Reeves Is Helping Burnham Prepare To Be Pm As She Fights To Keep Job

Chancellor Rachel Reeves is helping Andy Burnham prepare for government despite being widely tipped to be sacked or demoted if, as expected, the former mayor becomes Prime Minister, The i Paper understands.

There is mounting speculation that Burnham is planning to install his own pick for the Treasury to mark a break with the Sir Keir Starmer regime after two years of dwindling popularity for Labour.

But it is understood that Reeves is helping with the handover to ensure stability and continuity in the economy, regardless of who becomes chancellor next, The i Paper understands. The Chancellor is also keen to protect her legacy, should she lose her job.

Supporters of the current Chancellor, and even some allies of the new Labour MP for Makerfield, believe Reeves should remain in place to provide economic stability and to reassure the markets.

Reeves staked her own claim to stay in post when she said on Thursday she had “unfinished business” – including on fiscal devolution, one of Burnham’s key policy agendas.

Burnham and his team have just three weeks until he takes over at No 10 if, as expected, he does not face a challenger who can force a contest, which would push the timescale back to September.

Burnham met Reeves this week

It is understood that Reeves met Burnham this week and has offered her support to him to prepare for government during the transition phase.

In their talks, the pair did not discuss jobs, and an ally of Reeves told The i Paper that it was for Burnham and his team to decide whether to keep her in post or choose a new chancellor.

The ally also declined to say whether she would accept another Cabinet post, saying it was a decision for the former mayor.

But regardless of what comes next, Reeves has offered her support to Burnham’s transition team based on her knowledge of the economy and the inner workings of the Treasury and because it is one of the most important jobs in government, The i Paper understands.

It comes amid a lobbying operation among Reeves’s backers to keep her in position. Reeves’s aides have reportedly asked business leaders to lobby Burnham to keep her on, while some Labour MPs are also calling for her to stay.

A former minister and ally of Burnham said: “I think she has done a good job on growth in challenging circumstances and that she would represent stability so I do think keeping her on would be a wise move.”

But another Labour MP complained about Reeves’ absence in a group of allies and aides in Downing Street as Starmer made his resignation speech on Monday, before going to Westminster Hall to join a mass selfie of MPs supporting Burnham.

Reeves associated with policy U-turns

Some Labour figures believe that Reeves should depart Downing Street at the same time as Starmer because so many of his policy mishaps and U-turns are associated with the Treasury.

These include the winter fuel allowance cut, which was later partially reversed; the raising of employers’ national insurance, which businesses say has led them to take on fewer people and the huge row with Labour MPs over welfare cuts, which forced Starmer and Reeves into a climbdown.

One supporter of Reeves said it was probably right that she moved on but added: “She is still young and a fantastic talent, she still has credibility because there are signs of economic growth, and she has brought stability.

“Her political career should not end like this. She could take a job like Business Secretary, where she could still claim credit for the economy doing better. It shouldn’t be the end for her.”

Reeves’ chief of staff, Katie Martin, has been emphasising to business leaders, industry bosses and the defence sector how her boss has brought stability to the economy, in what is being seen as an attempt to persuade Burnham to keep Reeves in post.

An aide to Reeves insisted that the Chancellor was not involved directly in the lobbying of businesses but said that “stability is at the heart of Rachel’s agenda”.

Addressing the British Chambers of Commerce on Thursday morning, Reeves referenced her speech at the Treasury on her first day in July 2024, in which she said she hoped that girls and women across the country see no ceiling to their ambition.

She told the BCC conference: “It’ll be up to others to judge whether I’ve achieved my goals, but I’m very proud of what I’ve done, and believe I have.”

Chancellor has a strong recorce, allies claim

After two years, the Chancellor can also point to a strong record, her allies added – including rebalancing the economy and bringing stability to the public finances.

The economy is beating growth expectations and inflation expectations and there have been six interest rate cuts during her tenure, an ally said, adding: “The plan is working and she hopes that whoever takes the reins continues on that path.”

Reeves added: “The area where there’s certainly unfinished business is on fiscal devolution.

“And I set out in last year’s budget a consultation, for example, on the visitor levy, which is something that mayoral combined authorities will have responsibility for, moving us more in line with the US and Europe that have single visitor levies on hotel bookings, for example, and then that money being invested in the local area.”

Asked at the conference what her advice would be to the next chancellor, Reeves said: “I am not sure anyone wants my advice, but my advice would be: you’ve got a brilliant set of officials at the Treasury who will back you if you are clear about what you want to do, and I’ve been very clear about what I wanted to achieve as Chancellor.

“I wanted to restore stability to the economy, I wanted to induce investment, both public and private, into the economy, and I wanted to change how the economy works with a regulatory burden that is fairer and more efficient, with a planning system that actually allows things to get built in our country.”

She added: “I’m really proud of my record, and I hope that whoever is chancellor in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit, and we are seeing that investment return to the economy, that growth return to the economy, and crucially, that stability, so that businesses can plan and invest in the future.”

Reeves also said it was a “good thing” Burnham had committed to her fiscal rules.

She added: “I think that Andy Burnham, who will be the next prime minister, has been really clear that he is committed to those rules.

“And that is a good thing, because it means that businesses here can be confident that that stability… which is essential for getting inflation and interest rates down, will be continued.”

Other contenders for Chancellor

Burnham is also being granted more widespread access to the Civil Service as part of the formal transition period. It is understood that his team has made an official request for access talks but the discussions have not yet begun.

The three names being widely discussed to take over at No 11 are Energy Secretary Ed Miliband, former health secretary Wes Streeting, who announced he would not run against Burnham amid speculation that he is seeking a big role in the new cabinet and Home Secretary Shabana Mahmood.

Streeting delivered a major speech last week on what he termed “progressive capitalism” and has pledged to rebalance income taxes with wealth taxes, in what was seen as a pitch for chancellor.

He has also argued for a pragmatic approach to North Sea oil and gas drilling, saying the Government should neither “pretend North Sea oil and gas is the future or to treat every remaining project as a moral catastrophe” but to “manage decline responsibly, apply strict climate tests, and channel the proceeds into projects that will cut bills and cut emissions”.

Burnham is facing pressure from the Unite union not to pick Miliband because they say his policy on North Sea oil and gas has damaged jobs in the energy sector.

Some Labour MPs are also against Miliband taking control at the Treasury and have argued for Reeves to remain in post.

A Red Wall Labour MP said: “It can’t be Ed. He’s costing us jobs in my area. I’d like to keep Rachel to be honest, I think she has set us on the path to growth. We need to stop buggering around with business taxes as Wes suggested.”