Rachel Reeves' allies are emphasising her importance to Andy Burnham as Labour prepares for a future without Sir Keir Starmer. Supporters of the Chancellor argue that the Greater Manchester Mayor will require someone 'the bond markets trust' if he secures the keys to Number 10.
There are also warnings that appointing Ed Miliband as Chancellor would result in 'two white men' at the top of the Government. The prospect of the Net Zero Secretary taking charge of the Treasury has caused anxiety within Labour circles. One veteran who believes Mr Miliband would get the nod accompanied their views with a Soviet flag.
This manoeuvring comes amid signs that Cabinet ministers are scrambling for survival, with the expectation that Mr Burnham could become Prime Minister if he wins the Makerfield by-election next month. However, this outcome is far from guaranteed, as polls consistently show Reform UK in pole position to take the seat.
Foreign Secretary Yvette Cooper, Deputy Prime Minister David Lammy, and Defence Secretary John Healey have all declared they will campaign in Makerfield. Mr Burnham is expected to offer Cabinet positions to Angela Rayner and allies such as Louise Haigh, who co-chairs the soft-left Tribune group of MPs.
Ms Reeves notably backed Mr Burnham in his failed 2015 Labour leadership bid and was widely tipped to become his shadow chancellor if he had won. However, relations soured last year when they clashed over his suggestion that the Government should pay less attention to bond markets. Mr Burnham has since recanted that view, with his team making clear this week that he is committed to Ms Reeves' fiscal rules.
Senior Labour figures still believe Ms Reeves is unlikely to remain Chancellor if Mr Burnham takes charge. 'She's the only person who is more unpopular with the PLP than Keir,' one said. But an ally of Ms Reeves insisted: 'He could definitely keep Rachel on. She has restored her standing in the PLP. A while ago that wouldn't have been enough change, but now it is possible. He's going to need someone the bond markets trust. The last thing he wants is to start with a 50 basis points hit on gilts.'
The ally described Mr Miliband as a 'dogmatic' left-winger who would be a 'total disaster'. 'You can't have two white men at the top of the party. He needs a woman chancellor, and who are his other options?' One long-term Burnham supporter said they could 'see the case' for Ms Reeves staying, though it 'feels unlikely'. 'But then who does he go for? It has to be someone markets trust.'
Markets have already shown signs of nervousness at the prospect of fresh borrowing and spending. Ms Reeves, a Leeds MP, is seen as having put a 'chink of light' between herself and Sir Keir in recent weeks as his struggles deepened. The Chancellor is making a flurry of announcements on the cost of living this week, in what appears to be an attempt to burnish her credentials.
She is due to speak at a conference alongside Mr Burnham this afternoon, instead of taking her regular spot next to Sir Keir at PMQs. Mr Burnham was confirmed as the party's candidate in Makerfield yesterday, after the contest was triggered by former minister Josh Simons quitting to give him a path back to Westminster. It is understood that the mayor was the only person shortlisted for selection by Labour's ruling National Executive Committee, bypassing a vote by the local party. The decision sets up a contest between Mr Burnham and Reform UK's Robert Kenyon, a local plumber who contested the seat in 2024.
Sir Keir has insisted he is 'focused on the job' of governing and would fight any challenge to his leadership.
