Angela Rayner has stood down from the government after the prime minister’s ethics adviser found she had breached the ministerial code over her underpayment of stamp duty on her £800,000 seaside flat.
In a huge blow to Keir Starmer, Sir Laurie Magnus found that Rayner had “acted with integrity and with a dedicated and exemplary commitment to public service” but concluded she had breached the ministerial code over her tax affairs.
Rayner’s departure is deeply damaging for the prime minister, who initially stood firmly by her, and his authority has been badly bruised as a result. She has quit as his deputy and housing secretary, and as deputy leader of the Labour party.
Downing Street sources confirmed the prime minister would now conduct a reshuffle, but that Rachel Reeves would remain in post as chancellor.
In her resignation letter, Rayner said that she “deeply regrets” her decision not to seek “additional specialist tax advice” over her purchase of the Hove property.
She said she also had to “consider the significant toll that the ongoing pressure of the media” was taking on her family, despite her journey from “a teenage mum from a council estate in Stockport” to the highest level of government being “the honour of my life”.
In his handwritten response, Starmer said Rayner would “remain a major figure in our party” and would “continue to fight for the causes you care so passionately about”.
Rayner’s departure leaves the Labour government without one of its most authentic – and powerful – working-class voices at a time when it is struggling to reconnect with its traditional voter base and trailing Reform UK in the polls.
Rayner had referred herself to the ethics adviser after confirming she would have to pay more stamp duty – which experts have predicted could run to as much as £40,000 – because she had incorrectly paid the lower rate on the flat in Hove.
At the time, Rayner said she “deeply regretted” that the error had been made, after classifying the flat as her only property despite spending much of her time with her children at the family house in Ashton-under-Lyne, Greater Manchester.
Months before the Hove purchase, she had put her stake in the Ashton house into a trust set up in 2020 to manage a payment to one of her sons, who after a “deeply personal and distressing incident” as a premature baby had been left with lifelong disabilities.
Because her son is the beneficiary of that trust and is under 18, Rayner was still counted as having a financial interest in it for tax purposes.
However, when she bought the Hove flat, she declared she did not have an interest in any other property, allowing her to pay the lower stamp-duty rate of about £30,000. The higher rate would have been an estimated £70,000.
Though she claimed to have received written tax advice before completing her purchase, saying she was entitled to pay the lower amount, Rayner’s conveyancer said on Thursday she had not provided any such advice.
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Magnus revealed on Friday that two experts in trusts had also advised the then deputy prime minister to take full legal advice before buying the property, which she did not do.
He said in his letter: “Given the conjunction of the acknowledged complexity of her family circumstances, her position in government (most importantly as deputy prime minister) and the consequences of getting such a calculation wrong, it is deeply regrettable that the specific tax advice was not sought.”
Magnus added it was “highly unfortunate” that she had not paid the right amount of tax given she was also housing secretary.
The controversy was made even more awkward for the government by the fact that Reeves is thought to be considering higher property taxes in November’s budget – in part at the prompting of Rayner herself.
In a memo to the chancellor earlier this year Rayner suggested raising stamp duty on commercial properties, warning that the existing 5% rate was encouraging individuals to buy properties through shell companies.
Nigel Farage, the Reform UK leader, said Rayner’s resignation “screams to entitlement”.
He added: “It screams to a government that despite all the promises that this would be a new, different kind of politics is as bad – if not worse – than the one that went before.”
The Conservative leader, Kemi Badenoch, said Rayner’s position was “untenable for days”. In a video posted on X, she added: “It says everything about Keir Starmer’s weak leadership that he had to wait for a report before acting.
“The truth is simple, she dodged tax. She lied about it. Her position was untenable for days.”
