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Confident of Britain's Recovery, Conservatives Launch New Policies

BRITAIN'S Conservative government, in confident post-election mood, has swung into action in hopes of keeping its Labour Party opponents on the defensive in the early weeks of the new administration.

"Between now and mid-July Labour will be engrossed in factional infighting as it chooses a new leader to replace Neil Kinnock," a Conservative Party official said on the eve of the Queen's May 6 speech outlining Prime Minister John Major's new legislative program. "That means they will have a lame-duck leader for nearly 10 weeks, while we get on with the business of fulfilling our election promises."

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On May 5, Mr. Major signaled his government's positive mood by ordering a cut of half a percentage point in bank lending rates to 10 percent - the first interest reduction for eight months. With this new assurance, the Conservatives are pursuing plans to cut taxes, curb trade unions, sell large chunks of the state-owned railway system, restructure Britain's education and health services, and boost the ailing economy.

In a speech April 28, Major said his government's aims for the 1990s are "stable prices, sustained industrial peace, free enterprise given the chance to compete and win, and lasting growth without the scourge of inflation."

"As spring advances, so will confidence," Major said, noting that the rate of unemployment is showing signs of falling and inflation has steadied at around 4 percent. The interest-rate cut was seen by political and financial analysts as a sign that Britain's recession was ending.

As the prime minister and his officials were putting the finishing touches to the Queen's speech, which is delivered by the monarch but written by her ministers, there was speculation as to whether Major would be able to stamp his own leadership style on it.

Last month Margaret Thatcher, the former prime minister, wrote an article in Newsweek magazine denying that Major was "his own man" and warning him that if he failed to continue with Thatcherite policies he would meet resistance from his own party.

Major made no public comment about his predecessor's remarks, but Downing Street officials insist that the prime minister now believes he has his own personal mandate to govern and intends to use it to develop policies aimed at turning Britain into a classless society.

The newly elected government is committed to reducing taxes for low-paid workers. John Patten, the education secretary, said the government would encourage more state-supported schools to opt out of local authority control and place themselves under governors elected by parents. Virginia Bottomley, newly installed as health secretary, has promised that more publicly funded hospitals will become self-governing trusts.

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One of the government's most ambitious plans is to privatize large sections of British Rail, a state monopoly with a poor record of service to travelers. Richard Branson, chairman of the Virgin Atlantic airline, is expected to bid for the right to run high-speed trains on Britain's intercity track network.

In his campaign for the Labour Party's deputy leadership, John Prescott has bitterly opposed the rail privatization program. "It may work on profitable intercity runs, but it will be a disaster on commuter services in and out of London," he said.

But a comprehensive response from the opposition party is unlikely in the next few weeks while it undergoes a lengthy process of leadership selection.

Mr. Kinnock's decision to quit, along with his deputy, Roy Hattersley, has plunged the party into a campaign that will culminate July 18 with the election of a new leadership duo. John Smith, Labour's shadow finance minister, is front-runner for the leadership in a race with Brian Gould, the environment spokesman.

Major's best hope of capitalizing on Labour's internal difficulties and leadership preoccupation, and of putting his own stamp on government policies, appears to be his commitment to a "citizens' charter."

The charter offers consumers the right to demand efficient service from government-run departments, which are given guidelines on the standards they must attain. To underline his personal commitment to the charter, Major last month placed William Waldegrave, a minister with Cabinet rank, in charge of it.

Labour is likely to find itself at a disadvantage when Major presses another aspect of his program: further reform of the trade unions.

In Labour's leadership electoral college, the unions will command 40 percent of the votes, with members of Parliament and constituency party workers having 30 percent each. So far only two major trade unions have promised to ballot members before deciding whom to support for the party leadership. The others say voting will be decided by officials because their organizations lack the money to hold ballots.

When new union legislation comes before Parliament, the government is certain to cite this as evidence that trade unions should be forced to adopt democratic ways.

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