The Race to Be the Next UK Chancellor
For the prospective prime minister, each candidate has drawbacks.
The relationship between the prime minister and the chancellor is the most important in British politics. In short, they have to get on, or the government doesn’t. History is littered with examples of administrations that became dysfunctional because the first lord of the Treasury—to give the prime minister his full title—and the chancellor of the Exchequer did not see eye to eye.
Most recently, when Tony Blair and Gordon Brown fell out in 2005 over the Labour succession, the government largely lost the plot. Andy Burnham, the presumptive heir to the recently resigned Prime Minister Keir Starmer, was in government at the time, and he saw what happened. He will insist now on a chancellor who is simpatico.
The obvious choice is his leading supporter Environment and Net Zero Secretary Ed Miliband. Labour’s deputy leader, Lucy Powell, has publicly backed him for the post. But there is considerable opposition to “Red Ed,” as he is called by the tabloid newspapers, because of his almost messianic pursuit of the green energy agenda.
Powerful trade unions, such as the GMB, and MPs from industrial seats think he is crucifying British industry on the altar of Net Zero by banning drilling in the North Sea and allowing Britain to have some of the highest energy prices in the industrialized world. That is one big handicap.
Next on the wannabe chancellor list is the former Health Secretary Wes Streeting. He arguably opened the way for Burnham’s coup by his dramatic resignation from Starmer’s government last month. He was originally thought to be a possible candidate for the party leadership, but he decided to back Burnham when he apparently failed to get the required 81 names for a leadership challenge.
This lack of popularity in the Parliamentary Labour Party is Streeting’s main handicap in the race for chancellor. He is on the right of the party and was close to the disgraced former Labour spin doctor Peter Mandelson. That may be enough to rule him out as chancellor.
Many Labour MPs believe Burnham should have a woman chancellor to give gender balance to his administration and break up “the boys’ club,” as Labour feminists call it. Shabana Mahmood, the hard-hitting home secretary and architect of Labour’s more stringent immigration policies, has been widely touted for the second most important job in the cabinet. She would be capable and is highly respected for her intelligence and fortitude. But it is not clear that she is one of Burnham’s people. She is also in the middle of introducing Labour’s policy on creating “safe and legal routes” for would-be migrants and so is not easy to replace.
Foreign Secretary Yvette Cooper is one of the most experienced politicians in the Cabinet. She served as chief secretary to the Treasury from January 2008 to June 2009, the first woman to hold the post. She is also the wife of the former Labour minister Ed Balls, who helped mastermind Gordon Brown’s policy of central bank independence in the 1990s. Cooper must be under consideration at least, even though she too is not obviously close to the future prime minister
The dark horse in the race is John Healey, the former defense secretary. His resignation two weeks ago over defense cuts was the final knife in Starmer’s back, and the PM resigned within days. Healey is highly thought of by civil servants for his competence and common sense. But he resigned because Starmer reneged on his promise to allocate £28 billion for the all-important Defence Investment Plan. It is not clear that Burnham, who has other priorities, would be willing to deliver on defense spending. The Prime Minister-in-waiting does not want another resignation early in his time in Number 10.
There are no easy choices in politics, and perhaps the most likely move would be for Burnham to go with his instincts and support his close friend and key supporter, Miliband. But he would have to make it absolutely clear that, as chancellor, Miliband would have to accept cutting energy costs as the top priority.
If that means reopening the North Sea and allowing development of the blocked Rosebank and Jackdaw oil and gas fields, then Miliband would have to accept it with good grace. Whether the bond markets would accept Miliband with the same grace, given his left-wing credentials and his support for more public spending, is another matter.
Finally, Burnham could just leave the current Chancellor Rachel Reeves in post. She has been a modest success by Labour standards since she ramped up taxation without scaring the bond markets. She would solve Burnham’s woman problem.
But “Rachel from Accounts,” as she is known by her critics, was perhaps too closely associated with the old Starmer regime. The King of the North seems to want a clean sweep when he finally takes the reins of power in about two weeks.
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