Sir Keir Starmer's resignation has fired the starting gun on the race to be in charge of the UK's finances, with Andy Burnham, the newly elected Makerfield MP, almost certain to become the next prime minister. It is expected he will want a new chancellor to replace the current occupant of Number 11 Downing Street, Rachel Reeves — a person who will face quite the in-tray: high debt, low growth, welfare reform, defence spending, and the economic fallout from the US-Israel war with Iran.
Ed Miliband, the former Labour party leader and current energy secretary, is now the bookmakers' strong favourite for the number two job in British politics. Politically closer to Burnham than other rivals, Miliband's candidacy has drawn both support and sharp criticism. Paul Johnson, former director of the Institute for Fiscal Studies, sees that closeness as a positive: "You really don't want people in Number 10 and Number 11 having very different views."
“Andy Burnham is almost certain to become PM after Starmer resigns, sparking a contest to replace Rachel Reeves as chancellor.”
Opinions differ on whether Miliband would receive the backing of the financial markets, which the government depends on to lend money. Nick Macpherson, the former permanent secretary at the Treasury, told the Financial Times: "The key to gaining the confidence of the markets is to articulate, implement and deliver a coherent strategy. Miliband is one of the few cabinet members with the intellect, experience, and authority to do that."
Yet others see Miliband as an inflation risk, believing his drive for net zero as energy secretary is partly responsible for the UK's high energy prices compared to other countries. Analysts say that reputation, whether accurate or not, could affect how bond markets react to his time as chancellor. Lord Richard Walker, the boss of Iceland and the government's cost-of-living tsar, has warned Miliband would be "a disaster" in the role, saying he had been "far too ideological" about tackling climate change and that his policies were "putting unfair pressure on households... in a very regressive way".
The head of the Unite union, Sharon Graham, says Miliband as chancellor would be a "noose around the neck" of job creation because of his opposition to new oil and gas drilling in the North Sea. However, the TSSA union backs Miliband, with the Labour-affiliated rail union saying he would be willing to take a "different approach" to "delivering an economy that works for everyone".
Wes Streeting, a former contender for the Labour leadership, was the early favourite for chancellor, with suggestions that he could be awarded the job for coming out and backing Burnham and withdrawing his own ambitions. The speed of Burnham's takeover has unsettled Labour MPs, with supporters admitting there is not much time for the likely next prime minister to plan for power.