Rachel Reeves will be sacked as Chancellor by Andy Burnham if he ousts Sir Keir Starmer, it has been claimed. The wannabe Prime Minister, who won the by-election in Makerfield on Friday, will arrive in Westminster tomorrow.
Sir Keir is under intense pressure to stand down or set out a timetable for his departure. Ms Reeves’s allies are mounting a charm offensive to keep her in place.
They say the Chancellor would have the advantage of reassuring the markets during any transition.
But Mr Burnham’s allies have concluded she would not represent a sufficient change in direction.
Ed Miliband, the energy secretary, Wes Streeting, the former health secretary, Pat McFadden, the work and pensions secretary, and John Healey, the former defence secretary, have all been mooted as would-be contenders.
Mr Burnham was urged to publicly rule out appointing Miliband as Chancellor on Saturday
Sharon Graham, general secretary of Unite, Britain’s biggest trade union, said: “It is no secret that I disagree with Ed on almost every issue relating to a workers’ transition. Ed only seems to be interested in one side of the equation, rushing Britain to net zero with almost no thought for jobs, skills and national security.”
She also urged Mr Burnham not to retreat on Sir Keir’s plans to water down electric car sales targets, called on him to reverse his opposition to a third runway at Heathrow and demanded he back a return to North Sea oil drilling.
Mr Burnham will be sworn in as the MP for Makerfield tomorrow.
Keir Starmer, Angela Rayner and Andy Burnham (Image: Getty)
Yvette Cooper, the foreign secretary, is understood to have told the prime minister to stand down, the BBC reported, joining the growing number of cabinet ministers losing faith in his leadership.
The Greater Manchester Mayor has also been urged by the economist Jim O’Neill, who has long informally advised him, to scrap the pension triple lock.
Mr O’Neill said: “I’m trying to say him you have this ambition to be the leader, one of these years you’ve got to deal with the sacred cows and think that the reward would be a significantly low bond market premium and a big boost to financial conditions that would boost consumer and corporate confidence.”
Burnham’s First Test: Rebuilding Confidence Inside Labour
The potential arrival of Andy Burnham at the centre of national politics would represent one of the biggest internal shifts Labour has experienced in recent years. A change at the top of government would almost certainly trigger a wider reshuffle, with key economic positions becoming the focus of intense debate.
The future of Rachel Reeves as Chancellor would be one of the most closely watched decisions. Supporters of Reeves argue that her presence provides stability during a period of uncertainty, particularly because financial markets often react cautiously to sudden political changes.
They believe replacing the Chancellor immediately after a leadership transition could create unnecessary disruption and raise questions about Labour’s economic direction.
However, those close to Burnham argue that a new prime minister would need to demonstrate a clear break from the previous administration. They suggest that voters who are demanding change may not accept simply changing the leader while keeping the same economic team in place.
The Chancellor’s position has become closely linked to Labour’s wider economic strategy, including decisions on taxation, public spending, investment, and fiscal rules. Any new leader would face pressure to decide whether to continue the existing approach or introduce a different vision for growth.
Burnham’s supporters have suggested that his priority would be creating a stronger connection between economic policy and the everyday concerns of working families. They argue that future decisions should focus heavily on wages, employment opportunities, regional development, and support for British industries.
This could place him at odds with some figures within Labour who favour more aggressive environmental policies and large-scale structural changes to the economy.
The debate over Ed Miliband’s possible promotion has already exposed divisions within the party. Critics argue that Labour must balance climate ambitions with concerns about energy security, industrial jobs, and household costs.
Trade union figures have warned that workers in traditional industries must not feel abandoned during the transition toward cleaner energy. They argue that environmental policies need to be accompanied by investment, retraining opportunities, and protections for communities dependent on sectors such as manufacturing and energy.
A Burnham government would therefore face the difficult task of managing competing expectations from different parts of Labour’s coalition.
Urban voters may demand faster action on climate change and public services, while working-class communities may prioritise employment, affordability, and economic security.
The potential reshuffle would also raise questions about Labour’s broader political identity. Under Sir Keir Starmer, the party attempted to present itself as a disciplined and economically responsible alternative to the Conservatives.
Burnham may seek to maintain that reputation while adding a stronger emphasis on regional inequality, local decision-making, and reconnecting with voters who feel politically ignored.
Another major challenge would be rebuilding trust after months of internal instability. A leadership change so soon after an election victory could create doubts among voters about Labour’s ability to govern effectively.
Burnham would likely need to move quickly to show that the transition represents a deliberate reset rather than a sign of weakness.
Economic confidence would be one of the immediate priorities. Businesses, investors, and financial institutions would be watching closely for signs of whether the new leadership intends to maintain stability or introduce major policy changes.
The bond markets, in particular, are often sensitive to uncertainty surrounding government borrowing, taxation, and spending plans. Any new Chancellor would face pressure to reassure investors while also responding to demands for greater public investment.
The pension triple lock debate highlights another difficult issue facing any incoming government: whether politically sensitive policies can remain untouched while public finances face long-term pressure.
Burnham’s advisers have been warned that difficult choices may be unavoidable if he wants to improve the country’s economic position. Supporters of reform argue that addressing long-term challenges now could create greater stability in the future.
However, opponents warn that changing popular policies could create significant political backlash, particularly among older voters.
As Burnham prepares to enter Westminster, expectations will be extremely high. His supporters see him as a leader capable of reconnecting Labour with communities across Britain, while critics will be waiting for evidence that he can deliver more than a change in tone.
The coming weeks could determine not only the future of Labour’s leadership but also the direction of Britain’s economic policy.
A decision over the Chancellor’s role would therefore become symbolic of a much larger question: whether a Burnham-led government represents continuity with adjustments, or a fundamental new chapter for the country.