Thatcher Faces Party Challenge


MARGARET THATCHER is facing the most difficult phase of her 10-year premiership. The resignation last Thursday of Nigel Lawson, the Chancellor of the Exchequer, amid angry scenes at Westminster means that she will have to battle hard to restore the credibility of her leadership, which is likely to come under challenge in coming weeks.

Mrs. Thatcher must work with a hastily restructured team of senior ministers, many of whom believe Mr. Lawson's departure could have been avoided if she had been less stubborn and more prepared to listen to ministerial advice.

Thatcher's policies toward Europe are bound to come under close scrutiny, particularly her refusal to agree to Britain's early membership in the European Monetary System (EMS). This was at the root of Lawson's resignation.

Douglas Hurd becomes foreign secretary, replacing John Major, who has taken over from Lawson as Chancellor. Mr. Hurd is a ``convinced European,'' and was an intimate of Edward Heath, the prime minister whom Thatcher replaced as Tory leader 13 years ago.

Hurd is expected to keep pressing Thatcher to take Britain into the EMS as soon as possible. The prime minister, supported by Mr. Major, will probably resist, reinforcing the impression that her government remains divided.

Lawson threw the government into turmoil by resigning after Thatcher three times refused to bow to his demand that she sack Sir Alan Walters, her personal economic adviser. Sir Alan had publicly criticized the EMS, and Lawson maintained that by so doing Sir Alan was undermining his economic strategy.

Immediately after Lawson's departure, Sir Alan also resigned. Westminster sources say this followed an intervention by Kenneth Baker, chairman of the ruling Conservative Party.

Ministerial sources say there is likely to be a challenge to Thatcher's leadership of the party toward the end of November, because party backbenchers are deeply worried by Lawson's resignation.

Much depends on the contents of the annual speech by Queen Elizabeth II, scheduled to be delivered to both houses of Parliament on Nov. 21. The speech is always written by the prime minister and delivered by the monarch. It outlines the government's program of future legislation.

Thatcher now has the task of regaining a tight personal grip on policy and satisfying senior colleagues that she is still dominant in her own government. If she fails, a leadership challenge may be impossible to avoid.

In his resignation letter to Thatcher, Lawson said her retention of Sir Alan as an economic adviser made successful conduct of economic policy impossible. Tension between Thatcher and Lawson had been increasing for nearly a year, mainly because of their disagreement on economic and financial policy toward Europe.

Thatcher's reputation as the ``iron lady'' of British politics has been dented in recent months. In July she reshuffled her Cabinet, sacking Sir Geoffrey Howe as foreign secretary and replacing him with Major.

Major, who until July was Lawson's deputy at the Treasury, has been at the Foreign Office for only three months. He is widely considered a Thatcherite loyalist. Sir Geoffrey, now deputy prime minister, is not.

Hurd's move to the Foreign Office underlines Thatcher's growing isolation. He is a former Foreign Office diplomat and is seen as pro-European. The prime minister had little option but to appoint him as the best qualified person for the job.

Thatcher's attitude toward membership in the European Community (EC) has been the source of some of her most serious problems.

In 1986, her opposition to a linkup between Westland, a British helicopter company, and a proposed European consortium triggered the resignation of Michael Heseltine, her defense secretary, who is expected to bid for the premiership if there is a vote by Tory MPs later in November.

In June, Thatcher's lukewarm attitude to Europe resulted in serious Tory losses in elections to the European Pariament. A month later, Sir Geoffrey's support for the EMS, in collaboration with Lawson, persuaded her to replace him with Major.

At a more personal level, Thatcher's difficulties might be explained by her own style, which has appeared to be increasingly imperious. Never one to tolerate criticism, she had tended to isolate herself in her own Cabinet.

At international gatherings, the same tendency has been apparent. There have been many meetings of the EC at which Thatcher has found herself in a minority of one. She has stubbornly resisted moves toward closer political and economic integration of Europe. At the Commonwealth conference in Kuala Lumpur, Malaysia, a week ago, 48 of the Commonwealth's 49 members dissented from her opposition to tougher sanctions against South Africa.

Immediately after Lawson's resignation, leading Tory backbenchers held a private meeting at which Thatcher's policies came under criticism.

One backbencher emerged from the meeting and said: ``Mrs. Thatcher's behavior is a downright disgrace.''

A minister, who refused to be named, said: ``I am afraid she has taken one risk too many.'' A ministerial aide said: ``The time to challenge her is now.'' Leading contenders for the leadership are Mr. Baker, Mr. Heseltine, Major, and Sir Geoffrey.

An important factor for the party, if it opts for a new leader, will be who among the contenders would best be able to meet a challenge from the Labour opposition. Labour is currently 10 points ahead of the Tories in opinion polls, and its leader, Neil Kinnock, said after Lawson's resignation: ``The prime minister has been disloyal to her own Cabinet.''

An election must be held by mid-1992 at the latest.

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