British Prime Minister Keir Starmer on Friday promoted Foreign Secretary David Lammy to the role of Deputy Prime Minister during a major Cabinet reshuffle, following the resignation of Angela Rayner over a tax underpayment issue. Lammy, aged 53, will also take on the additional responsibility of Justice Secretary.

 

Rayner, who previously served as Housing Secretary, resigned after acknowledging she had failed to pay the correct amount of tax on a recently purchased property on England’s southern coast.

 

As part of the reshuffle, Home Secretary Yvette Cooper will replace Lammy as Foreign Secretary in the Foreign, Commonwealth and Development Office (FCDO). Meanwhile, British Pakistani politician Shabana Mahmood, who had been serving in the Ministry of Justice, has been appointed Home Secretary, marking a significant change in the upper ranks of the Labour government.

 

Rayner, 45, considered a strong voice within the Labour Party, stepped down after an expedited independent ethics investigation concluded she had breached the Ministerial Code of Conduct. The probe found that she had not sought specialist tax guidance to ensure the correct stamp duty was paid on her new property.

 

Starmer expressed his disappointment at losing a key member of his Cabinet after Sir Laurie Magnus, his Independent Adviser on Ministerial Standards, advised that Rayner’s conduct fell short of the standards expected under the ministerial code.

 

In her resignation letter, Rayner said she deeply regretted not pursuing additional advice, stressing that her intention had always been to pay the right amount of tax. She also noted that ongoing media attention had placed heavy strain on her family.

 

“I would like to repeat that it was never my aim to avoid paying what I owed. However, the pressure on my family has become overwhelming,” she wrote.

 

In response, Starmer praised Rayner for her years of service, describing her as a trusted colleague and friend. He emphasized that although she has stepped down from government, she will remain an influential figure within the Labour Party.

 

Downing Street also released correspondence from Laurie Magnus, who explained that while Rayner had acted in good faith and relied on legal advice, she had been cautioned that expert tax guidance was necessary but failed to follow through. As a result, she ended up paying less stamp duty than required, owing an estimated £40,000 in additional tax.

 

Magnus concluded that while Rayner had shown dedication to public service, her actions meant she had not upheld the “highest standards of conduct” demanded by the ministerial code.

 

Earlier this week, Rayner revealed that her family’s complex housing arrangements, including a property held in trust for her disabled son, contributed to the tax miscalculation. Under UK rules, buyers of additional properties must pay a higher stamp duty rate. Rayner had registered her new flat in Hove as a primary residence, which would have qualified for standard tax rates. However, the existing family home meant she was liable for the surcharge, resulting in a significant shortfall.