Britain’s Major Battles to Keep Government on Track After Setback

Prime Minister John Major, smarting from a surprise parliamentary defeat over a key element of the budget, fought Wednesday to pick up the pieces.

He sanctioned a rise in interest rates to limit the impact of the defeat on the British pound, consulted with senior ministers to chart a new course for his government and urged business leaders to help him tackle the thorn in his side--”Euroskeptic” rebels in his Conservative Party.

Dissident members of the party punched a $2.35-billion hole in the government’s budget Tuesday by helping to carry an opposition Labor Party motion against an increased tax on home heating bills.

Chancellor of the Exchequer Kenneth Clarke held a half-hour meeting with Major on Wednesday to discuss tax increases and spending cuts that will be announced today to plug the hole.

Major also met with Richard Ryder, the minister responsible for maintaining discipline among Conservative members of Parliament, to discuss how to avoid further House of Commons humiliations.

Seven of the eight MPs expelled from the Conservative parliamentary party last week for refusing to back Major in a vote over increasing Britain’s contributions to the European Union helped engineer Tuesday’s defeat.

In the vote on the tax, four abstained and three voted against it. The tax is deeply unpopular because of its impact on the poor, sick and elderly.

Tuesday’s defeat left Major looking more than ever like the lame-duck head of a minority administration doomed to lurch from crisis to crisis until the next election, due by mid-1997.