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9 April 2024updated 10 Apr 2024 10:58am

Is Angela Rayner in danger?

The row over the Labour deputy leader’s tax affairs is not yet a scandal – but it could become one.

By Freddie Hayward

What makes for a scandal? Savvy observers in Westminster know that the public does not fixate on daily political churn. They have better things to do. The danger point for politicians is when negative stories cross the line that separates Westminster gossip from potentially career-ending moments. In other words, when an embarrassing story enters the public consciousness and becomes a scandal. It’s obvious when it happens. Ant and Dec mocking Boris Johnson for partygate on I’m a Celebrity… was one such moment. Liz Truss losing to a lettuce was another (chapeau, Daily Star). Gordon Brown calling Gillian Duffy a “bigoted woman” was a third. Dominic Cummings’ press conference in the Rose Garden. Piggate (fiercely denied). 

The current row over Angela Rayner’s tax affairs is a long way from reaching this point. Labour’s deputy leader is unwavering in her insistence that she has done nothing wrong. But there is a growing sense that the story is gaining some momentum. Party press releases about sewage and the Rwanda scheme are mounting in an apparent attempt to divert attention. Time is precious because the local and mayoral elections on 2 May are only three weeks away.

Some in Labour suspect the Tories are using their 2022 local elections playbook. Back then, the Tories made the campaign about the possibility of the police reopening an investigation into whether Keir Starmer broke lockdown rules – a story that became known as “Beergate”. One party source said the Tories will once again “pressure the police into re-investigating something that has already been looked at, so the media focuses on this rather than their appalling record and Labour’s alternative”.

If you aren’t familiar with the story about Rayner – like many others – here are the basics. Labour’s deputy leader has been fending off accusations that she failed to pay capital gains tax owed on the sale of a house on Vicarage Road, Stockport, in 2015. Only someone’s primary residence is exempt from the levy, but Rayner reportedly lived at her husband’s house on Lowndes Lane and, as the tax expert Dan Neidle has explained, a married couple can only have one residence on which they don’t pay capital gains. Rayner’s then husband’s house was sold in 2016, raising the question as to whether capital gains was paid on this sale. If it was not, then Rayner may well have owed tax on her property (the other explanation, as Neidle has noted, is that Rayner spent £15,000 or more on tax-deductible home improvements).

A further accusation is that Rayner may have broken electoral law if her main residence was Lowndes Lane despite her being registered to vote at Vicarage Road. Following calls from the Tory MP James Daly, Greater Manchester Police has said it is reviewing its previous conclusion that no wrongdoing occurred.

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Rayner has taken legal and tax advice which she says establishes her innocence. She has rebuffed calls to publish her tax returns with the demand that the Conservatives do the same. “Angela is not the type to be bullied into doing something by the Tories,” one Labour source said. She retains Starmer’s backing and shadow chancellor Rachel Reeves was also supportive on yesterday’s broadcast round.

But the pressure shows no sign of abating. The Tory attack machine has been flaccid for months. It finally has a story it can run with – an opportunity it won’t overlook. How will this end? When will the pressure let up? 

Labour insiders believe that if Greater Manchester Police’s review confirms the original decision then the pressure will stop. Others think a sit-down interview in which Rayner clears up any confusion will be necessary.

The story’s technical nature limits its cut-through with voters. But if the police change their mind or HMRC launches its own investigation then that could change. This is not yet a scandal – but it has the potential to become one.

[See also: So is Labour going to level Britain up or not?]

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