Leading Article: Tory policies for survival

TORY days in Downing Street could be numbered. Regardless of how the party governs, there may have been a sea change in British politics. A resurgent Labour Party and regionally strong support for the Liberal Democrats have raised daunting obstacles to a fifth Conservative victory.

Yet the death of John Smith demonstrates that nothing is certain in politics, even in the short term. Given that the Conservatives retain control of the government and can avoid facing a nationwide electorate until 1997, there is no cause for defeatism. If the Tories seriously wish to keep power they must act as though salvation lies in their own hands.

The task they face is huge: to reverse a record slump in public confidence. The deterioration has three main causes: the humiliation of Black Wednesday that created an image of economic failure and mismanagement, broken promises on tax and conspicuous disunity within the party.

John Major can draw comfort from having at least begun to bridge Tory divisions. During the European elections he demonstrated his capacity to find common ground for his party, even if it was low-lying. He must now forge ahead with an imaginative programme. A policy of consolidation, suggested by some senior Tories, will only foster fractiousness. The party's right wing, having so damaged the Prime Minister yet failed to offer a viable alternative leader, should fall in behind Mr Major.

Reducing discontent over taxation is within his capacity. He has plenty of time to cut income tax. He can reasonably expect Tory waverers to attach more importance to fatter pay packets than to increased fuel bills; and he may conceivably be able to resurrect the bogey of Labour as the party of high taxation.

The Prime Minister's real problem will be to generate a sense of financial well-being and trust in the Government's handling of the economy. The defection of sections of the southern middle classes to Labour and the Liberal Democrats is a demonstration of mass anger and anxiety. Their sense of personal wealth and security has plummeted with the housing crash and the long recession. It will not be

restored by a few percentage increases in economic growth.

Pensioners and those on fixed incomes have also been slow to adjust to the low inflationary environment, feeling, however illogically, that smaller cash returns on savings are impoverishing them.

These are some of the people recently alienated from the Tories. Yet a united and energetic Conservative government with a sense of its own agenda and a will to win might regain their support. However, a government that lacks purpose and is sustained on an ad hoc basis by bickering MPs stands little chance of victory against the gathering forces of opposition.