Andy Burnham is expected to explicitly criticise Keir Starmer at Labour’s party conference on Sunday. Photo / Getty Images
British Prime Minister Keir Starmer has compared Manchester Mayor Andy Burnham to Liz Truss, saying his policies would inflict harm on working people.
In his first public intervention in the row over the Labour leadership, Starmer compared the mayor to the former Tory prime minister blamed for a market meltdown in 2022.
Yesterday, Burnham told the Telegraph that MPs were pressuring him to stand against Starmer, whose leadership is faltering amid tanking poll ratings.
In a separate interview with the New Statesman, he said key industries should be nationalised and called for looser financial rules, saying: “We’ve got to get beyond this thing of being in hock to the bond markets”.
Starmer, speaking to ITV Granada, suggested such a position could trigger a bond market rout on the scale of the one that followed Truss’ disastrous mini-Budget, adding that there is “nothing progressive about abandoning fiscal rules”.
He said he would not “get drawn into commenting on the mayor’s personal ambitions”, but added: “I do want to be really clear about our fiscal rules, because economic stability is the foundation stone of this Government”.
“It was three years ago this week that Liz Truss showed what happens if you abandon fiscal rules. In her case, she did that for tax cuts, but the same would happen if it was spending.
“And we saw what happened to working people three years ago, the infliction of harm on them.”
The Prime Minister added: “I’m not prepared to let a Labour Government ever inflict that harm on working people, which is why I’ve always been clear our fiscal rules are iron-clad, and that is because they protect working people”.
“There’s nothing progressive about borrowing more than we need to. There’s nothing progressive about abandoning fiscal rules. They’re the foundation stone of this Government.”
Burnham’s interventions, days before the annual Labour Party conference in Liverpool, have fuelled speculation in Westminster about Starmer’s future.
Speaking to the Telegraph, he set out a broad manifesto of policies that he said would “turn the country around”, including higher council tax on expensive homes in London and the South East, £40 billion of borrowing to build council houses, income tax cuts for lower earners, and a 50p rate for the highest-paid.
Rachel Reeves, the Chancellor of the Exchequer, also took a swipe at Burnham, saying: “We’ve seen this film a few times before”.
“When Keir ran for the leadership, people said that Labour couldn’t come back from the catastrophic defeat at the 2019 election, then people said he couldn’t overturn that huge Conservative majority.
“He won a landslide victory just over a year ago, and Keir and the whole Government are focusing on the change that people voted for [...] In the same way that this Government are delivering change, I know that Andy is focused on delivering change in Greater Manchester.”
Next week, the Chancellor will say that the Government’s policies must have the confidence of the markets.
Truss responded to warnings that Burnham would be “Labour’s Liz Truss” by saying: “He should be so lucky”.
Truss quit as prime minister after 49 days in 2022 following a backlash from the markets and Tory MPs to her mini-Budget, which included a range of uncosted tax cuts.
Her failure to say how she would pay for these cuts led to a significant increase in borrowing and helped to trigger a market meltdown that drove mortgage rates higher for millions of people across Britain, forcing her from office.
Since then, she has blamed the Bank of England for the economic chaos that followed her financial package, noting that British 30-year gilt yields had been higher on Reeves’ watch.
Government borrowing costs jumped today as bond traders warned that investors were “incredibly concerned” about a potential Burnham premiership.
Lloyd Harris, the head of fixed income at Premier Miton Investors, said this “weakness” reflected “nervousness about his [Burnham’s] comments” and lacklustre demand at recent Government debt auctions.
James Athey, a fund manager at Marlborough, added: “From a bond pricing perspective, the likelihood of Andy Burnham being in power is going to be a significant input into the calculus”.
“[The market] would be incredibly concerned about not just what he’s suggesting and the quantum of borrowing that he’s talking about, but the cavalier attitude to bond investors.”
Callum Anderson, the Labour MP for Buckingham and Bletchley, accused Burnham of “wishful thinking”.
Anderson wrote on X: “To lead a Labour Government – and a Labour Treasury – you can’t just dismiss the bond markets. Every pound spent on schools, hospitals and infrastructure depends on credibility with those who lend to the UK. Real change requires fiscal discipline, not wishful thinking.”
Neil Coyle, another loyalist Labour MP, accused Burnham of “craven” leadership manoeuvring, telling BBC Radio 4’s World at One programme: “Every year we get this nonsense that Andy wants to be PM and doesn’t want to be Mayor of Manchester”.
“I think if I was a voter, I’d be sick to the back teeth of hearing he doesn’t want to be the leader of my city, he wants a different job.
“Instead of working with the Labour Government, he looks like he’s part of the sideshow distractions. That upsets a lot of our members.”
Coyle claimed the idea Burnham had 80 Labour MPs “ready and waiting” to support him if he returned to Westminster was “all a bit fanciful”.
A Labour source responded to Burnham’s interventions by taking aim at his willingness to work with Jeremy Corbyn, Starmer’s predecessor as Labour leader, who has started a new left-wing party.
The source told the Telegraph: “Only Burnham could ask for a pact with Jeremy Corbyn in one breath and describe someone else as divisive with the next.”
A senior Government source told the BBC that Burnham had “a Boris-sized ego, but without the strategic thought”.
Burnham was asked today about his interview with the Telegraph, in which he said MPs had contacted him to urge him to stand against Starmer.
He told BBC Radio Manchester he had been asked a “direct question” and responded “honestly” but that he was “ready to support the Prime Minister”.
He said: “What has happened is somebody asked me if MPs had been in touch and I gave an honest answer to that. But I also said to those MPs that we have got to work on a plan, a proper plan to beat Reform, and that is where I think all of the focus needs to be.
“A plan to get the country back to where it should be, get the country functioning again – because people don’t feel it is right now.”
Today, polling by the More in Common think-tank showed that Labour would overtake Reform UK in the polls if Burnham became leader.
Of those surveyed, 28% said they would currently vote Reform, with Labour on 25%.
However, in a hypothetical poll with Burnham leading Labour instead of Starmer, 30% would vote Labour, with 28% still voting Reform.
The Greater Manchester Mayor told the BBC that it was “not up to me” whether he runs for the party leadership, saying: “It’s up to the Labour Party, in Parliament”.
Sacha Lord, Burnham’s former night-time economy adviser, said it was time for Starmer to go as Labour leader, telling Times Radio: “He’s lost my support, as has the Chancellor as well. I’d say he’s failing at the job, which is why I cannot support this leadership”.
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