Phase 2 begins: A government rebuilt for delivery

At the start of last week, Sir Keir Starmer set about his plan to launch the new parliamentary term with a reset of his Number 10 operation. There were internal changes, and Darren Jones took on the newly created role of Chief Secretary to the Prime Minister to become Starmer's ‘fixer’ within government. After a difficult first year in office, Starmer proudly declared Phase 2 of his government with a renewed focus on growth, security, and tackling the continued threat of Reform UK. He said Phase 2 would see the government, “focus on delivery, delivery, delivery and start to show what a difference a Labour government really makes”.

By the end of the week, Angela Rayner had resigned as Deputy Prime Minister, Housing Secretary and Deputy Leader of the Labour Party over failing to pay enough stamp duty on a flat she bought in East Sussex. Her departure triggered a major reshuffle of the Cabinet and ministers across government, as well as an election for Labour’s deputy leadership. The reshuffle was described as focusing on “growth and boats”, the two main issues the government see as key to their re-election. 

The most significant move in the reshuffle saw David Lammy move from his role as Foreign Secretary to become Deputy Prime Minister and Secretary of State for Justice, with Shabana Mahmood taking over as Home Secretary and Yvette Cooper appointed Foreign Secretary. This means that, for the first time, each of the three great offices of state are held by women, as Rachel Reeves remains in post as Chancellor of the Exchequer. 

Mahmood has played a crucial role in Starmer’s leadership of the Labour party, returning to the shadow cabinet in May 2021 after Labour’s defeat in the Hartlepool by-election and disastrous local elections results, as National Campaign Coordinator. She has also been close to Morgan McSweeney, the Prime Minister’s Chief of Staff, and in the aftermath of the 2019 general election, she was asked to commission a review launched by Labour Together, McSweeney’s think-tank, of the party's election performance.  

Mahmood will lead an entirely new ministerial team in the Home Office and her promotion to Home Secretary is likely to mark a shift in the government’s approach to stopping the boats, as Reform UK keeps up the pressure on the government. The Times reported that she is expected to unveil plans to move asylum seekers from hotels into military barracks as the government seeks to harden its immigration policy amid rising numbers of crossings. 

Wider moves in the reshuffle have seen Peter Kyle appointed Secretary of State for Business and Trade, along with an entirely new ministerial team. His appointment, combined with Angela Rayner, Jonathan Reynolds and Justin Madders in new roles or leaving government, has seen immediate pressure on the government to make changes to the Employment Rights Bill. Unison, the UK’s biggest trade union, general secretary Christina McAnea, expressed her fears: "It's very significant and very worrying that they've been moved. It doesn't send out a very good message that the people who were absolutely committed to driving through the Employment Rights Bill are no longer doing those jobs."  

However, the Prime Minister’s official spokesman was quick to play down these fears, saying: “We are absolutely backing the Employment Rights Bill…The workers’ rights legislation is the biggest single upgrade of workers’ rights in a generation. It’s a manifesto commitment that we remain absolutely committed to.” 

Steve Reed, another MP close to McSweeney, has taken over Rayner’s role as Secretary of State for Housing, Communities and Local Government, and will now be in charge of delivering Labour’s key pledge to deliver 1.5 million homes by 2029. Upon taking the role of Housing Secretary, he declared it’s time to “build, baby, build”.  

Pat McFadden has been moved to the Department for Work and Pensions where he will be leading the government’s agenda on welfare reform. The government’s plans to bring down the welfare bill came unstuck earlier this year when McFadden’s predecessor, Liz Kendall, was unable to get them through Parliament. However, welfare reform remains on the agenda, and it will now fall on McFadden to deliver.   

The Prime Minister has also rewarded several members of the 2024 intake of MPs with junior ministerial roles in a bid to freshen up his government. Kanishka Narayan was appointed Parliamentary Under-Secretary of State in the Department for Science, Innovation and Technology (DSIT) and Josh Simons was appointed Parliamentary Secretary in the Cabinet Office.  

Although there has been a lot of change in the reshuffle, the Cabinet itself has seen limited turnover, with many changing roles. Lucy Powell is the only previous member of the Cabinet to leave government, while, after much backlash against his sacking as Scotland Secretary, Ian Murray was given a joint ministerial role in the Department for Culture, Media & Sport and DSIT. Ellie Reeves was moved to Solicitor General.   

What is clear from these moves is the Prime Minister’s dissatisfaction with his first year in office. To undertake such large-scale changes across his government suggests that there are many areas he is unhappy with the lack of progress the government is making. He has also clearly chosen to give MPs on the moderate, centrist wing of the party what he believes are the key departments to lead the government’s work to tackle Reform.