Rift grows in debate over future of Labour

INTERNAL divisions over the future of the Labour Party deepened yesterday as a national executive member said she feared a project 'to dump the unions and the poor', and Roy Hattersley, its former deputy leader, said Labour had to look at targeting benefits.

The continuing row over the 'Clintonisation' of Labour overshadowed John Smith's attempts in a television interview yesterday to stress reviving Britain's economy, revamping its 'antiquated constitution' and turning the social security system into a springboard for opportunity as key Labour themes.

The debate between the 'modernisers' and the 'traditionalists' also become more personal as Mr Hattersley accused John Prescott - a rival for the deputy leadership in the 1980s - in a Sunday Times article of trivialising the debate. He charged that 'in the Prescott analysis, the litmus test of genuine socialism is opposition to the Maastricht treaty, support for a basically undemocratic party constitution and willingness to go on losing general elections'.

Mr Hattersley argued that a party committed to redistribution could not continue mortgage tax relief - a course now thought to be under review for the medium term by the Conservatives - but equally had to discuss targeting benefits. Labour, he said, 'cannot pretend that it does not have to choose between concentrating help on those in greatest need and spreading the available funds thinly over rich and poor alike'.

Mr Smith, on Breakfast with Frost, defended universal child benefit but said the state should be enabling. 'What the state ought to do these days is not go round to people and say 'Look, we will guarantee everything for you'; what they ought to say is 'Look, here's an opportunity'.'

After a weekend conference with key advisers to President- elect Bill Clinton, Mr Smith said there were lessons to be learned but he ruled out 'Clintonisation' of policy.

Mr Smith's comments, however, came as Patricia Hewitt and Philip Gould, two key Labour advisers, argued in the first edition of a Labour journal, Renewal, that the first lesson of the Clinton campaign was to forge 'a new political identity', rather than to be seen, like Labour, as 'the party of the poor and the past'.

Clare Short, a Labour frontbencher and national executive member, said she feared Mr Clinton's victory was being used to 'legitimise' an agenda 'to get rid of all our old values, be embarrassed about the unions, and don't talk about the poor'.

There was no point in having a Labour Party, she said on BBC Radio 4's The World this Weekend, if it 'dumps the unions and the poor'.

Donald Dewar, the party's social security spokesman, attempted to calm such fears in a speech in Oxford. He rejected the idea that 'Labour must be beastly to the poor to convince Essex man that we are on his side'.