Rachel Reeves had told Keir Starmer 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 after moving into No 11.
Keir Starmer has told Rachel Reeves she faces no further action over her “inadvertent failure” to obtain a rental licence, even though it was “regrettable” emails about the arrangement had not been shared with him initially.
Ms Reeves previously admitted to mistakenly breaching local council housing rules by failing to secure a “selective” rental licence for her family property.
She published emails on Thursday between her husband and the agency showing that Harvey & Wheeler had agreed to apply for the licence, while telling the Prime Minister she took “full responsibility” for the matter.
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In a letter to Sir Keir Starmer, the Chancellor wrote: “Today the letting agency and my husband have found correspondence confirming that on 17 July 2024 the letting agent said to my husband that a selective licence would be required and agreed that the agency would apply for the licence on our behalf.
“They have also confirmed today that they did not take that application forward, in part due to a member of staff leaving the organisation.
“Nevertheless, as I said yesterday, I accept it was our responsibility to secure the licence. I also take responsibility for not finding this information yesterday and bringing it to your attention.
“As I said to you today, I am sorry about this matter and accept full responsibility for it.”
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.”
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.”
In his response, Sir Keir said he was happy the “matter can be drawn to a close” after consulting his ethics adviser, who decided against launching a probe. Downing Street stressed the Prime Minister still retains confidence in his Chancellor and guaranteed Ms Reeves will deliver the Budget on November 26.