Ed Balls has given a staunch defence of Labour's record on the economy, saying there was no problem with public spending, the deficit or national debt before the financial crash of 2008.

In a challenge to the Conservative narrative about the causes of the economic crisis, the shadow chancellor said he was proud of Labour's public spending under the last government, which led to improvements in the NHS, schools and police.

He also insisted Labour was "pro-business" and said many businesspeople supported his plan to raise the top rate of tax to 50p again.

Asked on BBC1's Andrew Marr Show whether he felt any regrets about Labour's spending, Balls said the party might have done some things differently but its level of expenditure was not the cause of Britain's recession.

"We didn't spend every pound of public money well, but to be honest with you, I'm really proud of what we did in the NHS; I'm really proud of the improvement in standards in schools, the extra police on the streets, what we did to tackle antisocial behaviour. We went into the crisis in 2007 with a lower national debt than we inherited and lower than France, Germany, America and Japan.

"There would be some spending things we wouldn't do, some spending things we would do differently, some areas we'd spend more. But do I think the level of public spending going into the crisis was a problem for Britain? No, I don't, nor our deficit, nor our national debt. What happened was a global financial crisis which pushed up the deficit.

"The question then was: who can get the deficit down? George Osborne choked off the recovery, a recovery Labour had delivered but it wasn't caused by public spending in Britain and that's just the truth."

His steadfast defence of Labour's spending comes after he delivered a key speech about economic policy on Saturday, pledging to raise the top rate of tax to 50p. The move has been criticised by business groups including the CBI and a former Labour city minister, Lord Myners, who said it would take the party "back to old Labour and the politics of envy".

Balls said many businesspeople supported his plans, and stressed that the move would be a temporary one until the deficit had been reduced.

"I've had very many businesspeople say to me over the last year or so, they say: 'We want to get the top rate of tax down' – well, of course they do. I want lower tax rates," he said.

"But they also say to cut the top rate of tax when the deficit is still high and when ordinary people are seeing their living standards fall is foolish and actually breeds resentment and I want to do the opposite of that. I want to say, look, pro-business, pro-investment, pro-market but pro-fairness, let's get the deficit down in a fair way and make the reforms to make our economy work for the long term."

The shadow chancellor also promised that raising the 50p tax rate would not be the start of a return to the higher levels of taxation of the 1980s, when there was a 60p top rate of tax at one point.

Over the weekend, Balls also said he would run a budget surplus if Labour got back into power. However, he declined to say how the party would split its budgetary plans between raising taxes and cutting spending.

"We've said a mansion tax to cut the 10p rate for families. We've said that we would have to raise the 50p rate in the next parliament（国会，议会） while we get the deficit down. We said there would be spending cuts, there would be rises in the pension age, we wouldn't go ahead with the winter fuel allowance for the richest pensioners, we would have a zero-based spending review," he said.

"But what I can't do is say what our tax policy and our tax decisions would be in budgets three years out when we don't know what will happen to the economy. But I'm clear: middle- and lower-income families are already paying a lot more tax, their living standards are falling, they're hard-pressed and they want help."

The foreign secretary, William Hague, criticised Balls's proposal, telling the BBC he believed the shadow chancellor was sending out the wrong signal about Britain.

He said: "I see as foreign secretary every day the rest of the world now seeing Britain with falling unemployment, with low inflation, with a real return of economic confidence. The long-term economic plan of this government is working.

"Ed Balls is sending the signal that if there was a Labour government we would go back to high taxing, high borrowing, high spending, and that is an anti-business, anti-job-creation agenda."

However, the 50p top rate plan was backed by the Labour former chancellor Alistair Darling, who said Balls was "quite right … to lay out these proposals here in relation to deficit reduction".