The stakes are appallingly high, yet few Tory MPs realise it

BRUCE ANDERSON

From a Tory perspective, the New Year dawned in inspissated gloom. At most, there are four months left before the election, yet the party's political identity is still largely undefined. For long stretches of this Parliament, the Blairites have succeeded in driving the Tories to the margins of political debate, so that William Hague has barely been able to consolidate the voters who stayed loyal to John Major in 1997. Mr Hague would appear to have only one important electoral asset: the public's dislike of large majorities.

But the short term and the longer term are out of alignment. Though the Tories' immediate prospects may look bleak, that could rapidly change. For this general election is only the second most important test of public opinion to be held this year. The Tories' prospects look better for the more important one: the referendum on the euro.

The Foreign Office is now working on the assumption that the referendum will be held in September or October. The government favours an early date for two reasons. The first is to ensure that the transition to the euro is accomplished within one Parliament; it does not want to go into a 2005/6 election with sterling notes and coins still in circulation, thus giving the Tories an obvious battle-cry: 'The last chance to save the pound.'

The second is to exploit Tory disarray. The Blairites hope to win this year's election by a sufficient margin to provoke a Tory leadership crisis. They would like to see the Tory high command spend the spring and early summer at one another's throats, so that whoever emerges — or survives — as leader goes into the referendum campaign with minimal authority. Those who are planning the government's campaign have absorbed the lessons of the 1975 European referendum, when it appeared as if all the likeable and trustworthy politicians were on one side, all the wild and woolly characters on the other. If the Tory party were in a state of fratricidal confusion, the Blairites calculate that Messrs Clarke, Heseltine and Patten could seem much more persuasive than their notional party's nominal leaders. The government will do everything possible to keep the pound out of the election, while hoping to use the election to gain enough momentum to abolish it.

This is certainly the best chance of persuading the British people to vote for the single currency, but there are still formidable obstacles. Election victories do not guaran

tee referendum results, as Labour almost discovered in the 1997 vote on a Welsh assembly. The Tories were exhausted and demoralised, especially in Wales, where they had lost every seat. The 'Yes' campaign seemed to have all the assets and all the leadership, yet the 'Noes' almost won. The polls suggest that it is the settled will of the British people to retain the pound; it is certainly the settled will of the Tory media to encourage them to do so. So the government could still be defeated in a euro referendum despite the Tories' weakness.

But that would be a foolish gamble for any anti-federalist Tory to take. Another Parliament out of office would be a blow, especially to a party which hates opposition. As long as the Tories could help to secure a 'No' vote, however, another four years of Labour need not be a disaster. Tony Blair is not Tony Berm.

So everything depends on the referendum vote. If Mr Blair were to lose it, his government would not instantly disintegrate, but it would lose all its political impetus while Mr Blair's own prestige would suffer a grave blow. Since the war, every government which has lost an election had already lost its authority. If Mr Blair were to lose a referendum, that could also be true of him. It would certainly be true of Ken Clarke and Michael Heseltine. If they spent the referendum campaign in the Blairite camp and then lost, they would cease to have any influence on the Tory party.

But suppose they and the Blairites won. The Tories would be bitterly divided between those who insisted that, however unwelcome, the result had to be accepted and those who refused to surrender. The latter would be likely to broaden their agenda from the resurrection of the pound to a fullscale withdrawal from the EU. It might be hard to avoid a formal split.

If Mr Blair were to lose a euro-referendum this autumn, the Tories would suddenly become favourites to return to power in 2005. But if Mr Blair were to win, it would be hard to foresee the circumstances in which the Tories could win another election. The Eurofanatics would be in a position to dominate the political battlefield for at least a decade, by which time federalism would have become almost irreversible.

High stakes, yet an appalling number of Tory MPs seem unaware of just how high. One might have thought that after the past

ten years, the Tory party would have learnt that panic is not a suitable response to adversity. Nor is sharpening daggers for the leader's back. In the mid-1980s, David Steel suggested to his fellow Liberals that it was unwise to approach every problem with an open mouth. That may not have had much effect on the Liberal party, but it raised a chuckle in Tory circles. It was the sort of comment which Liberal leaders were expected to make, unavailingly. Well, for the past decade, the chuckle has been in the other mouth. It is Tory leaders who have been giving similar advice to their troops, who have shown no signs of heeding it.

Loyalty used to be the Tory party's secret weapon, except that there was nothing secret about it. After such a low, disloyal decade, even the most numbskulled Conservative backbencher ought to have realised that careless talk costs votes.

Mr Hague cannot escape all blame for his party's misfortunes. But there is a price to pay for having an inexperienced leader with an inexperienced team and an hereditas damnosa. Mr Hague took over the leadership in the worst possible circumstances. Convinced that the economic recovery had begun on 2 May 1997, the public were simply not interested in anything that the Tories had to say. Even well-founded criticisms of Mr Blair and his ministers seemed to misfire, because they merely reminded the voters how much they had disliked the previous government.

It is probable that nothing could have been done about this. The Tories simply had to possess their souls in patience and wait on events; hope that the government would exhaust its stock of goodwill; hope (in secret) for an economic downturn; above all, wait for Europe.

For three and a half years, while British politics appeared to be dominated by spin doctors and soundbites, a great event has been maturing, and in a Tory direction. The referendum on the single currency could transform British politics — and destroy Blairism — as long as the Tories concentrate on winning it rather than on destroying themselves.

William Hague is now a better leader than he was in 1997: the best leader the Tories have got — the only leader the Tories have got. Whatever happens on Thursday 3 May, the party ought to unite around him on Friday 4 May, in order to fight the real battle.