A defiant Angela Rayner will continue campaigning ahead of next month’s local elections, despite a police decision to open an investigation amid allegations of breaching electoral law and avoiding capital gains tax.
The deputy Labour leader vowed on Friday she would stand down if inquiries by Greater Manchester Police (GMP) led to a criminal conviction. It comes after a Tory MP asked the force to examine whether she gave incorrect information for the electoral register about where she lived in Stockport prior to becoming an MP.
It follows allegations, which she denies, that she owes capital gains tax (CGT) on the sale of her former council house in 2015, shortly before she became an MP. Because she listed the house as her primary residence, she did not have to pay the tax. However, her critics have argued she really lived with her former husband, just over a mile away. CGT is payable on second homes.
On Saturday night, it emerged that a former Rayner aide, Matt Finnegan, has written to GMP, contradicting her claims. “There was no doubt in my mind that this was Ms Rayner’s family home where she lived with her then husband, Mark,” his letter states, according to the Sunday Times.
“I remember it quite vividly because Ms Rayner was not at home at first and I had to wait for some time in my car before she eventually arrived. It was also memorable in that it was the first and only time I visited her home during the course of my voluntary work for her.”
Her supporters made clear this weekend that she would not be cancelling her plans because of the police announcement. “We’re not going to let this derail us,” said one ally. “She has a lot of commitments coming up in the next few weeks and we won’t allow it to derail that. She is happy to engage with any authority looking at this.”
Jim McMahon, the shadow local government minister, said the allegations were a “storm in a teacup” yesterday and said it was unfair to compare her situation to Boris Johnson’s Covid fines. Asked about pressure on Rayner to publish her tax advice, McMahon said: “We don’t get many Tory MPs who say if there is wrongdoing found, then they will take the appropriate action and to step aside, you don’t hear Conservatives saying that, and that’s why this is chalk and cheese.”
Rayner has been an important voice for Labour in the local elections, the final major electoral test before the general election later this year. Labour is trying to prove it can win back former “red wall” voters it lost at the last election.
There remains uncertainty over what exactly GMP is investigating. In a brief statement, it would only say it was looking at “whether any offences have been committed” in the light of material provided by James Daly, the Conservative deputy chairman, who asked them to look at the electoral roll and deeds relating to the sale of her council house.
Rayner has said that she has legal and tax advice stating that she does not owe any tax and that she is willing to share it with the relevant authorities. However, she has not publicly released what she regards as private information.
Electoral offences fall under the Representation of the People Act 1983, which states that providing false information to an electoral officer is an offence. It is not clear whether living at two addresses would be considered “false information” since it is not uncommon for people, from students to MPs, to have two residences.
The act also has a time limit of 12 months after the offence was committed. A magistrates’ court could extend the deadline for a year in some circumstances. Scott Wortley, a law lecturer at Edinburgh University, said that a police investigation into suspected electoral offences was “completely pointless”.
“Under the Representation of the People Act, any offence committed under that act has to be prosecuted within one year of the commission of the offence,” he said. “In this situation where the alleged events took place a decade ago, it seems a waste of time and resources to carry out an investigation for something that can’t be prosecuted.” It is also unclear that not paying capital gains tax on a second home would amount to an offence. Dan Neidle, a tax expert who raised questions about whether or not Rayner should have paid capital gains tax on her Stockport home, has said that “calls for prosecutions for tax evasion” were “plain daft”.
Rayner bought a semi-detached home in Vicarage Road in Stockport in 2007 with a 25% discount under the right-to-buy scheme, then in 2010 she married Mark Rayner. In 2015 she sold the Vicarage Road property and Neidle estimates that she may have been liable for no more than £3,500 in CGT, or may not have owed any tax in some circumstances.
Keir Starmer, who says he has full confidence in Rayner, has called the allegations against her “a smear”. They surfaced in a biography of the former carer by Lord Ashcroft and newspaper reports that were then taken up by Daly. GMP initially refused to look at the claims, but reconsidered after a further letter from Daly, which said that neighbours in Vicarage Road had contradicted Rayner’s account.
