4:06pm UK, Monday February 28, 2011
Ed Miliband has warned of a "cost of living crisis" that will hit middle earners hardest.
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The Labour leader's speech comes on the back of research that claims middle income families will be £4,000 worse off this year as a result of spending cuts and the struggling economy.
Mr Miliband said: "More and more families will face a cost of living crisis that will see them left behind, even as the economy recovers.
"The Government is hitting lower- and middle-income families hardest in the way it cuts the deficit."
In a speech at the launch of a Commission of Living Standards, Mr Miliband pointed to research showing that since the 1970s, wages for middle and low earners have grown slower than the economy.
Data from the Resolution Foundation, which is behind the new commission, shows working couples with children will be up to £4,250 worse off this year because of public service cuts, low wage rises, inflation, higher taxes and benefit cuts.
The Labour chief also attempted to appeal to the political centre ground in his speech.
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He admitted his party previously ignored families on middle incomes to focus on those with low incomes.
Previously, Mr Miliband has been portrayed as being to the left of his party.
He said: "In the past, people have been used to hearing Labour leaders talk about fairness in terms of just inequalities between the richest and poorest.
"For families in the middle, fairness was important because they cared about a just society but it wasn't something which made a material difference to their standard of living.
Mr Miliband said the economy was 'unfair' for many middle earners
"That was because for many decades, the proceeds of growth and rising prosperity benefited the vast bulk of those working on middle incomes.
"Over the last 20 to 30 years that once-safe assumption has broken down.
"While those at the top have done well, middle and low earners are no longer guaranteed the proceeds of growth.
"Our economy is increasingly unfair not just for those at the bottom but for many of those in the middle as well."
Ed MilibandI do not think we can be relaxed about the filthy rich getting richer if you're seeing people on low and middle incomes getting their incomes squeezed.
Mr Miliband said the "squeezed middle" included households earning up to £44,000.
When asked to define the squeezed middle by Sky News, he added: "I think it's about people who are basic rate taxpayers and some people in the higher rate of tax.
"You might be on £44,000, but you have a number of children and pressures on you."
In a jibe at Peter Mandelson- who once said he was relaxed about people becoming "filthy rich" - the Labour leader said: "I don't think we can be relaxed about the filthy rich getting richer if you're seeing people on low and middle incomes getting their incomes squeezed."
Mr Miliband also admitted in the speech that Labour got it "wrong" over the number of Eastern European immigrants.
He said the previous government was "certainly wrong about the number of people" enteing the country, which they "significantly underestimated".
He added: "The real issue is how do we address the udnerlying drivers of low wages and low skills in a world where we do have free movement of labour.
"We need to address it."
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