Keir Starmer has entered 2026 determined to fight back. After a difficult end to the year, he spent the Christmas break at Chequers thinking seriously about the argument he wanted to make to his party and the country. At the first cabinet meeting of the new year, he and his team decided he would set out that vision to colleagues – and to the TV cameras he had invited in to observe.
But before he could begin, he had to wait for someone: Wes Streeting, who had been on the morning broadcast round. “It would have looked bad if he wasn’t there,” an insider explains, after what happened last November, when “Starmer allies” accused the Health Secretary of plotting a coup to take down the Prime Minister.
Turmoil on the world stage has helped quieten whispers about a leadership challenge, yet Starmer’s every move is being made under the cloud of what happened towards the end of last year. If the Manchester mayor Andy Burnham’s interventions ahead of the Labour conference in October didn’t send a clear enough message that the PM was fighting for his job, the plotting accusations against Streeting must have. Soon enough, Starmer and his team knew for certain that rivals were making leadership plans. They knew, because they were told so directly.
On the day Streeting was accused of plotting to replace the Prime Minister by “Starmer allies”, an explosive phone call took place between the Health Secretary and Morgan McSweeney, the PM’s chief of staff. In a fury, he accused McSweeney of being behind the press briefings against him. McSweeney denied any involvement. There was a bitter, angry exchange, with raised voices, which ended any residual goodwill between two of the most powerful people in the Labour government.
More extraordinary was what was said next. Streeting told McSweeney he wasn’t plotting, but “planning”, as any self-respecting cabinet minister would. The Health Secretary said he had no plans to trigger a leadership challenge and the suggestion he had 50 or so frontbenchers poised to resign after the Budget was absurd. As Labour struggled desperately in the polls, however, he was preparing for what would come next. It’s not just me, Streeting explained to McSweeney: so is half the cabinet. He proceeded to list the names of colleagues making their own preparations for a leadership contest.
“It is 2026 and we are concentrating on tackling cost of living issues,” a Downing Street source said. “Any second thinking about 2025 political nonsense is a second wasted.” Everyone involved is determinedly carrying on as though none of it ever happened, but Starmer is still fighting to remain. Serious thinking about the direction of the Labour government is under way. Streeting now believes Starmer personally authorised the briefings against him. He feels betrayed. Burnham, too, makes no secret of his intentions. They are both thinking about what should come next.
Before Christmas, there was a striking certainty – you might call it complacency – among most Labour figures that there would be a leadership contest this year, though none knew how or when it might happen. I asked one cabinet minister what the trigger would be. They shrugged, saying May is the obvious moment of danger for Starmer, when support is likely to flood away in the devolved and local elections. But it could happen sooner. “All you need is 80 Labour MPs to get behind one name, and they are so cross about so many things, there are so many potential trigger points before then.” It would take 80 Labour MPs publicly nominating a single, named candidate to trigger a leadership contest. Senior figures from different camps were equally confident this would happen.
But now, there is a strange consensus that Starmer is safe. “We don’t do regicide,” is the mantra, as many express doubts as to whether the Parliamentary Labour Party (PLP) will be organised or ruthless enough to get rid of him. “I know the PLP – they’re a bunch of cowardly custards,” said one Labour veteran of a successful coup against a prime minister. So far, no one has been willing to wield the sword.
Many think the idea of replacing Starmer is mad. Even some who are unhappy with his leadership argue that changing the prime minister, especially so soon after winning a landslide election, would be an unconscionable act of self-harm, consigning Labour to the electoral fate of the Conservatives – tarnished by a reputation for chaos. Any successor to Starmer would face the same challenges, they say, but with less democratic legitimacy.
Yet so long as Labour is polling around 17 per cent and on course for near-wipeout in Wales, Scotland and in local English elections, Starmer’s position is not safe. Labour enters government roughly once a generation and many in the party fear they are squandering their opportunity. The stakes are higher than ever, as Labour insiders talk about the urgent need to prevent Nigel Farage from taking No 10. For that reason, the leadership question isn’t gossip to the people engaging in it, but a profoundly serious question about how to save Labour, and the country, from the existential threat of the radical right.
The planning for a leadership contest has begun, even as many say they doubt one will happen any time soon. Streeting has emerged as the leading candidate from the right, but he would face a contest. The soft left of Labour – the rump of the parliamentary party – has reacted with horror to the idea of a Streeting coronation, and insists someone from their faction – Andy Burnham, Angela Rayner, Ed Miliband, Lisa Nandy or Louise Haigh – would stand to stop him. Streeting, in turn, has told friends that he believes Rayner is “beatable” in a contest and that she is the candidate he would most fear, though he is still unsure if she would actually stand.
