Angela Rayner joined a call with City investors in which the bookies’ favourite to replace Sir Keir Starmer as prime minister offered reassurance that Labour would not lurch to the left.
Investors on the call, hosted by French bank BNP Paribas this month, said the former deputy prime minister pledged the party would stick to its manifesto and not resort to a borrowing blitz to fund greater spending.
Some investors have been anxious that Starmer could be ousted if Labour suffers at the regional elections in May, ushering in a more socialist prime minister who would increase public borrowing.
Hugh Osmond, founder of Punch Taverns, recently said the UK faced a “disaster” under a more leftwing government led by Rayner or Greater Manchester mayor Andy Burnham.
But investors on the call said the 45-year-old Rayner presented a reassuring message on the public finances, while also discussing her background and motivations for entering politics.
“One gets the impression that she might be doing the rounds, in case she was to launch a bid for the leadership at some point,” said one investor, who added: “They were trying to showcase her personality and trying to get us to understand who she is and why she came into politics.”
Another participant said Rayner was “adamant in terms of [the importance of] sticking to manifesto pledges” and stressed the need for growth.
The investor said Rayner seemed to be positioning herself between chancellor Rachel Reeves’ ironclad fiscal rules and Burnham’s comment that Britain should not be “in hock” to bond markets.
For bond investors the key question is whether any new Labour leader would consider relaxing the government’s fiscal rules, enshrined in the manifesto, which include having to balance the budget, excluding investment, by the end of this parliament.
The UK already has the highest borrowing costs in the G7 partly because of elevated levels of debt issuance in recent years. Investors still eye gilts with caution after the crisis in 2022 sparked by the tax and spending plans of shortlived prime minister Liz Truss.
According to allies, Rayner hopes that various speaking engagements — including this year’s Propertymark One Conference — as well as her autobiography will enable her to pay off a large outstanding fine to HMRC.
She quit the cabinet in September over her failure to pay £40,000 of stamp duty on the purchase of a seaside flat near Brighton.
However, her appearances this spring are more about her longer-term political comeback than a fundraising exercise, according to friends. Rayner was paid a five-figure fee for the BNP Paribas event.
One Labour official on the right of the party said: “She’s trying to reassure the banks that an Angela Rayner premiership wouldn’t crash the pound.”
A year ago she led a cabinet revolt against Chancellor Rachel Reeves’ plans to slash welfare spending. She was also the prime architect of the Employment Rights Act, which represents the biggest package of pro-worker reforms for decades. However, her supporters say she is not a radical leftwinger.
One ally of Rayner said: “Angela is an experienced politician and has been engaging with investors and the wider business community as a senior MP for many years. She’s been listening but also promoting the government’s pro-worker, pro-business policies including those she delivered in office.”
BNP Paribas declined to comment.
Additional reporting by George Parker
