Shabana Mahmood Expected to Be Named Andy Burnham’s Chancellor

Shabana Mahmood, the current home secretary, has become the leading candidate for Andy Burnham’s chancellor, ahead of Ed Miliband, who was considered a strong contender. Sources in Burnham’s team say no final decision has been made, but several senior Labour figures expect Mahmood to be moved to the Treasury.

The battle over who replaces Rachel Reeves has divided Burnham’s allies for weeks. Miliband’s supporters argue he is the only candidate who can challenge Treasury orthodoxy while sharing Burnham’s economic vision. However, critics fear appointing him could unsettle markets and prove risky with the electorate. Louise Haigh, one of Burnham’s closest allies, is also reported to have had qualms about Miliband.

Financial markets reacted positively to reports of Mahmood’s likely appointment: the pound rallied and UK government borrowing costs fell slightly. Investors regard Mahmood as a more centrist option than Miliband, given her tough stance on immigration and less pronounced economic views.

If confirmed, Mahmood’s first task would be to draw up an emergency cost-of-living package, potentially including targeted energy bill support, a rent freeze, and a cap on bus fares. She would then work on an autumn budget. Burnham has refused to rule out a wealth tax in the future.

Miliband is expected to be moved to the Foreign Office, possibly with the role of first secretary of state. Wes Streeting could replace Mahmood as home secretary. Burnham, who becomes Labour leader on Friday and prime minister on Monday, is expected to bring back Angela Rayner and Lucy Powell to the cabinet, with Haigh likely taking a key role at the heart of government.