Get a grip, Labour donors warn Starmer

On Friday, Labour’s biggest donors gathered at Chequers for a meeting with the prime minister. The wealthy backers, who between them have given millions of pounds to the party, warned Keir Starmer that Labour is in serious political peril.

The message was clear: they support Starmer, for now, but he must get a grip on No 10. The prime minister is considering replacing both Morgan McSweeney, his chief of staff, and Chris Wormald, the cabinet secretary. “They gave him a pretty clear message about the extent of the problem – that people are angry and think it’s terminal,” one source said.

This weekend, the prime minister is suffering a dark night of the soul, angry with himself for appointing as ambassador to Washington a man who was so close to a convicted paedophile and even more furious with Peter Mandelson for lying to him about the extent of the friendship.

At times over the past few days, Starmer has even started to question the sustainability of his position in No 10 after a tempestuous week in which he was bombarded by Labour MPs raising questions about his judgment. “It has hit him very hard – he’s a man who measures himself by his own integrity,” one ally said. “He’s not in the mindset of going now but there was a big wobble on Friday.”

Labour MPs are in a sulphurous mood. “I just think the trust from too many colleagues has gone,” one minister said. “Trust to get it right and trust to make the moral decision. It’s hard to come back from that.”

Another senior figure claimed a majority of cabinet ministers had lost confidence in the prime minister. “It’s like when Boris [Johnson] ran out of road – everyone knows it’s going to happen but they’re all looking around to see who will pull the trigger. Cabinet members are speaking to each other and I think there will be a move soon.”

Even people who have always been loyal to the Labour leader describe a sense of despair. “I’m now at the point where I really struggle to see a route to recovery,” one said. “I think we’ve reached a point of no return. People have a settled view about Keir and it’s impossible to win an election with a leader who is so disliked.”

McSweeney, who recommended Mandelson for the Washington job, is looking increasingly vulnerable. “The skids are under Morgan,” according to a Labour source. Wormald could also be replaced as part of a “domestic reset” by Starmer. But turning his closest aide or the head of the civil service into sacrificial lambs may not save the Labour leader. “If Morgan is in trouble, then Keir is in trouble,” one former cabinet minister said. “Morgan created Keir and Keir is totally dependent on him, if he gets rid of Morgan, it’s game over. This has the potential to be a moment that brings down a prime minister.”

There is now a sense on the Labour benches that it is a question of when, not whether, Starmer goes. ”It’s so volatile and I don’t know what the mechanism will be,” one insider said. “It could be ministers going into the PM, or MPs signing a letter. Keir might just decide it’s no longer in the interests of the country or his party for him to continue. There are lots of different routes that you can see leading to a point where he just has to go.”

Labour women are particularly angry that Mandelson’s association with a convicted sex offender was so easily brushed aside. Natalie Fleet, the Labour MP for Bolsover, who was herself groomed as a teenager, said: “What I hate is that the story of the women who were raped, trafficked and exploited is being ignored, and instead it’s being told through the lens of powerful men.”

Catherine MacLeod, who worked as an adviser to the former chancellor Alistair Darling and is now a Labour peer, believes that if there had been more women working in No 10 at the time of Mandelson’s appointment as ambassador, they would have “waved the red flag more vigorously” and he “might not have got that job”.

The Gorton and Denton byelection later this month and the local, Scottish and Welsh elections in May are predictable moments of danger for the prime minister but there could be another unforeseen trigger.

Downing Street is being forced to release tens of thousands of emails, WhatsApp messages and memos sent to and from Washington when Mandelson was there. Nobody knows where the landmines are buried. Insiders are discussing which advisers and ministers could be protected by having the “disappearing messages” facility enabled on WhatsApp. According to one source: “Morgan [McSweeney] has disappearing messages – Wes [Streeting] does not.”

The battle to replace Starmer is under way, accompanied by a vicious briefing war. With Andy Burnham, the Greater Manchester mayor, blocked from returning to parliament, Angela Rayner, the former deputy prime minister, and Streeting, the health secretary, are the favourites. Both have made clear to colleagues that they want to be leader and are ready to run but neither is in a position to launch a formal challenge.

Rayner is waiting for HM Revenue and Customs to complete an investigation into her tax affairs, while Streeting is widely seen to have been damaged by his past association with Mandelson. “The paradox is that the nature of this scandal simultaneously makes it more likely that Keir Starmer will have to be replaced and harder to find a suitable candidate to replace him,” one senior Labour figure said.

Al Carns, the armed forces minister and former marine sometimes discussed as a potential “fresh face” candidate, was conveniently out of the country with an ice pick in his hand on an expedition across Norway’s Arctic frontier last week. Supporters of Starmer hope the prime minister may yet be saved by the fear among Labour MPs from all factions about what could follow him. “The Tories made complete fools of themselves by thinking you could just change leader and with one bound be free,” one said. “It doesn’t work out like that. The idea of triggering a leadership election in a competitive sovereign bond market when the one thing Britain has going for it is a stable government with a big majority is completely irresponsible. And you are dealing with an electorate that voted for Jeremy Corbyn.”

Some senior party figures worry that Labour will learn the wrong lessons from the Mandelson affair. They are concerned that instead of seeing his egregious behaviour as the actions of a deeply flawed individual, MPs and members will interpret it as a symptom of an ideology that led him to declare that he was “supremely relaxed about the filthy rich” and that the party will veer away from the pro-business, centrist politics that Mandelson, Tony Blair and Gordon Brown championed with such electoral success.

One minister said: “All roads lead to Rayner.” The former deputy prime minister would certainly steer a more leftwing course. She has been discussing appointing Ed Miliband, the energy secretary, as her chancellor.

When Miliband was Labour leader, he promised to usher in a more “responsible” capitalism and divided businesses into “predators” and “producers”. The thought of him at the Treasury is already making Labour-supporting business leaders nervous.

“Keir abandoned pro-business centrism but it was better disguised. Angela would definitely end it completely,” one senior figure from the Blair and Brown era said. “We now have much more restrictive labour and union laws thanks to Angela. Rayner/Miliband would be a nightmare for the economy and for Labour’s prospects.” Another Labour source says Rayner’s authenticity appeals to voters “because she’s fresh and different and authentic, but can you imagine her on the world stage? I’m not sure voters can. Wes a bit more, but how tainted is he by what’s happened?”In the run-up to the 2024 general election, Mandelson met some of the young Labour candidates. One recalled how he asked: “Do you have any skeletons in your closet?” When the aspiring politician – who is now an MP – said he did not, Mandelson replied: “How very boring.” Now it is the former business secretary’s skeletons that have come tumbling out of the closet. Mandelson has always been a risk-taker, who relished sailing close to the wind with the rich and powerful, preferably on their yachts. But Starmer, a frugal pescatarian who prides himself on following the rules, looks increasingly likely to pay the political price.

Pat McFadden, the work and pensions secretary, believes the Mandelson affair will be bad for everyone in the end. “The tragedy is that a lot of voters will view this and it will confirm what they think about politics: that they’re all the same, they’re all in it for their own enrichment, there’s this gilded group of very wealthy people.

“Actually, that’s not the case. Most people, whatever party they are from, are in politics because they want to change the country or the world in ways that they would say would make it better.”

Photograph by Neil Hall/EPA/Bloomberg via Getty Images