‘I wouldn’t piss off Miliband’: Labour already at war over Burnham’s chancellor

As Andy Burnham strode onto the stage in the Trades Union Congress Hall on Friday, decked out in suit and tie, having eschewed his “Manchester clothes” of a navy t-shirt and jacket, the bloodless coup was complete. Standing in front of a deep red backdrop, he delivered perfunctory praise to the man he had just ousted, hailing Sir Keir Starmer’s leadership of the Labour Party, taking it from “our worst defeat to one of the best victories in our history”. “Keir put Labour back in a position to change people’s lives,” Burnham said, without acknowledging why he was now assuming control of the reins from Starmer, just two years on from a Labour landslide. Shorts Yet, while the transfer of power at the top of the party has been peaceful, the appointment of his cabinet risks being anything but; with the selection of his chancellor – the second most powerful position in the Government – in danger of sparking a fresh round of bloodletting inside Labour. Mahmood in pole position After a brief suggestion Yvette Cooper might take the role, Burnham’s apparent preferred choice to lead the Treasury is Shabana Mahmood, the current Home Secretary. His inner circle of advisers warned him against appointing Ed Miliband amid concerns that he would spook the financial markets, is too divisive, too power hungry and also happens to be a man, which matters to Labour given they have never had a female leader. Mahmood’s appeal to Team Burnham is multifaceted. As a member of the party’s Right, she sends a signal to the wider Parliamentary Labour Party (PLP) that the incoming prime minister will not be factional. The Home Secretary has also developed a serious reputation of being one of the few Cabinet ministers capable of getting things done, both during her time in the Ministry of Justice and, most notably, in the Home Office, where she is implementing far-reaching reforms to asylum and immigration rules. But having promised to “end the infighting” within Labour, already discontent is beginning to bubble to the surface within the PLP over Burnham’s likely choice to run the Treasury, which threatens to spoil his long-awaited second coming. The most vocal are the 80 MPs, who recently signed a private letter demanding Burnham “pause and refresh” Mahmood’s immigration reforms and branded the changes “anathema to who we are” as a party. One leftwing Labour MP said they harboured “concerns” about her potential appointment, adding that they questioned whether Mahmood and Burnham “would be a good fit”. Deep misgivings over economic experience Then there are the remaining Starmer loyalists, who view her with contempt, believing her to be the Brutus to Sir Keir Starmer’s Caesar due to her role in bringing him down, as she was one of the first Cabinet members to demand he set out a timetable for departure after May’s dismal election results. Indeed, when Mahmood recently called on Starmer to sack her own immigration minister Mike Tapp for breaking collective responsibility in the Home Office, a government source told The i Paper: “Why would we have helped her when she was central to forcing the PM out?” But above all else, there are deep misgivings over Mahmood’s perceived lack of economic experience, having never held any role in the Treasury. Newly confirmed Labour Party leader Andy Burnham has a selfie taken as he leaves after a visit to Gravesend Town Pier in Kent (Photo: Gareth Fuller/PA Wire) “I have no idea what her economic philosophy is, and I don’t think she does either,” a Whitehall source said. “At least Ed has thought about it.” “I imagine she will get immediately captured by the Treasury, will be a nightmare to deal with and they will fall out and then she’ll be moved to foreign secretary,” the source predicted. “I wouldn’t want to piss Ed off either,” they added. A senior Labour Party figure went further, saying: “It doesn’t make any sense. She isn’t a popular figure within the PLP but people understood what she was trying to do at the Home Office but the Treasury is a totally different prospect.” ‘Willing to take the unpopular decisions’ But a separate Labour source defended her, insisting she was suitable for the role, highlighting the fact that she is “willing to take the unpopular decisions”, and pointed to her more “progressive” policies around establishing “safe and legal routes” into the UK for refugees. She has been described as a “fiscal hawk” and has spoken up of the need for reindustrialisation, something close to Burnham’s heart, while she believes in the need for putting “British workers first”. Mahmood told allies on Wednesday as The i Paper led the news coverage suggesting she was about to be made Burnham’s chancellor, that she had not yet been offered the role and still hoped to remain as Home Secretary. Team Burnham has also insisted that no final decisions have yet been made. The spectre of the “TeeBee-GeeBees” (Tony Blair and Gordon Brown’s relationship) still haunts the Labour Party and there were fears in Burnham’s camp that Miliband would use the Treasury to erect an alternative power base. A senior Labour insider said that the Energy Secretary had demonstrated during his time in Starmer’s cabinet that he was “loyal to nobody but himself”. Despite being one of Starmer’s most trusted confidants, he is thought to have been among the first serving Cabinet ministers to back the Burnham project. Andy Burnham hugs Home Secretary Shabana Mahmood after he is confirmed as the Labour Party’s new leader and the country’s next prime minister on Friday (Photo: Henry NICHOLLS/POOL/AFP via Getty Images) He has also been accused of actively frustrating efforts by the Treasury to approve drilling licences in the North Sea – including the controversial Jackdaw gas field, which is now expected to be given the go ahead at the end of the consultation period this summer. The Rosebank oil field is also expected to be given the green light by the incoming Burnham administration. According to insiders, there were “furious rows” over his efforts to block these projects. As The i Paper exclusively revealed almost a month ago, Miliband signalled his intention to soften his position on North Sea drilling in a bid to become Burnham’s chancellor. However, his efforts fell short and he is said to be furious that he is no longer in contention for the coveted role. New chancellor will have to hit the ground running Mahmood has in the past acknowledged her own leadership ambitions, telling The Times last year: “You should not believe anyone in politics who says they are not ambitious about the top job, because they are basically lying to you.” Whoever takes on the chancellor role will have to hit the ground running. Burnham is expected to make a series of impactful announcements in the first few days of his premiership – including on the cost of living. It has also been reported that he will give his backing to bringing Thames Water under public ownership. Internal discussions are underway about whether that will require Burnham to recall Parliament in early August to avoid clashing with the Speaker, Sir Lindsay Hoyle, as Parliamentary protocol demands that announcements be made first in the House of Commons. This is unlikely to make Burnham popular with MPs if they are required to return to London in peak holiday season. “If he does go ahead with it, it’s likely to go down very badly,” one MP said. “A lot of MPs do surgery tours during that period, and if they are about to be made ministers it’s the only time they get to make an impression with their constituents.” There is also a steadily worsening economic outlook for the country. Civil servants are understood to have warned the incoming prime minister that the country faces rising borrowing costs, the prospect of interest rate hikes and a jump in inflation due to Donald Trump’s renewal of hostilities with Iran. It has prompted the International Monetary Fund to deliver a stark warning that Burnham cannot afford to boost public spending, insisting that any energy support package must come from cuts elsewhere. In his acceptance speech on Friday, Burnham declared to the watching world: “I have a plan.” It’s time he started telling the public what it is.