Rayner’s hidden deal with Starmer which is keeping him in power

It was not the first time Starmer had to call on his powerful rival to help him surivive.

In February the Prime Minister faced his most serious moment of danger when Scottish Labour Leader Anas Sarwar publicly called for him to resign. No 10 asked Cabinet ministers to express public support – a crucial intervention for his survival. Had they stayed quiet he was a goner. Perhaps even more vital, however, was Rayner’s endorsement too.

Open season on Starmer if local election results are bad

The prime minister now finds himself in a bizarre confidence and supply arrangement with his most powerful backbencher. This week Rayner is understood to have been convinced by the argument that it was too soon to think of an investigation into Starmer over Mandelson. She backed him against the Tories.

Next week’s local elections in England, and for the Welsh and Scottish Parliaments, could change her calculation, however. Rayner, who has become a rallying point for criticism of the unpopular PM, could open the startgates to a leadership contest if she goes public with an attack on his leadership.

Predictions vary. If Labour ‘only’ loses 800 English council seats, Starmer could perhaps get away with some warm words about having listened to the message voters have sent him. But the picture could be far worse. Holyrood could remain in SNP control and Welsh Labour could lose the Senedd to Plaid Cymru or Reform UK. Labour could lose 1,850 councillors in England. Then it turns into open season on Starmer.

Discussions in Downing Street this week about a post-election reshuffle to stamp his authority on his party only highlighted Starmer’s frailty instead, as senior members of his Government suggested he no longer has the clout for anything other than a minor rejig. The prime minister is understood to be still weighing up whether to hold a reshuffle.

“It’s a judgment about how much capital they’ve got, about whether they can do it and get away with doing it,” as one pro-Rayner Labour source put it. “The thing that’s hard to guess is the emotional impact of all the results next weekend and how people respond.”

Starmer needs Rayner more than she need hiim

Rayner was forced to resign last September because of the underpayment of stamp duty on a flat and is waiting for HMRC to rule on whether she owes them more tax. More important to her future is the judgment attached: did she deliberately mislead the taxman or was she simply careless? No date has been set, but a ruling is expected shortly.

When Starmer and Rayner visited Holy Trinity C of E Primary School in Greater Manchester last month, they discussed her return to the Cabinet. Even so, he had to couch his warm words, waiting for the conclusion of Rayner’s tax investigation. He told her wants her back and that she has a future role to play, according to a source familiar with the discussion, but no formal job offer was made. 

After weeks of Mandelson dominating the news agenda, it has now become clear to agitating Labour MPs that Starmer needs her in his Cabinet more than Rayner needs him. It’s also uncertain she would accept a job if he offered her one.

“She hasn’t been offered anything, but she would have to think about whether she wants to do it. Whether it was the right thing to go back. Would it be for a short time, for a good time, or for a long time?” an ally told The i Paper. “She’ll also want to know what’s the bigger picture in terms of the direction of travel of the Government.”

To refuse to serve would be a statement of such a lack of confidence in Starmer that it could prompt a fresh crisis. It’s certainly a risk for Rayner; to her supporters it could appear principled, to her detractors disloyal or churlish.

Rayner walks the line between loyalty and criticism

Starmer will use the King’s Speech to make the argument his administration is about long-term stability for the country in a volatile world and that sticking plaster solutions are not the answer. While the prime minister will refer to the economy, energy and security, he could equally be talking to his own party.

There are still Labour MPs who recognise naval-gazing about internal party politics annoys voters. When Labour MP Kim McGuinness criticised the direction of the party on Thursday, she drew incredulity from colleagues that she had chosen to do so on the day Starmer was dealing with the Golders Green terrorist attack.

Since her resignation, Rayner has so-far walked a line between loyalty and criticism of Starmer, popping up irregularly to stage interventions.

Some have been helpful to Starmer: she fashioned a compromise on the workers’ rights bill to help secure its passage through the House of Lords. But elsewhere she’s been viewed as grandstanding with an eye to a future leadership race.

In a sop to Labour’s left, she labelled as “un-British” planned strengthening of immigration rules, in a pub speech in which she said Starmer could not “go through the motions” in the face of ebbing support.

Ahead of any possible return, Rayner is likely to want more reassurance on help for younger people after focusing her efforts in Cabinet on renters and workers’ rights. This week she told The i Paper how Gen Z are stuck in “this trap of poverty” and spoke of how her adult son had to borrow money to afford dentistry treatment.

