Iron Lady polishes her heart of gold

THE flurry of party conferences that ushers in each British winter has made it plain that nearly a decade of Thatch-erite government has changed the nation's political agenda. Few were surprised that the Labour opposition and the two social democratic parties now battling for the center ground used their seaside get-togethers to attack the Conservatives for the alleged social insensitivity of Margaret Thatcher's policies.

More surprising was seeing the prime minister herself declaring that the time had arrived to stress moral values in politics. Mrs. Thatcher used her party's conference to encourage what she calls the ``active citizen'' to plow back into the community the wealth derived from a booming free-enterprise economy.

At the Conservative conference in Brighton, Thatcher announced that she hoped to remain in power for another 10 years. Those years, she indicated, could be spent harvesting the social fruits that prosperity brings in its train. The future need, she declared, was to stress the role of the family and to make society a better and safer place for the individual.

In a remarkable departure, she also hammered home a ``green theme.'' The Tories, she argued, were not only friends of the Earth: They were its long-term guarantors. A couple of days later, the tiny British Green Party, holding its annual conference, conceded that Thatcher appeared to have taken the environment on board. The Greens added that if Thatcher meant what she said, Britain would become a better place to live.

So persuasive have social themes become in British life that members of the royal family have decided to pursue them. This past week, Diana, the Princess of Wales, gave a widely quoted public address in which she voiced concern for her own children in a world of violence, drugs and widespread marital break-up. Only rarely does the Princess venture onto such topics, though her husband, Prince Charles, has a long track record in this respect. On the same day the Princess spoke, Douglas Hurd, the home secretary, gave a speech on a similar theme.

At the root of the growing emphasis on the social dimension in British politics is a wide-spread realization that rapid economic growth fostered by Thatcherism has created a new set of problems. The economy is expected to yield a 10 billion surplus by year's end. But unemployment, though falling, is still over 2 million, homelessness is rife, and problems of law and order are a preoccupation of many local communities.

The Labour Party, and the rival social democratic parties, argued during the conference season that Britain needs to tackle these problems, chiefly by the state playing a more active role in fields such as health, housing, and social welfare.

The Tory response is to continue to keep a tight rein on public expenditure and to encourage private enterprise to fill the social gaps. Tories care, Thatcher told the Brighton conference, clearly stung by Labour leader Neil Kinnock, who had insisted a week earlier that they don't.

As he tries to gain the initiative in the political debate, Mr. Kinnock is having to battle many of his own supporters. Thatcher was not slow to note that he is beset by a trade union movement that, in many cases, wants Labour to hew to policies of tight state control. Those policies contributed to the party's loss of the last three general elections.

British voters are likely to accept that Thatcher will devote the rest of her premiership to ensuring that hers is a Tory government with a human face. This is largely on the basis that, having promised economic recovery when she originally came to office in 1979, she succeeded.

Her approach now is to insist that health care and respect for the environment are better able to flourish under a free-market system than under the state control that she says is part of socialism. As long as the Tories are well ahead in the opinion polls, the prime minister's record of success gives her a head-start in efforts to persuade Britons that she can deliver a caring society.

Within the Conservative Party, however, Thatcher is receiving advice not to stress social issues too much at the expense of economic matters. While the Tories met in Brighton, it was announced that inflation had risen to 5.9 percent. There are signs that it may rise to 7 percent by year's end.

The chancellor of the exchequer, Nigel Lawson, acknowledged at Brighton that the economy is overheating, with spending and credit levels unacceptably high. The trade gap has been running at record levels.

While Thatcher pursues her aim of making Britain a compassionate society under capitalism, it will fall to Mr. Lawson to rein in the economy, using high interest rates that will bear heavily on industry and home owners.