U.K. deputy prime minister resigns over tax scandal, Starmer overhauls government

Britain's Deputy Prime Minister Angela Rayner arrives for a Cabinet meeting in Downing Street, London, Tuesday, Sept. 2, 2025. (Aaron Chown/PA via AP)

LONDON -- U.K. Prime Minister Keir Starmer shook up his Cabinet Friday after his top deputy stepped down over a tax error on a recent house purchase, leaving a big hole in the centre-left Labour government.

Foreign Secretary David Lammy was moved to replace Angela Rayner as deputy prime minister, and also took the justice portfolio. Yvette Cooper moved from the Home Office to become foreign secretary while the justice secretary, Shabana Mahmood, became home secretary.

Treasury chief Rachel Reeves was kept in post, meaning that the three major offices of state below the prime minister will be occupied by women for the first time in history.

The changes came after Rayner handed in her resignation to Starmer because an independent inquiry concluded that she hadn’t met the ethical standards required of government ministers over her recent purchase of an apartment in Hove, on England’s south coast. The report concluded that she should have sought more specific advice, even though she acted in good faith.

“I take full responsibility for this error,” Rayner said in her resignation letter to Starmer. “I would like to take this opportunity to repeat that it was never my intention to do anything other than pay the right amount.”

In response, Starmer voiced his sadness, but said that Rayner had made the right decision to stand down.

“I have nothing but admiration for you and huge respect for your achievements in politics,” Starmer wrote. The handwritten letter signed off “with very best wishes and with real sadness.”

Rayner is a hugely popular member of the Labour Party and was widely tipped to be a potential successor to Starmer. In addition to resigning as deputy prime minister, Rayner quit as deputy leader of the party, meaning that members will have to select someone new.

Starmer will be hoping that his government changes will allow him to seize back the political agenda following days of speculation surrounding Rayner’s future.

His government has seen its support fall sharply since its landslide victory in last year’s election, following a string of missteps over welfare reform and mounting public concern about immigration.

Rayner will remain a U.K. lawmaker on the back benches. She referred herself to the independent adviser on ministerial standards, Laurie Magnus, on Wednesday, who delivered his report to Starmer on Friday.

Though Magnus concluded that Rayner had “acted with integrity and with a dedicated and exemplary commitment to public service,” he said that “with deep regret” she had breached the ministers’ code of conduct.

In the U.K., levies are charged on property purchases, with higher charges due on more expensive homes and secondary residences. Reports have suggested that Rayner saved 40,000 pounds (nearly US$54,000) by not paying the appropriate levy, known as a stamp duty, on her 800,000-pound ($1 million) purchase.

Rayner, 45, had sought to explain that her “complex living arrangements” related to her divorce in 2023 and the fact that her son has “lifelong disabilities” underlay her failure to pay the appropriate tax.

In her resignation letter, Rayner said she also had to “consider the significant toll that the ongoing pressure of the media is taking on my family.”

Rayner’s journey from teenage single mother to trade union official to lawmaker and deputy prime minister is a rarity in British politics.

Her no-nonsense attitude and plain-speaking manner have been a distinct -- and politically useful -- contrast to the more pragmatic, lawyerly Starmer and she will be hard to replace. She had the ability to connect with sections of the public that Starmer had struggled with since he became prime minister.

Rayner, who also held the housing brief, had often railed against those who deliberately underpay tax, particularly those in the preceding Conservative administration, which Labour replaced in July 2024.

Her previous comments had opened her up to charges of hypocrisy, particularly from current Conservative leader Kemi Badenoch, who said that Rayner’s position had been “untenable for days.”

“The truth is simple, she dodged tax,” Badenoch said in a video posted on social media. “She lied about it.”

By Jill Lawless And Pan Pylas, The Associated Press