Big spending will not solve Britain's problems, Ed Miliband to tell Labour

Ed Miliband will tell Labour's national policy forum on Saturday that the party cannot rely on its traditional high-spending approach to social problems if it wins the general election.

In a speech intended to address Tory claims that Labour cannot be trusted with the economy, the Labour leader will stress that balancing the books will be a key element of the party's plans for the five years after 2015.

But he will also insist that the need to adapt to austerity has made Labour "more radical and more ambitious" and that the party is still committed to fundamentally reshaping the economy.

Miliband will argue that, although problems such as low pay and poor conditions have got worse since the coalition came to power, "they started before the recession and the answer cannot be our traditional answer of spending to fix the problem".

Addressing the meeting in Milton Keynes, Miliband will say: "You and I know we won't have the money. For all of the cuts, for all of the pain under this government, Britain still has a deficit to deal with and a debt to pay down.

"That's why our programme starts with a binding commitment to balancing the books in the next government.

"We will get the national debt falling as soon as possible in the next parliament. And we will deliver a surplus on the current budget."

Highlighting proposals such as those for a higher minimum wage, freezing energy bills and action to end the abuse of zero-hours contracts, Miliband will argue that the party has "moved on from New Labour" without returning to the policies of old Labour.

"Instead, our programme for government is more radical and more ambitious in the change we seek, crafted for the age we are living in and the challenges we face," he will say.

"Moving on from a time when rising inequality was just a fact of life – or when we acted as if there is nothing we could do about markets that aren't fair or aren't working. Not seeing big spending as the answer. Not going back to make do and mend."

In his speech Miliband will also say that Labour has defied the predictions made four years ago, when it was widely assumed the party would be out of power for at least two terms.

Now the party can win the election, he will say, "because of the journey we have been on in the last four years. Not losing touch, divided and drifting away from the British people – as we have been in previous times in opposition – but rooting the programme we agree this weekend in the everyday lives of the people of this country."

Among the policies due to be confirmed at the three-day meeting is a plan to allow public-sector operators to bid for rail franchises as they come up for renewal. But on Friday, concerns about the proposals were already being raised by the Rail Delivery Group (RDG), a body representing train companies.

"Any proposal for fundamental change to the railway suggests that it is failing, which is not true," said Martin Griffiths, the RDG chairman.

"As yet, there is no detail on how the idea of a public-sector bidder would work on a level playing field with private sector bidders when government is both referee and player in the competition for franchises."

Powered by article was written by Andrew Sparrow, political correspondent, for The Guardian on Saturday 19th July 2014 00.05 Europe/London © Guardian News and Media Limited 2010