Newts Across the Pond Rework the British Right

CALL it a slugfest of the mind. Britain's political parties are arming their intellectual torpedoes in anticipation of coming general elections, due in less than 18 months.

Think tanks across the political spectrum are scrambling to generate the one ''big idea'' that could make or break the campaign.

Not surprisingly, Newt Gingrich's Contract With America, which had such an impact on American voters in 1994, figures high in the Conservatives' mental gymnastics. Much of the policy production is being generated by the right wing of Prime Minister John Major's party.

Some of it is even coming from Margaret Thatcher, his influential predecessor. Her Thatcher Foundation is largely dedicated to opposing close European integration, and until now she has rarely commented on domestic policies.

Iron Lady chips in

But in a televised speech Jan. 11, Mrs. Thatcher urged fellow Conservatives to stick to cutting back big government and encouraging private enterprise. Her speech was widely interpreted as a sharp attack on Mr. Major and his failure to hold to a Thatcherite line since he took over from the Iron Lady.

Major himself clearly is feeling the need for a stronger intellectual underpinning before he faces a rejuvenated Labour Party, led by the youthful Tony Blair, though it may be doubted whether he entirely welcomed comments from Thatcher.

As well as strengthening his own policy unit at 10 Downing Street, the prime minister has begun to seek ideas from Politeia. This think tank is setting out to take the Thatcherite domestic agenda several steps further. Warwick Lightfoot, one of its leading members, has just sent Major a paper arguing for getting rid of laws dating back to the 1960s that safeguard workers against unfair dismissal and downsizing.

This spate of idea-mongering among Conservatives has been triggered by a concerted campaign on the left, aimed at ending the Labour Party's 16 years in the political wilderness.

Lined up behind party leader Blair are a host of think tanks to help him convince voters and leaders of big business that his party at last has a coherent and appealing set of policies.

During a recent visit to Singapore, Blair gave a test run to what a senior adviser says is Labour's ''big idea'' for the coming election campaign. Drawing on advice from the leftist Policy Studies Institute, Blair pledged that a Labour government would create a ''stakeholder economy'' giving every citizen a stake in the creation of wealth.

Labour, he said, would ''work with the grain of global change'' and foster ''a national team spirit.'' It also would ensure that the benefits of economic growth are fairly distributed and that ''all our citizens are part of one nation and get the chance to succeed.''

Miffed moderates

Blair's use of the term ''one nation'' angered Deputy Prime Minister Michael Heseltine, who dismissed the Labour leader's speech as ''a series of sound bites.''

For many decades moderate Conservatives such as Mr. Heseltine have claimed to be committed to the ''one nation'' concept, meaning that their party aims to unite people, regardless of class and income.

The cut and thrust of ideas across the Conservative-Labour divide is heating up as Blair attempts to give his party's candidates a credible ''song sheet'' for the election campaign.

But as Conservatives eye the 30-point lead Labour has notched in opinion polls under Blair's leadership, there is at least as much competitive thinking going on within their party, especially over European policy.

Even as Conservatives like Thatcher and John Redwood - who unsuccessfully challenged Major for the party leadership last summer - push the Conservatives for a more right-wing stance against European integration, some 50 members of Parliament have taken the opposite view, and are producing a pamphlet arguing the case for a single currency and a united Europe.

Call to order

Clearly upset by the trend toward ideological dissension in the governing party, Major warned his followers against so much public squabbling.

''If the Conservative Party does not realize the opportunities that lie ahead and throws it away by disputes within itself, then it will lose the election,'' he declared in a televised interview.

Major's call for an end to party infighting was supported by David Willetts, a member of Parliament. His book ''Modern Conservatism'' argues that Conservatives must ''marry the disciplines of the market and the rigors of competition with a social cohesion that is necessary to enable people to live better lives.''

A similar attempt to sail between political extremes marks the ideas of Peter Mandelson, who is also a member of Parliament and one of Blair's most influential advisers.

In a book soon to be published, Mr. Mandelson will argue that ''New Labour,'' as Blair increasingly calls his party, already has jettisoned old socialist shibboleths, such as opposition to the free market, and occupies the middle ground of politics.

''There is nothing wrong with capitalism with a social conscience or a human face,'' Mr. Mandelson says.