Introduction
As Andy Burnham prepares to take office as prime minister later this month, a fierce debate has erupted within Labour over who should be his chancellor. The choice is seen as a defining decision that could shape the direction of his government. Labour deputy leader Lucy Powell has publicly endorsed Ed Miliband for the role, while other sources indicate Home Secretary Shabana Mahmood has emerged as the frontrunner. The battle reflects broader tensions within the party between radical economic reform and reassuring business and markets.
Powell Endorses Miliband
Lucy Powell, who served as Ed Miliband's chief of staff in opposition and is close to the former party leader, told the BBC that she believes Miliband would be "good" at running the Treasury. However, she sought to downplay the significance of cabinet speculation, calling it "unedifying" and urging focus on jobs and the economy. "I think we've all got a really important job to do," Powell said, adding that the cost of living should be the party's focus rather than what she described as "tittle-tattle" about Cabinet positions.
Frontrunner Status and Concerns
Despite Powell's endorsement, sources with knowledge of Burnham's thinking told the Guardian they expected Shabana Mahmood to be moved to the Treasury. Concerns have been raised that appointing Miliband could unsettle markets, with big business sceptical and several large unions opposed due to his stance on the North Sea and net zero agenda. Some MPs also warned that giving the role to the politician who led Labour to defeat in 2015 could be risky with the electorate.
Supporters of Miliband argue he is the only candidate who could challenge Treasury orthodoxy and share Burnham's vision for the economy. However, his critics within the party believe they have been successful in preventing his appointment. Sources suggested Miliband might instead be moved to the Foreign Office, potentially with the additional title of first secretary of state.
Stern's Endorsement
Adding to the debate, Nicholas Stern, a former chief economic adviser to the Treasury and former World Bank chief economist, called on Burnham to appoint Miliband, describing him as "competent and strategic" with a "bold" vision. Stern, author of the 2006 Stern review on the economics of climate change, argued that Miliband has the ability to explain why investment should increase by two or three percentage points of national income to support clean infrastructure and economic growth.
Burnham's Upcoming Speech
Burnham is expected to deliver his first major economic speech since becoming prime minister, in which he will announce radical plans to devolve powers and money from Whitehall to England's regions. Sources say he will also reiterate his commitment to sticking to fiscal rules and Labour's tax pledges, aiming to reassure markets. The decision on chancellor is likely to be one of the first major tests of his leadership.
Key Claims
- Lucy Powell endorsed Ed Miliband as a good chancellor, but urged focus on the cost of living.
- Shabana Mahmood has emerged as the frontrunner for chancellor, according to senior Labour figures.
- Miliband's appointment could unsettle markets, according to critics within the party.
- Nicholas Stern endorsed Miliband, citing his bold vision and strategic competence.
- Wes Streeting is also a potential candidate, with supporters urging Burnham to choose him to reassure business.
- Burnham plans to devolve powers to regions while sticking to fiscal rules and tax pledges.
Perspectives
Miliband's Supporters: They argue he has the vision and drive to implement radical policies, such as bringing utilities into public control, and can challenge Treasury orthodoxy.
Miliband's Critics: They express concern that his appointment could unsettle markets and that his history as party leader could be a liability with voters.
Mahmood's Backers: They view her as a safer pair of hands, though some note she has little record of taking strong views on economic issues.