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Jeremy Corbyn today launched a blistering attack on Tony Blair and Gordon Brown for their "unsustainable" handling of the UK economy.

In his first major speech to business leaders, Mr Corbyn savaged New Labour for its "light touch" banking regulation, reliance on PFI schemes and failure to hike wages for the low-paid.

It burns any final links between Corbyn's new-look leadership of the party and the New Labour approach to the economy.

"The New Labour approach was to opt for light touch regulation of finance - and then sit back and collect the tax revenues," Mr Corbyn said in a speech to the British Chambers of Commerce annual conference this morning.

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"But you cannot base a decent social policy on an unsustainable economic policy."

Mr Corbyn said New Labour had used the huge tax revenues from the City of London to top up people's wages with tax credits.

He insisted a better approach was to force firms to pay more by introducing a genuine ' living wage'.

"Wealth creation is a collective process between workers, public investment and services," he said.

"It cannot be based on a race to the bottom in pay and job insecurity, or the subsidy of low wages with in-work benefits.

(Image: Reuters)

"That's why we're in favour of a real living wage and stronger trade unions."

Mr Corbyn also savaged the Private Finance Initiative (PFI) funding method favoured by New Labour for building new schools, hospitals and other key projects.

He said the huge debts racked up by Labour's PFI schemes had helped spark the current NHS crisis.

And he said Mr Brown "lacked the courage" to be straight with people that the Government needed to borrow money to invest in future infrastructure.

"PFI debt (is) an inefficient way of delivering necessary investment," Mr Corbyn said.

(Image: Reuters)

"The last Labour government lacked the confidence to make the argument to borrow to invest, and so it did what banks thought they could get away with before the crash - an off-the-books accountancy wheeze.

"In both cases, putting debt off the books did not work it came right back onto the books and helped trigger crisis."