Burnham Likely to Replace Reeves as Chancellor
The BBC understands that if Andy Burnham becomes prime minister, he is expected to replace Rachel Reeves as chancellor and offer her a more junior cabinet position.
A spokesperson for Burnham stated that no decisions have been made yet.
This development comes as the former Greater Manchester mayor begins assembling a Downing Street team, assuming he wins the Labour leadership race, in which he is currently the sole candidate.
Sir Keir Starmer announced he was standing down as prime minister days after Burnham won the Makerfield by-election, allowing him to return to Parliament.
The most significant decision Burnham will face as he begins to outline a potential cabinet is the appointment of his chancellor.
Most Labour MPs assume Reeves will not continue in that role but, as first reported by the Financial Times, she is expected to be offered a more junior cabinet position.
A close ally of Burnham told the BBC:
"Andy really respects Rachel and I'm confident he'll want her in his top team."
James Purnell, who served as a minister in Gordon Brown's government between 2007 and 2009, is set to be appointed Burnham's Downing Street chief of staff.
However, if the new MP for Makerfield becomes prime minister, determining the defence budget will be an immediate challenge.
Burnham and his team have been discussing this with John Healey, the former defence secretary who resigned earlier this month, warning that the current planned increase in military funding falls "well short of what is required."
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Sir Keir met Burnham for an hour on Tuesday, as the outgoing leader sought to ensure an "orderly" transition of power.
This was the pair's first meeting since Burnham won the by-election.
Burnham is currently the only candidate to have emerged as a contender for the Labour leadership. If he does not face a challenger, he could become prime minister as early as 17 July.
Cabinet minister Darren Jones and former armed forces minister Al Carns are being considered as potential candidates by some Labour MPs who want to avoid installing Burnham in No 10 without a contest.
Jones, a close ally of Sir Keir, said he was not currently minded to run but would want assurances on Burnham's approach to economic policy amid concerns about potential unease in the markets.
Former Royal Marines officer Carns told night he was still considering standing in a potential contest but was waiting to see what policies Burnham plans to "push forward." He added:
"We need to see that material before I can make a decision to back him."
It is not clear whether either MP would gather enough support to get on the ballot paper.
The party's rulebook states candidates need to be nominated by 81 Labour MPs, as well as either 32 of Labour's 634 local branches or three organisations affiliated to the party (including two trade unions).
