Keir Starmer said he was “very proud to sit alongside” Angela Rayner as the deputy prime minister referred to herself to the standards watchdog over unpaid stamp duty on her second home.
Minutes before PMQs began, Angela Rayner admitted she failed to pay the right amount of stamp duty tax on her second home.
Rayner also said a court order had prevented her from being able to speak about her living arrangements, with a row over stamp duties and her living circumstances lasting for weeks.
The deputy prime minister said she was “devastated” as she said an error in tax advice had led to an underpayment in stamp duty tax on her seaside home in Hove.
Starmer said Rayner had gone “over and above” in fully explaining the details behind her tax affairs as he emphasised his support for his deputy.
“I know from speaking at length to the deputy prime minister just how difficult that decision was for her and her family, but she did it.
“She did it to ensure that all information is in the public domain. She has now referred herself to the independent adviser. That is the right thing to do.
“I am very proud to sit alongside a deputy prime minister who is building 1.5m homes, overseeing the biggest upgrade to workers rights and has come from a working class background to be deputy prime minister.”
Starmer faces questions around tax dealings
A spokesperson for the prime minister later refused to comment on when he learned about Rayner’s unpaid tax, with Labour officials claiming Rayner had followed “relevant requirements” as recently as Tuesday night.
Kemi Badenoch used her questions to ask Starmer about higher borrowing costs and a late date set for the Autumn Budget, warning that the UK was heading for an “economic crash”.
But Starmer raised questions over her claims she had received an offer from Stanford University at the age of 16 to study medicine after admissions officials said the offer did not exist.
“Her claims about the economy under their watch are about as credible as her place at Stanford University,” Starmer retorted.
Starmer refused to comment on possible tax hikes as he claimed Labour was “putting out the fires [the Tories] created”.
Autumn Budget could include welfare cuts
But the latest tax row throws a spotlight on pressures facing the government as it looks set to reform property taxes.
Reports have suggested that the Treasury is considering replacing the stamp duty with a levy on property worth over £500,000.
The complex reforms could prove to be a challenge given the unpopularity of increasing property taxes among the UK electorate, though Reeves is poised to raise at least £20bn at this year’s Budget.
Reports have also suggested that Starmer is pushing for welfare cuts to be made, months after initial savings to personal independence payments (Pips) were reversed due to Labour backbenchers’ rebellion.
The cost of disability payments for working-age Brits is projected to rise to more than £70bn by 2030.
Bond traders are also urging the government to make deep cuts as they dumped gilts en masse over the course of Tuesday.