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Just how powerful will Red Queen Angela Rayner be in a Labour government?

She will probably survive the scrutiny of her tax affairs, writes John Rentoul – but is her employment rights policy the next “£28bn” U-turn?

Saturday 02 March 2024 15:27 GMT
We can expect Angela Rayner to fight her corner, but she is also a pragmatist
We can expect Angela Rayner to fight her corner, but she is also a pragmatist (Getty Images)

Angela Rayner protests that Michael Ashcroft, the Conservative former peer, takes an “unhealthy” interest in her private life. By which she means that extracts of his biography of her, Red Queen?, have prompted awkward questions about whether she has paid the tax due on the sale of one or other of her houses.

Lord Ashcroft has caused trouble for a lot of politicians. William Hague, who put him in the House of Lords, had to answer awkward questions about his tax status. He fell out with David Cameron and resigned from the House of Lords in 2015. He paid for a lot of opinion polls, some of which were unhelpful to the Conservative Party, but which provided a public service.

And he has written a lot of books, including Call Me Dave, an unauthorised biography of the prime minister at the time, co-authored with Isabel Oakeshott; Red Knight, an unauthorised biography of Keir Starmer; First Lady, about Carrie Johnson; two editions of a biography of Rishi Sunak; and now Red Queen? None of them has been comfortable reading for their subjects.

I am reminded of one of the rare occasions on which I engaged Theresa May in small talk. Rosa Prince’s biography of her, The Enigmatic Prime Minister, had just come out and I asked her if she had read it. “No.” So I asked her what it was like having a book written about you. “Strange.”

For Rayner, however, the experience has moved from “strange” to “dangerous”, because Ashcroft did some basic research, or had some basic research done, into the deputy Labour leader’s history as a citizen of the property-owning democracy. He revealed that she had bought her council house at a 25 per cent discount and later sold it.

The initial line taken by the Tory press was that this was “hypocrisy”, because Rayner wants to restrict the right to buy. She dealt with that briskly, saying she is against deep discounts of up to 60 per cent, and that she wants the proceeds to be reinvested in social housing. Score: one point to Rayner.

It took a little while for a more complicated charge to be assembled against her, which was to ask whether she should have paid capital gains tax on either her house or her former husband’s house when they were sold, because as a married couple they were entitled to nominate only one of them as their tax-free principal residence.

Even Dan Neidle, the tax lawyer who made his name dissecting Nadhim Zahawi’s tax affairs and who is a member of Labour’s national constitutional committee, thought she had questions to answer. Labour sources say that she has taken advice, which confirms that she doesn’t owe any tax, but at some point further details are going to have to be set out.

Journalists’ interest in her tax affairs is not “unhealthy”; as an elected representative, she has to account for the probity of her finances. But it seems unlikely that the issue will end her career: the law is complex; the amounts involved are relatively small; and complete disclosure should put an end to the story.

There is, however, a more substantial potential obstacle in Rayner’s way – and one in which many voters have a more direct interest. I wrote a month ago that she is likely to be a powerful minister in a Labour government. She is a formidable politician, and she is responsible for policy on employment rights – one of the few areas in which a cash-strapped new government will be able to make a significant difference to people’s lives.

In recent weeks, though, business leaders have started to express doubts about Rayner’s policy, to Rachel Reeves, the shadow chancellor, and to the leader’s office, and mostly in private. The most controversial policy is the promise of full employment rights from day one in a job.

This was watered down last year in Labour’s national policy forum (NPF), which put together the building blocks from which the party’s manifesto will be constructed. The NPF accepted that employers would still be allowed to require new hires to serve a probationary period. But probationary periods are usually six months, compared with the two years currently needed for protection from unfair dismissal.

What is more, there is no mention of probationary periods in Rayner’s “A New Deal for Working People”, published in January. The document also dropped the word “exploitative” from the party’s promise to abolish zero-hours contracts.

When Starmer and Reeves met business leaders at last month’s Labour business conference, they were lobbied behind the scenes by employers worried about a Labour government gumming up the flexible labour market that Tony Blair and Gordon Brown did so much to promote in the New Labour years.

Some of my sources suggest that this could be the next big U-turn after the dumping of the “£28bn” green investment plan. There is nervousness and tension in the Labour Party, but the Tories haven’t launched an onslaught and employers’ groups are keeping a low profile in the hope that quiet persuasion will be more effective than confrontation.

We can expect Rayner to fight her corner, but she is also a pragmatist. She might be persuaded that, say, reducing the qualifying period for protection from unfair dismissal from two years to one strikes the right balance between individual rights and a job-creating labour market. It was, after all, one year for most of the New Labour period, since 1999, and was only extended to two years by the coalition in 2012.

If there is a pragmatic retreat on employment rights, expect it to be a bit more orderly than the embarrassing “£28bn” green U-turn.

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