Keir Starmer is finalising a list of dozens of new peerages to strengthen his hand in the Lords, with his outgoing policy chief, Liz Lloyd, to be made a minister in the upper house after leaving No 10 in his major shake-up.
The prime minister has drawn up a list of Labour allies to be elevated to the House of Lords to help drive through legislation such as the bill scrapping hereditary peers, which has been obstructed by the Conservatives.
Starmer’s last peerages list in December created two dozen new Labour peers, including the short-lived former Downing Street chief of staff Sue Gray and former MPs including the former shadow culture secretary Thangam Debbonaire.
But government insiders hope the latest list could be announced as soon as October, with the aim of rebalancing the Lords to prevent the opposition clogging up legislation – including on renters’ rights, employment rights and hereditaries – as it goes through parliament.
The Tories currently have 285 peers, compared with Labour’s 209. Even once the 44 Tory hereditary peers are gone, they would still have about 30 more members of the Lords than the government, sources said, indicating No 10 could appoint enough new peers to balance the numbers.
The departure of Lloyd, who was Tony Blair’s deputy chief of staff, was among a slew of changes announced on Monday as Starmer attempted to wrest back control of economic policy from the Treasury by bolstering his team.
With Downing Street grappling with a difficult economic backdrop before the budget, he created two new roles. The chancellor’s deputy, Darren Jones, was put in charge of day-to-day delivery and Minouche Shafik, a former Bank of England chief, appointed chief economic adviser.
Government insiders have denied the reshuffle risks undermining Rachel Reeves’s position, with her allies insisting the chancellor had been discussing it with Starmer since the beginning of the recess, and was supportive of Downing Street having a stronger economic voice.
However, senior No 10 figures cast doubt on the significance of the role the chancellor had played. One said work on the new structure had begun after the May local elections, and was designed to create an operation that worked for this prime minister, rather than relying on the system inherited from previous administrations.
Morgan McSweeney, Starmer’s chief of staff, commissioned the Future Governance Forum to come up with proposals, and Vidhya Alakeson, the deputy chief of staff, then drew up a paper on which changes No 10 could adopt, which was presented to Starmer in May. By late June, the structure was settled, with the process concluded in early July.
While several candidates were considered for the delivery role, Jones, who had impressed the prime minister during the spending review process, was the “standout” favourite, according to sources. No 10 decided to wait until after the summer to announce the changes.
Lloyd’s departure from Downing Street just 10 months after being appointed came after internal tension over who was running the department. Stuart Ingham, another policy chief and Starmer’s most longstanding aide, also left the unit to work in a more political role in McSweeney’s team.
A new political policy chief is expected to be appointed shortly, but in the meantime Alakeson will oversee day-to-day policy work.
