A bloody week in the death of the IDS party

Even if the Parliamentary Commissioner for Standards clears Iain Duncan Smith over the employment of his wife, many Tory MPs believe their leader is, sooner or later, finished anyway. Even Labour is frustrated at the lack of a coherent opposition to engage with. But, writes Andy McSmith, despairing senior Tories fear a leadership contest won't make things any better

Michael Ancram, the deputy leader of the Conservative Party, indulged in fighting talk last week when he stood on the steps of Conservative Central Office and alleged that "malevolent forces" were at work to undermine Iain Duncan Smith.

Then it appeared as if revelations about the salary that Mr Duncan Smith paid out of public funds to his wife, Betsy, might be the death blow to his weakened leadership. Instead it has led to what one of Mr Duncan Smith's most ferocious Tory critics described as a "ceasefire".

His enemies are certain that his leadership is finished, however. If the investigation by Sir Philip Mawer, the Parliamentary Commissioner for Standards, does not force him from office, they are convinced something else will, probably before the end of November.

On the day of his outburst, Mr Ancram was given an insight into the strength of feeling that has built up against Mr Duncan Smith in significant parts of the Conservative Party. He was called to another engagement, away from the public eye, in a dining room on the lower floor of the House of Commons, where he was guest speaker at a fund-raising dinner for party activists from the Finchley and Golders Green constituency, in north London. The menu was roast lamb and lemon tart.

One of the guests was Vanessa Gearson, the deputy director of Conservative Central Office, whose testimony, handed over on Friday, is likely to be the centrepiece of the evidence gathered by the parliamentary commissioner.

Mr Ancram probably did not have Ms Gearson herself in mind when he spoke of "malevolent forces". But he may have been thinking of those friends of hers who have leaked information on her behalf, including the explosive claim that she was put under pressure to sign a statement exonerating the Duncan Smiths. In the past fortnight, she has felt it necessary to engage a solicitor to help "protect her integrity".

However, Ms Gearson's integrity is not being questioned by Conservatives who know her, as Mr Ancram discovered over dinner. The evening's host was a former MP, John Marshall, now president of the Finchley Conservatives, whose short address included an extravagant hymn of praise for Ms Gearson's role as a Barnet councillor. According to witnesses, she squirmed with embarrassment.

Like the support for Ms Gearson from party activists in Cheltenham, where she is the prospective parliamentary candidate, the incident in the Commons dining room demonstrates that for many of the Conservative Party faithful a more important question than whether Mr Duncan Smith can survive as their leader is the future of the party itself.

John Marshall, for instance, who sat in the Commons for 10 years until he lost in 1997, has no direct recollection of Mr Duncan Smith as a member of the Conservative front bench. He remembers instead the backbench rebel who gave continual grief to John Major, consistently voting against the government over the Maastricht Treaty and backing John Redwood's campaign to unseat the then Prime Minister in 1995.

Relations between Mr Duncan Smith and members of staff at Central Office are coloured by the long memories of those who have struggled to make sure that wages are paid and the overdraft kept to a minimum, relying heavily on contributions from local parties. Safe Tory seats, such as the leader's own constituency, Chingford, were obviously expected to give the most, and several of them routinely sent in more than £1,000 a month. But for several years, all that Chingford was prepared to hand over was an insulting £4 a year, keeping the rest of its money for local use - a fact which Mr Duncan Smith appeared to be quite proud of at the time. In 1996, with an election approaching, Chingford decided to be more generous and parted with £2,000. In the same year, the Aylesbury constituency party sent well over 40 times that amount.

Given such a history, it is not surprising that anyone whose loyalty is to the Conservative Party rather than to the right-wing gang who helped to destroy John Major should be irritated to learn that, with Central Office as hard up as ever, Mr Duncan Smith was keeping £15,000 from his parliamentary office allowance in the family by employing his wife.

Betsy Duncan Smith had for years worked as her husband's diary secretary and helped out in his constituency. But soon after Ms Gearson took over as his chief of staff, a seven-page memo arrived on her desk, written by the Tory leader's private secretary, Christine Watson, who welcomed her as a "breath of fresh air" able to see "how badly things were run".

Miss Watson described how she was running Mr Duncan Smith's diary, organising press cuttings, and creating a filing system, and complained that she had had "no extra help" with the backlog of constituency correspondence since the 2001 leadership election.

