Mr Miliband set out plans to fund the move with a “mansion tax” on homes worth more than £2m with Labour claiming 25m basic rate taxpayers would be up to £100 a year better off.
During a visit to Bradford yesterday, David Miliband backed his brother’s emerging plan to turn the next General Election into a debate about falling living standards.
Introducing a 10p income tax rate would reverse the controversial decision to scrap it made by Gordon Brown in his last Budget as Chancellor six years ago.
In a speech yesterday, Ed Miliband described scrapping the 10p rate as “a mistake” and its reintroduction as “moving Labour on from the past and putting Labour where it should always have been – on the side of working people”.
Mr Miliband said the policy demonstrated Labour’s “priority to do everything we can to make a difference to people’s living standards”.
He added: “When you play your part, when you make your contribution to the economy, you will be rewarded.
“Britain’s economic success will be built by the many, not just by a few at the top.”
In an interview ahead of the speech, Mr Miliband had said he would go into the next election asking voters “are you better off than you were four years ago?”
It was a theme he developed in the speech in Bedford where, in 1957, then Prime Minister Harold McMillan famously said that “most of our people have never had it so good”.
“People in Britain are putting in the hours – doing the shifts – as never before,” Mr Miliband said.
“But something has changed in the last few years. There’s less chance of promotion. Less chance of a pay rise. And 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 if we carry on as we are it will be like that for years to come.”
The Labour leader went on: “We were promised that we could have growth and a lower deficit.
“In fact, we’ve had almost no growth and the deficit is rising again. That’s because people aren’t in work paying taxes. Too many are out of work and on benefits.”
He said small businesses kept hearing promises that things would get better, but “tomorrow never seems to come”.
“And that’s why it isn’t working for Britain. It’s no mystery as to why we’re in the trouble we’re in.”
David Miliband yesterday backed the party’s new focus on living standards during a visit to Bradford University yesterday where he took part in a question and answer session with students.
“If the electorate conclude that they are worse off than they are five years ago they will then want to know how they will be better off in five years time. So I think its a very good way of starting the conversation because it goes to the heart of this point that people were offered a false prospectus.
“The light at the end of the tunnel is getting further and further away,” he said.
He described Labour’s loss in the previously safe seat of Bradford West last year as a result of the party looking “inwards and backwards.”
“People said why should we put up with a self-selecting oligarchy that’s reselecting itself and enhancing itself and freezing us out and I think we have to make sure Labour doesn’t fall into that trap again.
“We’ve got to show that the Labour Party has learned its lesson, is opening up its structures, is supporting things the community wants, does want to be in touch and is ready to speak up.”