The Treasury has taken such a role dictating the terms of devolution
A decade after retreating from the Labour leadership, Ed Miliband stands at the threshold of Britain's most powerful economic office — not as a radical outlier, but as a minister whose appointment would force a reckoning with how the Treasury's institutional grip shapes everything from regional devolution to the green transition. The question is less whether he is too dangerous, and more whether he and a presumed Prime Minister Burnham share enough common direction to bend that machinery toward something new. History suggests the partnership matters more than the ideology; what remains unresolved is whether the two men have decided, together, what they actually want.
- Westminster is alive with competing briefings — allies and critics alike framing Miliband's potential chancellorship as either a long-overdue reckoning or an economic catastrophe in waiting.
- Economists who know him dismiss the panic as theatre: fiscal rules are in place, bond markets are calm, and the charge of recklessness dissolves under scrutiny.
- The deeper fault line runs between London and the regions — devolved areas like Manchester carry heavy Treasury-imposed accountability burdens, and the fractured trust from Covid-era funding rows has never fully healed.
- The sharpest pressure point is climate: Miliband's North Sea drilling moratorium has drawn fire from union leaders and foreign governments alike, forcing a choice between green credibility and industrial job security.
- The prize being reached for is larger than any single policy — proving that green growth and economic expansion are not rivals but a single, unified agenda, on a scale no British chancellor has yet attempted.
Ed Miliband spent his post-leadership years hosting a podcast about fixing the world. Now, as energy secretary and frontrunner to become chancellor under an expected Prime Minister Andy Burnham, he faces the prospect of actually doing it — or trying to. The Westminster machinery has responded predictably: a storm of briefings, warnings, and endorsements.
The Treasury is not merely a department. It is the institutional centre of British government, controlling not just budgets but the long-term shape of economic policy across every ministry. Economist Jonathan Portes, who appeared on Miliband's own podcast, explains that a strong chancellor can bend this machinery to his will — but only if he and the prime minister share genuine alignment. The partnerships that worked historically were not defined by ideology but by mutual direction and shared purpose. On fears that Miliband would prove fiscally reckless, Portes is dismissive: the rules are in place, and the bond markets show no sign of alarm.
Beyond London, a quieter challenge waits. Sarah Longlands of the Centre for Local Economic Strategies points to the strained relationship between the Treasury and devolved regions — a relationship Burnham himself publicly raged against during Covid, when Manchester was left fighting for adequate support on the steps of its own central library. Rebuilding that trust, Longlands argues, cannot be reduced to accounting. It requires a fundamental decision about what kind of relationship central government wants with the places it funds.
The sharpest tension is climate. Miliband's moratorium on new North Sea drilling licences has drawn fire from union leaders warning of job losses and even foreign governments urging caution. Approving fields like Jackdaw and Rosebank would not technically breach Labour's manifesto, but would be read as betrayal by climate advocates. The previous chancellor favoured the tax revenue. Miliband may seek to find that money elsewhere — because the larger opportunity, proving that green growth and economic expansion are the same agenda rather than opposing ones, may be too significant for a politician of his convictions to pass up.
What these conversations collectively reveal is not a portrait of a dangerous radical, but of a capable minister confronting structural questions that ideology alone cannot answer. Whether he and Burnham possess both the vision and the political skill to navigate institutions built to resist change remains, for now, an open question.
Ed Miliband is back. A decade ago, he was hosting a podcast called Reasons to Be Cheerful with radio presenter Geoff Lloyd, discussing ideas to fix the world during what some unkindly called his wilderness years after stepping down as Labour leader in 2015. Now, as energy secretary, he's the clear frontrunner to become chancellor of the exchequer under Andy Burnham, who is widely expected to become prime minister. The prospect has unleashed the predictable Westminster frenzy: briefings from former advisers, union leaders, and assorted allies either championing him or warning of disaster.
The Treasury is not simply a department—it is the most powerful institution in British government, wielding influence that extends far beyond budgeting. Jonathan Portes, an economist and former Treasury adviser who appeared on Miliband's podcast in 2018, explains that the UK's system is unusual. Most countries separate budgetary functions from longer-term planning and growth strategy. Britain does not. Moreover, the centre of government has become the Treasury itself, partly because No. 10 functions more as a glorified prime minister's office than as a true department. This concentration of power means the Treasury's institutional mind—its rigid orthodoxies and short-term thinking—shapes policy across the entire government. A strong chancellor who knows what he wants can bend this machinery to his will. A weak one becomes its servant.
