Miliband as chancellor would be ‘noose around neck’ of job creation, says biggest union

Andy Burnham will put “a noose around the neck” of job creation if he appoints Ed Miliband as chancellor, according to the leader of one of Labour’s biggest trade union backers.

Sharon Graham, the general secretary of Unite, said she supported the “direction of travel” set out by the new MP for Makerfield, who is hoping to become prime minister when he returns to Westminster this week.

But she warned Burnham that the energy and climate change secretary would be the wrong choice to run the Treasury because of his determination to pursue strict “net zero” targets at all costs.

“It’s really important that Andy has the right team around him and people who understand that jobs in Britain are important,” Graham said. “We need somebody in that role who understands that, and at the moment that isn’t Ed Miliband.”

The Unite leader said it was “very hard to see” how Miliband could be viewed as “pro-worker” given the decisions he had taken at the Department for Energy Security and Net Zero.

“It’s been floated that Ed Miliband would be chancellor. That would be a noose around the neck of what we need to do on jobs,” she told The Observer. “If you’ve got somebody in there close to the decision-making where they’re not pro-worker in their gut, then that’s a problem for a party that’s supposed to be the party of workers.”

“A lot of the left has now become a middle class project – it now needs to work for the working class,” she added.

Graham pointed to Miliband’s failure to approve the development of oil and gas fields in the North Sea, which she said could provide thousands of jobs. She also highlighted the energy and climate change secretary’s determination to stick to targets for electric vehicle sales, which car manufacturers have warned could lead to factory closures.

The government is set to water down the target that 80% of all new cars sold in the UK must be electric by 2030. But Graham said Miliband had resisted the policy shift “every step of the way” despite concerns raised by business and the unions.

He “wants to let go of one rope before we get hold of another” in the transition from oil and gas to clean energy, she said.

“Ed only seems to be interested in one part of the equation, which is to reach the target, but doesn’t seem to be interested at all, in any way shape or form, in the jobs that will replace those that go,” she said. “He is completely deaf to that particular point.”

An ally of Miliband said that the “net zero economy” had been the UK’s fastest growing sector with more than a million jobs.

Burnham is receiving conflicting advice about who to appoint to the critical role of chancellor if he succeeds in replacing Keir Starmer as prime minister. Miliband, a former Treasury adviser with a background in economics, had been seen as the most likely choice.

He is from the same soft left wing of the Labour Party as Burnham, and worked closely with the former Greater Manchester mayor during the recent by-election campaign. He was among those urging him to calm jittery bond markets by promising to stick to the existing fiscal rules and tax pledges.

“If we are serious about driving economic change in a way that people will notice before 2029,” one senior MP close to Burnham said, referring to the next general election date, “there is only one person who has the experience, the gravitas and the understanding of getting stuff done in Whitehall that can deliver that in the Treasury, and that is Ed Miliband.”

Another Burnham supporter added: “Ed knows what he thinks, he knows how to make things happen. He’s worked around the Treasury, he is one of the most grown-up politicians. He’s of the soft left with Andy.” 

However, some around Burnham fear that appointing Miliband would send the wrong signal to business and the City. The energy and climate change secretary has been described as a “bogeyman” by some in the corporate world. As Labour leader, he alienated business leaders by dividing companies into “predators” and “producers”.

A Labour grandee said it would be “mad” to put Miliband in charge of the Treasury, adding: “That would not only be a lurch to the left, it would be a lurch to the left on fiscal and economic policy, so you are in danger of spooking the markets.”

There are also concerns that Miliband would have his own agenda as chancellor, leading to tension between the Treasury and No 10. Burnham is less devoted to the “net zero” agenda than Miliband and is committed to what he calls “business-friendly socialism”.

One Burnham supporter said: “It might replicate some of the elements of the Gordon Brown-Tony Blair relationship. Ed’s got a very firm idea of what he wants and how he wants it.”

Some around the MP for Makerfield would like to see Shabana Mahmood appointed as chancellor. But she has made clear that she wants to stay as home secretary. Louise Haigh, the former transport secretary who ran the by-election campaign, Pat McFadden, the work and pensions secretary, and Lucy Rigby, the chief secretary to the Treasury, have also been discussed.

Senior Labour sources believe Wes Streeting could be offered the Treasury role as part of a deal under which he would pull out from a leadership contest. One insider said: “Andy’s political problem is that all the people that he has to give jobs to who are not currently in the cabinet are soft left. He will be aware that the government being seen to lurch left is not good in terms of its electoral prospects and I think the way he balances it could be by giving Wes the chancellorship.”

Last week Streeting set out his stall on the economy with a speech insisting Labour must not “play fast and loose with the public finances” and calling for a move towards “progressive capitalism”. Like Burnham, the former health secretary wants to reform property taxes, equalise income and capital gains tax and invest in social care.

But a Burnham confidant said it would be “a big mistake” to appoint someone with little economic experience to the Treasury role. “This is a decision that would define Andy’s premiership. He has to have someone who has been thinking about the political economy all of their life and not do it as an issue of political management of the cabinet or the party or even the unions.”

Photograph by Zeynep Demir/Anadolu via Getty Images