Sue Gray ousted as Downing Street chief of staff

Sue Gray will no longer serve as Sir Keir Starmer's chief of staff and will become the Prime Minister's envoy for the 'regions and nations'
Sue Gray will no longer serve as Sir Keir Starmer’s chief of staff and will become the Prime Minister’s envoy for the ‘regions and nations’ - Steve Back/Steve Back

Sir Keir Starmer ousted Sue Gray as his chief of staff on Sunday after she lost a power struggle at the heart of Downing Street.

Ms Gray has been shifted to a part-time role as the Prime Minister’s envoy for the “regions and nations”, given a pay cut and will no longer report directly to Sir Keir, just weeks after it was revealed she had a higher salary than he did.

Morgan McSweeney, a longstanding Labour insider who ran the successful general election campaign, has been appointed in her place after a rumoured battle between the two for control in Downing Street.

Allies of his were made deputy chief of staff in a series of co-ordinated appointments that appeared to have been carefully planned by Number 10.

Downing Street also filled the vacant role of Sir Keir’s principal private secretary, a key position that Ms Gray had been expected to help recruit herself.

The overhaul of a Downing Street set-up still only three months old comes as the Prime Minister tries to draw a line under weeks of headlines about infighting and leaks, with Ms Gray at the centre of a storm of negative briefing.

One government insider said Ms Gray had become “a convenient punchbag for everything that has gone wrong”. A former Tory government adviser described her demotion as “pretty extraordinary”.

Sir Keir also appointed a head of strategic communications as he fights to regain control of the media narrative before a “painful” Budget later this month expected to include sweeping tax rises.

Ms Gray’s departure was presented as her own decision, with a quote issued in her name saying she had “chosen” to go after becoming a distraction, while Sir Keir praised the impact she has had.

But The Telegraph has talked to multiple sources with direct knowledge of developments who believe it was the Prime Minister who asked Ms Gray to move on.

Ms Gray told allies early last week she was not going anywhere. A change of stance from Sir Keir appears to have led to 48 hours of intense discussions about her departure.

Just days earlier, sources close to Ms Gray had stressed the pivotal nature of her role by emphasising that she was set to give advice on who should become cabinet secretary, ambassador to the US, national security adviser and the head of the Prime Minister’s private office in the coming weeks.

Ms Gray will take a pay cut in her new role, The Telegraph understands.

However, it is possible that Ms Gray, who had been paid £170,000 as chief of staff, compared to Sir Keir’s £167,000, may not get a salary at all in her new role.

‘Who will run the country now?’

Number 10 declined to comment on pay. Whether she will be paid for what is understood to be a part-time position is yet to be confirmed.

A Conservative Party spokesman said Sir Keir’s government had been “thrown into chaos”, adding: “The only question that remains is who will run the country now?”

Ms Gray had joined Sir Keir’s team in opposition as chief of staff in September 2023, prompting Tory fury given that as a civil servant she investigated Boris Johnson and his team for Covid lockdown-breaking parties. The scandal contributed to Mr Johnson’s resignation as prime minister.

Her influence in Downing Street has been the subject of intense press scrutiny, especially since the leaking of her salary last month, which indicated briefing wars inside Number 10.

The announcement of her ousting came at lunchtime on Sunday.

Sir Keir is said to have been considering a shake-up of his team for two weeks since the end of Labour conference.

A source told the Financial Times that he had been “chastened” by the depth of discontent within the party and increasingly concerned that Ms Gray had “become the story”.

Ms Gray said alongside the official announcement: “I am pleased to have accepted a new role as the Prime Minister’s envoy for the regions and nations.”

She added: “It has been an honour to take on the role of chief of staff, and to play my part in the delivery of a Labour government. Throughout my career, my first interest has always been public service.

“However, in recent weeks it has become clear to me that intense commentary around my position risked becoming a distraction to the government’s vital work of change. It is for that reason I have chosen to stand aside, and I look forward to continuing to support the Prime Minister in my new role.”

Sir Keir said: “I want to thank Sue for all the support she has given me, both in opposition and government, and her work to prepare us for government and get us started on our programme of change.

“Sue has played a vital role in strengthening our relations with the regions and nations. I am delighted that she will continue to support that work.”

Ms Gray’s new role will be connected to the Cabinet Office, where she was working years ago before quitting to join the Labour team, rather than Number 10.

She will be focused on trying to keep the UK together – an issue close to her heart having served in senior positions in the Northern Ireland executive – and pushing forward devolution.

McSweeney heads up new team

Mr McSweeney, credited with a ruthlessly efficient election campaign that won Labour a vast House of Commons majority, will become the new chief of staff.

He had been in charge of political strategy in Downing Street. Vidhya Alakeson, who had been working in Mr McSweeney’s team, will become a deputy chief of staff. Jill Cuthbertson, director of Sir Keir’s office while in opposition, has also been made deputy chief of staff.

Nin Pandit, a former chief of staff to the chief executive of the NHS, has become Sir Keir’s principal private secretary.

James Lyons, a former NHS director of communications who had been a political journalist with the Daily Mirror and The Sunday Times, will head up a new strategic communications team in Downing Street.

John McDonnell, who was Labour shadow chancellor under Jeremy Corbyn, said: “We’re facing the potential of a war setting the Middle East alight, already thousands are being killed in Lebanon. What is the focus of the boys around Keir Starmer’s office? Carving up Sue Gray and grabbing her job and salary. Words fail me.”

On Sunday night Tory leadership hopeful Kemi Badenoch said Sir Keir showed a “lack of integrity” by hiring MsGray while she was still a neutral civil servant.

She wrote in the Daily Mail: “When I worked with Sue Gray (who, by the way, I quite like), she tried to pressure me into dropping my opposition to the SNP’s crazy Gender Recognition Bill.

“Ignoring Sue Gray’s advice turned out to be one of my best decisions. Hiring her, however, will go down as one of Starmer’s worst – because it shows that Labour has no principles.”