Angela Rayner has resigned as Deputy Prime Minister and Housing Secretary after an independent ethics advisor found she breached the ministerial code over her tax affairs, throwing Keir Starmer’s Labour government into fresh turmoil just over a year after their landslide election victory.
The MP for Ashton-under-Lyne also stepped down from her position as deputy leader of the Labour Party following the damning report by ethics watchdog Sir Laurie Magnus. Magnus concluded that whilst Rayner had “acted with integrity and with a dedicated and exemplary commitment to public service”, she nevertheless breached the ministerial code.
The resignation marks a dramatic fall from grace for one of Labour’s most prominent figures, who had been a fierce critic of Conservative ministers over their tax affairs whilst in opposition. The scandal centres on Rayner’s underpayment of stamp duty on an £800,000 seaside flat in Hove, purchased earlier this year, with reports suggesting she saved £40,000 by paying the standard rate rather than the higher second home surcharge.
“Full Responsibility for Error”
In her resignation letter to the Prime Minister, Rayner said she accepted she “did not meet the highest standards” and that she “deeply” regrets not seeking additional specialist tax advice. She took “full responsibility for this error”, adding that it was “never my intention to do anything other than pay the right amount”.
The controversy emerged after Rayner paid just £30,000 ($40,000) in stamp duty on her Hove property purchase in May, rather than the £70,000 ($94,000) she should have paid under second home rules. She claimed she had initially been advised that she was not liable for the second property surcharge because she had sold her stake in her family home in Ashton-under-Lyne to a court-instructed trust established in 2020 to benefit her disabled son.
However, she conceded she had made a “mistake” after fresh legal advice from a “leading tax counsel” later revealed that she was liable for the extra duty on her new Hove flat. The trust arrangement, funded from a medical award after her son was left with life-long disabilities following complications at birth, had created complex tax implications that were initially misunderstood.
Opposition Seizes on “Hypocrisy”
Conservative leader Kemi Badenoch immediately seized on the resignation, declaring: “Angela Rayner is finally gone. It says everything about Keir Starmer’s weak leadership that he had to wait for a report before acting.” She added: “The truth is simple, she dodged tax. She lied about it. Her position was untenable for days.”
Badenoch continued her attack, saying: “Keir Starmer once promised honesty and integrity in politics, but when faced with this test, he hesitated: no principles, no backbone.” She demanded answers about “what did Keir Starmer know and when did he mislead the public?
Shadow Housing Minister Sir James Cleverly said: “Angela Rayner’s position has been untenable for some time. She has been deeply hypocritical, demanding more tax from others while seeking to pay less herself.” He added: “Starmer’s judgment is also in question. He accused people of sexism and classism in an attempt to intimidate us away from scrutiny of his deputy.”
Shadow Chancellor Sir Mel Stride weighed in, stating: “It took far too long to get to this point. Rayner tried to hang on to her job, and Labour did everything they could to protect her – even as serious questions mounted.” He described it as “utterly extraordinary that while working families and businesses are being hammered by Labour’s tax hikes, Angela Rayner failed to pay the right amount of stamp duty – by tens of thousands of pounds.
Past Comments Come Back to Haunt
The resignation is particularly damaging given Rayner’s previous attacks on Conservative politicians over their tax affairs. In 2018 she accused then-health minister Jeremy Hunt of “sleaze” for using a “Tory tax loophole” to save nearly £100,000 in stamp duty when buying seven apartments. She also called for the resignation of Nadhim Zahawi, the former chancellor, after he confirmed he paid nearly £5 million ($6.7 million) to authorities to settle his tax affairs.
These past comments opened her up to charges of hypocrisy from across the political spectrum, with critics pointing out the stark contrast between her fierce rhetoric whilst in opposition and her own tax failings as a government minister.
Starmer’s “Real Sadness”
In a handwritten letter responding to Rayner’s resignation, Starmer said he was “sad” that her time as deputy prime minister had “ended in this way. He wrote: “On a personal note, I am very sad to be losing you from the government. You have been a trusted colleague and a true friend for many years.”
The Prime Minister added: “I have nothing but admiration for you and huge respect for your achievements in politics,” whilst confirming that Rayner will “remain a major figure” in the Labour party. His supportive tone contrasted sharply with his initial backing of Rayner when the scandal first emerged, when he told Parliament he was “proud” to work alongside her.
Reform UK Capitalises on Crisis
Reform UK leader Nigel Farage, whose party is holding its conference in Birmingham today, declared “it was inevitable”, adding: “You’re going to see the hard left of Labour shouting very very loudly.” He predicted: “Mark my words, in a week there will be splits within the Labour Party.
Farage has also moved his conference speech to an earlier time of 1pm, clearly seeking to capitalise on the political turmoil engulfing the government. The timing of Rayner’s resignation, coinciding with Reform’s conference, represents a significant PR disaster for Labour.
Cabinet Reshuffle Looms
Downing Street has confirmed the Prime Minister has now begun a reshuffle, with ITV News understanding it is being billed as a “renewal” reshuffle. Chancellor Rachel Reeves is the only cabinet member confirmed to keep their job. The reshuffle adds to the sense of crisis surrounding Starmer’s administration, which has struggled with declining popularity and economic challenges.
Rayner’s departure marks the eighth, and most senior, ministerial departure from Starmer’s team, with five ministers having resigned over wrongdoing. This means Starmer has suffered the most ministerial resignations, outside government reshuffles, of any prime minister at the beginning of their tenure since at least 1979 – even more than Boris Johnson.
Complex Family Circumstances
Throughout the scandal, Rayner had attempted to explain the complex personal circumstances behind her property arrangements. She revealed that complications regarding her living arrangements were linked to her divorce in 2023 and the fact that her son has “life-long disabilities” following a deeply personal and distressing incident when he was a premature baby.
Speaking emotionally in an interview, she said: “I’ve been in shock, really, because I thought I’d done everything properly, and I relied on the advice that I received and I’m devastated because I’ve always upheld the rules and always have felt proud to do that.” She had also admitted to discussing resignation with her family before the ethics report was completed.
The resignation caps off what has been a dreadful summer for Labour, which has lost ground in the polls to the insurgent Reform UK despite winning a landslide victory just 14 months ago. Starmer’s economy is barely growing, ascendant critics assail him from the left and right, and his popularity has tanked to historic levels.
Rayner’s resignation has cost Labour one of its most talented politicians, whose forthright style, working-class roots and strong northern English accent helped bridge divisions within the parliamentary Labour Party. Rayner grew up poor on the outskirts of Manchester and became a mother at 16. Her journey from teenage mother to Deputy Prime Minister had been held up as an inspirational story within the Labour movement.
The loss of such a prominent figure, who was widely seen as a potential successor to Starmer and a counterweight voice for the party’s disgruntled left-wing, leaves a significant leadership vacuum at a critical time for the government. With Reform UK leading in national opinion polls and the Conservative opposition reinvigorated under Kemi Badenoch’s leadership, Starmer faces mounting challenges in restoring his authority and Labour’s credibility.
The stamp duty scandal has exposed Labour to charges that it operates under double standards – demanding higher taxes from others whilst its own senior figures fail to pay the correct amount. This perception of hypocrisy threatens to undermine the party’s economic messaging at a time when it is considering further tax rises to address fiscal challenges.
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Image Credit:
Deputy PM Angela Rayner meets Metro Mayors (9 Jul 2024) — photo by Alice Hodgson / No 10 Downing Street, OGL 3.0
