You have to hand it to Andy Burnham: the brand-new UK prime minister loves a surprise. After days of Westminster scuttlebutt that the contest to become his chancellor of the exchequer was a two-horse race between ‘fiscal hawk’ Shabana Mahmood and soft-left market frightener Ed Miliband, he has opted for one of the outside bets.
Former defence secretary John Healey will take the reins of Britain’s finances. This is just weeks after he quit Keir Starmer’s government, declaring war on the Treasury that he now heads for not coughing up the money to keep the nation safe.
The choice is intriguing for both fiscal hawks and military ones. It implies that Burnham has agreed to a significant boost in the UK’s armed forces budget, news that might ease his path to cordial relations with the US. Ukraine will be delighted, too, if Britain remains a staunch ally in more than just diplomatic terms.
Crucially, the appointment of someone who heralds from the economically liberal Blairite wing of the party is a signal to financial markets not to panic over the gusher of spending promises from Burnham. With dauntingly ambitious policies such as fixing adult social care, eliminating rough sleeping and building a huge number of council houses, someone needs to explain how they will be paid for.
In terms of credibility, it helps that Healey has shown himself as a man of principle. Unconvinced by Starmer’s funding of defence via an accounting sleight of hand, he opted to quit rather than hold on to his ministerial salary and trappings. When he resigned, the tributes from opposition parties were almost as fulsome as those from his own side.
It is doubtful Healey would accept the chancellor job had he not received a persuasive answer to how Burnham means to pay for his promises.
Starmer failed abjectly to get Labour to even consider serious reform of welfare spending to lessen the UK’s tax burden on workers and businesses. Maybe a prime minister who speaks the same language as the left-leaning majority in his parliamentary party will be better placed when tied to a somewhat more austere finance minister.
Healey’s presence at the Treasury should at least assuage some of the immediate investor doubts about Britain’s financial position—something a Miliband could not have achieved.
A test of Burnham’s—and now Healey’s—ability to make the sums add up [came] on Tuesday, when the PM announced how he will pay for measures to tackle what he sees, with justification, as Britain’s most urgent problem: the soaring cost of living. A budget will follow in the fall.
By not picking either Mahmood or Miliband, Burnham also avoids a binary choice between opposing political visions that would have left a big chunk of his party feeling alienated.
Mahmood’s fiscal instincts are sound, but as a lawyer by background, she lacked experience in a senior economic brief or in private sector finance or business. In contrast, Healey served for five years as a Treasury minister in the early 2000s, learning from Gordon Brown. Mahmood remains home secretary, a wise outcome in light of her success in tackling illegal immigration and small boat arrivals across the English Channel. That is a success that attracts the ire of many on the party’s left.
Miliband is a competent minister who knows his way around the Treasury, having been a senior adviser to Brown, yet he had too much baggage. A leftist net-zero champion, he was the least popular choice by far to become chancellor in a Bloomberg Markets Live Pulse survey.
Miliband’s consolation prize is a doozy: foreign secretary, a great office of state and one of the most coveted government jobs. It is a strange appointment, given that he has shown little interest in or aptitude for foreign affairs.
The endless global upheaval confronting the UK—war in Ukraine and West Asia, a wayward White House and an industrially domineering China—demands a serious player. Why not stick with the seasoned Yvette Cooper? There is already too much churn in government and nowhere is longevity more prized than in the Foreign Office.
Then there is the depressing question of Labour’s lack of female heavy hitters. Burnham’s predecessor Starmer was criticized for the absence of diverse voices on his Westminster team, but at least the three top ministerial jobs apart from his own were held by women. Now it is one.
That will worry female Labour members of Parliament already smarting from the failure, once again, to see a woman win their party’s leadership. Healey might well be a safe pair of hands as chancellor in the administration, but it does not seem as if the Downing Street boys’ club has shut shop quite yet. ©Bloomberg
The author is a Bloomberg Opinion columnist covering UK politics and policy.