Andy Burnham, the newly elected Makerfield MP and near-certain next prime minister, held an hour-long off-site meeting with the outgoing premier, Sir Keir Starmer, on Tuesday, as a stream of cabinet ministers threw their weight behind him. The meeting came as the race to replace Rachel Reeves as chancellor intensifies, with the bookmakers' favourite, Wes Streeting, and the former Labour leader Ed Miliband emerging as leading contenders.
The next chancellor will inherit a daunting in-tray: high debt, low growth, welfare reform, defence spending and the economic fallout from the US-Israel war with Iran. Many believe Burnham will want a new chancellor, and the choice could define his premiership.
“Andy Burnham held hour-long off-site meeting with Starmer as cabinet ministers back him; Wes Streeting and Ed Miliband race to be chancellor.”
Streeting, the former health secretary, threw his weight behind Burnham during the leadership contest and is now the bookies' favourite to be rewarded with the number two job. But the economist and cross-bench peer Lord Jim O'Neill, who has been advising Burnham, warned against handing out the chancellorship as a reward for loyalty. "There are clearly some people pushing to be chancellor who feel they are owed it for their support," O'Neill told the BBC.
Burnham and Streeting differ politically, with Burnham seen as more inclined to spend. Simon French, chief economist at Panmure Liberum, described Streeting as a "relatively market-friendly option" because of his pro-growth comments, but also a political risk: "Politics is what politics is. It's a popularity contest," French said, noting that Streeting might someday want to be prime minister.
Miliband, the bookmakers' second favourite, is politically closer to Burnham. Paul Johnson, former director of the Institute for Fiscal Studies, said that ideological alignment is crucial: "You really don't want people in Number 10 and Number 11 having very different views." Nick Macpherson, the former permanent secretary at the Treasury, told the Financial Times that Miliband has the "intellect, experience, and authority" to win market confidence. However, some analysts view Miliband as an inflation risk, blaming his net-zero drive as energy secretary for high UK energy prices, a reputation that could affect bond market reactions.
With Burnham already meeting Starmer and key decisions looming, the question of who will manage the UK's finances remains unresolved.