Break up the banks and restore 50p tax rate, says Ed Miliband Ed Miliband set out a populist tone on the opening day of the Labour party conference on Sunday by attacking the banks and threatening legislation to break up their retail and investment arms unless they showed a greater willingness to do so themselves. Miliband claimed the government had backtracked in its banking white paper on its commitments to separate the retail and investment arms. He is targeting banks, pensions funds and energy companies before his speech on Tuesday in an attempt to flesh out his call for a more responsible capitalism. But he also had to execute a hasty U-turn after he suggested on Saturday that he was not going to scrap the NHS reform legislation. Miliband is likely to battle all week to balance media demands for more policy substance with his own need to avoid expensive spending commitments more than two years from the election. Speaking on the BBC's Andrew Marr Show on the opening day of his party's conference, Miliband said he had a "very clear message" for banks. Either they sort out themselves so that once and for all the high street bank is not an arm of the casino operation, or the next Labour government will by law split those banks up. He said: "We need real separation, real culture change. The banks won two crucial lobbying victories in their attempts to water down proposals set out by the government-commissioned Vickers report into the future of banking. The first was that the government scrapped the Vickers recommendation that ringfenced banks should have stricter standards on how much equity they could issue compared with their assets. The second was that ministers allowed for interest rate and currency swaps to be sold from within the ringfenced arms of banks, putting them in the same category as ordinary loans and making them cheaper and easier to sell. Miliband said there had to be hard ringfencing, as proposed by Vickers, and a commitment to enforce the spirit as well as the letter of the commission report. The Ed Balls camp pointed out that Sir Mervyn King, governor of the Bank of England, had claimed Vickers was being diluted. They stressed that if the banks did not implement Vickers, a full and total break between retail and investment arms would be imposed. Previously, Ed Balls, the shadow chancellor, has warned against such an enforced, rigid split, telling an audience this summer that he understood why the Vickers inquiry had stopped short of such a recommendation. He said: "There are lots of risks and complications and potentially perverse outcomes." There have been reports that the business secretary, Vince Cable, had been unhappy at the way in which the proposals had been watered down, but his aides denied this, saying he recognises that banks need to be able to rebuild their balance sheets if lending is to be encouraged. In a speech in August, Miliband called for a return to what he described as stewardship banking and claimed the government had caved in to a concerted lobbying campaign to water down the Vickers plans. The Labour leader has also suggested that the big five banks be pushed to sell off 1,000 branches and introduce transferable account numbers to make it easier for consumers to switch banks. Also in his BBC interview, Miliband said it was a political game to ask him whether Labour would support coalition tax and spending plans in 2015 and onwards. We'll set out our plans at the next election for what we're going to do in the next parliament, and that's what you'd expect us to do. We don't know what the government's going to be spending or doing in the next three months, frankly, because borrowing's going up under this government. The Labour deputy leader, Harriet Harman, said she had been mistaken in suggesting in a Spectator interview last week that Labour had already decided it would cut more slowly. Miliband also said Labour would reverse the coalition's cut in the top rate of tax from 50p to 45p "if there was an election tomorrow. Next April, David Cameron will be writing a cheque to each and every millionaire in Britain for £40,000," he said. If I was in government tomorrow, one change I would make in relation to the better-off - first change in a Labour budget - we wouldn't be cutting the top rate of income tax from 50 to 45p. If there was an election tomorrow that is what we would do. Miliband also backtracked on suggestions made on Saturday that he would not repeal the government's NHS reforms. Asked about the shakeup, Miliband had said that it would not be sensible to "reverse it all back and spend another £3bn on another bureaucratic top-down reorganisation." Labour would instead find ways to "put the right principles back at the heart of the NHS," seeking a legal basis for the NHS based on "co-operation, not competition." Amid suggestions that represented a climbdown, the shadow health secretary, Andy Burnham, issued a statement on Twitter which read: "I'll repeal the bill. Full stop. On Sunday, Miliband said he opposed the bill because it "puts the principles of competition, markets and money as the central defining principles of the NHS. That's the wrong set of principles. I want hospitals to be able to co-operate with each other, not to be sort of taken to court for colluding with each other, which is one of the things in this bill - they can be fined up to 10% of their income. Labour says it will keep the commissioning groups set out in the bill, but remove the duty to compete. The remarks suggest Labour will not seek to restore primary care trusts, another top-down reorganisation NHS staff are unlikely to favour. The health minister, Norman Lamb, said it would be madness for Labour to repeal the coalition's Health and Social Care Act: "To say repeal the act, effectively, is telling the NHS we're going to go through another complete restructuring. It would be madness to do that. Miliband also told the Unite general secretary, Len McCluskey, that he was wrong to attack him for calling for a 1% cap on public sector pay, saying: "He's entitled to his view, but he's wrong." The conference is expected to pass a resolution on Monday opposing a wage freeze, and in a sign of the tensions with the unions over fiscal discipline, the GMB general secretary, Paul Kenny, said: "Next year is the test for the Labour party but if you ask me about Ed Balls I'd say he'd give aspirin a headache ... he is still stuck in this time mode as if we were doing the prawn sandwich offensive around the City."