There are plenty of solid arguments for Ed Miliband’s outriders to make about why he should be the chancellor when, and of course if, Andy Burnham’s first cabinet is formed. Miliband has been one of Burnham’s most consistent backers, he is one of the most experienced ministers Labour has and he has shown he has the determination to drive through radical policies. There is one great risk, however: would appointing Miliband as chancellor trigger a market meltdown?
We don’t know much about what a Burnham government might look like. But one thing seems certain. The hapless Rachel Reeves will be dispatched to the backbenches. From Wes Streeting to Yvette Cooper to Pat McFadden or John Healey, a whole list of potential candidates are quietly positioning themselves for the job. But Miliband is the one that would really excite the Labour party faithful.
The pound has already started falling in anticipation of a change of prime minister
In fairness, it is possible to make a case for the current Energy Secretary. Cooper would do nothing more than competently manage decline; Streeting would get into fights with the unions. Meanwhile, neither MacFadden nor Healey has enough of a public profile or much panache. By contrast, Miliband is bold, experienced, clever and thoughtful. If Burnham’s talk of ending ‘40 years of neo-liberalism’ and ‘ending trickle-down economics’ amounts to anything more than a few vapid soft-left soundbites for the activists, then Miliband is probably the only person who could develop a serious alternative.
The trouble is, Miliband would also crash the markets. Just take a look at his record. The Energy Secretary has been the champion of the fantasy of ‘green growth’, a strategy that has left Britain with the highest industry energy prices in the world and triggered rapid deindustrialisation. He has blocked the development of our own energy in the North Sea – even as we ramp up imports from Norway, which is still expanding precisely the same fields. And he has consistently argued for higher taxes, more borrowing, and more regulation, even though most observers might think that the country already has quite enough of all three.
It was noticeable today that the pound has already started falling in anticipation of a change of prime minister. In reality, Miliband embodies everything the market fears about a Burnham premiership. If it happened, it would mark a sharp shift to the left, with a bigger state, more borrowing, and even higher taxes.
Global investors are already very suspicious of Britain and have started charging a hefty premium for our debt. As chancellor, Miliband would be the final sign that the country had become far too risky – and money would start fleeing the country the moment his appointment were to be announced.
