Duncan Smith gives key roles in Shadow Cabinet to right-wingers

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Iain Duncan Smith promised to fight Tony Blair for the centre ground of British politics yesterday after he won a decisive victory over Kenneth Clarke in the Tory leadership election.

But the new Leader of the Opposition immediately promoted several of his right-wing allies to key jobs as he formed his Shadow Cabinet last night.

There was a surprise recall to frontline politics for Michael Howard, a former home secretary, who becomes shadow Chancellor. Oliver Letwin, the Treasury spokesman who called for public spending cuts during the general election campaign, won a big promotion to shadow Home Secretary.

The new Tory leader also rewarded people who backed his campaign. Michael Ancram, who rallied behind Mr Duncan Smith when he was eliminated from the leadership election, won the plumb job of shadow Foreign Secretary.

David Davis, another candidate when the race began, landed the key post of Conservative Party chairman. He will have an important role in Tory policy-making and will enjoy a high media profile as he fronts the Opposition's attacks on the Government. "He is a political streetfighter and we will deploy his skills," a senior party source said last night.

Bernard Jenkin and David Maclean, who ran the Duncan Smith campaign, were rewarded with the posts of Defence spokesman and Chief Whip respectively.

Party officials denied the balance of the Shadow Cabinet had shifted to the Eurosceptic right, pointing out that Quentin Davies, a moderate Tory, was appointed Northern Ireland spokesman. Officials said the leader's first priority was to appoint the frontbenchers who would have to respond to the terrorist attacks in America. But the decision to hand all the top jobs to Eurosceptics will worry the party's pro-European wing.

Mr Duncan Smith, a right-wing Eurosceptic, won the votes of 155,933 grassroots members (61 per cent) to Mr Clarke's 100,864 votes (39 per cent). His allies said the clear margin would give him a strong mandate to lead the party.

The new Opposition Leader will have an immediate test today when he will reply to a Commons statement from Mr Blair on the disaster in America, which led the Tories to delay the result of their three-month contest for a day and ensured a low-key announcement at Conservative Central Office.

Although he paid tribute to outgoing leader William Hague, Mr Duncan Smith made a deliberate break with his strategy by vowing that the Tories would be more in tune with what mattered most to voters.

In his victory speech, Mr Duncan Smith said: "The party I want to lead will be an effective opposition to this Government. It will campaign on the issues that matter to people, the things that affect them most in their daily lives that obsess them, these must be the things that obsess us: the state of their public services, health, welfare, education and the environment. We will campaign on these and we will plan to take the Government on over these major issues."

Significantly, his speech did not mention Europe, the issue that Mr Hague put at the heart of the Tories' general election campaign in June.

The new Tory leader said that the time was not right for party politics because of the "appalling acts" in America. He promised to stand "shoulder to shoulder" with Mr Blair in his strong support for President George Bush to ensure Britain was "a nation united."

Taking a hawkish line, Mr Duncan Smith said the "act of war must not go unpunished." he added: "It was not just an act of war against America but it was an act of war against all those who share the values and freedoms that characterise civilised nations the world over."

His first act as Tory leader last night was to go to the American embassy in Grosvenor Square to sign the book of condolence for the victims of the attack.

After an often bitter leadership election, Mr Duncan Smith sought to unite his party by offering an olive branch to the defeated Mr Clarke, saying he had "a huge amount to continue to offer the party".

Mr Clarke, who congratulated Mr Duncan Smith on his victory, promised to support his efforts to lead the Tories back to power. However, he will not accept a shadow Cabinet post and his defeat at the age of 61 spells the end of a long and distinguished career in frontline politics. Friends said he would concentrate on attacking the Government from the Tory back benches.

Allies of Mr Clarke pledged their support for Mr Duncan Smith and said their campaign organisation would be closed down immediately.

But Clarke supporters urged the new Tory leader not to allow his Eurosceptic beliefs to dictate his strategy. Ian Taylor, a leading pro-European, said: "I hope we will find Iain Duncan Smith leading the party to the centre ground and persuading some of his colleagues to join him there."

