In September of last year, Rachel Reeves, then the all-powerful Chancellor of the Exchequer, made a phone call that would ultimately seal her political fate. The call was to Andy Burnham, the Mayor of Greater Manchester, who had just issued a radical call for Britain to stop being 'in hock to the bond markets.' The intervention made national headlines and signaled Burnham's ambition to return to national politics.
The conversation was anything but cordial. According to sources close to Burnham, Reeves was furious and demanded that he walk back his comments immediately. 'My phone’s not stopped ringing!' she reportedly screamed. Burnham, however, was unmoved, replying calmly, 'Rachel, I simply don’t believe you.' That moment encapsulated the growing rift between the Chancellor and the future Prime Minister.
Nine months later, Andy Burnham had ousted Sir Keir Starmer from the leadership, and Reeves was forced to pack her bags and leave Downing Street after only two years as Chancellor. Her removal was largely overshadowed by the media frenzy surrounding Starmer’s departure, but within the Labour Party, it was a dramatic end to a career that had once seemed destined for the highest offices.
The Background of a Power Struggle
Rachel Reeves had long been seen as a steady hand on the economy, a technocrat who rose through the ranks of the Treasury. But her relationship with Burnham was strained from the start. Burnham, who had previously served as Shadow Health Secretary and ran for the Labour leadership twice, had returned to frontline politics with a clear goal: to become Prime Minister. His populist left-wing agenda contrasted sharply with Reeves' more orthodox economic policies.
The phone call was not an isolated incident. It exposed a fundamental disagreement over fiscal policy and the role of the state. Burnham’s criticism of the bond markets resonated with the left-wing base, but it alarmed financial markets and the Treasury. Reeves, who prided herself on fiscal responsibility, saw his comments as a direct threat to economic stability.
As Burnham’s national profile grew, Reeves attempted to adapt. In March, she delivered the Mais Lecture to the City of London, announcing plans for fiscal devolution to regional mayors—a clear olive branch to Burnham. She also floated policies such as rent freezes and food price caps, which were out of character for her and appeared to be attempts to appeal to Burnham’s base.
Desperate Attempts to Survive
Over the following months, Reeves’ behavior became increasingly erratic. She pressured supermarkets to cap food prices to tame inflation caused by the Iran war, drawing criticism for returning to 'failed policies of the 1970s.' She also considered rent freezes, a policy widely regarded as damaging. One Whitehall source noted that Reeves 'saw which way the wind was blowing and thought, if it’s populist Left-wing things that they want, then fine.'
Despite these efforts, Reeves never gained Burnham’s trust. When Burnham finally returned to Parliament after a by-election victory in Makerfield, he assembled a new cabinet. Reeves was not included. She was offered the education portfolio, which she declined, feeling it was too much of a demotion. Some believe the offer was made deliberately, knowing she would refuse.
The Final Days
In the end, Reeves’ departure was surprisingly graceful. She sent a supportive text message to her successor, John Healey, who responded warmly. Allies say she left with her head held high, having helped ensure that Ed Miliband did not succeed her as Chancellor. Her final Mansion House speech served as a coded warning to Burnham against appointing Miliband, whom bond traders viewed negatively.
Reeves’ sister, Ellie, who had been a close ally of Burnham, was promoted to Attorney General—a move that could deepen the rivalry between the siblings. A previous row over Burnham’s by-election candidacy had already caused tensions, with Rachel reportedly confronting Ellie at a child’s birthday party, leading to a fiery argument that ended with Rachel storming out without her shoes.
Despite the drama, Reeves retains significant loyalty among Labour MPs. She is credited with ending the two-child benefit cap and promoting 'green shoots of growth,' though the country’s economic performance under Labour has been modest. Friends believe she is not done with politics and could stage a comeback, much like David Cameron or William Hague.
For now, Rachel Reeves remains a backbencher, and her political future is uncertain. But the furious phone call that sealed her fate will be remembered as a pivotal moment in Labour’s internal power struggle—a warning of how quickly fortunes can change in Westminster.
Source:MSN News