Prime Minister Gordon Brown swept aside three decades of economic orthodoxy with tax increases on the rich and plans that will double Britain’s national debt.

Brown’s proposals yesterday to mitigate fallout from the global economic slump would cost 25.6 billion pounds ($38.7 billion) in the U.K.’s biggest round of stimulus since 1988.

The plan, which will result in the largest budget deficit among the Group of Seven industrialized nations, represents a retreat from policies that have shaped the British economy since Conservative Margaret Thatcher‘s 12-year tenure that began in 1979. Brown’s predecessor Tony Blair called himself a proponent of “New Labour” and advocated policies Thatcher had promoted, including spending restraint, low debt and tax cuts for the rich.

“It is back to the 70s,” said Bill Jones, a political scientist at the University of Manchester. “It’s a return to the two-party divide and a temporary end to consensus politics. It’s like Labour has suddenly burst out of its straitjacket.”

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Labour’s traditional union supporters backed the proposal by Brown, 57, to impose a new 45 percent tax on those earning more than 150,000 pounds a year, while opposition Conservatives accused him of irresponsibility for running up debt that will exceed 1 trillion pounds by 2014.

“This is a welcome warm-up exercise after 30 years of inaction and neo-liberal economics,” said Derek Simpson, joint general secretary of Britain’s largest trade union, Unite, which represents 2 million workers. “Gordon Brown has thrown off the shackles of New Labour to reveal the real Labour.”

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