CHANCELLOR Rachel Reeves said that she was backing Andy Burnham to be the next Prime Minister today as Sir Keir Starmer insisted he was handing over the keys to No 10 “with good grace.”

The so-called King of the North appears likely to succeed Sir Keir without a Labour leadership contest.

Asked about speculation that she would be replaced if Mr Burnham becomes PM, Ms Reeves told the BBC: “I’m not going to pre-empt the decisions that the new prime minister will make.

“I’m backing Andy. I think he’d be a great prime minister, but those are his decisions, not mine to make.”

She later urged her successor, whoever that is, to stick to her economic plans as she addressed the British Chambers of Commerce’s annual global conference.

She said: “I hope that whoever is Chancellor in the future, whenever that future may be, sticks to what I’m doing because it is beginning to bear fruit, and we are seeing that investment return to the economy, that growth return to the economy and, crucially, that stability, so that businesses can plan and invest in the future.”

The Makerfield MP is reportedly yet to settle on his choice of chancellor.

Speculation has focused on Energy Secretary Ed Miliband, though he has faced a backlash from those in the party and the unions who argue his net-zero commitments will cost jobs.

Unite and GMB have come out publicly against Mr Miliband, but he has now been boosted by an unusual public endorsement in the chancellor role from Unison leader Andrea Egan.

“We need a chancellor who will rewire the economy and properly invest to improve the lives of the majority. Of those reported to be in the running, only Ed Miliband could enact the kinds of policies trade unions and our members urgently need,” she said.

Sir Keir, meanwhile, said that he hoped to ensure disruption was “absolutely minimised” during his final weeks in Downing Street following reports of a “frosty” first meeting between him and Mr Burnham following his return to Westminster.

Launching plans to cut VAT on family activities for the summer, the PM told reporters: “On this occasion, we are in a nice cinema in Milton Keynes, but I recognise — the government recognises — that whatever is going on in the world and there’s a lot, whatever’s going on in politics and there’s a lot, for most families across the country, the single most important thing is the cost of living.”

Insisting that he planned to hand over the keys to No 10 “with good grace,” he added: “I’m going to be professional, I’m going to have foremost in my mind a sense of service and duty that has driven me as prime minister.”