Historically the party was broadly in favour of socialism, as set out in Clause Four of the original party constitution, and advocated socialist policies such as public ownership of key industries, government intervention in the economy, redistribution of wealth, increased rights for workers, the welfare state, publicly-funded healthcare and education. Beginning in the late-1980s under the leadership of Neil Kinnock, and subsequently under John Smith and Tony Blair, the party moved away from socialist positions and adopted free market policies, leading many observers to describe the Labour Party as Social Democratic or Third Way, rather than democratic socialist.
Party electoral manifestos have not contained the term socialism since 1992, when the original Clause Four was abolished. The new version states:
"The Labour Party is a democratic socialist party. It believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few, where the rights we enjoy reflect the duties we owe, and where we live together, freely, in a spirit of solidarity, tolerance and respect.
This is a very slick piece of editing. The Labour Party in Britain began as an amalgam of various left wing groups, none of which could win on its own. After a famous legal dispute in which a labour strike was defeated, the court decided the labour organization had to pay damages to the company for disrupting business during the strike. This was the fire that ignited the Labour movement, not the tracts or street speeches about the oppression of the proletariat.