LABOUR failed to do enough to improve transport and housing in the North during its 13 years in power, David Miliband admitted yesterday.

The front runner to succeed Gordon Brown as party leader pledged to give both issues “a higher priority” if he reaches No 10 – but without saying where the money would come from.

In an interview with The Northern Echo, Mr Miliband also set out his stall as the “business-friendly” candidate to win back support from a sector that deserted Labour en masse in May.

He predicted the Con-Lib coalition would crack under the strain, rather than last five years, pinpointing Foreign Secretary, and Richmond MP, William Hague as a Lib Dem critic to watch closely.

And he shrugged off brother Ed’s success in winning backing from the leaders of the public sector union Unison, saying: “Every trade unionist who pays the political levy has a vote – and that will be the test.”

With 54 hustings across the country nearly completed, the Shadow Foreign Secretary’s team believe he is significantly ahead of his four rivals.

In the interview, David Miliband suggested Labour’s drive to close the North-South divide was about to “take off”

when the party crashed to General Election defeat.

And he said: “The real tragedy is that we knew that we had a long haul to bring back wealth creation and social cohesion to the North.

“I felt we were really reaching take-off point – with apprenticeships building up, with the RDAs (regional development agencies) getting going, with business formation growing, with universities getting going. I think that’s being snuffed out.

“Would we do things differently?

We would give a higher priority to transport and to housing in the future.”

However, Mr Miliband suggested Labour’s priority must be to woo Southern voters, arguing it was impossible to win back power with only 12 out of 210 seats in the South, outside London.

And raising the alarm over the way business leaders ran away from Gordon Brown, he said: “I don’t want to fight another election when not a single major business comes out and supports Labour’s economic policy.

“I am determined that we are going to be a party that is known for spreading wealth creation, as well as for spreading wealth.”

Mr Miliband unveiled a fivepoint plan to “get us back in the game”, including an infrastructure “investment bank”, 60 per cent of young people in education or training, a “living wage” and a state-led industrial strategy, modelled on Germany. And he revealed he had recruited half of 1,000 “community organisers”, to make Labour a “movement not a machine”.

Mr Miliband said: “We will have people trained to lead campaigns on everything from new doors on council estates, to internships for people coming out of young offenders institutions.”

On the coalition, the man who rejects the label “Blairite” said: “People are overly confident that it is bound to last for five years.”

Pointing to yesterday’s embarrassment when Nick Clegg – to Tory horror – called the Iraq invasion “illegal”, he said: “You just had to watch William Hague’s face to realise this is a coalition of contradictions.”

■ Mr Miliband will speak at the Priory Street Centre, in York, from 3.30pm to 5pm today.

He is visiting the city at the invitation of York Central MP Hugh Bayley.