One of Labour’s biggest private donors has made a donation to Dan Jarvis in a sign that the MP is seen increasingly as a challenger to replace Jeremy Corbyn.
Mr Jarvis, a former paratrooper, received £16,800 last month from Martin Taylor, the hedge fund guru who gave £600,000 to the party under Ed Miliband. Mr Taylor is the second big donor to support the Barnsley MP, suggesting that he is being groomed as a potential leader. Peter Hearn, the owner of an executive recruitment company, gave Mr Jarvis £12,500 in January. The MP’s allies said that the money went towards running his office.
Other members of Labour’s Thousand Club, made up of people who give the party £100 a month, are known to back the idea of a leadership challenge from Mr Jarvis, although many of the club’s members have left since Jeremy Corbyn became leader.
Most Labour MPs are determined that Mr Corbyn must not lead the party into the next election. Opinion is split about when an attempt to oust him should be launched.
Some MPs are in such despair that they want to take action sooner rather than later, with Labour’s autumn conference seen as an opportunity. A row over the Trident nuclear weapons programme, which Mr Corbyn wants scrapped, could see unions become more willing to cooperate with MPs to bring him down. However, most MPs believe that it is unlikely that Mr Corbyn will be ousted this year because Labour’s membership appears to back him.
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A senior MP said: “I’m in the ‘sooner rather than later’ camp — I just don’t think this can go on. Labour voters are tearing their hair out. I just hope that whenever the time comes there is a firm plan and everyone moves together.”
While there is a widespread acceptance that moderates will need to unite behind a single candidate to defeat Mr Corbyn or another figure from the left, there is not yet any agreement on who the candidate could be.
Mr Jarvis has support within the party but some MPs are unsure that he has enough new political ideas for a leadership campaign.
Chuka Umunna, former shadow business secretary, still has his supporters after pulling out of the race to replaceMr Miliband last year. Some MPs believe that the party might need a completely fresh start with an MP from the 2015 intake, such as Keir Starmer, the former director of public prosecutions. The final option is to allow the party to regroup under a caretaker leader, with Hillary Benn and Alan Johnson seen as the only figures who could unite the party.
Mr Taylor, whose father was a Labour councillor, closed his £1 billion hedge fund Nevsky Capital in January. He has not donated to the central party under Mr Corbyn but gave £40,000 to Labour Together, a group set up to develop a new policy programme for the party.
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Mr Corbyn set out his vision of a “new economics” in a speech to the British Chambers of Commerce conference. He attacked key elements of New Labour’s years in office, such as the tax credits that provide a “subsidy” for low wages and the private finance initiative (PFI) schemes that landed the NHS with high debts.