Rachel Reeves does not need to resign after she admitted failing to follow local housing rules when renting out her family home, a minister has insisted.
The Chancellor said on Wednesday she did not obtain the required “selective” licence to rent out her south London home when she moved into No 11 Downing Street after Labour won the election.
The Prime Minister insisted it was “not necessary” to launch a probe into Ms Reeves’ error, after consulting his independent ethics adviser, Sir Laurie Magnus.
Policing minister Sarah Jones told Times Radio the situation had been rectified, adding: “No, she shouldn’t” resign.
“She, after the election of course, moved into 11 Downing Street, as chancellors do,” Ms Jones said.
“She has a family home in Southwark that she rented out through a letting agency. Now, Southwark Council has what’s called a selective licensing scheme.
“Some boroughs have them, some don’t… The Chancellor wasn’t aware that she had to apply for this selective licence. As soon as she became aware, she rectified the situation.”
An exchange of letters between Sir Keir and his Chancellor revealed they had met to discuss the matter on Wednesday evening.
In her letter to the Prime Minister, Ms Reeves “sincerely” apologised for her “inadvertent error” of not obtaining the licence, which was revealed by the Daily Mail.
Ms Reeves told the PM that “regrettably” she and her family were not aware a licence was needed in their area of the Southwark borough of London, after they rented out their home for £3,200 a month.
Southwark Council requires people renting out their properties in certain areas to get one of the licences in advance.
Not doing so can lead to a prosecution or a fine.
The Chancellor is understood to have relied upon the advice of a letting agent, which said it would advise if a licence was needed.
Ms Reeves told Sir Keir: “This was an inadvertent mistake. As soon as it was brought to my attention, we took immediate action and have applied for the licence.”
She added: “I sincerely apologise for this error and I would be happy to answer any questions you may have.”
In his reply, the Prime Minister said he had consulted his independent adviser, adding: “He has advised me that in relation to your inadvertent failure to secure the appropriate licence for your rental property – and in light of your prompt action to rectify the position, including your apology – further investigation is not necessary.”
“An apology is a sufficient resolution” in such cases, the Prime Minister said.
Sir Keri added it was “regrettable that the appropriate licence was not sought sooner” but he believed the Chancellor was “treating this matter with the urgency and seriousness it deserves”.
Conservative leader Kemi Badenoch said Ms Reeves needs to “be on top of her paperwork” following the mistake.
The Conservative Party leader pointed to the Chancellor’s public support of councils using selective licences.
Ms Reeves, who is also MP for Leeds West and Pudsey, posted on her verified Facebook page earlier this month welcoming Leeds City Council’s decision to expand its use of the scheme.
Mrs Badenoch said: “The more I hear about the story, the more questions there are to answer. This is a 2004 statute that was brought in by Labour.
“She has tweeted about how it should be extended, and yet she wasn’t following it herself.”
The Tory leader added: “She is the Chancellor. She needs to be on top of her paperwork. She was aware of this legislation. I think there should be an investigation.”
Sir Keir’s decision to back Ms Reeves comes less than a month until the Budget, in which she is expected to have to make difficult fiscal decisions.
It also follows on the heels of several high-profile exits from Government as a result of scandals.
Among these was Angela Rayner, the former deputy prime minister and housing secretary, who resigned following a row about her tax affairs.
Lord Mandelson was also sacked as ambassador to Washington after details of his relationship with the dead paedophile financier Jeffrey Epstein came to light.
Southwark Council was contacted for comment about the selective licence.
