The biggest choice facing Andy Burnham right now is who he will make his chancellor — and the relationship between prime minister and chancellor has historically been either intensely creative or toxically destructive. Get it wrong, and Burnham could face a market crisis before he has even entered Number 10. Get it right, and the fiscal straitjacket could loosen quickly, opening up all sorts of possibilities.
Andy Burnham is widely expected to succeed Sir Keir Starmer as Labour leader and prime minister. A former Labour cabinet minister, Burnham won the Makerfield by-election and has focused mainly on domestic policy, including a forthcoming speech on the economy and devolution. The transition is not yet official, but speculation is intense about who will fill key roles in his government — none more important than chancellor of the exchequer.
“Explains why Andy Burnham's choice of chancellor is crucial for UK economy and government stability.”
The choice is intimate as well as political. The Blair-Brown years showed how toxic a fractured PM-chancellor relationship can be; the Cameron-Osborne partnership showed how smoothly it can function. For Burnham, the decision is especially critical because bond markets are already jittery, and the chancellor will be the face of economic credibility. The current chancellor, Rachel Reeves, appears to be fighting a forlorn rearguard action. “Not Rachel,” one Burnham backer says bluntly.
Two names dominate the speculation: Wes Streeting and Ed Miliband. Streeting, associated with the centre right of the party, is the bookmakers' favourite. He has been working with the pro-growth guru Will Hutton and former Bank of England economist Andy Haldane. His reputation as a strong communicator and his business-friendly stance could reassure markets, potentially lowering gilt yields and unlocking billions for other purposes without raising taxes. But Streeting has made no secret of his own ambition for the top job, which might make Burnham nervous about having him next door. Contrary to some reports, Streeting has neither lobbied Burnham for the job nor asked for it directly.
Ed Miliband, the energy secretary and brother of former foreign secretary David Miliband, is the candidate from the centre left. His net zero policies have attracted fierce criticism from union leaders and right-wing commentators, and bond markets would scrutinise his appointment closely. “It’s actually unfair, but the question is, can Ed get beyond the vicious caricature of him?” one senior MP notes. Yet the case for Miliband is powerful and has not been fully aired: he is experienced, has a strong policy pedigree, and would appeal to the party’s grassroots. Harriet Harman has already said publicly that Ed Miliband should be chancellor.
Meanwhile, David Miliband — who left front-line politics in 2013 to run the International Rescue Committee — has expressed optimism about a Burnham government. Speaking at a think tank event, he praised Burnham’s “openness and energy” and called the expected appointment of James Purnell as Burnham’s Downing Street chief of staff “fantastic”. There has been speculation that David Miliband could return to government, possibly as a peer in the House of Lords, similar to David Cameron’s role as foreign secretary.
For UK readers, the chancellor choice matters directly. It will signal the economic direction of the next government — whether it leans toward business-friendly centrism or bold public investment and green transition. It will also affect market confidence, borrowing costs, and the government’s ability to fund public services. If the market reacts negatively, the new administration could face a fiscal crisis before it finds its feet.
Q: Who is Andy Burnham? Andy Burnham is a Labour politician, former health secretary and mayor of Greater Manchester, widely expected to succeed Sir Keir Starmer as prime minister after winning the Makerfield by-election. He has focused on domestic policy and devolution.
Q: Who are the candidates for chancellor? The two leading candidates are Wes Streeting, a centre-right MP and former shadow health secretary, and Ed Miliband, Labour's energy secretary and a centre-left figure. Rachel Reeves, the current chancellor, is seen as unlikely to continue.
Q: Why does the choice of chancellor matter so much? The chancellor is the government's economic chief; the relationship with the prime minister can define a government's success or failure. The choice will affect bond market confidence, fiscal policy, and the government's ability to borrow and invest. A wrong choice could trigger a market crisis at the start of the new administration.
What happens next? Burnham is expected to make his decision this weekend, according to sources close to him. If markets react poorly in the following week, the decision could become a major political story in itself.