Liz Kendall will slam the Tories’ “failed experiment in welfare privatisation” this morning, and say that powers to replace schemes such as the Work Programme should be devolved. In a speech on the economy at Reuters, Kendall will promise to tackle the perception of Labour as anti-business, and argue that the party must be seen as pro-business and pro-worker to succeed.

Kendall will make the argument for a more competitive banking sector; to ensure that small businesses are able to invest in training and technology; for greater opportunity for employees to own shares in the companies they work for; and for greater trade union membership in the private sector, saying that this “can help raise productivity” by building “more constructive dialogue in companies between management and staff”.

The Shadow Care and Older Poeple Minister will also reaffirm her view that Labour will not win in 2020 unless voters trust the party to control spending.

Kendall will spell out how she believes devolution can help reform welfare, tackle the housing shortage and boost the economy:

“Our great cities should not have to wait for Westminster to address housing shortages or fill skills gaps. They shouldn’t be stuck with national programmes, like the Work Programme, when they can do better themselves. And they shouldn’t have to look to central government for almost all of their funding.

“So Labour’s replacement for the Work Programme won’t come from Whitehall, it will be designed and led by our towns, cities, and county regions. They know their local labour markets best. And they can build partnerships with local employers, housing associations and other agencies far better than any national programme.

“I want local areas taking control and keeping some of the money they save by helping people back to work.

“That’s how we’ll put right some of this government’s biggest failings, such as the lamentable failure to help the long-term sick and disabled return to work – which has caused unnecessary suffering and set back the cause of equality.”

This big speech on the economy follows an intervention on the issue by Kendall supporter Chuka Umunna yesterday.