Burnham Upsets Labour Left Who Wanted Him to Become UK Premier

As reports swirl that Home Secretary Shabana Mahmood will be Andy Burnham’s pick for chancellor, the direction of his incoming UK government is causing consternation on the left of the Labour Party before he’s even become prime minister.

(Bloomberg) — As reports swirl that Home Secretary Shabana Mahmood will be Andy Burnham’s pick for chancellor, the direction of his incoming UK government is causing consternation on the left of the Labour Party before he’s even become prime minister. Five days from power and before he’s announced any cabinet appointments, there are strong indications that the former mayor of Greater Manchester is leaning away from naming Energy Secretary Ed Miliband as his choice for Chancellor of the Exchequer and zeroing-in on Mahmood, the home Secretary.

That’s raised alarm among members of Parliament in the so-called soft-left Labour faction from which Burnham derives much of his support. Who Burnham picks for chancellor will set the tone for his administration. Miliband appeals to the faction of the party that helped install him as presumptive premier, but is also seen by markets as the least friendly candidate.

A more centrist appointment such as Mahmood or Foreign Secretary Yvette Cooper would highlight how Burnham is seeking to appeal to what he’s called Labour’s “broad church,” while also risking fewer market jitters. The Financial Times and i newspapers both reported on Wednesday that Mahmood will be given the finance post. But Burnham’s team pushed back, telling Bloomberg he has not yet told his inner circle of any decision.

Miliband, a key ally who’s pushed Burnham to the brink of power, had been the overwhelming favorite to be given control of the national purse strings. But as power approaches, the premier-in-waiting’s team is divided over whether to go ahead with the appointment. One official said that Miliband — who advised Gordon Brown when he was chancellor — had emerged as favorite due to a lack of a clear alternative, and also because Burnham felt he owed him a top job.

But Louise Haigh, a former cabinet minister who is one of Burnham’s closest advisers and has been leading preparatory work for his administration, has opposed the move, according to five people who spoke on condition of anonymity discussing appointments that haven’t been made. One Burnham supporter said Haigh was the person standing in the way of “chaos with Ed Miliband,” referring to an attack line the Conservatives used to use on Miliband when he was opposition leader between 2010 and 2015. Anneliese Midgley, another Labour MP advising Burnham, has also been against it, two of the people said.

Some who are opposed to giving Miliband the job fear he would be a soft target for political attacks due to his support for net zero policies, several of the people said. Several Labour officials argued that it was a misconception that Miliband was universally popular among left-wing MPs. Haigh and Midgley are on the left of the Labour Party but their politics, and Burnham’s, are slightly different to Miliband’s because of their working class northern roots and close trade union links, one of the people said.

Several trade unions, including Unite and the GMB, don’t want Miliband as chancellor because they say his net zero policies hamstring British industry. A spokesperson for Burnham’s team, speaking on behalf of Haigh and Midgley, rejected that characterization of the positions. They declined to comment on whether Miliband would be appointed chancellor, saying Burnham would make the decision in due course.

A spokesperson for Miliband declined to comment. Other Labour officials said they expected Burnham would begin informing people over the weekend whether he’ll offer them jobs, with formal announcements coming after he becomes prime minister on Monday morning. The Financial Times reported on Wednesday that Burnham has chosen Mahmood, citing three people briefed on Burnham’s thinking, including one who described the appointment to the paper as “nailed down.”

While Mahmood is now the favorite to take the chancellorship, Burnham’s pick remains highly uncertain until any announcement is made. Foreign Secretary Yvette Cooper — who served in the Treasury’s No. 2 job when Brown was prime minister — has also been discussed as potential contender. Allies talked up her attributes, arguing she isn’t a divisive figure in Labour, has economic expertise and the political judgment not to walk into fights and make mistakes like the incumbent, Rachel Reeves, on winter fuel.

Others said her indecisiveness could prove problematic in the Treasury, but may provide Burnham’s No. 10 with the opportunity to exert more control over fiscal policy. Some investors may be relieved if Miliband isn’t appointed. He is seen as the least market-friendly candidate for the job, according to the latest Bloomberg Markets Live Pulse survey.

He attracted the lowest level of support, with 5% of votes, although Mahmood fared little better with 11%. “Why would you invite the market to price in even higher inflation and higher interest rates by your chancellor appointment, making a tough job, harder,” said Simon French, chief economist at Panmure Liberum, arguing against picking Miliband. However, a Labour official warned that Burnham risked amassing a growing list of political enemies who posed a risk to his leadership before he had even become prime minister.

Miliband would join supporters of Keir Starmer and potentially similarly overlooked politicians such as former deputy premier Angela Rayner and former health secretary Wes Streeting among those with reasons to feel aggrieved, they said. Supporters of Miliband told Bloomberg it would be a mistake for Burnham to overlook him. One said it was Treasury officials who persuaded the current chancellor, Rachel Reeves, to make unpopular cuts to winter fuel payments for pensioners and to resist expanding child benefits.

They argued a strong pick was needed to prevent similar mistakes. Another said that if Burnham appointed a more centrist figure like Mahmood or Cooper as chancellor, it would make it harder for him to convince voters he was delivering radical change and he would risk losing more votes to the left-wing Green Party. They suggested some around Burnham were wary of giving Miliband the job because they feared he would be effective and therefore reduce their own influence.

“It would be insane” not to name Miliband, John McTernan, a former adviser to Tony Blair, said in a phone interview. “Do you want to run the Treasury or do you want the Treasury to run you? The choice is Ed Miliband or the Treasury view.”

—With assistance from Lucy White and Ellen Milligan.