Chancellor Rachel Reeves says in an exclusive interview on BBC Breakfast that any Labour leadership contest would "plunge the country into chaos"
It comes as Angela Rayner, seen as a potential challenger to PM Keir Starmer, is cleared by HMRC of wrongdoing over her tax affairs after settling £40,000 in unpaid stamp duty
The former deputy prime minister says she had been "exonerated" of the accusation she had "deliberately sought to avoid tax" - more on that here
On Wednesday, allies of Health Secretary Wes Streeting said they expected him to launch a challenge as soon as today - Chris Mason says potential leadership contenders are jostling for position this morning
Starmer is battling to save his job after four ministers quit and dozens of Labour MPs urged him to resign after last week's heavy election losses
Any leadership challengers would need the support of 81 MPs to trigger a contest under Labour Party rules - how this process works
Chris Mason
Political editor
I have been shown an email from HMRC to Angela Rayner’s lawyers that verifies that the tax authority regards the row over her stamp duty as closed.
HMRC also spell out in the email that Rayner will not face a penalty charge.
Image source, EPARayner, pictured in July 2025
By Anthony Reuben
In her statement, former deputy prime minister Angela Rayner says she “welcomes HMRC’s conclusion, which has cleared me of any wrongdoing”, following an investigation into the amount of stamp duty she paid when buying a flat in Hove.
Rayner says she has now “paid every penny that I owed” and been “exonerated by HMRC of the accusation that I deliberately sought to avoid tax”. She adds that HMRC has accepted she took “reasonable care and acted in good faith, based on the expert advice I received”.
“Cleared of wrongdoing” is not the sort of language that HMRC uses on its website. It has four levels of classification for people who have not paid the right amount of tax., external
Rayner's statement would seem to indicate her case has been deemed to be in the bottom category, which means the tax authorities have concluded that she took “reasonable care” and should not pay a penalty.
The three categories which would lead to penalties are for those who are careless, those who deliberately pay the wrong amount and those who deliberately pay the wrong amount and then attempt to conceal it.
Hugh Pym
Health editor
Away from the political headlines, this morning we have had an update on some NHS figures - which come under Wes Streeting's brief as health secretary.
The government has hit an interim target for speeding up planned NHS treatment in England. The target was 65% of patients being treated within 18 weeks in March 2026.
The figure for that month out today showed 65.3% were treated in that time.
The main target is 92% by the end of this parliament. In March the overall waiting list in England fell from 7.2 million to 7.1 million, the lowest for three and a half years.
This looks like just the news Wes Streeting was hoping for on a day of intense speculation about a leadership bid.
There's still a long way to go to hit the 92% target by the time of the next election. But getting to the interim number on schedule will be seen by his supporters as proof of his record in trying to turn round the NHS.
Image source, Getty ImagesThere are a lot of political headlines to digest already this morning.
Here's the latest if you're just joining us:
This morning - amid speculation that Health Secretary Wes Streeting is preparing to launch a leadership challenge to Keir Starmer - former deputy prime minister Angela Rayner came out saying she has been "cleared" by HMRC after she initially failed to pay the correct stamp duty on a flat in Hove.
Rayner is on the left of the Labour Party and has called for Andy Burnham's return to Parliament.
Burnham, meanwhile, has pulled out of a regular appearance with the BBC today, citing the need for discussions around last week's elections results.
She has dropped a "news bomb" at the earliest possible moment, writes our political correspondent Joe Pike, while Chris Mason says that the political "jostling" is evident everywhere.
Starmer and his allies have repeatedly warned Labour MPs and ministers that any leadership challenge would plunge the UK into "chaos".
In an exclusive interview with the BBC, Chancellor Rachel Reeves warned against any leadership contest "when there is conflict in the world" and Labour's plan to grow the economy "is starting to bear fruit".
Joe Pike
Political correspondent
Image source, ReutersAllies of Angela Rayner have confirmed that HMRC notified her of its conclusions on Tuesday.
That timing could arguably not have been better for the former deputy prime minister - at the very moment a possible leadership contest loomed.
