Sir Keir Starmer makes major Cabinet reshuffle after Rayner quits over tax row

Sir Keir Starmer has completed a reshuffle of his senior ministers after Angela Rayner resigned from the Government for breaching the ministerial code.

Ms Rayner quit as deputy prime minister, housing secretary and deputy leader of the Labour Party following an official probe into her admission she did not pay enough stamp duty on a seaside home she bought earlier this year.

The Prime Minister instigated a major shake-up of his top team in order to reclaim the political narrative following Ms Rayner’s exit.

David Lammy was appointed Deputy Prime Minister and moved into a new role as Justice Secretary, after serving as Britain’s top diplomat – the Foreign Secretary – over the last year.

Shabana Mahmood, formerly the justice secretary, is the new Home Secretary, while Yvette Cooper has moved from her brief at the Home Office to take over Mr Lammy’s former job as Foreign Secretary.

With Rachel Reeves remaining in post as Chancellor, the appointment of Ms Mahmood and Ms Cooper to their new roles mean that for the first time in history the three so-called “great offices of state” are all filled by women.

Elsewhere, Pat McFadden, formerly a senior Cabinet Office minister, is set to take over a new “super ministry” comprised of the Department for Work and Pensions and the skills remit of the Department for Education.

Steve Reed has taken over Ms Rayner’s brief as Housing Secretary, leaving behind his role as environment secretary.

Darren Jones, a Labour rising star who was only days ago appointed to the new position of the Chief Secretary to the Prime Minister, also takes over Mr McFadden’s old Cabinet Office job: the Chancellor of the Duchy of Lancaster.

Elsewhere, Peter Kyle has been appointed Business Secretary, while Jonathan Reynolds has been moved from that post to become the Government Chief Whip, replacing Sir Alan Campbell, who is the new Leader of the House of Commons.

Lucy Powell, the former Commons leader was sacked, as was former Scotland secretary Ian Murray, now replaced by Douglas Alexander, who was until now a trade minister.

Liz Kendall, formerly the work and pensions secretary, takes over Peter Kyle’s old job as Science Secretary.

The Cabinet reshuffle was rounded off with Emma Reynolds’ appointment as Environment Secretary.

Junior ministerial roles within the Government remain to be filled, including Ms Reynolds’ now vacant former role as a minister within the Treasury team.

Lisa Nandy, who has faced months of briefing against her, remains as the Culture Secretary, and Ed Miliband also stays on as Energy Secretary.

Sources within Downing Street suggested the Government had been refreshed and reinvigorated by the reshuffle, and would focus on making people feel better off, protecting the UK’s borders, and reforming and renewing public services.

The Government has been given a new “sense of purpose” by the shake-up, a source said.

Labour also faces an internal election to replace Ms Rayner as its deputy party leader, arrangements for which will be announced in due course.

The contest could see the divide between different factions of Labour – and their positions on Sir Keir’s track record in No 10 – brought into the public eye.

Left wing Labour MP Richard Burgon has already cautioned against the race to replace the deputy leader – a figure intended to be a bridge with the party grassroots – becoming a “stitch up”.

Ms Rayner resigned as deputy PM, housing secretary and deputy Labour leader after Sir Keir’s ethics adviser said she failed to “heed the caution” contained within legal advice she received when buying an £800,000 property in Hove.

The outgoing deputy prime minister admitted she had underpaid stamp duty on the flat, and referred herself to Sir Laurie Magnus, the independent ethics adviser.

In a letter published on Friday, Sir Laurie said he believed Ms Rayner 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 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”.

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”.

The major upset to the Government comes just days after Sir Keir instigated a smaller reshuffle, and made new back office appointments with a view to begin what he billed as “phase two” of his administration, focused on delivery.

Conservative leader Kemi Badenoch said: “Phase Two of Starmer’s Government didn’t even last three days. He was too weak to fire the deputy prime minister, even after he was told she broke the ministerial code, and now he’s shuffling deckchairs around on his sinking Government.

“The Labour Party is now engaged in a civil war for its deputy leadership. All of which will be an enormous distraction from the problems facing Britain, with the cost of borrowing reaching its highest point in decades, and inflation and unemployment rising.”

Liberal Democrat leader Sir Ed Davey meanwhile cautioned Labour, warning that the reshuffle showed it was “learning the wrong lessons from the calamity Conservatives before them”.

“Until Keir Starmer is ready to grab the bull by the horns and confront the problems our country really faces, it makes little difference who sits where around the Cabinet table,” he added.

Reform UK leader Nigel Farage brought forward a keynote speech at his party’s conference in Birmingham, and claimed the Government is “deep in crisis” and “not fit to govern”.