June 27 (Bloomberg) -- U.K. Prime Minister Tony Blair's Labour Party trails the Conservatives in popularity for the first time in 11 years apart from a blip during the fuel blockades of September 2000, an opinion poll found.

The findings of the YouGov Ltd. poll, published in the Daily Telegraph, will add to pressure on Blair for more visible improvements to schools, hospitals and the railways before the next election, due by June 2006, analysts say.

Thirty-five percent of voters back Labour, down two percentage points from a month ago, while support for the opposition Conservatives and Liberal Democrats both grew one point, to 37 percent and 21 percent respectively.

``You really do have to sort out public services, and there is skepticism about the government's ability to deliver,'' said John Curtice, a professor of politics at Strathclyde University in Glasgow, Scotland. ``Because of Iraq, there are questions about trusting Tony Blair on his promises.''

Labour won a second landslide election in June 2001 after Blair promised voters he'd deliver better schools, hospitals and railroads. Since then, he's increased deductions for social security, sent British troops to war in Iraq in defiance of public protest and rebellion in his own party, and put off a decision on joining the euro amid a government rift.

`Not Honest'

A majority of people surveyed by YouGov said they disapproved of Blair's record in office, and consider his government to be untrustworthy and ``not honest,'' as well as ``indecisive,'' bad at ``practical day-today management'' and ``not on the side of the trade unions.''

YouGov interviewed 2,288 voters via the Internet between June 24 and 26. Its findings on voting intentions are in line with other surveys. A Populus Ltd. poll last week put Labour at 37 percent, down two points; the Conservatives had 33 percent, up one point. ICM Research Ltd. earlier this week put Labour at 38 percent, down three points; the Conservatives had 34 percent, up five points.

Blair is under fire from members of his own party for forcing cabinet member Peter Hain to retract a suggestion that high- earners should pay more income tax, and over allegations that he misled voters over the case for war in Iraq by overstating the threat from Saddam Hussein's weapons program.

Twice as many of those polled by YouGov said Blair should have allowed Hain to call for a debate on taxation. Sixty-seven percent said they favored taxing people earning 100,000 pounds ($166,000) a year at a higher rate of 50 percent, compared with a top rate now of 40 percent on annual incomes above 35,000 pounds.

Iraq Testimony

Foreign Secretary Jack Straw and Blair's top aide Alastair Campbell this week testified before a parliamentary probe into the Iraq charges.

Both said the government had made ``mistakes'' in presenting reports about Hussein's regime, including a dossier that contained information plagiarized from academic journals, dubbed ``the dodgy dossier'' by government critics.

The rows over tax and Iraq follow Conservative attacks on Blair that he was exceeding his authority by announcing changes to the British constitution before consulting Queen Elizabeth II or parliament.

Such spats are a sign of wider unhappiness, some say.

``There is genuine underlying discontent with the government which could be exploited by a competent opposition,'' said David Smith, chief economist at Williams de Broe Plc. ``The birds are beginning to fly off the telephone wires, away from Labour.''

Short on Results

Blair fought the 2001 election on the slogan of ``Schools and hospitals first'' and raised taxes this year to pay for 100 billion pounds of extra public spending by 2006.

Some 40 billion pounds of the extra spending is going on the National Health Service over the next four years. Early signs suggest it's not producing the results Blair wants.

The Audit Commission, an independent government watchdog last week said hospitals are using the extra cash for day-to-day services instead of investing in long-term improvements in staffing, equipment and buildings.

One-in-five train services runs late, the government's Strategic Rail Authority said earlier this month. To pay for improvements, passengers later this year will face increases above the rate of inflation, Transport Secretary Alistair Darling said last week

``People still don't perceive much of an improvement in public services,'' said Michael Saunders, chief Western Europe economist at Citigroup Inc. in London. ``It will shift the government's focus onto trying to improve public services.''

Even some Labour legislators aren't convinced by Blair's plans to overhaul health care and education.

In the last two months, Labour legislators have rebelled against Blair's flagship policies of introducing more management freedom for the National Health Service and allowing British universities more scope to set their own tuition fees.

Still, Labour's majority in the House of Commons may take more than one election to reverse. Labour won 411 seats in the 659- seat House of Commons in 2001, and the Conservatives got 166.

``Unless the geography of electoral support is fundamentally changed, Labour will win the next election even if the Conservatives get 37 percent and Labour gets 35 percent,'' said Curtice at Strathclyde University.

Last Updated: June 27, 2003 07:41 EDT