Andy Burnham has not even started as Britain’s prime minister but already faces accusations of “buckling under pressure” should he fail to appoint staunch left-winger Ed Miliband as chancellor, Labour insiders have told The National.
Accommodating financial market sensitivities over the Chancellor of the Exchequer role, changing direction over North Sea oil drilling and creating an AI ministerial post for the first time have all loomed large.
Key to the first two was what job to offer former Labour leader Ed Miliband, who at one point was favoured for chancellor, Labour insiders have told The National.
Sources have disclosed that the key post was “categorically” promised to Mr Miliband several weeks ago by the prime minister-in-waiting, yet that offer has apparently since been withdrawn.
Instead, the keys to the Treasury are now set go to Shabana Mahmood, who sits on the right of the party, as Mr Burnham is understood to have been “spooked” by the prospect of the stock markets reacting badly to a chancellor with a left-wing background.
Thus the new prime minister will find himself in Downing Street on Monday with his decision-making under question.
“There's definitely a lot of unhappiness on the left about,” a Labour official said. “One, because Shabana’s on the right and has no known views on economics at all. There's also a feeling that if you buckle under pressure then it's a bad sign because that’s a hallmark of Starmer’s U-turning.”
The direction of Mr Burnham’s administration will be most telling in who he makes chancellor: appointing Ms Mahmood – who would become the first Muslim woman to hold the post – would suggest he will stick to tight fiscal rules and not revert to heavy borrowing.
Ms Mahmood is also seen as one of the most competent ministers in government, serving as justice minister before being promoted to the Home Office post where she took a hard line on immigration.
Ms Mahmood did study law at Oxford but has little experience in national economics. She has experience of working in her father's corner shop, however, where she learnt the economics of hard-pressed customers.
“Ultimately, Burnham clearly didn’t want to spook the markets first thing and Ed Miliband might have made the gilts go crazy,” the Labour source said.
Mr Miliband was an early backer of Mr Burnham and a key figure in manoeuvring Mr Starmer out of No 10, so he is likely to be rewarded with a more senior role than his current Energy Secretary remit.
He could be offered foreign secretary, which would suggest a harder line on Israel. There is also speculation that his brother David could be given the post, although this is regarded as unlikely.
That would mean incumbent Yvette Cooper could be moved out of government. She is likely to be joined on the backbenches by current Chancellor Rachel Reeves, setting up a conundrum over how to keep an equal balance between men and women in the four top posts.
Louise Haigh, another early Burnham backer who was sacked as transport secretary by Mr Starmer, could land the post of chief secretary to the prime minister, running the Downing Street operation.
Wes Streeting, who resigned as health secretary to trigger a leadership contest from which he later withdrew, will also need to be placated. He is unlikely to return to health where his successor James Murray has been running the department with some skill. Mr Streeting, a Blairite who is distrusted by the left-wing, could cover the welfare and pensions beat.
Deputy Labour leader Lucy Powell, a strong Mr Burnham ally, could replace Steve Reed running local government and current Culture Secretary Lisa Nandy is set to be promoted with an eye on the education portfolio.
Where any new artificial intelligence minister will fit in is still to be established. Perhaps as a reflection of Mr Burnham’s ability to run a disciplined operation, there is a tight lid on who will be appointed where.
