Knives out for 'the real deputy PM' as Sue Gray seeks revenge on the man who helped oust her, reveals ANDREW PIERCE

Daily Mail​

2 days ago

At a glitzy fundraising gala for one of Labour 's rising stars on Monday night, the mood was buoyant. The party faithful cheered speakers including Lord Mandelson, now ambassador to Washington, Business Secretary Jonathan Reynolds and Chief Secretary to the Treasury Darren Jones.
Unusually, another figure who prefers to lurk in the shadows was spotted at the event, where tickets cost up to £200. Standing quietly to the side in the Ev Turkish restaurant in Southwark was Morgan McSweeney, 48, the No 10 chief of staff. Labour insiders tell me that McSweeney is the real Deputy Prime Minister, wielding far more clout than the hapless Angela Rayner, who carries that title 'in name only'.
Perhaps McSweeney's attendance was unsurprising. After all, the purpose of the event was to raise money for his wife: Imogen Walker, the Labour member for Hamilton and Clyde Valley. She became an MP only at last year's election, but is already rising fast. She is parliamentary private secretary to Chancellor Rachel Reeves, so McSweeney has eyes and ears in the heart of the Treasury as well as at No 10.
Today, as Labour's civil war escalates over the Government's plan to cut billions from the ballooning disability benefits bill, McSweeney's unshakeable grip on the party machine – and his reputation as one of the canniest operators in Westminster – appears to be collapsing.
Yesterday, reports emerged that unnamed Labour MPs have been demanding 'regime change' in No 10 – and the ousting of Starmer's team of 'over-excitable boys'.
One authoritative source tells me: 'What they mean by 'regime change' is 'sack McSweeney'. We haven't even got to the Government's first anniversary next week but the No 10 kitchen cabinet already has bunker mentality. Morgan has been semi-detached from the benefits row, which is hugely damaging.'
This very point was underlined by Starmer on Wednesday at the Nato summit in Holland. The PM waved away the benefits row – which could yet see a sensational defeat for his government despite its vast majority of 165 – as 'noises off'. This airy dismissal saw the number of rebels swell to almost 130, among them, crucially, 14 select committee chairmen: senior MPs immune to the usual threats and blandishments from party whips.
The opponents need only 83 MPs to scupper the Bill and inflict a humiliating defeat on Starmer next week.
A second source tells me: 'Keir seems more exercised by managing relations with Donald Trump than he is with his own backbenchers.'
Once again, insiders point to the hand of McSweeney. In February, he was photographed sitting near Starmer in the White House when the PM met Trump. My source adds: 'McSweeney thinks 'Starmer the international statesman' plays well with voters. But what voters actually see is: Keir's never here.'
Yesterday, research from the BBC showed that Starmer has voted in the Commons on fewer occasions in his first year as PM than all his recent predecessors (excluding Liz Truss's brief tenure): just seven times, barely half the record managed by runner-up Tony Blair. Boris Johnson came top with 57.
As the welfare blame-game swirls, I can reveal that two sides are forming in the Downing Street bunker.
In one corner is McSweeney, who I'm told is 'obsessed'
with the threat posed by Reform after Nigel Farage's stunning recent successes in the local elections and the Runcorn by-election.
In the other corner is Liz Lloyd, a Downing Street veteran and Starmer's 'director of policy delivery'. While Morgan worries about Reform, Lloyd wants more emphasis on economic growth and schools policy. Morgan sees cutting sickness benefits as playing well with Reform voters – but Labour MPs are unconvinced the policy is worth it.
'Team Morgan is in denial and in chaos,' says one furious party figure. 'They're making things worse, not better. It's one thing to shake up welfare to try to get millions of economically inactive people back into work – but this is targeting the sick and disabled. Keir has a tin ear because he's been listening to Morgan for too long.'
Only yesterday, a YouGov poll, the most extensive since the general election, showed Labour on course to plunge from 411 MPs to 178 at the next election – with Reform roaring ahead to become the largest party on 271 seats. Starmer's personal rating is at a record low of minus 46 per cent.
McSweeney cites such polls as vindication for his emphasis on fighting Reform – but his enemies say that Starmer, as a self-professed socialist, is never going to convince voters he's 'Farage-lite', and that Labour's best approach is instead to tack to the Left to see off the threat of the Greens and Lib Dems.
Friends of McSweeney have told me there are rumours that the briefing against him is coming from Louise Haigh – sacked as Transport Secretary by Starmer last year and still smarting. McSweeney fired her in November after it emerged she had pleaded guilty to a fraud offence a decade earlier.
Haigh is close to Baroness (Sue) Gray, who was ousted by McSweeney as chief of staff in October after just three months in the job. Gray, the former 'neutral' civil servant who helped defenestrate Boris Johnson during the 'Partygate' farrago – and who went on to sign up as a paid senior Labour official – was blamed for the ugly PR debacle over free suits and spectacles greedily accepted by Starmer and other senior Labour figures from donor Lord Alli.
Many Labour MPs have convinced themselves that purple-haired Haigh was hard done by – and that 'macho' McSweeney
went too far. Gray is said to be bitter on a personal level, too – and loathes McSweeney for orchestrating her early political demise.
'This is Lou and Sue's revenge on Morgan,' one senior female Labour adviser tells me.
'Sue will be wryly observing the unfolding chaos in the Downing Street machine, which she used to run, from her new perch in the Lords.' Labour ultra-grandee Tony Blair, too, is said to be privately critical of McSweeney's approach.
The buck, however, ultimately stops not with McSweeney, but with Starmer. The PM's critics say he lacks any serious political convictions or instincts, having entered Parliament in 2015 after decades as a human rights lawyer, and having run for the party leadership on a far-Left Corbynista ticket before tacking to the centre ground to woo Middle England at the election, before finally governing on an unoriginal Old Labour tax-and-spend playbook.
Starmer likes to think of McSweeney as his political barometer – yet the equipment seems increasingly faulty.
According to party lore, Irishman McSweeney – who came to Britain aged 17 – was on a placement to Labour's Millbank HQ a few days before the 2001 general election when a receptionist dropped a vase on her foot and had to be signed off work. McSweeney, the story goes, was asked to step in and man the desk – and has never looked back. (Interestingly, Lord Mandelson, who was a fixture at Labour HQ during the campaign, has no recollection of the 24-year-old manning the reception desk – and to this day, several members of Blair's Cabinet are bewildered by McSweeney's rise.)
Regardless, he eventually made his name running Labour Together: a think-tank set up to engineer the end of Jeremy Corbyn's leadership during the 2010s. After Corbyn led his party to its worst election defeat since 1935 in 2019, McSweeney moved effortlessly to Starmer's side, with the new leader appointing him as his chief of staff.
At Monday night's fundraiser, thousands of pounds were raised for Imogen Walker's constituency work. Yet it may all be for little: yesterday's doom-laden poll predicts she will lose her Commons seat at the next election.
If the rumbles of discontent over the No 10 operation grow louder still, it may be that McSweeney is out of a job even sooner than his wife – and you can be sure that Blair's former adviser Liz Lloyd will happily take his place.