A Labour civil war was gathering pace today as factions draw battle lines for who will replace Keir Starmer.
The timetable for appointing a new PM is emerging as the critical issue as Blairites and the hard-Left wrestle for control.
The latter want a delay so Manchester Mayor Andy Burnham has a chance to return to the Commons – while Blairite Wes Streeting would be favourite if the contest is resolved quickly.
Sir Keir made a last-ditch appeal for MPs to stick with him after the local elections meltdown. He warned in a speech this morning that there will be ‘chaos’ if he is kicked out of No10.
However, more backbenchers have been breaking cover to call for his departure.
The whirlwind drama escalated when Angela Rayner teed up a Left-wing ‘dream ticket’ for the leadership.
She used a speech to a union conference to back Mr Burnham returning as an MP.
Backbencher Catherine West had seemingly helped Mr Streeting’s cause over the weekend by unexpectedly launching a ‘stalking horse’ challenge to the PM.
However, she was persuaded to back off this morning – instead urging a ‘timetable’ for Sir Keir to be replaced by September.
There were signs Mr Streeting might be pulling the trigger this afternoon as Chris Curtis, chair of the 50 MP-strong Labour Growth Group, added his voice to pressure for a change at the top.
He notably urged a faster schedule than September – which could effectively rule out Mr Burnham participating.
The bewildering manoeuvres have left Sir Keir looking increasingly like a bystander.
In his speech, Sir Keir said he knew some people were ‘frustrated with me’ and he took ‘responsibility’ for disastrous local elections.
He insisted he had ‘learned’ from his dismal first two years as premier and would not ‘walk away’ – claiming he would fight any leadership challenge.
Markets have already been spooked at the prospect of Labour swerving Left in a post-Starmer era. Interest rates on gilts, one of the main ways the Government borrows money, ticked up this morning.
Starmer allies have been warning backbenchers that there could be a snap general election if he is ousted.
As the political drama develops today:
- Loyalist Cabinet minister Peter Kyle insisted Mr Burnham should not fight a Commons by-election because Labour might lose the Greater Manchester mayoralty;
- More than 40 MPs have now called for Sir Keir to quit or set out a timetable for his departure;
- Backbencher Catherine West says she will formally launch a leadership challenge if she is not ‘satisfied’ with the PM’s speech;
- Sir Keir said legislation will be brought forward this week to take ‘full national ownership of British Steel’;
Keir Starmer admitted people are ‘frustrated with me’ in his speech
Markets are braced for Labour to lurch dramatically to the Left as Keir Starmer desperately tries to save himself today
Jitters have been sparked after Angela Rayner formed an alliance with Manchester mayor Andy Burnham – and laid out a manifesto of higher tax, more handouts and nationalisations
The former deputy PM also hinted that she has linked up with Mr Burnham, calling for him to be allowed to stand at a Commons by-election
Interest rates on 10-year gilts, one of the main ways the Government borrows money, ticked up this morning
Sir Keir teed up his speech saying he would offer ‘hope for the future’
Ms West said she was not satisfied with the premier’s speech, but will now only be ‘collecting names’ of those who would like him to be replaced.
That cannot directly trigger a leadership contest, as 81 MPs must nominate a specific candidate.
In an email to MPs this afternoon, Ms West said: ‘I have listened to the Prime Minister’s speech this morning. I welcome the renewed energy and ideas. However, I have reluctantly concluded that this morning’s speech was too little too late.
‘The results last Thursday show that the prime minister has failed to inspire hope. What is best for the party and country now is for an orderly transition.
‘I am hereby giving notice to No 10 that I am collecting names of Labour MPs to call on the prime minister to set a timetable for the election of a new leader in September.
‘I want to thank everyone who has been in contact over the weekend to offer good wishes. We need our best top team in place to fight the next election. We owe working people up and down the country nothing less.’
Shortly afterwards Mr Curtis, MP for Milton Keynes North, went on Sky News to push for a quicker timetable.
‘I think the moment, the dramatic situation that we face, the geopolitical context, the fact that we have such a difficult economic inheritance, does mean that we need more radical change than the Government has set out so far,’ he said.
‘I don’t think we saw a plan from the Prime Minister this morning in order to implement the kind of change that this country needs, and I therefore think it’s time for us to look for new leadership.
‘And I think what that means is the Prime Minister right now setting up a timetable and an orderly process for a leadership election, and one in which Labour has a discussion about the vision for the country and what changes we think are needed in order to face the very real challenges that Britain currently faces.’
Asked whether September was the right timeline, Mr Curtis said: ‘I certainly think the timetable should be much shorter.’
Expectations were low for Sir Keir’s speech after a slew of abortive ‘reset’ efforts. He has suggested the Government’s mistakes have been mostly presentational, and reiterated he wants to be in No10 for a decade.
Sir Keir said: ‘If we don’t get this right our country will go down a very dark path,’ he said.
‘I take responsibility for not walking away, not plunging our country into chaos.’
He added: ‘I think what we witnessed with the last government was the chaos of constantly changing leaders. And it cost this country a huge amount.’
Sir Keir tried to appease the Labour rank and file by promising to go further in unwinding Brexit.
He said leaving the EU had made the country poorer and less secure, and he would put the UK ‘at the heart of Europe’ at a summit this summer. He committed to a ‘youth free movement’ scheme.
Despairing Labourites have warned that the pro-EU message will go down like a ‘cup of cold sick’ in the Red Wall. One former aide warned it will be a ‘head in hands’ moment.
