Infighting in Team Burnham Over Miliband as Chancellor Pick

Advisers to incoming UK prime minister Andy Burnham are in disagreement over who he should appoint as chancellor of the Exchequer, illustrating early strains on his premiership less than a week before he’s due to enter office.

(Bloomberg) — Advisers to incoming UK prime minister Andy Burnham are in disagreement over who he should appoint as chancellor of the Exchequer, illustrating early strains on his premiership less than a week before he’s due to enter office. While many Burnham supporters on the left of the governing Labour Party had expected him to put Energy Secretary Ed Miliband in charge of the Treasury, others in the presumptive leader’s team are strongly arguing against making the appointment. The second faction increasingly believed Miliband, a former leader of the party, wouldn’t get the chancellor’s job, people familiar with the matter said.

Those conversations were still taking place as late as Tuesday, according to the people, who asked not to be named discussing internal debates. That suggested Burnham had been unable to decide who to appoint to the post despite being due to take over from incumbent Keir Starmer on Monday next week. A spokesperson for Burnham said no decisions had been taken about cabinet appointments.

The chancellor pick will shape the direction of Burnham’s administration for its duration and is the appointment of greatest interest to investors and business leaders because of its broad power over tax-and-spend decisions. A lack of clarity over who will serve in the role risks fueling criticism that the former mayor of Greater Manchester lacks a coherent plan for power. There were concerns among some in Labour that Miliband would represent a shift to the left that could deter investors and some voters.

Miliband 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. A Chancellor Would Be a Fine Thing: The Readout The Times newspaper reported on Tuesday evening that Burnham allies believed Home Secretary Shabana Mahmood, who has been known for taking a harder line on immigration and criminal justice issues, was now the favorite to be made chancellor, ahead of Miliband.

Burnham’s approach of holding off from making appointments until this late stage has stoked uncertainty and infighting among his allies already, several of them told Bloomberg. They spoke on condition of anonymity discussing internal political matters. Many long-standing supporters of Burnham who had helped his rise to power had yet to be told whether they would be given jobs in the government or his Downing Street operation, they said.

Supporters of Miliband argued he was the best candidate for the chancellor post because of his popularity with Labour lawmakers and supporters, his experience in government and his track record in the Energy Department. They also noted he had been one of Burnham’s closest allies as he sought power over the past year and was integral to persuading him to commit to the current government’s existing fiscal rules in order to reassure investors in the weeks before taking power. A Labour Party official said Miliband’s allies had still been pitching himself to be chancellor in recent days, suggesting he hadn’t been given any assurances by Burnham about the job.

Another expressed disappointment that Miliband had yet to be confirmed for the post and suggested that failing to appoint him would provoke outcry from the left of the party. Others loyal to Burnham said he had never promised Miliband the chancellorship. One said it was important that Burnham’s government represented a broad church across the Labour Party, echoing the former mayor’s sentiments in remarks to lawmakers on Monday evening.

Burnham remained the only candidate with enough support to compete in the race to replace Starmer as the MP nomination phase of the contest neared its close, with the deadline set for 6 p.m. on Wednesday July 15. The leadership process will officially end on Friday, following nominations from Labour Party affiliate groups including trade unions, but with no other contender the remaining days of the contest are merely a formalilty. Bloomberg reported on Tuesday that Burnham will be warned by senior civil servants that he faces a worsening economy and rising interest rates in his first six months in power, as well as a potential oil price shock if the Iran war drags on.

Burnham will receive detailed economic forecasts from the Treasury on his first day in office that will paint a challenging picture for the months ahead, according to people familiar with the government’s preparations for the transition of power. He’ll be told the latest internal government inflation forecasts have been revised upwards to 3.2% for the fourth quarter, they said. The analysis will say the price of oil could rise to $150 a barrel if a ceasefire between the US and Iran wasn’t quickly restored.

The gloomy assessment highlights the challenging inbox Burnham and his chancellor will inherit. Meanwhile, Josh Simons, the former Labour member of parliament who resigned from the House of Commons to allow Burnham to run in his seat, said he wouldn’t be taking a job in Burnham’s Downing Street team. Despite being widely expected to do so after advising Burnham on policy, Simons said in a statement on Tuesday that he wanted to “take a breather.”

(Updated to include response from Burnham’s spokesperson.)