Clarke gives a glimpse of electoral salvation

The British Chancellor, Mr Kenneth Clarke, gave the Tories a glimpse of electoral salvation yesterday - telling them they had…

The British Chancellor, Mr Kenneth Clarke, gave the Tories a glimpse of electoral salvation yesterday - telling them they had "little to fear but fear itself". And the Defence Secretary, Mr Michael Portillo, set the scene for the Prime Minister's speech later this morning, urging the party to put "unity, unity, unity" at the top of its agenda.

In his most widely acclaimed conference speech ever, Mr Clarke faced the issues of tax cuts and the single currency head-on, telling the party conference to unite behind the Prime Minister's policy to win a fifth term.

"Re-elected next year, we will continue our historic mission", declared Mr Clarke: "Be proud of Britain, a world beater. Be self-confident about your country and its future. Be self-confident about your party. Be united against our political foes."

To the visible relief of the platform, the conference then closed ranks against Mr Clarke's political foes - rewarding him with the longest and most enthusiastic standing ovation of the week. Mr Major joined his Chancellor centre stage in an act of personal solidarity designed to put paid to a concerted whispering campaign against Mr Clarke from the Tory rig ht.

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In a bravura performance, Mr Clarke charged his party to fight the general election on the economy, telling them Labour would fight it on anything but.

Noting Mr Tony Blair's admiration for President Clinton, Mr Clarke said: "When Bill Clinton ran against George Bush four years ago he put a sign on the wall of his party workers' office. It told them what the big issue was in the election. It said `The economy, stupid.'

"Tony Blair cannot use that slogan. For Labour, the only slogan can be: `Not the economy, stupid'. In fact: `Anything but the economy, stupid'."

Quoting the IMF's description of Britain's "enviable" economic conditions, Mr Clarke said: "If Labour fight the election on the economy, they know they will lose. If we fight the election on the economy, we will win."

The Chancellor said Mr Major's boldest promise was already being delivered: Britain was becoming the enterprise centre of Europe. But Mr Clarke said prosperity does not just fall from trees" - nor would it come "from Blair's smile or Brown's bluster". Mr Clarke said Labour's shadow chancellor based his policies on the Dolly Parton school of economics: an unbelievable figure, blown out of all proportion, with no visible means of support."

Praising the achievements of the past 17 years, Mr Clarke told his party: "You created it. Every one of you, who for 17 years supported trade union reform, privatisation, deregulation, lower personal and business taxes, lower public borrowing, tough budgets and good budgets. We fought Labour, old and new, to create the modern enterprise economy.

Signalling one of the themes of the coming election campaign, Mr Clarke declared: "It is because we have already been in power for 17 years, not despite it, that the Conservatives are the party that must go on keeping the British economy on the right path."

There was warm applause when, on the single currency, Mr Clarke said: "All Conservatives agree on more things in the European Union than we ever debate. We all support a partnership of nations, and we are all hostile to any United States of Europe."

But he continued: "We have business to do in Europe, and we must therefore play a powerful part in determining how business is to be done in Europe. It is no good creating a modern enterprise economy in Britain, if we do not defend the interests of that enterprise economy in Europe."

Mr Clarke insisted: "It is in Britain's interest to keep all our options open. We should decide when we have to, not before. When we do decide, Britain's choice will be free. By staying in the game, we sacrifice nothing and we gain much. At every stage we will have the right to say no."

Interviewed later, Mr Clarke resisted suggestions that his November budget would be governed by his need to ensure Britain could meet the Maastricht convergence criteria. Affirming the party's belief in low taxation, Mr Clarke repeated his view that "the people would not trust us if we tried to buy the next election by unsustainable tax cuts." But he kept the faithful happy with the declaration: "For Conservatives, tax cuts must be for keeps."