Andy Burnham is expected to move to sack Rachel Reeves as Chancellor as he lays the groundwork for a possible takeover of power.
The Makerfield MP is due to set out a major economic speech next week aimed at calming markets while boosting his credibility on the economy. According to reporting by The Times, Burnham will promise to drive economic growth while sticking to Labour’s fiscal rules, amid market concerns over his potential rise to No10.
He is also expected to commit to lowering national debt and reducing borrowing costs, in what his allies are calling a “credible” growth strategy.
Behind the scenes, discussions are already taking place over who could sit in a future Cabinet, with Reeves potentially replaced by figures such as Wes Streeting, Ed Miliband, or Shabana Mahmood.
Burnham’s supporters, however, insist no positions have been agreed and no deals struck as of Monday night.
Ed Miliband was initially seen as a leading contender for Chancellor, but some within Cabinet believe he lacks the business focus needed to reassure financial markets. His allies strongly reject that, arguing he has the expertise to strengthen the economy.
Wes Streeting is also viewed as a possible successor to Reeves, particularly after he publicly backed Burnham’s leadership ambitions shortly after Sir Keir Starmer’s resignation speech. He has said Burnham could bring “the change our country needs” and ruled himself out of a leadership contest.
Shabana Mahmood is also under consideration, though she is reportedly keen to remain as Home Secretary.
Another proposed reshuffle idea involves bringing in former Goldman Sachs banker and Treasury minister Lord O’Neill of Gatley alongside former Bank of England chief economist Andy Haldane to strengthen the economic team.
Burnham is currently seen as the frontrunner for No10, though Darren Jones is reportedly considering whether to challenge him by seeking backing from MPs to force a contest. A source close to Jones said he is reluctant to run but would want firm assurances on economic and national security direction before supporting a “coronation”.
Another possible challenger is former Armed Forces minister Al Carns, who has not yet decided whether to launch a bid.
Speaking to ITV News, Carns said he is not ready to make any decision, stressing the need for a clearer long-term national strategy rather than short-term political manoeuvring.
In his resignation letter, he criticised delays to the Defence Investment Plan, calling it inadequate for current threats and arguing the Treasury treats defence spending as a cost to be controlled rather than a strategic priority.
David Lammy said on Monday the government aims to publish the plan before July 7, though it is widely expected it could be delayed until a new prime minister takes office in September.
Burnham is said to be closely watching the plan and wants to assess and shape it personally if he enters Downing Street.
