Queen's Speech to lay foundation for 1995 election: Ministers believe economic recovery could help Tories increase majority

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THE CABINET prepared the ground for an early general election yesterday by delaying the privatisation of the Royal Mail and agreeing a 'law and order' package of legislation for the next session of Parliament.

Although the final contents of the Queen's Speech will be decided nearer the next session in November, Cabinet sources said that the package would allow a general election to take place in the autumn of 1995 - 18 months early - if necessary.

'It all depends on how the economy is going. But if we can win in 1995, there is a strong feeling that we should go then,' one ministerial source said.

There is growing optimism among ministers that economic recovery, and the end of the traumas over the Maastricht treaty, would enable John Major to increase the Conservatives' narrow 20-seat majority, which the Prime Minister has found increasingly irritating. But that may depend on going to the country before the economic brakes have to be applied.

The Cabinet is seeking to avoid antagonising its own supporters in the next session. Michael Heseltine, the President of the Board of Trade, is convinced the Tories will win a 60-seat majority at the next election. He has been persuaded to delay the privatisation of the Royal Mail, which many Tory backbenchers fear would prove unpopular, in spite of repeated assurances about the future of rural post offices.

Privatisation of British Coal will go-ahead, as an essential part of Mr Heseltine's strategy for the collieries threatened with closure.

Mr Heseltine's department is leading the drive to greater deregulation, including the abolition of some workplace regulations, which may need primary legislation. John MacGregor, Secretary of State for Transport, will introduce a Bill to deregulate, then privatise London bus services.

Kenneth Clarke, the Home Secretary, is expected to have at least three Bills, including a Criminal Justice Bill to give courts powers to send young offenders to a new generation of secure units. Other Home Office Bills vying for time are the reform of the Sunday Trading laws, allowing MPs to choose greater liberalisation or tigher controls; a comprehensive Police Bill, including reforms to police pay grading and efficiency, with changes to police authorities; a measure to crack down on New Age travellers and mass rave parties; and an emergency Bill to add six European seats for the European elections in 1994.