The Financial Times has reported ex-Labour leader Mr Miliband – who worked for then-Chancellor Gordon Brown at the Treasury – has been advising Mr Burnham on the economy “for some time” and was allegedly instrumental in getting the mayor to back the Government’s fiscal rules to calm the bond markets. In a further sign Mr Miliband could be moving into the Chancellor’s residence in Number 11, Downing Street, he has been endorsed in the FT for the role by Lord Nick Macpherson, a former permanent secretary at the Treasury.

Shadow Chancellor Sir Mel Stride was appalled at the prospect, saying: “Ed Miliband wants to sacrifice our economy on the altar of net zero. He would be a disaster for Britain if he ever got near the Treasury. Rachel Reeves has already crushed businesses and households under an avalanche of tax rises. Miliband would pile more burdens on top of that with higher energy bills and billions in taxpayers’ money wasted on his green vanity projects.”

Last week, Enrique Cornejo of Offshore Energies UK warned in the Sunday Express that the country has “less than two weeks worth of stored gas supply” and that growing dependence on imports will expose the UK to international bidding wars.

“Extracting our own resources creates jobs, fuels growth and generates vital tax revenues. Crucially, it acts as a perfect economic shock absorber. When global crises push oil prices up, Government tax receipts from oil rise in accordance.

“This creates a natural buffer, giving the Chancellor dividends when energy markets bite hardest.”

Warning against installing Mr Miliband as Chancellor, he said: “If Ed Miliband is allowed to advance his flawed ideology at the Treasury, it will only compound the problems facing the British economy.”

Andy Mayer, an energy analyst at the Institute of Economic Affairs said: “We don’t have to imagine what his economic plan would be as Chancellor because we’ve been living with it for nearly 20 years… It means state interference in the name of moral crusades in every area of our lives and at great cost, but it will make no difference at all to the global thermostat.”

An Aberdeen-based manager in oil and gas exploration, speaking on condition of anonymity, told the Sunday Express why a change of policy is needed.

He said: “The UK has handcuffed itself to net zero targets and the entirely false and damaging binary that you can either drill or transition to renewables. The fact is that we need to do both.

“We need oil and gas today, and there is broad political and scientific consensus that we’ll still need it for a long time to come as renewable capacity increases to required levels.

“North sea operations run to the very highest global standards of safety, environmental protection and worker welfare. The UK is in an enviable position that must not be squandered: we have the ways and means of safely and cleanly bridging between fossil dependency and net zero, all while benefiting our economy and taxpayers’ pockets. According to some projections, North Sea extraction could entirely cover the UK’s oil and gas demand as we shift to net zero.”

He warned against making the UK “an energy vassal state” and warned that “lives, livelihoods and the economy are suffering with Aberdeen shedding thousands of well paid jobs that contribute huge amounts of tax and National Insurance”.

The Department for Energy Security and Net Zero strongly denies that it is “shutting down” extraction in the North Sea by banning the exploration licences for new fields.

He said: “All Miliband’s ban achieves is replacing domestic production with LNG imports from the US and Qatar… Britain will need oil and gas right through to 2050 and beyond. The only question is whether we produce it ourselves, or pay someone else to.”

A spokesperson for Mr Miliband’s department said: “Oil and gas production will be with us for decades to come, and we will manage existing fields for the entirety of their lifespan – while actively scaling up clean energy industries in the North Sea. Issuing new licences to explore new fields cannot give us energy security and will not take a penny off bills. Our ambitious plans will make the North Sea a clean energy powerhouse and support up to 40,000 new jobs in Scotland by 2030.”

Mr Burnham’s campaign declined to comment.

‘Miliband would be a disaster for UK!’ Panic as Burnham poised to make Ed chancellor

For a brief period this summer, Ed Miliband appeared to be on the verge of becoming one of the most powerful figures in Andy Burnham’s new government.

The former Labour leader was widely reported to be in contention for the Treasury as Burnham prepared to enter Downing Street. Reports suggested the pair had been discussing economic policy, while Miliband was said to be interested in the Chancellor’s job.

But the speculation ultimately came to nothing.

When Burnham announced his Cabinet on July 20, it was John Healey who became Chancellor. Miliband was instead appointed Foreign Secretary, moving from his previous position as Energy Secretary.

