LABOUR would tax the banks and pump the money into Britain's great towns and cities to create jobs, party leader Ed Miliband has revealed.

In an interview with The Journal, he set out his plan to support local businesses and give the construction sector a massive boost.

And he slammed the Government for failing to tax Britain’s banks and financial services industry, largely based in London, while employers in other parts of the country were struggling.

Local elections this week will be Mr Miliband’s first major test since replacing Gordon Brown as Labour leader last September.

He claimed the poll was about “the fate of the country”, and urged voters to use it as a chance to show their opposition to the policies of the Conservative/Lib Dem coalition in Westminster.

Mr Miliband also warned that cuts to police budgets had forced chief constables to sack hundreds of their most experienced officers by making them take early retirement – and predicted this would hit public confidence in the police.

The party leader accused the coalition of failing to draw up a strategy to help employers bring jobs and prosperity to the regions.

He said: “Here’s one thing I would do very differently. I would be having a bank bonus tax this year – I wouldn’t be cutting taxes for the banks.

“And I would be using that money to put young people back to work, to get the housing sector moving and to give more money to small and medium-sized enterprises to help them grow.

“That’s a big difference. We’d be transferring money from the finance sector, from the banks, to help industry and to help put people back to work.