Rachel Reeves has launched a rearguard action to save her job as chancellor, telling friends she would like to remain in post even under a new prime minister. Her allies are urging Labour MPs to back her if Keir Starmer is replaced later this year, arguing she is the only candidate who can safeguard the UK’s finances.
The lobbying push comes as Andy Burnham prepares for a potential leadership challenge, with reports suggesting he may appoint Ed Miliband as chancellor if he reaches No 10. Reeves’ supporters warn that Miliband would not be trusted by bond markets, which set government borrowing costs. One Labour MP close to the chancellor said: “The biggest fear for the bond markets and the unions is Ed Miliband.”
Despite the political uncertainty, Reeves has had one of her better weeks in office. The IMF upgraded its UK growth forecast to 1%, inflation fell to 2.8%, and the government postponed the planned fuel duty rise. On Thursday, Reeves announced a surprise VAT cut on family attractions as part of her cost-of-living plan, dubbed “Project Mint” to prevent leaks.
However, Reeves faces serious headwinds. Burnham may seek a clean break with the Starmer government, and she has struggled to convince MPs she can overcome economic challenges from the Iran war. Friday’s borrowing figures also exceeded expectations. Yet Reeves remains defiant, hitting back at a heckler during an interview and hosting a reception for 60 MPs at No 11, where she joked about supermarket bosses criticising her price cap efforts.
Her allies insist she is the only person to keep borrowing costs down long-term, citing her commitment to fiscal responsibility. “There is real value in consistency at the Treasury,” one said. Some analysts believe Reeves is now reaping rewards for refusing to change her borrowing rules, though doubts persist.
