The furious phone call that sealed desperate Rachel's fate: CHRISTIAN CALGIE

By CHRISTIAN CALGIE, SENIOR POLITICAL CORRESPONDENT-AT-LARGE Published: 23:00, 25 July 2026 | Updated: 23:02, 25 July 2026 Last September Rachel Reeves, then still the all-powerful Chancellor, sealed her fate with Andy Burnham. The mayor of Greater Manchester was basking in national news headlines after he issued a radical call for Britain to stop being ‘in hock to the bond markets’.  His intervention marked the first time most in Westminster realised just how blatantly the so-called ‘King of the North’ was prepared to go to secure the limelight and begin his much-longed-for ascent to Downing Street. While he and his team plotted out how to capitalise on his national prominence, he received a call from a furious Chancellor of the Exchequer. A friend of Andy’s – as he insists we call him – said there was ‘no love lost’ between the pair and reveals to The Mail on Sunday that Ms Reeves told the mayor, in furious and certain terms: ‘You must walk back on your comments, now.’ Her panic was sparked by the market reaction to Mr Burnham’s words, which saw the yield on 30-year gilts rise and pushed long-term borrowing to a 27-year high. One person privy to the call said Ms Reeves ‘was screaming and shouting down the phone’ as she informed Mr Burnham: ‘My phone’s not stopped ringing!’ The mayor is said to have replied coolly: ‘Rachel, I simply don’t believe you.’ Nine months later, Andy had ousted Sir Keir Starmer, on whom the Chancellor was reliant for her position, and she, too, was forced to pack her bags and leave Downing Street and the job she had coveted, though she had enjoyed it for only two short years. Last September Rachel Reeves, then still the all-powerful Chancellor, sealed her fate with Andy Burnham, writes Christian Calgie While Andy and his team plotted about how to capitalise on his national prominence, he received a call from a furious Chancellor of the Exchequer In the maelstrom of media coverage about Sir Keir’s departure, the sacking of Ms Reeves has played a weak second fiddle. But unlike so many other top ministers, her fate was taken for granted by the media and commentariat. Despite her best and very sincere efforts to cling to the job she loved, she was rarely taken seriously as a potential Chancellor candidate for Andy Burnham. But hope springs eternal and one close colleague of Ms Reeves said she genuinely believed she could still be in with a shot… ‘provided all the other frontrunner candidates decided it wasn’t for them’. The colleague said: ‘I don’t think it was unreasonable to think Ed [Miliband] might rule himself out, or Shabana [Mahmood] might not want to do it. And [Burnham] might just think, “for now, I don’t need to change”.’ It appears Ms Reeves and the Treasury were just as blindsided by the eventual appointment of John Healey as her replacement as everyone else in SW1. Her attempts to signal her ability and willingness to implement Burnham-ite policies stretch back further than many realise. In March, just months after her furious phone showdown with the future Prime Minister, Ms Reeves delivered her Mais Lecture to the City of London, using the speech to reveal she had asked officials to work with Mr Burnham and other mayors ‘to develop a roadmap for future fiscal devolution, to be published at this year’s Budget’. She said: ‘This will set out plans to give regional leaders control of a share of some national taxes which have, for too long, been allocated by central government.’ This was, Ms Reeves hoped, exactly what Mr Burnham would want to hear, and her colleagues now believe that at this point she began in earnest to cling on to the job she loved dearly. Despite her best and very sincere efforts to cling to the job she loved, Rachel was rarely taken seriously as a potential Chancellor candidate for Andy Burnham (at a pub after her goodbye to No 11) Her flirting with devolution wasn’t the end, however, and over the coming months Westminster witnessed increasingly erratic briefings from the Treasury that appeared at odds with Reeves’ normally dour technocracy. In April, The Guardian reported she was examining rent freezes to protect household budgets in the fallout from Donald Trump’s intervention in Iran – a lunatic policy proven across the world never to work, but which is a frequent demand from hard-Left politicians. The following month she was branded ‘desperate’ by supermarkets as she pressured them to cap food prices in an attempt to limit inflation caused by the Iran war. The proposal saw her accused of trying to return to the ‘failed policies of the 1970s’, in keeping with Mr Burnham’s wider policy agenda. A Whitehall source said Ms Reeves ‘saw which way the wind was blowing and thought, “if it’s populist Left-wing things that they want, then fine”.’ The efforts became more forlorn upon Mr Burnham’s return to Westminster after his victory in Makerfield. Last month, Ms Reeves notably failed to turn up to Downing Street to listen to Sir Keir Starmer’s resignation speech, alongside loyalists. Yet there she was, just hours later, applauding and grinning like a Cheshire cat in parliamentary selfies with newly minted MP Mr Burnham as he marked his triumphant return to the Commons. But despite her endeavours, a month later she was summarily dismissed by Andy. She was offered the education brief on her way out – not defence, as some claimed, a job it would have been impossible to hand her given Healey’s claims just weeks ago that she was blocking vital investment for the military. Allies insist she would have been happy to continue in government but it was always likely she would turn down the education job, feeling it was too much of a demotion. Indeed, there are claims she was only offered it by Mr Burnham’s team in full knowledge she would be unable to accept the position. This theory is backed by Lucy Powell’s accession to the role – for any less of a position would have been a poor reward for the Labour deputy and close Burnham ally. In the end, Rachel Reeves concluded her time in office not with a strop or tantrum, but a ‘supportive text message’ to John Healey following the announcement, The Mail on Sunday can reveal, which elicited a ‘nice reply’. While losing the job she always dreamed of so soon after getting it, allies of the former Chancellor believe she got to ‘leave with her head held high’ after ensuring that her successor wasn’t someone who would ‘trash her legacy on stabilisation’ of the economy. This being an unsubtle coded term for ‘ensuring Ed Miliband never got the role’. Her efforts were evidenced by one of her final public outings as Chancellor, as she delivered her Mansion House speech on July 15. In a coded warning to Mr Burnham against picking Mr Miliband to replace her, Ms Reeves told the City that only economic stability could help deliver the ‘radical change’ Britain needs, hailing London’s financial services as the ‘crown jewel’ of the economy. Polling of bond traders’ views on who Mr Burnham should pick was also circulated around Whitehall, which showed Mr Miliband as ‘clearly negative’. One ally argued that Mr Burnham would not have enjoyed the ‘muted’ reaction from the City to last week’s swathe of unfunded promises had he gone with Red Ed. Having at least seen off Mr Miliband as a successor, Ms Reeves was photographed last Monday alongside Sir Keir and her closest advisers and allies at a pub in the ex-premier’s backyard of Kentish Town, north London. The team drank, cried, sang karaoke and laughed in photos like demented hyenas, as one present observed that both she and Sir Keir already looked ‘ten years younger’ thanks to the weight of responsibility being lifted. They added: ‘It was a leaving do. They’re always sad and always happy. She worked for a long time to get there, so did Keir. ‘I think they expected more. They had promised a decade of national renewal.’ While debate will continue about whether Ms Reeves could have played her cards better to stay on in No 11, all her friends and allies agree on her plans. ‘I don’t think she’s done with frontline politics,’ said one. ‘I think [Reeves] won’t be anything like Thatcher or Blair with [her] interventions. And I think that Rachel’s incredibly serious and credible. ‘So yes, there’s a “change” moment for the Labour Party now, but I don’t think she’s done.’ Ellie Reeves, Rachel's sister, got a promotion to Attorney General when Mr Burnham took control of No 10 on Monday One loyal backbencher insisted: ‘Rachel is delighted for Ellie. It’s lovely to see her get such a brilliant chance in the area she is an expert in’ Mr Burnham's decision could risk driving an even larger wedge between the two ultra-competitive sisters An MP friend of Ms Reeves from the West Midlands told the MoS: ‘She’s immensely talented. She has loads, loads, loads more to give. ‘The history of the last couple of years is you shouldn’t write people off. All sorts of people ended up having really successful second acts – David Cameron, William Hague. ‘There’s no reason to suppose that someone with so much to give – and relatively young, she’s not yet 50 – couldn’t have a second act.’ While Ms Reeves continues as a humble backbencher, last week wasn’t all bad news for the family name. Her sister Ellie managed not only to cling on to the Government, but to win promotion to Attorney General, a job she’s long coveted as a former lawyer. But the move by Mr Burnham could risk driving an even larger wedge between the two ultra-competitive sisters. In May, The Mail on Sunday revealed the pair had an ‘almighty row’ at Ellie’s son’s birthday party over Andy Burnham. When Mr Burnham attempted to run for parliament earlier this year in the Gorton and Denton by-election, Ellie joined Sir Keir in voting to block him from standing. But she only did so after No 10 got wind that she was minded to vote alongside Lucy Powell, and back him to stand in the constituency. Sir Keir’s office was said to have called Rachel to lean on her younger sister and ‘sort it out’ – unaware the pair were at that moment together at the child’s birthday party. Rachel confronted Ellie, an intervention that sparked a blistering row and ended with the then-Chancellor storming off in her ministerial car – before she had bothered to put her shoes on. Ellie’s continuation in Cabinet, after a more overt flirting operation with Team Burnham for the past few months, will surely test her sisterly bond with Rachel. The pair will do well not to become the new Milibands of British politics. Of course, friends of Rachel Reeves were keen to downplay rumours of a family split, as one loyal backbencher insisted: ‘Rachel is delighted for Ellie. It’s lovely to see her get such a brilliant chance in the area she is an expert in.’ Another added: ‘She’s always happy for Ellie…’ It’s clear Rachel Reeves still commands enormous loyalty among Labour MPs – tempered by equally sizable levels of derision, pity and anger. Friendly MPs couldn’t help but recount what they see as Ms Reeves’ successes such as ending the two-child benefit cap. They also credit her with watering the ‘green shoots of growth’ – something that her detractors will doubt given the country’s anaemic levels of ‘growth’ under Labour. Either way, her legacy is now in the hands of others.