Labour must be 'the party of the grafters' says Ed Miliband

People in work could be given priority in the allocation of council housing under changes being considered by Labour, party leader Ed Miliband revealed today.

And private companies could be required to publish the pay ratio between their highest earning executive and the average member of staff, as well as including an employee on the committee which sets top salaries.

Mr Miliband said that the moves, being considered by Labour's ongoing policy review, were examples of ways in which the party will seek to restore a sense of "responsibility" to British society.

In a speech in London, he admitted that many voters saw Labour in its time in power as the party which protected both benefit claimants who abused the welfare system and bankers who raked in millions while causing the financial crisis.

And he said that Labour "must change" in order once again to be "the party of the grafters".

Mr Miliband's comments came as he sought to reassert his authority after a weekend dominated by questions over his position, prompted by new claims in a book about his rivalry with brother David, who he beat in last year's leadership contest.

David Miliband was yesterday forced to deny he still coveted Labour's top job and had been plotting against his younger sibling, and this morning said: "I made my position clear yesterday... It is Ed's speech that counts today."

In an apparent olive branch to Blairite critics within the party, Ed Miliband quoted Tony Blair approvingly in today's speech. And he was rewarded by the former Prime Minister telling BBC Radio 4's World at One: "I'm content to give Ed my 100% support. I hope and believe he will do well."

In his speech, Mr Miliband attempted to draw the line under elements of the legacy of his predecessor as Labour leader, Gordon Brown.

"For too many people at the last election, we were seen as the party that represented these two types of people: those at the top and the bottom who were not showing responsibility and were shirking their duty to each other," said the Labour leader.

"From bankers who caused the global financial crisis to some of those on benefits who were abusing the system because they could work - but didn't.

"Labour - a party founded by hard working people for hard working people - was seen by some - however unfairly - as the party of those ripping off our society."

While New Labour "changed the fabric of the country", it "didn't do enough to change the ethic", he said.

And he insisted: "My party must change. When we were in government, the CBI, the FSA and the Governor of the Bank of England sounded more willing to speak out on top pay than us.

"We were intensely relaxed about what happened at the top. No more. We will be a party that supports the real boardroom accountability that rewards wealth creation not failure.

"It is said we cared too little about responsibility at the bottom of society. No more.

"We will be a party that rewards contribution, not worklessness."

Labour's policy review is looking at a scheme in Manchester, where priority in social housing allocation is given to people who contribute to their communities by working or volunteering, said Mr Miliband.

And he said the party should debate whether a requirement for employee representation on remuneration committees should be extended to all firms.

Mr Miliband said Labour would tackle the "new inequality in this country between the top and everyone else". After a decade in which the salary of a company's top earner has gone up from 69 to 145 times its average employee's wage, Mr Miliband said firms should be required to publish pay ratios - though he stopped short of calling for a maximum differential.

Mr Miliband said that the last Labour government talked about fixing the lack of responsibility in British society, but failed to do it.

But he said that the coalition Government's approach to the same problem was "woefully inadequate".

He rejected "the Conservative characterisation of those on benefits as feckless and worthless", but said that those people who are able to work have a responsibility to do so.

Lack of responsibility went beyond abusing the benefit system, and was reflected in problems like fly-tipping, late-night music and overgrown and litter-strewn gardens, he said.

"Every time someone acts with casual indifference to the lives of those around them, it undermines the trust of others and frays the bonds which bind our society together," said Mr Miliband

And he said that business leaders too have a responsibility to wider society, citing the former bosses of Southern Cross who took millions of pounds from the company which is now struggling to keep its care homes for the elderly open.

Chief executive pay has quadrupled in the past 12 years while share prices have remained static, he said. Too often, executives' pay and rewards were "not linked to what they have achieved".

"The overwhelming majority of people - at every level of society from rich to poor - still play by the rules," said Mr Miliband. "Working hard. Paying taxes. Obeying the law. Caring for others. Good citizens.

"But they feel others are not doing the same. They are having to pay the price for the behaviour of an irresponsible minority.

"They feel that while they stick to the rules, others are getting one over on them. It's part of the squeeze on the middle.

"The services on which they rely are being cut by an austerity government after a global crisis caused by bankers who still get multi-million pound bonuses.

"The gap grows ever wider between the rewards for those at the top and the squeeze on the living standards of everyone else.

"And they still have to pay taxes to fund the bankers and to fund some people on benefits who aren't bothering to work.

"People who act responsibly - people who do their duty - are getting angry. And I understand why."

And he added: "We need a culture in our country which marks a real break with the 'take what you can' ways of the past.

"I know that there is a yearning for that different culture. A more responsible economy. A more responsible society. And a sense of common life that offers meaning and purpose.

"That is the mission for our party."

The latest wave of speculation about Mr Miliband's future was sparked by an unauthorised biography by Mehdi Hasan and James Macintyre which alleges that David and Ed are barely on speaking terms after falling out as a result of last year's leadership contest.

But David Miliband denied he was seeking to undermine his younger brother, saying in a statement: "I have moved on from the leadership election and so should everyone else. Ed won, I stand fully behind him and so should everyone else."

Labour health spokeswoman Diane Abbott blamed the elder brother's supporters for destabilising the party.

"You have got a small group and they just cannot believe he lost and now are just endlessly briefing about Ed - you know, 'he won't last till next week', 'he won't last till next May'," she said.

And shadow defence secretary Jim Murphy acknowledged that factions within the party were engaged in briefing against one another.

"My advice to everyone involved in this week's briefing and counter-briefing is just shut up and get on with your job," Mr Murphy wrote on the LabourList website.