Rayner is keeping her own side of the party guessing, too. Senior figures who would like to forge alliances with her say they can’t work out her intentions. She has indicated she would try to stop Streeting, but equally, her allies say she will make a personal decision about whether or not she stands if the time comes. Because Rayner needs to settle her affairs with HMRC before attempting a comeback – she resigned as deputy PM in September after failing to pay sufficient stamp duty on a new property – her supporters urge MPs to take their time with the delicate business of replacing a prime minister. It is in her interests for the process to happen slowly.
Burnham, meanwhile, has become a more familiar face in Westminster. He was in London the week before parliament broke up for Christmas to engage with MPs, and returns on 20 January to deliver a speech at the Institute for Fiscal Studies about economic policy. Behind the scenes, Burnham is in regular contact with senior allies in parliament, though he still has to overcome the hurdle of securing a seat in the Commons. Figures on Labour’s ruling body, the National Executive Committee, say they could use various excuses, from gender balance to him being insufficiently local to an area, to prevent him standing as a by-election candidate. Burnham allies scoff at the idea. “If Andy went on TV and said, ‘I want to stand to be the MP for that seat,’ would Keir or Morgan really have the political power to stop him?” an ally asks. “The PLP needs to show its hand,” another ally urges, arguing he needs MPs to make it clear that they want him to come back.
There are other would-be candidates, of course. Shabana Mahmood, the Home Secretary, is concealing her intentions. Some expect her to stand to Streeting’s right to make her case to the Labour membership in the event of a contest, but whether she would fold in behind him if she failed to garner enough support is less certain. She received a tacit blessing from Tony Blair before Christmas as the speaker at his eponymous institute’s Christmas party, but she has admirers to her left, too – including Burnham, who worked closely with her following the Yom Kippur terror attack on a synagogue in Manchester in October. There is speculation that a formidable left-right alliance could be formed between the pair.
There are other names under discussion, too, including cabinet ministers Darren Jones, Bridget Phillipson, John Healey and a defence minister, Al Carns, who only entered parliament in 2024. But for now the shadow leadership contest, and the important ideological battle, is between Streeting and the soft left.
Wes Streeting and Angela Rayner were both in attendance in the Marylebone penthouse of the Labour donor Gary Lubner for his annual Christmas party last month. Their presence was interpreted by fellow guests, who hadn’t seen them there in previous years, as further evidence of “planning”. But among the No 10 staffers, think-tankers and trade unionists mingling at Lubner’s winter bash, it was a third politician whose presence attracted the most interest: Ed Miliband.
For someone who has ruled himself out of any leadership contest – declaring his 2011-15 spell as leader “the best inoculation technique” against running again – Miliband had a certain buzz about him before Westminster broke up for Christmas. Onlookers concluded he was “on a circuit”. As well as attending Lubner’s do, he spoke at the New Statesman Christmas party and the Welsh Labour gala dinner. What is he up to? Friends insist he means what he said about having no desire to enter a contest – although one suggests he would stand if there was no other soft-left candidate. He’s focused on winning a different contest: the battle of ideas inside the Labour Party.
Miliband has long been the highest-profile figure in Starmer’s government making the case for a bolder economic plan. Take, for example, his row with Rachel Reeves before the election over whether to ditch the pledge of £28bn in green investment: while she wanted to emphasise fiscal credibility and reassure voters of Labour’s economic credentials, he favoured a more radical change message. Now, having argued for two decades that Labour needs to move to the left economically, the mansion tax he campaigned for in 2015 has just been implemented in Reeves’ Budget. “Ed is feeling intellectually powerful at the moment,” is how a friend puts it. He is positioning himself as the intellectual kingmaker of his faction and a chancellor-in-waiting. Whoever emerges as the soft-left candidate, Miliband expects to be a key player in shaping their approach. He believes a bold offer of economic change – such as taxes on the wealthy, or the mass construction of social housing – is the only way to counter the threat of Farage.
The soft left in Westminster is closer and more cohesive than is often acknowledged, some of its leading figures insist. Miliband, Nandy, Rayner and Lucy Powell, the deputy Labour leader, are close. All four gave speeches at the Christmas drinks of the revived soft-left Tribune caucus, a formal grouping that is bringing them even closer. Burnham speaks to many of these figures regularly, too, though some of his allies worry he has been making his intentions too brazen. “We have to try to make things work under Keir,” is the line put to me by several of the soft left’s leading lights. Powell, in particular, is invested in Labour’s success in May as the party’s deputy leader and focused on making things work under Starmer. She has told friends it would be irresponsible to use her new job to make mischief, and Labour MPs don’t want a contest right now. A delay to a leadership contest would also give Burnham more time to enter it, of course. Starmer supporters, Burnham allies and Rayner fans all have an interest in saying there is no appetite for a leadership contest any time soon.
