* Opposition party leads in polls, but lags on economy
* Labour to fight election on 'cost of living crisis'
* Promises to freeze fuel bills if its wins in 2015
* Attacked as 'economic vandalism' that will cost jobs
By Peter Griffiths
LONDON, Sept 26 An attack by British opposition
leader Ed Miliband on energy companies, big corporations and
landowners may give him a short-term lift in the polls, but
could damage his Labour party's bid to restore its economic
credibility before the 2015 election.
Miliband said a freezing of energy bills for 20 months if he
replaces Conservative Prime Minister David Cameron would help
curb rising prices after years of cuts, stagnation and weak wage
growth. It would compensate the public for high prices resulting
from a lack of effective market competition.
The declaration, at a party conference, exposed the
43-year-old son of a Marxist academic to what his rivals see as
their most damaging line of attack before the election: that a
Labour party flirting with traditionalist state control cannot
be trusted with the world's sixth biggest economy.
One former minister with Labour accused him of "alarming
populism" that would sacrifice Britain's wealth on the "altar of
tribal socialism". Energy firm Centrica's biggest shareholder
called it "economic vandalism".
Centrica and another utility SSE have lost
2.7 billion pounds ($4.34 billion) in market value since
Miliband's speech to his party on Tuesday.
"This is real 1960s, 1970s socialism, whipping up people to
hate business," Digby Jones, a former head of the Confederation
of British Industry who worked for Labour as an independent
trade minister, told Reuters.
"He doesn't like wealth creation, he doesn't like
entrepreneurship. It will cost millions of jobs and denude
Britain of investment."
Labour, however, enjoyed a bounce in the polls after
miliband's speech, a reflection perhaps of popular discontent
over falling living standards.
A YouGov/Sun newspaper survey on Thursday put Labour on 41
percent and the Conservatives on 32. That compared to a single
point Labour lead last Friday, before the speech.
The polls also show Labour trailing on the economy, however.
Miliband's pitch also reopened old Labour internal arguments
over how a party founded by socialists and unions at the turn of
the last century should handle business and globalised markets.
Former minister, Peter Mandelson, one of the architects of
the reforms that turned Labour into the centrist, pro-market
"New Labour" movement that won three elections under Tony Blair,
said it could undermine the party's reputation.
"Perceptions of Labour policy are in danger of being taken
backwards," he told the Guardian newspaper.
While the "New Labour" reforms, including a much-vaunted
commitment to economic prudence, brought electoral success after
hard left policies turned voters off in the early 1980s, they
alienated traditionalist core voters.
Miliband, whose personal ratings are far weaker than those
of his party, had been accused of failing to explain his vision
to a public that by an large does not see him yet as a future
Supporters said his speech was an attempt to address that
and widen the ideological gap between Labour and its rivals.
Critics saw it as a "lurch to the left" that could take
Britain back to the 1970s, when strikes, blackouts and an IMF
bailout hurt its reputation.
However, one of Blair's closest advisers, former media chief
Alastair Campbell, said Mandelson was wide of the mark.
"Peter M wrong re. energy policy being a shift to left. It
is putting consumer first versus anti competitive force," he
Tweeted. "More New Deal than old Labour."
Miliband said he was not anti-business: "I'm in favour of
competition, I'm in favour of markets, but they've got to be
Labour, which says cuts delayed the recovery, saw its
credibility undermined by the financial crisis and a record
budget deficit during its time in office. Thirteen years of
Labour ended in 2010 with its second worst defeat since 1918.
Labour said voters questioned in focus groups liked the
energy bill freeze, plans to halt a corporation tax cut and to
grab land that owners don't develop.
"After 2010, the assumption was that we'd be out of power
for two or three terms. Instead, we'll be very competitive at
the next election and have a good chance of winning," a Labour
source told Reuters.
Miliband will be helped by a split in the right-wing vote.
The UK Independence Party, which wants to leave the European
Union immediately, is on 11 percent, a poll said on Thursday.
Much of their support comes from former Conservatives.
Three years of cuts should also give Labour a lift, while
observers say Cameron has underestimated Miliband and voters'
"Unless he (Cameron) can persuade voters that he's on their
side, there are enough left-wing voters in Britain to elect the
most left-wing government of modern times," commentator Tim
Montgomerie wrote in the Times.