Britain: It's Beginning To Look A Lot Like Labor

Even British Prime Minister John Major is losing hope that he can extend the 18-year reign of his Conservative Party much longer. His Tories were routed in a special election in the normally rock-solid middle-class Liverpool suburb of Wirral South on Feb. 27. The 8,000-vote defeat represented a stunning 17% swing against the Tories since the 1992 general election. If voter opinion doesn't change fast, admitted Major, "we are going to have a Labor government."

Major is expected to dissolve the House of Commons soon and call a general election for May 1. The date is a formality because the campaign already is under way for an election that could bring big changes to Britain.

Veteran Tory politicians and right-wing thinkers, who have preached in favor of the market and against big government for a generation, will be swept aside. A younger, less experienced, more left-leaning crowd will succeed them. "On the whole, we will be more positive about what government can do," says Geoffrey W. Hoon, 43, a Labor member of Parliament.

FADING HOPES. Business leaders seem relaxed about a potential change of government. Some still fear Labor might return to its old tax-and-spend ways. But many seem prepared to give Labor the benefit of the doubt on economic policy. "We are much more confident than we previously have been that there is not going to be a major fork in the road" if Labor wins, says Adair Turner, director general of the Confederation of British Industry.

Major, 53, is pinning his dwindling hopes of reelection on appearing more statesmanlike than boyish Labor leader Tony Blair, 43. And he is trying to fan fears that a Labor government would kill the current, robust economic expansion. Major warns that "Britain could be just weeks away from a midsummer nightmare" of tax and interest-rate hikes if Blair gains power. Tory billboards show a family crying red tears of blood because Labor has increased their mortgage payments.

So far, there is no sign that these scare tactics cut any ice. Labor's economic brain trust has managed to reassure Britain's haves that they have little to fear. Labor has promised not to increase personal taxes for the life of the Parliament. Modest pledges to have-nots and its own left wing haven't hurt Labor, either. The biggest is a pledge to levy a windfall-profits tax of up to $6 billion to $8 billion on privatized utilities to fund a jobs program. Critics object that it would punish current shareholders rather than those who harvested big gains years ago. Labor also is vowing to introduce a minimum wage, although they don't say how high it would be. Unions want $6.40 an hour, a level unlikely to be set as it could snuff out jobs.

The Tories have yet to score enough hits on Blair to wipe away his perennial smile or cut into his roughly 20% lead in the polls. That could change if advertising maestro Maurice Saatchi's attack ads begin to work. The Tories have a much bigger campaign cash hoard. But Stefano Hatfield, editor of Campaign, the London ad-industry trade magazine, doubts the Tories can make full use of it in the available time. Paid radio and TV political advertising is banned in Britain.

The Tories have little hope of winning unless they close ranks and restore their own unity and battered credibility. There is no sign that's happening. Instead, factional fighting is deepening, with right-wingers such as John Redwood readying a push to seize control of the party. And voters now are hearing allegations from a former party treasurer that Major once sent him to collect an $810,000 donation from a Greek shipping tycoon. It all is bringing a Labor victory closer.