Chancellor Rachel Reeves has publicly thrown her weight behind Andy Burnham to be the next prime minister, urging him to keep her economic policies in place – despite reports he could demote her to a junior cabinet role.
Speaking at the British Chambers of Commerce (BCC) conference, Reeves said Burnham had been “really explicit” in backing her fiscal rules. She claimed her approach was “beginning to bear fruit” and argued that whoever becomes chancellor should “stick to what I’m doing”.
“Reeves urges Burnham to keep her economic policies despite reports he could demote her.”
Burnham looks set to replace Sir Keir Starmer, who announced he was standing down on Monday after losing the support of Labour MPs. The former Greater Manchester mayor could take over as soon as 17 July if no other contenders emerge. So far, he is the only candidate in the race.
But there have been reports that Burnham is considering Ed Miliband, Wes Streeting or Shabana Mahmood as possible replacements for Reeves. Asked directly about the prospect of being moved aside, the chancellor refused to pre-empt his choice, but stressed that she had worked closely with him as mayor on “fiscal devolution” – transferring more powers to English regions.
Some on the left of the Labour Party have called for Reeves’ fiscal rules to be relaxed to allow more spending on defence and other priorities. Those rules are designed to ensure day-to-day spending is funded through tax revenue by the end of the Parliament, only borrowing for capital investment and reducing debt as a proportion of GDP.
Reeves defended her record, telling the conference she had brought “stability” to the economy and was “proud” of her work on inflation and growth. “Yes, there is more to do,” she said, adding that the budget later this year would include further reforms to business rates and fiscal devolution.
Asked whether she accepted there needed to be a change at the top after Starmer’s resignation, Reeves said: “Clearly we need to do more to connect to the country to tell a better story of what we’ve done in government but also set out the vision of where we want the country to go. That is what Andy will be able to provide as our next prime minister. He is a great communicator, he’s got a great track record of delivering in Greater Manchester, and I have no doubt he will bring that to the position of prime minister.”