Andy Burnham faces significant internal opposition from the left wing of his party regarding the potential appointment of Shabana Mahmood as his chancellor, according to reports. Rachael Maskell, a left-wing Member of Parliament, has publicly stated that Mahmood would not be the "right person for Chancellor" and instead endorsed Energy Secretary Ed Miliband for the position.
Burnham is set to formally assume leadership of the Labour Party imminently, but decisions on key cabinet roles, including the crucial Treasury position, remain unconfirmed. His team asserts that no final decisions have been made and appointments will be finalized upon his entry into Number 10. However, Mahmood, reportedly aligned with the Labour Right, is considered the frontrunner for the chancellorship, despite earlier indications that Miliband might be chosen.
The prospect of Mahmood's appointment has reportedly unsettled some markets. Additionally, major unions have expressed reservations due to Miliband's stance on North Sea oil and gas, a policy that has drawn criticism from the party's left. Some within the party also view Miliband's past leadership of Labour, which preceded a general election defeat in 2015, as a potential liability for such a prominent role.
Supporters of Miliband have launched a public campaign to influence Burnham's decision, highlighting Miliband's experience. "I don't think Shabana would be the right person for Chancellor. I do think Ed Miliband would be a suitable candidate," Maskell stated. She further argued that Miliband possesses the necessary leadership skills for the Treasury and could integrate climate action into economic policy, a critical consideration given projected government expenditure on climate-related challenges.
Mahmood's policies on immigration have also drawn criticism from some left-wing MPs, who deem them too stringent. Zack Polanski, the leader of the Green Party, accused Burnham of being "subservient to the City of London" if he prioritizes Mahmood over Miliband, suggesting the decision was influenced by financial sector stakeholders.
Reports indicate that Mahmood, in 2014, advocated for restoring the top rate of income tax to 50p, considering the reduction to 45p by the Conservative government unfair. She later served as a shadow Treasury minister. Burnham and his prospective chancellor may soon face the challenge of addressing a significant budget deficit to fund defense commitments.
Mahmood's potential appointment reportedly caused markets to rally. Both she and Burnham have expressed support for measures such as windfall taxes on oil and gas firms, levies on tech companies, and equalizing capital gains and income tax rates. However, Burnham has also signaled a potential increase in taxes, suggesting a desire to reduce reliance on bond markets.
While Miliband remains popular among Labour members and the party's left, some believe his appointment as chancellor could prove divisive for the party.