POLITICS
Don't panic: it's just another one of those triumphs for Mr Major
SIMON HEFFER
Mr Major had no doubt hoped the French referendum would happen before his currency, his policy, and his leadership were put on the spit for roasting; but he was wrong. The trouble with making promises you can't keep is that the markets have a habit of pointing out the foolishness of your rhetoric. Once sterling assumed the lira's place as the ERM's most effeminate currency, that is exactly what happened, and why interest rates had to go up.
Mr Major's leadership is in deep trouble. It will continue to be, whatever the result in France. The Italian devaluation proved the failure of the ERM, and the markets simply lost patience with Britain a few days earlier than they would otherwise have done. Mr Major's party is not behind him. The rise in interest rates is impossible for them to defend to their constituents. A devaluation, which may yet come too, would mean the end of Mr Lamont's career at the Treasury, and would put the first tranche of nails in Mr Major's coffin. His lack of judgment in having gone out on a limb to defend ster- ling, and his failure to listen to the over- whelming advice he has had that it would end in tears, has badly damaged him. He has only himself to blame, and, as this crisis deepens, the chorus will be not of sympa- thy, but of voices yelling 'told you so'.
A few of Mr Major's fellow Tory MPs choose to believe the Government's propa- ganda. Far more do not believe a word of it. Their innate loyalty, and passionate desire to avoid trouble, mean they keep an embarrassed silence. But there is a growing group, numbering anything up to 60 or 70 and best described as the Provisional Wing of the Tory party, who are in open revolt, and are further inflamed by Wednesday's rate rise. They state that Messrs Major and Lamont have forfeited their trust. With the Opposition in disarray, this group is the greatest threat to Mr Major. For the first 18 months of this adminis- tration a successful operation was conduct- ed to marginalise those who continued to profess 'Thatcherite' sympathies. But since the Danish vote the outlook inside the party has changed. It is not just the usual suspects, as Kenneth Baker and Sir Peter Tapsell (to name but two) have proved. 'You know', one MP told me the other day, 'how every Frenchman you meet of a cer- tain age was in the Resistance? We've just about reached that stage on Maastricht. If the French vote "no" only a few loonies will ever claim to have supported it.'
This is despite the division lists, which show only a small and embattled group opposing Mr Major at each turn. Such would be the relief if the French voted non that those less principled souls who have signed up with the `no' camp subsequently would engage in a corporate act of amne- sia; in which it would be as impolite to mention their former enthusiasms as it would be to disclose to their wives their lat- est adultery. The hard core, however, are in a less forgiving mood, and want revenge.
If there is a `no' vote, that revenge will be unsatisfactory. They can cry 'coward' at Mr Major for letting the French and the Danes take a step that he was too misguided, or too craven, to take himself. But Mr Major would, for the time being, survive. Forced to change tack, he might even become a good prime minister. But a `no' would exac- erbate the turmoil on the foreign exchanges. Sterling would come under still more pressure; Mr Major would be faced again with putting up interest rates or devaluing. This time it would, unlike Wednesday's rise, be no holding operation until some event like the French vote. It would be a long-term move. In those cir- cumstances, even the most loyal of Tory MPs would have trouble telling their dis- traught voters that the hike in rates served them right for being so spendthrift and imprudent in their personal economic prac- tices. Unless complete insanity sets in, devaluation it will be, no doubt through sterling floating on the foreign exchanges.
All this is bad enough, but, if I were Mr Major, I would be infinitely more worried about the French voting oui. Whatever the the majority, it would change nothing as far as his party's anti-Maastricht tendency are concerned. This group recognises that many colleagues — inordinately many when one recalls that the Government's majority is 21 — never wanted the treaty but only supported it because of cowardice in the face of the whips. Many bridges have been burned since then. Opinion in the country has hardened behind them. 'I've started to get letters about it these last few weeks,' one MP told me. 'I couldn't tell you really what they think about the principle of the thing. I do know they're deeply pissed off at not getting a referendum here. They think Major's sending them up.'
Any 'yes' vote is unlikely to be on the scale of Ireland's in June, when two-thirds voted for the gravy train to continue to call at Dublin. This would give Mr Major's opponents the added weapon of pointing to underwhelming support across the Chan- nel. The problems on the foreign exchanges would not go away. Worse, many Labour MPs believe Mr Smith is searching for an unhumiliating way of resiling from his earli- er passions on Europe. This is not merely because of the attack he is under from a third of the Shadow Cabinet, but also because even he has realised he cannot continue to con the public that interest rates must come down while holding the value of sterling. And, as some of his less subtle colleagues observe, he should say that sterling needs devaluing because of the mess the Tory party has made. If the French vote 'yes', Mr Major has no escape. He has promised to bring the Maastricht Bill back. He could instead bring his leadership further into question by deciding on a new postponement until the Danes have told the world their plans. Since it is conveniently forgotten that the Treaty requires unanimous approval, Mr Major would have logic, if not honour, on his side if he were to seek a new delay in confronting the problem. If the Bill comes back, Mr Smith could support a referendum and solve two prob- lems. He could just about unite his party — for the moment — and it would give him a chance to bloody Mr Major's nose. His own leadership has been so hapless since his election in July that he urgently needs some stunt or other to put himself on the map.
So the Opposition, like the Government, is relying on the French to make its deci- sions for it, just as the Germans decided our interest rates had to rise on Wednes- day, and as they may yet force us into fur- ther rises or devaluations as well. As Mendes-France, and Lord Lawson after him, used to say, gouverner, c'est choisir. Mr Major, for failing to choose either at all or very carefully, is in what President Bush used to call deep do-dos. Having elected him to govern — something which, in his repudiation of referenda, he claims to be keen to do — his people are now anxious to see him do a bit of governing. In the inter- ests of seeing whether he has the skill to deserve to stay as Prime Minister, perhaps the French should vote 'yes'.
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