Rachel Reeves is facing calls to be sacked after it emerged she broke local housing rules when she put her family home up for rent. The Chancellor admitted to Sir Keir Starmer that she failed to obtain a rental licence for her south London home when she moved into 11 Downing Street after Labour won the election.

Ms Reeves raised the error with the Prime Minister and his independent ethics adviser after it was revealed by the Daily Mail just weeks before her Budget. 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 prosecution or a fine.

In a letter to the Prime Minister, the Chancellor “sincerely” apologised for her “inadvertent error” of not obtaining the licence.

Ms Reeves told the Prime Minister that “regrettably” she and her family were not aware that a licence was needed.

She 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, Sir Laurie Magnus, 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.

“The Ministerial Code makes clear that in certain circumstances, an apology is a sufficient resolution. It is important that all ministers are able to acknowledge where they consider themselves to have fallen below the standards expected of them.

“I am satisfied that this matter can be drawn to a close following your apology.”

But the Conservatives are calling on the Prime Minister to “launch a full investigation” into Ms Reeves’s error.

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Tory leader Kemi Badenoch said: “Rachel Reeves has broken the law and broken the Ministerial Code, but Keir Starer is too weak to sack her.

“While the Chancellor is planning tax hikes for millions of families across the country at the Budget, it’s one rule for the Chancellor and another for everyone else.

“Keir Starmer pledged to restore integrity to politics, but now he’s laughing in the face of the British public.

“He should grow a backbone and sack the Chancellor now. This is not over.”

Daisy Cooper, Lib Dem deputy leader, said: “The Chancellor is meant to be delivering growth, but the only thing she appears to be growing is the Government’s list of scandals.

“Just weeks before the Budget, this risks seriously undermining confidence in this Government and its ability to focus on the urgent tasks at hand.”

It also follows several high-profile exits from Government due to scandals, including Angela Rayner’s involvement in a stamp duty row.