As the sun rose over the Thames on this morning, Sir Keir Starmer’s government, sold to the British public as a symbol of stability, found itself fractured, inward-looking and more akin to the turbulent Truss administration than any Labour politician would feel comfortable admitting.
The damming resignation of Wes Streeting, yesterday, was not the first domino to fall, but it did dramatically increase the chances of the PM being forced out. Mr Streeting, a figure long seen as a potential successor to Keir Starmer, delivered a calculated strike. In his blistering resignation letter, Streeting accused the Prime Minister of a failure to define the Labour project, suggesting that the government had become reactive rather than transformative. By citing a vision vacuum, “where we need vision, we have a vacuum,” he said.
His resignation has effectively fired the starting pistol on a leadership challenge that many had predicted, but it still has not formally got underway. This weird situation, due to the Labour Party rules that demand that any candidate must have 20 per cent of the Parliamentary party supporting the challenger, (currently 81 MPs).
The immediate fallout saw James Murray, formerly of the Treasury, parachuted into the Health brief and the important financial markets reacting with predictable jitters; the pound fell to a six-month low against both the dollar and the euro as traders weighed the possibility of another prolonged period of British political instability.
For a government that staked its reputation on being the “adults in the room” after the chaotic Tory years, the optics of a sliding currency and a protracted leadership battle are particularly damaging.
While Streeting provided the spark, the fire really came to life as the popular Mayor of Manchester, Andy Burnham, the so-called “King of the North,” announced that he would be attempting a return to Parliament.
In a move that has sent shockwaves through the Parliamentary Labour Party, Josh Simons, the MP for Makerfield, announced he would step aside, triggering a by-election that Mr Burnham is widely tipped to contest.
Burnham’s return to Westminster is far from assured, as Reform UK could win the seat from Labour, based on local election results. However, recent YouGov polling suggests that the Mayor of Manchester is the most popular Labour figure and 34 per cent of the British public believe Burnham would make a better Prime Minister than Starmer.
Adding a layer of drama to the week’s events was the timely political resurrection of Angela Rayner. The former Deputy Prime Minister, who was forced to resign in September 2025 over a dispute regarding stamp duty on a former property in Hove, has been cleared of wrongdoing by HMRC. In a statement released on Thursday morning, the MP for Ashton-under-Lyne said she “welcomes” the conclusions of the tax authority, which she claims has exonerated her of any accusation that she “deliberately sought to avoid tax.”
Rayner’s potential return to the frontline changes the arithmetic of any leadership contest. She remains a darling of the trade unions and the party’s left-leaning wing, which has grown increasingly disillusioned with the government’s centrist trajectory. Rayner clarified that when she purchased her home, she had no personal financial interest in the trust set up for her son and had acted in good faith based on expert advice. HMRC’s acceptance of this “reasonable care” defence means she is now legally and ethically “clear to stand” in any potential leadership battle.
However, Rayner appears to be playing a longer game. Rather than putting herself forward immediately, she has been vocal in her support for a “course-correction” and has reportedly been in close contact with the Burnham camp. Her critique of the current leadership on Monday was sharp: “What we are doing isn’t working, and it needs to change. It’s no good acknowledging mistakes if they’re not put right.” If Rayner throws her formidable weight behind Burnham, the “north-west axis” could prove unstoppable.
Despite the sense of impending collapse, the Prime Minister still has loyalists in the bunker. Steve Reed, the Environment Secretary, has emerged as the chief defender of the Starmer legacy. In a series of media appearances, Reed warned that Labour was in danger of indulging in the same “Tory-style leadership chaos” that the public had so decisively rejected at the last election. Reed’s argument is one of pragmatism over personality, suggesting that a leadership contest during an economic downturn is a self-indulgent luxury the party cannot afford.
While Ed Miliband continues to focus on the Net Zero transition, his silence on the leadership has been noted by many as a sign that he is waiting to see which way the wind blows. He is widely seen as a potential King Maker.
As the weekend approaches, the focus shifts from the floor of the House to the constituencies. The Labour National Executive Committee (NEC) is under immense pressure to manage the Makerfield by-election timetable. If they attempt to block Burnham, as they did during a by-election earlier this year, they risk a grassroots revolt that could tear the party apart.
The next 72 hours could be critical. If more cabinet ministers follow Streeting out of the door, Keir Starmer’s position will become untenable. If, however, the PM can face down his critics, in the absence of a declared candidate with 81 MPs triggering a contest, then he might just limp on until the King of the North makes his return, or should the second release of the Mandelson papers provide more revelations about the disgraced peers appointment.
For further updates on parliamentary news and the developing government crisis, stay tuned to Parliament Politics Magazine.
Starmer clings on to power as the King of the North plots his return
