Jim O'Neill, the former Goldman Sachs economist, has publicly urged Andy Burnham to cut the Department for Work and Pensions (DWP) welfare bill as part of a 'genuine reform' agenda, warning the Prime Minister against further tax increases ahead of the Autumn Budget in October.
Speaking to the BBC, Lord O'Neill, who has been dubbed Mr Burnham's 'favourite economist' by some media outlets, stressed that a more joined-up approach is essential to solving the country's fiscal challenges and reducing welfare spending.
O'Neill backs 'genuine welfare reform'
“I am a supporter of a more sensible approach to government spending and taxation. As Andy himself has emphasised, genuine welfare reform,” Lord O'Neill told the BBC. “You are only going to be able to solve those issues and cut the welfare bill if you have a more joined-up approach.”
Mr Burnham has previously hinted at imposing DWP cuts, admitting it was time to “get serious” over the ballooning welfare bill.
Triple-lock and tax hikes under scrutiny
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.”
He also made clear his opposition to further tax increases: “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.”
Pressed on whether the government could turn to wealth taxes, Lord O'Neill said he was “not a fan of further increases in these kind of taxes, particularly as it relates to capital gains for genuine risk taking things like venture capital.”
Spending priorities and future role ruled out
Lord O'Neill said it was a choice for the Prime Minister and his team “based on the things they're saying they want to do more of.” He cited “defence spending” as one area that “obviously catches the eye,” among other things.
He has also ruled out returning to the government as an adviser under Mr Burnham.
Lord O'Neill noted that the country has boosted government spending “dramatically” in recent years and needed a “more sensible approach to welfare spending under genuine welfare reform.”
