Rachel Reeves was sacked as chancellor on Monday afternoon. New Prime Minister Andy Burnham removed her within hours of taking office, then offered her a different senior Cabinet job. She said no. The first woman to run the Treasury is heading to the backbenches.
That refusal turned this Rachel Reeves news story into the talking point of Burnham’s first day.
- Reeves was sacked on Monday afternoon, soon after Burnham took power.
- She was offered a “big job” in the new Cabinet but turned it down.
- John Healey, the former defence secretary, is the new chancellor.
- Lammy, Reed, Kyle, Jones, Kendall, Hermer, Stevens and Benn also left.
- Ed Miliband is Foreign Secretary. Angela Rayner is back in government.
- Reeves was the 109th Chancellor and the first woman in the role.
What Happened on July 20
Andy Burnham moved fast. Junior ministers went first, with prisons minister Lord James Timpson and science minister Lord Patrick Vallance quitting in the morning. Deputy Prime Minister David Lammy followed, with Steve Reed and Peter Kyle.
Reeves was the biggest name on the list. PoliticsHome confirmed she was removed before the new Cabinet was named. The clear-out went further than Westminster expected.
Rachel Reeves Turned Down Burnham’s PM Job Offer
The BBC reported that Reeves was offered a “big job” in Burnham‘s Cabinet and declined it. Her allies would not say which role it was.
The Daily Mail has since suggested it was the defence secretary. That would have been an awkward fit. Healey quit that same job on 11 June after a row over defence spending, blaming the Treasury for underfunding rearmament.
Reeves said no. She now sits on the backbenches beside her close ally Sir Keir Starmer.
What Reeves Said
Her statement, posted on X, read: “It has been the privilege of my life to serve as the Chancellor of the Exchequer.
“The economy today is stronger, fairer and more resilient because of the choices we have taken as a Labour government over the past two years.”
She added that her time in office saw “stability restored, investment delivered and reform to our economy under way.”
“I said when I was appointed Chancellor that I would judge my time in office by whether the lives of ordinary working-class people have been improved. I’m proud to say that they have,” she said.
She closed: “And to every young woman and girl, let my time in office show there should be no ceilings on your ambitions, your hopes or your dreams.”
On her successor, she wrote: “I wish the very best of luck to my successor, Andy, and his cabinet. You have my full support, and I will continue to play my part in helping this Labour government deliver the change the country needs.”
John Healey Takes Over the Treasury
Healey was first through the door of No. 10 on Monday. His appointment surprised many, as The Mirror noted, with Ed Miliband and Shabana Mahmood both tipped for the job.
Healey has been an MP since 1997 and served under Tony Blair, Gordon Brown and Sir Keir Starmer. He was a junior Treasury minister in the early 2000s, so the brief is not new.
He called the role the “greatest privilege” of his career, writing, X: “Together, we will build a new economy, build new hope and advance the working people of this country.” He added: “Time to get on with the job.”
The Wider Clear-Out
The Independent listed the full sweep of departures. Lammy said he “would have been proud to continue serving in Cabinet. But a new Prime Minister is entitled to build his own team.” He will help “defeat Reform again at the next general election”.
Reed was blunter, writing: “Keir Starmer showed loyalty to me by appointing me to his Cabinet. I make no apology for returning that loyalty.”
HuffPost UK reported that Liz Kendall and Jo Stevens were also sacked. Lord Hermer, the attorney general, said on Bluesky it had been “the privilege of my life to serve my country”.
Who Is In
Mahmood stays at the Home Office, and Miliband becomes Foreign Secretary. Yvette Cooper takes health, Wes Streeting takes defence, and Angela Rayner returns to housing. Louise Haigh is first secretary of state, and Lucy Powell takes education.
Reeves’ Record
Reeves became chancellor in July 2024. She handled Trump’s tariffs and shaky growth but never won over voters. As The Standard set out, her rating hit minus 71 in November, the worst on record for a chancellor.
Shadow Chancellor Sir Mel Stride said her legacy was “one of wholesale mismanagement of our economy and leaving us with more challenges.”
What Happens Next
Healey inherits tight finances and a prime minister promising cost-of-living action, including a VAT cut on electricity bills from October. Rachel Reeves has pledged full support. Even so, a former chancellor on the backbenches is rarely quiet.
FAQs
Q. Why was Rachel Reeves sacked as chancellor?
A. Andy Burnham wanted a fresh economic direction and removed several Starmer loyalists on day one. Reeves was the most senior name in that clear-out.
Q. What job did Rachel Reeves turn down?
A. She was offered a senior post described only as a “big job”. Her allies would not name it, though reports point to the defence secretary.
Q. Who is the new Chancellor of the Exchequer?
A. John Healey. He was defence secretary until June and has served in government since the Blair years.
Q. Is Rachel Reeves still an MP?
A. Yes. She remains MP for Leeds West and Pudsey and will sit on the Labour backbenches with Sir Keir Starmer.
Q. How long was Rachel Reeves Chancellor?
A. Just over two years, from Labour’s election win in July 2024 to July 2026. She was the 109th person to hold the post.
Q. Who else lost their job in Burnham’s reshuffle?
A. David Lammy, Steve Reed, Peter Kyle, Darren Jones, Liz Kendall, Lord Hermer, Jo Stevens and Hilary Benn all left.
Sources & References:
- The Standard – Rachel’s rating hit minus 71 in November, the worst on record for a chancellor.
- HuffPost – Liz Kendall and Jo Stevens were also sacked.
- Independent – The Independent has listed the full sweep of departures.
- Mirror – Ed Miliband and Shabana Mahmood are both tipped for the job.
