Streeting Says Markets Aren’t Villains in Bid for UK Leadership

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(Bloomberg) — Wes Streeting, the Labour MP who’s said he may seek to topple UK Prime Minister Keir Starmer this summer, set out a leadership pitch centered on economic growth and defended bond investors in an effort to differentiate himself from front-runner Andy Burnham.

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“Bond markets are not Bond villains and fiscal rules matter,” Streeting said in a speech in London laying out his economic agenda on Tuesday morning. “While we must reject the reckless approach that says stuff the bond markets, we must also aim higher than the stability of the graveyard,” he said.

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His remarks will be seen as a tacit criticism of Burnham, who perturbed gilt investors last year when he said Britain was “in hock” to bond markets, as well as other left-wing politicians from their Labour Party who have called for more public borrowing.

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“Markets are rational actors. Give them a plan for growth they can have confidence in, and we’ll see the benefits in gilt yields coming down and minimize the wasteful spend on debt interest,” Streeting said.

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The former health secretary, who resigned in protest at Starmer’s leadership last month, has said he intends to stand in any leadership contest that takes place this summer. Starmer is widely expected to face a challenge after a by-election taking place on Thursday at which Burnham is attempting to secure a seat in parliament.

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Streeting is seeking to pitch himself as the candidate representing the right of the Labour Party — by contrast with Burnham, the overwhelming favorite, who’s seen to hail from the so-called soft-left faction. The former health secretary still reiterated an earlier call to equalize rates of capital gains and income tax rates. 

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Britons on the highest 40% or 45% income tax rates currently pay a much lower 24% on investment gains from most assets, like shares. 

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Streeting insisted at his Tuesday event he has enough support from Labour Members of Parliament to join a leadership election, something that rivals and supporters had cast doubt on when he failed to follow up his resignation from cabinet with an official challenge. 

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In his speech, Streeting said that if he was prime minister he would:

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“When it comes to demands on the government to spend more money there is no shortage of competition,” Streeting said.

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“There is a risk that a Labour leadership contest becomes a Dutch auction of the most expensive and popular pledges to appeal to the Party faithful at the expense of the British people. Not on my watch. We can’t play fast and loose with the public finances or the trust of the people. Not when the risks are so high and faith in politics is so low,” he warned.

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