City says Red Ed is anti-business

ED MILIBAND’S policies could have “very serious consequences” for the economy, a City pressure group warned yesterday, after the new Labour leader used his first major interview to launch a scathing attack on bankers.

Ed Miliband, who beat his brother David in the race to become Labour leader by mopping up trade union votes, yesterday said he would increase taxes on banks and bankers to help cut the deficit.

“I think we can do more on taxation from banks. Why is it is important to take more from the banks? They caused the crisis,” Miliband said in an interview with the BBC’s Andrew Marr.

He added: “Of course for people creating wealth there need to be incentives, but for people destroying wealth, people were rightly appalled by that.”

The new Labour leader said, if elected, he would make the 50p tax rate permanent and try to narrow the gap between the wealthiest and poorest by introducing a High Pay commission and a new higher living wage.

In his leadership campaign, Miliband also argued for a financial transactions levy or “Tobin tax”.

But yesterday Stuart Popham, chairman of lobby group TheCityUK and senior partner at law firm Clifford Chance, said such policies could damage the British economy.

He said: “Each of these policies would have an impact individually, but their aggregated impact could lead to very serious consequences for our economy.”

Tim Linacre, chief executive of stockbroker Panmure Gordon, said the Labour party needed to “recognise the importance of business in generating wealth to tackle the deficit”.

He added: “Many of the policies he has proposed have the potential to drag Britain back very far indeed, and such an anti-business position is madness. I think and hope that there will be quite a significant change in Ed Miliband’s position as Labour leader rather than as a leadership hopeful.”

Meanwhile, Miliband sounded the death knell for New Labour, insisting: “The era of New Labour has passed, a new generation has taken over.”

He distanced himself from former chancellor Alistair Darling’s plan to cut the deficit in half within four years. “I think as far as Alistair’s plan is concerned we should keep looking at that plan and see how to improve it.”

And he said Tony Blair was wrong to say bank regulation had gone too far since the crisis. “New Labour got stuck in an orthodoxy that deregulation was the answer. We need to be reformers.”