Andy Burnham is set to move into Number 10 Downing Street this coming Monday. Having already secured nominations from an overwhelming number of Labour MPs, he successfully crossed the necessary threshold of trade union support today to cement his position. While the transition to the premiership is now clear, a significant and largely discreet battle is currently unfolding regarding the appointment of the Chancellor of the Exchequer at Number 11 Downing Street. This choice is viewed as a critical signal of Burnham’s intent, carrying weight with both political observers and the bond markets.
The official position from Burnham’s camp remains that no final decisions have been made. Announcements regarding cabinet posts are not expected until Monday, when Burnham officially assumes office. Currently, deliberations are being conducted by a tight-knit group of advisors, including the incoming Number 10 chief of staff James Purnell, Louise Haigh, and the former MP who stepped aside for Burnham, Josh Simons.
Following Burnham’s victory in the Makerfield by-election, there was a widespread assumption that Energy Secretary Ed Miliband would be the natural choice for the Treasury. However, his potential appointment has encountered both noisy and subtle resistance. This opposition ranges from trade unions representing workers in the oil and gas sector, who reportedly distrust Miliband’s instincts, to Sir Keir Starmer’s unpaid 'cost of living' tsar, Lord Walker, the boss of Iceland. Lord Walker, while noting his background in the supermarket industry, has argued that the bond markets would "freak out" if an "ideological" chancellor were installed at the Treasury.
In recent days, several MPs close to Burnham—who hold no personal animus toward the energy secretary—have suggested that the likelihood of Miliband being appointed has lessened significantly. While these individuals are not the final decision-makers, they are attempting to discern the prevailing mood. Conversely, those close to Miliband argue that his appointment is not only highly possible but also highly desirable. They point to his extensive credentials, including an economics background, his tenure as an adviser in the Treasury under Gordon Brown, and his time chairing the Council of Economic Advisers. Supporters emphasize his ministerial experience in both the previous and current Labour governments, with one colleague noting, "He can make the Treasury do what it doesn't want to do."
Miliband has offered regular advice to Burnham and would be expected to work in lock-step with the new prime minister to achieve the goal of spreading growth to "every postcode." Regarding concerns about the bond markets, one supporter stressed Miliband’s adherence to fiscal rules on debt and borrowing, while another remarked, "He isn't Che Guevara." Many within the parliamentary party expect him to move to Number 11; if he is passed over, some on the party's soft left may interpret it as Burnham refusing the first fence in the race to change Britain.
Other factors are also influencing the decision. Lord Jim O'Neill, the former chief economist at Goldman Sachs and commercial secretary to the Treasury under David Cameron, has been advising Burnham, as has Andy Haldane, the former chief economist at the Bank of England. Both men have deep roots in the north of England. If Burnham views the Treasury as a potential brake on regional growth, he might choose to give his Number 10 operation—which will soon include a presence in Manchester—a stronger grip on economic policy. Louise Haigh has already called for a "beefed-up No 10" to promote growth, raising questions about whether Miliband’s specific skills would be as essential at the Treasury if such a structure is adopted.
There are also "live discussions" regarding the possibility of installing Home Secretary Shabana Mahmood in Number 11. While she lacks an economics background, it is speculated that a senior minister from the party's right could reassure the markets and ensure a smoother transition. A senior source insists the decision is not yet "clear cut," and Foreign Secretary Yvette Cooper is also considered a potential occupant. While nothing will be confirmed until next week, Burnham’s team acknowledges that as his first day in Downing Street approaches, these private decisions must be finalized soon.
