Sir Keir Starmer has refused to back Angela Rayner staying in post until the next election, in the first sign he could be distancing himself from the under-fire deputy prime minister, as the crisis over her tax affairs deepens.
Ms Rayner’s political future hangs in the balance after she admitted she did not pay enough stamp duty when purchasing her £800,000 flat in Hove, East Sussex, sparking calls for her to resign.
It comes as Sir Keir condemned an “appalling” graffiti attack outside the seaside flat, after the words b***h and “tax evader” were daubed on the wall outside, while a spokesperson for Ms Rayner said the vandalism was “totally unjustifiable and beyond the pale”.
On Wednesday, Ms Rayner, who is also housing secretary, insisted she had made a “mistake” in failing to pay the required £40,000 tax on the second home, based on incorrect legal advice, and referred herself to Sir Keir’s standards adviser, Sir Laurie Magnus – a probe which is expected to report back as early as Friday.
But the prime minister has repeatedly refused to say if he will sack Ms Rayner if she is found to have broken the ministerial code.
He told the BBC he would “of course act” on the conclusions of Sir Laurie’s report, but would not be drawn on whether his deputy would be fired.
While Sir Keir said he retains “full confidence” in Ms Rayner, he declined to commit to her staying in post for the rest of the Parliament as he has previously done with foreign secretary David Lammy and chancellor Rachel Reeves when they faced pressure to step down.
Losing the deputy prime minister would be a hammer blow to the prime minister’s authority and pile further pressure on his government, which is significantly lagging behind Reform UK in the polls and has faced mounting criticism for not achieving enough in its first year in power.
There are also growing questions over what Sir Keir knew, and when, after he publicly defended Ms Rayner over her tax affairs despite knowing she was taking legal advice.
Downing Street has refused to say when Sir Keir was first made aware of key details that led his deputy to refer herself for an ethics investigation, in a sign Number 10 is trying to limit the scope of the fallout.
It comes as sources close to Ms Rayner said she was given three separate pieces of legal advice before buying the flat at the centre of the row.
They said a conveyancer and two experts in trust law had all suggested the amount of stamp duty she paid on the property was correct, and she acted on the advice she was given at the time.
When asked what exactly the prime minister knew when, his spokesperson said Sir Keir was “kept updated on the steps that the deputy prime minister was taking as appropriate”.
Chancellor Rachel Reeves threw her weight behind the deputy prime minister on Thursday morning, saying she has “full confidence” in her, but added that it was “on all of us” to understand the tax rules.
“Angela tried to do the right thing and, of course, it is incumbent on all of us to try to properly understand the rules, and she is now working to make sure that the correct tax is paid”, she told broadcasters.
Meanwhile, former Labour leader Lord Kinnock told The Independent, “there is no objective reason” for her to resign.
“She had the wrong professional advice, discovered that as the result of the fuss, got correct professional advice and is paying the right stamp duty. End of ‘story’, except that she’s Labour and relatively popular so a prime target.
“Her experience will not influence her ministerial duty or conduct, so there is no objective reason for her to leave her position”, he said.
But a former government ethics adviser told The Independent that while they didn’t believe Ms Rayner purposefully tried to dodge taxes, her position as housing secretary was now untenable.
“For her judgment, it does not look good to have thought she could get away with paying less tax. You would have hoped and thought that your instinct as a Labour politician, who is also the housing minister, would be to – even if there was a modicum of doubt that you are technically liable for second home stamp duty – that you should just pay it.”
The former official said they thought it “really unlikely” that Ms Rayner would be found to have breached the ministerial code if she could demonstrate that she followed the initial advice she was given, adding that it would be a “massive shame” to lose the frontbencher.
But they warned that continuing as housing secretary would hand the opposition a “massive open goal every single time she opens her mouth”.
“I think that the most survivable version of this is that you’d end up with a reshuffle. It’s quite hard to imagine her carrying on doing housing and her standing up in the House and talking about second homes.”
Education secretary Bridget Phillipson also declined to guarantee Ms Rayner’s political future on Thursday, insisting the investigation should “run its course”. However, she insisted that the housing secretary had acted in “good faith”.
Ms Rayner’s admission followed mounting pressure and media reports claiming she saved £40,000 on the property in Hove, East Sussex, by removing her name from the deeds of a family home in her Ashton-under-Lyne constituency.
In a public statement, Ms Rayner said a court-instructed trust was established in 2020 following a settlement with the NHS over a “deeply personal and distressing incident” involving her son.
He was left with lifelong disabilities, and to ensure he continued to have stability in the family home in Greater Manchester, she said her family had agreed its interest in that property would be transferred to the trust.
Details about the complex arrangements continued to emerge on Thursday, when the Telegraph reported Ms Rayner had sold her remaining stake to the trust for £162,500, which the paper suggested had then been used to buy her new flat.
