Breakfast time, and he's full of fight

Feeble jokes and flat oratory aside, the Prime Minister remains formidable, says Andrew Marr

There was no interruption from a wild-eyed, air-stabbing member of another party. There were no hard questions. Among the scrambled eggs, smoked salmon and coffee, there was a great, murmuringly omnipresent desire by hundreds of business leaders to be

It did, however, provide a fascinating and useful foretaste of how Mr Major will campaign; what his main lines of attack will be, and the tone of voice he has chosen in trying to grapple with and pin down new Labour.

Let us begin with the voice. He was not then, and never will be, a silky or inventive orator; the jokes were almost endearingly lame, the sentences studded with redundant "most emphaticallys", and the rhetoric replete with classic, anti-climactic Majorisms ("deregulation is like wrestling with a greasy pig - there is always a lobby opposed to it").

But those of us easily distracted by the fleeting image of anti-pig-wrestling lobbies are in a minority. These slight eccentricities of speech apart, Major was compelling, lucid, thoughtful and friendly. The nation may not yet be at ease with itself; but its Prime Minister most emphatically is.

The central theme was that Britain is experiencing a golden economic dawn. It seems clear that Major wants to fight on the economy first, and the constitution second.

Economically, he wants to focus the country's mind on the remaining important differences of policy with Labour. Gordon Brown's emphasis on tackling youth unemployment will be met with Tory insistence on the connection between the higher joblessness in France, Italy and Germany, and the minimum wage. Continental protectionism, Mediterranean social costs and Britain's swollen share of inward investment were savaged and lauded as Major tried to convince us that we really are, this time, on the edge of economic rebirth.

Of course, incumbent politicians have been saying that for decades. With the exception of the Lawson hubris, economic success is perpetually declared to be "a real prospect", "just around the corner" or "beginning to dawn" - a benign, curly-haired golden Godot who never quite makes it.

Yet Major is a good advocate and much of his case today is not really contested by Labour (or Brown wouldn't have signed up to Kenneth Clarke's expenditure totals). On the other hand, like any good advocate, he ignored one half of the picture - our structural weaknesses, our underinvestment, the great swaths of failed and hopeless Britons. He was hot about the evils of job-killing minimum wage legislation, but strangely silent on the evils of poverty wages and exploitation.

The Prime Minister did not dwell on Gordon Brown's dramatic promises about income tax and VAT, merely noting - interestingly - that if the Tories won, there would be "relatively little tax changes in the next parliament". He did ask a series of detailed questions about the legality, scope and scale of Labour's proposed windfall tax - Tony Blair's men now have ample warning about one persistent Conservative line of attack, and should be preparing their answers.

I did not get the impression that Major wanted either VAT or income tax to feature much in the coming campaign, perhaps for obvious historical reasons. But that, if so, would represent a hugely significant tactical Labour success, vindicating Brown's announcement at the beginning of the week. This, so far as I can tell, would make 1997 the first Tory campaign since the war not to feature Labour's plans for income tax.

Major was not, however, implying that taxation generally wouldn't feature. He reasserted his pledge to concentrate on cutting capital gains taxes and inheritance tax and hoped to cut the basic rate to 20p.

But he emphasised that all this would come "only when it is affordable". Early Tory thinking in response to Brown's political coup on taxes seems to be to question new Labour's credibility, since the business cycle might mean taxes going up anyway, as happened after 1992. This is cheeky stuff. Once the Conservatives said Labour was irresponsible because it was the party of high taxation. Now they say Labour is irresponsible because it is promising not be a party of high taxes.

The other theme that Major wove in and out of his economic message was Europe. In a sense, for him, the EU and the economy have become a single message, with federalism and social protection the twin evils. Unlike, say, Michael Portillo or John Redwood, he describes the European question in economic and pragmatic terms. I don't think he mentioned the word "sovereignty" once.

For him, "national interest" is more about GNP than the grand sweep of Our Island Story. As to the true Brussels-hater's fervid concentration on legal authority, European supreme law and all the rest, Major just doesn't get it. This must have comforted the businessmen, even if it depresses his Eurosceptics.

Partly because of the business audience, no doubt, Major said relatively little about the other big issue, political reform. But he was withering about Labour's proposal to turn the Lords into an elected quango. Far from the hereditary peers being Tory poodles, they had just defeated his government's proposals (on the Police Bill). This was something the Lords had not inflicted on him since - well - the day before. How would government be improved if the Lords were turned into a body appointed by Downing Street?

Fundamentally, I think, he is wrong on the Lords, just as he is deeply wrong when he suggests that Scottish home rule would be "the blue touch- paper" breaking up the British Union.

In the case of the Lords, there is a deep Tory majority available for the really important occasions, and there is the anti-democratic use of inherited voting to frustrate the Commons. He is right to mock Labour's half-way-House; the answer is either abolition or an elected, senatorial Upper Chamber. And when it comes to Scotland, it is the anti-change, anti- popular Tory diehard position which endangers the Union, not the moderate proposals of the reformers.

But this first real taste of Major in electioneering mood was not a test of whether one agreed with his ideas or not - they are familiar enough. It was more a test of his ability to compress and project arguments in a compelling way - a test, in short, of whether he still "has it" as a campaigning leader. And he has.