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Andy Burnham, Labour mayor of Greater Manchester, has launched a thinly veiled pitch to replace Sir Keir Starmer as prime minister, proposing tax hikes on the wealthy, mass nationalisation and a big increase in borrowing.
Speaking in the run-up to Labour’s annual conference, Burnham said MPs were privately urging him to challenge Starmer and set out what was in effect a personal manifesto for the party leadership.
Burnham did not deny he was interested in the Labour leadership — which he has tried and failed to win on two previous occasions — and made it clear that if he was successful he would take the party sharply to the left.
Starmer’s allies have no doubt Burnham is stirring up trouble for the prime minister ahead of Labour’s conference in Liverpool, with activists worried about the party’s sharp decline in support in recent months.
“We are watching Andy — of course we know what he’s up to,” said one colleague of the prime minister. Starmer’s allies privately mock Burnham’s economic policies, which they believe would be hugely damaging.
In two separate interviews, Burnham set out to woo left-leaning Labour MPs, suggesting he would like the state to control key sectors, possibly partly funded by reclaiming dividends already paid out to shareholders.
“When you’ve lost control of housing, energy, water, rail, buses, you’ve lost control of the basics of life,” he told the New Statesman. He said there might be ways to reclaim dividends that had been “siphoned out”.
Burnham acknowledged nationalisation could be expensive at a time when Rachel Reeves, chancellor, is facing a fiscal hole of up to £30bn at her November 26 Budget.
But he argued his programme could be partly funded by higher council tax on expensive homes in London and the home counties, a 50p income tax rate for the highest paid and £40bn of borrowing to build council houses.
Asked if this might alarm bond markets, Burnham said: “We’ve got to get beyond this thing of being in hock to the bond markets.” One Starmer ally scoffed: “Markets, what markets?”
Meanwhile, Burnham was asked by the Daily Telegraph if he was being urged to stand against Starmer. “People have contacted me through the summer — yeah,” he said.
Asked if he still wanted to be prime minister, he said: “I stood twice to be leader of the Labour party. And I think that tells you, doesn’t it?”
His comments, to a Conservative-supporting newspaper, will infuriate Starmer and his allies as the prime minister tries to reset his struggling administration at Labour’s conference.
Many Labour MPs believe Starmer could be in jeopardy if has not turned around his party’s fortunes before next May’s elections to the Scottish parliament, Welsh senedd and English councils.
Burnham, a former Labour cabinet minister, would have to overcome a number of hurdles before he could mount a leadership challenge, including winning a parliamentary by-election to become an MP.
Under Labour rules, unless a vacancy emerges, potential leadership challengers need the support of at least 20 per cent of MPs — meaning a threshold of 80 to trigger a contest. Starmer could automatically be on the ballot if he wished.
Meanwhile, the prime minister is under pressure from his MPs to find £3bn a year to end the two-child benefit cap, introduced under the previous Conservative government.
The two deputy leadership contenders Lucy Powell, a former cabinet minister, and Bridget Phillipson, education secretary, have both signalled their support for ending the cap, in spite of the cost of doing so.
A government child poverty task force, made up of ministers and officials, has found “clear evidence” that ending the cap would alleviate child poverty, according to one person briefed on its findings.
There has been speculation Starmer could indicate at Labour’s conference his willingness to fund the move, but people close to the discussions said the timing of any decision was “still unclear”.
Reeves would normally prefer to take big spending decisions in the context of a broader Budget package, not least to reassure markets that she has a plan to fund any additional welfare spending.
When Labour MPs forced Reeves to abandon £5bn of annual welfare savings earlier this year, Treasury insiders said the move had killed off any prospect of the two-child benefit cap being removed.
