Political Commentary: Paddy's reasons to be cheerful

SIX long weeks ago, you may remember, there was a reshuffle. It was traumatic for the Prime Minister, though not quite as traumatic as for his departing Chancellor. But the advantages, as stated at the time, were clear. It would help to draw the line under the Government's annus horribilis culminating in its defeat at Newbury; it was essential if the the Prime Minister's authority were to be preserved. With any luck it would help him turn the political, as well as the economic, corner.

And now? Last week the Daily Telegraph/Gallup poll placed the Tories third, behind the Liberal Democrats. The reshuffle seems to have changed nothing. Indeed, Mr Lamont could be forgiven for wondering if the Government's showing could have been any worse if he had stayed in office.

This is deepening Tory gloom as the Christchurch by-election on 29 July looms; and hardly ever was a by-election called with greater reluctance. The Tories have so heavily discounted the result that if they won it by the narrowest of margins it would be seen as a signal victory.

Spirits are not lifted by dark and persistent rumours - denied by the local party organisation - that party volunteers from outside the constituency have been thin on the ground in the run-up period of early July. They are not lifted either by the high proportion of elderly voters in the constituency. In the party's unpublished constituency surveys, the fall in interest rates is near or at the top of listed reasons against voting Tory. It is a constituency of savers and the fall in interest rates counts against the Conservative Party. But, discount it though they may, the fall of Christchurch would have a serious impact on the Tory party. It is, after all, their 15th safest seat.

The conventional wisdom is that the polling day at Christchurch was deliberately timed to coincide with the rising of the House, to ensure minimum plotting time in the Commons in the event of a defeat. Some MPs are saying, more precisely, that the date also ensures that any bad news comes after John Major gives his traditional end-of-term address to the 1922 committee, which all Tory backbenchers belong to. Bad news could mean a bad reception, a piece of advance planning which does not display much confidence in the state of backbench opinion. But it now looks as though John Major will address the 1922 even earlier than originally thought.

For the other imminent danger is the debate on the European Social Chapter, expected on 26 July, in which at least a handful of Euro-rebel MPs are still threatening privately to vote with the Opposition. There are even a handful of pro-European Tories who actually believe in the Chapter and could vote for it. This remains of intense interest, because the Government is not yet certain of winning, and it will be hugely destabilising if it does not. The Euro-rebels are now divided and the Government's best prospect would be if John Biffen, much listened to as an adviser by all but the most extreme, decides to vote with the Government. None of this is yet certain. A possible scenario for the critical last full week of July - and perhaps also the best the Government can hope for - goes like this. 1 John Major gives rallying speech to the 1922 committee, appealing for a unified pro-government vote in the social chapter debate. 2 Victory in the debate. 3 Probable defeat in Christchurch. 4 Everyone goes home and all talk of a stalking horse for the Tory leadership in November is banished once and for all. By the time they get together again for the party conference, the Christchurch hangover has gone.

Well, maybe. The party conference itself may not be easy, whatever happens. The European elections are coming up next summer and there are already signs of a forthcoming internal struggle over the Tory manifesto for them, over what kind of Europe the party wants post Maastricht, and how far the manifesto should incorporate elements, unwelcome to the Euro-sceptics, from the European People's Party, the Christian Democrat-dominated international alliance to which the British Tories now belong. John Major is not suddenly going to sign up to the goal of monetary union, much less the Social Chapter. But the ratification of Maastricht marks hardly a pause, much less an end, to the struggle for the party's soul over Europe.

Nor will other sources of discontent have disappeared: VAT on fuel bills, for example. Tomorrow Harriet Harman, shadow chief secretary to the Treasury, publishes a list of councils where Tory councillors have voted in favour of Labour motions condemning the imposition of VAT on fuel. The point of publication, on the eve of tomorrow's Finance Bill vote, is to encourage Tory MPs to rebel. But what it demonstrates is that, away from the relative discipline of Westminster, Tory activists would rather vote against government policy on VAT than risk the obloquy of supporting it. The party conference, is threatened by many motions on the same subject. The Liberal Democrats in Christchurch will be campaigning on the VAT issue and a defeat for the Tories, caused partly by such a campaign, could make the conference all the more difficult.

Not that there is much comfort for Labour here. The party is in real trouble over internal democracy. John Smith still faces the possibility of a personally damaging defeat by the unions at his own party conference over his insistence, which he will restate today, that parliamentary candidates should be selected on the principle of one member, one vote. There is bad blood in the argument, with each side accusing the other of undermining the leadership of Mr Smith. There is no firm evidence yet that by agreeing to shelve the question of how the leader is elected he can salvage a sensible method of selecting MPs. And if Mr Smith is defeated, he may take some of the blame for not giving a more decisive lead on the OMOV issue earlier in the political cycle. He may yet have to, in the words of Hugh Gaitskell, 'fight, fight and fight again to save the party I love.' Christchurch has few pluses for Labour, either; if it does well it helps the Tories win. If it does badly, its grip loosens still further in the south of England.

Compare and contrast Paddy Ashdown. Mr Ashdown will tomorrow make an important speech on some big issues which most have us had forgotten about. One of them will be how you can win an election without lying about tax. He will challenge the other parties to think about whether one way is to say explicitly where the money would go, as the Liberal Democrats did in the general election with their 1p income tax rise for education; and whether another would be referenda on tax-raising proposals for specific projects such as the Channel Tunnel link.

The usual gripe against the Liberal Democrats is that they can afford the luxury of raising such questions, because they stand no chance of dirtying their hands with power. Yet they are at their highest level since Mr Ashdown became leader and without any of the media hype which attended the Alliance. In the three months to the end of June they gained 19 seats in local council by-elections compared with six by Labour and seven by the Tories. They are likely to win another by-election. Of the three party leaders, only Mr Ashdown has something to shout about.