Make Ed Miliband chancellor, ex-chief Treasury adviser tells Andy Burnham

Nicholas Stern joins growing number backing Miliband, saying he has vision and experience to revive economy

A former chief economic adviser to the Treasury has called on Andy Burnham to appoint Ed Miliband as chancellor, arguing the energy secretary has a “bold” vision to revive the economy.

Nicholas Stern, a professor at the London School of Economics who was a senior figure in the Treasury during Gordon Brown’s tenure, said only Miliband had the experience and the strategic vision to accelerate investment and rebuild public trust in the state’s ability to “get things done”.

Burnham has yet to say who would be his chancellor if he becomes prime minister this month. Miliband, the former health secretary Wes Streeting and the home secretary, Shabana Mahmood, have all been tipped to replace Rachel Reeves .

Stern, who is also a former chief economist at the World Bank, joined a growing number of senior academics and officials calling for Miliband to be handed the keys to No 11 and take control of the government’s £1.4tn annual spending.

“I think of him as competent and strategic. I would also say bold, though I am not using the language of Yes, Minister,” Stern said, referring to the 80s BBC comedy in which civil servants used the word bold as a synonym for rash and foolish.

“I mean bold in the sense that we have to have a clear direction showing where investments need to occur and the ability to explain why it should involve an increase in spending of two or three percentage points of national income.

“That’s the kind of sums we need to invest in clean, efficient and modern infrastructure, particularly around energy, cities and transport. That will be a big part of the growth story – creating the environment in which private capital can flourish and investments in human capital can also flourish.”

Stern was the author of a 2006 review on the economics of the climate crisis, in which he argued that the benefits of strong and early action far outweighed the economic costs of not acting.

He backed Miliband’s moratorium on additional drilling licences in the North Sea for oil and gas, saying it would be a diversion to keep old industries alive beyond their useful life.

“Investing in North Sea oil is not a strategy for the technologies of the 21st century. The key is that we have got to invest in people and places as old industries wane,” Stern said.

He said places such as Aberdeen should benefit from huge investment in new technologies, but the impetus would be lost if the oil industry continued to be propped up.

Miliband would also be a respected figure on the world stage, said Stern, after many years attending climate crisis conferences, where the UK was a leader.

“The UK looking flaky on [oil drilling] has very serious consequences. It is not simply that we are 0.8% of emissions. Our arguments on climate change and the technologies of the future carry weight beyond our GDP or share of emissions,” Stern said.

He added that he believed Miliband had deeper knowledge of the industrial strategy and economy after years in the Treasury as an adviser.

“I got to the Treasury in 2003 and was second permanent secretary and head of the government economic service, and he was a youngish chair of the council of economic advisers. So we interacted quite a bit, and had many common interests. You could see he understood and was dynamic,” he said.

Last month, Labour’s deputy leader, Lucy Powell, said Miliband would make “a good chancellor” .

Josh Ryan-Collins, a professor of economics and finance at University College London’s Institute for Innovation and Public Purpose , said interpretations of Miliband’s support for net zero as a costly mistake were misguided. “The problem is not ambitious climate policy per se, but the absence of willingness from the Treasury to mobilise resources to support affected workers and regions,” Ryan-Collins said.

He added that Miliband as chancellor would make the case for green investment as “the only way to stabilise the UK economy in the long term and create the decent, well-paid jobs that the poorer regions of the country desperately need”.