Starmer meets rival Streeting as leadership plot stalls

Keir Starmer met one of his main leadership rivals at a private meeting on Wednesday morning, before the unveiling of a legislative agenda that many people in the ruling Labour Party don’t back the prime minister to deliver.

Health Secretary Wes Streeting, one of Starmer’s potential successors, didn’t answer questions from the media as he arrived at 10 Downing Street to see Starmer on Wednesday, nor when he left 17 minutes later. But what was said between the two men will be pivotal for where the U.K.’s political crisis goes next.

A slew of ministerial resignations have so far failed to force Starmer’s downfall this week. Charles III will deliver the King’s Speech in bizarre circumstances after around 100 MPs called for the PM to step aside and let the Labour Party choose a new leader.

Several allies of Streeting have been among those to say he should go, leading lawmakers to conclude that he is attempting to build pressure against the premier ahead of announcing a challenge.

“I think it’s being a bit over dramatized,” Starmer loyalist Nick Thomas-Symonds said on BBC Radio 4 on Wednesday, ahead of Starmer’s meeting with Streeting. “Anyone would think we were talking about the final scene at Casino Royale or something.”

Trade unions have joined the calls for change. “It’s clear that the Prime Minister will not lead Labour into the next election, and at some stage a plan will have to be put in place for the election of a new leader,” unions affiliated with the party said in a statement published Wednesday morning.

Four junior ministers have quit their posts, saying they believe the governing party needs new leadership in order to turn around its fortunes after a disastrous set of local election results last week. The ructions have roiled the U.K. bond market, driving long-term yields back to the highest in nearly three decades.

Gilts opened higher led by the short-end which is more sensitive to the impact of falling oil prices and the knock on consequences for monetary policy. U.K. two-year yields fell six basis points to 4.48%, while 10-year peers dropped five basis points to 5.05%.

“I am underweight gilts,” said Shinji Kunibe, a portfolio manager at Sumitomo Mitsui DS Asset Management Co. in Tokyo. “Yields have already risen beyond Truss-era levels, so they’re attractive if we see any positive signals. But with so much uncertainty, I doubt anyone is willing to touch gilts right now.”

While most in Labour still expect Starmer to have to announce a timetable for his departure in the coming days, he defied widespread expectations that he would have to do so on Tuesday. Starmer ended the day by making a string of junior ministerial appointments to replace those who had quit his administration, showing that he was determined to battle on.

One minister told Bloomberg they were shocked he had survived the day, saying he had managed to buy time in a way they didn’t think was possible.

At the high-stakes Cabinet meeting on Tuesday morning, Starmer told the room he wouldn’t discuss his future there and that if ministers wanted to speak about his leadership they should come to him individually. Streeting tried to talk to him afterward but the premier refused, according to people familiar with the matter who requested anonymity disclosing private conversations.

Starmer’s move was seen as effectively daring his opponents to come out and publicly challenge him, a position that his deputy, David Lammy, put voice to in Downing Street on Tuesday evening.

“It’s been 24 hours now, and nobody has come forward to put themselves forward in the processes that exist in the party,” Lammy told reporters. “No one seems to have the names to stand up against Keir Starmer, and for those who are suggesting that he should stand down, they should say which candidate would be better.”

Streeting’s camp appeared to be conducting what one Labour official described as a campaign of attrition against Starmer by having his supporters drip-feed their calls for his departure. An ally of the health secretary denied he was orchestrating a plot. His backers, meanwhile, seemed divided about his strategy. Some were disappointed he had not yet gone public to challenge Starmer, fearing he could be seen as losing his nerve.

However, others cautioned that pressure had to grow on Starmer organically before he was able to challenge, saying that if Streeting went too soon, the left of the party would accuse him of a cynical attempt to force a contest before another potential Starmer successor, Greater Manchester Mayor Andy Burnham, can find the parliamentary seat he needs to run himself.

One supporter of Streeting said they feared his chances of becoming prime minister were decreasing. They said they did not see how he had a path to Downing Street because Labour’s so-called soft-left faction would put up a candidate against him who would be more popular with the party members who will elect their next leader. They added that they were coming to terms with what they saw as the likelihood of Burnham succeeding Starmer.

However, as of Wednesday morning, Burnham also remained silent. Supporters said he was meeting Labour MPs in London and discussing his options. They insisted he had a route to parliament and had found an MP to stand aside and trigger a by-election for him to attempt to run in.

However, they stopped short of announcing the plan. Burnham canceled a planned appearance at an insurance conference slated for Wednesday morning.

Some allies of Starmer sought to rally around him. A statement opposing a leadership contest was signed by more than 100 MPs.

Lammy said Starmer has his “full backing” and urged Labour MPs to put “country before party,” saying that only Reform U.K. leader Nigel Farage and the populist right would benefit from “navel-gazing” in the governing party.

“What I say to colleagues is, look, let’s just step back, take a breath,” Lammy said. “Let’s get on with the business of running this country and government.”

While Labour appears in a state of paralysis, that could quickly change in the days ahead if either Streeting or Burnham make a move, or if members of the Cabinet go to Starmer and tell him he has to go. Most in Labour who spoke to Bloomberg on Tuesday still expected that to happen in the coming days.

---------

—With assistance from Masaki Kondo, Paul Dobson, Fran Wang and Isobel Finkel.