Prime Minister Andy Burnham's economic strategy has come under fierce attack from his own adviser, Andy Haldane, who warned that the Government's handling of the British economy is so reckless it could trigger an economic "heart attack".
Haldane, a former chief economist at the Bank of England and now president of the British Chambers of Commerce, made the comments in an article in The Independent, following a similar warning in the Financial Times weeks earlier. He was one of three experts advising Burnham on economic plans and was offered a formal Number 10 role, which he turned down.
Adviser's warning on fiscal risks
Haldane said Britain's finances were "on a knife-edge", with most of the lights on the fiscal dashboard flashing red. He compared Burnham's approach to Liz Truss's mini-Budget, warning that his policies could cause similar havoc and "swamp the poor". He dismissed the idea that the Government's plans were progressive, saying they were "neither prudent nor progressive".
Britain's fiscal position, he warned, was more precarious than at any time in the past half-century. Ahead of the Budget, Haldane urged Burnham and Chancellor John Healey to shun tax hikes and balance the books, but they instead ran down fiscal reserves rather than restoring them. He argued the Government needed to find between £30 billion and £40 billion through tax rises or spending cuts, but ducked the difficult decisions in Healey's "do no harm" Budget.
Medical analogy and criticism
Continuing the medical analogy, Haldane said Britain's financial blood pressure was sky-high and required serious intervention. Instead, Burnham's Government had offered "homeopathic remedies", including higher deficits, debts, taxes and spending.
"A doctor prescribing this course of treatment would probably be struck off," he concluded. Haldane also said Burnham's failure to reduce Britain's borrowing costs in the Budget could trigger an economic "heart attack".
A second adviser, Lord Jim O'Neill, formerly of Goldman Sachs, has also criticised the PM's plans, while the third has kept a low profile. The criticism follows two years of similar concerns raised under both Rachel Reeves and now John Healey, with the Government yet to change course.
