Last month, the OBR confirmed that Britain is now experiencing growth of over 2 per cent. After the slowest recovery from a recession on record – partly because of the depth of the impact of the crash, partly because of the fiscal austerity chosen by this government – we should all welcome this news, whatever our views on economic policy or our party affiliations. To do otherwise is not simply churlish: it is self-defeating for those who want to make the case that there are serious problems with the UK economy, and with the policy choices this government is making. And I think there are some very serious problems.

To see what the problems are, you need to look under the bonnet of the UK recovery. Firstly, it is a recovery predominantly fuelled by consumption, more than any other major economy. Where is this consumption coming from? Partly from the expansion of household debt, which reached a record high at the end of 2013. And partly from people running down their savings to spend more. Between January 2012 and December 2013, the UK savings ratio went from 8 per cent of GDP to 5.4 per cent. Germans save nearly twice as much as that.

Secondly, it is a recovery of an economy that is relatively inefficient. Our productivity has gone from bad to worse since the crash, and is now about 20 per cent below the average of our G7 competitors. This year, Britain’s trade deficit is predicted to rise to the highest level of any industrial country in 2014, its highest level for a quarter of a century. And what about investment? As a share of GDP, investment in the UK economy dropped by a quarter in the five years after 2008. We now rank 159th in the world, just behind Paraguay and Mali.

Thirdly, it is a recovery whose benefits are being felt by a very few, not by the broad majority. And not any old "very few" either. City bonuses are predicted to be 15 per cent up on last year. Meanwhile, average earnings are £1,600 a year lower than at the last election, and earnings will only have grown by half the level of the overall economy by the next election. The median household has seen their income drop by nearly 4 per cent since the recession. In our country, the poorest 40 per cent have the lowest share of national wealth of any western country.

However you cut it, our economy has a problem in the engine room. We are too dependent on housing and debt for family incomes, too dependent on consumption rather than saving and investment, too dependent on an under-skilled workforce, and too dependent on low-wage and insecure jobs.

But let’s be honest about these problems. They are not being addressed by this government, but they were not caused by it either. Nor are they problems that will be rectified in one policy heave, but instead require a determination to address them over a number of years. The question is: what is to be done?

This is where a clear choice between Labour and the Conservatives starts to emerge. The Conservatives’ answer has two parts. First, to say that the return of growth is the definition of economic success. Second, to double down on the economic model created after 1979. In George Osborne’s view, there is no point trying to reform the way our economy works. It is what it is. The role of government is to feed the low-wage, low-skill monster.

That’s why the Tories prioritise further labour market deregulation in an economy that is among the most deregulated in the OECD. It’s why they want to revisit UK membership of the Social Chapter, 20 years on from the last debate about it. It is why they refuse to tackle zero-hours contracts. It is why they are happy to subsidise demand for housing yet preside over historically low levels of housebuilding activity. It is an approach based on the policy recipes of the 1980s and 1990s. And it won’t fix what doesn’t work.

The response of Labour under Ed Miliband’s leadership is different. We refuse to accept that there is nothing to be done about the snapping of the link between the fortunes of the economy and those of working people. Britain's problems with productivity, competitiveness and living standards are interconnected, and demand a thoroughgoing reform of how our economy works. That’s why Ed Miliband has said that the government he leads will prioritise a transformation of our banking system, resetting the energy market, a new target of building 200,000 new homes a year, a revolution in apprenticeships and technical education in our schools, and a historic transfer of many of the levers of economic policy from Whitehall to city regions and county-regions.

The easy response to the return of growth after such a long wait is to say that this agenda for fundamental reform is both too difficult and unnecessary. I strongly believe that would be a mistake. As Britain emerges from the most devastating and prolonged downturn of the past 100 years, to resign ourselves to a return to the economic pathologies of the past would be to miss a historic opportunity. As long as Britain’s international ranking on skills, investment and productivity is so low, and on inequality, centralisation and poverty so high, there will be a need for a government that sets itself the defining challenge of reforming the way our economy works. That is the challenge that Ed Miliband will meet.

Stewart Wood (Lord Wood of Anfield) is shadow cabinet minister without portfolio and an adviser to Ed Miliband in the leader's office