The question, then, is whether Miliband and Burnham are sufficiently aligned. Portes points to successful partnerships that worked because both parties were strong-minded, disagreed on details, but shared fundamental direction—Lawson and Thatcher, Blair and Brown. The political ideology matters less than alignment. On the criticism that Miliband is insufficiently pro-business or dangerously radical, Portes is blunt: "The idea that he's going to be fiscally irresponsible is just stupid." The government has committed to fiscal rules. The bond markets, which some warn would panic at his appointment, show no signs of distress. Interest rates and prices reflect calm, not fear.
But the Treasury's power extends beyond London. Sarah Longlands, chief executive of the Centre for Local Economic Strategies, raises a different challenge: the relationship between central government and devolved regions. Manchester, the West Midlands, and other areas operate under funding frameworks that come with heavy accountability burdens—all set by the Treasury in Westminster. This relationship fractured during Covid, when Andy Burnham himself raged on the steps of Manchester Central Library about inadequate financial support. A new chancellor must rebuild trust, but not through mere accounting. "That can't just be about collecting receipts," Longlands says. The Treasury has spent years dictating the terms of devolution. A Miliband chancellorship offers a chance to reset that dynamic, but only if both he and Burnham decide what kind of relationship they actually want.
The sharpest tension, however, concerns climate policy. Miliband's commitment to net zero—particularly his moratorium on additional North Sea oil and gas drilling licences—has drawn fire from union leaders like Sharon Graham, who warns it will put a "noose around the neck" of job creation. The Trump administration has reportedly cautioned against his appointment. The dilemma is real. Jillian Ambrose, the Guardian's energy correspondent, notes that approving the Jackdaw and Rosebank fields would not breach Labour's manifesto but would be seen by climate advocates as betrayal. Rachel Reeves, the previous chancellor, favoured the tax revenue and economic productivity these projects would generate. Miliband may be willing to find that money elsewhere to avoid the backlash. Yet there is also a wider prize: proving that green growth is not a choice between environmental protection and economic expansion, but a unified agenda. For a politician as aware of his climate legacy as Miliband, the opportunity to demonstrate this on an economy-wide scale may be irresistible.
What emerges from these conversations is not a portrait of a radical about to wreck the economy, but of a capable minister facing genuine structural questions about how power flows through British government. The Treasury's grip on devolved regions, the tension between climate commitments and industrial jobs, the need for alignment between chancellor and prime minister—these are not problems that ideology alone can solve. They require both vision and the political skill to navigate institutions designed to resist change. Whether Miliband possesses both remains to be seen.
Notable Quotes
The idea that he's going to be fiscally irresponsible is just stupid— Jonathan Portes, economist and former Treasury adviser
A future chancellor has to rebuild that relationship, because the Treasury has taken such a role dictating the terms of devolution— Sarah Longlands, chief executive of the Centre for Local Economic Strategies
The Hearth Conversation Another angle on the story
Why does the Treasury matter so much more in Britain than in other countries?
Most democracies split the budget function from longer-term economic planning. We don't. The Treasury ends up running the whole show because No. 10 is essentially just the prime minister's office, not a real department. So if you want to reshape the country, you need a chancellor who can reshape the Treasury itself.
But won't the markets panic if Miliband gets the job? He's been painted as a radical.
That's the argument people keep making, but it doesn't hold up. The government has fiscal rules it's committed to. If you look at actual bond prices, interest rates, what money is actually doing—there's no panic. The fear is political theatre, not market reality.
What's the relationship between the chancellor and the prime minister? Does it matter if they disagree?
It matters enormously. The best partnerships—Lawson and Thatcher, Blair and Brown—worked because both were strong-minded but aligned on fundamentals. They didn't agree on everything, but they knew where they were going. That's what you need.
What about the regions? Manchester, the Midlands—do they factor into this?
Absolutely. The Treasury has spent years dictating the terms of devolution to regional governments. That relationship broke during Covid. A new chancellor has to rebuild it, but not just by moving money around. It's about deciding what kind of relationship the centre wants to have with the regions.
And the climate question—that seems like the real test.
It is. Miliband won't approve more North Sea drilling, but some unions and the Trump administration want him to. The tension is real. But there's also a chance to prove that green growth isn't a trade-off—that environmental protection and economic expansion are the same thing. That's worth fighting for.
So he's not the radical they're painting him as?
No. He's someone facing genuine structural questions about how power works in Britain. That's harder than ideology. That requires both vision and the skill to navigate institutions built to resist change.