Kemi Badenoch has warned the UK faces a "summer of chaos" due to Andy Burnham’s indecision over his future government.
The Tory leader urged Mr Burnham to sack Energy Secretary Ed Miliband, rather than promoting him to chancellor, claiming business chiefs were "terrified" of him in No 11.
In a London speech, Ms Badenoch stated the economy was "in limbo" as businesses awaited Mr Burnham’s decisions.
She said: “People are worried about capital gains tax, so they are changing their investment decisions.
“The car industry is in limbo again because they do not know when petrol cars will be phased out. Everyone is terrified about what will happen if Ed Miliband becomes the chancellor.
“The same is true in every sector of the economy. Britain is facing a summer of chaos.”
Mrs Badenoch, who has called for more drilling for oil and gas in the North Sea, said: “It is time to get Britain drilling again and if Andy Burnham had any sense, he would sack Ed Miliband, not make him chancellor.”
She said Mr Burnham was facing a “harsh economic reality”, with the nation’s credit card “maxed out”.
“Any signal that Andy Burnham intends to borrow even more money will instantly mean higher borrowing costs.
“But he won’t have to pay them, we will, in higher mortgage costs, in higher taxes. And some day this money will have to be paid back, and that burden will fall on our children and grandchildren.”
The Government needs to cut spending and get the welfare bill under control, she said.
She criticised Mr Burnham’s main promise of greater devolution to spread prosperity around the country, saying another layer of politicians would not boost growth.
She said: “They will mean more power taken away from Parliament, but more and more government created all over the country.
“More politicians, more outsourcing of decisions to bodies with even less scrutiny and accountability.”
She added: “He doesn’t have a plan beyond telling mayors to go and sort it out. This is not good enough.”
