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Text File | 1993-04-08 | 5KB | 112 lines

                                                                                BRITAIN, Page 56

Victor Beware


John Major's status quo policies may have won him re-election,
but they have failed to repair the economy

By BARRY HILLENBRAND/LONDON


    Throughout the fall, President Bush's re-election team has
invoked John Major as its model of the incumbent who squeaks by
in spite of a weak economy and polls predicting his defeat. But
if one looks at what has happened to the British Prime Minister
since his victory last April, the lesson is different. Major now
suffers the lowest approval rating -- just 16% -- ever recorded
in postwar popularity polls. A group of M.P.s in his own party
is openly attacking his leadership and threatening to bring down
his government in a critical vote over Britain's participation
in the European Community. More than 150,000 people paraded
through London in the pelting rain last week to demand his
resignation. The din of discontent has forced the Prime Minister
to make so many embarrassing U-turns on policy that he seems to
be steering the ship of state in circles.

    Bush would do well to ponder how Major could have sunk so
low so quickly. The answer is, paradoxically, that Major has
stuck to his conservative mandate at a time when voters want a
more activist government. Major traded mainly on trust and
character to defeat his rival, and he figured that the old
free-market doctrines of the past would continue to work in his
new term.

    So he has been tough and inflexible in handling the huge,
often intractable problems that beset Britain's
recession-battered economy. He has made difficult decisions,
then stubbornly held his ground until forced to back down by
overwhelming popular opposition. He was so convinced he was
doing the right thing for his country that he and his Cabinet
failed to listen to what the public really wanted the government
to do.

    Major's troubles became dramatically manifest when
protests against his decision to shut down 31 coalpits within
five months, tossing 30,000 miners out of work, turned into a
general attack on his lack of leadership in economic matters.
The government said the decision to cut back on coal production
was dictated by hard financial realities: newly privatized
electric companies are switching to gas-fired generators or
foreign coal. But many Britons, already knee-deep in the cold,
hard realities of recession, were not prepared to see the
remaining workers of a once proud industry further savaged in
such an uncaring manner. Major even came under attack from
renegade Tories who threatened to vote with Labour to overturn
the decision -- and put the government's survival in jeopardy.
After six days of unrelenting derision, Major made a humiliating
retreat, suspending the closure orders on 21 mines and ordering
a thorough review of the entire program.

    The underlying cause of Major's free fall is his failure
to deliver on his election promise to bring the economy out of
its tailspin. As in many recession-struck nations, the popular
mood has shifted toward a desire for more government action to
stimulate growth, while many leaders are still stuck in a
let-the-market-fix-it mind-set. Major's strict anti-inflation
policies kept interest rates high, stifling any hopes for
growth in business or for the recovery of the devastated
property market.

    Major's credibility was damaged further in September when
a combination of largely uncontrollable forces -- the troubled
German economy, aggressive foreign-exchange dealers -- brought
on a currency crisis that forced the pound down to the lowest
level allowed by the exchange-rate mechanism, which linked
sterling with other European currencies and served as a symbol
of British commitment to European union. Major passionately
insisted that Britain must keep the pound in the system at all
costs. But after the government spent millions of pounds and
drastically raised interest rates, the effort failed: Major had
to suspend participation in the exchange-rate system, and the
pound lost more than 10% of its value. The Prime Minister's
basic economic strategy also lay in ruins.

    The currency battle touched a sensitive nerve. Two-thirds
of Britons generally favor participation in a unified Europe,
but about the same number remain leery of losing national
sovereignty and identity to some superstate, which they believe
approval of the Maastricht treaty would bring. "Many people
remain little Englanders at heart," says Robert Waller, research
director of the Harris U.K. polling firm. But because the Prime
Minister believes that a Britain outside the European Community
would face untenable political and economic isolation, he is
obstinately insisting on bringing a procedural vote on the
treaty to the floor of Parliament on Nov. 4. The vote is a test
not only of European unity but also of John Major's stewardship
of Britain.

    He is betting that the rebels within his party will return
to the fold rather than risk a no-confidence vote that could
lead to a new election and a possible victory for Labour. But
the nation's distress over the economy and the Prime Minister's
inability to do much about it make Major's bet a dangerous
long-term one.