Why Andy Burnham must NOT make Red Ed his new Chancellor, hints ex-Starmer ally

A former Treasury chief has warned Andy Burnham against making Ed Miliband chancellor.

Darren Jones was a close ally of Sir Keir Starmer but has rallied behind the future prime minister after he left himself out of the Labor leadership race.

He revealed he had been reassured about Mr Burnham’s plans for the economy, who is also Chancellor Rachel Reeves’ former number two.

But the controversial Energy Secretary refused to say whether Mr Miliband would be appointed head of the Treasury or whether he would pass “the tests that I think need to be passed” to be successful in the role.

Mr Miliband is seen by many as a pioneer.

Mr Jones, who currently serves as the Prime Minister’s Secretary General, also claimed that the public budget would be relaxed under the Burnham government.

His comments echo those of an economic adviser to former Manchester mayor Lord O’Neill, who has called for billions of pounds in debt for major infrastructure projects.

Mr Miliband spent five years at the Treasury as special adviser to Gordon Brown, has a master’s degree in economics and taught the subject at Harvard.

Former Starmer ally Darren Jones has rowed behind the future prime minister after he removed himself from the Labor leadership contest

But many Labor MPs, union bosses and business leaders fear he could move to No 11.

During his time as party leader in the 2010s, he would seek to increase taxes on the wealthy, campaigning for the estate tax and income tax rate to be brought back to 50p. It is also likely to target businesses that have previously branded some firms as ‘predatory’.

And it will push for the Net Zero target, which critics say destroys jobs in the oil and gas sector as well as heavy industry by keeping energy prices high.

Mr Jones, who was responsible for the major spending review as chief secretary of the Treasury in Labour’s first year, said he would not enter the Labor leadership race despite ‘more than 100 MPs’ opposing Burnham’s coronation or feeling ‘depressed’ about Sir Keir’s sacking.

In an interview with Sky News, he suggested many Labor MPs wanted him to be the candidate because he would keep public spending and borrowing under control, and said he had raised the issue at a meeting with Mr Burnham this week.

Asked what MPs’ concerns were, Mr Jones said: ‘Their concern is who will Andy appoint as chancellor? What does this mean for public confidence in the economy?’

While Labor MPs shared Mr Burnham’s interest in building council houses and having greater control over public services, he said ‘economic stability’ needed to be maintained and there was a ‘risk’ in ‘just saying you’re going to borrow a lot of extra money’ because it increases debt interest payments.

‘I think there’s room to borrow some more,’ he added, but said giving money to councils for new homes wouldn’t work because there weren’t enough builders or bricks.

Asked what his view was on Mr Miliband becoming Chancellor, Mr Jones said he ‘won’t get into personalities’ but added that any candidate should be able to ‘ensure the prime minister delivers on his priorities and not try to control the prime minister’.

He also said that they should be able to ‘give confidence to the markets, the unions, the Parliamentary Labor Party and, by extension, the public’.

Asked whether Mr Miliband could meet his own criteria, Mr Jones said: ‘Well, I’ll let you mark those tests, but these are the tests that I think must be met.’

On what the bond markets’ reaction might be to Mr Burnham becoming Prime Minister, he said: ‘I think they might be pleased and I think it can be done the right way.’

Meanwhile, Conservative Party leader Kemi Badenoch accused Mr Miliband of betraying Sir Keir, as did his brother David Miliband, whom he challenged in the 2010 Labor Party leadership contest.

At Prime Minister’s Questions on Wednesday, Ms Badenoch said: ‘He was a failed Labor leader, rejected by voters, brought back from the wilderness. [Sir Keir]and when the going got tough, she jumped into bed with the mayor of Manchester.

‘Does the Prime Minister think his betrayal should be rewarded by being appointed Chancellor?’ It was noted that Sir Keir was unable to present a defense on behalf of the Energy Minister.

Who else is in the competition and how do they compare?

Wes Street

The former health secretary has less background in economics than his main rival, but there are rumors he was promised the Chancellor job in return for not opposing Andy Burnham.

He studied history at Cambridge and spent just six months as Shadow finance secretary at the Treasury when Keir Starmer was first elected Labor leader in 2020. But since leaving the Cabinet last month, he has focused on the economy.

He set out his vision of ‘progressive capitalism’ in an article in the Financial Times and expanded on it further in a speech last week.

If he were chancellor, he would support more drilling in the North Sea, recruit scientists from abroad and scrap planning rules to boost growth.

His team also claimed they would find money for the defence, which Sir Keir and Rachel Reeves failed to find.

Shabana Mahmood

The wild card candidate Home Secretary studied law at Oxford and worked as a barrister before entering politics.

He was appointed principal secretary of the Shadow Treasury after Labour’s general election defeat in 2015, but resigned a few months later when Jeremy Corbyn was elected. He said he and the veteran Left winger ‘absolutely disagree’ on the best way to manage the economy, in a statement that could strengthen his position with many in the Labor Party.

Since Labor came to power, he has focused on criminal justice as Lord Chancellor and then Home Secretary, but some of Burnham’s allies want him in 11th place.

But this could put him in a difficult situation as he advocates reducing legal immigration and stopping boats. The Treasury always wants people from abroad to fill gaps in the UK workforce.

Yvette Cooper

Yvette Cooper has the necessary background to become Chancellor, although she has only recently been considered a candidate. He studied economics at university and, like Ed Miliband, has a master’s degree in the subject and was an economics correspondent for The Independent newspaper.

Ms Cooper was the first female chief secretary of the Treasury during the 2008 financial crisis, when she was forced to take Northern Rock into public ownership. But she was overlooked in opposition for her role as Shadow chancellor in favor of her husband Ed Balls.

He supported the return of the 50p income tax rate in 2015.