Cut welfare and avoid tax hikes, Burnham is warned by his favourite economist

ANDY Burnham’s favourite economist has urged the PM to cut welfare and avoid tax hikes — but turned down a job with him. Jim O’Neill, a former Goldman Sachs guru, blasted governments for sticking sky-high spending on the credit card. Andy Burnham’s favourite economist has urged him to cut welfare and avoid tax hikes Credit: Reuters Jim O’Neill blasted governments for sticking sky-high spending on the credit card Credit: ROGER HARRIS He told the BBC: “I am a supporter of a more sensible approach to government spending and taxation. As Andy himself has emphasised, genuine welfare reform. “You are only going to be able to solve those issues and cut the welfare bill if you have a more joined-up approach.” Sign up for the Politics newsletter Thank you! He said governments had been “scared” to make cuts over the past 15 years — which had left the UK saddled with debt and some of the highest interest rates in Europe. Lord O’Neill added: “If the country wants to have better longer-term growth performances, we have got to deal with those things. “I would include the (pensions) triple-lock as well as a more sensible approach to welfare spending.” The UK is spending nearly £1billion a day on welfare, and has nearly £3trillion of debt after worse than expected borrowing figures. The gloomy numbers have fuelled fears that Mr Burnham’s Chancellor John Healey will increase taxes in his first Budget in late October in order to fund defence and other spending commitments. Some in Labour want to see the introduction of a wealth tax — but Lord O’Neill warned this could backfire. Most read in The Sun He said: “I’m not a fan of further increases in these kinds of taxes. “The last thing we should be doing is discouraging genuine risk-taking.” Lord O’Neill denied falling out with the new PM, insisting he had no policy disagreements with him and is happy to act as an informal adviser. He said he had turned down a job at No10 because he did not want to have to ditch his other business interests. Lord O’Neill also suggested Mr Burnham’s upbeat approach to government could get optimistic consumers spending more, boosting the economy. Comment now