POLITICS
How the Prime Minister won his dispute with the Chancellor (with Hezza's help)
BRUCE ANDERSON
For once the British system of govern- ment worked properly: high principle gave way to high politics. As recently as the weekend, the fundamental arguments were still in play, the Cabinet apparently still divided by a constitutional dispute. Mal- colm Rifkind's paper on a single currency referendum had not yet appeared; would it be discussed in Cabinet this Wednesday, or would everyone disperse for the holiday with the decision postponed yet again?
But the negotiators were hard at work. Nos. 10, 11 and 12 Downing Street (No. 12 being the Chief Whip's Office) all have sep- arate façades, as does the Cabinet Office. But they are merely façades: a network of passages connects all four buildings, and on Monday and Tuesday there was a lot of traffic along them.
Michael Heseltine played a key role. Ini- tially opposed to a referendum, he had become persuaded by the political argu- ments. He has also settled down as a loyal deputy: he knew that the Prime Minister had to win this dispute. So he used his Euro-credentials to steer Mr Clarke towards a settlement. But right up until Prime Minister's Question Time on Tues- day, the issue seemed to be in doubt. It was Mr Clarke's confident and bonhomous manner on the front bench, displaying an easy rapport with the PM, which made it clear that the matter was settled.
It is still unclear what game Ken was play- ing. He has demonstrated over the past few weeks that he is a big beast of the jungle, and not to be trifled with — but no one thought otherwise. The probability is he did not have a plan and was just following his instincts. Ken Clarke has never been a tacti- cian; Chris Patten once described him as a biller, and he is inclined to biff first and only then think out his position.
In these protracted negotiations — for this matter had been on the agenda for over a year — Mr Major made one technical mis- take, but Mr Clarke committed a strategic blunder. Mr Major's error was to let the Chancellor pocket a concession without extracting a quid pro quo. Originally, Mr Clarke had declared himself opposed not only to a referendum but to the idea of a manifesto commitment ruling out British membership of a single currency in the life- time of the next Parliament. The PM let him have his way on the latter instead of insist- ing that there had to be a choice: Mr Clarke could veto one or the other, but not both. From his point of view, Mr Clarke chose the wrong proposal to kill. A commitment not to join a single currency in the next Parlia- ment is a relatively minor concession there may not even be a currency to join. But the referendum is a much more formidable obstacle to the Euro-fanatics' ambitions. It will make it hard for any gov- ernment ever to join a single currency. Labour is now bound to match the refer- endum pledge. Its failure to anticipate the Government's decision and make Mr Major look foolish by pre-empting it was a rare tactical blunder by Tony Blair, whose Euro-enthusiasm and belief in a single cur- rency were strong enough to lead him for once — to disregard electoral calcula- tions. But he cannot now hold out.
So Mr Clarke, as fervent an enthusiast for the single currency as is to be found on either front bench, may have put up fierce resistance, but he has ended by settling on inferior terms. That said, the whole argu- ment had a farcical quality.
It is now inconceivable that any Tory prime minister could induce his party to accept entry into a single currency. A sub- stantial and growing majority of Tory MPs simply would not accept it. There are cir- cumstances under which a Tory premier might come under pressure from a section of his own supporters. If a single currency were established and seemed to be working and if, in consequence, Britain was suffer- ing trading disadvantages plus high interest rates and endless assaults from currency speculators, much of industry and the City might well swing in favour of joining. But even if this hypothetical future premier were persuaded, he would be unable to carry his own benches. It would be a replay of 1846 — the Corn Laws — or even of 1931.
This helps to explain Mr Clarke's recent demeanour. Over the past few months, he has often given the impression of being 'not settled in Government', as one of his Cabi- net colleagues puts it. This gave credence to the rumours about resignation. A num- ber of explanations have been offered. At the time of the July reshuffle, after the Redwood leadership challenge, there were suggestions that for a few hours Mr Clarke might have thought that he was to be moved from the Treasury. Gillian Clarke was said to have been in tears, while one of Ken's political advisers was telling journal- ists that they were off to the DTI, which would have been a demotion. I have spo- ken to a couple of chaps who ought to know what went on in that reshuffle, and they both insist that there was never any question of moving Mr Clarke (it would seem odd if there had been). But did he perhaps receive a brief, misleading impres- sion which festered as lasting suspicion?
Then there was the PM's recent praise for Chris Patten. It is not clear what else Mr Major could have said: he would naturally want to be as warm as possible — the Gov- ernor deserves nothing less. But neither Mr Major nor Mr Patten nor, surely, Mr Clarke is under any illusion as to the difficulties that would be involved in organising Mr Patten's ascent to the Tory leadership, even if that was Mr Major's plan. Mr Clarke is a big man; if a little thing like that unsettled him, he must have been unsettled already.
With reason. His side in the Euro-debate are losing numbers. When Ken Clarke and John Gummer — who shares almost all his views — arrived at the Commons in 1970, Ted Heath was in his pomp and it seemed probable that the Conservatives would become the party of Europe. In those days, the antis were marginal figures, more numerous than the League of Empire loy- alists but with hardly greater purchase on the future. A generation later, it is the Europhiles who are on the margin, and with each new intake of Tory MPs their iso- lation will grow.
This is not to say that the 1971/72 rebels — Teddy Taylor et al. — will secure a belated triumph. The Tory Party will remain in favour of Europe, as it will remain in favour of spending on welfare: as a necessity of modern government and pol- itics, not as a cause for enthusiasm. Messrs Clarke, Gummer and Heseltine are enthu- siasts; they would like to celebrate Europe and boast about the Conservative Party's role in achieving and consolidating Britain's membership. They do indeed slip such passages into their speeches, but they also know how little such rhetoric is conso- nant with the language of the modern Tory Party.
This explains Mr Clarke's detachment, and his occasional impatience. In certain circumstances, it could make him danger- ous. He seemed at ease on Tuesday, but how long will it last?
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