Rachel Reeves has publicly endorsed Andy Burnham as the next prime minister, even as reports suggest she may be demoted from her role 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 did not dismiss the possibility of accepting a less senior cabinet position. When asked about reports that Burnham might offer her a reduced 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 at BCC Conference
Speaking at the British Chambers of Commerce (BCC) global annual conference in London on Thursday, Reeves emphasized that Burnham would likely retain her fiscal rules, which she described as "a good thing." She defended her economic record against questions from Sky News presenter Sophy Ridge about "unfinished business," acknowledging that fiscal devolution and business rates required further action. Reeves asserted, "I know that whoever is prime minister and chancellor in the future will inherit a stronger economy than the one I inherited two years ago."
Support for Defence Spending and Fiscal Rules
Reeves addressed defence spending, confirming that the upcoming defence investment plan would involve "more money, spent more effectively." She noted that her fiscal rules already permit additional borrowing for defence, stating, "We do treat now, for the first time ever, day-to-day spending and capital spending differently because of the fiscal rules." She stressed the importance of cooperation with Nato allies, particularly European partners, to improve value for money.
Allies Lobby for Reeves to Stay as Chancellor
According to Sky News, Reeves's allies have been lobbying Burnham to keep her in the Treasury. Katie Martin, appointed as Reeves's business adviser in January, reportedly contacted major companies in insurance, banking, defence, and other sectors this week to advocate for "stability" and "continuity." A Labour source commented, "Rachel talking herself into a job is quite mad." Reeves, who became the first female chancellor after Labour's 2024 landslide, was notably absent from outgoing Prime Minister Keir Starmer's resignation speech but attended Burnham's Westminster Hall rally on Monday.
Burnham's Cabinet Choices Spark Division
Burnham's supporters are split over his potential choice for chancellor, with a briefing war between advocates of former health secretary Wes Streeting and energy secretary Ed Miliband. Streeting is seen as more reassuring to business and the fossil fuel industry, while Miliband is viewed as more likely to back radical reforms. Chief Secretary to the Prime Minister Darren Jones cautioned against appointing Miliband, suggesting any new chancellor should not seek to "control" the prime minister and must reassure markets, trade unions, MPs, and the public.
Burnham Moves Closer to Leadership
Burnham's path to the Labour leadership became clearer after Darren Jones confirmed he would not stand in the contest. Former armed forces minister Al Carns, who resigned over defence spending, has not ruled himself out. 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 by telling Labour to "back business and we will deliver growth," but warned that extra taxes would be the "road to ruin."
