Andy Burnham could replace Reeves if he becomes PM.

The BBC understands that if Andy Burnham becomes prime minister, he will replace Rachel Reeves as chancellor and give her a more junior cabinet position.

A spokesman for Burnham said no decision had been made.

As the former Greater Manchester mayor began assembling his Downing Street team, he believed he had won the Labor leadership race, where he is currently the only candidate.

Sir Keir Starmer announced his resignation as Prime Minister days after Burnham won the Makersfield by-election, allowing him to return to Parliament.

As Burnham begins to form his cabinet, the biggest decision he will make is who will be his chancellor.

Most Labor MPs expect Reeves not to continue in that role, but as first reported Financial Times, ExternalIt is expected that she will be given more moderate cabinet space.

A close friend of Burnham’s told the BBC: “Andy really respects Rachel and I’m sure he wants her in his senior team.”

James Purnell, who served as a minister in Gordon Brown’s government between 2007 and 2009, will become Burnham’s Downing Street chief of staff.

But if the new MP for Makersfield becomes prime minister, how much to spend on defense will be an immediate test.

Burnham and his team have been in talks with former Defense Secretary John Haley, who resigned earlier this month, now that the proposed increase in military funding has fallen “less than desired.”