Things may get worse, Burnham warns Labour

Labour activists have been warned the party has yet to hit rock bottom as the contenders for leadership of the party faced off.

Front-runner Andy Burnham delivered the dire message that Labour might not be at “ground zero” during a hustings yesterday which kicked off the race to succeed Ed Miliband.

Burnham, Yvette Cooper, Mary Creagh and Liz Kendall set out their stalls at the event in London alongside Tristram Hunt, who is expected to put his name forward this week.

As they debated the party’s future at UK level, Jim Murphy was announcing his intention to resign as leader of Scottish Labour.

He admitted the party is divided, and said he intends to use his last few weeks in charge to prepare the ground for his successor.

The vibes coming out of the meeting in London were equally downbeat.

Burnham said despite a disastrous election night that saw Labour almost wiped out in Scotland, things could get worse.

And, he added, unless the party addressed people’s concerns over immigration, the EU referendum could see the country “sleepwalk” out of the union.

“I do not assume this is ground zero for Labour, that things can only get better,” he said.

All the contenders set out positions conceding Labour should have handled the public finances differently before the credit crunch.

In one of the strongest admissions, Hunt said the party had been spending to “fix the roof while the sun was shining”.

But he added: “We should admit we spent too much in the last Labour Government.

“We didn’t leave enough headroom to deal with the financial crash.”

He said the party had allowed the economy to become too reliant on financial services, and called for spending priority to be given to early years education and training to boost productivity.

Burnham said he was the Chief Secretary to the Treasury during Labour’s last spending review in 2007, and pointed out that the Tories had described it as “tough”.

But he added: “I think we let the deficit get too large. We should have brought the deficit down sooner.”

Cooper said Labour could be “proud” of the investment it made in public services.

However, she admitted the deficit “should ideally have been in surplus” in the run-up to the credit crunch.

Kendall said there was “nothing progressive about spending more on debt interest than on educating our children”.

Ms Creagh said Labour had built up “economic credibility” in office, but should not have been running even a small deficit.