The danger of overshadowing the King’s Speech meant all of Wednesday seemed to be off-limits for any major interventions on Labour’s future.
Angela Rayner’s team therefore dropped their news bomb as soon as possible on Thursday: at 6am just as Westminster was waking.
While she has committed to not directly challenging the prime minister, her Guardian interview was lukewarm about his future in No 10.
Asked whether the PM should step aside, Rayner replied: “Keir will have to reflect on that”.
As a politician who came up through the union movement, Angela Rayner will be well aware that all eleven of Labour’s affiliated trades unions have said they believe Keir Starmer will not lead the party into the next general election. But could she?
Chris Mason
Political editor
Image source, Getty ImagesWhat we are witnessing this morning is the jostling on the expected start line of a race to be our next prime minister.
The jostling is evident everywhere.
From the prime minister's supporters, not least the Chancellor Rachel Reeves, telling BBC Breakfast that a contest would be "plunging the country into chaos at a time when there is conflict in the world, but also at a time when our plan to grow the economy is starting to bear fruit".
Then there are friends and allies of the Health Secretary Wes Streeting who expect his challenge to Keir Starmer to now be imminent, but with his rivals briefing that he has struggled to get the numbers of backers he requires.
Then the interviews the former Deputy Prime Minister Angela Rayner has done.
She is saying she has resolved the tax issue that cost her her job in government and she is now ready to "play my part" in the forthcoming anticipated debates about the Labour leadership.
Then there is Andy Burnham, the mayor of Greater Manchester, currently marooned outside Parliament and so unable to take part in any immediate leadership race unless he can demonstrate he can get a move on, find a seat, persuade the party to let him stand, and hope that the timeframe of any contest means he can play a part in it.
His weekly phone-in slot with Mike Sweeney on BBC Radio Manchester isn't going ahead this morning, which is rare.
Speculation over a potential challenge to Keir Starmer's leadership continues to mount.
Wes Streeting's allies say he could try to launch a contest as early as today, while questions also remain over whether mayor of Greater Manchester Andy Burnham or ex-deputy leader Angela Rayner would stand.
But how would a leadership challenge work?
It is possible for Labour MPs unhappy with Starmer to trigger a leadership challenge.
But only if 81 of them - 20% of the Parliamentary Labour Party - agree to back a candidate.
That would trigger a contest, which other candidates could then join so long as they also receive 81 backers.
If Starmer remains as leader and a contest is triggered, he would automatically be on the ballot.
Here's how a leadership election would work in such a scenario:
The other way a Labour leadership challenge can be triggered is if the leader - currently Starmer - resigns.
If Starmer chooses to resign with immediate effect, a member of the cabinet would replace him in a caretaker capacity under Labour Party rules. He could also stay in post during a transition period before handing over to a successor.
Starmer has given no indication that he intends to do that, and has said instead that he wants to stay in the role. Last week he suggested quitting would "plunge the country into chaos".
Joshua Nevett
Political reporter
Andy Burnham has a regular phone-in radio slot on BBC Radio Manchester and he was due to appear on presenter Mike Sweeney's programme on Thursday morning.
But we learned last night that Burnham has pulled out, as speculation mounts over a potential challenge to Prime Minister Keir Starmer's leadership.
A spokesperson for Burnham told the BBC: “As you know, Andy doesn’t like to miss the Hotseat.
“But this week, to get the best deal for Greater Manchester, he has to prioritise discussions arising from last week’s local elections.”
The election results in Greater Manchester were dire for Burnham’s party, as they were across England, Scotland and Wales, as Reform UK and the Green Party made major gains.
Image source, EPAThe Labour Mayor of West Yorkshire says she had a "frank conversation" with Keir Starmer in Downing Street on Wednesday ahead of the King's Speech.
Tracy Brabin tells Radio 4's Today programme Labour "just are not moving fast enough" and that she told the prime minister the party has "to escalate the pace of change".
Brabin describes how the election results in Yorkshire were "catastrophic for the Labour Party" and adds that she "expects to see change" if Starmer is to remain as prime minister.