The only mention of Mrs Duncan Smith in the 39-point memo appeared to imply she created work rather than helped out. Miss Watson wrote: "Betsy has asked me to do what work she may have, keep her papers in order, invitations and draft letters when necessary. Also it is important to keep her informed at all times of changes in the diary."

This litany of complaints from Mr Duncan Smith's secretary naturally led Ms Gearson to wonder what Betsy Duncan Smith did for her £15,000 a year. She raised the issue in September last year with Owen Paterson, Mr Duncan Smith's parliamentary secretary, who is probably closer to the leader than any other MP.

Ms Gearson brought up the matter with Mr Paterson again on two separate occasions in the next few weeks, and with Mark MacGregor, the former chief executive in Central Office, who was sacked by Mr Duncan Smith earlier this year. Mr MacGregor, like Ms Gearson, has said that he will give evidence to the standards commissioner.

At the end of the year, she raised it yet again, with the chairman, Theresa May, Sir Stanley Kalms, the party treasurer, Stephen Gilbert, the director of campaigning and organisation, and Mr Paterson. She also sent Mrs May the now famous email in which she warned of the risk of a "Crick-style investigation". At about this time, Betsy Duncan Smith left her husband's payroll.

Though it must be distressing and time-consuming for Mr Duncan Smith to have his wife dragged into political controversy, he can take cold comfort from the reactions of MPs last week. On this narrow issue - as opposed to the wider question of whether he can continue as party leader - opinion in Parliament is generally on his side. Mr Duncan Smith got a stupendous cheer when he rose to speak at Prime Minister's Questions in the Commons on Wednesday, with most of the noise coming from Labour MPs, waving their order papers in his support. In part, this was deliberate mockery, because Labour has identified Mr Duncan Smith as its best hope of securing another landslide victory at the next election.

But even on the Labour benches there is a great deal of unease about the complaint against Mr Duncan Smith, particularly since about three dozen Labour MPs employ their wives, husbands or other relatives. The most prominent is the Secretary of State for the Environment, Margaret Beckett, whose husband, Leo, works as her parliamentary assistant. One minister said: "It's really disgusting to attack a man through his wife, and it reminds me of the attacks on Cherie Blair. I don't want anything to do with it." Other ministers areactually disappointed that the Conservatives have become so wrapped up in their internal problems that they cannot engage in a serious political argument.

John Reid, the combative Secretary of State for Health, is spoiling for a fight over the health policies set out at the party's Blackpool conference, which he sees as the first breach in the post-war agreement to allow equal access to health care. Tony Blair also appeared impatient to have an argument over the Conservatives' pensions policy.

Some of the plotters in the Tory party have also decided to stay their hand while the commissioner is investigating. For them, the issue was never a matter of Mr Duncan Smith's personal integrity but rather his ability to lead the party.

Oddly, perhaps, the Tories who appear to be most angered by "Betsygate" are not the plotters, but those who want Mr Duncan Smith to carry on, many of whom fear that he may now have inflicted on them what they were dreading most, another destructive leadership election.

One said: "I'd rather we limped on under Duncan Smith because the party is basically ungovernable, and if we have an election that leaves David Davis in charge, there'll be a lot of angry activists and a lot of senior people who will refuse to serve on the front bench. But Ms Gearson is a serious person and the fact that she has gone to these lengths suggests that there is something that she feels very strongly about. That worries me."

The leader's trouble with women

Betsy Duncan Smith

The Tory leader's wife, who is the daughter of a hereditary peer, Lord Cottesloe, has tried to keep herself and their four children out of the public eye. She was paid to work for her husband from 1997 until last December.

Vanessa Gearson

Is risking a promising future in politics by taking on IDS. She gave up an academic career to join Conservative Central Office in 1998. Later elected to Barnet council in London and selected as parliamentary candidate for Cheltenham.

Christine Watson

IDS's former constituency secretary brought firm ideas about efficiency to Central Office. A leaked letter complaining she was getting no help seems to be damning evidence against IDS's wife, but she has also made a statement attesting to Betsy's "efficient and professional" performance.

Annabelle Eyre

Head of planning and tours at Central Office. She was IDS's private secretary after his election as leader, and fought a battle with Ms Watson over who ran his office.