more Tory MPs behind Labour for a make-or-break vote on rail privatisation in February.

In a move to halt the momentum towards EMU, John Redwood, the Tory challenger for the leadership, last night warned the Government it could face fresh votes in the Commons over the plans agreed at the Madrid European summit by Mr Major for the Ecu to be renamed the Euro.

Mr Redwood said it would require a new treaty or a change to the Maastricht treaty because it involved more than a change of name. He said thatunder the Maastricht treaty it was necessary to be a member of the Exchange Rate Mechanism (ERM) for two years before entering a single currency, in spite of denials by Mr Major. He wrote to Tony Blair, the Labour leader, calling for Labour to come clean on the issue.

Letters, page 16