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Is Britain's Labor Party Back To Pre-Blair Ways?

STEVE INSKEEP, host:

Mr. Miliband belongs to Britain's ruling Labor Party, and its economic policies have become the source of fierce debate. Under former Prime Minister Tony Blair, the Labor Party captured the center ground of British politics. It won three elections by shedding its tax and spend reputation and by appealing to the middle class. Its new leader, though, Prime Minister Gordon Brown, has responded to the financial crisis with policies that remind some people of the old Labor Party. NPR's Rob Gifford explains.

ROB GIFFORD: Ruling Labor Party's announcement that it would confront the current economic downturn by borrowing much more now and raising taxes later set off a firestorm of debate in Britain, not least on the floor of the House of Commons.

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(Soundbite of speech, House of Commons)

Mr. DAVID CAMERON (Leader, British Conservative Party): The fact is, this prime minister has given us the debt levels of Italy and the accounting practices of Enron.

(Soundbite of laughter)

GIFFORD: Leader of the opposition Conservative Party, David Cameron, launched a full-scale assault on Prime Minister Gordon Brown's pre-budget report, or PBR.

(Soundbite of speech, House of Commons)

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Mr. CAMERON: Isn't the real lesson from this PBR this? The country is going bankrupt, he's been found out, and New Labor's dead.

GIFFORD: That accusation has struck a nerve in a Labor Party which rode the economic wave for a decade based on the way it transformed itself in the 1990s under Tony Blair away from its socialist roots.

Ms. POLLY TOYNBEE (Commentator, The Guardian): Psychologically, I think this is a major turning point, very important.

GIFFORD: Polly Toynbee, commentator at the Guardian newspaper.

Ms. TOYNBEE: There's no doubt that the New Labor settlement meant never laying a finger on the rich, praising them, sucking up to them, and certainly promising never to tax them more. It's been in all three of Labor's winning manifestos that they wouldn't raise tax on the rich, and now they've done it. So that seems to me to break a very important taboo.

GIFFORD: Breaking that taxation taboo is just a part of a whole raft of measures implemented by Gordon Brown, not least the nationalization of several British banks. Critics say he's pushing too far to the left with his government interventions and his higher taxes. But members of Parliament on the left wing of the party, like John McDonnell, are very pleased with the recent moves.

Mr. JOHN MCDONNELL (British Member of Parliament, Labor Party): They're the first very small step on a road back to the principles of the Labor Party. And the credit crunch has brought about a complete review of where we're going as a political party, so it's the death of New Labor and the reassertion of the Labor tradition and principles of a planned economy.

GIFFORD: Most independent analysts say that is overstating it, and that Labor will never go back to the days of a planned economy. What's clear, though, says Tony Travers of the London School of Economics, is that both parties are moving away from the center.

Mr. TONY TRAVERS (Director of the Greater London Group, London School of Economics): What we've now got is the Labor Party inching leftwards, the Conservatives inching rightwards. And that is a big change because nobody knows exactly where it will end up, in the way they don't know, frankly, where the economy will end up. There is a great deal of uncertainty. And I think politicians, like economists, are now using different parts of their brains to the ones they've used for some years. And whether you like it or not, it is actually intellectually interesting. And certainly for them it is, if it's a bit scary for the rest of us.

GIFFORD: In the end, much will be decided by the voters in towns like this one, Rochester, just outside London.

(Soundbite of traffic)

GIFFORD: Part of the traditional Conservative, or Tory, heartland that was persuaded to support Tony Blair and elect for the very first time a Labor member of Parliament at the last three elections. But after all the economic problems of the last year and the changes to New Labor in the last weeks, it seems the Labor Party has lost any chance of getting one shopper, John Spurgeon's(ph), vote.

Mr. JOHN SPURGEON: I think we must put our faith back into the Tories. They seem to have some better ideas at the moment.

GIFFORD: Further along the high Street, shoppers Doreen Williamson(ph) and Cathy Skinner(ph) show just how hard it will be for Gordon Brown to win the next election.

Ms. DOREEN WILLIAMSON: There's no way that anybody in their right mind would vote for Labor these days.

Ms. CATHY SKINNER: I've got some friends that did vote Labor, and they said they wouldn't do it again.

GIFFORD: That signals an important change in Britain, away from the political center, back to the more traditional battle lines between right and left in British politics. Rob Gifford, NPR News. Transcript provided by NPR, Copyright NPR.