LONDON (AP) _ In a move critics called a desperate effort to stay in office, the embattled Conservative government cut the basic income tax rate by 1 percentage point Tuesday.

``We have cut taxes, we are cutting taxes,'' Britain's top Treasury official, Chancellor of the Exchequer Kenneth Clarke, told the House of Commons. ``We will cut taxes again. Good economics is good politics.''

The opposition Labor Party, favored to win elections that must be held by May 1997, predicted voters won't be swayed after enduring 16 years of Tory government.

``If this budget was supposed to relaunch the Conservative Party, it will fail,'' said Labor leader Tony Blair.

Clarke said he would cut basic income taxes to 24 percent from 25 percent. This is down from a basic rate of 33 percent, with wealthy people paying up to 83 percent, when the Conservatives took control of Britain in 1979.

Clarke also raised taxes on cigarettes and gasoline but cut them on liquor, to help Britain's Scotch whisky industry.

The chancellor said an average couple with two children would pay $304 a year less in taxes, and predicted the British economy will grow by 2.75 percent this year and 3 percent next year.