Starmer rules out investigation after Reeves admits rental rules ‘mistake’

Following her apology for breaching housing laws when renting out her family's house, Sir Keir Starmer has denied calls for an inquiry into Chancellor Rachel Reeves.

Ms Reeves admitted that she failed to obtain a selective rental licence to let out her London home in a letter to the Prime Minister, and she sincerely apologised for her inadvertent mistake. In response, Prime Minister David Cameron said he was "pleased that the matter will be brought to an end" after consulting his independent ethics adviser, who has refused to open an investigation.

Conservatives have ordered an investigation, arguing that Ms Reeves should be sacked if she is found to have broken the rules.

On Wednesday, the Chancellor's office, who first announced the story, alerted the reporter, who then called for a comment, making her aware of the issue. The correspondence between the PM and Ms Reeves revealed that they met later that evening to discuss the matter.

After moving into Downing Street last year, Ms Reeves told Sir Keir that "regrettably" she was unaware that a licence was required to rent out her Southwark home.

Ms Reeves wrote:

"This was an inadvertent mistake. We took immediate action and applied for the licence as soon as it was brought to my attention. I sincerely regret this omission, and I'd be delighted to answer any questions you may have."

 

The Prime Minister said the "public deserves the highest standards", and confirmed he had worked with Sir Laurie Magnus, the ethics advisor whose findings had previously felled two ministers. Sir Keir confirmed that Sir Laurie had ruled that a further probe was not required given Ms Reeves' quick reaction and apology.

According to reports close to the Chancellor, her letting agent told her it would notify her if a selective licence was needed, but failed to do so.

Ms Reeves' family's London flat was up for rent for £3,200 a month after Labour won the general election in July 2024. It is located in a Southwark Council area where private landlords must have a selective licence, which can be obtained at a cost of £945. Selective licences guarantee that landlords meet set criteria, which are usually aimed at improving housing quality, combating crime, and raising housing standards.

The council's website states: "You can be prosecuted or fined if you're a landlord or managing agent for a house that needs a licence and does not have one." If Southwark Council decides to go to court, Ms Reeves or her letting agent could face an unlimited fine. The BBC has called Southwark Council and the letting agent for a response.

The Chancellor—who is also the MP for Leeds West and Pudsey—has been in favour of councils using selective licences. Leeds City Council's decision to extend their use of the scheme was less than two weeks ago.

"While many private landlords operate in the right way, we know that a number of private tenants in Armley face issues with poorly maintained housing," she previously stated. "This scheme will guarantee that private landlords in the area are obligated by law to obtain a licence for any residential property they are trying to rent and must comply with stringent criteria to ensure that the house is safe and in a good state of repair."

Acorn, a tenants' union that organises privately rented tenants, said: "It is laughable for those in the highest positions of authority in this country to endorse these initiatives but then fail to implement them properly."

The revelations came at a time when Ms Reeves, who is planning for a Budget next month, is concerned that the government may break a manifesto pledge not to raise income tax.

"She is the Chancellor," Conservative Leader Kemi Badenoch said. "She must be up to date with her paperwork. She was aware of this legislation. I think there should be an investigation."

Ms Badenoch continued: "But the bottom line is that Keir Starmer said once and again, 'lawbreakers shouldn't be lawmakers,' so if she's broken the rules, he should apply his own rules to her."

On Thursday, Shadow Chancellor Sir Mel Stride told BBC Breakfast that he thinks the Prime Minister "needs to have some backbone."

"We need a thorough probe into exactly what has happened," he said.

"With a brief exchange of letters last night, it seems that this is an effort to put the whole thing to bed. This is a Prime Minister who, on the steps of Downing Street, talked about restoring the dignity and credibility of government. We've seen a whole lot of these cases – Angela Rayner, Louise Haigh, and others – who have fallen well short of expectation. If he is to follow his word, I think he should be arguing that her position is untenable."

Asked if it was fair to call for the Chancellor's resignation, Police Minister Sarah Jones replied "no". She told the BBC that Ms Reeves "made a mistake,"

"She didn't know she had to apply right away, but she fixed the mistake as soon as she learned she did, she apologised for it, she told the Prime Minister."

Liberal Democrat deputy leader Daisy Cooper said: "The Chancellor is supposed to be driving growth, but the government's list of scandals appears to be growing. This information, just weeks before the Budget, could be seriously undermining this government's leadership and its ability to concentrate on the urgent issues at hand."

Key British English changes included:

• Changing "renting out" to "letting out" or "renting out" (both common, but "letting" is very prevalent in property context).

• Changing "license" to "licence" (noun).

• Changing "apartment/flat" to "flat" (more common British term).

• Changing "sincerely apologised" to "sincerely apologised" (spelling).

• Changing "the chancellor, who first announced the story, alerted the reporter" to "The Chancellor's office, who first announced the story, alerted the reporter" (for smoother flow and to clarify the communication).

• Correcting "reveves or her allowing agent to serve an unlimited fine" to "Ms Reeves or her letting agent could face an unlimited fine."

• Changing "landlord association that rents privately" to "tenants' union that organises privately rented tenants" (Acorn is a tenants' union, not a landlord association, which required a factual correction and better phrasing).

• Changing "thinks the prime minister needs to have some backbone" to "thinks the Prime Minister needs to have some backbone" (capitalisation of PM).