POLITICS

Can the Government survive the Chancellor's resignation — or his remaining in office?

BRUCE ANDERSON

Mr Rifkind will not shun support; neither will he rely on it. In the short term at least, there is no hope of destabilising the Fran- co-German entente which has so often frustrated Britain. It is probable that the whole of Euro-politics will become much more fluid once Chancellor Kohl has left office, but there will be no significant change until then.

As regards the IGC, this need not worry us. In 1985, we wanted the Single Market; in 1990, enlargement. If you go shopping for such large items, you must pay a high price. This time, we have no shopping-list. From time to time, I used to ask Douglas Hurd whether he was psychologically pre- pared for the IGC to crumble into failure and recrimination; the prospect did not entice him. He appeared to share the For- eign Office's belief in the overriding impor- tance of a deal, plus its horror of isolation. Mr Rifkind finds no terrors in solitude, and, even if his Minister for Europe, David Davis, does not relish that prospect as much as he claims, he is a sound Euro- sceptic.

Hence Tuesday's White Paper; hence widespfead Tory assent — hence also, one might have thought, a chance of electoral advantage. Such is the anti-European mood in the country that, all things being equal, the party which is least enthusiastic about Europe should have an advantage. That is the problem for this benighted Govern- ment. Things never are equal; there is never any luck.

The European Court of Justice did not actually conspire with Kenneth Clarke to wreck the Rifkind launch, but the poor Foreign Secretary was entitled to feel put upon. He might have been grateful that certain newspapers did not report the matter fully; they needed the space for the Princess of Wales's sporting interests.

The European Court of Justice is a much bigger threat to this country's long-term interests than the Chancellor of the Exche- quer is; but Mr Clarke's colleagues could be forgiven for believing otherwise. There is a 50-50 possibility that Ken Clarke is determined to confront the Prime Minister and the Cabinet with a brutal choice: crisis, or disaster.

There are powerful arguments against a referendum. Our system, which has served us well, is not plebiscitary but representa- tive democracy. As such, it sits uneasily with referenda. But our system is flexible. In recent years, the practice has grown up of using referenda to decide constitutional issues, and it is interesting to observe how quickly an expedient can turn into a prece- dent.

For about two years, the Prime Minister has been convinced that it would be impossible to take Britain into a single currency without a referendum, and that any attempt to do so could provoke such public indignation and withdrawal of con- sent from the governing process as to threaten the stability of the system. That is a position which would seem to be but- tressed by an immense weight of common sense.

But Ken Clarke is a formidable counter- weight. His position is the same as Helmut Kohl's: to unite Europe as rapidly as possi- ble, irrespective of public opinion. Both men have seized on the single currency for political rather than economic reasons. If it were introduced, it would indeed add an almost irresistible momentum to the pro- cess of political union. Messrs Clarke and Kohl share a belief that they understand the public interest far better than the public does. So build Europe first, and let democ- racy catch up later.

Among the many minor details which Mr Clarke would be happy to bulldoze aside in the pursuit of his vision is the management of the Tory Party. Mr Major, who does not share the Clarke-Kohl vision, can be forgiv- en for devoting himself to that lesser task. In effect, he offered Ken Clarke a choice: to agree that the Government would com- mit itself against entering a single currency during the lifetime of the next Parliament, or to accept a referendum. Mr Clarke's reaction was the opposite of his usual response when confronted by a restaurant menu: on this occasion, he rejected both. But he could never have prevailed.

When John Major became Chancellor, his officials noted the contrast between his style and his predecessor's. Nigel Lawson had relished adversarial meetings. He enjoyed jousting with his Treasury knights; sometimes, he liked to sum up the discus- sion before it had taken place.

Mr Major was wholly different, with an almost Japanese enthusiasm for decision- making by consensus. It was some time before the officials realised, as issue after issue moved crab-like towards agreement, that it was almost invariably a consensus on the new Chancellor's terms.

Thus it has been with the referendum. Mr Major has used the mechanisms of Cab- inet government to try to bring his Chan- cellor into line. The slowness of this pro- cess has exasperated some Cabinet colleagues who feel that the issue should have been resolved much earlier. But mat- ters have now arrived at a climax. The PM cannot give way without forfeiting all authority. So will Mr Clarke accede or secede?

There is an obvious parallel with Michael Heseltine and Westland. Hezza and Ken are both proud men. If they are offered a choice between an ignominious retreat and a desperate attack, they will choose attack every time. But there is a difference. Mr Heseltine could claim — justifiably — that Mrs Thatcher had stifled Cabinet discus- sion and swept aside his objections with a snap of the handbag. Mr Clarke cannot complain about lack of courtesy or lack of opportunity to express his views, When he is overruled, it will not be by prime ministe- rial fiat, but by the collective decision of his colleagues.

He might still resign. He has not made up his mind, but he is in a truculent mood. His departure would not of itself bring down the Government, but it would be vastly damaging, adding further layers of contour-lines to the Tories' electoral moun- tain.

But the alternative would be the destruc- tion of the Prime Minister's prestige and a guarantee that the Tories would fight the next election as hopelessly divided on Europe as Labour was on nuclear weapons in 1983. That would not be an alternative; it would be suicide.