Labour will raise living standards in the North East - but will not back down over plans to cut public spending, Shadow Business Secretary Chuka Umunna has told The Journal.
He rejected calls from some Labour MPs for the party to turn its back on austerity and instead invest in a major programme of public works to get the economy moving.
MPs calling for a change of direction included Blaydon MP Dave Anderson, Wansbeck MP Ian Lavery, Gateshead MP Ian Mearns and Easington MP Grahame Morris.
In a letter published earlier this week, they warned: “All three main parties, tragically, seem to agree that deep spending cuts must continue to be made until the structural budget deficit is wiped out in 2019-20.”
Mr Umuna insisted that public spending had to be bought under control, but pledged that people in the North East would enjoy a better standard of living as a result of Labour policies.
He said: “I think getting the minimum wage to £8 an hour, banning exploitative zero hour contracts and incentivising employers to pay the living wage - that’s going to make a real tangible difference to people in the North-East.
“Also - and the overwhelming majority of colleagues in the North-East agree with me on this – is that there’s nothing progressive, or social democratic, in spending more on your debt interest repayments as a country than you do on housing, or transport.”
Labour want to reduce debt and the deficit to “invest more”, not make further cuts to public services, he said.
The MP also revealed that he wanted to introduce a graduate tax to replace the tuition fees currently paid by university students.
But he said this would only be possible in “the medium term”.
Labour would stick with fees in the short term if it won the general election in May, but would make them “more progressive” than the current system in which students can be charged up to £9,000 a year, he said.
Mr Umuna said: “I agree that, in the medium term, a graduate tax is the way to go.
“It’s fairer, it’s more progressive and, ultimately, it’s the way you clear up the unsustainable financial mess that’s been created by the Government’s current system
“They are going to have make huge write-offs on student loans they have been giving in order for people to pay these trebled tuition fees.
“A graduate tax, ultimately, getting to that place as fast as possible is key in my view
What the Government has done is “throw a huge heap of debt on students” – which is “unacceptable”, he said.
He admitted it had “taken some time” to devise Labour’s policy, adding: “That’s because the ground has moved from under us, because their estimate of what students will have to repay – and the amount they expect to get back – keeps falling. And that changes the figures”
At the election, Labour “will have more progressive offer”, he said.
“We will not be able to go straight to a graduate tax – but getting to it as soon as possible is my priority.”
Mr Umuna said the next Labour government would focus on creating more jobs in industries where the UK had a “competitive edge”, including aerospace, the automotive sector, the creative industries, chemicals, business and professional services and green technology.
He said: “These are all sectors where we are world beating. What we need to do is to grow them.”
Key policies would include creating more apprenticeships, introducing technical degrees in universities so that more people are trained in science, maths and technology, creating a regional network of banks to invest in businesses, ensuring that big government contracts were used to create jobs and devolving power to city and county regions.