Mrs Thatcher’s choice

Press, 7 May 1987, Page 16

Mrs Thatcher’s choice

The local elections being held in Britain today will have to show a marked swing against Conservative candidates to dissuade Mrs Thatcher from calling a General Election during June. The Parliamentary term does not have to end until June next year, but many factors are at present going Mrs Thatcher’s way. The Conservatives would be foolhardy to believe that similar circumstances will arise again in 12 months. Economic changes, some of them painful, can be expected, whether or not there is an election. But it will make a difference whether Mrs Thatcher faces them at the beginning of another parliamentary term, or whether she has to deal with them as the time nears for voters to decide whether she should be given another parliamentary term. Mrs Thatcher has several economic indicators on her side. Britain’s annual growth rate is expected to be 3 per cent, which puts the country at the top of the members of the Organisation for Economic Co-operation and Development. The British need not consider themselves the poor relations of Europe. Unemployment is still high, but the trend has been down and the number of people unemployed is expected to drop below three million fOr the first time for months. Interest rates are on the way down. There has been something of a consumer boom and sterling has remained a strong currency as confidence builds up abroad about expectations of a win by the Thatcher Government The sharemarket has been booming and although there have been falls in investment in certain areas, total investment in Britain has grown. Exports have been increasing until recently. Politically, the Conservatives have been improving in the opinion polls and the Labour Party’s position has been declining to a point at which questions are being asked-about whether Labour will run third in the popular

vote after the Alliance. There is no chance that Labour will run third in the number of seats it wins, but it would still be a sorry day for Labour if the party ran third in the total vote. Labour has been beset by the problem that the leader of the party, Mr Kinnock, had a markedly unsuccessful visit to the United States to try to persuade the Americans to accept his policy of getting rid of United States nuclear weapons in Britain. It has been further beset by the links the Conservative Party has been attempting to demonstrate between Britain’s “loony Left” and the mainstream of the Labour Party. Speculation about a June election is, in itself, an important factor in the election. If Mrs Thatcher puts off the election, it is likely to be delayed for a full year until the next northern summer; the warmer months appear to help the Tories at elections. Important political decisions have been postponed because of the uncertainty about an election and a number of firms have put off investment decisions because of the election. If the election is postponed, some of Britain’s new-found confidence would evaporate. Investment might drop and this would have an effect on employment. Unemployment is expected to rise again because of those who will leave school at the end of the school year. The consumer boom will soon start to have an impact on imports. Inflationary expectations may rise again. The Government may feel compelled to squeeze the economy to reduce imports and to keep inflation under control. With the economy in some sort of order and the main Opposition party in serious disorder, Mrs Thatcher could scarcely ask for more. She will look for signs in the results of the local elections, but she would have to have a formidable reason to hold back the election tide which the Conservatives see running in their favour.