Angela Rayner is under pressure to hand back a £16,876 exit payment she received when she left Government last autumn over her tax affairs.
The Labour MP for Ashton-under-Lyne was reinstated as Housing Secretary by Prime Minister Andy Burnham on Monday.
She was given the payout after stepping down from Cabinet in September, but her return to the same role in the reshuffle has prompted demands that she give the money back.
Shadow Housing Secretary James Cleverly led the criticism, telling the Daily Mail: “She pocketed a £17,000 reward courtesy of the taxpayer, and now she’s got her old job back courtesy of her mate Andy Burnham, who wants to hike taxes on the family home for everyone else.”
The former home secretary said: “Ms Rayner should hand back the cash. Her reappointment just confirms that there is one rule for Labour, and another for everyone else.”
Ms Rayner was compelled to leave her positions as deputy prime minister and housing secretary last September after a Telegraph investigation revealed she had underpaid £40,000 in stamp duty on an £800,000 property she owned in Hove, East Sussex.
The tax controversy forced her departure from Labour’s frontbench in disgrace, and she only resolved the outstanding bill with HMRC in May of this year.
Barely ten months after her exit, Ms Rayner has been handed back control of the very department responsible for housing.
Ms Rayner has maintained HMRC’s inquiry found no deliberate wrongdoing or carelessness on her part, and she had always acted “in good faith” throughout.
However, her detractors argue the tax authority’s conclusions carry little weight when the minister who failed to pay the correct stamp duty is once again overseeing Britain’s housing regulations.
Property industry figures have reacted furiously to the appointment.
Craig Fish, Director at Lodestone Mortgages, told Newspage: “This feels like a slap in the face to anyone who plays by the rules.”
Rohit Kohli, of The Mortgage Stop, added: “This looks like loyalty being rewarded, not competence being recognised.”
Harvey Dhillon, of Zmartly, cautioned ordinary taxpayers would face severe penalties for making the same mistake, stating: “Whatever you think of the politics, that is a two-tier message about tax.”
Anita Wright, of Ribble Wealth Management, described the decision as “moral hazard in a sash and rosette”, arguing: “The problem isn’t that people make mistakes; it’s that at the top, mistakes have stopped costing anything.”
Ms Rayner is also expected to revive plans for an overnight visitor levy in England, granting regional mayors new powers to impose charges on tourist accommodation.
The policy, which Mr Burnham championed during his time as Greater Manchester mayor, could add up to £300 to the cost of a family holiday within Britain.
As many as ten of England’s 14 regional mayors are reportedly planning or considering the introduction of such levies.
Speaking at a New Economics Foundation event on July 1, Ms Rayner signalled her determination to overcome what she called “institutional resistance” to fiscal devolution, citing the overnight levy as proof that such opposition could be defeated.
Tourism industry sources have warned the charges would undermine England’s competitiveness as a destination and push holidaymakers towards areas where councils opt not to impose them.
The Overnight Visitor Levy Bill featured in Sir Keir Starmer’s final King’s Speech in May but failed to pass before his resignation.
