As the PM’s fate lay in doubt, Labour MPs plotted the party’s future direction

Less than a mile from the select committee room in Portcullis House where Olly Robbins held the prime minister’s future in his hands, Labour MPs were publicly workshopping how the party might look under new leadership.

It came in the guise of the Good Growth Foundation’s conference, but felt like a Labour leadership beauty parade on Pall Mall. The former deputy prime minister Angela Rayner was a last-minute addition to the programme but the most talked-about guest.

Rayner in her speech was dismissive of the scandal occupying Westminster over Peter Mandelson, urging the government to refocus on everyday hardships. The Iran war – and the impending economic shock – would require government intervention. “Ordinary people fear they will once again pay the price,” she said. “That is why this crisis calls for bold action. Help with people’s everyday housing, transport, energy and water costs.”

Addressing panels at the national growth debate, Labour MPs dismissed the platform that propelled Keir Starmer to power less than two years ago, attacking his growth “mission” for lacking clear purpose, while the dominance of the fiscal rules left them tied to pledges not to raise income tax or national insurance.

Louise Haigh, a former transport secretary, said the government had “mistaken rules for responsibility and until we change that, we will struggle to deliver renewal”.

She dismissed what she viewed as the media portrayal of Labour MPs as “unruly and irresponsible” when making demands for bolder proposals from government – including for welfare reform. “We are united in both our diagnosis and the prescription for the economy,” she said.

The government should urgently revisit the way the Office of Budget Responsibility assessed policy, she said, as well as “the obsession with fiscal headroom over all other measures of economic health”.

She added: “We have been guilty of treating the fiscal rules as the objective, rather than designing our fiscal strategy and economic strategy to achieve our objectives.”

Haigh called for an overhaul of the tax system to reform “outdated and regressive” property taxes and address disparities between employment and wealth, including profits made by large corporations.

“Our tax system is on the side of the billionaire owners of those companies while our neighbours who work in them feel abandoned and squeezed by the systems we govern,” she said. “We need to ask ourselves the most simple question anyone involved in politics should. Whose side are we on?”

Chris Curtis, whose centrist Labour Growth Group has formed an alliance with Haigh’s soft-left Tribune group to push for bolder economic reforms, criticised the “Ming vase” approach of the 2024 election. He said the strategy, by which Labour sought not to spook markets or the public, including with a pledge not to raise taxes, was deeply flawed and “had not won us a single vote”.

The MP for Milton Keynes North said that it had instead equated to not “saying anything meaningful”. He added: “You came up with phrases like, ‘we need to have an honest conversation about immigration’. No conversation then followed. We said things like, ‘skills were important’. Nobody ever engaged in the policy discussion – the moment somebody did, people were worried that comes with tradeoffs.”

Ed Miliband’s speech – in which he announced steps to delink electricity and gas prices – was a full-throated defence of the net zero and green agenda that once had sceptics at the heart of No 10. The policy victory was not his only deviation from Downing Street.

Earlier, the energy secretary had been even more candid in the TV studios, revealing he and David Lammy, the justice secretary, discussed concerns that the appointment of Mandelson could “blow up”.

His slot at the debate had previously been given to the health secretary, Wes Streeting, who dropped out because of a diary clash. The presence of another apparent leadership contender might have furthered uncomfortable tongue-wagging about manoeuvres.

Miliband said he would not “turn off the taps” in terms of North Sea oil but warned more drilling licences would not solve any of the UK’s energy issues.

“I will not betray the future generations of this country,” he said, saying adding that Westminster “massively overestimates the net zero backlash” in the country. “Hope is the biggest thing that matters,” he said. Rayner was at pains to praise her “friend” Miliband in her speech.

It was left to the prime minister’s chief secretary, Darren Jones, to question the viability of the government taking a bolder approach. “If there were easy answers we would have taken them,” he said.