By Andy Bruce LONDON, Jan 20 (Reuters) - Andy Burnham, a prominent figure in Britain's governing Labour Party and leadership rival to Prime Minister Keir Starmer, said on Tuesday his vision for the
Burnham Promises Safety for UK Bond Investors Under His Economic Plan
Burnham's Economic Vision for the UK
By Andy Bruce
Public Control and Long-term Planning
LONDON, Jan 20 (Reuters) - Andy Burnham, a prominent figure in Britain's governing Labour Party and leadership rival to Prime Minister Keir Starmer, said on Tuesday his vision for the economy should reassure bond investors.
Market Reassurance and Investment Strategies
Burnham, who is mayor of the major northern English city of Manchester, said restoring public control over key services would lower long-term costs for the state while past deregulation, privatisation, austerity and Brexit had weakened control over public finances.
Response to Global Economic Tensions
Speaking to Reuters after a speech at the Institute of Fiscal Studies think tank in London, he said Britain was stuck in a low-growth trap and needed reforms that he billed as "Manchesterism".
Investment in housing and utilities could reduce government waste and boost economic growth if combined with the kind of collaborative, long-term planning that has served Manchester's economy well, he said.
"That is the way to reassure markets."
He said welfare benefits disappearing into private rents instead of social housing, as well as soaring bills charged by private utility companies, were examples of where the state could lower costs to the wider economy.
With Labour trailing in opinion polls, investors are focused on Starmer's future before local elections in May, as well as on the fiscal discipline championed by finance minister Rachel Reeves.
Consultancy Pantheon Macroeconomics said the market was underpricing the risk of a change in Downing Street and a government under Burnham would probably run looser budgets.
Burnham, 56, mayor of Greater Manchester since 2017, was in Gordon Brown's 2007-10 Labour government and has twice stood for the party leadership.
He has had a sometimes strained relationship with the Starmer government and in September set out his pitch for economic reform at Labour's annual conference, taken by some lawmakers as a leadership campaign launch - something Burnham denied.
Burnham said comments made that month - when he said "we've got to get beyond this thing of being in hock to the bond market," drawing scrutiny from media and investors - were misinterpreted as meaning the market should be ignored.
"I wasn't saying that. I was saying that the system doesn't work for (investors) either," Burnham said, citing a short-termist culture in London's Westminster government district.
Asked about the risk from escalating tensions between the United States and its historic allies, Burnham said Manchester would go its own way and push investment in green tech and skills.
"If the U.S. is pulling back from certain things, I think if you hold your ground and say - no, we're going to carry on - the economic opportunity becomes bigger," he said.
(Reporting by Andy Bruce; editing by Mark Heinrich)
