Tory Prospects Under John Major

BRITAIN's Conservative Party has changed its leader and thereby revived its fortunes. Until former Prime Minister Thatcher resigned, the Tories for months had been at least 15 percent behind the rival Labour Party in the polls. Now under John Major, the Conservatives have a lead of 8 percent over Labour. A general election must be held by the summer of 1992. Despite the apparent revival of his party's fortunes, the view from the new prime minister's Downing Street window is anything but rosy.

The hated poll tax is still in operation. Major has promised to review it, and with great intelligence has made the forceful and progressive Michael Heseltine responsible for the poll tax as Secretary for the Environment.

Another sign of Major's political acumen is the appointment of the popular and moderate Chris Patten as chairman of the Conservative Party. Mr. Patten doubtless will attempt to consolidate the Tories' new-found popularity by emphasizing Major's commitment to reshape the National Health Service and to restore school teachers to their former status.

These appointments show the new cabinet to have a genuinely progressive and powerful wing. This would have been unthinkable under Mrs. Thatcher, and should be attractive to middle-ground voters.

But local taxation and government reorganization, important as they are, are not the nub of the Tories' difficulties. Britain is in a recession. The gross national product is declining; unemployment is at 1.7 million and rising; companies are going bankrupt; interest rates are at 14 percent; the balance of payments is in chronic and huge deficit.

If Britain's prime minister looks to the rest of the world to rescue his economy, the outlook is bleak. America is also in a recession. Japanese growth is slowing, and the value of its stock market has nearly halved this year. There is potential for a terrifying slide in the wildly overvalued Tokyo property market - the land under the imperial palace in Tokyo notionally is worth more than the whole of the state of Florida. Without allowing for the apparent collapse of the GATT talks or the possibility of a Persian Gulf war, the growth of virtually the entire industrialized world, except for Germany, is slowing. This is a grim prospect for a trading nation like Britain.

John Major as Chancellor of the Exchequer recently took Britain into the European Exchange Rate Mechanism, fixing the pound sterling in a 6 percent band around an overly ambitious central rate of 2.95 German deutschmarks to the pound. If, as is expected, the German Bundesbank raises interest rates, Major will be forced either to keep British interest rates at a very high level or to devalue sterling. This would be politically awkward as an admission that Major had fixed the exchange rate too high.

Many in the Tory party dislike the moves toward European currency union. The next stage is supposed to be a European central bank. The Tories do not seem to understand there already is one in the shape of the German Bundesbank, and perversely object to the proposed central bank in which Britain would have a say. Doubtless the prime minister will see the wisdom of participating in a new central bank, and of taking part in future European debate on a common currency.

Despite all Britain's economic difficulties, the Tories have two great electoral assets. One is a new prime minister enjoying a honeymoon with the voters and the press. The other is Labour's leader, Neil Kinnock. Although widely liked and respected for his party management, Kinnock generally is regarded as doubtful prime ministerial material - an electoral liability for Labour.

Surveying the political horizon, John Major may well feel that if he can reform the poll tax quickly, there is a strong argument for calling a general election soon. There seems to be nothing favorable in the economic stars to merit waiting for 18 months.

During such an election campaign, Major would have to blame the recession on his predecessor, rather than on his own tenures as Chancellor of the Exchequer and chief secretary of the Treasury. He thus would have to distance himself from Mrs. Thatcher, despite owing his entire political career to her.

The new prime minister obviously is a likable man, but with all these difficulties, can he carry the Tory party to victory? Major's trapeze artist father would have known how to pull off the trick. Time will tell if his son has inherited this talent.