Miliband: Labour must rediscover role of government

Monday, 25 October 2010 5:03 PM

By Ian Dunt

Labour needs to embrace government involvement in the economy in the same way it embraced the market economy in the 1990s, Ed Miliband argued today.

In a speech to the Confederation for British Industry (CBI), the new Labour leader said the financial crisis has taught analysts that government must support British industry if it is to be at the forefront of innovation.

Mr Miliband argued for a system of financial regulation which avoids recent regulatory failures, a more balanced economy with a broader industrial base and a banking system that better supports small business.

"Without profound change in the way we manage our economy, we are at risk of, at best, sleepwalking back to an economy riddled with the same risks as we saw before the recession hit," Mr Miliband said.

Mr Miliband tried to flesh out his argument that a healthy economy requires a strong and involved government, in contrast to the Tory vision of society, which sees the state step back while private enterprise and voluntary groups take on a leading role.

Delivering his pro-government speech to a hall of business leaders, the Labour leader said: "What it means to be pro-business in the 2010s is different to what it meant in the 1990s.

"It means more than just getting out of the way."

Mr Miliband will be keen to stress that his attempt to reframe the involvement of the government in the economy is pro-business, to avoid the caricature of himself as 'Red Ed'.

He said: "We need to understand that unless government plays its proper role in partnership with business, we cannot create the pro-business environment we need.

"Government should not be afraid to provide support to business that the market will not offer. A laissez-faire approach to financial services is not pro-business, for the vast majority of businesses in Britain it is a commercial risk."

Tags:
• economic policy
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• economy
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• labour
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• party politics