Senior officials in President Trump’s administration have privately warned that appointing Ed Miliband as chancellor would be a “mistake”, according to reports in the Times.
US officials relayed their concerns directly to British counterparts and senior Labour figures, citing Miliband’s opposition to new oil and gas drilling licences in the North Sea.
During his tenure as energy secretary in Starmer’s cabinet, Miliband drew significant backlash from industry and City figures over his drive to push the UK toward net zero.
He has stalled on approving new exploration projects from Shell and Equinor and refused to ease North Sea drilling licences, with US officials believing his approach is “ideologically driven”.
Trump has previously described the UK’s net zero policies as “stupid”, placing him in sharp contrast with Miliband’s stance on renewable energy and fossil fuel development.
Andy Burnham, who is expected to enter No 10 later this month, said on Thursday that he had not yet made a decision on who he would appoint as chancellor, although Miliband is considered the frontrunner.
While Miliband has been a long-term ally of Burnham, the two are clearly divided on the question of North Sea energy policy and future drilling licences.
Miliband has argued that North Sea drilling creates little economic benefit and causes significant environmental damage, but Burnham has said he is “open” to new drilling.
That position is heavily favoured by large numbers of Labour MPs and some unions, including the GMB, adding political weight to arguments against Miliband’s energy stance.
A government source told The Times: “The Trump administration has made clear that they have concerns about him becoming chancellor, particularly over North Sea oil and his environmental agenda.”
Trump has urged the UK to “bring back the oil” and “get rid of the windmills”, and described the North Sea as a “treasure chest” during a visit to Scotland last year.
He also claimed high taxes on North Sea operations “make no sense”, arguing that revenues raised from lifting restrictions could help fund defence spending.
Trump previously criticised Burnham directly, saying: “I think I see that he was, I guess, the mayor of a town. I hear he’s extremely liberal, extremely, so that means he probably won’t open up the North Sea.”
Burnham is expected to choose between Miliband and Home Secretary Shabana Mahmood for the Treasury role, with allies of the incoming prime minister divided on which candidate to back.
Some within Burnham’s circle believe that appointing Miliband would pose a “threat to the country”, while City figures have warned that markets would take a Miliband appointment “worse” and that banks view him as someone who “would be a disaster”.