Keir Starmer to step down as PM, paving way for Andy Burnham

Keir Starmer has finally bowed to intense pressure to stand down as British prime minister as he conceded that he was no longer the right man to lead the country, leaving Andy Burnham all but certain to succeed him.

In an extraordinary day at Westminster, Starmer announced a timetable for his departure after months of growing discontent among Labour MPs and cabinet ministers, many unnerved by the threat from Reform UK before the next general election.

As the new-elected MP for Makerfield made his way down by train to Westminster, it became increasingly likely Burnham would be crowned Labour leader without having to face a contest, giving him just over three weeks to prepare for government.

After Wes Streeting confirmed he would not challenge him for the top job, the focus among jubilant Labour MPs turned to Burnham’s policy agenda, his plans to take on Nigel Farage’s party and who might be in his first cabinet.

With his platform beginning to take shape, the Guardian understands that:

Burnham will begin to set out his likely policies next week with a series of speeches to demonstrate a big symbolic shift from Starmer’s government, starting with the economy and devolution.

He is considering appointing Ed Miliband as chancellor in order to challenge Treasury orthodoxy but has not yet made a final decision. Sources said Burnham was aware of the potential risks with business and the unions opposed to the move, but could be prepared to make the argument.

Shabana Mahmood is expected to stay at the Home Office after the former Greater Manchester mayor praised the home secretary for “facing up” to the big issues on immigration during the byelection campaign.

Wes Streeting could be appointed to one of the top cabinet jobs, but did “not come with any leverage” to discussions, with campaign sources rejecting his claims he had the numbers to run. Others have argued for him to be appointed chancellor to reassure the markets.

Starmer loyalists are still seeking a candidate who could potentially stand against Burnham – with it depending on whether Miliband was chancellor. Darren Jones has been touted as a possibility, and while sources said he was not organising a run, they stopped short of a categorical denial.

After spending the weekend with his family at Chequers, Starmer took the painful decision to set out a timeline for his departure, less than two years after a historic election victory, thereby kickstarting the process to select the UK’s seventh prime minister in 10 years.

“The question my party is asking now is whether I am best placed to lead us into the next general election,” he said in an unusually emotional speech from a lectern in Downing Street.

“I have heard the answer of my parliamentary party to that question, and I accept that answer with good grace. Every decision I have taken has been about putting the country I love first, that is why I will resign as leader of the Labour party.”

While Starmer had insisted on Friday that he would fight any leadership contest, conversations with cabinet ministers over his weekend and time with his wife, Victoria, shifted his thinking.

He has asked Labour’s ruling national executive committee to set out a timetable for a contest, with nominations opening on 9 July, and to be completed by the summer recess just a week later. Labour MPs would hold an in-person hustings regardless of the number of candidates.

But with no other Labour MP expected to get the requisite 81 names, and Streeting saying he would not challenge him, Burnham is set to take over unopposed, entering No 10 as early as 16 or 17 July.

In a message aimed at his likely successor, Starmer said he would do “everything I can” to ensure an orderly handover of power, despite what insiders have described as his earlier anger and frustration over Burnham’s ambitions. One friend said he would do so through “gritted teeth”.

In his resignation speech, he said: “I will also give my successor my full and unequivocal support, knowing they will inherit a Britain that is far stronger and fairer than the one I inherited two years ago, better prepared for the challenges ahead and better able to ensure the Labour party secures a second term in office.”

It was unclear last night whether Starmer would stay on as an MP once he leaves Downing Street, with some friends suggesting that he would feel duty-bound not to inflict another byelection on the country, while others believe he is unlikely to stay on for long.

In a statement shortly after Starmer’s resignation, Burnham – who has not spoken to the prime minister since before the Makerfield campaign – thanked him for his service.

“His decision marks the beginning of a transition and it is important that this process is conducted in an orderly and responsible way,” he said.

“I will put myself forward as part of this process. The country expects stability, seriousness and a continued focus on the issues that matter most and that is what it will get.”

To cheers from Labour MPs and jokes from the opposition benches, Burnham – who changed out of the T-shirt and jeans he was wearing when he left Manchester earlier in the day, dressing in a suit and tie – was sworn in as an MP.

Bond markets were muted on Monday, with the yield on 10-year government bonds – a key measure of government borrowing costs – falling slightly. But Burnham allies say he wants to do more to reassure investors given his comments about the country being “in hock” to bond markets.

As part of that push, Burnham’s team have spoken to Jim O’Neill, the economist and former Conservative Treasury minister, about becoming his chief economic adviser should he enter No 10.

One of Burnham’s first moves in office could be to make a major devolution announcement, with some around him advocating for major fiscal changes, for example allowing mayors to set their own business rates.

While he will stick to Labour’s manifesto, he is expected to look at other areas where his government could be bolder.

Louise Haigh, who ran Burnham’s successful byelection campaign, will now run his transition team, with Miliband, former minister Miatta Fanbulleh and ex-Makerfield MP Josh Simons all working alongside her. Labour MPs Anneliese Midgley and Sally Jameson will remain closely involved.

After the announcement, Farage was the only opposition leader to call for a general election in the event Burnham takes over, saying the UK could not afford to “waste another week drifting from crisis to crisis”. Burnham has signalled he would not go down this route.