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

Karl Matchett, business and money editor of The Independent, reports:

It’s a retrospective sigh of ‘what could have been’ for the UK economy today, as the latest figures show GDP growth of 0.6 per cent in the first three months of the year, including monthly economic growth of 0.3 per cent in March.

This was, of course, the very beginning of the Iran war, and the expectation will be that it will end very soon, and there will be some disappointments as issues outside of domestic forces put the brakes on.

These figures are above expectations at the time, and industry figures will point to how well a surprisingly resilient economy would do if properly supported by a sound government in terms of business rates, the cost of hiring and fiscal policy.

However, as noted, these are retrospective figures and the picture has changed dramatically since the end of the first quarter.

Most economists will now expect these three months to be the highest point of the year, driven by inflationary pressures and instability among leaders.

Speaking to reporters in Downing Street, Chancellor Rachel Reeves said Labor MPs needed to make a “major decision”.

Asked whether he was concerned about the impact of a potential leadership race on the economic policies he has been working on over the last few years, he said: “Labour MPs have an important decision to make today, but the figures show that the economy is growing and when we come into this conflict, our economy is growing strongly because of the decisions I have made as chancellor, we should not risk that.”

The Independent’s political correspondent Millie Cooke reports:

Keir Starmer can win a future Labor leadership contest, a Treasury minister has insisted.

Asked if he believed the Prime Minister would survive and contest the leadership election, James Murray told Times Radio: “Yes.”

Asked if Sir Keir would enter any competitions, he said: “In response to a question following his speech on Monday, he said that if there was such a thing he would enter.

“But I repeat my earlier opinion; I think the leadership election would be the wrong choice for us.”

Angela Rayner said she was “relieved” to be able to “get on with my job” after HMRC cleared her of intentional wrongdoing in an investigation into her tax affairs.

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

“I have been cleared by HMRC of charges that I deliberately tried to avoid tax.

“When I bought a house for myself with a mortgage, I did not own any other property and had no personal financial interest in the court-ordered 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 accepted this.

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

“I wanted to make sure I paid every penny I owed, and I did that. I’m relieved that my family can now move on with my life and I can keep my job.”

The Independent’s political correspondent Millie Cooke reports:

Angela Rayner has been cleared of wrongdoing in relation to her tax affairs by HMRC, saying in a statement on Thursday she was “exonerated” of charges that she “deliberately sought to avoid tax”.

The tax issue that caused Rayner to leave government has been a hot topic for months since he resigned and was seen as a major obstacle to his standing in any potential leadership contest. But now that HMRC appear to have cleared the former deputy prime minister, he is now free to throw his hat in the ring and represent the soft left option for the party.

In an interview with GuardHe did not rule out taking part in the leadership race, but he also ruled out triggering a contest. So he would most likely be waiting for an attack to be triggered by Wes Streeting in the coming days. He also said Andy Burnham should not be prevented from returning.

What remains unclear, however, is whether Rayner will stand against Andy Burnham if he returns to parliament, or whether he will hope to take a senior position in a potential cabinet formed by his rival.

Andy Burnham has reportedly left his weekly show on BBC Radio Manchester to prioritize discussions about last week’s election.

Many have tipped the mayor of Greater Manchester as a popular potential successor to Sir Keir Starmer, but the fact that he is not currently an MP prevents this.

His spokesman said Mr Burnham “must prioritize the controversy arising from last week’s local elections”.

Angela Rayner says she has been cleared of any intentional wrongdoing in the investigation into her tax affairs.

The former deputy prime minister resigned last year after it was revealed he had not paid enough stamp duty on his £800,000 waterfront flat in Hove, East Sussex.

He attributed the underpayment to incorrect legal advice and always insisted it was not a case of “tax evasion”.

Ms Rayner said she had settled the £40,000 loss with HMRC but had been cleared of deliberately breaking the rules and would not face any further penalties.

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

The former deputy prime minister told ITV he would not strike a deal with Greater Manchester mayor Andy Burnham to challenge Sir Keir.

“I’m not making deals or anything like that,” he said.

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

Responding to the intervention of TUV MP Jim Allister (North Antrim), the prime minister said: “I am well aware of the tensions in Northern Ireland, the issues that need to be addressed in relation to relations with the EU.

“We have to face the fact that the promises made regarding Brexit were not true and did not bear fruit.

“It is in our economic interests, our national interests and our defense interests to be closer to Europe. Of course, we will act carefully, taking into account the issues in Northern Ireland, as he expects, but it is in our interests to be closer to the EU.”

Conservative MP Lincoln Jopp (Spelthorne) also pressed Sir Keir on when the defense investment plan would be published, saying it was “in its final form and will be published soon”.