Labour chancellor contest sharpens as Sadiq Khan backs Ed Miliband

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Labour chancellor contest sharpens

Highlights

Sadiq Khan privately urges Andy Burnham to appoint Ed Miliband as chancellor, citing his economic credentials and support for city-region devolution.
Unite and GMB unions publicly oppose Miliband as chancellor, citing net zero policies' impact on North Sea output, while Unison and Lord Nick Macpherson express support.
Alternative cabinet candidates circulate as Labour MPs scrutinize Burnham's choices, and David Miliband expresses willingness to return as foreign secretary in a Burnham government.

Backing for Miliband before key appointments

As reported by Financial Times, Khan has entered private discussions over who should take the Treasury job, urging Burnham to trust Miliband's political judgment and economic credentials as the prospective prime minister shapes his senior team.

People familiar with the exchanges say Khan argued that Miliband could help deliver Burnham's wider programme, including devolving more powers to city regions such as London. Burnham is due to be anointed Labour leader next Friday after securing 322 nominations from Labour MPs on the first day of the contest, leaving no viable rival candidate.

He has spent much of the week in talks with civil servants as he develops his agenda before making major appointments. Burnham is spending the weekend in his new Makerfield constituency and is set to face Labour MPs at a hustings on Monday, where his plans for government and his choice of chancellor are likely to come under close scrutiny.

Union resistance and wider cabinet options

Opposition to Miliband is building among parts of Labour's parliamentary and union base, especially among critics who say his net zero policies are hurting North Sea output and Britain's industrial base. Sharon Graham, head of Unite, says appointing Miliband to the Treasury would put "a noose around the neck" of job creation, while the GMB union is also strongly opposed.

Some Labour MPs are expressing similar concerns in private, although Miliband retains support in other parts of the party. Unison, the UK's biggest union, backs him, and former senior Treasury official Lord Nick Macpherson argues that Miliband has the experience and authority to be an effective chancellor.

Alternative names in circulation include home secretary Shabana Mahmood, work and pensions secretary Pat McFadden and chief whip Jonathan Reynolds. Senior Labour figures also say Miliband's allies are contacting influential party figures to reassure them that he is less hostile to North Sea exploration than critics suggest.

Khan's office declines to discuss private conversations and says he will work with whoever becomes chancellor for the good of London. A spokesman for Miliband also declines to comment.

The manoeuvring extends beyond the Treasury, with some Labour MPs viewing David Miliband as a possible foreign secretary in a Burnham administration. He currently lives in New York and runs the International Rescue Committee, but has told friends he would welcome a return, potentially through a seat in the House of Lords or in a non-ministerial role.

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