Rachel Reeves' time as Chancellor was marked by significant political pressure, including a tense phone call with Andy Burnham last September that highlighted the market's sensitivity to political statements. Burnham, then mayor of Greater Manchester, had issued a call for Britain to reduce its reliance on bond markets, a statement that reportedly caused Reeves considerable alarm.
Sources indicate Reeves, then Chancellor of the Exchequer, called Burnham in a state of distress over the market reaction, which saw yields on 30-year gilts rise and long-term borrowing reach a 27-year high. She is quoted as having insisted Burnham "walk back on your comments, now," while he reportedly responded with disbelief.
Nine months later, Burnham had become Prime Minister, and Reeves was out of her position. Her departure, occurring amid the wider political upheaval of Sir Keir Starmer's exit, received less attention but was seen by some as inevitable. Despite her efforts to secure her position, including signaling a willingness to pursue policies aligned with Burnham's agenda, she was not perceived as a strong contender for the Chancellor role under Burnham.
Reeves' attempts to court Burnham's favor included efforts to signal her support for fiscal devolution. In March, she announced that officials were working with Burnham and other mayors to develop a roadmap for future fiscal devolution, intended to give regional leaders control over a share of national taxes. This initiative was seen by some as an effort to align with Burnham's policy preferences and secure her position.
In the months leading up to her dismissal, the Treasury under Reeves issued briefings that appeared to deviate from her usual technocratic approach. Reports surfaced in April of her examining rent freezes, and in May, she pressured supermarkets to cap food prices, measures described by critics as attempts to adopt populist left-wing policies and reminiscent of 1970s economic strategies.
Her political maneuvering was further evidenced by her actions following Burnham's return to Westminster. While she did not attend Sir Keir Starmer's resignation speech, she was later seen celebrating Burnham's return to the Commons with him.
Ultimately, Reeves was dismissed by Burnham. She was reportedly offered the education brief, a position considered by some as a demotion, which allies suggest she was unlikely to accept. Her replacement as Chancellor was John Healey.
Allies maintain that Reeves left with her "head held high," having ensured her successor would not "trash her legacy on stabilisation" of the economy, a move interpreted as an effort to prevent Ed Miliband from taking the role. Her Mansion House speech in July was seen as a coded warning to Burnham against appointing Miliband, emphasizing economic stability.
Following her departure, Reeves' sister, Ellie, was promoted to Attorney General by Burnham. This move has been suggested to potentially create further tension between the two sisters, who have a history of rivalry.
Despite her exit from the Treasury, allies of Rachel Reeves believe she remains a significant figure in front-line politics and is not finished with her career, drawing parallels to politicians who have had successful second acts.