Britain’s beleaguered prime minister, Keir Starmer, suffered a gut punch on Friday, as his deputy prime minister, Angela Rayner, resigned after admitting that she had failed to pay adequate taxes on the purchase of a seaside apartment.
Ms. Rayner, a plain-spoken politician who is popular on the left wing of the Labour Party, stepped down after an independent ethics adviser concluded she had breached the code of conduct for cabinet ministers. She underpaid the tax as part of a complex transaction involving another house that she had owned with her former husband, but then only remedied the error after weeks of public scrutiny.
“I accept that I did not meet the highest standards in relation to my property purchase,” Ms. Rayner said in a letter to Mr. Starmer. “I take full responsibility for this error,” she said, adding, “it was never my intention to do anything other than pay the right amount.”
Mr. Starmer accepted her resignation with palpable regret, replying in a three-page handwritten 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.”
Although the ethics adviser, Laurie Magnus, wrote that he did not believe Ms. Rayner set out to evade taxes, he said she had failed to heed a recommendation from financial and legal advisers to consult tax lawyers to determine her obligations. That fell short, he concluded, of the “highest standards of proper conduct” that apply to top government officials.
Ms. Rayner’s resignation deepens a sense of the disarray around Mr. Starmer’s government, which has struggled with a stagnant economy, lurching economic policies and a resurgent populist right. The Labour Party now trails an anti-immigration party, Reform U.K., by nearly double digits in opinion polls.
Adding to the political complications for Mr. Starmer, Ms. Rayner had responsibility for housing issues, and was spearheading the government’s pledge to build 1.5 million additional houses. Ms. Rayner also resigned as deputy leader of the Labour Party, setting the stage for a potentially divisive battle to replace her.
Minutes after the news of her resignation broke, Downing Street indicated that Mr. Starmer was embarking on a wider shake-up of his cabinet, with several other ministers expected to be moved, though not the chancellor of the Exchequer, Rachel Reeves, who is drafting a new budget to be presented in November.
At one level, Ms. Rayner’s resignation lays bare how the ethical goal-posts have moved in British politics since Labour came into power 14 months ago. During a previous Conservative government, Boris Johnson, then prime minister, stood by a senior minister who was found to have violated the ministerial code.
Mr. Starmer’s vow to run a cleaner government made Ms. Rayner’s departure inevitable as soon as Mr. Magnus issued his report. But her downfall adds to a perception of ethical shortcomings among senior members of the Labour government. Mr. Starmer himself disclosed last year that he had accepted donations to buy clothing for himself and his wife, as well as free tickets to soccer games.
While Ms. Rayner’s departure puts an end to a highly personal drama that had transfixed British political circles for two weeks, it will cost Mr. Starmer a powerful ally who served as a bridge to Labour’s restive left. Ms. Rayner will retain her seat in Parliament, which some analysts said meant she could one day make a comeback or emerge as a potential rival to the prime minister.
“The most damaging thing is that it destabilizes Starmer’s leadership,” said Robert Ford, a professor of political science at the University of Manchester. “She provided a link and a counterbalance to him. Both of those things are now gone. From the point of view of authority and control of the message, this is a nightmare.”
The fallout, he said, would be particularly corrosive inside the party, where he predicted the race to succeed Ms. Rayner as deputy leader would lead people to vent their grievances against the government’s faltering first year.
Opposition parties were quick to exploit Ms. Rayner’s downfall. The leader of the Conservative Party, Kemi Badenoch, said in a statement that Mr. Starmer had “lost his housing secretary for dodging property taxes while lobbying to put them up.”
Nigel Farage, the right-wing populist whose Reform U.K. party gathered Friday in Birmingham, England, for its annual conference, said, “It screams to a government that, despite all the promises that this would be a new different type of politics is as bad, if not worse, than the one that went before.”
Ms. Rayner’s meteoric political rise was cut short by a tangled chain of events that began in May, after she bought an apartment in Hove, on England’s southeast coast. On Wednesday, she said in a statement that she had contacted the tax authorities to notify them that she owed additional “stamp duty,” a tax paid in England by the buyer of a residential property above a certain price.
Ms. Rayner insisted that the underpayment was an innocent mistake, a result of complex arrangements involving a financial trust that she established for her disabled son in 2020, and another house near Manchester, which she had owned with her former husband.
Ms. Rayner said that she and her former husband, whom she divorced in 2023, alternated living in the house, where they cared for their son. The trust was designed to secure part ownership of the house for the child and Ms. Rayner no longer owned any part of the property.
After British newspapers raised questions about her tax payments, she consulted a prominent lawyer, who concluded that this arrangement did not shield her from paying a higher tax rate for the apartment, since it qualified as a second home.
In his report, Mr. Magnus said “the interpretation of these rules is complex.” He noted that Ms. Rayner was told twice in writing by her advisers that she was entitled to pay a lower rate of tax. But that advice, Mr. Magnus said, was qualified by a recommendation that she seek “specific tax advice,” which she did not.
“The responsibility of any taxpayer for reporting their tax returns and settling their liabilities ultimately rests on themselves alone,” Mr. Magnus wrote. He added, “it is deeply regrettable that the specific tax advice was not sought.”
Ms. Rayner said her decision to step down was also driven by the pressure the episode had put on her family. “My family did not choose to have their private lives interrogated and exposed so publicly,” she wrote. “The strain I am putting them under through staying in post has become unbearable.”
Mark Landler is the London bureau chief of The Times, covering the United Kingdom, as well as American foreign policy in Europe, Asia and the Middle East. He has been a journalist for more than three decades.
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