Heath's First Week

Champagne glasses clinked and beaming smiles were exchanged behind the doors of clubman's row on London's St. James's Street. Inside such traditional Tory haunts as White's and the Carlton, the good cheer was positively palpable. Board rooms in the City took on renewed bustle, and shopkeepers from Mayfair to Manchester exuded an air of optimism. Britain in general seemed overlaid with a vaguely comfortable feeling that the old masters were back in power.

While the Conservatives celebrated their unexpected victory, Prime Minister Edward Heath formed a government with great dispatch. Between a party for his campaign workers and a speech to civil servants about his plans for streamlining the governmental system, Heath presided over a 50-minute Cabinet meeting and pondered the legislative priorities that would become the framework of the Queen's speech at the opening of Parliament this week. Then, at the helm of his sloop Morning Cloud, he competed in a 60-mile race around the Isle of Wight.

Strike Threats. The problems facing the new government were quick to surface. The economy is in uncertain health; the gross national product dropped 1% during the first quarter. Nonetheless, Chancellor of the Exchequer Iain Macleod will give top priority to reducing direct taxes this year as a way of heading off another round of price and wage increases.

The Tories will also forge ahead with promised labor legislation. They intend to press for laws to make industrial agreements legally binding and to require a 60-day cooling-off period in labor disputes affecting the national welfare. On the Isle of Man last week, delegates to the Confederation of Shipbuilding and Engineering Unions' convention warned against interference in industrial relations. "The unions," shouted one speaker, "will not be led like lambs to the slaughter!" A national dock strike set for July 14 could paralyze Britain's crucial export trade.

Facing another urgent problem, Home Secretary Reginald Maudling prepared to fly to Belfast to study the renewed violence between Ulster's Protestant majority and Catholic minority (see following story).

Market Problems. Meanwhile, Heath's new government was already slightly embarrassed by the hasty arrival of South African Foreign Minister Hilgard Muller, who flew to London for talks with Foreign Secretary Sir Alec Douglas-Home. Tories assumed that Muller intended to remind them about their promise to end the Labor government's 1964 embargo on arms sales to South Africa. The Labor Party's National Executive warned Heath, however, that such action could "endanger the existence of the Commonwealth and flout the authority of the United Nations."

The most pressing issue of all is the forthcoming round of Common Market talks, in which Britain's new chief negotiator will be Anthony Barber, who managed the recent Heath campaign. The view on the Continent is that the Conservatives' victory has enhanced Britain's prospect of joining Europe. Not necessarily. Some observers believe that Harold Wilson, who has never been as deeply committed to Market entry as Heath, may try to rally antiMarket sentiment in both parties as a means of thwarting the new Prime Minister's ambition.

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