ED Miliband today claims the next General Election will be a fight for "the soul of our country" as he contrasts Labour's plan for a balanced approach to deficit reduction with the Tories' slash and burn policy, which would condemn Britain to a permanent cost-of-living crisis.

The Labour leader, who infamously failed to mention the deficit in his party conference speech in September, devotes a whole keynote address in central London to the subject.

Following last week's Autumn Statement in which Chancellor George Osborne insisted the Coalition's austerity programme had halved the national deficit and would balance the books by 2018, the Tories came under fire for their mission to reduce the size of the state.

The respected think-tank, the Institute of Fiscal Studies, warned of "colossal" cuts ahead while the Office for Budget Responsibility pointed out that only two-fifths of public spending reductions had been made.

Today, the Labour leader, conscious his party is well behind the Tories on who people trust to manage the economy, sets out his economic stall to persuade voters his party leadership can be relied upon to steer Britain to prosperity in a fairer and more balanced way.

He will condemn the Conservatives for their "extreme and ideological" approach to deficit reduction; cutting back the state whatever the consequences.

"This is a recipe for public services that will disintegrate and for a permanent cost-of-living crisis because we won't be investing in the skills and education people need for good quality jobs and indeed for sufficient tax revenues."

Setting out what he describes as a "tough and balanced One Nation Labour approach" to tackle the deficit Mr Miliband will seek to sound determined, making clear he will not "spray around unfunded commitments".

He will point out how Ed Balls, the Shadow Chancellor, will write to every Shadow Cabinet colleague, stressing that, apart from protected areas like the NHS and overseas aid, every department in a Labour government will face cuts, not for just one year but every year until the books are balanced.

The Labour leader will say: "There is no path to growth and prosperity for working people which does not tackle the deficit. What we need is a balanced approach, which deals with the deficit but does so sensibly."

Mr Miliband will set out his five principles for dealing with the deficit, which will include ensuring the wealthiest bear the biggest burden, not everyday people and having fully-funded commitments without additional borrowing, not unfunded tax cuts that put the NHS at risk.

"This is now a fight for the soul of our country," he will declare. "It is a fight about who we want to be and how we want to live together."

The Labour leader will add: "The Tory vision is clear: the wealthiest being looked after, everybody else on their own, public services not there when you need them.

"Our vision is different: a country that works for everyday people, with public services your family can rely on, a government that prioritises working people so that we can earn our way out of the cost-of-living crisis, a Britain built on strong economic foundations."