Reeves launches lobbying campaign to retain Chancellor post amid leadership speculation

UK Chancellor Rachel Reeves has initiated a concerted lobbying effort to retain her position, urging Labour MPs to support her tenure even if Keir Starmer is replaced as prime minister. The move follows reports that potential leadership successor Andy Burnham may appoint Ed Miliband as Chancellor should he secure the top job. Reeves’ allies argue she remains the only candidate capable of safeguarding the country’s finances and maintaining confidence in bond markets, contrasting her fiscal approach with that of Miliband.

The backbench push occurs as Labour prepares for the Makerfield byelection, with Burnham having launched his campaign on a pledge to challenge Starmer’s leadership. While Burnham has not explicitly named a Chancellor, insiders suggest Miliband would be a leading contender. However, MPs close to Reeves warn that the energy secretary would lack the trust of bond markets, potentially increasing government borrowing costs. One Labour MP described the prospect of a "double change" in leadership and Treasury as detrimental to credibility with both markets and unions.

This political manoeuvring coincides with a week of improved economic indicators for the government. The International Monetary Fund recently raised its forecast for UK growth to 1 per cent for the year, up from 0.8 per cent. Additionally, inflation fell to 2.8 per cent, outpacing economists’ expectations. The Prime Minister also announced the postponement of a planned rise in fuel duty, a policy Reeves had been developing for several weeks.

Reeves further bolstered her public profile by announcing a cut to VAT on family attractions such as soft play centres and theme parks for the summer, codenamed "Project Mint". The initiative, designed to manage cost-of-living pressures, was kept secret from the wider press until its announcement, allowing the Treasury to control the narrative. Officials reported satisfaction with the positive media coverage, noting the strategy avoided premature leaks.

Despite these economic positives, Reeves faces significant internal and external headwinds. Recent figures showed government borrowing for the previous month was higher than expected, and critics point to the economic impact of the conflict in Iran. Some Labour MPs are angered by her lobbying efforts, blaming her for unpopular decisions such as cuts to winter fuel payments and attempts to reduce disability benefits.

Harry Quilter-Pinner of the Institute for Public Policy Research noted that some of the chancellor’s early, unpopular fiscal measures have proven more effective than initially anticipated. However, he cautioned that larger interventions may be required to address public anger over the cost of living. Meanwhile, Reeves has maintained a defiant public stance, recently rebuking a Reform UK supporter for interrupting an interview and joking about supermarket bosses’ criticism of voluntary price caps during a reception at No 11.

The rivalry between Reeves and Miliband extends beyond personal ambition to fundamental policy differences. Miliband has historically prioritised the green transition, whereas Reeves has focused more on taxpayer costs. The two previously clashed over Labour’s planned green energy scheme while in opposition, suggesting that their instincts on economic management remain distinct.