Rachel Reeves will make Andy Burnham pay for axing her as chancellor. She's taking him down with her.

10:19, Wed, Jul 8, 2026 Updated: 10:19, Wed, Jul 8, 2026

Burnham-Reeves-shock

Andy Burnham had better read up on those fiscal rules quickly. They're coming to get him (Image: Getty)

The PM-in-waiting hasn't yet announced his new Cabinet, but everybody seems to agree on one thing. Rachel Reeves won't be chancellor afterwards. She's tried to cling on, but it's now clear that even she has accepted this uncomfortable truth. That's unusual for her. Usually she ignores reality. She's told us again and again that she's “restored stability” to the UK economy, when in fact she’s only shoved us even further down the road to ruin.

Soon she'll have plenty of spare time to lament her failures. And maybe have the odd snigger at the man who finished her political career. Because she's sunk him before he's even begun. Reeves likes to boast about her supposedly “iron-clad” fiscal rules, but in truth they’re a rusty old bucket with a hole in the bottom. Under her plan, Britain is supposed to cover its day-to-day spending from tax revenues rather than borrowing by the end of this Parliament. The problem is, she's nowhere near that today.

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Reeves is on course to borrowing another £140billion this year. That's on top of the £132billion she borrowed last year, and £146billion the year before that. So she's nowhere near balancing the books. But here’s the real killer. The one that is about to blow up Andy Burnham. It's the worse news he could have imagined getting, as he looks to revive Labour's fortunes with yet another spending splurge.

Incredibly, Reeves always planned to leave the really painful decisions until the final two years of this Parliament. That's when the serious fiscal tightening was supposed to happen. That meant spending cuts, tax rises or both, just as Labour gears up to fight the next general election. No government wants to go into an election while hammering the country with austerity, let alone a Labour one. Yet that was her plan. Madness.

Reeves spent the first half of the Parliament avoiding the hardest choices and pencilled them in for later. I don't know how she thought she would manage that. But now she doesn't have to. Instead, it's Burnham's problem. He doesn’t stand a chance. Slash spending and Labour MPs revolt. Raise taxes again and voters revolt. Borrow more and the bond markets will call time.

Reeves inherited a dreadful financial position from the Conservatives, but Britain's debt addiction goes back much further. When New Labour’s Gordon Brown was made chancellor in 1997, the public sector debt was just 35.7% of GDP. When he left, it had almost doubled to 69.2%. Today it's around 95%. At that level, we're in serious danger. The Office for Budget Responsibility has just warned that Britain's public finances are on an "unsustainable" path and we're on the road to a fiscal crisis. Now here's the really frightening part.

The OBR watchdog says that simply stabilising debt at 95% of GDP would require tax rises or spending cuts worth a staggering £120billion. If Burnham somehow survives Reeves's impossible final two years and wins that election, it becomes his problem. I doubt it will come to that.

Thanks to the ticking time bomb that Rachel Reeves has handed him, Burnham unlikely to reach that point. His dreams of having 10 years in power will be blown apart, thanks to her dishonest fiscal plan. Reeves won’t be around when her timebomb explodes. But it will blow Andy Burnham to pieces. Along with his chancellor, whichever unlucky soul he chooses. If it’s Ed Miliband, the bomb might go off on day one, as the bond market goes into meltdown at the prospect. And Rachel Reeves will be the only one laughing. The rest of us certainly won't.