Miliband: We Need To Help 'Squeezed Middle'

Ed Miliband will later attempt to put himself on the side of the "squeezed middle" as he warns Britain's economy will not recover until ordinary living standards improve.

The Labour leader will set out his battlelines ahead of next month's Budget as he seeks to turn around his party's popularity on the economy.

In a major speech, he will declare that the UK is at "a fork in the road" and must not follow "the Conservative vision of a race to the bottom in wages and skills".

The party leader will accuse the Tories of rewarding the rich and ignoring the plight of ordinary families as he tries to flesh out his "One Nation" vision.

Despite a substantial lead in the polls, the Labour leader and shadow chancellor Ed Balls are still considered less trustworthy on the economy than David Cameron and George Osborne.

The Opposition has been criticised for attacking coalition policy while failing to make clear how they would tackle the vast economic problems facing the country.

Now, in an audacious move, Mr Miliband will argue that his party represents the strivers in society who have been badly hit by the recession and sluggish recovery.

He will issue a renewed call for a temporary VAT cut to kick-start the economy, and the reversal of last year's Budget cut in the 50p top rate of tax.

His intervention comes after a Bank of England warning that the pressure on living standards is set to continue for another three years, with inflation likely to be above 2% until early 2016.

Speaking in Bedford, where Tory prime minister Harold Macmillan made his famous "You've never had it so good" speech in 1957, Mr Miliband will say millions now fear they will "never have it so good again".

"People in Britain are putting in the hours, doing the shifts, as never before. But something has changed in the last few years," he will say.

"There's less chance of promotion, less chance of a pay rise, and at the same time, prices just go up and up and up; petrol for the car, tickets for the train, childcare for the kids, deposits for a first home.

"The 'squeezed middle' has never been so squeezed - and it looks like it will be that for years to come.

"It's no wonder our economy isn't growing when people can't afford to buy the things that British businesses try to sell."

He will accuse Mr Cameron and Mr Osborne of failing to grasp that economic recovery will be made "by the many, not just by a few at the top".

The speech will repeat his attack on the cut to the top tax rate, which takes effect in April, claiming it will help 13,000 millionaires.

Mr Miliband will say that half the population has earned less than 15p of every pound made, with 24p in each pound going to the top 1% of earners.

"Things are getting worse not better. The Government promised change but change isn't coming. We can't succeed as a country just by hoping wealth will trickle down from those at the top," he will warn.

The Labour leader will also challenge Mr Cameron's talk of Britain now being in a "global race".

"It is essential that we can compete with China and India and others," he will say. "But I have to tell you, Britain won't win a race to the bottom by competing in the world as a low skill, low wage economy."