Reeves makes case to remain as chancellor with reports Burnham may favour Miliband | Rachel Reeves
Rachel Reeves launched a rearguard action to save her job as chancellor, telling friends she wanted to stay in office even if there was a new prime minister.
The chancellor’s supporters are calling on MPs to back him if Keir Starmer is replaced later this year, saying he is the only candidate who can protect the country’s finances.
The backbench lobbying comes amid a wider fight for the position among Labor MPs preparing for what will happen if Andy Burnham wins the Makerfield by-election and replaces Starmer as prime minister.
Reports I suggested Burnham is considering appointing Ed Miliband as chancellor if he lands in 10th place. But Reeves’ allies warn that the energy secretary won’t trust bond markets, which determine the government’s borrowing costs.
A Labor MP close to the chancellor said: “I’m worried we could lose everything if a new leader sacrifices the chancellor for promises and new alliances with MPs who now want the job for themselves. The biggest fear for the bond markets and unions is Ed Miliband.”
Another said: “Rachel has been very candid with us about the need to move on. A double change is not the right thing to do.”
“Because of her credibility in the markets, if Rachel is given a clearer and slightly different direction, she can provide the necessary reassurance to the markets. Ed Miliband cannot do this.”
Spokespeople for Reeves and Miliband declined to comment.
Amid turmoil in the Labor Party, Reeves has had one of his best weeks in office as Burnham launched his campaign for Makerfield promising to challenge Starmer’s leadership.
On Monday, the International Monetary Fund raised its forecast for Britain’s growth, predicting that the economy will grow 1% this year instead of 0.8%.
Figures released later on Wednesday showed inflation fell to 2.8%, faster than economists expected. On the same day, the prime minister announced that the government would postpone the planned increase in fuel tax; This was a policy the Chancellor had been working on for several weeks.
On Thursday Reeves unveiled the final pieces of his cost of living plan, announcing a surprise cut to VAT on family attractions such as soft play centers and theme parks for the summer.
Officials at the Treasury were pleased that the “Great British Summer Savings” scheme was featured in all afternoon news bulletins and that it had not been leaked in advance.
They had codenamed the proposed VAT cut “Project Mint” to ensure that no one except a close group of the Chancellor’s advisers would know about it.
However, Reeves’ chances of remaining in office continue to face serious downsides. While Burnham is likely to seek a clean break from the Starmer government in senior roles, she has struggled to convince MPs or the public that she can meet the new economic challenges created by the Iran war. Figures released on Friday showed the government borrowed more than expected last month.
Along with the economic and political news came a series of impressive personal appearances from Reeves.
On Wednesday afternoon, he hit back publicly at a Reform UK supporter who interrupted his interview to shout abuse at Starmer and the Labor Party.
As he drove away, he called after him, “I love our country, and one of the characteristics of our country is good behavior.” “Not very British.”
The bullish attitude continued for the rest of the day. That evening he hosted a reception for around 60 MPs at Number 11, where he struck a defiant note despite a public row with supermarket bosses who criticized attempts to agree voluntary price caps.
“If they think it’s a good strategy to go on TV and radio and say there’s nothing they can do and it’s outrageous for the government to ask them to help families, they’re doing our communications for us,” he joked, according to one person there.
Friends of Reeves insist that he is the only one who can keep the nation’s borrowing costs low over the long term, given his proven commitment to fiscal responsibility.
“In my view, there is real value in consistency and predictability in the Treasury,” one of them said.
Some analysts say the Chancellor is now reaping the rewards of his refusal to change or break borrowing rules, but others believe he is still too timid about tackling the cost of living.
“Some of the unpopular things the chancellor did early on in parliament to try to get the country on the right fiscal path turned out to be a better bet than people thought at the time,” said Harry Quilter-Pinner, executive director of the Institute for Public Policy Research.
“But if progressives are going to deal with the anger felt by people across the country, we’re going to have to do bigger things, whether it’s freezing rents or pushing for greater intervention in energy markets.”
But some Labor MPs were outraged by what they saw as Reeves’ open lobbying to keep his job, which they felt was at fault for many mistakes Starmer had made in office, such as cutting winter fuel payments or trying to reduce disability benefits.
And some were outraged by claims by those close to him that only he could calm bond markets.
“Everyone of us understands how important reliability is in bond markets,” said a Labor MP. “We all signed a manifesto in which fiscal rules are at the center.”
Although Burnham has not commented on who his chancellor would be if he wins Makerfield and replaces Starmer, he believes Labor MPs Miliband and Reeves would be at the top of his list.
But while Miliband has prioritized the green transition throughout his career, Reeves has tended to focus more on the cost to taxpayers. The pair clashed when Starmer and Reeves cut Labour’s planned green energy plan while in opposition.
“The two may have served in the same cabinet and been close in the past, but their instincts are very different,” a Labor insider said. “The fight over who gets to be chancellor is almost as important to the prime minister.”
