Andy Burnham has stood by his warning that Britain should be less “in hock” to the bond markets, saying the country’s high level of borrowing has left it “over-exposed” to global shocks.
The Prime Minister also accused his predecessor Sir Keir Starmer’s team of taking his original remark out of context in an attempt to fend off his challenge to the then-Labour leader’s authority.
Mr Burnham first made the comment in the run-up to last year’s Labour conference, which was dominated by speculation about his ambition to topple Sir Keir.
A year on, he told The New Statesman: “I mean, the point about the bond markets, it holds – in that what I was saying was the country has left itself over-exposed.”
Mr Burnham argued that he was not calling for spending restraints to be abandoned, but rather making the case for “a much more streamlined, productive state”.
The Prime Minister, whose time in office has been marked by warnings over the threat from Russia, the economic impact of the Iran war and high borrowing costs, also expressed concern that the UK was often “that little bit more exposed” to global volatility than other nations.
It comes as the head of the International Monetary Fund Kristalina Georgieva said the UK and other leading economies must cut borrowing and reduce debt levels.
Government borrowing costs have soared in recent weeks, with the yield on UK gilts hitting the highest levels since the 2007 financial crisis.
Mr Burnham accused the previous Labour administration of seizing on one line of his wider argument and misrepresenting it.
Then-chancellor Rachel Reeves said at the time that she would like to be “less in hock to the bond markets” but that “we rely on those bond markets and those people participating in them to buy our debt”.
The Prime Minister, who replaced Sir Keir in July, said: “They couldn’t understand why I was saying some of the things that I was saying…
“[They] didn’t know what to do with it, but they did what they always do, which is they pulled one line out of it and then framed that one line within their world, rather than the one that I was talking about.”
He also hit out at Tory attacks over his recent statement at Prime Minister’s Questions that national security cannot “come at the expense of social security”.
Conservative leader Kemi Badenoch claimed the Prime Minister was sending a “dangerous” message that he would not cut welfare to fund the military.
“It oversimplifies the political discourse that we need to have,” Mr Burnham told the magazine, arguing he had used social security to mean the resilience of society.
National resilience, social care, devolution and jobs for young people will feature prominently in his speech at the Labour conference starting on Sunday in Liverpool.
“We don’t have sufficient control of our destiny and that theme will come through in what I say in Liverpool,” he said, adding that his address “will develop the themes” of Manchesterism he set out last year.
“I think defence and resilience from local right up to the top – Manchesterism, No 10 North – driving power out and building places back up, is all one thing,” Mr Burnham said.
“People won’t be in any doubt what I want to do with the job.”
The Prime Minister also said his father’s decline and death from Alzheimer’s had made his time so far in Downing Street “hard”.
“It’s been simultaneously a very public thing, but very lonely as well,” he said.
