London Mayor Sadiq Khan has privately lobbied prospective Labour leader Andy Burnham to appoint Ed Miliband as the next Chancellor of the Exchequer.
In a private discussion with Burnham, Khan argued that Miliband had both the political skills and economic expertise to deliver Burnham’s agenda, including devolving powers to city regions.
A spokesman for Khan said they would not “comment on private conversations” and that he will “work with whoever is chancellor for the good of London.”
Khan’s intervention comes amid fierce internal Labour debate over who should take up residence in No 11, with Home Secretary Shabana Mahmood and Work and Pensions Secretary Pat McFadden also under consideration.
Miliband, who spent time in the Treasury during Gordon Brown’s premiership, is facing significant pushback from union leaders and fellow Labour MPs who argue his net zero agenda is damaging the UK’s industrial base and North Sea oil production.
Miliband has stalled on giving the green light to new exploration projects from Shell (LON: SHEL) and Equinor, with owners of the Jackdaw gas platform warning the stance could leave the UK at risk of a winter fuel shortage.
One Labour MP told the Financial Times: “If Ed goes to the Treasury, we might as well pack up and go home.”
Sharon Graham, head of the Unite union, warned that putting Miliband into the Treasury would put “a noose around the neck” of job creation in Britain.
Burnham has reportedly been receptive to colleagues’ requests for a change of policy on North Sea oil and gas, though one Scottish Labour MP described him as “non-committal but positive” on the matter.
Burnham is due to be anointed Labour leader next Friday after receiving 322 nominations from Labour MPs on the first day of the leadership contest, making it mathematically impossible for any other candidate to stand.
Senior Labour figures say allies of Miliband have been calling on influential party figures to reassure them that the energy secretary is not as hostile towards North Sea exploration as his stance suggests.
While Miliband lacks the backing of Unite, he does have the support of the UK’s biggest union, Unison, alongside Lord Nick Macpherson, permanent secretary of the Treasury for over a decade.
However, City figures have argued that banks and financial markets would not receive a Miliband appointment at the Treasury well, with opposition from senior banking voices growing louder.
One senior UK banking source told City AM: “Ed Miliband would be a disaster… I just don’t think he believes in a deregulated system.”
The same source instead called for Wes Streeting or Jonathan Reynolds, figures who show an “understanding” of the free market and would be more palatable to business and investors.
The boss of investment bank Cavendish also told City AM that markets would take a Miliband appointment in “a worse way”, claiming the energy secretary had the “wrong angles” for the role.