Prime Minister-in-waiting Andy Burnham has confirmed he would not make “significant” Department for Work and Pensions (DWP) cuts if he enters Number 10, instead proposing to reduce the welfare bill by “rethinking the education system” and supporting young people into work.
Speaking to The i Paper, Mr Burnham, who is widely anticipated to be the likely successor to Prime Minister Sir Keir Starmer after his Makerfield byelection victory, said he is against “crude cuts”. However, economists have argued that “tinkering around the sides” is unlikely to get a grip on the ballooning DWP benefits bill.
Economists Question Burnham’s Approach
Jonathan Cribb, deputy director at the Institute for Fiscal Studies (IFS), questioned whether these policies would convince the Office for Budget Responsibility (OBR) that “significant savings” could be made in the short term. He said the public finances watchdog would be “much more confident” if spending were controlled by measures that “change the actual financial entitlements”, compared with changes “around the edges”.
Will Prescott, head of research at think-tank Bright Blue, said Burnham must look at “big ticket items” such as the state pension if he wants to bring down the welfare bill, rather than “tinkering around the edges”.
Economic Advisers Brought In
It comes as three economic heavyweights have been brought in to advise Burnham as he attempts to reassure the markets before his return to parliament and possible challenge to Starmer. Mr Burnham is understood to be getting advice from Andy Haldane, a former Bank of England chief economist, as well as Richard Hughes, a former chair of the OBR, and Jim O’Neill.
This reflects a wider push from Burnham to win credibility with financial markets after he was criticised for claiming the government was “in hock” to the bond markets.
Leadership Contest Heating Up
Upon winning the Makerfield by-election, Burnham said there would be “no second chance” for the party as he called for “change”. Rival Wes Streeting, the former Health Secretary, took aim at Burnham’s economics policymaking in a speech this week as he appeared to accuse the former Manchester mayor of failing to draw up credible policy pledges.
“There is a risk that a Labour leadership contest becomes a Dutch auction of the most expensive and popular pledges to appeal to the party faithful at the expense of the British people – not on my watch,” Streeting said.