Mr Taylor added he would not leave the party and said he did not expect MPs to defect. He said: "There may be [defections] in the country as a whole, but I would encourage them to stay. Ken probably lost a lot of people who would have supported Ken but had already left the party. I certainly hope no-one leaves the party."

Bill Cash, a leading Tory Eurosceptic, welcomed Mr Duncan Smith's election, saying: "The connection between domestic policy and European policy is so obvious it naturally follows that when one is talking about domestic policies one has to take into account European policy. It's impossible to disentangle the European issue from the domestic agenda."

Bookmakers William Hill reacted to Mr Duncan Smith's victory by suggesting that it had made the Tories less electable.

It lengthened the odds on the Conservatives winning the next general election from 3/1 to 7/2.

The Votes

Iain Duncan Smith:

155,933 (61%)

Kenneth Clarke:

100,864 (39%)

Turn-out: 256,797 (79%)

New Shadow Cabinet Members

Michael Howard, Shadow Chancellor

The former home secretary who Ann Widdecombe famously declared had "something of the night about him". Born in Llanelli in 1941, the son of a shopkeeper, he was only the second boy from his school to win a place at Cambridge. At Westminster, his cabinet posts included Employment Secretary and Environment Secretary. But he is probably best known as Home Secretary from 1993-97 when he had a reputation for being zealous on crime, insisting that "prison works". He is regarded by the Duncan Smith camp as a "big hitter" who may give Gordon Brown a run for his money.

David Davis, Party chairman

The chairman of the powerful Commons Public Accounts Committee and self-confessed "dark horse" of the Tory leadership race was number one on Iain Duncan Smith's "must call list". He was widely tipped for the chairmanship, a role that puts him at the heart of the party's policy development under the new leader. Mr Davis was reluctant to give up his job chairing the PAC but realised he could not turn down a major portfolio. He has developed a high media profile and is acknowledged to have been one of the most effective opponents of the Government.

David Maclean, Chief Whip

He was widely tipped for advancement after playing an important role in Iain Duncan Smith's slick leadership campaign. He moved to the IDS camp after winning plaudits as manager of David Davis's leadership campaign. Regarded as a shrewd operator who helped to rescue Mr Duncan Smith from the furore over his campaign's links with the British National Party. He is noted for being one of the few MPs to have turned down a seat at the cabinet table ­ refusing John Major's offer and insisting instead that he stay as number two at the Home Office.

Oliver Letwin, Shadow Home Secretary

Former special adviser to Sir Keith Joseph and member of Margaret Thatcher's policy unit in the 1980s. He helped to create the assisted places scheme for independent schools. Notorious for his comments during the election campaign that William Hague would cut £20bn from public spending ­ he had to go to ground while Labour put out "wanted" posters as they harried the Tories over his cuts pledges. A merchant banker with NM Rothschild who rose to become shadow Chief Secretary to the Treasury under Hague. Educated at Eton and Cambridge, wrote a PhD thesis on "The philosophy of emotion".

Bernard Jenkin, Shadow Defence Secretary

As campaign manager to Iain Duncan Smith, he has been given a job despite bungling the start of his boss's campaign when he announced the candidature a day early. He is basking in glory from the well-organised campaign, but has been said to have upset some Tory MPs with his abrasive manner. He was sidelined after the exit of David Davis from the leadership race when David Maclean was brought in to bolster Mr Duncan Smith's fortunes. The MP for Essex North is the son of Lord Jenkin of Roding, a cabinet minister under Margaret Thatcher.

Michael Ancram, Shadow Foreign Secretary

The aristocratic former party chairman resigned his post to stand as the Tory "unity candidate". He immediately shed this "unity" image with a bitter side-swipe at Michael Portillo, referring to "spin and stardust". His leadership campaign was soon floundering, the only question being the candidate on whom he would bestow his preference. This he eventually gave to Mr Duncan Smith after attacking Kenneth Clarke on the eve of the poll. His appointment to the Shadow Cabinet is seen as a move to bolster the new leader against claims of a further shift by the party to the right.