UK chancellor choice tests Burnham's business stance

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Highlights

Burnham's upcoming selection of the chancellor of the Exchequer is under intense scrutiny, with few expecting Rachel Reeves to remain due to political realignment.
Ed Miliband, favoured by betting markets and party members, is seen as a commercially sensitive choice due to his opposition to new oil and gas licences and delays on North Sea energy projects.
Miliband's potential appointment as chancellor faces backlash from business and labour leaders, citing concerns over anti-business policies, threatened job creation, and resistance to easing electric vehicle sales targets.

Succession decision and leading contenders

As reported by CNBC, Burnham’s decision on the chancellor of the Exchequer is attracting more scrutiny than any other early cabinet appointment because the post is the second most powerful in government and will shape expectations for his economic agenda.

Burnham has disclosed little about his policy priorities so far, and few expect current chancellor Rachel Reeves to remain in the role. Reeves is closely associated with outgoing prime minister Keir Starmer, and a reshuffle is also likely to reflect Burnham’s need to reward political allies with senior positions.

Miliband, now energy secretary, is described as the overwhelming favourite in betting markets. A long-time ally of Burnham despite defeating him in the 2010 Labour leadership contest, he sits on the party’s left and retains support among members, making him a politically plausible but commercially sensitive choice.

Business and labour concerns over Miliband

Miliband’s potential appointment is unsettling parts of the private sector because he is widely seen as anti-business and less committed than Reeves to fiscal discipline. The concern is reinforced by his stance on energy policy, including his refusal to issue new oil and gas exploration licences and his delays in approving the proposed Jackdaw gas field and Rosebank oil field in the British North Sea.

He argues those projects would not materially improve Britain’s energy self-sufficiency, while critics say blocking domestic production risks greater reliance on imports and threatens thousands of well-paid jobs. The issue is especially sensitive in Scotland, where Labour MPs are nervous after the Conservatives won a recent by-election in Aberdeen South after focusing heavily on North Sea oil and gas.

Miliband is also facing resistance from organised labour. Sharon Graham, general secretary of Unite, told The Observer last month that appointing him as chancellor would put “a noose around the neck of job creation”, while also criticising his refusal to weaken electric vehicle sales targets despite carmakers warning of possible factory closures and job cuts.

Our earlier report on the Mansion House dinner highlighted how City executives and investors used the annual gathering to gauge who Andy Burnham might choose as chancellor as Rachel Reeves delivered what many saw as a farewell speech. It also noted Reeves’s pitch to preserve economic credibility through the transition and Bank of England governor Andrew Bailey’s warning that financial stability and AI risks should keep regulators cautious about sweeping deregulation.

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