Fiscal hawk or big spender – what kind of chancellor will John Healey be?

Diligent, popular, unexpected pick for the Treasury has been given a straitjacket – and the job of funding PM’s policy promises

On the frequent occasions that John Healey would travel abroad as defence secretary, he was so determined to keep working he would get the crew to tether a desk to the inside of his military aircraft so he could read his papers.

His diligence is one reason why Andy Burnham, the new prime minister, made Healey his unexpected pick for chancellor on Monday. Allies say others include their shared commitment to re-industrialisation and devolution.

After an occasionally vicious briefing war between allies of other potential candidates, the hardworking Healey is seen as a safe choice who can unite a fractured party while not scaring the markets.

But many who know him say the new chancellor is more ideologically driven than he may seem, and that Burnham will come unstuck if he treats his most senior minister as little more than a factotum.

“This is being billed as equivalent to Gordon Brown appointing Alistair Darling,” said one Labour official, referring to the former prime minister’s choice of chancellor, who was initially seen as someone who would simply do the bidding of No 10.

“But it turned out Darling had views of his own which did not always chime with Brown’s – Andy has to avoid making the same mistake.”

The decision to appoint Healey was arguably the most important Burnham made on his first day in Downing Street. The new chancellor will be tasked with finding money for the prime minister’s various policy promises, including higher defence spending, taking utilities into public control and finding ways to cut voters’ living costs.

Burnham has promised not to raise income tax, VAT or national insurance, and to stick to the last government’s borrowing rules, placing his chancellor in the same straitjacket that hampered his predecessor, Rachel Reeves.

Healey is in an almost unique position to take the tough decisions required while keeping Labour MPs onboard. Since entering parliament in 1997, he has largely avoided becoming attached to one faction or another.

Although he served in the Treasury for five years while Brown was chancellor, he was always respected by the opposing Blairite camp. More recently, he has successfully bridged the widening gap between allies of the former prime minister Keir Starmer and those on the soft left agitating for his removal.

Part of Healey’s ability to appeal to different wings of the party comes from his personal warmth. He will often involve relatively junior members of staff in policy and political discussions and, like his new boss in No 10, has an ability to remember names and details about people’s lives.

David Walker, the bishop of Manchester, was one of the local Labour members who voted for him to be the Labour candidate for the seat of Wentworth in 1997 – over other rising stars such as Yvette Cooper – now health secretary.

“One of the things that impressed us at the time was that John was committed to living in the community and putting down roots here,” said Walker. “He always made sure he turned up to community events and showed his face, even when he was busy with national politics.”

Luke Pollard, his former ministerial colleague at the Ministry of Defence, called Healey “genuinely the finest and most decent man I’ve worked with since being elected”.

As defence secretary, Healey earned a reputation as a strong ally of the armed forces, putting the repair of dilapidated military housing at the top of his list of priorities. To some in government however, this closeness to the military was a weakness.

When he asked the Treasury for an extra £28bn to fund the defence investment plan (Dip), just months after negotiating a multi-year budget, Reeves was infuriated.

Her allies said Healey had been hoodwinked by service chiefs into believing that last year’s strategic defence review was fully funded, only to have to go back and ask for more when it came to thrashing out the detail.

Those close to the chancellor, however, say he needed more money for his budget because of the additional geopolitical commitments Starmer had made in the months after the defence review, including playing peacekeeping roles in Ukraine and the Gulf.

One former government official said the row showed that far from being a fiscal hawk, as some have claimed, Healey would come down on the side of higher spending when presented with a policy dilemma.

“He is definitely not a fiscal hawk or even a firm hand in the tiller as he’s being portrayed by some,” they said. “He is a big spender.”

In the end, Healey resigned in protest just days before the Dip, which some of Starmer’s allies believe was part of a deal with Burnham to become his chancellor.

Wes Streeting, Healey’s replacement as defence secretary, suggested additional money was also likely to be found from cuts elsewhere. “We understand the sacrifices that involves from other government departments,” he told a press conference during his first day in the job.

The chancellor will now have to do the kind of adjudicating between departments that could, for the first time, make him unpopular with large parts of the parliamentary Labour party.

The question is whether, when faced with a minister in sudden need of extra cash, as he himself once was, he loosens the purse strings or sticks to the discipline of his predecessor.