Ed Miliband has become the bookmakers’ strong favourite to become the next chancellor after Sir Keir Starmer’s resignation fired the starting gun on the race to control the UK’s finances. Andy Burnham, the newly elected Makerfield MP, is almost certain to be the next prime minister, and he is expected to want a new occupant for Number 11 Downing Street, replacing Rachel Reeves.
The person who takes the job will inherit an in-tray packed with high debt, low growth, welfare reform, defence spending and the economic fallout from the US-Israel war with Iran. Miliband, the former Labour leader and current energy secretary, is politically closer to Burnham than other rivals, a quality that Paul Johnson, former director of the Institute for Fiscal Studies, sees as a positive. “You really don’t want people in Number 10 and Number 11 having very different views,” he said.
“Ed Miliband is bookmakers' favourite to become chancellor after Starmer resigns, but faces market and union concerns.”
But opinions diverge sharply on whether Miliband would command the confidence of the financial markets, on which the government depends to borrow 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 view Miliband as an inflation risk, blaming his net‑zero drive as energy secretary for the UK’s high energy prices relative 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, warned Miliband would be “a disaster” in the role, arguing he had been “far too ideological” on climate change and that his policies were “putting unfair pressure on households… in a very regressive way”. Sharon Graham, head of the Unite union, said 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, a Labour‑affiliated rail union, backs Miliband, 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 amid suggestions he might be awarded the job for backing Burnham and withdrawing his own ambitions. The race remains fluid, with Burnham yet to announce his choice.