Rachel Reeves has publicly endorsed Andy Burnham to become the next prime minister, despite widespread speculation that she could be demoted from her position as chancellor if he wins the Labour leadership. In an interview with the BBC, Reeves stated, “I’m supporting Andy to be prime minister,” and described Burnham as a friend. When asked about reports that Burnham might offer her a less prominent cabinet role, she replied, “I’m not going to pre-empt the decisions that the new prime minister will make. I’m backing Andy. I think he’d be a great prime minister, but those are his decisions, not mine to make.”
Reeves defends her record and fiscal rules
Speaking at the British Chambers of Commerce (BCC) global annual conference in London on Thursday, Reeves expressed confidence that Burnham would retain her fiscal rules, calling that prospect “a good thing.” She defended her tenure as chancellor, noting that “whoever is prime minister and chancellor in the future will inherit a stronger economy than the one I inherited two years ago.” Reeves acknowledged areas where she wanted to go further, including fiscal devolution and business rates, while emphasizing that her fiscal rules already allow for increased borrowing for defence spending.
The chancellor addressed the possibility of reclassifying defence spending as investment to permit more borrowing, stating, “That’s exactly what my fiscal rules allow. We do treat now, for the first time ever, day-to-day spending and capital spending differently because of the fiscal rules.” She added that defence is capital investment and stressed the importance of cooperation with Nato allies, particularly European partners, to achieve better value for money.
Reeves absent from Starmer’s resignation speech
Reeves was notably absent when outgoing Prime Minister Keir Starmer delivered his resignation speech, but she attended Burnham’s Westminster Hall rally on Monday. A Labour source commented, “Rachel talking herself into a job is quite mad,” noting that while her chief of staff could be seen at the centre of Starmer supporters, her absence was conspicuous. Reeves countered that “no one could doubt” her commitment to Starmer, having worked alongside him for six years as shadow chancellor and chancellor.
Allies lobby for stability at the Treasury
According to Sky News, one of Reeves’s top aides, Katie Martin—appointed as her business adviser in January—has contacted major companies in insurance, banking, defence, and other sectors this week to advocate for “stability” and “continuity” at the Treasury. The lobbying effort aims to persuade Burnham to keep Reeves in the top job. Reeves’s support for Burnham comes as speculation mounts over who will become the next chancellor, with MPs viewing the choice as a key indicator of Burnham’s intended radicalism.
Burnham’s supporters divided over chancellor pick
Burnham’s allies are reportedly split between former health secretary Wes Streeting and energy secretary Ed Miliband. Some see Streeting as a reassuring choice for business and the fossil fuel industry, while others lobby for Miliband, whom they view as more likely to back radical reforms. Chief Secretary to the Prime Minister Darren Jones cautioned against appointing Miliband, suggesting that any new chancellor should not seek to “control” the prime minister and must reassure markets, trade unions, MPs, and the public.
Burnham moved closer to the Labour leadership on Wednesday after Jones ruled himself out of the contest. Former armed forces minister Al Carns, who resigned earlier this month over defence spending, has not yet ruled out a potential bid. On social media, Carns called for “a proper debate about where we go next. Not a reshuffle. Not a few degrees of course correction. The big, difficult, honest choices we’ve spent 30 years avoiding.”
Business groups criticise Reeves’s policies
Reeves has faced criticism from business groups over higher taxes and tighter employment regulations. BCC head Shevaun Haviland responded to Reeves’s comments with a message to Labour: “Back business and we will deliver growth.” However, she warned that extra taxes would be the “road to ruin.”
