Thatcher Political Fortunes Revive : Opposition’s Errors Boost Her Chances for a Third Term

When Prime Minister Margaret Thatcher remarked recently that she would like to lead Britain for another 10 years, a close aide was asked if the remark was an honest reflection of her thinking.

“The point she was making,” he replied, “was that she wasn’t going to step down immediately after winning a third term. I can’t firmly say she’s looking toward a fourth term, but I certainly wouldn’t rule it out.”

Serious talk about what Thatcher may do if she wins a third term--never mind mention of a fourth term--shows the extent to which the prime minister’s political fortunes have revived in recent months.

Last spring, mired in scandal, Cabinet resignations, stubborn economic problems and mounting criticism of her abrasive personal style, she was urged by some members of Parliament from her own Conservative Party to step down so that the party could go into the next elections under new leadership.

Her decision to allow American bombers to mount a raid on Libya from British bases in April put her further at odds with the electorate.

The Conservatives slumped to the bottom in the opinion polls. At one point they trailed the opposition Labor Party by up to 18% and the Liberal-Social Democratic Alliance by a smaller margin.

Commentators began talking about the twilight of the Thatcher era. The talk was premature.

Last month, two polls put Thatcher’s Conservatives dead even with Labor and far ahead of a fast-fading Alliance. People around the prime minister were infused with a new sense of confidence about the government’s future.

“Inflation is down, strikes are down; profits, investment and growth are up,” Thatcher’s party chairman Norman Tebbit said enthusiastically. “Now we’re on to our next move forward.”

When President Reagan greets his most trusted European ally for talks in Washington on Saturday, he will do so in the knowledge that her chances of remaining in power are brighter than they have been for months.

To be sure, the election will still present a major battle. She must call elections sometime before the end of her present five-year term, in June, 1988, and the same polls that now place her party even with Labor indicate that she has yet to overcome a negative personal image. Her often-haughty, combative demeanor has helped to make her the only leader of any of the four major parties who is personally disliked by a majority of the electorate.

But political analysts believe she has recovered the initiative and is now in position to make a strong run at reelection.

“The government is in a better spot to win reelection than any of its predecessors since 1955,” noted Malcolm Rutherford, political commentator for the Financial Times.

Added Strathclyde University political scientist Richard Rose, “They’ve got to run on their record, which is a mixed blessing, but the Tories could suffer an enormous setback and still get the most seats and need only a small breakthrough to get a majority.” The Tories now have a 139-seat majority in the 650-seat Parliament.

To some extent, Thatcher’s revival is the result of her opponents’ errors, especially in the sensitive area of nuclear arms policy. At its annual convention six weeks ago, the Labor Party pledged that if it comes to power, it will forgo a multibillion-dollar modernization of Britain’s nuclear arsenal and scrap unilaterally the country’s modest deterrent force of 64 U.S.-designed Polaris missiles.

Labor also promised to withdraw permission for basing American nuclear weapons on British soil--permission that has not been challenged since it was extended by Prime Minister Clement Atlee to President Harry S. Truman 35 years ago.

Labor’s position was instantly unpopular; it raised fears that it could lead to an unraveling of treaty obligations that have kept the peace in Europe for four decades.

Earlier the two parties of the Alliance, the Liberals and the Social Democrats, found that they were incapable of agreeing on a nuclear policy. This created more confusion than concern.

The Alliance difficulties are seen as especially significant in contributing to the new Conservative strength, since much of the Alliance growth in recent years has come from Tory defections.

“There is now only one party in this country with an effective policy for the defense of the realm,” Prime Minister Thatcher told her fellow Conservatives at the party’s annual gathering in Bournmouth earlier this month. “That is the Conservative Party.”

Thatcher’s secretary for defense, George Younger, labeled the opposition defense policy “a distinct and serious minus,” and he said the Conservatives would work hard to exploit it in an election campaign.

Neil Kinnock, the Labor leader, apparently felt somewhat ill at ease himself with his party’s position. He recently turned down a request to appear on a prestigious hour-long Sunday television interview show after learning that the program would address only defense issues.

At least temporarily, Thatcher appears to have pushed aside controversial reforms and begun to concentrate her energies on issues where political observers believe her to be most vulnerable: unemployment, the declining quality of education, the deteriorating National Health Service.

The most critical of these, unemployment, seems to be tipping gradually in her favor. Although there are still 3.2 million Britons out of work, a record high, several economic forecasts project a gradual but politically important decline in the 13.1% unemployment rate over the next 12 months.

The Confederation of British Industry predicts a net decline of around 100,000 in unemployed over the period. This would permit Thatcher to say that the worst is over.

Inflation May Climb

On the other hand, there are signs that inflation, another politically important indicator, is likely to grow worse, possibly doubling the present annual rate of 2.4% to almost 5% by the end of next year.

Ian McCafferty, chief economic analyst for the confederation, said that “if inflation is the issue, the prime minister would do better to call an election early, but the employment picture makes it better if she waits.”

At the Conservatives’ conference, Norman Fowler, the secretary for social services, emphasized the Thatcher government’s commitment to the National Health Service. He unfolded a computer printout of hospital construction projects so that it trailed off the podium and out of view onto the floor below.

Thatcher quickly backed him up, saying, “This government is devoting more resources of all kinds to the health service than any previous government.”

But it takes time for the impact of large building projects to be felt, and if services are still perceived as poor, the issue will be difficult for a prime minister who has been in office for seven years to defend.