Labour's internal divisions have erupted into the open as Keir Starmer and senior cabinet ministers criticised Greater Manchester mayor Andy Burnham for his comments dismissing bond market concerns. The prime minister is understood to be furious at Burnham's admission that he would challenge for the leadership if a path existed.
On Thursday, UK borrowing costs surged to their highest level since early September, with one official attributing the rise to market unease over Burnham's remarks. The increase was equivalent to half the cost of scrapping the two-child benefit limit, a policy Burnham has called for. Cabinet ministers explicitly condemned Burnham's New Statesman interview, in which he said: 'We've got to get beyond this thing of being in hock to the bond markets.'
One senior source retorted: 'If you don't want to be in hock to the bond markets, don't announce plans that involve billions of borrowing.' Education Secretary Bridget Phillipson warned that working people had already suffered from a 'reckless approach on the economy' under Liz Truss. Starmer told broadcasters: 'It was three years ago this week that Liz Truss showed what happens if you abandon fiscal rules.'
Burnham has proposed higher council tax on expensive properties, more council house building, a 50% income tax rate for high earners, and nationalising water and utilities. He also criticised the two-child benefit limit as the 'worst of Westminster', though he abstained on the legislation that introduced it. Burnham said he had fought hard for an amendment but 'the nuances of that debate just got lost'.
Despite the backlash, Burnham insisted he would not 'toe the line' or 'be quiet' on issues important to Greater Manchester. He accused Downing Street of creating a 'climate of fear' among MPs. While he denied plotting a leadership bid, he said it was 'for other people in Westminster to make a decision about'. Some Labour MPs see him as a potential challenger to Nigel Farage's Reform UK.
