Britain's Tories Squabble Over Proper Role in Europe

PRIME Minister Margaret Thatcher's decision to align the British pound with other Common Market currencies has exposed divisions within her government about Britain's future in Europe. Public argument about the best European course for the country to follow burst forth at the Conservative Party's annual conference last week in Bournemouth. It is calling into question Mrs. Thatcher's own stance on Europe and could delay the next general election.

At Bournemouth, Nicholas Ridley, a former senior minister who resigned from the Cabinet this past summer after making a verbal attack on Germany, warned the government that if it went further with European economic and monetary union (EMU) it would be opposed by a majority of British voters.

Mr. Ridley, whose thinking on European issues is known to be close to Thatcher's, drew an immediate response from other senior Conservatives who want Britain to accept EMU and agree to the creation of a single European currency.

Michael Heseltine, another former minister whom many see as a possible replacement for Thatcher, replied that Ridley's view of Europe would lead to Britain having little influence over decisionmaking in the European Community (EC).

He also took issue with Ridley's view, which Thatcher holds as well, that the EC should allow East European countries to join as soon as possible.

Ridley then rebuked Mr. Heseltine for trying to turn the EC into ``a rich man's club'' which excluded aspiring members of ``the European family'' and in which unelected officials in Brussels made decisions on behalf of the EC's 250 million citizens.

The public argument, which Thatcher had hoped to avoid, was set off by her government's Oct. 8 decision to join the EC's exchange-rate mechanism, which pegs the pound to the value of a basket of other European currencies.

John Major, the chancellor of the exchequer, announced the move on the eve of the party conference. But instead of providing a focus of agreed-upon policy around which the party could rally, it reawakened deep concerns among many Conservatives about the loss of sovereignty allegedly entailed if Britain moves more fully into union with her EC partners.

In December in Rome, an intergovernmental meeting of the EC will have EMU at the top of the agenda. Thatcher will come under heavy pressure to agree to a plan, supported by a majority of the EC's 12 members, to unify their policies.

Ridley, who left office swearing he would battle to oppose EMU, said last Tuesday that at Rome ``Euro-fanatics'' would try to push Thatcher further down the road to economic union.

He predicted that a single currency linking the pound to the German mark would ``lead to greater economic instability and would eventually break down.'' History was littered with failed attempts to affect exchange rates, he said.

Thus, Thatcher finds herself awkwardly positioned between the Ridley and Heseltine standpoints. She shares Ridley's opposition to EMU and his enthusiasm for throwing open the gates of Europe as wide as possible. But some of her most senior Cabinet ministers, including Mr. Major and Foreign Secretary Douglas Hurd, privately agree with Heseltine that Britain should be more sympathetic to moves to unite Europe around the existing 12 members of the EC.

A week before the Conservatives held their annual conference, the opposition Labour Party held its own gathering. Afterward Neil Kinnock, the Labour leader, claimed his party was united on European policy.

His statement that Labour was ``the party of Europe'' riled Thatcher and, according to Conservative Party officials, helped her decide to agree to Britain joining the EC's exchange rate mechanism.

When Major announced the EMS move, party officials had forecast an election as early next June. After the Ridley-Heseltine exchanges, which the prime minister attempted to ignore, the same officials were talking about an election in October or the spring of 1992.

``Europe is likely to be the main election issue, and Thatcher doesn't want to go to the polls at the head of a party divided on European policy,'' one Conservative delegate said.

A member of the Bow Group, an association of young, progressive Conservatives, described Ridley's view as ``verging on the Neanderthal,'' but conceded that it reflected the views of enough potential Conservative voters to give Thatcher ``reason to worry.''