The Tories still had a solid majority at this point, even factoring in cabinet loses (which would probably have been filled with new Tory members pretty quickly through by-elections anyway.) - we're talking about the 1987 parliament, not post-1992. I don't really see any need for an immediate general election at all, nor a 'national' government. We've had substantial terrorist atrocities before and on the whole we've just sailed on as normal for the most part, electorally/politically speaking.
Tosh
February 1991 - the Conservative government are deeply unpopular and the country is teetering on the edge of Recession. Although Thatcher is gone, most of her supporters are still about in government, if not in the cabinet then in junior ministerial posts and it wasn't until 1997 that most of them are cleared out.
Suddenly the IRA fire mortars at Downing Street on 7th February, hit the cabinet meeting and Major is killed whilst several cabinet ministers are injured, some seriously. At once COBRA swings into action, sealing off the surviving MPs. It isn't clear who is in charge but "constitutionally", the Lord Chancellor Baron Mackay, takes nominal leadership until the Conservative party members can elect one of their own to become leader. This has to be done PDQ as the UK are members of the coalition fighting Iraqi occupation forces in the Gulf War.
Eventually, it is decided that Douglas Hurd should be appointed as PM - although he finished third in the race to succeed Thatcher, he is a more palatable choice than Heseltine who has been suffering from a dodgy heart for some time and was quietly being briefed against in Central Office. Hurd has been doing a lot of work behind the scenes in the run up to Operation Desert Storm and is generally seen as a safe pair of hands. It is being examined whether the IRA and Saddam have any links.
Britain cannot particularly afford to be fighting both in the Gulf and against the IRA at home and the both the army regulars and the TA are somewhat stretched so Bush negotiates to send US troops to help police Ulster for the time being. Massive internment is implemented - at least as long as the Allies are pounding Iraqi positions and the province is locked up tight.
Although Bush declared a ceasefire 4 days after the start of the ground campaign, Hurd is successful in persuading the President that the Iraqis should not be allowed to use military helicopters as it's clear revolt is about to break out and this is the best chance for indigenous regime change rather than one forced by the coaliton which could make a martyr of Hussein. Instead the revolt should be backed by the Allies which would probably see the Generals overthrow Hussein, negotiate with the rebels and the coalition and put the country back together again. This is precisely what happens and the coalition take care of Iraqi security whilst rebuilding the nation, keeping it together but allowing more autonomy in the north and south of the country, turning it into a Federal Republic.
Domestically, the war is won although the IRA are at large in the UK. Fortunately Bush who is shaken by the assassination of the British Prime Minister (and is predominantly English in ancestry) decides to take measures to stop IRA fundraising activities in the USA and suspend bank accounts. It has been known for a while that Libya has been training IRA terrorists and ways are being sought to stop this too although this won't come to fruition until the Iraq mess is resolved. The US units have been very successful in peace keeping actions although Ian Paisley's DUP haven't been too welcoming given his particular anti-American stance. It's decided to keep the Americans in Ulster in exchange for greater British commitments abroad to counter-balance the two. This leads to further charges of colonialism in reverse in the more left-wing media and Spitting Image get a second number one in the charts with "In the UK of A" which was a hit in a 1990 episode of the show.
Kinnock decides that the time is right for an attack. Although recent events have quelled party politics for the time being, there has to be an election within the next twelve months. Before Major's demise, he thought Labour were a shoe-in, what with the 1987 crash, recession, unemployment, the Poll Tax and general Tory nepotism but with Hurd at the reigns, he cannot afford to be complacent. The 1991 Labour Party conference is very slick, professional and authoratitive. Some more exuberant party members wanted to play Queen's "We Are The Champions" but were quickly derided by Kinnock's team who wanted to keep the event high profile and serious - these were serious times and didn't need such friviolity.
In a move that helped win the election for Bill Clinton a year later, the theme of the Labour campaign now that the policy battles had been won was that of the economy and taxation. The Labour party lambasted the failures of the Conservatives time and time again. The manifesto wasn't as austere as it could have been although the abolition of the Poll Tax was at the top of the agenda together the promise to abolish Clause IV of the party's constitution emphasising social democracy rather than wholesale public ownership.
In contrast, Hurd could hardly point to military success in the Gulf with the paramilitary assassination of his predecessor. There wasn't even peace in Northern Ireland as all sides refused to sit around a negotiation table although there was clear evidence that the American financial moves were hurting the IRA and all the other groups in Ulster. The economy underwent a small period of growth in the aftermath of the Iraq campaign but the electorate had long memories and Hurd knew his days were numbered, the object of the Conservative campaign was to minimise losses.
Also there was a brief war in Yugoslavia when Croatia and Slovenia declared independence. Yugoslav troops marched in to restore order but the EU managed to broker a ceasefire after ten days. Shortly after this, the Warsaw Pact was dissolved and in August, the USSR fell to bits after an attempted coup on Gorbachev. Change was in the air and the British people weren't immune to it.
The election was called for November 1991 in order to capitalise on whatever goodwill there was left from the Gulf War. Election day was a very quiet one and the newspapers were quite mute about it, even the Sun wasn't screaming at its readers to vote Conservative because the Labour Party manifesto actually looked a decent read. The results were a comfortable 40 seat majority for the Labour Party and Neil Kinnock became Prime Minister. The first job on his table - peacekeeping operations in Yugoslavia. The UK are somewhat obligated to take the lead on this given the deal between Bush and Hurd.