Andy Burnham has held secret talks with Keir Starmer away from Downing Street, as the prime minister pledged to smooth his transition to power, while Burnham’s chosen economic adviser called for billions more in borrowing for infrastructure.
Starmer was said to have left Downing Street for an hour-long “off-site” meeting with Burnham – the first time the two men had spoken since Burnham returned to Westminster, the Times reported. The meeting was confirmed by Pippa Crerar.
“Andy Burnham held secret talks with Keir Starmer as his economic adviser called for billions in infrastructure borrowing.”
Jim O’Neill, the former Goldman Sachs chief economist tapped by Burnham to be his chief economic adviser, has called for billions of pounds more borrowing to pay for investment in infrastructure. O’Neill, who also served as a minister, said he wanted the government to create an independent body for infrastructure spending along the lines of the Office for Budget Responsibility (OBR), which could be freed up to spend significantly more on major projects.
“There is a lot more room under the existing fiscal rules to borrow for investment, and the next chancellor should take advantage of that,” O’Neill said. “We can do way more to boost infrastructure projects, and that is what we should be doing.”
With Burnham almost certain to succeed Starmer as prime minister, attention is turning to his likely policies, especially on the economy, where he is seen as more leftwing than the present government. In the past few weeks, Burnham has been consulting three high-profile economists as he looks to flesh out his policy agenda: O’Neill, former Bank of England economist Andy Haldane, and Richard Hughes, the former head of the OBR.
Burnham is also weighing up who to pick as his chancellor, with Ed Miliband, the energy secretary, and Wes Streeting, the former health secretary, emerging as the frontrunners. The Makerfield MP will give a speech next week fleshing out more of his probable programme, including significant measures on devolution.
The extra borrowing O’Neill advocates could add to jitters in the bond markets about the prospect of a Burnham government, though O’Neill argued it would still meet the government’s fiscal rules and provide sufficient transparency to reassure investors. Last year Burnham was blamed for a rise in UK borrowing costs when he argued the UK should not be “in hock” to the bond markets, prompting speculation he could ditch the government’s fiscal targets if he became prime minister. But during his campaign for the Makerfield seat, Burnham said he would stick to the existing fiscal rules and to Labour’s manifesto pledges not to raise income tax, VAT or national insurance.