Andy Burnham's economic credibility has been torn to shreds by the experts he hired to bolster it. The Prime Minister had secured the support of three heavyweight economists—Lord Jim O’Neill, former Goldman Sachs executive; Andy Haldane, former Bank of England chief economist; and Richard Hughes, former chairman of the Office for Budget Responsibility—to reassure markets that he would not run riot with the nation's finances. However, none of these big names has actually taken a formal Government role, despite Burnham being ensconced in No 10, having picked John Healey as his Chancellor, and setting a date for the autumn Budget on October 28.
Why the Experts Have Backed Away
Reports suggest O’Neill is talking to Number 10 and doesn’t like what he’s hearing, particularly regarding Burnham’s wavering over whether to unleash a wealth tax. O’Neill, who is himself very rich, is not keen on being bashed and knows a wealth tax could backfire, causing chaos as the Treasury battled to make it work while the wealthy packed their bags. He also wants to retain oversight of his business interests, which he can't do if he's hugger-mugger with the government. Haldane and Hughes seem to be keeping their heads down, possibly having succumbed to early-stage Andymania.
Market Concerns and Expert Warnings
Julian Jessop of the Institute of Economic Affairs warned that the no-show could make bond markets nervous and keep UK borrowing costs high. Simon French, chief economist at Panmure Liberum, said the trio had lent credibility to Burnham’s transition and could sink it unless they publicly back him. The absence of these advisers is a slap in the face for Burnham, who personally called them in to burnish his credentials, only for them to take a closer look and not like what they see.
Retained Adviser Raises Questions
Burnham has retained the services of one adviser: economist Neil Amin-Smith, who advised the catastrophic Rachel Reeves. This raises questions about whether the PM has lost the advisers he needed or kept the one he shouldn't have.
