Immigration from Eastern Europe was underestimated by the former Labour government and hit people's wage packets, Ed Miliband admitted today.
The Labour leader said economic migration had been allowed to widen the gap between rich and poor.
In a speech, he admitted that the previous government had been wrong not to concentrate on the type of economy it was building.
'The story of the last two decades is of an economy divided between high-skill, high-productivity sectors and low-skill jobs,' he said.
'At the same time, economic migration and greater labour market flexibility have increased the pressure faced by those in lower skill work.'
He added: 'There is a difference between our government and this one - we did take action through tax credits and other decisions to help families.
'But we were wrong not to focus more on the type of economy we were building and what that meant for the widening gulf between those at the very top and the rest.'
Taking questions afterwards, Mr Miliband said there was no doubt that managed migration contributes to the economy.
But he said: 'We've got to look at the interaction of migration with, for example, flexible labour markets, because when you have the interaction of Eastern European migration and flexible labour markets there was pressure created on people's wages.'
Mr Miliband added: 'We were certainly wrong about the number of people who were going to come in, make no bones about it, because I think we under-estimated significantly the number of people who were going to come in from Eastern Europe.'
Mr Miliband said that, despite 'advances' under Labour, the economy was 'not delivering' for many people, including increasing numbers of middle earners.
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