Andy Burnham will use a speech next week to pledge to grow the economy and commit to Labour’s fiscal rules amid growing speculation over who will become the next Chancellor.
Mr Burnham, who is expected to move into Downing Street, must first await a potential leadership challenge from the chief secretary to the prime minister Darren Jones and former armed forces minister Al Carns who have indicated they may also seek to replace Sir Keir Starmer.
With Rachel Reeves almost certain to accompany Sir Keir out of Downing Street, Mr Jones is said to be concerned about the potential appointment of Ed Miliband as chancellor.
Mr Jones is said to want assurances on economic and national security policy before signing up to a coronation.
Nominations to become Britain’s seventh prime minister in the past 10 years will open on 9 July and close by 16 July and Mr Burnham could be in office the following day if likely rivals are unable to gather enough support. If there is a challenge, a new leader announcement will be delayed until 1 September.
Labour peer Baroness Margaret Hodge said she’d “rather get on quickly” with a new leadership team in place – instead of spending the summer debating who is best placed to be the UK’s next prime minister.
“We’ve got to get on with delivering, we’re in government”, she said in a radio interview, adding that the country doesn’t want the Labour Party to “spend time looking inwards”.
In his speech next week Mr Burnham will focus on the national debt and the cost of borrowing as he sets out a “credible” plan for growth within the current fiscal rules.
The appointment of chancellor will be a key signal of his intentions and he also said to be considering Wes Streeting, the former health secretary, and Shabana Mahmood, the home secretary.
There was speculation that Mr Streeting had withdrawn his candidacy for the leaderhip in exchange for a plum job, but sources say there have been no deals.
Opponents of Mr Miliband say he is not pro-business enough and will undermine market confidence. He has received considerable criticism for his refusal to support the oil and gas industry.
Mr Burnham is expected to hand roles in government to Lord O’Neill of Gatley, a former Goldman Sachs banker and Treasury minister, and Andy Haldane, a former chief economist at the Bank of England.
His approach to defence and the EU will be keenly watched amid a clamour for more spending on defence and closer ties with Europe.
He paid tribute to Sir Keir saying he had “given huge service to our country” and praised his “leadership and dedication during such a challenging period”.
He added: “His decision marks the beginning of a transition and it is important that this process is conducted in an orderly and responsible way. The country expects stability, seriousness and a continued focus on the issues that matter most and that is what it will get.”
In an emotional resignation speech at the door of 10 Downing Street, Sir Keir said the question his party had asked was whether he is best placed to lead it into the next general election. He said he “accepts that answer with good grace…I will resign as leader of the Labour Party.”
Despite his claims to have restored trust in the economy, his critics will point to economic mismanagement as a key factor in his departure as the shortest serving Labour prime minister.
Thousands of businesses have closed and jobs lost over heavily-criticised measures such as the rise in national insurance contributions and refusal to support continued investment in the North Sea oil and gas industry
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