Ed Miliband: ‘We need to raise taxes for the better-off’

The leadership candidate promises radical Labour leadership – and carves out clear divisions between him and his brother David

Ed Miliband has called on Labour to propose raising taxes for the better-off and impose a £5bn-a-year tax on the banks as he marks out a new dividing line with his elder brother David.

In an interview with The Independent, Ed Miliband claimed New Labour was haunted by three "old ghosts" which shaped its policies when Tony Blair became party leader in 1994. He said they were a fear of increasing taxes for high earners, a fear of Old Labour's anti-Americanism, which resulted in the Iraq war, and an unnecessary desire to protect the public from the views of Labour members, which led to a "control freak" style of party management and "hollowed out" party.

The shadow Climate Change Secretary made clear he wanted to end the cautious approach to tax adopted after it was blamed for the party's 1992 election defeat if he wins what is expected to be a close Labour leadership race between him and his brother next month.

David Miliband has backed the former chancellor Alistair Darling's plan to halve the public deficit in four years, with two-thirds of the money raised through spending cuts and one-third by tax increases.

But, in his interview, Ed Miliband said the previous government's policy was "a starting point but not the final word," adding: "I think we can change the balance [raised from cuts and tax rises] to support public services."

Although he declined to go into detail, one option would be to extend the reach of the 50p top rate of tax, which currently applies on earnings over £150,000, lower down the income scale – perhaps to £100,000.

Ed Miliband argued Labour needed to win back the support of lower and middle income voters who deserted it at the May election. He emphasised that any tax changes would not be "about hitting ordinary families".

On the banks, he said Labour should make permanent the one-off tax on bankers' bonuses to bring in £2bn a year and could raise at least another £3bn a year through a levy on the banks and a tax on financial transactions.

Rejecting claims by his brother's allies that he would take the party to the left, he said he did not regard a 50p tax rate or a proposed High Pay Commission as particularly left-wing. "I think I am appealing to the common sense of the British people," he said.

He returned repeatedly to his theme about Labour's old ghosts. "What always happens in politics is that a generation is shaped by particular events," he said, citing 1994. "Then the danger is that you get stuck in a particular period. What happened to New Labour is that we got stuck – defending flexible labour markets and not understanding the limits to markets at a time when the world had moved on.

"If you don't move with it, we end up being ideologically beached – defending bankers' bonuses, saying you can't have a [50p in the pound] top rate of tax on earnings above £150,000 and a [£7.60 an hour] living wage. You end up being out of touch with the public."

He added: "We became more cautious as time went on. The minimum wage and the windfall tax [on the privatised utilities] were pretty bold for their time. We became overly cautious. Government does that to you."

Yesterday the former minister David Lammy, who nominated Diane Abbott for the Labour leadership, announced he would vote for David Miliband. He said: "David offers the hope of a genuinely new political project. This means more than a shopping list of promises to different interest groups. Such a politics can appeal but never stands the test of time. There is one more vital thing David will change: our habit of retreating into a comfort zone in opposition – and staying there while the Tories do great damage to our country's social fabric."

Addressing a rally in London today David Miliband will reject David Cameron's vision of a "Big Society" and call for a "good society". He will say: "I want to lead a Labour movement, not just a machine. This movement has changed me. I am a different politician and a different person now."

Ed Miliband's thinking on tax emerged as Danny Alexander, the Liberal Democrat Chief Treasury Secretary, angered some Tory MPs by playing down the prospects of tax cuts before the next general election. He said the overall tax burden was likely to remain the same for the next five years. He told The Observer: "I think the tax burden is necessary as a significant contribution to getting the country's finances in order. So it will have to stay at that level for quite some time."

He added: "The plan we set out is to rebalance the tax system. We need the revenues from the taxes we are putting up to help us reduce the deficit."

Labour leadership timetable

Wednesday, 1 September: Ballot papers go out to Labour Party's 160,000 members. They have a third of the votes in Labour's electoral college, as do the trade unions and Labour MPs.



*The five candidates take part in a televised debate on Channel 4



*Tony Blair's memoir, A Journey, published



5 September The five candidates go head-to-head on Sky News



8 September Deadline for new members to join the party and vote in the contest



22 September Voting ends



25 September Result is announced at start of Labour's annual party conference, in Manchester



28 September New party leader makes first keynote address to the conference



13 October New leader faces David Cameron at Prime Minister's Questions for the first time

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Salesforce Developer

£50000 - £65000 per annum: Recruitment Genius: Due to continued business growt...

Recruitment Genius: Internal Sales Executive

£20000 - £22000 per annum: Recruitment Genius: An exciting opportunity has ari...

Recruitment Genius: Sales Executive

£20000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Finance / Accounts Manager

£25000 - £30000 per annum: Recruitment Genius: Well established and expanding ...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss