It's Not Dead Yet.(International Edition; BRITAIN)(Labour Party)

Byline: William Underhill

Labour may be struggling. But its Blairite model is surprisingly resilient.

British Prime Minister Gordon Brown still occupies 10 Downing Street, but the eulogies for his party's New Labour philosophy are already being written. Last month, Brown's Labour government sparked an outcry with its proposal of a new 50 percent tax rate on every pound sterling of income over [pounds sterling]150,000. In response, Conservative leaders swiftly proclaimed the death of New Labour, the moderate and market-friendly program pushed by former prime minister Tony Blair. They claimed Labour was reverting to its old hostility to the wealthy, and press headlines spoke of a return to the politics of envy and class war that reeked of the rancorous, confrontational Thatcherite 1980s and earlier.

But if that's the case, the British public looks like reluctant warriors. New Labour preserved and built on much of the Margaret Thatcher inheritance, stressing the value of private enterprise and wealth creation as the most efficient means of achieving the economic growth that would pay for a mild redistribution of the nation's earnings and better-funded public services. And there are few signs that it is turning back now--or that anyone wants it to. Talk of a return to Labour's old ways is "scaremongering," says Jessica Asato of the Labour pressure group Progress. "We are not going back."

Consider: taxes paid by the rich--slashed under Thatcher--may be set to rise 10 points to 50 percent, but they're still modest compared with the 1970s, when the highest marginal rates under Labour topped 90 percent. Nor has Labour abandoned the sell-off of state-owned industries, a cornerstone of the Thatcher program. There was extreme hesitation about the nationalization of the banks, and even in today's antimarkets mood, the government is planning the partial privatization of the Royal Mint, makers of Britain's coinage, and the Post Office. Labour has done little to undo Thatcher's work in breaking the power of the trade unions.

The rhetoric of some leading ministers would also still find favor with Thatcher admirers. Defending last month's budget, Business Secretary Lord Mandelson, a key architect of the New Labour project, spoke of a continuing commitment to "aspiration and reward." Put simply, the core elements of the Thatcherite settlement, later seen as a model by much of the European right, remain firmly in place. "Many of the changes she made are completely accepted across the spectrum," says Thatcher's former private secretary, John Whittingdale, now a member of the ...