Sir Keir Starmer stood at the podium on Monday morning, listing his achievements – “investment secured, small boat crossings falling, our reputation in the world restored” – while in the background Steve Bray’s speakers ensured “yet another historical moment is irrevocably cheapened”. The prime minister had just announced his resignation, cutting short a premiership that began with a historic landslide two years ago but ended in political paralysis after devastating local and devolved election results in May prompted a wave of ministerial resignations, a by-election that allowed Andy Burnham to return to Westminster, and finally a leadership challenge Starmer concluded he could not survive.
Now Burnham, the newly elected Makerfield MP, is almost certain to be the next prime minister. He has confirmed he will stand for the leadership and is meeting Labour MPs to “win their confidence” as their next PM, according to former deputy leader Harriet Harman. But attention is already turning to who will occupy Number 11 Downing Street. The bookies’ favourite is Wes Streeting, the former health secretary who resigned after the May elections and threw his weight behind Burnham. The thinking is Streeting could be awarded the chancellor’s job for his loyalty.
“Wes Streeting and Ed Miliband lead the race to become chancellor as Andy Burnham prepares to take over as PM.”
Yet economist and cross-bench peer Lord Jim O’Neill, who has been advising Burnham, warned against that approach: “There are clearly some people pushing to be chancellor who feel they are owed it for their support.” Though Burnham may appreciate Streeting’s backing, their politics differ – Burnham is seen as keener to spend. Simon French, chief economist at Panmure Liberum, called Streeting a “relatively market-friendly option” because of his pro-growth comments, but also a political risk because he might someday want to be prime minister. “Politics is what politics is. It’s a popularity contest,” French added.
The second favourite is Ed Miliband, politically closer to Burnham than Streeting. Paul Johnson, former director of the Institute for Fiscal Studies, sees that as a positive: “You really don’t want people in Number 10 and Number 11 having very different views.” Nick Macpherson, former permanent secretary at the Treasury, told the Financial Times that Miliband “is one of the few cabinet members with the intellect, experience, and authority” to articulate a coherent strategy to gain market confidence. But others see Miliband as an inflation risk, blaming his net-zero drive as energy secretary for high energy prices – a reputation analysts say could affect bond markets.
Whoever takes the job will face a daunting in-tray: high debt, low growth, welfare reform, defence spending, and the economic fallout from the US-Israel war with Iran. With Starmer gone, Burnham must now decide whether loyalty or economic credibility shapes his choice – and whether the markets will trust the outcome.