25 September 2011 Last updated at 17:19 ET

Labour conference: Miliband urges U-turn on economy

 

By Brian Wheeler Political reporter, BBC News

Ed Miliband admits his party faces a big challenge to win back votes

David Cameron must "start showing some leadership" and "change course" on the economy, Ed Miliband has said.

Speaking as his party gathered for its annual conference in Liverpool, the Labour leader said the coalition's austerity programme was "not working".

And he again called for a temporary VAT cut to kickstart growth: "You can't leave an economy flat on its back."

He also called for a £6,000 cap on university tuition fees to ease the debt burden on students.

Labour is expected to use its week in Liverpool to set out an alternative economic vision, ending what Mr Miliband has called the "fast-buck" economy.

'First step'

Shadow chancellor Ed Balls is expected to step up attacks on the coalition and urge David Cameron and Chancellor George Osborne to change course in his speech to conference on Monday.

Labour remains committed to halving the deficit in four years and concedes there would be spending cuts if they were in power.

But Mr Miliband, who makes his big speech on Tuesday, and Mr Balls say money should be pumped into the economy at the same time to boost growth.

Mr Miliband told the BBC: "As a first step we say cut VAT. Keep to a plan to cut the deficit over four years but do it with growth because that's the only way you are going to achieve what you need to achieve.

He added: "There is an absence of leadership and I say to the prime minister 'put the politics aside, start showing some leadership'."

Brother's backing

Mr Miliband admitted the party faced a big challenge in winning back support at the ballot box.

But he insisted: "We are a party on the way back. There's a long way to go and I, more than anyone, know the scale of task.

"But, you know what's most important? I know who I am and I know where I want to take this country and that's what I'm going to be talking about this week."

And he received a vote of confidence from older brother David, who he beat to the party leadership by the narrowest of margins at last year's Labour conference.

Arriving at the conference centre, in Liverpool's rejuvenated dockside area, David Miliband told BBC News: "Ed will lead the party in the way that he sees fit, with conviction and purpose - and that's right."

David Miliband confirmed he would be in the US when his brother makes his leader's speech to the conference on Tuesday.

He said it was important he was here on Sunday evening - speaking at a fringe meeting - because "it's very important that all members of the Labour Party rally behind our cause and I'm here to support the leadership".

'Fiscal realists'

Shadow work and pensions secretary Liam Byrne, who is in charge of the party's policy review, said Labour needed to seize the centre ground of British politics - and regain economic credibility.

He told a fringe meeting organised by Labour group Progress: "People will not trust us with power if they don't trust us with money.

"We have to be fiscal realists. We have to be a party, like the government, that says we want to bring the deficit down, but the fiscally realistic thing right now is to get our country back working."

Shadow communities minister Caroline Flint said Labour had "not been comfortable talking about efficiency and saving money".

She said people had come to associate the Conservatives with talk about value for money, adding: "We need to reclaim that ground."

Shadow Cabinet Office minister Tessa Jowell told the meeting people were "just not listening" to Labour because they were focused on "the financial anxieties of managing from one day to the next".

She also said the party had to understand that "people are much more sceptical and much more hostile about the idea of the state spending money on their behalf".