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Burnham urges early EU referendum

Labour leadership front-runner Andy Burnham has ramped up pressure on David Cameron by demanding he bring forward the in-out EU referendum to next year.

In a dramatic bid to outflank the Prime Minister, Mr Burnham announced he wants to change the Opposition's policy to support a national poll on the key issue.

He also warned Mr Cameron he would be "held to account" if he failed to negotiate a good settlement for Britain that addressed concerns over immigration.

The intervention follows calls from Tory backbenchers for the referendum to be held next year rather than by 2017, as the premier has promised.

In an interview with the Observer, Mr Burnham said: "The country has voted now for a European referendum and under my leadership the Labour party will not be a grudging presence on that stage. We will now embrace it. It should be brought forward to 2016.

"It should be in the Queen's speech that it should be in 2016, and the message I would send to Cameron is that I would offer support to deliver it in 2016. It is not going to be in anybody's interest for this to rumble on through this parliament.

"We have to get to it. We have to do it, embrace the argument. That is the most fundamental problem facing British business right now."

Mr Burnham, who made clear he would campaign for an "in" vote, went on: "If Cameron doesn't deliver legislative change in terms of abuse of the rules of free movement by agencies and the effect on people with jobs here, it won't be good enough. It really won't be good enough."

Mr Burnham conceded there were risks with holding a referendum, but insisted an "in" vote could be achieved.

"I am passionately pro-European. I cannot see how it could possibly be in the interest of this country to come out of the European Union. This is the challenge that prime minister has set himself and he has to deliver," he said.

Earlier, the Leigh MP joined other declared candidates, Yvette Cooper, Mary Creagh and Liz Kendall at a hustings in central London with Tristram Hunt, who is expected to put his name forward next week.

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

"I do not assume that this is Ground Zero for the Labour Party, 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, Mr Hunt said the party had been spending to "fix the roof while the sun was shining".

But he added: "I think that we should admit that we spent too much in the last Labour government ...

"What we did not do was 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 in order to boost productivity.

Mr 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: "In truth, I think we let the deficit get too large ... we should have brought the deficit down sooner."

Ms 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.

Ms Kendall said she was clear that there was "absolutely nothing progressive about spending more on debt interest than on educating our children".

Ms Creagh said Labour had built up "economic credibility" over its time in office, but should not have been running even a small deficit.

Highlighting the importance of the immigration issue, Mr Burnham stressed that while the party should "always defend free movement" it could not "defend freedom to claim" and had to curtail access to benefits.

He also warned concerns of workers that their pay was being driven down by foreign labour were real.

However, Mr Hunt argued Labour needed to be honest with people that it could not stop the march of globalisation.

"Immigration has put pressure on wage rates," he said.

"We should be absolutely up front about that. But workers should be urged to 'go up the value chain' rather than trying to compete for low-skilled roles.

"The way British people get jobs of the future is to get educated and more skilled because we cannot compete on labour costs alone."

Mr Hunt also clashed with Mr Burnham by complaining that his former brief of education had been given a lower priority than "grab rails" for the elderly in the election manifesto.

Mr Burnham hit back that care for the elderly was the most important issue we face.

At one point Ms Kendall rued that there had been no "ambitious, inspiring" Labour policies on education, but Mr Hunt contradicted her by citing plans to devolve powers over schools to local communities.

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