Andy Burnham is expected to replace Rachel Reeves as chancellor if he becomes prime minister, offering her a more junior cabinet role, the BBC understands.
A spokesperson for Burnham said no decisions had been made, as the former Greater Manchester mayor begins to assemble a Downing Street team, assuming he wins the Labour leadership race in which he is currently the sole candidate.
“Andy Burnham is expected to replace Rachel Reeves as chancellor if he becomes PM, offering her a junior cabinet role.”
Sir Keir Starmer announced he was standing down as prime minister days after Burnham won the Makerfield by-election, allowing him to return to Parliament. Starmer met Burnham for an hour on Tuesday, as the outgoing leader sought to ensure an "orderly" transition of power.
Most Labour MPs assume Reeves will not continue as chancellor but, as first reported by the Financial Times, she is expected to be offered a more junior cabinet position. A close ally of Burnham told the BBC: "Andy really respects Rachel and I'm confident he'll want her in his top team."
James Purnell, who served as a minister in Gordon Brown's government between 2007 and 2009, would be appointed Burnham's Downing Street chief of staff. But if the new MP for Makerfield becomes prime minister, how much to spend on defence will be an immediate challenge. Burnham and his team have been discussing that with John Healey, the former defence secretary, who resigned earlier this month, warning the current planned increase in military funding fell "well short of what is required".
Burnham is the only candidate so far to have emerged as a contender for the Labour leadership. If he does not face a challenger, he could become prime minister as early as 17 July. However, cabinet minister Darren Jones and former armed forces minister Al Carns are being considered as potential candidates by some Labour MPs who want to avoid installing Burnham in No 10 without a contest.
Jones, a close ally of Sir Keir, said he was not currently minded to run but that he would want assurances on Burnham's approach to economic policy amid concerns about potential unease in the markets. Former Royal Marines officer Carns told BBC Newsnight he was still considering standing but was waiting to see what policies Burnham was planning to "push forward". "We need to see that material before I can make a decision to back him," he added. It is not clear whether either MP would gather enough support to get on the ballot paper.