Andy Burnham will walk into Downing Street on Monday, but before he has even named a single cabinet minister, the first challenge has arrived from north of the border. Jenny Gilruth, Scotland's deputy first minister, has called for a second independence referendum, confirming that First Minister John Swinney will meet Burnham next week to press the case.
The pressure on the incoming prime minister comes as the identity of his chancellor remains the subject of intense speculation, with the BBC reporting “live discussions” about promoting Home Secretary Shabana Mahmood to Number 11. The Financial Times has gone further, calling it a certainty based on three sources close to Burnham.
“Burnham enters No 10 Monday amid Scotland's IndyRef2 demand and chancellor speculation.”
Markets have reacted positively to the prospect of Mahmood at the Treasury. Kathleen Brooks, research director at XTB, said the pound had risen about 1% against the US dollar this week, adding: “It tells us two things about Andy Burnham’s government: firstly, the market trusts Mahmood to take a sensible approach to economic policy, and to tackle the hard questions of welfare spending; secondly, Burnham is willing to have those to the right of the Labour party in his cabinet in key economic roles.”
Yet Mahmood is reportedly keen to remain at the Home Office to see through changes to the asylum system, according to the Press Association. On the left of the Labour party, the idea of Mahmood as chancellor is causing upset, with The Times reporting that Ed Miliband is seen as the preferred choice. Miliband, the former Labour leader and bookmakers’ strong favourite for the post in late June, is politically closer to Burnham than Mahmood, but some analysts view him as an inflation risk due to his net-zero drive as energy secretary.
Burnham, who will succeed Sir Keir Starmer after running unopposed for the Labour leadership, has said no cabinet decisions will be announced until Monday. But his political vision is already clear. In a landmark speech in Manchester last month, he vowed to “break with the more-of-the-same approach” and build a “more collaborative politics”. His programme, dubbed “Manchesterism”, draws on the success of the Bee Network, which brought bus services under public control. Mathew Lawrence, director of the Common Wealth think tank and an influential figure in Burnham’s circle, told The Independent that bus fares had fallen 15% and ridership expanded under the model.
Whoever takes the Treasury will inherit an in-tray of high debt, low growth, welfare reform, defence spending, and the economic fallout from the US-Israel war with Iran. And within days, they will also have to contend with a Scottish government demanding a new independence vote.
Burnham’s team has refused to comment on the chancellor question. But with the markets already voting and Scotland waiting, the countdown to Monday has begun.
