Angela Rayner's Resignation, Tax Evasion Allegations and ‘Islamophobia’ Working Group

On 5 September 2025, Angela Rayner resigned as UK Deputy Prime Minister, Housing Secretary, and Deputy Labour Leader. The resignation followed intense scrutiny over an underpayment of stamp duty on a property purchase, prompting an ethics probe.

However, it isn’t only this that exposes her unsuitability (and most in Labour) for public office.  Her apparent failure to secure expert tax advice, combined with her curious and headlong pursuit of a discriminatory working group pandering to the Muslim vote reveal a pattern of poor judgment, deepening national divisions and fuelling distrust in government.

Alleged Offence

Rayner underpaid £40,000 in stamp duty on an £800,000 flat in Hove, East Sussex, purchased in May 2025. She paid the standard stamp duty rate, claiming the Hove flat was her primary residence. She said this was based on legal advice that she no longer held a stake in her family home in Ashton-under-Lyne, which was transferred to a trust for her disabled son. Rayner then said that subsequent advice revealed her interest in the trust classified the Hove property as a second home, requiring a higher stamp duty rate of £70,000. Kemi Badenoch, Conservative Party leader, alleged tax evasion and called for an HMRC investigation. No criminal charges are reported to have been filed as yet.

The Law on Stamp Duty and Tax Evasion

Stamp duty land tax (SDLT) is governed by the Finance Act 2003. Underpaying SDLT through deliberate misrepresentation or failure to disclose relevant information can constitute tax evasion, a criminal offence under the Taxes Management Act 1970 (Section 106A) or the Fraud Act 2006 (Sections 2 or 3). Penalties include fines or up to 7 years’ imprisonment. HMRC may impose civil penalties for non-deliberate errors, but Rayner’s case awaits review to determine if the underpayment involved intentional misconduct.

Rayner’s Response

In her resignation letter, Rayner accepted “full responsibility” for the underpayment, expressing regret for not seeking specialist tax advice. She stated the error arose from legal advice that misjudged the trust’s impact on her tax obligations. Rayner maintains the trust was set up for her disabled son’s future, citing personal circumstances tied to her divorce. As pressure increased, she referred herself to the Prime Minister’s ethics adviser, Sir Laurie Magnus, who found she breached the Ministerial Code by failing to address cautions in the legal advice.

Ministerial Code and Nolan Principles

The Ministerial Code requires UK ministers to uphold the highest standards of propriety and transparency, including accurate disclosure of financial interests and tax compliance. The Nolan Principles—honesty, integrity, and accountability—guide public officeholders. Sir Laurie Magnus’s report concluded Rayner violated the Code by not resolving ambiguities in her tax arrangements, breaching the principle of accountability. This failure undermined public confidence in her adherence to these standards.

Islamophobia Working Group Sparks Outrage

However, these actions by Rayner appear to be part of a deeper problem as evidence by her establishment of the Anti-Muslim Hate/Islamophobia Working Group, chaired by Dominic Grieve, has fuelled national discontent over perceived favouritism toward Islam.  Critics, including former Labour MP Khalid Mahmood, counter-extremism expert Haras Rafiq, and Fiyaz Mughal of Tell Mama, warn the group’s adoption of the 2018 APPG definition—describing Islamophobia as “a type of racism targeting expressions of Muslimness”—risks creating a de facto blasphemy law, stifling free speech and shielding extremist practices like grooming gangs from scrutiny. The inclusion of figures like Qari Asim, previously dismissed for supporting a film ban, heightens fears of bias.

With Rayner’s Labour Party relying on the Muslim vote—evidenced by its adoption of the APPG definition and engagement with groups like the Muslim Council of Britain—this move is seen as pandering, infecting taxpayer-funded services with divisive ideologies akin to discredited Diversity, Equity, and Inclusion frameworks. The working group must be disbanded immediately to prevent further erosion of free expression and public trust.

Political Fallout

Rayner’s resignation is a significant blow to Prime Minister Keir Starmer, who initially stood by her, citing her cooperation with the ethics probe. The ethics report’s findings left Starmer with little choice, highlighting Rayner’s non-compliance with the Ministerial Code. The scandal has sparked accusations of hypocrisy, given Rayner’s past criticism of tax avoidance, and has further eroded Labour’s standing amid falling poll numbers.

A Damning Verdict

Rayner’s tax scandal and her divisive Islamophobia Working Group expose a Labour government, elected with just 20% of the British people’s support, as dangerously out of touch, incompetent, and untrustworthy, even among its own supporters. Labour-controlled councils in Durham and Doncaster have defied party policy by pledging to reinstate winter fuel payments for pensioners, reflecting fury at Starmer’s means-testing of the allowance.

Rayner’s apparent failure to secure expert tax advice and her pursuit of a discriminatory working group pandering to the Muslim vote reveal a pattern of poor judgment, deepening national divisions. As Labour stumbles, these missteps signal a government adrift, alienating voters and risking further unrest unless it abandons such divisive initiatives.