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Out of the shadows

Labour may pretend to relish Ken Clarke's return to the front bench, but the former chancellor is th

During the 2001 Conservative leadership contest, the second of three in which the party opted for ideological purity over electability by rejecting Ken Clarke, their most popular pol­itician, Labour spin doctors put it about that Michael Portillo was the candidate they really feared. Not for the first or last time, Labour was “reverse-spinning”; bowling the political equivalent of a “googly”, making out it was not worried about Clarke when, in fact, Tony Blair, Gordon Brown and Peter Mandelson always knew he was the Tories’ most formidable sleeping weapon. Downing Street wanted the leadership to go to Portillo, who remained unpopular in the country even after his supposed reinvention as the “modernising” candidate. If Labour was disappointed when his campaign imploded, it could not believe its luck when, after the Tory activists had their say, the hard-line defence spokesman Iain Duncan Smith emerged victorious.

In recent weeks, it looked as if the googly tactic was being redeployed, with reports that Mandelson was telling friends he "relished" the prospect of being shadowed by Clarke. This time, however, the - inaccurate - reports were carried in the Eurosceptic press, in an apparent attempt to discredit Clarke and prevent the recall that has so infuriated the considerable section of the Tories who remain obsessed with Europe.

Clarke easily tops the list of Tory MPs who have voted against the party line – 33 times under David Cameron

But whatever the spin and counter-spin, the truth is that Labour is unsettled by Clarke's return, which many thought would never happen under Cameron. The two men became rivals in 2005, when Cameron audaciously stood against Clarke for the leadership. Like Portillo four years previously, Cameron had declined an approach by Clarke to be his ­number two on a "dream ticket". (Both moves against Clarke were urged by Portillo's biographer, the Times writer and MP, Michael Gove, keen to block the pro-European.) On the eve of the party conference "beauty contest" of that year, it is now largely forgotten, Clarke was emerging as favourite to win, and sealed his re-emergence with a warmly received speech to the party faithful. The same day, however, Cameron wowed the media - the beginning of a long honeymoon - with an inferior speech but one without notes.

Although Clarke would joke privately in the following months that Cameron was merely doing what he would have done, but without the fights, the reality is that Cameron's Portillo-style blend of social liberalism plus state-slashing fiscal policy is very different from the former chancellor's politics. Only last week, Clarke said: "Anybody who stands at the next election on a platform of tax cuts is asking for trouble." A ­social conservative and a believer in investing in public services, he easily tops the list of Tory MPs who have rebelled against Cameron's leadership, voting against the party line 33 times since 2005. (And it's worth remembering that, unlike Cameron, Clarke opposed the Iraq invasion. Had he and not Duncan Smith been leader at the time, he might even have prevented Britain's becoming involved.)

But as with Mandelson and Brown, the credit crunch and recession have caused them to bury the hatchet. Clarke was the star of what will probably be Cameron's final reshuffle ­before the election; a reshuffle whose winners were pointedly portrayed by Tory press officers this week as "down to earth", a contrast to the high-born Cameron and George Osborne. And although it's true that Osborne floated the idea of a job for Clarke in December, after months of asking for economic guidance from him, that the shadow chancellor's position is diminished by the older man's appointment is not in doubt. One insider called the move the culmination of a slow-­motion "punishment" for Osborne's ill-advised misadventure with the Russian businessman Oleg Deripaska in Corfu last summer, and his weak performance on the economy in recent months.

Initially, Cameron was by no means convinced of the case to bring back Clarke. He was disturbed by criticism of Clarke from the right, led by Lord Tebbit, who repeated civil servants’ whispers that the former chancellor can be “lazy”. And he faced opposition from some inside his shadow cabinet, notably Gove, the shadow education secretary; and even some doubts from William Hague, whose bizarre unveiling in the Sun as Cameron’s “deputy leader in all but name” and his pledge that Britain would never join the euro under the Conservatives were designed to reassure both anti-European MPs and the Murdoch press.

