Focus: Bonding one week, shattered the next

When David Curry, who yesterday quit the Shadow Cabinet as agriculture spokesman, went on a two-day tour of Suffolk and East Anglia last Thursday, he was supposed to rally the party faithful.

But even the farmers in Cambridgeshire knew his pro-European reputation and wanted to ask him about one thing: his attitude to the European single currency. Finding it impossible to defend the Conservative Party's new toughened stance, Mr Curry rose early yesterday and drafted a letter of resignation.

Just after 8am, the former Financial Times journalist phoned his constituency party chairman, his chief whip and then, at 9.30, William Hague in Yorkshire. It was a miserable end to a nightmare of a week for the Tories. Seven days which began with the Gov- ernment under a cloud of criticism over economic and monetary union, ended with the familiar spectacle of Conservative disarray.

The toll includes a resignation from the Shadow Cabinet, one from the front bench, and public criticism of the leadership from the three great beasts of Tory politics - Kenneth Clarke, Michael Heseltine and Douglas Hurd. A backbench MP, Peter Temple-Morris, decided only at the last minute to stay within the party rather than defect to Labour. Meanwhile, the arch-Eurosceptic backer Paul Sykes voiced his dissatisfaction with Tory policy on Europe, and placed his well-filled wallet at the disposal of the Referendum Movement. Since the Tories are destined to continue their civil war on Europe, Mr Blair's long-term aim of splintering Conservatism remains very much on track.

Given the timidity of the Government's statement on EMU last Monday, this shows how the Prime Minister's luck has held. After lengthy discussions between Mr Blair and the Chancellor of the Exchequer, Gordon Brown, a formula was agreed which declared in principle in favour of the European single currency, while setting tough - and subjective - tests for joining. Mr Brown ruled out any decision to join EMU in this Parliament.

In domestic political terms, this achieved two apparently contradictory objectives. It kept the Eurosceptic Murdoch press - the Sun especially - on board, while beginning formal preparations for monetary union (although there will be no commitment to endorse EMU ahead of the next election). Flexibility is the key.

THIS alone might not have been enough to de-stabilise the Conservative Party. What caused it to lurch was William Hague's own doing four days earlier. At a meeting of the Shadow Cabinet, he hardened the party's position on EMU. It had been against joining for the "foreseeable future". Under pressure from Eurosceptics, the policy returned to the harder position on which Mr Hague had fought during his leadership contest. This committed the opposition to fighting the next general election against EMU, effectively ruling out membership for nine or 10 years.

A poorly co-ordinated pro-European Conservative counter-offensive began to take shape. On Monday, Mr Temple-Morris entered Downing Street by a private entrance and, over tea with Tony Blair, his chief of staff and his press secretary, discussed his defection to Labour. But, behind the scenes, Michael Heseltine made known his objections to the policy shift, speaking to Mr Hague a couple of times. One of these occasions was a face- to-face meeting in the Leader of the Opposition's office at the Commons on Tuesday morning. The two men sat in easy chairs for half-an-hour and had what is known in the business as a frank exchange of views.

Dissension became public on Wednesday in an article by Kenneth Clarke, published in the Daily Telegraph, calling for a cross-party alliance in favour of entry into EMU. The day got worse for Mr Hague when Ian Taylor, front-bench spokesman on Northern Ireland, quit. During Wednesday morning, Mr Taylor had gone about his normal business, attending a meeting to prepare for Northern Ireland Questions, though he did request a personal meeting with Mr Hague. Following Prime Minister's Questions, Mr Taylor informed the Opposition chief whip, James Arbuthnot, of his decision to go. His 15-minute conversation with the party leader was amicable, but formal.

Meanwhile, the Macleod group of leftish Tory MPs had gathered in Committee Room J in the Commons to appeal to Mr Temple-Morris to stay. Quentin Davies pleaded with him not to quit, but it was not this, but Mr Heseltine's radio interview which eventually persuaded Mr Temple-Morris. The former deputy prime minister had contacted the Today programme late on Wednesday morning offering to appear the following day. When Mr Temple-Morris listened to his radio, he was pleasantly surprised. If there was going to be a fight within the party, he would stay and be part of it. Clearly, a close- knit group of political allies had lines open to each other. Mr Taylor's resignation was followed by a supportive press release from other pro- Europeans, including Ray Whitney. However, Mr Clarke's Daily Telegraph article, the catalyst for the crisis, seems to have been an accident. The idea came from the assistant editor of the Scotsman, who asked Mr Clarke to write an article last Tuesday. (The former Chancellor agreed, only to back out two hours later, claiming he had had a similar approach from the Daily Telegraph.)

