Tensions within the Labour Party have intensified, with allies of Greater Manchester Mayor Andy Burnham accusing the Prime Minister of hypocrisy in his handling of a rental licensing scandal involving Chancellor Rachel Reeves. The dispute appears to highlight divisions ahead of Ms Reeves’ second Budget on November 26.
Sources close to Mainstream, the Labour grouping supported by Mr Burnham, argue that Ms Reeves has received more lenient treatment than former deputy leader Angela Rayner, who resigned over comparable tax issues. Ms Reeves has been accused of a “cover-up” regarding her failure to secure a licence from Southwark Council for a property she rents in Dulwich, south-east London, at £3,200 per month. Tenants may now claim refunds totalling up to £38,400 for residing in an unlicensed home. Ms Reeves initially informed Sir Keir that she was unaware of the requirement, but emails published on Thursday showed her husband had been notified by the letting agency.
Chancellor Rachel Reeves (Image: Getty)
Downing Street maintains that the cases differ from Ms Rayner’s tax misconduct, which led to her resignation in September. Sir Laurie Magnus, the independent adviser on ministerial interests, ruled then that Ms Rayner had paid the wrong stamp duty rate “in good faith” but breached the ministerial code.
For Ms Reeves, Sir Laurie advised on Thursday that her error was “unfortunate but inadvertent,” with “no evidence of bad faith.” He described the information sequence as “regrettable” for causing confusion but recommended no resignation.
No 10 has not confirmed a code breach. In a letter, Sir Keir stated: “It is clearly regrettable that the information in this correspondence was not shared with me when you wrote to me last night, but I fully accept that you were not aware, at that stage, of these emails.
“I understand that the relevant emails were only unearthed by your husband this morning, and that you have updated me as soon as possible. I accept that you were acting in good faith when you wrote to me last night.
Critics have contrasted Labour’s handling with the situation with how it dealt with Angela Rayner (Image: Getty)
“However, 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.”
A source close to Mainstream told The Telegraph: “There’s a reason Rayner was turfed out as soon as possible but support for Reeves is robust. It’s always one rule for their people and another for anyone who threatens to loosen their grip on control.”
Labour MP Mr Graham Stringer suggested the Budget timing influenced the decision. He said: “With other circumstances or other timings, I believe he may have come to a different decision on Rachel Reeves.
“I understand why the Prime Minister has made a different decision because of the Budget, but in other circumstances I would have expected them to be treated the same.”
A left-wing Labour MP noted an “inequity,” stating: “Both failed to know the policies that they had to follow, both left with having to seek financial and other redress, yet Angela had to resign and Rachel is not even being investigated by the PM.” Another MP added: “I think people will form their own opinions as to how this looks.”
The Prime Minister’s spokesman defended Ms Reeves, describing the cases as “distinct and separate.” He said: “There was a ruling from the independent adviser on ministerial standards, and you have the ruling from the independent adviser on ministerial standards in this case.
“The Prime Minister agrees with that and sees no need for any further action.”
On Ms Reeves’ record, he highlighted “five interest rate cuts” and trade deals with India, the US and the EU, adding: “The Government knows that the economy has felt stuck for many working people and businesses, so we are going to be honest about the choices we face and candid about the choices we will make.”
Mr Burnham, long seen as a potential leadership contender with his focus on regional devolution, has not commented directly.
However, he has not denied his political ambitions either, and speaking in September said: ““When I left Westminster, which is almost 10 years ago now, I took a vow not to speak in code, to answer honestly, as people say politicians don’t do.
“I gave an honest answer and sometimes it feels to me that the Westminster world can’t deal with those answers.
“I think all of the focus needs to be a plan to get the country back where it should be… I’m ready to support the Prime Minister and the Government.”
The episode revives questions about Labour’s internal dynamics, as Mr Burnham’s allies challenge Sir Keir’s authority amid perceptions of uneven standards.
