British Labour Party Adopts Growth Plan

BRITAIN'S opposition Labour Party, searching for policies that will appeal to voters, has taken a leaf out of President Clinton's political book.

It has decided to jettison the "tax and spend" image that helped Labour to lose last year's general election and replace it with an "invest and grow" approach to the nation's economic problems. But a document spelling out the new policy is being attacked by Labour left-wingers who complain that the party is set to abandon its ideological beliefs and embrace Conservative principles.

John Smith, who became opposition leader after Labour's March 1992 electoral debacle, deputed Gordon Brown, the party's senior economic spokesman, to launch the new policy document.

In it Mr. Brown wrote: "The next Labour government will not tax for its own sake. The basis of our tax policy is not to penalize wealth but to promote greater opportunities for all." This could be done by "a commitment to invest and grow."

Brown's attempt to appeal to middle class voters who failed to support Labour 18 months ago has come under heavy criticism from within his own party.

Peter Hain, secretary of the Tribune group of left-wing Labour members of Parliament, publicly complained that the rich had received huge tax cuts in the 1980s. "Labour should come clean and say that the rich have got to pay more, or society is going to go down the plug-hole in terms of quality of life," Mr. Hain said.

His broadside was followed by a savage attack on Mr. Smith by Bryan Gould, who resigned from Labour's "shadow cabinet" last year because of policy differences with the new leader.

Mr. Gould accused Smith of adopting policies that left Labour "stuck in a time warp." Voters "look in vain to John Smith for a real alternative" to the Conservatives, he said.

Gould's friends say he is likely to run for Labour's deputy leadership post later this year.

In the 1992 general election campaign Smith, then his party's chief economic spokesman, produced a "shadow budget" which proposed tax increases for people on middle to high incomes.

Post-election analysis indicated that large numbers of middle class voters rejected the proposals and either abstained from voting or opted for other parties. Labour has lost four general elections in a row and has been out of office for 14 years.

The split in Labour's ranks opened up by Brown's policy document has enabled leading Conservatives to portray their opponents as unfit to govern.

Michael Portillo, chief secretary to the Treasury, accused Labour of promoting policies based on vague and wishful thinking. "Labour fought the last election on higher taxes," he said. "Now they say Labour would not tax for its own sake. They simply do not understand how an economy works."

In its attempts to modernize itself, Labour has already dropped long-standing commitments to nationalized industry and antinuclear defense policies. Under Smith it has veered toward a pro-European stance.

John Major's government has a House of Commons majority of only 18 seats. In the most recent opinion polls, it has fallen to third place after Labour and the Liberal Democrats. At two key by-elections earlier this year the Conservatives were badly beaten.