Chuka Umunna says Labour neglected the wealth creators under Ed Miliband and Ed Balls

Umunna criticised the party for focussing too much on economic 'predators'

Chuka Umunna believes that that the last Labour government’s “fatal mistake” was overseeing an economy with “too few savings, too concentrated in too few sectors and regions of the UK, and too based around cheap credit” (PA)

Chuka Umunna has launched a stinging critique of Labour’s economic policy under Ed Miliband and Ed Balls, accusing them of not placing enough focus on the “producers” who create wealth in the economy.

Writing in The Independent on Sunday, the shadow Business Secretary says the previous Labour leadership focused too much on those “doing the wrong thing” – a clear reference to Mr Miliband’s war on “predators”.

Mr Umunna, in what will be seen as a pitch for the job of shadow chancellor under the next leader, also says that the last Labour government’s “fatal mistake” was not spending too much, but overseeing an economy with “too few savings, too concentrated in too few sectors and regions of the UK, and too based around cheap credit”. “This left our economy awfully exposed,” the MP for Streatham adds.

“If there is any outstanding mea culpa Labour needs to make, it is in relation to our failure to restructure and rebalance the economy. The previous Major government had failed to rebalance, too, but we failed to sufficiently address it, although the Tories chose to bash us on spending rather than acknowledge the real problem.

“Our goal now must be to show that we have learned the lessons from this past. We must now go about doing this ruthlessly if we are to regain trust again. It starts by asserting again and again that reducing the deficit is a progressive endeavour – we seek to balance the books because it is the right thing to do. We will not stand by while the state spends more paying interest every year to City speculators and investors holding government debt than we do on people’s housing, skills or transport. It will be far too late to leave this to the 2020 general election campaign.”

Mr Umunna, who is backing Liz Kendall for leader, adds that the “urgent task” for Labour now is “to find progressive answers to the world as it is now and as it will be, not revert to tired, old policies from a bygone era”.

Mr Umunna, who withdrew from the leadership contest last month, is seen as a frontrunner for the job of shadow chancellor or shadow foreign secretary if Ms Kendall wins.