BRITAIN/Church, state lock horns over inner cities

A row has developed between the government of Margaret Thatcher and the Church of England on what to do about the condition of Britain's inner cities. Opposition politicians seized on the issue last week, saying that urban plight will be a crucial issue in deciding who wins the next general election.

The dispute arose over a Church of England report on inner city areas. The report contains policy proposals that run against Thatcher government policies. Even before the 400-page document was published, an unnamed government minister condemned it as ``Marxist theology'' and accused the Church's Commission on Urban Priorities of adopting a left-wing approach to urban questions.

Furious, the Archbishop of Canterbury, Robert Runcie, replied that it was unfair to prejudge the report and incorrect to describe it as Marxist. Meanwhile, as Conservative politicians assailed the Church of England for dabbling in political questions, Mrs. Thatcher's opponents argued that the report had put its finger on one of the government's greatest weak- nesses: a failure to deal with unemployment and to improve the condition of the poor in Britain's big cities.

The report argues that it is the responsibility of Christians to involve themselves in urban questions and that the Church of England has to act as the ``conscience of the nation'' when it discerns social injustice.

The report says that in present-day Britain there is too much emphasis on individualism and not enough on social responsibility. Current policies, which had not been able to deal with unemployment needed to be changed, and the most important starting point was the plight of the poor in inner city areas.

One proposal that especially annoyed government ministers was that tax relief on house loans should be abolished and the resulting funds spent on the inner cities. Tax relief on home loans is widely considered to benefit the middle classes from whom the government derives much political support.

Accusations that the report was Marxist caused deep offense among Church of England bishops and leading laymen and were rejected by the chairman of the group that produced the document.

For Thatcher's political opponents the dispute provided an opportunity to point out that even the Church of England, which is generally considered to be a conservative element in British life, was unhappy with government policy.

A Labour Party opposition spokesman on the inner cities said the controversial report was ``objective evidence of the government's neglect of duty to the urban poor.''

But Conservative MPs hit back.

One said the report proved that the Church of England was run by ``a load of Communist loonies.''