Sleaze issue still dogs the Tories

THE Tories don't deserve this; nor does "New" Labour

THE Tories don't deserve this; nor does "New" Labour. That heartfelt complaint was implicit in Chancellor Kenneth Clarke's prediction (prayer, more like) that the Conservative Party's luck must eventually turn, and election `97 focus on the real issues.

The retiring Douglas Hurd has said it is time to close down "the amusement arcade". Mr Major yesterday attempted to draw a line under allegations of "sleaze", accepting the right of those who protest their innocence to stand as candidates, while promising to back the expulsion of any MP found guilty by Sir Gordon Downey's report on the "cash for questions" affair.

Mr Tony Blair says he wants to raise the sights of the electorate and talk about education, the economy and Britain's role in Europe. Well, we shall see. Past experience tells us what usually happens when Mr Major stages a fightback. And Mr Blair's campaign manager, Mr Peter Mandelson, warns that if former minister Neil Hamilton remains the Conservative candidate for Tatton, the "sleaze" issue will dog the Prime Minister until polling day.

The Opposition parties continue to enjoy the best of both worlds, somewhat piously regretting that the campaign should be mired in "sleaze", while joyfully assisting the disintegration of the Tory effort. They have properly drawn a distinction between MPs embarrassed by revelations about their private lives, and those like Mr Hamilton accused of taking bribes in pursuit of their parliamentary duties.

READ MORE

MPs on all sides will share Sir David Steel's anxiety about the slide into the grubbiest election in living memory. There are already suggestions that the Conservatives, in opposition, might feel little inclination to resist fresh calls for new privacy laws. And the Beckenham Tories have coupled their backing for Mr Piers Merchant with the warning that "we seem rapidly to be descending to the point where the tabloid press is our unelected government".

Many commentators were astonished at the speed with which Mr Major and Mr Heseltine invited Mr Merchant to consider his position, after the exposure of his alleged affair with a 17-year-old nightclub hostess. They would have expected them to take the Hurd line that "private lives are for individuals to sort out". The opposition inevitably contrasted Mr Major's attitude to Mr Merchant with his continued indulgence of Mr Hamilton.

Labour and the Liberal Democrats are actively considering standing down in favour of an "anti sleaze" candidate in Mr Hamilton's constituency. It is suggested that Mr Hamilton's misleading of the deputy prime minister (over his financial relationship with a lobbyist) and the question of his tax returns would provide ammunition enough, without need to pre-empt the Downey report, or his findings on the allegation that Mr Hamilton took envelopes stuffed with cash from Mr Mohammed al-Fayed.

Mr Major at first insisted Mr Hamilton should be regarded as innocent until proven guilty. As the allegations threatened to sink the Tory campaign, he then let it be known that he wanted Mr Hamilton, like Mr Tim Smith, to be stood down.

Faced with refusal by the Tatton Tories (backed by some of Mr Hamilton's powerful friends on the right) Mr Major found himself mocked for yesterday's compromise, in which he appeared to resign himself to Mr Hamilton's candidacy, while threatening the full "draconian" powers of parliament would be deployed against any MP found guilty of misconduct.

Labour accused Mr Major of running up the white flag. But some close observers suspected a deliberate lifting of the public pressure (which plainly wasn't working) in the hope that Tatton Tories would reflect on Mr Major's barely-coded appeal that they should act ahead of nomination day if they have any fear that Downey will find against Mr Hamilton.

IT IS against this unnerving background that Mr Major will this morning introduce the Conservative manifesto. He will seek to assert continuing Tory dominance in the Big Ideas market with proposals for a pensions revolution, radical reform of the Welfare State, and continuing privatisations.

He will promise to keep public spending to below 40 per cent of national income; maintain inflation at 2.5 per cent or less throughout the next parliament; chart a course to eliminate public borrowing by 2000; and promise Britain under him will maintain the lowest tax burden of any major European economy.

Mr Major will couple the Tory pledges with a renewed assault on "New Labour" as "a sham, a con trick, a fraud". Chancellor Clarke will let rip against Mr Gordon Brown, who says he will live within Tory tax and spending limits, not because they got the economy right, but rather because they got it wrong.

The Tories will renew their attack on the "job-destroying" implications of Labour commitments to the Social Chapter and the Minimum Wage. They will repeat claims of a black hole in Mr Brown's spending plans, the result of missing privatisation receipts. And they will challenge him to spell out in advance of polling day the detail of his proposed July budget statement.

World rankings published last week showed UK plc soaring from 19th to 12th place in the world competitiveness league, the result of robust economic growth, falling unemployment and competitive labour costs.

By any objective standard, the Tories still have a good campaign to fight. Despite the excitable reaction to Dr Mo Mowlam's comments on the terms for Sinn Fein's involvement in talks, the essential bipartisan approach to Northern Ireland should hold good for the duration of the campaign. But the people of England will surely want a debate about the implications of a tax-raising parliament in Edinburgh.

Labour has lost the battle of ideas over the past 18 years. Mr Blair's steady convergence on Conservative ground is not wildly appealing to many traditional Labour voters, and would suggest pause for thought by erstwhile Tory supporters, no matter how disillusioned with the government's performance. In a withering contribution yesterday, Baroness Thatcher said that, while imitation was the sincerest form of flattery, an imitation remained a fake.

The "demon eyes" are set to reappear, and the Tories will play "phoney Tony" for all their worth. In a remarkable (and presumably accidental) piece of choreography yesterday, even Sir Edward Heath weighed in, rejecting Mr Blair's claim to represent the party of "One Nation".

Mr Major will take support wherever he can find it. But he must privately reflect, too late, too late. The sense persists that the Tories blew it early in the life of this parliament. And if Mr Major has shown an unerring capacity to make bad situations worse, he has been routinely sabotaged by the party he now struggles to save.

The two former prime ministers in their own ways have done much to undermine Mr Major's position. Their protestations of loyalty now are likely to carry as much conviction as Mr Hamilton's claim to be a victim of media conspiracy. While Mr Major won't want to talk about him this morning, it will be amazing if the press pack elects for a vow of silence on the issue which has thus far refused to go away.