LONDON (Reuters) - The government unveiled reforms on Thursday to ease planning laws and boost construction to revive the flagging economy, but the resurgent Labour party ridiculed the move as it laid out its own economic vision.
In an uncomfortable day for the government, whose flagship austerity plan is under fire with the economy in recession, the Organisation for Economic Co-operation and Development (OECD slashed growth forecasts and Labour ridiculed the planning reforms as a "mouse when we need a lion to roar".
Winning back confidence in its handling of the economy is crucial for the increasingly unpopular Conservative-led government ahead of a 2015 general election, as pressure mounts even with the Conservative Party for a new economic strategy.
The government's new initiative involves easing planning laws to allow properties to be more easily expanded, removing restrictions on house developers and bringing in legislation allowing the government to underwrite infrastructure projects.
The government is also extending financial help for first-time buyers, who are often priced out of the housing market due to a chronic shortage of property in some parts of Britain.
Business leaders welcomed the move, which lifted the share prices of Britain's biggest house building firms, including Bovis Homes, Persimmon, Taylor Wimpey and Barratt Developments.
But Ed Miliband ridiculed the initiative, saying that new home extensions would not fix Britain's economic woes.
"Here is our central criticism of today. First of all it's incredibly complex, but more importantly, what is the real problem we have in the economy today? It is a lack of confidence and lack of demand. I don't think it's the rules on conservatory extensions," Miliband said.
In laying out his vision for the economy, Miliband challenged the idea that low inflation leads to economic stability and said his party would take a greater role in regulating financial markets to foster "responsible capitalism".
Despite tens of thousands of job losses and welfare cuts Britain continues to borrow more than hoped and the economy has shrunk for the last three quarters, with the OECD now predicting that the economy will shrink by 0.7 percent this year.
Additional reporting by Sven Egenter and Rosalba O'Brien; Editing by Michael Roddy