Reeves allies unleash on Miliband in battle for Britain’s Treasury

LONDON — Chancellor Rachel Reeves must not be “torpedoed” if Keir Starmer is removed as Britain’s prime minister, her allies are warning — as they unleashed a barrage of criticism against a would-be successor as Britain’s top finance minister.

Ed Miliband is now firmly in the sights of Chancellor Reeves’ supporters in parliament. The energy secretary is seen as positioning himself to lead the Treasury if Greater Manchester Mayor Andy Burnham succeeds in his bid to replace the embattled Starmer in Downing Street.

But allies of Reeves are coming out swinging, and the chancellor has in recent days put herself front-and-center of a drive to tackle the cost of living.

“If there are future debates around fiscal flexibility, defense spending or how we unlock growth more aggressively, there is only one person currently capable of doing that without spooking the markets or risking another self-inflicted crisis,” one serving government minister — like others in this article granted anonymity to speak frankly — told POLITICO.

“The country cannot afford a repeat of the [Liz] Truss experiment.”

Asked if that attack was aimed at Miliband, this person responded: “Hell yeah.”

Reeves declined to comment for this piece, as did Miliband’s team. but a backbencher on Labour’s soft-left core of MPs rebutted the attack, praising him as a “a first-class economic mind,” who has made “pro-growth planning decisions in this parliament.” Britain’s “net zero economy is booming under him,” they said.

Cascade effect

Starmer has been seriously damaged in the wake of dire nationwide election results. His key challenger is Andy Burnham, who must first re-enter parliament by winning a tough by-election in Makerfield, and then launch a Labour leadership bid.

Reeves was attacked early on in government, accused of helping to kill the mood of a Labour landslide with gloomy warnings about a £22 billion “black hole” in the nation’s finances handed on by her Conservative predecessors.

She has since been blamed for various missteps, ranging from now-massively-curtailed plans to slash winter fuel payments to pensioners, to a failed attempt to curb welfare. Some businesses reacted with anger to a hike in national insurance contributions — although figures in London’s crucial financial sector have backed her staying in office.

Already, strident briefing against Reeves from some in the pro-Burnham camp has begun.

“Rachel is long gone. She won’t even be a junior aid minister,” said an official in the current government and allied to Burnham. “She is responsible for so many of the failures … she is strapped in and going down with the plane.”

Reeves with Ed Miliband, the man seen as positioning himself to replace her, when they met petrol retailers and energy suppliers at Downing Street in London in March. | Dan Kitwood/Getty Images)

A second friend of Burnham said “there’s no love lost” between the pair.

Reeves was a key supporter in Burnham’s failed 2015 tilt at the leadership — and was even widely tipped to be his shadow chancellor if he won.

But the pair shared a call last year after the mayor suggested in an interview with the left-leaning New Statesman during Labour’s party conference that the government was too “in hock to the bond markets.” Burnham’s team disputed the characterization that the chancellor had “berated” him over those comments at the time. They declined to comment on any Burnham thinking beyond the by-election.

One of Reeves’ close allies downplayed any rift. They said the pair have “been friends for years” and continue to “speak a lot,” pointing to their recent work on the Northern Powerhouse Rail project and tax devolution to regional mayors. 

‘Catastrophic’

On Thursday POLITICO was contacted by seven Labour MPs rallying around Reeves — and warning against the prospect of Ed Miliband as chancellor in a move they fear would tilt the Treasury to the left.

Although loyalists, they largely accepted Starmer’s departure as an inevitability — but argued for Reeves to stay in place.

One backbencher argued Miliband would “turbocharge” his push to drive U.K. carbon emissions to net zero if he entered the Treasury, which the MP warned would be “catastrophic” for their industrial constituency — a claim Miliband would dispute.

Regardless, the MP — who represents a seat in Labour’s former Red Wall heartlands — said Reeves shouldn’t “be bound by Keir.”

“It would be grossly unfair for any minister to be torpedoed just for proximity to the prime minister who is currently going,” they added.

The MP stressed that given both Burnham and the other main leadership contender, Wes Streeting, have signed up to Reeves’ fiscal rules it “doesn’t leave much margin for significant change anyway.”

“The bond markets kind of make her bomb-proof,” another Labour MP argued, praising the incumbent chancellor’s record for steadying the economy in turbulent times.

“The big clash between Rachel and Ed is over the North Sea,” this person added, referring to the Jackdaw and Rosebank oil and gas fields whose licenses have been stymied by legal challenges. Reeves is seen as being in favor of their expansion, while Miliband puts more emphasis on the climate trade-offs. “So there’s a big fault line there. No wonder he wants her out of the way.”

Climate activists at a November 2024 demonstration against the Rosebank and Jackdaw oil and gasfield developments, which are seen as a point of contention between Reeves and Miliband. | Jeff J Mitchell/Getty Images

Another backbencher said they believed Miliband — who has made no public comment on whether he would want the job and remains in Starmer’s cabinet — would prevent “any meaningful welfare reform.”

“Reverting back to a 2010-15 economic policy hymn-sheet” — the years when Miliband led the Labour Party to electoral defeat — would, the same MP added, “send a bad signal to entrepreneurs, industry leaders and investors. It will not end well for Labour.”

One person who’s worked closely with Miliband praised Reeves for commanding “strong support from women across the party.” They said she continued to face “rampant sexism and misogyny” as the U.K.’s first female chancellor.

Reeves makes a public play

All of the above appeared motivated to defend Reeves out of a sense her post would be threatened under Burnham — and that the energy secretary is maneuvering. The Financial Times reported Thursday that Miliband has been offering economic advice to Burnham for some time, and in recent days urged him to back the government’s existing fiscal rules in order to calm fears in the bond markets.

The pair have a long history on the front line for Labour, and Burnham served as Miliband’s shadow health secretary.

Reeves has been noticeably more prominent in recent days, launching a “Great British Summer Savings” scheme this week to try alleviate some of the effects of the Iran crisis on Brits.

She launched a new TikTok profile to announce free bus travel for children and teens across England this summer — and followed that up Thursday with a raft of new measures aimed at cutting cost-of-living pressures. It included slashing value added tax on leisure attractions and children’s meals from 20 percent to 5 percent over the summer. The chancellor also postponed rises to fuel duty, a move she had long resisted.

A fifth MP supportive of Reeves said: “I’m absolutely sick of men whether wanting to be leader, or for chancellor, or whatever, thinking we’re waiting for them to ride in and save us.

“[Rachel is] well liked across the PLP — she puts in time with colleagues and seeks their views and input, understands the movement and is good fun.”