That outcome matters because the prospect of Miliband becoming Chancellor had generated unusually sharp debate inside Labour and among financial-market commentators.

The controversy was not simply about personalities. It reflected a much bigger argument about the direction Burnham wanted to take the British economy.

Miliband is associated with policies involving the expansion of renewable energy, a stronger role for government in the economy and a rapid transition away from fossil fuels. As Energy Secretary under Keir Starmer, he became one of the government’s most prominent advocates of its clean-energy programme.

His possible appointment to the Treasury therefore raised questions about whether Burnham’s government would pursue a more interventionist economic strategy.

Some Labour figures supported precisely that possibility.

Supporters of Miliband argued that he had economic experience and the political authority to implement a more ambitious programme. He had previously worked as an economic adviser to Gordon Brown and taught economics at Harvard before returning to frontline politics.

Other Labour figures took a different view.

The Guardian reported in July that some senior Labour figures believed Miliband could become a target for criticism if given the Treasury, while business groups and some trade unions were sceptical about the appointment. Some critics also expressed concern that financial markets could react negatively to the prospect of a more radical economic programme.

Those concerns should be distinguished from evidence of what would actually have happened.

There was no confirmed economic-market shock caused by a Miliband chancellorship because Miliband never became Chancellor.

Indeed, once reports suggested that Shabana Mahmood was the likely choice, the pound strengthened and government borrowing costs fell somewhat during the day, according to the Independent.

The eventual decision was different again.

Rather than choosing either Miliband or Mahmood, Burnham selected Healey.

That decision gave the new government a Chancellor with previous experience at the Treasury. Healey had served as Economic Secretary and Financial Secretary to the Treasury under Tony Blair and Gordon Brown, giving him direct experience of the department he now leads. ITV reported that Downing Street also highlighted his experience in housing, which could be relevant to Burnham’s plans for a large expansion of council-house building.

Miliband’s move to the Foreign Office nevertheless leaves him with an important position.

The Foreign Secretary is one of the most senior members of the government, and Miliband remains closely associated with some of the administration’s major economic and environmental priorities.

His new role also means that the argument about his influence has not disappeared.

The central question is how much influence Burnham will allow his senior ministers to exercise over the government’s overall economic direction.

Burnham has repeatedly presented himself as a pragmatic politician. He has also promised to maintain fiscal discipline.

That became particularly important as the economic backdrop deteriorated during September.

On September 16, Reuters reported that UK inflation had risen to 3.1% in August, while government borrowing costs had climbed sharply. The 30-year gilt yield reached its highest level since 1998 and the 10-year yield its highest since 2007. Burnham responded by saying his government was prepared to take difficult decisions to keep the economy on track.

Those circumstances make the choice of Chancellor especially significant.

Burnham’s political programme includes major commitments involving social care, infrastructure, public services, housing and greater regional devolution. Each requires money.

At the same time, the government’s fiscal room has been squeezed by higher borrowing costs and inflation.

The Guardian reported earlier this month that Healey faces a difficult first Budget, with roughly half of the fiscal headroom available to his predecessor reportedly eroded by higher inflation and interest rates.

This is where the difference between Burnham’s political ambitions and Treasury constraints becomes important.

Burnham wants to demonstrate that his government represents a substantial break from the previous administration.

Healey, meanwhile, has emphasised fiscal responsibility and adherence to existing fiscal rules.

The Guardian described this as a potential tension between Downing Street’s ambitious programme and the more cautious instincts of the Treasury. Government aides, however, insisted that Healey was aligned with Burnham’s agenda.

The disagreement is therefore not necessarily between two competing Labour governments.

It is a question of how quickly and how extensively Burnham can implement his programme without undermining the fiscal credibility that his Chancellor says must remain the foundation of economic policy.

The earlier Miliband speculation exposed exactly this dilemma.

Miliband was viewed by supporters as someone who could challenge conventional Treasury thinking.

His critics viewed that same characteristic as a potential source of instability.

One Labour MP quoted by the Guardian argued that the party needed a senior politician with substantial economic experience and suggested that Miliband could provide it. Other Labour figures believed his appointment would create unnecessary political difficulties.

The disagreement also reflected different attitudes towards Britain’s energy policy.

Miliband has been a prominent supporter of the transition away from fossil fuels, while Burnham has indicated that he wants a more pragmatic approach to existing North Sea resources.