Pressed on whether she wants Starmer to stay in his job, Brabin says that there is currently not a leadership contest and that she has "no horse in this race".
The mayor, who was previously a minister in Starmer's shadow cabinet when she was an MP, adds that Labour "need to make sure the next two years are different".
Image source, PA MediaTracy Brabin pictured on Downing Street on Wednesday
The UK public "might never forgive" the Labour Party if they were to hold a leadership contest now, says Treasury minister James Murray.
Asked on BBC Breakfast if triggering a leadership challenge would be irresponsible, he says: "I think it runs the risk that people might never forgive us if we turn inwards on ourselves."
He stresses "the importance of not putting stability that we brought to the economy at risk" and warns of a contest bringing "huge instablity".
Pressed further on the prospect of a leadership campaign, he says: "I don't think any of my colleagues should run a campaign, I don't think any of my colleagues should trigger leadership election."
Murray says those in his party in favour of a leadership change "should all take a deep breath and a step back".
Image source, Aaron Chown/PA WireAlongside her announcement about her tax affairs this morning, Angela Rayner has spoken to the Guardian and ITV News, as questions continue to swirl over a possible Labour leadership challenge.
Asked if she believes the prime minister should resign, she tells the Guardian: "Keir will have to reflect on that."
Rayner tells the paper the "pace of change hasn’t been enough for voters to see", and that "mistakes have really blown us off course and made voters doubt us".
When asked about whether she would run in any leadership election, she says "I’ll play my part in doing everything we possibly can to deliver the change," and will "keep pushing and pushing hard" in "whatever role" she plays.
She echoes this in an interview in ITV News: "I want to deliver as part of the team and, I've always said that it is a team effort."
When pressed further on whether she does want to become prime minister, she does not explicitly say no. Instead, she says: "I want us to pull together."
Rayner also denies making any deals with Greater Manchester Mayor Andy Burnham for a potential Labour leadership race: "I'm not doing deals or anything like that."
Joe Pike
Political correspondent
Angela Rayner‘s intervention today has been both carefully choreographed and carefully calibrated.
The main message she seems to want to get across is that she’s back in the fray, because HMRC has cleared her of deliberate wrongdoing or carelessness over her tax affairs.
In recent days the ongoing uncertainty over her finances has led some natural pro-Rayner MPs on the ‘soft left’ of Labour to look elsewhere and seek out alternative potential successors to Keir Starmer.
The timing of her Guardian and ITV interviews - just as many allies of Wes Streeting expect him to mount a leadership challenge - reasserts her position and threatens to distract from the health secretary’s big move.
Secondly Angela Rayner confirms she is “not doing deals” and has not committed to support Andy Burnham. It remains unclear whether the Greater Manchester mayor even has a route back to parliament.
But thirdly, and perhaps most importantly, Rayner says “I would not trigger the prime minister”. She therefore would not directly challenge Starmer by finding 81 MPs to back her, but she could run in an eventual contest to become Labour leader and prime minister.
Angela Rayner’s intervention suggests there may be a rather full field of candidates if a leadership campaign does begin.
Yet with Labour MPs split on both whether the prime minister should be replaced, and by whom, that contest is not yet inevitable.
Image source, EPA
Henry Zeffman
Chief political correspondent reporting from Downing Street
I just exclusively interviewed the Chancellor, Rachel Reeves, in Downing Street for BBC Breakfast.
It’s the first time she has spoken about the prospect of a Labour leadership election.
She said it would “plunge the country into chaos”.
That’s a very, very stark message - and a preview of what we can expect to hear from other Starmer loyalists if Wes Streeting challenges him today.
But there is particular resonance to the chancellor saying it, given so many Labour MPs of all wings of the party believe this government cannot win re-election, whoever is PM, without an improved economy.
Reeves pressed on Labour leadership
Chancellor Rachel Reeves says Labour should not plunge the country into chaos by holding a leadership contest "at a time when there is conflict in the world and also at a time when our plan to grow the economy is starting to bear fruit".
