Englishman in New Jorts

EXCLUSIVE: Andy Burnham must “take the knife” to public spending in the budget or risk a Liz Truss-style crisis that will “crater” the economy and the government’s popularity, an ally of the prime minister has warned Andy Haldane, a former chief economist at the Bank of England, said he feared the government would deliver a “mañana budget” that deferred the difficult decisions on public spending and “doesn’t speak to the urgency of now” In an interview with The Times, he said that Britain was “close to being taxed out and maxed out in terms of borrowing”. He spoke of concerns that the government was failing to grasp how “precarious” the fiscal position was He said that the government needs to cut the size of the state and reduce taxes if it were to “unleash the animal spirits and generate growth” Haldane warned Burnham that he cannot “vibe-code” his way to growth, and raised concerns about the gap between the government’s rhetoric and the reality. He said that the government was effectively deferring the “day of reckoning” He also said that the decision to increase taxes on banks could show that the government lacked the courage to cut public spending. He said the move was “penny wise, pound foolish” and sent a broader economic message that if businesses make profits “the taxman cometh” Haldane said that while Burnham had the potential to be a “great prime minister” who could serve two terms, the economy was his “blind spot”. He said that the fiscal situation facing Britain was “precarious” “The penny has not yet fully dropped, including in Downing Street,” he said. “You see that in us having the highest borrowing costs in the G7, despite not having the highest debts and deficits. “It’s the old Hemingway [Ernest Hemingway, the author] thing, isn’t it? How do you go bankrupt? First slowly, then very quickly. The biggest risk to Andy not transforming Britain, to not serving two terms, to not being seen in the history books as a great prime minister, is not political risk. “It’s not those who sit behind him. It’s probably not even those who sit opposite him in Westminster. Keir [Starmer] lost the dressing room. Andy’s biggest risk is that he loses the dealing room. And then that’s an even more painful way to go, as Liz Truss would tell you.” Andy Haldane: PM risks Truss-style crisis if he dodges tough choices thetimes.com/article/9b12c00…