Andy Burnham is also in the wings

But there are other Labour MPs and ministers who think Rayner – a Marmite character with voters – should hold off any challenge to Starmer and wait for Mayor of Greater Manchester Andy Burnham to secure a seat in Parliament.

The Socialist Campaign Group of Labour MPs is said to have fallen in behind Burnham after his attacks on the bond markets. Soft left MPs cheered his remarks in an interview this week, which suggested that supposedly iron-clad fiscal rules could be relaxed to increase defence spending.

“Ange needs to make her mind up what she wants to be,” according to one left-wing, pro-Burnham Labour source. “Maybe wait and fall in behind Andy. Don’t have the hassle of the top job and all the scrutiny that goes with it. Go and do amazing things. For instance, be the one to take on and fix social care. Or finish the job on workers’ rights. Be a modern Barbara Castle. You don’t need the top job to go down in Labour history.”

Meanwhile, there are plenty questioning whether Burnham can make it back to Parliament anytime soon.

One concern is the lack of organisation or staff surrounding the mayor. Critics point to the fact he didn’t canvass support on the party’s National Executive Committee [NEC] which oversees seat selections, when he said he wanted to stand for Parliament in January.

“When he decided to go for Gorton and Denton, he should’ve had outriders. He didn’t have people ringing round the NEC or unions for their backing. It probably wouldn’t have changed the outcome and allowed him to stand, but it would’ve shown willing,” a Cabinet aide said.

A Labour MP with close links to No 10 said: “What’s underestimated is the determination of Keir and the people around him to block Andy. Keir said maybe in a couple of years, when he’s near the end of his term, Andy could come back. That could be the case for some time.”

Burnham will not also necessarily command support in Westminster. “He may be king of Manchester, but nobody knows who he is where I live,” said one Labour MP, dismissively.

For those pinning their hopes on the makeup of Labour’s NEC changing at internal elections later in the year, all the signs are the slate will still be stacked against Burnham, according to Labour sources close to the process.

And even if Starmer relents and allows Burnham to stand, there is a question of which seat would suit his family, settled just outside of Manchester. “He is holding out for St Helens,” a party source said, referring to the St Helens South constituency currently held by Labour MP Marie Rimmer. A spokesperson for Burnham declined to comment.

‘Tidal wave of Keir’s unpopularity’ will ‘overwhelm’ council candidates

Another Rayner ally suggested in a messy summer fight where Starmer is challenged, perhaps by a stalking horse, and Burnham is not in Parliament; Energy Secretary Ed Miliband could emerge as a frontrunner.

“If there is someone who’s better placed to be the candidate, she might be happy to be part of their team. I don’t think Ed wants it; he’s been through that loop and he’s not desperate to do it. But if it turns out there’s a situation where the only person who can do it is him, then I don’t think it’s impossible. And the other names that get floated around are Bridget Phillipson, John Healey or Yvette Cooper,” the Labour source said.

Parliament prorogued on Wednesday, with MPs anxiously eyeing the aftermath of the local elections. “It’s just one day at a time,” said one Labour MP, a Starmer loyalist. Another Labour MP said: “I’m going back home to campaign, and I know some friends are going to lose their seats through no fault of their own. The tidal wave of Keir’s unpopularity is overwhelming them.” 

What happens after the elections is far less clear. “Everybody knows that there will be a reset, the question is how good it is,” as one party aide put it. “We know what’s in the King’s Speech, it’s been trailed or leaked and we’re not expecting any fresh revelations, no rabbits.”

One Labour staffer, with an eye to recent history, said the atmosphere reminded them of 2016’s failed so-called Chicken Coup against former Labour Leader Jeremy Corbyn. “No one is ready to go. It feels just like that collective despair when all the Shadow Cabinet resigned but had no one in place to take over,” they said.

Mandelson saga is not over yet

Any planned reset by Starmer and his team, could also be stymied by the Mandelson saga. The next tranche of the files could be published the first day Parliament returns, pushing Starmer’s appointment of the disgraced peer to the top of the agenda again.

Senior Tories told The i Paper they have also not ruled out another attempt at referring Starmer to the Privileges Committee if there is a convincing case Starmer misled the Commons.

“Did you like our timing?” one gleeful Tory MP asked rhetorically this week after Starmer survived the vote on Tuesday night. “The aim was to wound, not to kill. Let him drag his sorry carcass on and on.”

Spokespeople for Rayner and Starmer declined to comment.

For now, Starmer is wounded but not fatally. The local elections are a moment of maximum political danger for the prime minister. Whether Rayner will strike a killer blow and withdraw her support is a live question.