Phillips made her statement from the seaport town of Grimsby, a seat that voted to leave the European Union in 2016, which Labour lost to the Conservatives in the December 2019 election.
Phillips said that politics needed more honesty and that Labour needed a leader who 'could take on' British Prime Minister Boris Johnson.
Known for being outspoken and candid, Phillips has long been a critic of Jeremy Corbyn's leadership.
The 38-year-old ran women's refuges for victims of domestic abuse before becoming member of parliament for Birmingham Yardley in central England in 2015.
Senior Labour party lawmaker Emily Thornberry has also said that she will stand in the Labour leadership race to replace Corbyn following the party's election defeat at the hands of Johnson's Conservatives.