Rayner will take over as shadow Cabinet Office minister from Rachel Reeves, who has been promoted to shadow chancellor to replace demoted Anneliese Dodds.
It comes after a day of wrangling between Starmer and Rayner, Labour’s deputy leader, over her removal from the job of party chair and national campaign coordinator following damaging losses in so-called “red wall” areas in Thursday’s local elections.
Rayner’s move to a senior shadow Cabinet position could allow her allies to argue that she has emerged from a row with the Labour leader in a stronger position.
Honoured to accept the role of Shadow Chancellor.— Rachel Reeves (@RachelReevesMP) May 9, 2021
Our economic recovery must be fair. We must transform lives & back businesses in every part of our country.
Together we can create the secure jobs & strong infrastructure we need.
Everyone deserves a stake in Britain's future.
HuffPost UK understands that Rayner has also been given a new title of shadow secretary of state for the future of work, and will have a key role in developing Labour’s economic policy for the regions, alongside Dodds who will move to party chair and lead a policy review.
Rayner’s beefed up role is likely to be cheered by MPs on the left, who feared Starmer may listen to calls for party to drift to the right on the economy following the election defeats.
Shabana Mahmood will take over Rayner’s other former responsibilities as national campaign coordinator.
Announcing the reshuffle, Starmer said: “The Labour Party must be the party that embraces the demand for change across our country.
“That will require bold ideas and a relentless focus on the priorities of the British people.
“Just as the pandemic has changed what is possible and what is necessary, so Labour must change too.
“In the last 24 hours we have seen fantastic results for Labour metro mayors, as well as the Labour government in Wales under Mark Drakeford.
“They have shown the difference Labour can make in power, standing up for their communities.
“We have seen Labour begin to turn around its fortunes in Scotland under the leadership of Anas Sarwar.
“These results give us optimism and inspiration for the future.
“The challenge for us now is to build upon these successes and learn from the places we lost.
“I look forward to working with our refreshed and renewed team to take on that challenge, deliver that change and build the ambitious programme that will deliver the next Labour government.”
In other moves:
- Shadow Commons leader Valerie Vaz was sacked and replaced with Thangam Debbonaire
- Lucy Powell was promoted to shadow housing secretary to replace Debbonaire
- Chief whip Nick Brown was sacked and replaced with Alan Campbell
- Wes Streeting was promoted to shadow child poverty secretary
A spokesperson for Brown said: “Nick thinks it’s a reasonable time for Nick to move on.
“He and Keir have parted on good terms, with mutual respect.
“He wishes Keir and the new chief whip every success.”
CORRECTION: This article incorrectly referred to shadow employment secretary Andy McDonald working under Rayner. This reference has now been removed.