Miliband and Streeting to fight Starmer for No 10

Wes Streeting will fire the starting gun on a three-way leadership contest with Ed Miliband and Sir Keir Starmer on Thursday, allies of the Prime Minister believe.

The Health Secretary is expected to resign from the Government and trigger a leadership contest in the morning, and the Prime Minister believes Mr Miliband will throw his hat in the ring shortly afterwards.

Sir Keir’s allies insist he will not resign and will battle any rivals to remain in Downing Street.

Mr Streeting, who met Sir Keir for a 16-minute showdown in No 10 before the King’s Speech on Wednesday morning, has been scrambling for the 81 Labour MPs he needs to back him so he can launch a leadership challenge.

If a contest is triggered, Sir Keir is planning to stand against Mr Streeting and also an expected challenger from the party’s Left wing.

Labour sources said the soft-Left faction was likely to propose Mr Miliband as its candidate because Angela Rayner, the former deputy prime minister, has unresolved tax issues and Andy Burnham is not eligible to stand because he is not an MP.

Whitehall sources told The Telegraph that a leadership contest would plunge the country into chaos by paralysing government business and spooking the bond markets.

The value of sterling slid against the dollar on Wednesday morning in response to news that Mr Streeting was preparing a leadership challenge,while government borrowing costs improved only marginally from Tuesday’s 28-year high.

Mr Streeting is understood to have told MPs he will make his move on Thursday, after days of speculation.

The Telegraph understands that Mr Streeting’s team has contacted MPs to ask for their support, while also suggesting they could transfer their vote to another candidate after a contest is triggered.

The same tactic has previously been used to garner support by leadership contenders who hope to trigger an election without the backing of enough MPs.

An attempt to force the Prime Minister from office without a formal challenge was dismissed by Sir Keir on Monday at a tense Cabinet meeting, in which he told his detractors they could only remove him by meeting the threshold of 81 Labour MPs.

If a contest is triggered, the timetable will be set by Labour’s ruling National Executive Committee (NEC), but it is unlikely to be long enough to allow Mr Burnham to return to Westminster through winning a by-election.

Mr Burnham’s allies are lobbying the NEC to run a longer contest if one is called, which could allow him to make his way into the Commons, but an ally admitted on Wednesday that he would probably be “squeezed out of the race”. 

Friends of Mr Burnham suggested he could instead strike a surprise pact with Mr Streeting in exchange for a Cabinet position.

Allies of the Prime Minister have discussed the same theory, and believe that a joint ticket between the two men could be deployed to defeat Sir Keir.

Two sources familiar with Mr Burnham’s thinking said the Mayor of Greater Manchester had identified a seat to contest in a by-election, pointing to his visit to London on Tuesday, when a sitting MP was alleged to have agreed to stand down to make way for him.

Afzal Khan, the MP for Manchester Rusholme, denied reports on Wednesday night that he was willing to step aside in favour of Mr Burnham. 

Mr Miliband, the Energy Secretary, has always insisted that he would not want to become Labour leader again because he experienced the “inoculation technique” of running the party between 2010 and 2015.

However, it is thought that he could receive the blessing of soft-Left MPs if they deem Ms Rayner too risky because of her unresolved tax case with HMRC, which was triggered by a Telegraph investigation into her underpayment of stamp duty last year.

Mr Miliband’s allies believe he would secure enough MP backers to stand against Sir Keir, although his wife, Justine Thornton, is believed to be against the idea of him running for the party leadership for a second time.

Mr Streeting is expected to use the publication of new NHS waiting list data on Thursday to argue that he has a strong record of government delivery.

He will then give a speech on Saturday at an event organised by Progress, a Blairite pressure group, to lay out his credentials to be prime minister.

Sir Keir held last-ditch talks with MPs and ministers in Parliament on Wednesday night, urging them to reject a leadership contest that would cause “chaos”.

It is understood Sir Keir told would-be rebels that a race for No10 would paralyse the Government.

He insisted he would stand against any rival but said any contest “would destroy our country and our party” and that Labour would not be forgiven if MPs “plunged the country into chaos”.

Cabinet ministers told MPs in the tearoom that “a leadership contest is not what the country wants or what the country needs right now”, one source said.

They told MPs that Sir Keir was “ready to fight” and that “the country gave us a massive message last week, and it wasn’t to descend into chaos.”

The news that Mr Streeting was planning to resign came as the King prepared to give his address to MPs and peers at the State Opening of Parliament, where he announced 37 bills for the new parliamentary session.

Mr Streeting’s team had previously promised not to release details of his meeting with the Prime Minister for fear of overshadowing the King’s Speech.

Allies of Sir Keir complained that his leadership manoeuvring had become a snub to the King and had damaged the Prime Minister’s attempted “reset”.

One source said ministers were “furious” about Mr Streeting’s decision, while another said his strategy could “backfire” because he was perceived to have weakened Labour further.

A senior MP told The Telegraph: “This was poor and unclassy timing on the day of the King’s Speech. He is desperate to get in before Burnham returns.”

Addressing the Commons for the first time since last Thursday’s local election results, Sir Keir appeared to joke about the lists of MPs that were either supporting him or urging him to resign.

Praising a Labour MP for her new book, he said: “Her list of endorsements is truly impressive, reaching well over 100 members. At last, a list that we could all get behind.”

Mr Streeting scowled as Kemi Badenoch, the Tory leader, joked he had “been a bit distracted lately” and should “do [his] job” rather than plot against Sir Keir.

“There’s no point him giving me dirty looks,” she responded. “We all know what he’s been up to. He knows, we know.”

Sir Keir has clung on in Downing Street since last Thursday despite Labour’s disastrous results in the local elections and its loss of the Welsh Senedd for the first time.

Four ministers, including some allies of Mr Streeting, have resigned and almost 100 MPs have called for Sir Keir to go. More than 110 have signed a rival letter warning against a leadership election.

There were reports on Wednesday night that Al Carns, the Armed Forces minister, was also preparing to launch a leadership run.

[Source: Daily Telegraph]