One Tory Europhile says: "We took advantage of a fortuitous series of events. No one knew in advance that Ken would up the tempo, Ian would resign, and that Michael had decided to deliver a bombshell."

The immediate danger of a formal splintering of the Tory party appears to have been avoided, but last week's public fissure creates the germ of a party within a party. It could still be the prelude to a realignment of British politics. The pro-European Tories are in a minority of around 30 MPs, augmented by a number of peers, but, as one of their number says: "It is a substantial minority because it includes a large number of people who, since 1979, have given the Tory party its credibility with the public - people like Clarke, Heseltine, Hurd and Howe." Mr Hague faces the prospect of more resignations from his Shadow Cabinet and strife among Conservative MEPs in the run-up to the Euro-elections of 1999. Moreover, a pro-European cross-party alliance can call on powerful voices in business to back them, divorcing Mr Hague from vital backing.

So why has he allowed this to happen? It derives partly from genuine conviction; while in Cabinet, Mr Hague had done little to hide his hostility to EMU from his colleagues. In opposition, his cronies egg him on. The senior Shadow Cabinet posts have gone to Eurosceptics: Peter Lilley is shadow Chancellor, Michael Howard, shadow Foreign Secretary, and Sir Brian Mawhinney, shadow Home Secretary. Alan Duncan, the leader's closest aide, is a hardline sceptic. By contrast, the pro-Europeans in the Shadow Cabinet are weak. One MP observes: "David Curry, Sir George Young and Alastair Goodlad are not forceful figures. As for Stephen Dorrell, he had such a bad leadership contest that he has very little clout."

CONSPIRACY theories abound. Some pro-Europeans believe that the Shadow Cabinet's senior sceptics, like Messrs Howard and Lilley, are trying to force another leadership crisis from which they might benefit as potential successors. Others see a Duncan-inspired plot to force them out of the party. A Europhile explains: "Duncan wants people like Temple-Morris to go. His is a Communist-style purge: first you get the Mensheviks, then the Social Revolutionaries, then the right opposition and then the left opposition." This may be exaggerated, but Hague backers are contemptuous of the "Mainstream" banner under which pro-Europeans are gathering, calling it "side-stream" or "slip-stream". They point out that the party's policy agenda will be approved by party members either in a ballot or at a special conference. That, they say, will leave the left isolated.

The most likely explanation is that Mr Hague, like a general fighting the last war, is compensating for the failings of his predecessor. As one front-bencher put it: "He is so determined to show that he's not John Major, that he's not going to duck and weave on Europe, that it is forcing him to take a very hard stance. The more the pro-Europeans try to move him, the more he will dig in."

This tough line is already being tested again. The Shadow Cabinet has to decide how to react to the coming vote on the Amsterdam Treaty. The likely three-line whip against will put strain on the remaining pro-Europeans, Mr Dorrell, Sir George Young, Mr Goodlad and Lord Kingsland (who formerly led the Tories in the European Parliament). More resignations may follow.

The 1999 Euro-elections present further problems. Because of changes to the voting system, Central Office is likely to have unprecedented control over the lists from which MEPs will come. Any attempt to purge the pro-European contingent could produce a score of resignations or even a rival, splinter list under a Christian Democrat-style banner. Even if this is overcome, the MEPs might refuse to fight under an anti-EMU manifesto.

Potential challengers to Mr Hague wait in the wings. Mr Clarke's role on the left will grow, while Michael Portillo remains aloof from the EMU row and has sought to re-position himself towards the centre-ground. Chris Patten has said nothing at all. For the Government spin doctors there was disappointment on Thursday when Mr Temple-Morris decided not to defect to Labour. But, as the saying goes, sometimes when you lose, you win.