Angela Rayner, a prominent Labour MP, has been officially cleared by HMRC of any deliberate wrongdoing or carelessness regarding her tax affairs. This significant development, revealed by The Guardian, potentially paves the way for her to launch a leadership bid amidst growing pressure on Keir Starmer's leadership within the Labour Party. Rayner has settled an outstanding amount of £40,000 in unpaid stamp duty, which arose from initially paying a lower rate. Crucially, the HMRC investigation concluded that no penalties were warranted, and there was no evidence of tax avoidance.

The investigation by HMRC had cast a long shadow over Rayner since her resignation from the cabinet last September. The scrutiny focused on her underpayment of stamp duty on an £800,000 flat in Hove, East Sussex, which she bought when her son’s trust purchased her out of the family home. Rayner acknowledged the complexity of the tax law in this area, stating, "it’s a really complex area of law." She had sought advice at the time and felt she had done everything to comply, despite two leading tax lawyers reaching different conclusions on her affairs. One advised a "realistic chance" of appealing HMRC's decision, but Rayner ultimately accepted it and paid the tax, emphasizing that politicians should be held to high standards.

Emotionally, Rayner described herself as "bruised" by the entire experience, citing the intrusion into her disabled son’s personal life and the public perception that she was "in it for myself" rather than advocating for ordinary people. She expressed profound relief at the HMRC's conclusion, particularly because she feared the public might think she had "dropped all her values" or was "on the take" by being careless or trying to avoid tax. "To me, that was the most distressing thing, that people felt that I was tax-dodging or trying to set up trusts to avoid tax," she told ITV, adding that she didn't want people to think the person who went into politics to fight for them had "suddenly had dropped all her values and was just on the take." She also noted that the investigation had "clipped my wings" politically.

With her tax affairs now resolved, the door is open for Rayner's return to frontline politics, coinciding with a period of intense internal strife within the Labour Party. Following last week’s "disastrous" local election results, which left many MPs "heartbroken," there is mounting pressure on Keir Starmer. Wes Streeting, the health secretary, is reportedly preparing to launch a leadership challenge on Thursday, provided he can secure sufficient support from MPs to trigger a contest. This move has spurred a frantic search on the left of Labour for a candidate to oppose him, with Ed Miliband and Rayner considered potential contenders, though Andy Burnham remains unable to run from outside parliament.

Rayner herself has indicated her willingness to participate in a leadership contest, stating she wants to "play my part" in delivering change. While she has not explicitly called for Starmer's resignation, she suggested he should "reflect on" stepping aside, noting that "the pace of change hasn’t been enough for voters to see, and also mistakes have really blown us off course and made voters doubt us." She stressed that her ambition is not personal, but rather a commitment to "fighting for" struggling people. She did not rule out endorsing a "soft left rival" if such a candidate had a better chance of success, emphasizing the need for unity and a shared vision to "pull the party together." However, she firmly ruled out initiating a coup against Starmer herself, preferring to "see actions, not just words."

Rayner also voiced her opinion on the broader party dynamics, advocating against factionalism and ego. She reiterated her belief that figures like Andy Burnham should not be prevented from contributing, stating, "If somebody wants to come and help, and be part of the future that we can deliver, then absolutely we shouldn’t be blocking people." Despite this, she deemed it inappropriate to ask North-West Labour MPs to stand down for Burnham. As the Labour Party faces a critical juncture, Rayner's clearance by HMRC removes a significant personal obstacle, positioning her as a key figure in the unfolding political drama.