As jockeying escalates, Ms Rayner has formed an alliance with Manchester mayor Mr Burnham – and laid out a manifesto of higher tax, more handouts and nationalisations.
Ms Rayner acted last night amid worries on the Left that Blairite Wes Streeting is in pole position to take over from Sir Keir if there is an immediate contest.
The former deputy PM is still wrangling with HM Revenue & Customs over unpaid stamp duty, while Mr Burnham is not currently an MP.
That means both have an interest in delaying the denouement for Sir Keir until they are in a position to challenge.
In his speech, Sir Keir said he was engaged in a ‘battle for the soul of our nation’.
‘To meet the challenges that our country faces, incremental change won’t cut it,’ he said.
‘On growth, defence, Europe, energy – we need a bigger response than we anticipated in 2024 because these are not ordinary times.
‘Strength through fairness. It’s a core Labour argument. And you will see those values writ large in the King’s Speech. And you will see hope, urgency and exactly whose side we are on.’
He said: ‘People need hope. We will face up to the big challenges and we will make the big arguments.’
Highlighting his efforts to build new ties with Brussels, Sir Keir said: ‘This Labour Government will be defined by rebuilding our relationship and by putting Britain at the heart of Europe. So that we are stronger on the economy, on trade, on defence, you name it.
‘Because standing shoulder to shoulder with the countries that most share our interests, our values and our enemies – that is the right choice for Britain, that is the Labour choice.’
Arguing that the Government must stay on the centre ground, Sir Keir said: ‘We cannot win as a weaker version of Reform or the Greens. We can only win as a stronger version of Labour.’
Pushed on whether he still wanted to stay in No10 for another eight years, he said: ‘It will take time to clear that damage up and to build the better country that we need. And that’s the decade that I’ve been talking about.’
In a devastating 1,000-word verdict, Ms Rayner said the Peter Mandelson scandal showed a ‘toxic culture of cronyism’ and accused the PM of failing to help ‘working people’ enough.
The former deputy PM also hinted that she has linked up with Mr Burnham, calling for him to be allowed to stand at a Commons by-election.
The pair were caught holding a secret summit at her house in Greater Manchester last month, with speculation they were mulling a ‘dream ticket’.
Ms Rayner said the Government had allowed ‘wealth and power to concentrate at the top’, demanding a wave of nationalisations.
She said her controversial workers’ rights overhaul should be ‘just the start’, and indicated a push for more taxes on the wealthy and business to fund handouts for struggling households.
Britain should emulate countries such as Spain instead of carrying on with ‘deregulation, privatisation, and trickle-down economics’, she said.
‘We are in danger of becoming a party of the well-off, not working people,’ she added.
Allies of Mr Burnham have also been laying out their desire for mass nationalisations.
Economists have warned that the prospectus being set out by the Left-wing candidates could trigger chaos on the markets.
One London hedge fund boss told the Daily Mail: ‘If Rayner gets in, the sterling and bond market will get smashed. It will be the shit show to end all shit shows.’
Ms Rayner acted last night amid worries on the Left that Blairite Wes Streeting is in pole position to take over from Sir Keir if there is an immediate contest
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LIVE Rayner calls on Starmer to allow Burnham return to Westminster
Mr Streeting’s camp has been spreading the message that ‘no one in the City trusts Andy Burnham’.
Simon French, of Panmure Liberum, said Ms Rayner’s plan was ‘for an economy some parts of the Labour Party believe exists – not the reality of one where the tax take is already at an 80 year high, concentration of tax on high earners & on assets is already high by international standards’.
‘The minimum wage has moved way higher than the international benchmark, and growth is clearly impaired by the frictions of the high cost of energy, building & capital.
‘I would predict that if the Rayner statement became a detailed policy platform you would see the Gilt vs Other Sovereign spread widen, not narrow.’
More than 40 Labour MPs have now indicated they want Sir Keir to depart.
Navendu Mishra, previously a Parliamentary aide to Ms Rayner, said the PM should set out a timetable for an ‘orderly transition’.
Speaking on BBC Radio 4’s Today programme, Mr Mishra said such a move would allow the ‘best people’ in the Labour Party time to ‘put forward their vision’.
Asked whether he was referring to Mayor of Greater Manchester Andy Burnham, Mr Mishra said: ‘I think he’s done some really good things in my constituency of Stockport, and in Greater Manchester, and he has the experience of a previous Labour government, having served in senior roles including in the cabinet.’
Asked about a potential leadership bid from Ms Rayner, he added: ‘Look, I think she’s from Stockport… if you look at her achievements coming from Stockport, as a trade unionist, a Stockport trade unionist, I think are phenomenal.’
Business Secretary Peter Kyle was sent to TV studios to try to cool the temperature in the party this morning.
But he risked deepening frustration by insisting the PM should serve another eight years in Downing Street.
Mr Kyle also told Sky News he went to the cinema with Mr Streeting last week.
‘Somebody who is planning to pull the plug and launch a leadership bid in a couple of days’ time doesn’t go to the cinema with a friend,’ he added.
Asked what film they watched, he said ‘Devil Wears Prada’, later describing it as ‘good’ and ‘fun’.
Mr Kyle also said: ‘Wes and I are very good friends, but I’m not going to fall into the trap of being his spokesperson, but what I can tell you is that he, like me, is focused on the success of this Government.
‘His primary mission in Government is making sure the whole Government is a success and he is there for Keir when he needs him.’
