Burnham adviser calls for billions of pounds in borrowing for infrastructure

Andy Burnham arrives at the Houses of Parliament on Monday to be sworn in as the new MP for Makerfield. Photograph: Tolga Akmen/EPA View image in fullscreen Andy Burnham arrives at the Houses of Parliament on Monday to be sworn in as the new MP for Makerfield. Photograph: Tolga Akmen/EPA Burnham adviser calls for billions of pounds in borrowing for infrastructure Exclusive: Jim O’Neill, a former chief economist at Goldman Sachs, says government should spend more on major projects The man tapped by Andy Burnham to be his chief economic adviser has called for billions of pounds more borrowing to pay for investment in infrastructure, in a sign of how Burnham may seek to break from the policies pursued by Keir Starmer. Jim O’Neill, an economist and former minister, said he wanted the government to create an independent body for infrastructure spending along the lines of the Office for Budget Responsibility (OBR), which could be freed up to spend significantly more on major projects. The extra borrowing could add to jitters in the bond markets about the prospect of a Burnham government, though O’Neill argued it would still meet the government’s fiscal rules and provide sufficient transparency to reassure investors. He said: “There is a lot more room under the existing fiscal rules to borrow for investment, and the next chancellor should take advantage of that. We can do way more to boost infrastructure projects, and that is what we should be doing.” View image in fullscreen Jim O'Neill could become chief economic adviser in Andy Burnham’s new government. Photograph: Andy Hall/The Observer With Burnham almost certain to succeed Starmer as prime minister, attention is turning to his likely policies, especially on the economy, where he is seen as more leftwing than the present government. The Makerfield MP will give a speech next week fleshing out more of his probable programme, including significant measures on devolution. In the past few weeks Burnham has been consulting three high-profile economists as he looks to flesh out his policy agenda: Andy Haldane, a former Bank of England economist, Richard Hughes, the former head of the OBR, and O’Neill, a former chief economist for Goldman Sachs. He is also weighing up who to pick as his chancellor, with Ed Miliband, the energy secretary, and Wes Streeting, the former health secretary, emerging as the frontrunners. Last year Burnham was blamed for a rise in UK borrowing costs when he argued the UK should not be “in hock” to the bond markets, prompting speculation he could ditch the government’s fiscal targets if he became prime minister. But during his campaign for the Makerfield seat, Burnham said he would stick to the existing fiscal rules and to Labour’s manifesto pledges not to raise income tax, VAT or national insurance. The Guardian revealed on Monday that Burnham’s transition team had spoken to O’Neill about taking on a role in government, possibly as his chief economic adviser in Downing Street. Oth