Rachel Reeves has stated she has "unfinished business" at the Treasury, signaling a bid to retain her position as Chancellor amidst reports of potential job displacement. Her allies are reportedly engaging with business leaders to garner support and counter a potential challenge from Ed Miliband, who is considered a favorite to succeed her should a change occur.
Ms. Reeves has emphasized her role in restoring a "semblance of stability to the economy" through "fiscal discipline." She expressed pride in her record, which has seen the UK's tax burden rise to a post-war high. Speaking at the British Chambers of Commerce annual conference, she highlighted her work on Mr. Burnham's devolution agenda, including a consultation on a visitor levy that would empower mayoral combined authorities and align with international models. "The area where there's certainly unfinished business is on fiscal devolution," Reeves stated.
Her supporters argue that her authority is crucial for reassuring financial markets about Labour's commitment to fiscal rules. Her former political director, Matt Pound, questioned the rationale for her removal, acknowledging that her adherence to borrowing rules has created friction with some Labour MPs advocating for increased spending. "I don't think our problem is that we have not borrowed enough money," Pound commented.
Reports suggest that Andy Burnham, who is expected to become Prime Minister next month, is deliberating over his choice for Chancellor. Ed Miliband has been collaborating with Mr. Burnham on economic policy, positioning himself as a leading candidate. However, concerns exist among some business leaders about Miliband potentially shifting Labour's economic direction further left. Allies of Mr. Burnham have reportedly expressed apprehension about the potential for excessive government direction, drawing parallels to past political rivalries.
Other individuals mentioned as potential candidates for the Chancellor role include Shabana Mahmood, Wes Streeting, Yvette Cooper, Pat McFadden, and Jonathan Reynolds. Ms. Reeves has publicly endorsed Mr. Burnham and indicated her belief that she remains the best choice to maintain economic confidence.
Ms. Reeves cautioned against altering existing fiscal rules, warning that a loss of control over public finances would lead to increased inflation, taxes, and interest rates for ordinary citizens and businesses. In contrast, former Goldman Sachs economist Jim O'Neill, a potential economic adviser to Mr. Burnham, suggested that Labour could increase borrowing for investment. "There is a lot more room under the existing fiscal rules to borrow for investment, and the next chancellor should take advantage of that," he stated, advocating for greater investment in infrastructure projects.