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Blair's Campaign Gave Few Hints Of Labor Government's Course

LONDON, May 1 -- It is plausible to predict that in substance the new government of Britain will be totally different from the old. It is also plausible to predict that it will be pretty much the same.

It is possible to predict a long honeymoon, a short one or none at all; a fiscal and budgetary triumph or a fiscal and budgetary disaster; Britain at the "heart of Europe," or Britain somewhere near the extremities.

The campaign of Labor Party leader Tony Blair was devoted largely to exorcising ghosts of Labor Parties past -- heavy taxation, profligate government spending, unbridled union power -- and to guaranteeing that his will be the first Labor government to serve two full five-year terms. Thus, it was as much about what he will not do as what he will do, allowing for any number of scenarios. He boasted at once of his program's "modesty" and of a government that could be "more radical than anybody thinks."

There are, however, a few certainties for change, assuming Blair makes good on his specific pledges.

Britain will get a minimum wage law, opposed by the outgoing Conservatives, with the level of the minimum to be determined by a commission. Workers will get a right to choose a union and the unions a right to be recognized, through workplace balloting procedures similar to those in the United States.

The Blair government will enact Britain's first freedom of information act, in theory helping to make one of Europe's most secretive governments more open.

And Scotland and Wales will get referendums on whether to have limited home rule assemblies.

With those measures lined up and ready to go, his first few months are likely to be relatively productive and smooth. Unlike a U.S. president, he should not confront any messy cabinet controversies or uncooperative legislatures. In Britain's system, the top cabinet choices are already known, and the only legislature around is the House of Commons, where the prime minister is, by definition, leader of the majority.

Plus, the John Major administration of the past three years will not be a hard act to follow. A Conservative government at war with itself, struggling with scandals and broken promises, stumbling around the carcasses of animals with "mad cow disease" and trying futilely to fend off disaster for the country's beef industry, will be replaced by what appears to be one of the most tightly disciplined, well-rehearsed shows in modern British politics.

Nor is it a great feat to be more colorful than Major, and the style of leadership will doubtless be very different. Major makes no pretense of being a rousing, inspirational figure. Blair specializes in that image. Indeed, Blair campaign insiders have put people on notice to expect some theatrical gesture by the new prime minister at the outset of his administration to demonstrate the difference. Whether it will be a grand tour of the country, a walk down Whitehall or a fireside chat is unknown. Perhaps Blair will deliver Britain's first inaugural address, a custom this country lacks, opting instead for the official Queen's Speech outlining the government's program.

Down the road, however, there are two potential, predictable hazards of career-threatening proportions for Blair.

One of the demons he felt compelled to exorcise was the Labor Party's reputation for taxing and spending. To do so, he took the "read my lips" oath. He vowed not to raise income taxes; to spend no more than the Conservatives have already budgeted while, at the same time, improving Britain's struggling public services, particularly the National Health Service; and to narrow the embarrassing gap between rich and poor.

But virtually no independent expert on Britain's government finances believes the math works. The oath could prove a curse, as it became for former U.S. president George Bush and for Major. The Blair campaign came to realize this midstream, and cobbled together revenue proposals, including diverting funds from the National Lottery and selling off government assets, such as the air traffic control system.

Neither plan would necessarily provide a lot of money or steady revenues, and neither would be without controversy.

At the same time, investment analysts are pleading for an increase in interest rates to cool off the currently hot economy, a measure that could help avoid inflation but also cut down consumer spending, business profits and tax revenues.

On top of this is the problem of Britain's increasingly expensive currency, the pound. A strong pound is great for Britons vacationing in France or Spain. But for exporting industries it is a potential nightmare, since it means that foreigners must pay more for British goods and services. Exporters -- responsible for about a third of Britain's gross domestic product -- already are reporting sharply declining profits, which also means declining revenues for Britain's treasury.

The new government's other big problem is likely to be the same one that stalked the old: Europe. Important decisions await Blair on proposals for further integration of the 15 nations in the European Union -- including whether to sign on to the new single currency program planned for 1999 that would eliminate Britain's pound and all the other currencies of EU members and replace them with a new legal tender called the euro.

Europe as a political issue is Britain's equivalent of, say, school prayer in the United States. Not everyone cares about it, but those who do are passionate. Divisions over Europe helped bring down the Conservatives. There are divisions in the Labor Party as well, but they were kept under control during the campaign.

While generally friendlier toward European integration than the Conservatives, Blair has remained noncommittal on his own views about the euro, promising a referendum if his government chooses to join. In consequence, Britain is unlikely to be in the first wave of those signing up for the single currency.

Some business experts say this could be a disaster -- for the pound and for British business. Others say the country will take it in stride. All agree, however, that the anticipation of Britain out and Germany and France in is the source of great hand wringing and uncertainty.

Ultimately, whether Blair can avoid raising taxes or cutting public services, let alone improve them, will depend largely on the overall performance of the economy. Britain's economy, however, has been dependable only in one respect: Bust follows boom, often in relatively quick succession.

Unfortunately for Blair, the boom is now, and if there is a bust, it could land on his watch.