Andy Burnham, the former Mayor of Greater Manchester, is poised to shake up Labour's economic leadership with a potentially seismic move: replacing Rachel Reeves as Chancellor of the Exchequer. According to well-placed sources, Ms Reeves would be offered a more junior cabinet position if Mr Burnham secures the Labour leadership, a BBC report suggests. This significant reshuffle signals a major realignment in Labour's economic policy direction as Mr Burnham begins building his potential Downing Street team.
The emergence of Mr Burnham as the sole candidate in the Labour leadership contest follows Sir Keir Starmer's surprise announcement that he will step down as Prime Minister, just days after Mr Burnham secured a parliamentary seat following his victory in the Makerfield by-election. While Mr Burnham's camp insists no decisions have been finalised, sources indicate that the allocation of the Chancellor role is a top priority for the prospective leader.
Those close to Mr Burnham reveal he holds Rachel Reeves in high esteem and intends to include her in his top team, albeit in a different capacity. This potential shift in Treasury leadership aligns with long-held assumptions among many Labour MPs that Ms Reeves would not continue in her current role under a Burnham premiership – a prospect first reported by the Financial Times.
Further details are emerging about Mr Burnham's prospective team, including the anticipated appointment of James Purnell as his Downing Street Chief of Staff. A seasoned veteran, Mr Purnell previously served as a minister in Gordon Brown's government between 2007 and 2009. However, Mr Burnham's potential premiership faces immediate challenges, particularly concerning defence spending. Reports indicate discussions are underway with John Healey, the former Defence Secretary, who recently resigned, warning that current military funding increases are woefully insufficient.
Despite Mr Burnham's current unchallenged position, some Labour MPs are exploring alternatives to avoid an uncontested leadership. Cabinet Minister Darren Jones and former Armed Forces Minister Al Carns are among those considering a potential challenge. Mr Jones, a close ally of Sir Keir, has expressed concerns about Mr Burnham's economic policy approach, fearing potential market unease. Meanwhile, Mr Carns, a former Royal Marines officer, is weighing up a bid, awaiting clarity on Mr Burnham's policy proposals before making a decision. Any challenger would need nominations from 81 Labour MPs and either 32 local party branches or three affiliated organisations, including two trade unions.