25 Oct 2010

Miliband: Government ‘lacks economic plan’

After warning the CBI that Britain risks “sleepwalking” back into economic ruin, Labour leader Ed Miliband tells Channel 4 News the Coalition is gambling with growth and jobs.

In his first speech to business leaders since being elected Labour leader last month, Ed Miliband told CBI delegates the government needed to learn lessons from the financial crisis.

Speaking after Prime Minister David Cameron promised to boost financial growth, Mr Miliband said a new financial system should be introduced to rebalance the economy and ensure that everybody was able to make “a decent living”.

“Without profound change in the way we manage our economy it seems to me we are at risk of at best sleepwalking back to an economy with the same risks as we saw before the recession hit,” he said.

Mr Miliband insisted he would take forward New Labour’s pro-business approach and modify it to take account of changing times.

“In the 1990s, New Labour changed its approach to business. It recognised the role of wealth creation as well as the distribution of wealth.

“It recognised the centrality of economic efficiency alongside social justice, and it recognised also that Government and business working together in partnership was the best way forward for our country.

“I want to take forward all of these insights into the future relationship that we have together.”

Spending cuts warning
Speaking to Channel 4 News the Labour leader said the government’s approach to cut £81bn from the deficit in four years was a “gamble for our economy”.

Mr Miliband said although Britain’s record budget deficit needed to be tackled, the pace of the coalition’s cuts would damage the UK economy.

“The scale of the reductions they are making mean we are seeing cuts to, for example, housing benefit which really threatens homelessness and poverty,” he told Channel 4 News.

The spending cuts are a gamble for our economy. Ed Miliband

“We would have had a different plan – we would have cut by less.”

Mr Miliband went on to say the government lacked sufficient plans for economic growth and jobs.

“Government needs to do a lot more then cut the deficit,” the Labour leader warned.

“We need to show how we can create the jobs of the future in the industries of the future; big reforms of banking; support from government to make that happen. We need to show how we can support small business better in this country and we need to make sure we have rising living standards for lower and middle income people.

“Their deficit plan is dangerous and the government doesn’t have a wider economic plan for growth and jobs.”

Deficit must be tackled
In response to Ed Miliband’s speech to business leaders, CBI director general Richard Lambert said: “This was a well-judged speech for a business audience, which acknowledged the critical role of entrepreneurs and small businesses.

“Although Mr Miliband recognised the importance of cuts, he disagreed with Government on the pace. The CBI firmly believes that the budget deficit must be tackled during the lifetime of this Parliament.”