Britain Trimming Around the Edges

By GEORGE J. CHURCH. By Anne Constable and William Mader/London

I see a tendency to try to undermine what I achieved and to go back to more powers for government.

-- Margaret Thatcher, March 8, 1991

Margaret Thatcher never minced words during her 11 1/2 years as British Prime Minister, and will not do so now. But she exaggerates the changes her country's Conservative government has set in train since an intraparty revolt four months ago replaced her with her Chancellor of the Exchequer, John Major.

During her tenure, Thatcher effected changes in British life that are now probably beyond anybody's power, or even wish, to undermine; not even the Labourites, for example, would want to restore the stranglehold that unions exercised on the pre-Thatcher economy. Nor has Major shown much philosophical deviation from Thatcherism: the impulse to rely on private enterprise rather than government still rules.

But there are differences that go beyond the contrast between Major's low- key amiability and Thatcher's imperious hectoring. Less ideological and less combative than Thatcher, Major also is far more ready to dump a policy that is going wrong. He proved it last week by washing his hands of Thatcher's widely hated poll tax.

The levy, introduced over the past two years, replaced property taxes as a source of funding for local government. It was intended to make high-spending local councils, mostly Labour-controlled, accountable to the public by ensuring that every adult, not just property owners, paid directly for local services. But the tax bore no relation to ability to pay; within a locality every adult was charged the same amount, although millions of poor people got rebates. Resentment boiled over into a major riot in Trafalgar Square.

The 1991-92 budget presented last week by Chancellor of the Exchequer Norman Lamont -- inevitably dubbed Stormin' Norman by the press -- calls for an immediate cut in the poll tax of $250 a person, an average of 36%. That is to be offset by an increase in the value-added tax, a kind of super sales tax, from 15% to 17.5%. Environment Secretary Michael Heseltine later announced that the poll tax would be scrapped entirely by 1993, but talked only vaguely about what might replace it.

The budget restricted tax breaks on mortgage interest paid by higher- salaried home buyers. Thatcher had opposed any measures that would discourage homeownership. It stepped up an already scheduled increase in the benefit paid weekly to mothers for each child; the new level will be $16.56 for the eldest child, $13.43 for younger ones. By contrast the budget imposed new levies on executives who receive "in-kind" benefits such as the use of company cars and mobile telephones; private car phones provided by employers will be taxed $356 a year. These measures hardly add up to a change in direction, but they do mark a shift in the tone of policy toward more generosity to the underprivileged and less to the well-off.

Major has also changed the tone of some British foreign policies. Like Thatcher he opposes any further political integration of the 12-nation European Community, but he does not share her aversion to greater economic unity. He said in a recent speech that Britain's "rightful place" was "at the very heart of Europe," a remark no one could imagine Thatcher making.

Many political analysts now think Major might call a general election in June before the glow of victory in the gulf is dimmed by Britain's recession. Inflation is coming down, and as price increases ebb, Major is reducing interest rates; last week's budget called for a further 2-point cut, to 13%. Businessmen, however, are unsure whether that is enough to produce an expected upswing by fall. Even if it does, unemployment, at a two-year high of 7% of the labor force, is expected to keep rising, perhaps to as much as 9% by the end of 1991.

Since Major took over, the Tories have pulled from a deep deficit in the opinion polls to a 4-point lead over Labour. Even if Major wins, however, he would remain under the eye of a formidable presence. Thatcher has been grumbling lately that she was unseated as a result of a plot, a suspicion for which others can find no evidence. Last week she became president of a new group, Conservative Way Forward, dedicated to pushing Thatcherite policies; it will blow the whistle on any backsliding. Even out of power, this lady is not for turning.

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