Angela Rayner has resigned as deputy prime minister and housing secretary after Sir Laurie Magnus, the independent adviser on ministerial standards, concluded she had breached the ministerial code over an underpayment of stamp duty on an £800,000 flat in Hove.

In a letter to the prime minister, Sir Laurie said that while Rayner had acted in “good faith” and with “a dedicated and exemplary commitment to public service,” her failure to pay the correct rate of stamp duty land tax (SDLT) meant she had fallen short of the “highest possible standards of proper conduct” required of ministers.

The case centred on Rayner’s decision earlier this year to sell her 25% share in her family’s home in Ashton-under-Lyne to a trust established for her disabled son. The trust, created following a compensation award linked to his premature birth and lifelong care needs, bought her stake for £162,500. She then used the proceeds as a deposit on the Hove flat, taking out a £650,000 mortgage.

On completion of the purchase in May, she paid £30,000 in stamp duty. Tax counsel has since advised that the correct liability was £70,000 because the trust’s ownership of her former home meant she was deemed still to have an interest in it, and so the higher rate should have applied.

Sir Laurie found that Rayner had twice been told in writing by her lawyers that the lower rate applied, but those assurances were qualified with the warning that specialist tax advice should be sought. Had such advice been taken at the time, he said, she would likely have been told to pay the higher rate.

“DEEPLY REGRETTABLE”

He noted that she had cooperated fully with his inquiry and had referred herself to HMRC to settle the outstanding liability, but said her failure to meet the highest standard “is deeply regrettable, particularly given her status and responsibilities as housing secretary and as deputy prime minister.”

In her resignation letter, Rayner said she accepted Sir Laurie’s findings. “I deeply regret my decision to not seek additional specialist tax advice given both my position as housing secretary and my complex family arrangements. I take full responsibility for this error. It was never my intention to do anything other than pay the right amount,” she wrote.

She also said the “significant toll” on her family had been decisive. “While I rightly expect proper scrutiny on me and my life, my family did not choose to have their private lives interrogated and exposed so publicly. The strain I am putting them under through staying in post has become unbearable,” she said.

Her decision brings to an end the career of one of Labour’s most prominent frontbenchers, little more than a year after Sir Keir Starmer led the party back into government. Rayner had been a key figure in shaping Labour’s agenda on housing, renters’ rights and workers’ protections.

She highlighted her record in office, pointing to her Employment Rights Bill, which she described as “the biggest uplift in workers’ rights in a generation,” the Renters’ Rights Bill banning no-fault evictions, and record investment in social housing. She also cited her department’s work on devolution, homelessness prevention and building safety reforms.

“For a teenage mum from a council estate in Stockport to serve at the highest level of government has been the honour of my life,” she wrote. “Every day I had in office, I worked to serve working class communities like the one that I grew up in, which are too often overlooked by those in power.”

Sir Laurie emphasised in his report that he believed Rayner’s actions were motivated by a desire to protect her children and fulfil her obligations. “I have no doubt that she has been motivated in the management of her property and financial arrangements by a desire to act in the best interests of her children, and with the intention to pay all appropriate taxes,” he said.

Nevertheless, he concluded that her reliance on flawed legal advice, and her failure to act on clear recommendations to obtain specialist tax counsel, represented a breach of the code.

The resignation marks a significant blow to the government. Rayner, who had served as deputy leader of the Labour Party since 2020, was one of the most recognisable figures in Starmer’s team and had been central to its efforts to frame housing policy as a defining theme of the new administration.

She pledged to continue serving her constituents in Ashton-under-Lyne, Audenshaw, Droylsden and Dukinfield, and to remain active in Labour politics. “I will continue to serve you, our country and the party and movement I love in the weeks, months and years ahead,” she told the prime minister.

The episode closes a turbulent week for Rayner, who just days ago had insisted she had paid the correct amount of tax. Her referral to Sir Laurie and swift resignation underscored both the political sensitivity of the issue and her determination, as she put it, “to uphold the highest standards.”

Her departure leaves a vacancy at the very top of government, and the Prime Minister now faces the challenge of reshaping his Cabinet and party leadership team at a critical stage in Labour’s term.