Tory right tears up uneasy truce with Major: Newsletter threatens new rebellion over value-added tax increases

THE THATCHERITE right-wing of the Conservative Party yesterday tore up the uneasy truce after the battle over Maastricht by attacking John Major for 'drift' and warning the Chancellor that he could face a fresh rebellion over tax increases.

In the most outspoken attack so far on the Prime Minister's leadership, Lord Parkinson, the former party chairman, accused the Government of lacking coherence and betraying its natural supporters. 'We must face the harsh truth: they feel let down, even betrayed,' Lord Parkinson said in Forward, a newsletter for Conservative Way Forward, a right-wing Tory group that he chairs with Baroness Thatcher as its president.

Lord Parkinson advised Mr Major: 'What we need now above all else is a period of stable government. Natural Conservative voters won't be impressed by a whole series of new initiatives or by the glamour of government advertising campaigns.

'They don't want a whole series of speeches from the Prime Minister setting out his philosophy . . . They want good government, they want an end to drift and they demand coherence and good presentation. Above all, they want a government they can once again believe in.'

He said the Government had been undermined by the Prime Minister's determination to force the Maastricht treaty through Parliament, the UK's exit from the European exchange rate mechanism, the handling of the pit closures, and ministerial resignations and sackings.

'Fifteen months on, there are many who will not bet on the Government's survival, let alone a fifth term. I believe that we will win the next election, but only if we can rediscover the coherence and unity which have been so sadly lacking this past year,' Lord Parkinson said.

The newsletter, produced by Sir George Gardiner, leader of the 92 Group, dismayed some of the Government's whips, who had hoped to put the divisions on Maastricht behind the party. Government business managers had been hoping for a trouble- free summer, leading to a Tory recovery at its annual party conference.

In an editorial, the newsletter warned that there could be a further right-wing rebellion if Kenneth Clarke widened the value-added tax base, without deep cuts in public spending. It said the Chancellor's readiness to raise taxes to pay for a 4 per cent increase in public expenditure was 'not the language of a Conservative Chancellor'.

'Simply to go for higher taxes is a cop-out,' it said. 'For a Conservative government to increase direct tax rates is totally unthinkable. But even further extension of indirect taxation will not be accepted unless a sharp knife is taken to public spending.'

One leading member of the group described Mr Major as a 'wimp'. However, he said there would be no challenge to his leadership from the Thatcherite right, because they did not want to replace Mr Major with Mr Clarke, who was more pro-European.

The Tories who are still bitter at the 'assassination' of Lady Thatcher by Mr Clarke and other Cabinet colleagues, would like to see her return, but accept it is not possible. 'It would be like Churchill coming back, but it won't happen,' one sadly said.