Even if Andy Burnham makes it to number 10, he won’t enjoy himself (Image: Getty)
I don’t understand why the Labour Party is getting so excited about Andy Burnham. Because until now, it’s never been that bothered. The King of the North has run for the leadership twice before, and lost heavily both times. In 2010, he came fourth with just 8.7% of the vote. That vote was won by election-winning colossus Ed Miliband. Burnham did beat Diane Abbott, but only just. She scored 7.4%.
Abbott saw sense and stayed out of the race in 2015. Burnham tried again and to be fair, came second this time and improved his vote to 19%. Jeremy Corbyn completely crushed him with 59.5%. Still, Burnham refuses to give up. He’s now chancing his luck on the Makerfield by-election, to be held on Thursday June 18. He hopes this will be the springboard that launches him into Number 10. Sadly for him, he may just have made the biggest mistake of his life. Makerfield used to be a safe Labour seat. These days, there’s no such thing.
Burnham has gathered a high-profile support team. Big guns Angela Rayner and Ed Miliband back him. Yet Labour only holds a majority of 5,399 there. In this month’s local elections, Nigel Farage’s Reform UK swept all eight wards. They’ll be pulling out all the stops. So Burnham could stumble at the very first hurdle.
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If he does battle through, he faces another hurdle. Britain already has a PM. He’s called Sir Keir Starmer, and although he’s not very good at his job, he wants to keep it. Starmer is trying all sorts of sneaky tricks to sabotage Burnham and save his own neck.
Ultimately, though, Burnham’s biggest enemy waits elsewhere. It’s called the bond market and it has the firepower to blow him away.
The bond market is where governments go to borrow money. Chancellor Rachel Reeves practically lives there. She plans to tap it for another £130billion this year just to balance the books. She also has to raise a further £160billion to refinance existing debt.
These are mighty sums, and it’s therefore vital to keep the bond market sweet. Because if bond investors don’t trust the UK, they’ll charge us even more to borrow their money. That will cost us billions in extra interest.
Earlier this year, Burnham decided to show bond investors who’s boss and declared Labour should “get beyond this thing of being in hock to the bond markets”. Basically, he wants to borrow even more money, while sticking two fingers up at the people lending it to us. Try that little trick with your bank manager.
Britain is already dangerously overstretched. Of the £130billion Reeves plans to borrow this year, roughly £100billion will go towards servicing existing debt. That’s like taking out a personal loan to cover your credit card interest, without reducing the underlying balance. It won’t end well.
Bond investors are already nervous, as Donald Trump’s war on Iran drives up global inflation. When inflation rises bond investors demand more interest, forcing up yields around the world. And that’s terrible news for Andy Burnham.
Yields on 30-year UK gilts already hover around 5.7%, the highest this century. By comparison, Germany pays just 3.7%. That’s because bond investors trust Germany, and don’t trust Labour. And they really, really don’t trust Burnham. The closer he gets to power, the higher yields will rise.
Even if he does make it to Number 10, he may be doomed once he gets there. If 30-year gilt yields climb past 6%, we’ll be staring a currency crisis in the face. He won’t be able to make good on all his spending promises. Instead, he may be forced to make cuts. At which point, he’d be even more hated than Starmer. Burnham should have chosen his enemies more carefully. He could be more in hock to the bond market than he ever imagined.