For years Angela Rayner was the Labour bruiser sent out to savage Conservative MPs engulfed in scandal.
In 2018 she accused Jeremy Hunt, then Conservative health secretary, of “sleaze” for using a “Tory tax loophole” to save nearly £100,000 in stamp duty when buying seven flats.
In 2023 Labour’s deputy leader called for Nadhim Zahawi to be sacked as Tory chair after he paid a tax penalty to HM Revenue & Customs.
Those comments have now come back to haunt Rayner, who on Wednesday admitted that she had wrongly failed to pay £40,000 of stamp duty on purchasing a £800,000 seaside apartment in May.
The revelation has left the deputy prime minister and housing secretary — seen by some as a potential successor to Prime Minister Sir Keir Starmer — fighting for her political career as the government seeks to fend off accusations of high-level hypocrisy ahead of the Budget in November.
“Keir is standing behind Angela for now, but that doesn’t mean he hasn’t considered pushing her,” said one Labour backbencher. “Don’t forget that Keir has a very ruthless streak.”
Rayner’s admission that she underpaid tax is awkward for a government struggling to deal with a hole in the public finances which is likely to entail fresh tax rises.
This year, in a private memo to the Treasury, Rayner called for major tax increases, including a crackdown on the use of companies to avoid stamp duty.
Angela Rayner tells Sky News on Wednesday that she underpaid stamp duty. Earlier this year she called for major tax increases, including a crackdown on the use of companies to avoid stamp duty. © Sky News/PA Wire
Rayner will also have to grapple with a more acute challenge to her own personal finances: tax experts said she would have to cough up the unpaid stamp duty to HMRC, plus a penalty of as much as £13,000.
For weeks the government batted away queries about whether Rayner had paid the right amount of stamp duty on the Hove apartment. Starmer this week accused people of “briefing against her and talking her down”.
Some MPs fear the saga could undermine public support for a government whose poll ratings are already slumping.
“This was an accident waiting to happen; it feels so inevitable given Angela’s chaotic life,” said one senior Labour MP. “Keir can’t remove the deputy leadership from her but I don’t see how it’s tenable that she carries on running a department.”
Questions were raised over whether Rayner should have been liable for the higher rate of stamp duty that applies to second homes, owing to how much time she spends at another residence in her constituency in Greater Manchester.
Rayner’s defence pivots on her claim that she was initially advised that she did not need to pay the extra stamp duty that applies to second homes. She said “lawyers” told her she should pay the lower rate because she had already sold her stake in the constituency property to a trust set up for one of her sons.
That trust was funded from a medical award after the boy was left with life-long disabilities after a “distressing incident” when he was a premature baby, she said in a statement.
The government has so far failed to say who provided the advice, let alone publish it.
But on Wednesday she conceded in her statement that, following fresh advice from a “leading tax counsel”, it was clear the home should have been subject to the higher rate of stamp duty for second homes.
The government has so far refused to say when Rayner received that second piece of tax advice and whether Downing Street was aware of it when Starmer defended his deputy.
Her fate now rests in the hands of Sir Laurie Magnus, Starmer’s ethics adviser, who has been tasked with examining whether her excuse holds up.
“A reasonably prudent person, and certainly a prudent deputy prime minister, would have asked the lawyers who set up the trust for her what the stamp duty situation was when buying another home,” said Dan Neidle, founder of think-tank Tax Policy Associates.
“It would be surprising if this was a mistake a tax trust specialist would make,” he added. “Or did she just ask a conveyancing lawyer? In which case that was careless.”
At Prime Minister’s Questions on Wednesday, Starmer mounted a spirited defence of Rayner that belied their at times strained relationship.
Sir Keir Starmer defends his deputy Angela Rayner, far left, at Prime Minister’s Questions in the House of Commons on Wednesday © House of Commons/PA Wire
Rayner is one of Labour’s few “alpha” personalities and enjoys support among several trade unions and plenty of MPs. Even after the mea culpa she was still one of the favourites on Betfair to be the party’s next leader.
After growing up on a council estate and becoming a mother at the age of 16, Rayner trained as a carer before becoming a trade unionist and then MP.
Her extrovert approach contrasts with the more buttoned-up approach of Starmer, a former human rights lawyer, whose number has been logged in her phone as “Mr Darcy”, the uptight lawyer from the Bridget Jones books.
The pair were thrown together through separate votes by the Labour membership in 2020 for the party’s leadership and deputy leadership roles.
A year later tensions came to a head after Labour lost the Hartlepool by-election and local elections. Starmer sacked Rayner as chair, but she fought back and emerged with several new jobs including shadow chancellor of the Duchy of Lancaster.
Allies of Rayner have since suggested that, had Starmer not backed down, she could have launched a coup with the backing of big trade unions and leftwing pressure group Momentum.
The pair have since learned to work together more closely. “He’s quite fond of her,” said one Labour minister.
Starmer, left, and Rayner on a building site in Cambridgeshire last December. One former aide to the prime minister said: ‘They know each other’s strengths’ © Chris Radburn/Pool/AP
One former aide to Starmer said: “Yes, there have been some difficult moments but they know each other’s strengths . . . Now they do need each other,” they added.
During some stand-offs between the leadership and the Parliamentary Labour party — for example the recent rebellion over welfare cuts — Rayner has played a pivotal role as intermediary.
Where tensions have arisen between the pair they have tended to involve Rayner complaining about being left out of major decisions, which has not always been Starmer’s fault, according to colleagues.
Some Labour MPs suggested the dispute over Rayner’s stamp duty payment was not entirely unhelpful to Starmer, since it could leave her wounded as a potential challenger to the leader but still in the cabinet.
The alternative could be a big personality on the backbenches acting as a lightning rod for criticism of Downing Street.
“I would say he [Starmer] may not be entirely unhappy with a situation where his main rival is still in the tent but basically unable to damage him much,” said one MP.
Additional reporting by Martin Arnold in London