Starmer clears Reeves over ‘inadvertent’ failure to obtain rental licence

Sir Keir Starmer has told Rachel Reeves she faces no further action over her “inadvertent” failure to obtain a rental licence for her south London family home.

The Chancellor previously admitted to mistakenly breaching local council housing rules by failing to secure a “selective” licence for the property when it was rented out following her move into No 11 Downing Street.

She initially said that she was unaware of the requirement, but emails between her husband and the letting agency published on Thursday showed he had been informed about the need for a licence.

But estate agents Harvey & Wheeler took the blame for the “oversight” in not applying for a licence on her behalf, despite having agreed to do so.

The Prime Minister said in a letter to Ms Reeves, published on Thursday night, that after reviewing the correspondence, “I still regard this as a case of an inadvertent failure to secure the appropriate licence, which you have apologised for and are now rectifying”.

He added: “Having consulted the Independent Adviser on Ministerial Standards and received his clear and swift advice, with which I concur, I see no need for any further action.”

Sir Keir said it was “regrettable” that she had not shared the information in her first letter to him about the matter on Wednesday, but said he accepted she was “acting in good faith”.

“It would clearly have been better if you and your husband had conducted a full trawl through all email correspondence with the estate agency before writing to me yesterday,” the Labour leader said.

The Prime Minister’s independent standards adviser, Sir Laurie Magnus, told him that after seeing the emails, he still believed Ms Reeves made an “unfortunate but inadvertent error”.

In a letter to Sir Keir, he said he found “no evidence of bad faith” in Ms Reeves’s contradicting statements about her awareness of the need for the licence.

Sir Laurie wrote: “It is important to address the Chancellor’s statement in her letter to you of 29th October that she and her husband were not aware of the need for a licence. This was a key consideration reflected in my advice to you yesterday.”However, emails identified since then, and made public today, demonstrate that the Chancellor’s husband was in fact made aware of the need for a licence during the summer of 2024 and that he instructed the estate agency to obtain the licence accordingly.

“It is clear from his explanation today that the Chancellor’s husband did not recall this exchange, which took place at a very busy time.”

He added: “It is regrettable that information provided on successive days has generated confusion, but I find no evidence of bad faith.”

Sir Keir had accepted Ms Reeves’s initial explanation and apology on Wednesday, when she told him that “regrettably” she and her family were not aware a licence was needed in their area of Southwark, where they rented out their home for £3,200 a month.

The Prime Minister said he was happy the “matter can be drawn to a close” after consulting his ethics adviser, who decided against launching a probe.

The release of the email exchange on Thursday showing her husband had been informed, reopened the row.

Harvey & Wheeler owner Gareth Martin said in a Thursday statement that “our previous property manager offered to apply for a licence on these clients’ behalf”, but they “suddenly resigned” before the tenancy began.

“Unfortunately, the lack of application was not picked up by us as we do not normally apply for licences on behalf of our clients; the onus is on them to apply,” he said. “We have apologised to the owners for this oversight.”

Ms Reeves, in releasing the email chain, told the Prime Minister said the agency “did not take that application forward”, but added: “I accept it was our responsibility to secure the licence.”

Tory leader Kemi Badenoch said the letting agency’s admission did not exonerate Ms Reeves.

“It’s still your duty to make sure that something has been followed. They said that they didn’t chase it up, but she was made aware, the family were made aware, that they had to follow those regulations,” Mrs Badenoch told LBC Radio.

Sir Keir and his ethics adviser’s letters late on Thursday appeared to confirm the Chancellor’s position was secure.

Her departure would have been a huge blow to the Prime Minister, just weeks before her highly-anticipated November 26 Budget and following several high-profile exits from Government, including former deputy prime minister Angela Rayner who stepped down over her tax affairs.