Victor Beware

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.