Keir Starmer left the door open for Angela Rayner to return to government last night after she was forced to quit for dodging up to £40,000 in stamp duty on her second home.
Following days of bluster and misinformation, the Deputy Prime Minister finally resigned when a report by the Government’s sleaze watchdog found she had broken the Ministerial Code by failing to ensure she paid the right tax on an £800,000 seaside apartment.
She also resigned as Housing and Communities Secretary and quit her elected role as Labour’s deputy leader.
In a handwritten letter, Sir Keir hailed her as the ‘living embodiment of social mobility’ and told her he was ‘very sad to be losing you’.
He added: ‘You have been a trusted colleague and a true friend for many years. I have nothing but admiration for you and huge respect for your achievements in government.’
Despite her forced resignation for dodging tax the PM also hinted at a possible future comeback, telling her: ‘You will remain a major figure in our party.’
Even though she railed against Tory ‘tax dodgers’ for years, Ms Rayner insisted her own case was different, saying her failure to pay tens of thousands of pounds in tax was ‘inadvertent’.
Tory leader Kemi Badenoch criticised the Prime Minister for having waited for Ms Rayner’s resignation, saying her position had been ‘untenable for days’.
Keir Starmer left the door open for Angela Rayner to return to government last night after she was forced to quit for dodging up to £40,000 in stamp duty on her second home
Following days of bluster and misinformation, the Deputy Prime Minister finally resigned when a report by the Government’s sleaze watchdog found she had broken the Ministerial Code
Prime Minister Sir Keir Starmer tore up his cabinet after Angela Rayner stepped down as deputy prime minister
She said: ‘Angela Rayner is finally gone. It says everything about Keir Starmer’s weak leadership that he had to wait for a report before acting.’
Nigel Farage said the circumstances of Ms Rayner’s downfall showed the Labour government was ‘as bad – if not worse – than the one that went before’.
For days Ms Rayner had been battling claims that she failed to pay her taxes in full when she bought the flat in Hove in May.
As Deputy PM she had use of a lavish grace and favour Whitehall flat in Admiralty House.
She told the Cabinet Office her ‘primary residence’ was her family home in her Ashton-under-Lyne constituency in Greater Manchester.
It later emerged she had sold her share of that property to help fund the purchase of the flat in Hove, which allowed her to be closer to her on-off boyfriend Sam Tarry.
In an unusual move, she sold her stake to a trust set up to provide for her disabled son who still lives in the property.
But tax experts suggested that she would still be considered to have an interest in the property as her son is under 18 – meaning that the Hove property should have attracted the punitive rate of stamp duty levied on second homes. Yesterday’s report by Sir Laurie Magnus, the PM’s independent adviser on ministerial standards, accused Ms Rayner of an ‘unfortunate failure to settle her stamp duty liability’.
In a handwritten letter, Sir Keir hailed her as the ‘living embodiment of social mobility’ and told her he was ‘very sad to be losing you’
Sir Laurie said that although Ms Rayner took legal advice from two separate sources, neither was a tax expert. One warned her that she should seek specialist tax advice but she failed to do so.
As a result she paid around £30,000 in stamp duty on the flat in Hove, rather than the estimated £70,000 that was due if the property was treated as a second home.
Sir Laurie said he accepted Ms Rayner had acted in ‘good faith’. But he said her failure to seek the right advice, coupled with the fact that the truth only came out as a result of ‘intensive public scrutiny’ by the media, meant she had failed to conduct her affairs to the ‘highest possible standards’ required of ministers.
He said he had also considered evidence on other issues, including council tax and inheritance tax but had decided to ‘focus my inquiries’ on the stamp duty issue.
In her resignation letter to the PM, Ms Rayner said she ‘deeply regretted’ her ‘error’ in failing to seek proper tax advice.
In a swipe at the media, which exposed her failure to pay her taxes, she said her family was suffering a ‘significant toll’ from the scrutiny of her affairs.
Ms Rayner’s resignation could be financially crippling for her as she will see her salary slashed from £161,409 to £93,904 just months after she took out a £650,000 mortgage to buy her flat in Hove. She also now faces having to pay the taxman an extra £40,000, and could be hit with a fine of around £12,000 if she is found to have been ‘careless’.
Her departure will raise fresh questions about the future of the controversial Employment Rights Bill, which she championed in government, but which the Government’s own assessment suggests will hit business with £5 billion of red tape.
It also means new housing secretary Steve Reed will now be left to press on with planning reforms – and take the critical decision over whether to approve controversial plans for a huge Chinese embassy in London.
