Senior UK ministers have poured scorn on the idea of freezing private sector rents for a year, less than 48 hours after the Guardian revealed Rachel Reeves was considering it.
Ministers Dismiss Rent Freeze Proposal
Steve Reed, the housing secretary, and Matthew Pennycook, the housing minister, became the latest government figures to criticise the idea, which has since been ruled out by No 10. Pennycook stated on Wednesday: "We are not doing this. It's not a credible or serious policy proposition." He added: "I can't remember how many times I'm on record of saying this government has no intention, does not agree with rent controls, and there are really good reasons for that."
Pennycook highlighted the government's exhaustive review of evidence from countries like Sweden, Germany, and cities like San Francisco, as well as the Scottish experience. He noted that rent controls often push up rents outside regulated tenancies. Reed gave a similarly scathing response, saying: "I've been crystal clear – we're not doing it."
Speculation Over Chancellor's Future
The immediate pushback has prompted renewed questions over the chancellor's future in government. Kemi Badenoch, the Conservative leader, asked Prime Minister Keir Starmer in the Commons on Wednesday: "This is not a serious way to run the economy … Will he listen to businesses, listen to the country, and reshuffle the chancellor?" Starmer praised Reeves but did not explicitly guarantee she would remain in post as he has done in the past.
Downing Street later stated: "[The prime minister has] full confidence in the chancellor." When asked to repeat Starmer's previous guarantee that she would stay until the next election, a spokesperson said: "That position remains unchanged."
Reeves's Allies Dismiss Sacking Reports
Reeves's allies have dismissed reports over the weekend that the prime minister intended to sack her as "one final roll of the dice" to stay in power after heavy local election losses. One described it as "bollocks". Reeves herself spent Wednesday morning speaking at an all-staff meeting in the Treasury, flanked by her ministerial team, thanking officials and urging them to press ahead with the government's mission of kickstarting economic growth.
Treasury sources said she highlighted recent decisions, including cuts to utility bills in November's budget, and repeated her insistence on avoiding a costly kneejerk response to the Iran crisis. One ally insisted the chancellor's tone was "massively upbeat" and forward-looking, promising more detail soon on AI policy and the UK's relationship with the EU.
Market Concerns Over Political Uncertainty
However, a source close to Reeves's team suggested they had been spooked by recent reporting about divisions in No 10 over whether to hold an immediate reshuffle after next week's local elections. City investors are watching Labour's internal ructions closely, with some warning the prospect of a leadership race could push up the yield, or interest rate, on government bonds still further.
A research note from analysts at the investment bank Jefferies called next week's polls "the local elections markets can't ignore". Yields have already risen sharply since the outbreak of the Middle East war as investors fear higher inflation and rising interest rates, potentially wiping out much of Reeves's "headroom" against her fiscal rules. The government's borrowing costs jumped afresh on Wednesday amid fears of a prolonged conflict, with 10-year yields at their highest closing level since 2008, well above 5%. Reeves's allies believe the threat of gilt market chaos is a strong argument for keeping her in place.
