Labour Left ‘at war' with Starmer's new right-hand woman
Morgan McSweeney may have gained unwanted fame in Westminster as Sir Keir Starmer's ruthless and wily adviser, but he is not the only behind-the-scenes figure ruffling feathers.
After conversations with well-placed sources, The Telegraph has uncovered government tensions over the influence of a new top adviser: Liz Lloyd, Sir Tony Blair's former fixer, who has returned to the top of government after nearly two decades to help Sir Keir Starmer turn Labour's fortunes around.
Though Ms Lloyd has largely operated behind the scenes, avoiding the media attention of her influential colleague Mr McSweeney, she has been making waves since she was appointed by Sir Keir in January as his 'head of policy delivery', a drab title that in fact carries considerable influence.
She has been busy upsetting the Labour Left and bringing the hard-nosed politics of Mr Blair's premiership to this Labour government.
A former girlfriend of Ed Miliband in the 1990s during the heady days of New Labour, she rose through the ranks of Sir Tony's Number 10 to become his deputy chief of staff by the time he left office in 2007.
With Sir Tony's departure, Ms Lloyd also largely left front-line politics behind and moved into the private sector, where she has worked in banking and investment advice.
She was once described, in the early 2000s, as one of 'the Young Turks, an elite being groomed by Tony Blair to lead the country a decade from now'.
It took a little longer than a decade thanks to Labour's 14-year hiatus in the political wilderness, but now Ms Lloyd is indeed operating at the highest levels of government.
While other top advisors such as Mr McSweeney have been working in Labour politics for a number of years, Ms Lloyd's return was a surprise to some.
'Power struggle'
One insider told the Sunday Telegraph: 'Liz Lloyd hasn't been in politics for a very long time. She's been in commercial banking for a very long time. Politics has changed.'
Ms Lloyd has already ruffled feathers and sources speak of a 'power struggle' in Number 10 between Ms Lloyd and those with more progressive ideas.
'There is definitely a power struggle going on. There has been briefing between rivals and there were also, very suddenly, people asked to leave their jobs in No 10,' said a Cabinet source.
The Telegraph understands that she has already clashed with Bridget Phillipson, the Education Secretary, along with other more progressive members of the Cabinet.
The pair are said to have disagreements about Ms Phillipson's radical changes to education, known as the children's wellbeing and schools bill, with Ms Lloyd asking the reforming minister to explain why the changes to academies and free schools were necessary.
As a Blair acolyte, Ms Lloyd is understood to be passionately committed to the rollout of academies that Sir Tony and his reforming education ministers pioneered.
Much of the work was carried on by the Conservative governments of the last 14 years, with Tories praising education as their one great success story in government.
In government Sir Tony railed against the 'forces of conservatism' in the educational establishment who resisted such changes.
Now there is a feeling that Ms Phillipson has appeased those forces by reducing the autonomy of academies and free schools.
A source familiar with Ms Lloyd's thinking said 'she thinks Bridget must be doing something wrong because the unions haven't turned against her.'
Another has even blamed Ms Lloyd for a recent spate of negative briefings against more Left-wing Cabinet ministers such as Ms Phillipson, Culture Secretary Lisa Nandy and even her former partner Mr Miliband.
They claimed: 'Everything was fine before Liz arrived. She is where the briefing against progressive ministers is coming from.'
Then came a wave of dismissals in the inner sanctum of Downing Street. Nick Williams and Tom Webb, long-serving advisers to Sir Keir and both of a Left-ish hue, were asked to leave their jobs shortly after she took up her new post as their boss.
Number 10 has maintained that the advisers departed on good terms and were not let go because of their politics. However one has already emerged as a Left-wing critics of the Government only a few months out of the job.
Mr Williams, former special adviser to Sir Keir and ex-head of economic policy in the Labour party, penned an article declaring 'the bottom line is that taxes will have to go up'.
In it he criticised the government's cautious approach as 'not credible' and described the forthcoming autumn Budget as 'the last opportunity to make a meaningful change that the public has time to feel before the next election'.
Mr Williams also set out a range of tax-raising proposals that the Government should follow.
'The Blairite of Blairites'
Insiders have described Ms Lloyd as 'the Blairite of Blairites' who is resistant to such blue-sky thinking. But her Blairite credentials are what made her attractive to Sir Keir.
Downing Street has also played down talk of divisions at the top of Government, with a Number 10 source telling the Sunday Telegraph: 'Liz has a wealth of knowledge and experience, not least of driving policy delivery in the last Labour government, which is why the Prime Minister hired her.
'She is working closely with Bridget and other ministers to deliver on this government's Plan for Change and national renewal.'
Mr Williams' breaking rank was soon followed by the publication in the Telegraph of a secret memo by Angela Rayner, sent to Rachel Reeves before the Spring Statement, setting out a highly similar set of proposals for tax rises.
The memo has split opinion in government with one minister telling the Sunday Telegraph: 'I hope the Government will be looking closely at those very interesting proposals.'
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