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Lisa Nandy is through to the final stage of the Labour leadership contest after wining the backing of small affiliate Chinese for Labour.

It came after she won the backing of Jess Phillips after she pulled out of the race herself.

Ms Nandy, who had already secured the backing of the party's third biggest union the GMB, the National Union of Mineworkers is guaranteed a place on the ballot paper sent to members.

It came after a wide-ranging speech in which Ms Nandy said the party had for too long accepted the Thatcherite economic consensus.

She said that while she did not want to "trash" the record of the last Labour government under Tony Blair and Gordon Brown: "We tacitly accepted that four decades of economic conservatism was a bigger priority than people.

"That only by showing we could be as tight as the Tories could we buy legitimacy for helping people in the most need."

She said Mr Corbyn's rejection of the politics of austerity had been an "important moment" for the party.

But she said that Labour had to go further.

She said the welfare system was in "real trouble" and that Labour needed to recover the ambition which led it to build the welfare state after the Second World War.

(Image: Adam Gray / SWNS)

"This change must start with being honest with ourselves. In the Labour Party we’ve been captured by the mythology of our past. Our welfare state didn’t arise from one man - a liberal reformer -, stepping in to save us.

"It arose from a movement that had grown over many decades."

She added: "The case for change starts now. This has been a shattering defeat for Labour but it is a reminder that defending the status quo has never paved our route to power. We will not wait for permission to make change in 2024. We can be that change. But it will take a movement.

In a wide-ranging speech on tax and welfare she said: “We need to change the debate. Tax is not an evil. Tax is how we contribute to something bigger, better than ourselves."

Ms Nandy reminded the audience how she had voted against the Tories' Welfare Bill despite being on maternity leave at the time.

"For many in the Labour Party this was the symbolic point when Labour lost its way," she said.

(Image: PA)

And she slammed the system for "losing sight of the human being" and treating people as numbers and speaking about her constituents turning up at her surgeries with plastic bags full of computer-generated forms.

She said: "It cannot be right that the poorest can find themselves paying the highest marginal effective rate of tax – that baker’s bonuses are taxed more than bankers.

"The root is universal credit, and the cuts made in 2012."

She vowed to scrap the system explaining the many flaws not least expecting people to get online when they don't have access to a computer and the libraries are being closed.

Although she recognised the need for a simpler system, she said it is "fundamentally flawed".

Adding: "The problem with Universal Credit is that the circumstances, the very, very diverse and different circumstances and changing circumstances of the individual human beings in the system could never have been dealt with by just one single payment, so it is fundamentally flawed.

"And that's why I think Labour asked to scrap it and replace it with a system that's able to deal with the complexity.

"And the lived reality of the people who are in it."

But she would also overhaul the whole tax system.

This would include bringing Capital Gains Tax rates in line with those on earnings, and raising corporation tax to at least the basic rate of income tax.

She said: "It makes no sense that we tax companies and wealth at a lower rate than income – that people who work hard to earn money should pay proportionately more than those who have the good fortune of an unexpected windfall."

(Image: Ian Vogler / Daily Mirror)

The Wigan MP secured her place on the final ballot paper after she won the backing of Chines for Labour.

She said in response: "As someone of mixed heritage, I'm incredibly proud that it is Chinese for Labour who have secured my place on the ballot paper.

"They do incredibly important work to ensure we are a representative and inclusive party that can truly speak for modern Britain.

"I'm now looking forward to getting out intro the country and laying out my vision for reuniting the party, rebuilding trust, and returning Labour to power at the next election."

She was also boosted by the decision of colleague Jess Phillips to drop out of the race and back Ms Nandy instead.

A spokesman for the Birmingham Yardley MP said: “Jess will be backing the candidates who she thinks can bring the party together and win back the trust of the electorate.

“She will be voting for Lisa and Keir. As she has said before, Lisa will be her first preference choice.”

Told of Ms Phillips's support for her in the Q&A after her speech, she said she was “very pleased to hear it”, before joking: “If she’s got about 250,000 friends we could end this contest right now!”

This morning Ms Nandy spoke to staff at the homelessness charity Centrepoint, where she used to work.

Reflecting on the work of the homeless charity, she said: ""It feels quite emotional being back here."

Adding: "In many ways this is where my journey to this point began."

It follows the all-important endorsement yesterday of trade union giant the GMB, which should be enough to ensure she joins frontrunners Keir Starmer and (the soon-to-be-confirmed) Rebecca Long-Bailey in the final ballot of members next month.