Starmer leadership latest: Streeting challenge expected in hours after Rayner cleared over tax affairs

The Independent’s business and money editor Karl Matchett reports:

A backward-looking sigh of ‘what might have been’ today for the UK economy, as the latest figures show GDP growth of 0.6 per cent for the first three months of the year, including monthly economic growth of 0.3 per cent in March itself.

That was of course the very start of the Iran war and the expectation will be of a tail-off very soon afterwards, and there will be some frustration that matters outside of domestic hands have put the brakes on.

These numbers are above the expectations of the time, and will have industry figures pointing to how much better a surprisingly resilient economy would do if it was properly supported by a solid government, in terms of business rates, cost of hiring and fiscal policy.

But, as noted, they are backwards-looking numbers, and the picture has changed dramatically since the end of the first quarter.

Most economists will now expect these three months to be the high point of the year, with inflationary pressures incoming and instability among the leadership.

Chancellor Rachel Reeves said Labour MPs had an “important decision to make” as she spoke to reporters in Downing Street.

Asked if she was worried about the impact of a potential leadership race on the economic policies she has been working on these past few years, she said: “Labour MPs have got an important decision to make today, but the numbers show that the economy is growing and that when we entered this conflict, our economy was growing strongly because of the decisions that I have made as chancellor, we shouldn’t put that at risk.”

The Independent’s political correspondent Millie Cooke reports:

Keir Starmer could win a future Labour leadership contest, a Treasury minister has insisted.

Asked whether he believed the prime minister would survive and fight a leadership election, James Murray told Times Radio: “Yes.”

Asked whether Sir Keir would stand in any contest, he replied: “He’s said that, he said that on Monday in response to a question after his speech on Monday that he would if there were one.

“But I repeat my earlier point, I think having a leadership election would be the wrong choice for us to take.”

Angela Rayner said she was “relieved” she could “get on with my job” after HMRC cleared her of deliberate wrongdoing in an investigation over her tax affairs.

In a statement, the former deputy leader said:” I welcome HMRC’s conclusion, which has cleared me of any wrongdoing.

“I have been exonerated by HMRC of the accusation that I deliberately sought to avoid tax.

“When purchasing a home of my own with a mortgage, I did not own any other property and had no personal financial interest in the court-instructed trust set up to manage my son’s financial award. I was advised by experts that I should pay stamp duty at the standard rate.

“I set out to pay the correct amount of tax. I took reasonable care and acted in good faith, based on the expert advice I received, and HMRC has accepted this.

“I have always sought to act with integrity, and I believe politicians should be held to high standards – that is why I resigned from government and co-operated fully with HMRC.

“I wanted to ensure that I paid every penny that I owed, and have done so. I am relieved that my family can now move on – and that I can get on with my job.”

The Independent’s political correspondent Millie Cooke reports:

Angela Rayner has been cleared by HMRC of wrongdoing over her tax affairs, saying she had been “exonerated” of the accusation she had “deliberately sought to avoid tax” in a statement on Thursday.

The issue of Rayner’s tax affairs – which precipitated her departure from government – has been hanging over her head for months since she resigned – and was seen as a major obstacle to her standing in any potential leadership contest. But now that HMRC appears to have cleared the former deputy prime minister, she is now free to throw her hat into the ring and represent a soft left option for the party.

In an interview with the Guardian, she didn’t rule out standing in a leadership race, but she did rule out triggering a contest. Meaning, most likely, she would be waiting for one to be triggered by Wes Streeting in the coming days. She also said that Andy Burnham shouldn’t be blocked from coming back.

However – what is not yet clear is whether Rayner would stand against Andy Burnham if he returned to Parliament, or whether she would hope for a senior position in a possible Cabinet formed by the challenger.

Andy Burnham has pulled out of his weekly slot on BBC Radio Manchester to prioritise discussions over last week’s elections, it has been reported.

The Greater Manchester mayor is tipped by many to be a popular potential successor to Sir Keir Starmer, but is hampered by the fact he is not currently an MP.

His spokesperson said Mr Burnham “has to prioritise discussions arising from last week’s local elections”.

Angela Rayner has said she has been cleared of any deliberate wrongdoing in an investigation into her tax affairs.

The former deputy prime minister resigned last year after it emerged she had not paid enough stamp duty on her £800,000 seaside flat in Hove, East Sussex.

She blamed the underpayment on incorrect legal advice and always insisted it was not a “tax dodge”.

Ms Rayner says she has now settled that missing £40,000 with HMRC, but has been cleared of deliberately breaking the rules and will not face any further penalty.

Angela Rayner has said in interviews with the Guardian and ITV that she has been cleared of any tax misconduct by HMRC, paving the way for a potential leadership bid if Sir Keir Starmer were to resign.

The former deputy prime minister told ITV she will not make a pact with Greater Manchester mayor Andy Burnham to challenge Sir Keir.

“I’m not doing deals or anything like that,” she said.

Sir Keir Starmer said he will navigate closer relations with the European Union “carefully”.

Responding to an intervention from TUV MP Jim Allister (North Antrim), the prime minister said: “I’m very well aware of the tensions in Northern Ireland, the issues that have to be dealt with in relation to relations with the EU.

“We have to face the fact that promises were made about Brexit, which were not true, which haven’t borne fruit.

“It is in our economic interests, our national interest, and defence interests, to be closer to Europe. Of course, we will navigate carefully, taking on board the issues in Northern Ireland, as he would expect, but it is in our interest to be closer to the EU.”

Sir Keir was also pressed by Conservative MP Lincoln Jopp (Spelthorne) on when the defence investment plan will be published, to which he said it “is being finalised and will be published soon”.