John Healey was appointed chancellor on Monday in Andy Burnham’s government after weeks of lobbying by Labour figures. Dan Jarvis sits inside the same cabinet fight, where the first named choice has now been made and Rachel Reeves has resigned after rejecting another senior appointment.
The appointment followed intense briefing from allies of Ed Miliband, Shabana Mahmood and Rachel Reeves. Burnham chose Healey because they agreed on borrowing rules, re-industrialisation, devolution and intervention to help with the cost of living.
Healey and the Treasury
Healey brings five years as a junior minister in the Treasury under Gordon Brown. That background is now tied to a job that is likely to shape how Burnham handles spending, especially because Healey will almost certainly use the post to increase defence spending.
One route would be defence bonds. Healey’s record matters here because he resigned as defence secretary last month in protest at the proposed defence investment plan, and he has now moved from that break with Starmer’s government into Burnham’s top economic role.
Rachel Reeves and Katie Martin
Weeks before Burnham was elected as Makerfield MP, some in Labour thought Reeves was positioning herself to stay in post as chancellor. Her proposal to freeze private sector rents was read as a deliberate signal to Burnham, while Katie Martin was calling business lobbyists and executives and asking them to press Reeves’s case publicly or privately.
That effort ended on Monday when Reeves resigned from the government after turning down another big appointment reported to be defence secretary. Some Starmer allies believed Healey’s resignation sapped Keir Starmer’s will to fight Burnham for the premiership.
Burnham’s black box
Burnham said on Monday that “The black box is still sealed.” After Healey’s appointment, one Labour MP said, “We did not see this coming,” and added, “But that is probably a sign that it is a good decision.”
Another Labour MP said, “I am concerned that we may lose everything if a new leader sacrifices the chancellor for promises and new alliances they are currently forging with MPs who fancy the job for themselves. The biggest fear for the bond markets and the unions is Ed Miliband.” The next cabinet choices remain inside that sealed box, and Healey’s appointment is the clearest sign yet of which direction Burnham wants to take.