That tension became especially visible around the future of the Jackdaw and Rosebank oil and gas fields.

The Guardian reported in September that senior trade union figures had raised concerns about the possibility of Miliband becoming Chancellor because of his position on North Sea drilling. Unite leader Sharon Graham and GMB general secretary Gary Smith have both argued that Britain needs to maintain industrial capacity and employment in the sector while developing replacement industries.

Again, the issue is more complicated than simply being “for” or “against” Miliband.

The North Sea debate involves energy security, employment, investment, climate policy and the UK’s legal obligations on emissions.

A Chancellor would also have to consider the fiscal consequences of different energy policies.

Miliband’s appointment to the Foreign Office therefore removes him from direct control over the Treasury but does not remove him from these wider debates.

For Burnham, the choice of Healey can be understood partly through the immediate economic circumstances.

The government needed a Chancellor capable of reassuring financial markets while Burnham prepared to pursue an ambitious political programme.

Healey’s previous Treasury experience provided an obvious qualification.

It also gave the new government a different balance from what a Miliband appointment would have represented.

The final Cabinet announcement therefore ended weeks of speculation.

Burnham appointed Healey Chancellor, Mahmood remained Home Secretary, Miliband became Foreign Secretary and Wes Streeting was appointed Defence Secretary.

That settlement suggests that the headline scenario of “Miliband becoming Chancellor” belonged to the period before Burnham’s government was formed rather than describing the government’s current composition.

Nevertheless, the arguments that surrounded the speculation remain relevant.

They reveal the competing expectations placed on Burnham.

One group of Labour politicians and supporters wants the new government to deliver substantial structural change.

Another priority is maintaining confidence among investors and ensuring that government spending remains compatible with fiscal rules.

Those objectives are not necessarily incompatible, but they can create difficult choices.

The coming Budget will provide the clearest test.

Healey will have to balance Burnham’s political commitments against the government’s limited fiscal headroom.

At the same time, the prime minister will have to decide which of his long-term ambitions can be funded immediately and which must wait.

The September economic data have made that calculation harder.

Higher inflation means households continue to face pressure. Higher gilt yields increase the government’s borrowing costs. Energy prices remain sensitive to geopolitical developments. And Burnham has promised additional investment in infrastructure, housing and public services.

That is a demanding combination.

It also explains why the choice of Chancellor mattered so much.

A Chancellor does not simply announce tax rates and spending programmes. The Treasury controls the process through which government departments’ ambitions are tested against available resources and the fiscal rules.

Burnham may want a radical transformation of the British state, but the Treasury still has to make the numbers work.

The choice of Healey rather than Miliband therefore represents an important feature of Burnham’s government.

It does not establish that Miliband would have been a “disaster” for Britain, as the headline claims.

Nor does Healey’s appointment prove that the government will follow a particular economic philosophy.

Those are political judgments.

What is established is that Miliband was seriously discussed as a possible Chancellor before Burnham entered Downing Street, that the possibility generated competing arguments within Labour, and that Burnham ultimately chose someone else.

The decision also demonstrates how quickly political speculation can change during a leadership transition.

Only days before the Cabinet was announced, Miliband and Mahmood were widely discussed as the main candidates for the Treasury.

Then Burnham selected Healey.

The new Chancellor now has the responsibility of turning the prime minister’s economic ambitions into a programme that can survive scrutiny from the Treasury, Parliament, investors and the public.

Miliband, meanwhile, has a different challenge as Foreign Secretary.

He will remain a prominent member of the government, but his influence will be exercised through foreign policy, international relations and Britain’s wider strategic direction rather than through direct control of taxation and public spending.

The episode is therefore less a story about a “panic” over Miliband than a window into the difficult choices facing Burnham’s administration.

The prime minister wants major change.

His Chancellor is emphasising fiscal restraint.

His Foreign Secretary remains one of the government’s most prominent advocates of a rapid energy transition.

And the economic environment is becoming less forgiving.

The crucial question now is not whether Miliband becomes Chancellor.

He did not.

It is whether Burnham can reconcile his ambitious political programme with the economic constraints facing Britain.

That challenge belongs to John Healey and the Treasury.

And the October Budget will provide the first major test of whether the new government can turn Burnham’s promises into financially sustainable policy.

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