Chancellor Rachel Reeves has told the next prime minister – widely expected to be Andy Burnham – to keep her economic policies in place, even as reports suggest he could demote her to a junior cabinet role. Speaking at the British Chambers of Commerce (BCC) conference on Wednesday, Reeves said her approach was "beginning to bear fruit" and should be continued by whoever holds the keys to No 11 Downing Street.
Burnham, the former Greater Manchester mayor, is the only contender so far to replace Sir Keir Starmer, who announced his resignation on Monday after losing the support of Labour MPs. If no other challenger emerges, Burnham could take over as soon as 17 July. And despite reports that he is considering replacing Reeves with Ed Miliband, Wes Streeting or Shabana Mahmood, the chancellor offered him her full backing.
“Rachel Reeves backs Andy Burnham as PM despite reports he could demote her, urging him to continue her economic policies.”
"I don't think anyone can doubt my commitment to the prime minister," Reeves said, before pivoting to the man who could soon be her boss. She argued that she had worked closely with Burnham on "fiscal devolution" – transferring more powers to English regions – and stressed that he had been "really explicit" in backing her fiscal rules. Those rules are designed to ensure day-to-day spending is funded by tax revenue by the end of the parliament, with borrowing only for capital investment and debt reduction as a share of GDP.
Reeves claimed her tenure had brought "stability" to the economy and said she was "proud" of her record on inflation and growth. "Yes, there is more to do," she told Sky News journalist Sophy Ridge, who hosted the conference, adding that the budget later this year would include further reforms to business rates and fiscal devolution. But she warned: "I hope that whoever is chancellor, in the future… sticks to what I'm doing because it is beginning to bear fruit."
Asked directly whether she accepted the need for a change at the top, Reeves demurred. "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," she said. "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."
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. But for now, the chancellor is betting that her economic blueprint – and her public loyalty to the man who may sideline her – will survive the transition.