John Healey urged to avoid a 'Liz Truss moment' as Osborne warns he 'can't afford to make a mistake' with bond markets
George Osborne warned that Andy Burnham is going to face the same choices that he faced 16 years ago.
Former Chancellor George Osborne has warned John Healey against making any mistakes in his first budget or else he will get his "Liz Truss moment".
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Mr Osborne, now Chairman of the British Museum, told LBC's Tonight with Andrew Marr that recently appointed Chancellor Mr Healey should "take a leaf" out of what Gordon Brown did.
"Gordon Brown, in his first budget as Labour chancellor, he introduced a tax break for entrepreneurs. And it was so counterintuitive.
"There hadn't been a Labour government for 18 years. And it completely sealed the deal between the Tony Blair government, Blair-Brown government, and the entrepreneurial class." Mr Osborne said.
He added that Prime Minister Andy Burnham has "got to fire up the engines of enterprise" to get the "foreign investment, the private investment into this country that can then amplify what he wants to do in the north and elsewhere in the country".
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Mr Osborne said: "You've got to sort of put the lights on for Britain and say, 'Come here, invest here. We want you. We're not hostile to you.'
"And you've got to get British people sitting on savings and investments to say, 'I'm not going to put it into gilts, which are going to give me loads of money now because of the bond market, but actually I'm going to take a risk and invest in a project here.'
"So that, to me, is one of John Healey's key objectives in this budget."
Mr Osborne's comments came the day after Mr Burnham took on his first Prime Minister's Questions in the House of Commons.
Mr Burnham blamed the rising cost of borrowing and market turbulence on the Tory record of ballooning debt and declared “we are turning that corner”.
He took his first PMQs after Government long-term borrowing costs were sent soaring to their highest levels for 28 years, amid a global bond sell-off over inflation concerns.
Kemi Badenoch pointed to a warning from Lord Jim O’Neill that the Prime Minister’s tone during his Tuesday Commons debut would have unsettled investors.
Mr Burnham replied that he and his former economic adviser Lord O’Neill did “not always agree” before turning to the Tory legacy.
Speaking of the new Prime Minister, Mr Osborne said he wants him to succeed.
He told LBC: "I guess I take with a little bit of a pinch of salt; he says he's going to get rid of 40 years of neoliberalism, which includes the Blair and Brown governments.
"And I think he's going to face the same choices that were not dissimilar to the choices I faced 16 years ago, which is you can either tax more or you can cut spending, but you can't borrow more.
"And that's what the bond markets are saying."