Miliband said his party would reject large state hand-outs in favour of “predistribution”, a policy he defined as emphasising training over tax credits. This would enable the poor to earn more by qualifying for higher-skilled jobs.
“The redistribution of the last Labour government relied on revenue, at least in part, which the next Labour government will not enjoy,” he said in a speech at the London Stock Exchange.
“Predistribution is about saying that we cannot allow ourselves to be stuck with permanently being a low-wage economy and hope that through taxes and benefits we can make up the shortfall.”
But it was the Labour leader’s revelation that he has been in contact with Cable that raised eyebrows.
Miliband said he would be happy to open discussions on the future of the economy with Cable, who was a Labour party adviser in the 1970s: “I welcome all people who recant,” he said.