Andy Burnham is expected to replace Rachel Reeves as chancellor and offer her a more junior cabinet position if he becomes prime minister, the BBC understands. The MP for Makerfield is the only candidate to have emerged so far for the Labour leadership, and has met Prime Minister Sir Keir Starmer for talks as he prepares for a likely entry to No 10. Senior Cabinet minister Darren Jones ruled himself out of the running on Wednesday, and if there are no other candidates, Burnham could become prime minister by 17 July.
The biggest decision Burnham will make as he begins to sketch out a possible cabinet is who will be his chancellor. Most Labour MPs assume Reeves will not continue in that role. 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." The Treasury has been approached for comment.
“Andy Burnham expected to replace Rachel Reeves as chancellor and offer her a junior cabinet role if he becomes PM.”
It is unclear who might replace Reeves as chancellor, with Ed Miliband, Wes Streeting, John Healey and Yvette Cooper among the names mooted. James Purnell, who served as a minister in Gordon Brown's government between 2007 and 2009, is expected to become Burnham's Downing Street chief of staff.
The economic challenges facing the next prime minister are formidable. Paul Johnson, former director of the Institute for Fiscal Studies, said any chancellor had a number of difficult decisions to take. The UK had borrowed more than virtually any other country in the last 25 years at very high rates, but had also failed to grow to pay off the debt. "Simply borrowing more is certainly not an easy thing to do and it's absolutely not a costless thing to do," he told BBC Radio 4's Today programme, adding: "Growth clearly is the number one priority." He said: "That requires a lot of really quite difficult decisions in terms of not just increasing taxes but reforming taxes, reforming welfare, focusing investment on the things that are actually likely to get you growth, radically changing regulatory and planning regimes."
Another immediate challenge for a new prime minister is how much to spend on defence, following the row over controversial defence spending proposals which triggered the resignations of two defence ministers. A spokesperson for Burnham said no decisions had been made about who he would appoint.