Phase 2, week 2…

Last week was not a good week for Keir Starmer.

What started as a full-throated defence of his deputy, Angela Rayner, ended in a sorrowful handwritten letter of goodbye.
Behind in the polls and hemmed in on the economy, the PM and his team decided to grab the moment they hadn’t chosen to carry out sweeping changes to the government.

Friday was all about Shabana Mahmood, whose star has been rising for some time. Originally planned for an autumn reshuffle, the objective of the day was to get the Birmingham MP into the Home Office, where she would take the same uncompromising approach to small boats and migrant hotels as she’d taken at Justice.

The pursuit of this objective meant manoeuvring Yvette Cooper and David Lammy into face-saving positions, avoiding any flouncing from Cabinet. Yvette’s clear signals to No10 were a nostalgic reminder of legacy Brownite behaviours…
Lucy Powell’s departure from Cabinet was well received by many on Labour’s right, but set her up as a Mancunian Martyr. She will be a thorn in the government’s side, particularly as the ‘Mainstream’ group launches today, backed by Powell’s longtime buddy, Andy Burnham – and which no doubt will make claim to Labour’s ‘soul.’

With Mahmood in the Home Office and Pat McFadden at DWP, the focus for phase two’ is clear: control immigration, tackle worklessness and kickstart growth. I’m told we should expect a shift from tactical interventions, which failed spectacularly in ‘phase one’ (the welfare vote ‘to give some fiscal headroom’ being the prime example), to a more strategic, values-led approach: from cutting welfare, to reforming the system to get people into work and improve their life chances. This approach of ‘tough choices but with Labour values at the core’ will be used to persuade a restless Parliamentary Labour Party to vote through proposed changes – at a time when many are looking at their ‘efficient’ majorities with stomach-churning fear.

But the next few weeks will kickstart a debate in the Labour party about its direction, about whether the leadership has strayed from ‘true Labour values’ (the moral test always lurking the background). The unwished-for (by the PM at least) deputy leadership contest will see candidates appeal to their parliamentary colleagues, alongside tilting towards the trade union movement (whose influence and voice we’ll hear more of in phase two) and membership at large, who are uneasy about many of the government’s ‘tough choices’.

Tensions will be out in the open but will the spectre of Reform on the horizon encourage discipline or more dissent? I’m told that whilst the major trade unions are in their predictable corners to defend workers’ rights reforms from business lobbying (and claims proposals will inhibit growth), key general secretaries are prepared to reach a compromise after ‘a period of suitably performative posturing.’ Encouraging.

And what of the junior ranks of the reshuffle?

Decisions made in No10 on who to bring on from the 2024 intake and who to exit point to a clear direction of travel: the corpus of government has moved to the right.

No10 sources assert that ‘PM now has the team he needs to deliver.’

I hope he does. There are few rolls of the dice left.