John McDonnell and Apsana Begum have had the Labour whip reinstated, it is understood.
The pair had the whip suspended in July last year after they voted against the Government on the King’s speech, along with five of their colleagues.
The group backed an SNP motion calling for an end to the two-child benefit cap, though four of the rebels – Ian Byrne, Richard Burgon, Imran Hussein and Rebecca Long-Bailey – had the whip reinstated six months later.
The seventh rebel, Zarah Sultana, subsequently resigned her membership to co-found a new left-wing party with former Labour leader Jeremy Corbyn.
Mr McDonnell was Mr Corbyn’s shadow chancellor when they were in charge of Labour. They both now sit as independent MPs.
It is understood Mr McDonnell’s and Ms Begum’s suspensions ended on Friday following discussions with the chief whip, Jonathan Reynolds.
Ministers are face rising pressure to abolish the two-child benefit cap, with both Labour deputy leadership candidates expressing opposition to the policy along with voices from outside Parliament such as Greater Manchester Mayor Andy Burnham.
The issue is expected to be a key theme of Labour’s annual conference, which begins in Liverpool on Sunday.
John McDonnell had the whip suspended in July last year after they voted against the Government on the King’s speech, along with five of their colleagues.
Apsana Begum was also among the group backed an SNP motion calling for an end to the two-child benefit cap
Mr McDonnell was Jeremy Corbyn’s shadow chancellor when they were in charge of Labour. They both now sit as independent MPs.
The annual conference comes as Britain’s elections watchdog is facing a backlash after it rejected calls for a fresh investigation into claims Keir Starmer’s chief of staff ‘hid’ more than £700,000 in donations.
In a controversial move, the Electoral Commission said it would not reassess why Morgan McSweeney failed to declare the donations to his think-tank Labour Together, which was instrumental in Sir Keir’s rise to the Labour leadership.
The move throws a lifeline to the Prime Minister, who has faced growing questions about his top aide’s conduct in recent days.
It came despite the publication by the Daily Mail of a leaked email in which a top Labour lawyer advised Mr McSweeney to present the episode as an ‘admin error’.
Labour Together was fined in September 2021 after the Electoral Commission found more than 20 breaches of donations law.
In a statement, the Electoral Commission said: ‘We investigated the late reporting of donations by Labour Together and published our findings in 2021. We determined multiple offences including those relating to the late reporting of donations with a cumulative value of £739,492, as well as the failure to appoint a responsible person. The fine was significant and reflects the seriousness of the offences determined, for which no reasonable excuse was put forward.
‘Earlier this week the Conservative Party wrote to us with concerns that other offences had been committed. We have thoroughly reviewed this information and found no evidence of any other potential offences. We are confident that the initial determination and sanction were appropriate.
‘We are therefore not reopening the investigation.’
Labour’s annual conference comes as Britain’s elections watchdog is facing a backlash after it rejected calls for a fresh investigation into claims Keir Starmer’s chief of staff ‘hid’ more than £700,000 in donations
The Conservatives had asked the Commission to assess whether Labour Together had committed a further offence by deliberately withholding information from the original inquiry, which would potentially be a criminal matter.
In a letter of reply, the watchdog said the offence did not apply because the original investigation was conducted on a voluntary basis.
The Conservatives have argued that Mr McSweeney should be brought to book for huge sums in ‘hidden’ donations.
Sir Keir is also facing a major bout of Labour infighting, according to the mayor of Greater Manchester Andy Burnham who claiming mutinous MPs want him to challenge the prime minister.
The elected Manchester mayor was told in no uncertain terms to stay up north and do his job after he used eve-of-conference interviews to lash out at the Prime Minister.
Mr Burnham, who twice failed to be elected leader of the party when he was an MP, accused Sir Keir of leaving Labour riven by ‘alienation and demoralisation’ since entering No10.
He said he had been approached by MPs who wanted him to mount a leadership challenge and outlined his own tax-and-spend manifesto that included £40bn of borrowing to fund nationalising housebuilding.
It prompted a blunt response from ministers who pointed out his term as Manchester mayor runs until 2028.
Housing Secretary Steve Reed branded Mr Burnham a ‘regional politician’ and suggested he concentrate on the city, a point later echoed by Chancellor Rachel Reeves.
‘In the same way that this Government are (sic) delivering change, I know that Andy is focussed on delivering change in Greater Manchester,’ she told broadcasters.
Questions were also raised about his claim that the UK has ‘got to get beyond this thing of being in hock to the bond markets,’ with comparisons drawn with Liz Truss’s financially chaotic time in office as a Tory PM.
Economist Paul Johnson said: ‘The bond markets are simply the people and institutions who lend government money. We can avoid being ”in hock” to them by reducing borrowing.
The Manchester mayor used a newspaper interview ahead of Labour’s annual conference to set out an alternative tax-and-spend manifesto he claimed could ‘turn the country around’
‘In the same way that this Government are (sic) delivering change, I know that Andy is focussed on delivering change in Greater Manchester,’ Rachel Reeves told broadcasters
‘We struggle now because our borrowing and debt are extremely high. Mr Burnham wants to increase borrowing.’
Mr Burnham later took to the airwaves himself to insist he ‘loved’ his role in the city and was committed to serving a full term.
The Manchester mayor used a newspaper interview ahead of Labour’s annual conference to set out a massive tax-and-spend manifesto he claimed could ‘turn the country around’.
It would see the top rate of income tax hit 50 per cent and increase council tax on homes in the south of England, with £40billion of borrowing to nationalise housebuilding.
But yet again he stopped short of confirming he would resign as mayor and seek a Westminster seat to take on the PM directly, which would require a by-election and support from 80 other MPs.
He insisted to the Telegraph he was not ‘plotting to get back’, a view not universally shared.
However MPs suggested he would find it hard to win a Westminster seat in the current climate, with one telling the Daily Mail: ‘We all know he’s not a fan of England south of the Keele services and hasn’t ever really talked about Wales or Scotland so where he thinks his pathway lies with MPs would fascinate me.
‘And if anyone thinks any by-election right now is a cert for Labour then they are taking the voters for granted – the very thing people hate and (which) is turning them towards Reform et al.’
Mr Burnham, a former New Labour minister and ex-MP for Leigh, insisted he was not plotting an immediate return to the Commons or wanting to step on the Government’s toes as it seeks a reset at the Labour Party conference.
He signalled a willingness to work with the Liberal Democrats and Jeremy Corbyn, and told the Telegraph he believed Britain should introduce proportional representation to encourage co-operation within the ‘progressive majority’.
Asked if MPs had urged him to run for the top job, he said: ‘People have contacted me throughout the summer – yeah.
‘I’m not going to say to you that that hasn’t happened, but as I say, it’s more a decision for those people than it is for me.’
To run against Sir Keir in a leadership contest, Mr Burnham would have to resign his position as Greater Manchester mayor, win a Westminster seat in a by-election, and receive nominations from at least 80 Labour MPs.
More to follow
