Rayner cleared of tax wrongdoing, intensifying pressure on Starmer ahead of potential Labour leadership contest

Former UK Deputy Prime Minister Angela Rayner has been cleared by HM Revenue and Customs (HMRC) of any deliberate wrongdoing or carelessness regarding her tax affairs, a development that significantly alters the political landscape within the Labour Party. The announcement removes a potential obstacle to Rayner launching a leadership challenge against Prime Minister Keir Starmer, whose position has been severely weakened by recent electoral losses and mounting calls for his resignation.

Rayner confirmed the outcome in a statement on X, declaring she had been "exonerated" of accusations that she deliberately sought to avoid tax. She noted that she had resigned from her government post to cooperate fully with authorities, citing a commitment to maintaining high standards of integrity. The clearance allows her to re-enter the political fray without the cloud of an ongoing investigation, a move that has immediate implications for the party’s internal power dynamics.

The timing of the clearance coincides with a period of significant instability for Starmer’s administration. Following disastrous results in last week’s local and regional elections, more than 80 Labour MPs have publicly urged the Prime Minister to quit. Although four junior ministers have already resigned, Starmer has pledged to remain in office, warning that a leadership contest would plunge the government into chaos. However, the threshold for triggering a contest is low, requiring the backing of just 81 of the party’s 403 MPs, a number that has already been surpassed by those calling for change.

Attention is now focused on Health Secretary Wes Streeting, who is reportedly preparing to resign to launch a bid for the leadership. Rayner told The Guardian she was prepared to "play my part" in a leadership election if Streeting were to trigger the process. This sets the stage for a potential contest between Streeting, who represents the party’s centrist wing alongside Starmer, and Rayner, who is popular among the party’s left wing and has advocated for higher taxes on the wealthy and increased minimum wage protections.

Other figures are also being considered as potential candidates, including Greater Manchester Mayor Andy Burnham. However, Burnham faces procedural hurdles as he is not currently a sitting MP. The Labour National Executive Committee previously blocked his request to seek selection for the Gorton and Denton byelection, meaning he would need to find an alternative route back into Parliament, potentially through a special election triggered by a sitting member’s resignation.