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 Birmingham Post, he set out his plan to support local businesses and give the construction sector a massive boost, in the run-up to local elections.

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 and Liberal Democrat 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.

Speaking to the Birmingham Mail, Mr Miliband accused the Coalition Government 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.

“That shows the focus we have on jobs and growth, and I’m afraid the focus the Government doesn’t have.”

Massive public sector cuts had cost jobs, he said, as he highlighted recent figures which showed the economy grew by only 0.5 per cent in the first quarter of the year.

“Because of the speed at which they are cutting in the public sector, the private sector is not being able to keep up.

“That’s why you’ve seen the economy flat over the last six months.

“And so, I hope that they’ll listen to what people are saying at these elections and be willing to change elections.

“What I pick up as I go around the country is a sense of fear at what the Government is doing and a sense that actually, they aren’t addressing the real questions that people need addressed.”

The public will see fewer police on the streets because of cuts to the law and order budget, Mr Miliband claimed.

He was speaking after it emerged that more than 2,000 of Britain’s most experienced police officers are to lose their jobs because of budget cuts.

Chief Constables trying to save money have used a little-known regulation known as A19, which allows them to force officers with more than 30 years service to take early retirement.

This is because police officers are officially “servants of the crown” rather than employees, so it is almost impossible to make them redundant before they are eligible for a pension.

The Labour leader admitted he would also have cut police budgets - but by half as much as the Tories and Lib Dems.