Rachel Reeves has taken full responsibility for her failure to get the correct licence to rent her south London property, as crucial new emails were passed to the prime minister and his ethics adviser.
With one of the most consequential Budgets in recent history less than a month away, the chancellor has found herself under scrutiny for potentially breaking the law.
Ms Reeves was thrown a lifeline when her estate agent issued a statement admitting a mistake and apologising.
An email from Harvey & Wheeler to Ms Reeves’s husband appeared to show the firm had offered to obtain the licence on their behalf.
Sir Keir Starmer has told Ms Reeves she will face 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.
In its statement, the firm suggested that Ms Reeves “would have been under the impression that a licence had been applied for”.
The prime minister’s independent standards adviser, Sir Laurie Magnus, said he still believes the chancellor made an “unfortunate but inadvertent error” in her failure to obtain a rental licence, and that it was clear her husband “did not recall” being informed about the requirement for a licence.
In a letter to the prime minister published on Thursday, 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.”
Downing Street had sought to draw a line under the row surrounding the chancellor’s breach of local housing rules, but the discovery of the messages has reignited scrutiny.
A No 10 spokesperson said: “Following a review of emails sent and received by the chancellor’s husband, new information has come to light. This has now been passed to the prime minister and his independent adviser.”
The spokesperson said it would be inappropriate to comment further at the moment, but added that Sir Keir still has full confidence in Ms Reeves. The PM is thought to have become aware of the messages on Thursday.
The government has published an email exchange between the chancellor’s husband, Nicholas Joicey, and the letting agency.
In one email, dated 26 July 2024, Harvey & Wheeler reveals the licence will cost £900, adding: “You will pay in two parts, so £640 first and then once the application has been processed then the remaining £260.00 is taken.”
On 13 August, Mr Joicey belatedly gets back and says “yes please, do go ahead” and arrange for the licence.
In the most recent email, sent later that day, the agent says: “I will do the Selective Licence once the new tenant moves in as I wont need to do this just yet.
“At the moment we are only applying for a council licence.”
The issue was made worse for Ms Reeves after it emerged she had campaigned in her Leeds constituency for the same rules she has just fallen foul of.
Meanwhile, Southwark Council, from whom the licence should have been obtained, suggested she could be liable for paying back thousands of pounds in rent and subject to enforcement action.
The council said it only takes enforcement action against landlords who do not apply for a licence within 21 days of receiving a warning.
“When we become aware of an unlicensed property, we issue a warning letter advising the landlord that they have 21 days to apply for a licence – enforcement action such as fines are reserved for those who do not apply within that time or where a property is found to be in an unsafe condition.
“We cannot comment on individual cases.”
The property was listed for £3,200 a month, according to the Daily Mail, which first reported the story, meaning her tenants could seek around £40,000 if the requirements are met.
With opponents scenting blood, the Conservatives questioned the chancellor’s initial explanation that she had not been made aware that she was required to get a rental licence for her home.
A Conservative Party spokesperson said: “Last night Rachel Reeves said ‘she had not been made aware of the licensing requirement’. Today, we find out that Reeves was alerted to the need for a licence in writing by the estate agents.
“Having been caught out, the chancellor is now trying to make the estate agents take the blame, but Reeves never followed up with them to ensure that the licence had been applied for, or checked if the licence had been granted.
“Regardless, under the law, Reeves and her husband are responsible for ensuring the licence is granted. With more information coming to light every few hours, the prime minister needs to grow a backbone and start a proper investigation.”
The Tories suggested Section 95 of the Housing Act 2004 meant Ms Reeves was ultimately still responsible for obtaining the licence.
Meanwhile, after already losing deputy prime minister Angela Rayner to an administrative error on failing to pay stamp duty, colleagues rallied around the beleaguered chancellor.
Business secretary Peter Kyle said he had “complete confidence” in Rachel Reeves and praised her “work ethic”.
He said: “She is so focused on her role as one of the big public servants of our time.
“She is focused on not just fixing the mess that she inherited as chancellor from the previous administration, she is working day and night to make sure we can get our economy where it needs to be, so it’s creating the jobs and the wealth and economic growth that we need going into the future.”
