The next Labour government would not be able to simply increase tax credits for the less well-off as it did during the Gordon Brown years, Ed Miliband has said.
Speaking at a conference at the London Stock Exchange, the Labour leader said the public finances his party would inherit if it wins the next General Election would prevent a return to the kind of wealth redistribution of the previous Labour government.
Instead, Britain must shift to a more highly-skilled economy in a bid to ease the burden on the squeezed middle.
The UK must move away from its “low-wage economy” so that workers were better paid and could help stimulate economic growth, Mr Miliband said.
“The redistribution of the last Labour government relied on revenue which the next Labour government will not enjoy.
“The option of simply increasing tax credits in the way we did before will not be open to us.”
Mr Miliband called for a greater emphasis on “predistribution”, ensuring people are better paid rather than relying on tax credit top-ups.
“It is neither just, nor does it enable us to pay our way in the world.
“Our aim must be to transform our economy so it is a much higher-skill, higher-wage economy,” he added.
Mr Miliband also said he did not think the Prime Minister’s new plans to rebuild the economy through relaxing planning rules would have “the success the Government is hoping”.
“A one year holiday for the current rules on planning a conservatory extension for up to eight metres in a garden, which is what the Government is announcing today, does not represent an economic plan,” he said.
Shadow chancellor Ed Balls added: “It’s a mouse when we need a lion to roar.”
For my two pennies worth in rely to young Miliband’s speech When I look back at New Labour’s record in government my thoughts start to drift into the Blair Revolution the forecast of our political priorities, central policy reforms and governing strategy. I came to the conclusion that New Labour created a bold task to modernise not just our public services but UK strengths to go further than any political parties had dreamed off. What is the difference I hear folks saying?New Labour wanted to involve all sectors like public, private and voluntary to work in harmony and dismantle Thatcher’s legacies. In doing so New Labour had stepped on many trade unions and socialist societies as a political movement, it accepted that successful governments built on the cumulative foundations of those which precede them and such large and significant sections of Thatcherite settlement that New Labour inherited in office was incorporated into our framework for governance. Thus, until the global financial crisis the current juncture Labour stuck with the Tory reforms to industrial relations, privatisation and secured the ceiling on top rates. Some people will reject the New Labour mantra but when I look from a distance and consulting at what was trying to be created by New Labour adamantly rejected of Thatcherite conceit that society no existed. Today the National Health Service is a resurrected goliath of university high quality healthcare educational standards and opportunities have radically increased higher education and research received unprecedented investment cities and regions were built from the embers of more tolerant open free fair and liberal than before.
But of course New Labour should have achieved more envisions of New Labour. Instead New Labour were over complacent about Britain’s economic strengths not least in unbridled over reliance on the financal service sector and long-term damage Thatcherism inflicted on the country’s productive and manufacturing base has left the British economy looking dangerously unbalanced. New Labour thought they could narrow inequality by focusing their efforts on poverty it is only now it has become clear global forces driving inequality are much more powerful and that during the 1980s and 1980s mantras of labour market flexibilities will have to change. Sadly New Labour did not have a clear enough conception of balance to be struck between centralism and localism state provision and third sector innovation.
This requires a new process of revisionism one of which learns from New Labour’s mistakes builds upon its many successes and prepares us once again for a Labour government.