Reeves was asked by the BBC about a possible leadership contest and her message for Health Secretary Wes Streeting, who is widely expected to challenge Keir Starmer.
She adds that Labour MPs have "an important decision to make today" as she said the economy is growing strongly because of decisions she has made as chancellor.
"We shouldn't put that at risk," adds Reeves.
It comes after the latest GDP figures show that the economy grew by 0.6% in the first quarter of 2026. Read more on today's figures here.
Image source, PA MediaAmid the pageantry of the State Opening of Parliament, Wednesday was dominated by talk of a Labour leadership challenge.
The day began with Wes Streeting walking up Downing Street for a meeting in No 10. Less than 20 minutes later, he was walking out the front door again.
Later in the morning - and with the usual pomp and ceremony of a State Opening - the King outlined the government's legislative agenda, announcing bills focused on strengthening ties with the EU and increasing defence spending among other things.
But by lunchtime supporters of Streeting had told the BBC they expect he will challenge Starmer for the Labour leadership as soon as Thursday.
Later in the day, the prime minister met ministers and Labour MPs in Parliament as he warned them any potential leadership contest would "plunge" the party into "chaos".
Angela Rayner says she has been "cleared" by HMRC over a row surrounding her tax affairs - what happened?
Rayner stood down as deputy prime minister and Labour's deputy leader in September 2025, after it was revealed that she underpaid stamp duty on her £800,000 flat in Hove.
Due to complex arrangements surrounding a trust for her disabled son, the flat should have been considered to be Rayner's second home. This meant she owed an additional £40,000 in stamp duty.
Following the scrutiny around her tax affairs, Rayner said last autumn she sought advice from a senior lawyer and admitted that she should have paid the higher rate on the home.
She then referred herself to the prime minister's ethics adviser, who concluded that Rayner "acted with integrity" but had breached the ministerial code.
The adviser also said she did get legal advice when buying the property, but failed to seek further expert tax advice as recommended.
Image source, Getty ImagesFormer Deputy Prime Minister Angela Rayner says she has been cleared by HMRC of wrongdoing over her tax affairs.
She stood down in September 2025 after admitting she underpaid stamp duty on a flat in Hove.
In a statement on Thursday morning, the MP for Ashton-under-Lyne says she "welcomes" the conclusions from HMRC "which has cleared me of any wrongdoing," and says she has been exonerated "of the accusation that I deliberately sought to avoid tax".
She goes on: “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."
She adds that she "wanted to ensure that I paid every penny that I owed, and have done so".
Chris Mason
Political editor
Keir Starmer argues a leadership debate will paralyse the government and cause chaos within the Labour Party. Can this argument shrink the potential support for Streeting or any other potential challengers?
But the prime minister also knows that a significant number of his MPs now think he is a loser - and a major factor in the scale of Labour's defeats in elections in England, Scotland and Wales last week.
For those wannabe challengers, the challenge is trying to set out a distinctive and attractive alternative Labour agenda, that can appeal to MPs and party members - and convince them they would be more popular than Keir Starmer.
There is a big moment coming in the next 24 hours: for Wes Streeting, deciding to go for it or not, and the tone and tenor of any launch that he is planning.
For the prime minister, his back is against the wall.
And for any others too, with designs on the top job.
You can read more of Chris' analysis here.
Image source, PA MediaPrime Minister Keir Starmer has warned his party that a Labour leadership contest could result in "chaos", amid speculation that Health Secretary Wes Streeting is plotting a run for the leadership.
Allies of Streeting have told the BBC that they expected him to challenge Starmer as early as today.
He would need the backing of 81 Labour MPs to trigger a contest under the party rules.
It comes after four ministers quit and dozens of Labour MPs urged Starmer to quit after last week's heavy losses in elections across English councils, the Welsh Senedd and Scottish Parliament.
We’ll be providing live updates as today unfolds, with plenty of analysis and reaction to come.
Image source, PA MediaStreeting and Starmer, pictured in September 2024