His presence does as much to refresh the Tory brand as do all the image changes since 2005

By last weekend, the question of whether Cameron would "gamble" on Clarke had become a "test" of his grasp on the party - and it was one he passed, although Clarke himself only made the final decision after consulting his wife and deciding that it was time to "stop enjoying himself" on the back benches; the prospect of opposing Mandelson, whom Clarke admires, was too tempting to resist.

Over a meatloaf lunch at Osborne's house last Saturday, Clarke made clear, as he always has, that he would not budge on his pro-European views. But he also promised not to "rock the boat" on an issue that he, publicly at least, agrees is ­"settled" for now. In their clashes to come, Mandelson will no doubt enjoy teasing Clarke on Europe, the subject on which the two men once shared a platform, but the Business Secretary and the Prime Minister know perfectly well that Clarke will improve the Tories' performance on the economy, the defining issue of our times.

Labour strategists envisage two serious problems that Clarke could cause Cameron in the coming months. The first is how the Tory leader will cope with being outshone, either in the Commons or on television, by the new shadow ­business secretary, who may be 68 but whose appetite for politics has not diminished - he amusingly tells friends he is in mid-career. The second problem will come if and when Ireland votes "Yes" in its second referendum on the Lisbon treaty later this year. Even before Clarke's recall, Cameron faced sharp questions about whether he would then reverse his commitment to Britain's holding a retrospective referendum on the treaty. With Clarke, whose firm position is well known, having to field questions on the issue, the pressure on Cameron will be all the greater.

For now, however, Cameron should be praised for surprising his critics - including this one - with a bold move that, in a stroke, does as much to "decontaminate" the brand of Conservatism as have all his superficial image changes since 2005. The Clarke camp's slogan during the last leadership contest, after years of refining the message, was, simply, "Change to win", and his presence goes some way to addressing the lack of any Cameron "Clause Four moment".

Clarke is one of very few politicians with genuine popular appeal: what strategists call "cut through", an ability to connect. It is arguable whether Labour has anyone as popular. ­Although Brown, Alistair Darling and Mandelson - "serious people for serious times" - represent a heavyweight team on the economy, the Tories appear to be on the front foot for the first time since the Business Secretary's recall. Suddenly, it is harder for Cameron to be criticised from the left by those who believe he has done nothing substantial to change the Tory party. The "nasty party" image has faded more this week than in any other in the past decade.

In fact, with easily the most popular Tory in the country now installed on the opposition front bench, the only hopeful question for Labour is whether the wearer of Westminster's most famous Hush Puppies has returned to the front line too late in the parliamentary term to have a powerful influence on the outcome of the next election. For the first (and perhaps last) time, Cameron has signalled that he is serious about making compromises with the electorate and - like Mandelson during the 1980s and 1990s - pursuing electability over ideology.

There was a telling moment this week when a Tory spin doctor briefed the press that Clarke would "lead" the ­economic fightback, before correcting himself: he would "help lead" it. But the question of whether this impressive, if overdue, move will be enough to transform the Tories' image depends entirely on the extent to which Cameron allows Clarke to lead their fightback - and not just on the economy.

KEN CLARKE: THE CV

Born: l940

Educated at Nottingham High School and Gonville and Caius College, Cambridge, where he was chairman of the University Conservative Association and president of the Union.

MP for Rushcliffe since l970. Married, with two children. A barrister, he took silk in 1980.

Health Secretary, July 1988

Education Secretary, November 1990

Home Secretary, April 1992

Chancellor, May 1993 - April 1997

Stood for Conservative leadership, 1997, 2001, 2005

Deputy chairman, British American Tobacco, 1998-2008

Shadow business secretary, Jan 2009

James Macintyre is political correspondent for the New Statesman.

This article first appeared in the 26 January 2009 issue of the New Statesman, Nixon went to China... Will Obama go to Iran?