The U.K.'s Labour party, the main opposition party in Britain, plans to hike taxes levied on banks to pay for more free childcare in a move it hopes will help it win a general election in the country in 2015.
Ed Balls, the man who could be the U.K.'s finance minister if Labour wins the next election, told CNBC that although the economy was growing, for most working families things were getting worse.
"People want an economy that works for all and not just a few...They want a government that is on their side," Ed Balls told CNBC Europe's "Squawk Box" on Monday.
Speaking from the Labour party's annual party conference in Brighton, Balls launched a stinging critique of the spending cuts introduced by the ruling Conservative-Liberal Democrat coalition government. As part of his economic plan to help working families, Balls said he would increase the bank levy rate to pay for an increase in free childcare from 15 hours to 25 hours a week.
"I want our banks reformed to play a proper role in our economy. I'm not a bank basher but I do think they should pay more tax," Balls said while the party's shadow business secretary told CNBC the move would give the party around £800 million to use offsetting childcare costs.
"The tax take from the financial services sector is £2.7 billion lower than it was in 2010....and all we ask is that the financial services sector does a little bit more for our real economy at home," Chuka Umanna told CNBC.
The Labour party has promised an independent audit of its new spending pledges to show it could be trusted to run the economy. But as economic data improves, Labour could face an uphill struggle to convince voters.
Britain's economy grew 0.7 percent in the second quarter of the year, house prices are rising, consumer confidence is improving and the manufacturing sector is expanding. After high profile criticism from the International Monetary Fund (IMF) of tough austerity to get the country out of a recession, the U.K.'s current treasury chief George Osborne cheered the figures last week and said the economy was "turning a corner."