Sir Keir Starmer has been forced to conduct a major reshuffle of his top team after Angela Rayner sensationally quit as both housing secretary and deputy prime minister, after admitting she failed to pay £40,000 in tax when purchasing a property.
The resignation comes as a hammer blow to the prime minister and piles 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.
It followed 48 hours of Ms Rayner trying to hold on to her job before she was told the game was up on Thursday night, before the publication of a report by ethics adviser Sir Laurie Magnus.
With Nigel Farage opening his Reform UK conference in Birmingham by gloating from the stage that his party had “unstoppable momentum” to win the next general election, Sir Keir acted decisively to try to reshape his top team – but with Rachel Reeves staying on as chancellor.
David Lammy will replace Ms Rayner as the deputy prime minister, moving from his role as the foreign secretary. He will also take up the role of justice secretary.
Shabana Mahmood, formerly the justice secretary, will become the new home secretary, charged with getting a grip of the worsening small boats crisis, while Yvette Cooper has moved from her brief at the Home Office to take over Mr Lammy’s former job as foreign secretary.
And Pat McFadden, a senior minister within the Cabinet Office, is said to be taking over a new “super ministry” comprised of the Department for Work and Pensions and the skills remit of the Department for Education.
Steve Reed has taken over Ms Rayner’s brief as housing secretary, leaving behind his role as environment secretary.
Lucy Powell and Ian Murray have been sacked as leader of the House of Commons and Scotland secretary, respectively.
But the departure of Ms Rayner has left a massive hole in the cabinet, while the left of the party is now without a champion at the heart of government.
Ms Rayner resigned as deputy PM and housing secretary after Sir Keir’s ethics adviser said she failed to “heed the caution” contained within legal advice she received when buying an £800,000 property in Hove.
She admitted to underpaying stamp duty on the flat.Sir Laurie’s report found that she had been advised at the time to seek specialist tax advice but failed to do so.
He concluded that she “cannot be considered to have met the ‘highest possible standards of proper conduct’” and had therefore breached the ministerial code.
Ms Rayner thanked Sir Keir for his initial support during the scandal, but wrote to the PM with her resignation on Friday.
“I deeply regret my decision to not seek additional specialist tax advice given both my position as housing secretary and my complex family arrangements,” she said.
The MP for Ashton-under-Lyne added: “Given the findings, and the impact on my family, I have therefore decided to resign as deputy prime minister and secretary of state for housing, communities and local government, as well as deputy leader of the Labour Party.”
In a handwritten response, Sir Keir said his deputy had reached “the right decision”.
But, in an emotional appeal, he added: “On a personal 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. I have nothing but admiration for you and huge respect for your achievements in politics.”
Tory leader Kemi Badenoch welcomed Ms Rayner’s departure but said it was a sign of Sir Keir’s weakness that “he had to wait for a report before acting”.
She said: “The truth is simple, she dodged tax. She lied about it. Her position was untenable for days.
“Keir Starmer once promised honesty and integrity in politics, but when faced with this test, he hesitated: no principles, no backbone.”
Meanwhile, Mr Farage used his main conference address on Friday to argue Ms Rayner’s resignation shows this government is “as bad – if not worse – than the one that went before”.
Capitalising on the chaos within government, the Reform UK leader told the Birmingham crowd the scandal “screams entitlement”.
“It screams to a government that despite all the promises that this would be a new, different kind of politics is as bad – if not worse – than the one that went before.”
Making his pitch to the British electorate, he said he had brought forward his keynote speech at Reform UK’s party conference after Ms Rayner’s resignation because the government is “deep in crisis” and “not fit to govern”.
The Clacton MP repeated his prediction that a general election could take place as soon as 2027, two years earlier than expected, as well as promising to stop the boats within two weeks of forming a government.
He also announced that the party will set up a new “department for preparing for government so that when we win, we can hit the ground running”.
