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

The Independent’s political correspondent Millie Cooke reports:

Angela Rayner has been cleared by HMRC of wrongdoing over her tax affairs, saying she had been “exonerated” of the accusation she had “deliberately sought to avoid tax” in a statement on Thursday.

The issue of Rayner’s tax affairs – which precipitated her departure from government – has been hanging over her head for months since she resigned – and was seen as a major obstacle to her standing in any potential leadership contest. But now that HMRC appears to have cleared the former deputy prime minister, she is now free to throw her hat into the ring and represent a soft left option for the party.

In an interview with the Guardian, she didn’t rule out standing in a leadership race, but she did rule out triggering a contest. Meaning, most likely, she would be waiting for one to be triggered by Wes Streeting in the coming days. She also said that Andy Burnham shouldn’t be blocked from coming back.

However – what is not yet clear is whether Rayner would stand against Andy Burnham if he returned to Parliament, or whether she would hope for a senior position in a possible Cabinet formed by the challenger.

Andy Burnham has pulled out of his weekly slot on BBC Radio Manchester to prioritise discussions over last week’s elections, it has been reported.

The Greater Manchester mayor is tipped by many to be a popular potential successor to Sir Keir Starmer, but is hampered by the fact he is not currently an MP.

His spokesperson said Mr Burnham “has to prioritise discussions arising from last week’s local elections”.

Angela Rayner has said she has been cleared of any deliberate wrongdoing in an investigation into her tax affairs.

The former deputy prime minister resigned last year after it emerged she had not paid enough stamp duty on her £800,000 seaside flat in Hove, East Sussex.

She blamed the underpayment on incorrect legal advice and always insisted it was not a “tax dodge”.

Ms Rayner says she has now settled that missing £40,000 with HMRC, but has been cleared of deliberately breaking the rules and will not face any further penalty.

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

The former deputy prime minister told ITV she will not make a pact with Greater Manchester mayor Andy Burnham to challenge Sir Keir.

“I’m not doing deals or anything like that,” she said.

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

Responding to an intervention from TUV MP Jim Allister (North Antrim), the prime minister said: “I’m very well aware of the tensions in Northern Ireland, the issues that have to be dealt with in relation to relations with the EU.

“We have to face the fact that promises were made about Brexit, which were not true, which haven’t borne fruit.

“It is in our economic interests, our national interest, and defence interests, to be closer to Europe. Of course, we will navigate carefully, taking on board the issues in Northern Ireland, as he would expect, but it is in our interest to be closer to the EU.”

Sir Keir was also pressed by Conservative MP Lincoln Jopp (Spelthorne) on when the defence investment plan will be published, to which he said it “is being finalised and will be published soon”.

It is clear now that Wes Streeting is planning to resign to trigger a leadership election against Sir Keir Starmer.

Allies of Mr Streeting have confirmed with The Independent that this is the health secretary’s intention – although he is yet to make the plunge.

We still do not know the details of the 16-minute showdown that Mr Streeting had with the prime minister on Wednesday morning in Number 10. But it is clear from those close to Mr Streeting what path he now plans to take.

Read more here by political editor David Maddox:

Moderate Labour MPs are warning Wes Streeting not to start a leadership contest because he will lose to a left-wing candidate.

Speaking to The Times, Luke Akehurst, MP for North Durham said: “Wes is a huge talent” but “I would urge him not to throw the party into further chaos by resigning”.

“The risk of initiating this process is the outcome isn’t Wes Streeting becoming PM,” he said.

Phil Brickell, MP for Bolton West, added: “Wes can’t win the membership”

Two MPs have ended the speculation around whether they will be standing down to allow Andy Burnham to attempt to return to Parliament.

MP Jeff Smith was asked if he was about to make way for the Greater Manchester Mayor, but the anchester Withington MP said he was not.

It comes after MP Afzal Khan also denied speculation he was preparing to quit Parliament to create a vacancy for Andy Burnham to return to Westminster.

Asked whether he was planning to stand down for Mr Burnham, the Manchester Rusholme MP he said: “I am not.”

The Mirror reported he said: “At the last General Election, the people of Manchester Rusholme put their trust in me to represent them to Parliament, and that is the job I am focused on doing.”

Mr Burnham is being touted as a leading contender to replace Sir Keir Starmer if he resigns as Prime Minister.

He has previously indicated he would be willing to overthrow the current Labour leader.

But as the current mayor of Manchester without a seat in Parliament, Mr Burnham faces a potentially arduous route to the top.