Ed Miliband, the energy secretary and former Labour leader, is widely expected to become chancellor under Prime Minister Andy Burnham. As the frontrunner for the role, Miliband faces significant challenges, including reforming the Treasury, managing devolution, and balancing green commitments with economic growth. This article draws on insights from experts who appeared on Miliband's podcast 'Reasons to Be Cheerful' to explore the hurdles ahead.
Treasury Reform: A Key Challenge
Jonathan Portes, a professor at King's College London and former Treasury adviser, argues that the UK Treasury is unusually powerful compared to other countries. 'The centre of government ends up, in many respects, being the Treasury, because No 10 is a glorified prime minister's office, rather than a department,' he says. Portes notes that while the Treasury's 'institutional mind' is often criticised, it is also highly political. 'If it has a strong chancellor who tells them what to do, it is much better at delivering than other departments.'
The partnership between Miliband and Burnham will be crucial. Portes compares it to successful duos like Lawson and Thatcher or Blair and Brown, which 'worked because you had people who were strong-minded, they didn't agree about everything, but they were aligned enough.' He dismisses claims that Miliband is anti-business or fiscally irresponsible as 'rightwing propaganda' and 'just stupid.' Regarding fears that Miliband's appointment would spook bond markets, Portes says, 'If you want to know what the markets are saying, you look at actual money, prices, interest rates. And we can see that there's no sense of panic.'
Devolution: Rebuilding Trust
Sarah Longlands, chief executive of the Centre for Local Economic Strategies, highlights the need for a better relationship between central government and devolved regions. 'One of the big questions for any incoming chancellor is how to work better with devolved regions and the nations,' she says. The funding frameworks for areas like Manchester and the West Midlands come with 'a huge burden of accountability,' set by central government. 'More care needs to be taken with how we manage the relationship between the centre and those devolved nations and regions to make sure that we're not putting such a burden on the process that you can't actually deliver.'
The relationship was tested during Covid, when Burnham criticised the government's lack of financial support. 'A future chancellor has to rebuild that,' Longlands says, 'because the Treasury has taken such a role dictating the terms of devolution.' With the prospect of a 'No 10 North' shifting the dynamic, she adds, 'they need to decide what kind of relationship they want to have. That can't just be about collecting receipts.'
Green Growth: Balancing Net Zero and Jobs
Miliband's commitment to net zero has drawn opposition, including from Unite's Sharon Graham, who said it would put a 'noose around the neck' of job creation. The Guardian's energy correspondent, Jillian Ambrose, says the North Sea issue must be resolved. 'A greenlight for the Jackdaw and Rosebank fields would not be a breach of the Labour party's manifesto, but it would be viewed by many in the climate movement as a betrayal.' Rachel Reeves was reportedly in favour of the extra tax revenue, but Miliband may be willing to forgo that to avoid a green backlash.
Ambrose notes that voters in former industrial heartlands have turned against Labour's net zero agenda, but failing to be 'green enough' could also alienate progressive voters. She argues that a Miliband chancellorship could end the 'green v growth' debate. 'A green economic agenda is a 'growth agenda', in Miliband's view, and the opportunity to prove this on an economy-wide scale will be irresistible, especially to a politician so keenly aware of their climate legacy.'
