Andy Burnham is set to move into Number 10 on Monday, having successfully secured the necessary nominations from an overwhelming number of Labour MPs and the required support from trade unions. While his path to the premiership is now clear, a significant, behind-the-scenes battle is currently underway regarding the appointment of the next chancellor at Number 11 Downing Street.
This decision is widely viewed as a critical signal of Burnham’s intent, carrying weight for both political observers and the bond markets.
The official stance from Burnham’s team is that no final decision has been reached, and formal cabinet announcements are not expected until he officially takes office on Monday. Behind the scenes, discussions are being held among a tight-knit group of advisers, including the incoming Number 10 chief of staff James Purnell, Louise Haigh, and the former MP Josh Simons, who stepped aside to allow Burnham to contest the Makerfield by-election.
When Burnham first secured his position, the prevailing assumption was that Energy Secretary Ed Miliband would move to the Treasury. However, that expectation has faced both noisy and subtle opposition. Resistance has emerged from unions representing workers in the oil and gas industry, who reportedly distrust Miliband’s political instincts.
Additionally, Sir Keir Starmer’s unpaid 'cost of living' tsar, Lord Walker, the boss of Iceland, has weighed in. While he manages supermarkets, he has argued that the bond markets would react poorly if an "ideological" chancellor were installed at the Treasury.
In recent days, several MPs close to Burnham have noted that the likelihood of Miliband’s appointment has decreased significantly. While these individuals are not the final decision-makers, they are actively gauging the mood within the party. Conversely, those close to Miliband maintain that his appointment is both highly possible and desirable.
They point to his extensive credentials, including an economics background, his time as an adviser in the Treasury under Gordon Brown, and his role chairing the Council of Economic Advisers.
Supporters emphasize his ministerial experience in both the previous and current Labour governments, with one colleague noting, "He can make the Treasury do what it doesn't want to do."
Miliband has reportedly offered regular advice to Burnham and would be in lock-step with the incoming prime minister’s goal of spreading growth to "every postcode." Supporters have also moved to reassure the bond markets regarding his fiscal discipline, with one ally stating, "He isn't Che Guevara." Nevertheless, some members of the party’s soft left warn that if Miliband is passed over, it could signal that Burnham is refusing to take the first step in the race to change Britain.
Other factors are also influencing the decision. Lord Jim O'Neill, a former chief economist at Goldman Sachs and commercial secretary to the Treasury under David Cameron, has been advising Burnham, as has Andy Haldane, the former chief economist at the Bank of England. Both have strong regional ties—O'Neill to Greater Manchester and Haldane to north-east England.
While their potential roles remain unknown, if Burnham views the Treasury as a potential brake on regional growth, he may choose to empower his Number 10 operation—both in Downing Street and eventually in Manchester—to take a firmer grip on economic policy.
Louise Haigh has also advocated for a "beefed-up No 10" to promote growth, raising questions about whether Miliband’s specific skills would remain as essential at the Treasury in such a structure.
Discussions are also reportedly "live" regarding the possibility of installing Home Secretary Shabana Mahmood at Number 11. Although she lacks an economics background, some believe a senior minister from the party’s right could reassure the markets and ensure a smoother transition for Burnham.
Foreign Secretary Yvette Cooper is also considered a potential candidate. While a senior source insists the decision is not yet "clear cut," Burnham will need to finalize his choices privately as his "D-Day" at Downing Street approaches.
