Reeves Rearguard Holds — “Chancellor Question Almost as Important as PM”
Chancellor Rachel Reeves’s backbench-lobbying push continues this week. Reeves has told friends she would like to stay in the chancellorship even under a new prime minister, and her allies are urging MPs to back her if Sir Keir Starmer is replaced later this year. One Labour MP close to the chancellor: “The biggest fear for the bond markets and the unions is Ed Miliband. I am concerned that we may lose everything if a new leader sacrifices the chancellor for promises and new alliances they are currently forging with MPs who fancy the job for themselves.” The chancellor question is now “almost as important as that for prime minister”.
Friends of Reeves believe there is a world in which she survives the transition to a Burnham premiership precisely because it would reassure the markets. The 10-year gilt yield is at 5.02%, well off the 5.18% peak Friday week; sterling has firmed; and lower oil prices are easing the imported-inflation pressure that has been the central political-economy variable through the war. The Reeves cost-of-living package this week — fuel duty cancellation, VAT cuts, food tariff removals, and £120 million ceramics support — lands into a measurably easier macro backdrop than the brief was drafted for. Burnham’s allies have suggested Ed Miliband as his pick for chancellor; Reeves’s allies counter that Miliband “would not be trusted by the bond markets”.