Kate WhannelPolitical reporter, BBC News
BBC
David Lammy has become deputy prime minister and Shabana Mahmood the new home secretary in a major reshuffle triggered by the resignation of Angela Rayner.
Rayner stepped down as deputy prime minister, Labour deputy leader and housing secretary on Friday, after the PM’s ethics adviser concluded she had breached the ministerial code when she failed to pay enough tax on the purchase of a flat in Hove.
In her resignation letter, Rayner said she “deeply regretted” not seeking additional specialist tax advice to ensure she was paying the correct stamp duty.
Rayner’s exit is a blow for Sir Keir Starmer and comes just days after he made changes to his No 10 team in an effort to focus on “delivery”.
Dubbed “phase two”, the prime minister had announced a mini-reshuffle on Monday, in a bid to re-energise his team after a shaky first year in office and a threat to Labour in the polls from Nigel Farage’s Reform UK.
Following Rayner’s departure on Friday, the prime minister could have opted to simply replace her but instead opted for a wider restructure of his frontbench.
The shake-up also saw Yvette Cooper become foreign secretary. With Rachel Reeves remaining as chancellor, this is the first time the UK has had three women in the so-called “great offices of state” alongside the prime minister.
Rayner was first elected to Parliament in 2015 to represent the Greater Manchester seat of Ashton-Under-Lyne.
In her 10 years in the House of Commons, the former carer and union worker had established herself as an influential member of her party and, following the 2024 general election, in the new Labour government.
But over the past week she had been facing questions about her purchase of an £800,000 three-bedroom flat in Hove, East Sussex.
Her team initially insisted she had paid the correct amount of stamp duty on the property but after seeking legal advice, Rayner acknowledged she had underpaid by £40,000.
She said the “mistake” came about because she believed it was the only property she owned, and therefore only needed to pay the standard rate of stamp duty.
Due to complex arrangements surrounding a trust for her disabled son, the Hove flat should in fact have been considered Rayner’s second home – meaning an additional £40,000 in stamp duty was due.
After investigating, the prime minister’s ethics adviser Sir Laurie Magnus said Rayner had “acted with integrity” but decided that she had breached the ministerial code by failing to seek appropriate tax advice when making the purchase.
In her resignation letter, Rayner accepted she had not met “the highest standards in relation to my recent property purchase” adding: “It was never my intention to do anything other than pay the right amount.”
Unusually Sir Keir’s reply was handwritten – a sign of the genuine personal affection he has for his colleague – saying he was “very sad” to be losing her from government, describing Rayner as “a trusted colleague and a true friend”.
Her resignation prompted the biggest reshuffle of Labour’s 14 months in power, with around half of the cabinet switching roles.
Rayner was replaced by Lammy as deputy prime minister and Steve Reed at the housing department.
In another big switch, Pat McFadden moved from his role in the Cabinet Office to a new job as work and pensions secretary, which will incorporate a skills brief that has, until now, sat in the education department.
It means he takes over from Liz Kendall, whose struggle to introduce welfare reforms saw a significant backbench rebellion and a subsequent rowing back on proposed cuts. Kendall becomes the new science secretary.
Other changes include:
Emma Reynolds becoming the new secretary for environment, food and rural affairsJonathan Reynolds moving from the business department to become chief whip, making him responsible for party disciplinePeter Kyle is the new business secretarySir Alan Campbell taking on the role of leader of the House of Commons from Lucy PowellDarren Jones adding the chancellor of the Duchy of Lancaster to his existing role of chief secretary to the prime minister.
Ian Murray expressed his disappointment at losing his job as secretary of state for Scotland – and has being replaced by Labour veteran Douglas Alexander, who held the same job under Tony Blair.
Lisa Nandy, John Healey and Wes Streeting remain in their current roles of culture, defence and health secretary respectively.
In addition to a major reshuffle, Rayner’s departure also triggers a deputy leadership election among party members.
Details of the contest are yet to be announced, but it could create a severe political headache for the prime minister, as it has the potential to become a vehicle for MPs and members to voice their discontent at Sir Keir’s leadership.
PA Media
Angela Rayner’s personal story and personality made her a big figure in the Labour party
As the reshuffle was taking place, Reform UK members were gathering in Birmingham for the party’s annual conference.
Bringing his keynote speech forward to lunchtime, to coincide with Rayner’s departure, Reform leader Nigel Farage said the government was “in crisis”.
Responding to the reshuffle, 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.”
Liberal Democrat leader Sir Ed Davey said: “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.”
