25 JUNE 1977, Page 3

Knife of Steel

David Steel, through the fluky combination of a minority government wanting to stay in power and a collection of nationalists wanting a general election, finds himself in a most unusual position. As long as the Tories and the nationalists want an election, and as long as the socialists do not, Steel and his tiny band of liberals hold the balance. As long as it remains abundantly clear that the Prime Minister fears an election, the ability to call one is transferred from Mr Callaghan to Mr Steel. By declaring his intention of soldiering, or rather sailing, on, the Prime Minister has handed his most valuable tactical weapon to the Liberal. The gut political question is whether Steel will dare to use the knife. Will he have the guts to Plunge it into Callaghan; and if so, when will he Choose to strike? The Prime Minister must presume that Steel will lack the political will to stab him in the back; and he may well have argued to himself that since the Liberals are just as frightened of a general election as is the Labour Party, the knife will never be used. But at the moment, and for the remainder of this Year and the first half, at least, of next, Steel's knife is Sharp enough to finish off the Government. Mr Callaghan himself honed it well, when, huffing and puffing, he said, 'So I say to the Conservatives, calm down. Huff and puff as much as you like, we shall keep straight on until the day comes for a fair test, and When that day comes I have no fear of the result.' He could have added, but sensibly did not, 'And I say to the Liberals, sit down. Huff and puff if you must, but You will keep supporting me until I decide that the day has come for a fair test, and when that day comes it Will be the end of you.' What the Prime Minister Cannot have calculated, or, if he has, has nonetheless decided to risk it, is that Steel will be very foolish if he does not use the opportunity he now possesses. The greatest power he and the Liberal MPs have ever had, the power to force a general election, is in their hands. Yet the indications remain that they will soldier, or rather, sail on with Callaghan, helping to make up the ragged crew of HMS Irresolute, that foundering dreadnought whose only remaining function, before being broken up, is to remain afloat. Not that Steel puts it like that. Instead, he huffs and puffs: 'In the autumn we shall either be fighting an election on the basis that the Labour Party has proved unable to govern in a purposeful and useful way, or else we shall be sustaining a Government in office with an agreed programme which will include some Liberal content.' What more does he expect this Government to do, to prove that it is unable to govern in a purposeful and useful way, which it has not already done and is not already doing? How much more incompetence and irresolution does Mr Steel want?

Steel justifies his feeble posture most curiously. Correctly he appreciates that there is a view on the Labour left which is prepared to contemplate a massive Tory victory at a general election as a means to reconstruct the Labour Party on Senn lines. 'Liberals', says Steel, 'could even welcome such a prospect, because it would also lead to a reconstruction of the centre-left in politics.' Why, then, does he hesitate to strike? Because, he says, 'all this ignores the dire consequences of a new ultra-right-wing Tory government.' If Mrs Thatcher's government shows signs of being ultra anything (and it doesn't), it is of being ultra liberal, using 'liberal' in the sense it had when the Liberal Party was an anti-socialist party of government. 'Right-wing', in the usual sense of being authoritarian, paternal, bossy and interventionist Mrs Thatcher is not. Steel doubtless knows that for the present Liberal Party in the country, the Lib-Lab pact has been a disastrous mistake; but he can scarcely admit it, and he might as well let it run on until the autumn. But should he negotiate a second term, then he will have thrown away the knife that Callaghan has given him. Has Steel the steel to use the knife? We will know by October.