Angela Rayner quits Government after standards probe into tax affairs

Angela Rayner has resigned from Government after Sir Keir Starmer’s ethics adviser found she had breached the ministerial code over her underpayment of stamp duty on a seaside flat.

Sir Laurie Magnus said the outgoing deputy prime minister had “acted with integrity”, but failed to “heed the caution” contained within legal advice she received when buying the £800,000 property in Hove.

Her resignation marks a major blow for the Prime Minister and a wider Government reshuffle is now under way, with Commons Leader Lucy Powell among those to be dismissed on Friday afternoon.

Ms Rayner had referred herself to the standards watchdog for investigation after she admitted she had paid as much as £40,000 less surcharge than she should have done on the purchase in May.

She said she made a mistake based on legal advice she received at the time, before consulting a leading counsel, who found she was liable to pay a higher stamp duty rate, following headlines about her tax affairs.

In a letter published on Friday, Sir Laurie said: “She believed that she relied on the legal advice she had received, but unfortunately did not heed the caution contained within it, which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought.”

Ahead of her resignation as deputy prime minister, housing secretary and deputy Labour leader, the conveyancer she blamed for the underpayment denied it had given her tax advice on the purchase.

Ms Rayner told the Prime Minister in a letter on Friday that “I deeply regret my decision to not seek additional specialist tax advice” and said she took “full responsibility for this error”.

Sir Laurie said he believed she had acted in “good faith”, but that “the responsibility of any taxpayer for reporting their tax returns and settling their liabilities rests ultimately with themselves”.

Ms Rayner added: “I have long believed that people who serve the British public in government must always observe the highest standards, and while the independent adviser has concluded that I acted in good faith and with honesty and integrity throughout, I accept that I did not meet the highest standards in relation to my recent property purchase.

“I would like to take this opportunity to repeat that it was never my intention to do anything other than pay the right amount.”

The ethics watchdog said that his deputy’s failure to settle her full stamp duty liability, along with the fact that this was only established following media scrutiny, led him to consider the ministerial code had been breached.

In his response, Sir Keir said Ms Rayner would “remain a major figure in our party” and “continue to fight for the causes you care so passionately about.”

Losing the deputy prime minister will cause a headache for Sir Keir as he seeks to reset Government following a difficult summer dominated by criticism of the small boats crisis and speculation about tax rises in the autumn Budget.

Ms Rayner is popular among the Labour grassroots and is said to have played an important role in defusing the backbench revolt over proposed welfare cuts earlier this year.

She has been key to his political project, overseeing the manifesto pledge to build 1.5 million new homes as well as the Government’s flagship workers’ rights expansion, and is seen as a bridge between No 10 and the wider party.

In a wider reshuffle on Friday, Sir Keir dismissed Ms Powell, who said serving in the Government had been “an honour” but the Prime Minister had “informed me of his intention to appoint a new Leader of the House of Commons”.

“This has not been an easy time for the Government,” she said in a statement.

“The future of our democracy looks uncertain and Parliament and representational politics has an important role to play.”

Scotland Secretary Ian Murray was also sacked as part of the shake-up, saying he was “hugely disappointed” to be leaving the Government in a statement posted on X.

Mr Murray said Sir Keir would have his “full support” from the Labour backbenches, adding: “I wish my former Cabinet colleagues, and those now joining, well.”

Labour now also finds itself with the prospect of having to elect a new deputy leader, who will not necessarily also take up the role of deputy prime minister as Ms Rayner did.

The contest could expose divisions between different factions of the party – and their views on Sir Keir’s track record in No 10.

Tory leader Kemi Badenoch criticised the Prime Minister for having waited for Ms Rayner’s resignation, saying her position had been “untenable for days”.

“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 said.

Meanwhile, Reform UK leader Nigel Farage brought forward his leader’s speech at the party conference in the wake of the scandal, speaking at 1pm, three hours earlier than previously expected.

He said Ms Rayner’s resignation over her tax affairs “screams to entitlement” and showed the Government was “as bad – if not worse – than the one that went before.”

On Wednesday, Ms Rayner had acknowledged she had not paid enough tax when buying her East Sussex flat after receiving legal advice that failed to “properly take account” of her complex circumstances.

Because of a complex arrangement involving a trust set up to help her disabled son and her family home in Ashton-under-Lyne, the property should have been considered a second home, meaning she was liable for the higher rate of stamp duty.

She conceded she had made a “mistake” after fresh legal advice from a “leading tax counsel” confirming the error this week.

Before then, she had insisted for weeks that she had paid the correct amount of tax.