The way is now clear for Angela Rayner to enter any Labour leadership contest as a soft left candidate, but her exoneration by HMRC over tax affairs poses a significant problem for Wes Streeting's ambitions to become prime minister.
Ms Rayner resigned as deputy prime minister amid allegations of tax avoidance, which hung over her for months and were seen as a major obstacle to her standing in a leadership race. However, on Thursday morning, she announced that HMRC had cleared her of any wrongdoing, stating she had been "exonerated" of deliberately seeking to avoid tax.
With the threat of a leadership contest looming over the Labour Party, Ms Rayner's statement is highly significant. It removes a key barrier to her candidacy, allowing her to represent the soft left wing of the party and increasing pressure on Sir Keir Starmer to step aside. She has suggested the beleaguered prime minister should not fight in any leadership contest and told the Guardian she understands why colleagues are upset with the party's direction after disastrous local election results.
While Ms Rayner has ruled out triggering a leadership race herself, she crucially did not rule out standing if one is triggered by an opponent. She appears to be waiting for Wes Streeting to fire the starting gun or for the prime minister to step aside voluntarily. However, the conditions under which she would stand remain unclear. She did not rule out endorsing a soft left rival with a better chance of winning and argued that Greater Manchester Mayor Andy Burnham should not be blocked from returning to Parliament, suggesting a possible pact between them.
A Rayner-Burnham alliance, with one as leader and the other as chancellor or deputy, would be a formidable force on the left of the party. Such a combination would be extremely difficult for Mr Streeting, seen by many as too right-wing to win over the membership, to beat. However, if both stood, they could split the left-wing vote, potentially making it easier for the health secretary to secure victory.
Crucially, Ms Rayner's intervention has intensified pressure on Sir Keir to step aside, making an imminent leadership contest much more likely. Mr Streeting is aware of the threat posed by a combined Rayner-Burnham force, which could push him to act quickly and trigger a contest before Mr Burnham has a chance to return to Westminster. With Ms Rayner now waiting in the wings, the next few days are critical for the health secretary's hopes of entering Downing Street.
