Starmer Shakes Up UK Government After Messy Rayner Departure

UK Prime Minister Keir Starmer was forced to reshuffle his year-old government in the wake of his deputy’s shock resignation over failing to pay proper taxes on her private home.

Starmer was forced to advance the shake-up on Friday after Deputy Prime Minister Angela Rayner stepped down from official roles as No. 2 of both the government and the Labour Party. The departure threw Downing Street into further disarray in a week that Starmer had hoped would mark “phase two” of an administration dogged by disunity and falling poll numbers against Nigel Farage’s populist Reform UK.

The prime minister subsequently swapped around ministers in some of the Cabinet’s most high-profile roles, with Yvette Cooper tapped to leave the Home Office and become foreign secretary, according to people familiar with the matter. Meanwhile, Shabana Mahmood was set to move from the Ministry of Justice to take Cooper’s job as home secretary, the people said.

David Lammy, who had served as Starmer’s top diplomat, was expected to take up Rayner’s role as deputy prime minister and succeed Mahmood as justice secretary. Peter Kyle will become business secretary, replacing Jonathan Reynolds. Pat McFadden takes on the work and pensions beat from Liz Kendall.

Rayner, 45, quit after the government’s independent ethics adviser, Laurie Magnus, found that she had breached the ministerial code of conduct. While Magnus said Rayner had “acted with integrity” during his investigation, he determined that she had broken the rules governing ministers’ behavior by failing to pay the correct taxes on the purchase of an £800,000 ($1.1 million) home.

“I accept that I did not meet the highest standards in relation to my recent property purchase,” Rayner wrote in a resignation letter to Starmer. “I take full responsibility for this error. I would like to take this opportunity to repeat that it was never my intention to do anything other than pay the right amount.”

Starmer said Rayner was “right” to refer herself to the independent adviser on ministerial standards and “right to act on his conclusion.” In a rare handwritten letter, he added that he was “very sad” that her time in government had “ended this way.”

Chancellor of the Exchequer Rachel Reeves will remain in her role, according to a person familiar with the matter. The reshuffle was wide-ranging, giving Starmer another chance to reset his government after a series of destabilizing setbacks.

The departure of the minister who was the second-most-senior member of Starmer’s administration is a significant loss that threatens to further darken the mood surrounding the governing party. Starmer has found the coalition that propelled him to power in July last year chipped away at from both the left and the right amid fiscal struggles and divisive battles over migration and the war in Gaza.

Over the summer, Starmer was forced to shore up Reeves’ position after a Labour rebellion sunk her proposed welfare reforms and the chancellor later turned up in the House of Commons visibly upset. The prime minister announced a series of staff changes in 10 Downing St. on Monday that appeared to get a grip on economic policy ahead of a crunch budget due to be released on Nov. 26.

Rayner’s exit leaves a power vacuum at the top of the government that will need to be filled at a time when Starmer can ill-afford fresh internal pressures, a matter complicated by the fact Labour’s deputy leader role is an elected post. 

While the cabinet can appoint an interim deputy leader, the party’s rules require an election by Labour members and affiliated supporters to the permanent position, which must be held by a sitting Labour member of Parliament. It means Starmer could face the election of a rival to challenge his authority as prime minister.

Rayner acknowledged that she had underpaid property taxes on the home in Hove on Wednesday. That followed days of media reports about her complex financial arrangements after her divorce, which she said were put in place in the interest of her child, who is disabled. 

The revelations were particularly awkward because Rayner also held the role of housing secretary in addition to being deputy prime minister. She was also Labour’s chief attack dog against Conservative politicians during the party’s years in opposition, and had frequently called for Tory ministers to resign, including over claims they had avoided tax, leaving her open to the charge of hypocrisy.

Magnus wrote in his report that the advice Rayner received on the tax she owed had been “qualified by the acknowledgment that it did not constitute expert tax advice and was accompanied by a suggestion, or in one case a recommendation, that specific tax advice be obtained.” Rayner didn’t heed that advice and as a result underpaid her taxes, the ethics adviser concluded.

“It is with deep regret that I must advise you that in these circumstances, I consider the code to have been breached,” he wrote.