A former Treasury chief appeared to warn Andy Burnham against making Ed Miliband his chancellor.

Darren Jones was a close ally of Sir Keir Starmer but has rowed in behind the would-be prime minister after ruling himself out of a Labour leadership contest.

Also a former number two to Chancellor Rachel Reeves, he revealed that he has been reassured by Mr Burnham about his plans for the economy.

But he declined to say whether controversial Energy Secretary Mr Miliband should be put in charge of the Treasury or whether he would meet ‘the tests I think need to be met’ to succeed in the role.

Mr Miliband is seen by many as the frontrunner for the job.

Mr Jones – who is still serving as Chief Secretary to the Prime Minister – also claimed the public purse strings would be loosened in a Burnham government. 

His comments echo those of an economic adviser to the former Greater Manchester mayor, Lord O’Neill, who called for billions of pounds of borrowing to pay for major infrastructure projects.

Mr Miliband spent five years as a special adviser to Gordon Brown in the Treasury, has a Master’s degree in economics and taught the subject at Harvard. 

Close ties: Many see the Energy Secretary as the front runner for the role of chancellor in an Andy Burnham government

Former Starmer ally Darren Jones has rowed in behind the would-be prime minister after ruling himself out of a Labour leadership contest

However many Labour MPs, trade union bosses and business leaders fear the prospect of him moving into No 11.

He would seek to hike taxes on the wealthy, having campaigned for a mansion tax and the restoration of the 50p rate of income tax when he was party leader in the 2010s. He would also likely target businesses, having previously branded some firms ‘predators’.

And he would push his Net Zero drive, which critics say is killing heavy industry by keeping energy prices high as well as destroying jobs in the oil and gas sector. 

Mr Jones, who as chief secretary to the Treasury during Labour’s first year was in charge of the crucial spending review, said he would not join a Labour leadership race despite ‘upwards of 100 MPs’ opposing a Burnham coronation or feeling ‘depressed’ about Sir Keir being ousted.

In an interview with Sky News, he suggested many Labour MPs had wanted him to run because he would keep public spending and borrowing under control – and said he had broached this in a meeting with Mr Burnham this week. 

Asked what MPs’ concerns were, Mr Jones replied: ‘Their concern is, well, who is Andy going to appoint as chancellor? What does that mean for the trust that we have won from the public on the economy?’

He said that although Labour MPs share Mr Burnham’s interest in building council houses and having more control over public utilities, ‘economic stability’ must be maintained and there is a ‘risk’ in ‘just saying you’re going to borrow lots of extra money’ because it adds to debt interest payments.

‘I think there’s room to borrow a little bit more’, he added, but said it would not work to simply give money to councils for new homes because there aren’t sufficient builders or bricks.

Asked what his view was of Mr Miliband becoming Chancellor, Mr Jones said he was ‘not going to get into personalities’ but added that any candidate would have to be able to ‘enable the delivery of the prime minister’s priorities and not try to control the prime minister’.

They would also have to be able to ‘reassure the markets, reassure the trade unions and reassure the Parliamentary Labour Party and, by extension, the public’, he said.

Asked if Mr Miliband would fall short on his criteria, Mr Jones said: ‘Well, I will let you mark those tests, but those are the tests I think need to be met.’ 

On what the reaction of the bond markets might be to Mr Burnham becoming PM, he said: ‘I think they can be content and I think this can be done in the right way.’

Meanwhile, Tory leader Kemi Badenoch accused Mr Miliband of betraying Sir Keir as he had his brother, David Miliband, who he challenged in the Labour leadership contest of 2010. 

At Prime Minister’s Questions on Wednesday, Mrs Badenoch said: ‘He was a failed Labour leader, rejected by the electorate, brought back from the wilderness by [Sir Keir], and when the going got tough he jumped into bed with the mayor of Manchester.

‘Does the Prime Minister think that his treachery should be rewarded by being appointed Chancellor?’ It was noted that Sir Keir failed to offer a defence for his Energy Secretary.

Who else is in the running and how do they compare? 

Wes Streeting

The former health secretary has less of a background in economics than his main rival, but there are rumours he has been promised the Chancellor job in return for not standing against Andy Burnham.

He studied history at Cambridge and spent just six months as Shadow exchequer secretary to the Treasury when Keir Starmer was first elected Labour leader in 2020. But since quitting the Cabinet last month he has focused on the economy.

He set out his vision of ‘progressive capitalism’ in a Financial Times article and expanded on it in a speech last week.

If he were Chancellor he would support more North Sea drilling, recruit scientists from overseas and tear up planning rules to boost growth.

His camp have also suggested he would find money for defence that Sir Keir couldn’t and Rachel Reeves wouldn’t.

Shabana Mahmood

The wild card candidate, the Home Secretary studied law at Oxford and worked as a barrister before entering politics.

She was appointed as Shadow chief secretary to the Treasury after Labour’s 2015 general election defeat but quit just months later when Jeremy Corbyn was elected. In a remark that could boost her standing with many in Labour, she said that she and the veteran Left-winger ‘strongly disagree’ on the best way to run the economy.

Since Labour took power she has focused on criminal justice as Lord Chancellor then Home Secretary, but some Burnham allies want her in No 11.

It could put her in a difficult position however as she has championed reducing legal migration and stopping the boats. The Treasury always wants people from overseas to fill gaps in the UK work force.

Yvette Cooper

Despite only recently being seen as a contender, Yvette Cooper has the right background to become Chancellor. She studied economics at university and, like Ed Miliband, has an MSc in the subject, and was an economics correspondent at The Independent newspaper.

Ms Cooper was the first female chief secretary to the Treasury in the 2008 financial crisis, during which she had to take Northern Rock into public ownership. But in opposition she was overlooked for the role of Shadow chancellor in favour of her husband, Ed Balls.

In 2015 she backed the return of the 50p income tax rate.