Miliband brothers going head to head in battle to lead Labour

New target: Ed Balls took aim at George Osborne
12 April 2012

Labour's leadership race entered its final stretch today, with all five candidates ramping up their campaign rhetoric before voting next week.

The drama was dominated by an increasingly aggressive battle between brothers David and Ed Miliband, now clear frontrunners in a contest that either could win.

More than 1,000 councillors backed David Miliband this morning in another show of strength by the bookies' favourite. They amount to a quarter of Labour's town hall chiefs.

Ed Balls told today how he disagreed with the last Labour government's key economic plan to reduce the budget deficit by half over four years.

He also did not dispute that Chancellor Alistair Darling had overruled Prime Minister Gordon Brown to enforce this policy.

"Before the election, I said to Gordon Brown and Alistair Darling that I thought halving the deficit in four years was too fast," the Labour leadership contender and shadow education secretary told BBC radio.

"I thought it would be very difficult for that to command wider market and public support because it could put jobs and growth at risk and could put our public services at risk."

Asked if Mr Darling had overruled Mr Brown on this issue, he added: "These are discussions which Gordon and Alistair had and then they decided the way forward."

His stance for a slower cut in the deficit is likely to appeal to many Labour members who will vote shortly on the leadership and who oppose cuts in public services.

Ed Miliband used a speech in London this afternoon to mount a coded attack on his brother for wanting "to linger in the comfort zone of New Labour" rather than dump the less popular aspects of Blairism. He warned: "The past can be a powerful anchor. Labour now faces a big, defining choice: whether to linger in the comfort zone of New Labour or whether to change, reach out to those who have lost trust in our party. Only change can win."

A survey by Labour website Left Foot Forward claims that David Miliband is in the lead on 36.31 per cent, with Ed on 30.98 per cent. The other three contenders — Ed Balls, Andy Burnham and Diane Abbott — were each on roughly 11 per cent.

If accurate, the analysis means that David Miliband will win if second preference votes for the other candidates are split evenly between him and brother Ed. However, Ed will win if most of the backers of Mr Balls and Ms Abbott make him their second choice.

Mr Burnham issued a policy plan for higher taxes on expensive homes — which would hugely increase the bills paid by better-off Londoners.

Promising to replace council tax bands with a new Land Values Tax that hits pricey homes much harder, he said: "It cannot be right that someone living in a home valued at £70,000 pays half of the tax of someone living in property worth £1 million plus."

His tax could raise the annual tax on a £1 million home in London from a typical £2,500 to about £5,800. The tax would hit London harder than other areas because so many families live in costly properties, although many struggle to pay the bills.

Mr Balls staked his claim as a possible shadow chancellor with a speech to the City warning of an economic hurricane. He turned his guns away from his leadership rivals and onto George Osborne whose optimism, he said, would soon be seen as a blunder to rank "alongside Norman Lamont singing in his bath".

Back from a break in the US, he said: "The prevailing attitude I saw in America was not optimism but fear. They fear what Americans like to call a perfect storm'."

The schools spokesman said Coalition cutbacks exposed Britain to a double-dip recession.

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