Burnham, meanwhile, has begun to call for a radically different economic approach: “Manchesterism”, a form of consensual, business-friendly socialism that seeks to retake public control of essential services, from housing to transport. Burnham wants to bring in “maximum devolution” to England’s regions and spur growth in towns and cities around the country: Manchester’s booming economy is his proof of concept. He has said the alternative – “firing up London and the south-east and hoping everything will be fine” – is not an option.
Streeting has begun to outline his own vision: economic growth as the top priority, but from a more centrist, pro-business perspective, favouring deregulation and tax cuts while remaining within fiscal rules. He believes in building market confidence to bring down the costs of borrowing and drive investment in the UK.
The Health Secretary, who describes himself as a progressive from Labour’s “new right”, often cites his closest friend in politics, the Business Secretary Peter Kyle, on this key economic point: “We need to treat growth like an emergency.” Like the young Tony Blair and Gordon Brown, the pair shared an office in parliament until joining the shadow cabinet. Though there is no suggestion Kyle would be Streeting’s choice for No 11, critics to the Health Secretary’s left are already hitting out at the idea. “Peter Kyle as chancellor would be a shift to the right,” a concerned internal opponent of Streeting’s says. Kyle has been criticised for being too close to Big Tech, and has frequently clashed with Miliband in government.
Streeting believes this government hasn’t backed up the promise of prioritising growth with action. This is a delicate subject for him because Reeves is a friend of his, and he remains loyal to her despite his rift with Starmer. But Streeting is increasingly critical of the government’s economic agenda, from business rates to the farmers’ inheritance tax increase to the mooted manifesto breach on income tax. He has already found one example of a pro-growth policy that would differentiate him from the Chancellor: for the UK to rejoin the EU customs union.
As Streeting begins to work up his economic vision, his opponents are already tearing it down. “Reheated Blairite centrism coupled with calling out Farage on racism simply won’t be enough,” one soft-left figure says. Burnham, too, has been burned by making his position clear. He feels bruised by the backlash to his comments in the New Statesman last September that Labour needs to move beyond “being in hock to the bond markets”. At that speech to the Institute for Fiscal Studies, he will seek to rectify this by outlining his approach to the markets in more detail. Miliband also faces criticism from the right that he wouldn’t be reassuring enough to bond markets in a time of economic volatility. The Labour right has spotted a looming contest as an opportunity to unpick some of the soft left’s policies: Labour Together, one of the think tanks from that wing, has produced a policy paper suggesting Angela Rayner’s workers’ rights reforms should be reversed because of their impact on business, while the Tony Blair Institute is working up a suite of policy proposals to shape the debate over Labour’s future.
Labour’s divisions over economic policy are becoming clear. Even Keir Starmer’s advisers are divided on how to position themselves against Reform, and how close they want to get to the EU. While half of the party wants a pro-business, pro-innovation dash for growth, its left wing – and even its centre – is calling for something more radical. “If Wes won, the whole party would get behind him, of course,” says the same soft-left figure who described Streeting’s vision as insufficient to tackle the threat of the Reform right. Even before a leadership contest has been declared, the starkly different visions within Labour about what it wants to do with power are emerging. That messy debate could play out in public. Even if it doesn’t, one thing is clear: Labour doesn’t believe it is performing well enough in government to tackle the threat of Nigel Farage. Many in the party are planning to change that. But so far, they haven’t managed to reach the same answer.
[Further reading: Labour bickers over the “stakeholder state”]
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This article appears in the 14 Jan 2026 issue of the New Statesman, Battle for power
Join the debate
Subscribe here to commentReversion to a Miliband-style soft-left Labour leadership would surely be an electoral disaster. But there is much to like about Burnham’s commitment to genuine devolution; and taking control of vital natural national assets need not intellectually be the preserve of the left.
The idea of a joint Burnham-Mahmood ticket is intriguing as long as they would agree to get (perhaps) Streeting driving through effectively rejoining the EU. Reeves is surely, please god, a goner. And maybe Starmer would be relieved to be demoted to Foreign Secretary – a job he is actually doing quite well.
I find it slightly odd that amid all this discussion about the different factions and possible candidates, Reeves’s name is eerily missing. Where does the Chancellor stand on a possible leadership contest? And why is she fairly absent from any reporting on this matter? Is there any inkling she may throw her hat in the ring too? Or is she expected to stand behind Streeting? Would be very interested to know more.