Reeves' series of blunders: Rental licence fail is not Chancellor's only act of neglect, says ALEX BRUMMER

Rachel Reeves and her entourage are agitated that the Government receives no credit for a sharp decline in gilt yields.

When they shot up earlier in the year, exaggerating the nation’s budgetary ills, the media was up in arms. It was even described as a Liz Truss moment.

The yield on the ten-year gilt has since retreated to 4.4 per cent from 4.9 per cent in January. The Treasury received no thanks for sticking with iron-clad fiscal rules and easing the pressure on the public finances ahead of next month’s Budget.

The temptation is to trumpet this as a success. It should be noted that bond yields in the UK are the highest among the G7. The US ten-year Treasury yields 4.1 per cent and Italian bonds offer a 3.4 per cent return.

Yet because some 25 per cent of Britain’s debt stock is index-linked to Britain’s G7-leading inflation rate of 3.8 per cent, savings from lower bond rates are limited.

The bond market is Reeves’ greatest friend. Fears of a sudden sell-off in the gilts market, of the kind experienced during the brief Truss government in 2022, ensured that, until now, the Chancellor has been safe in her job.

At the time of the welfare cuts U-turn in July, Reeves looked at her most vulnerable politically. There was fear in Downing Street that her departure would precipitate a crisis.

Mistakes: Chancellor Rachel Reeves (pictured) failed to obtain a rental licence when she placed her family home in Dulwich on the rental market last year

However badly the fiscal rules may be drawn, it was the Chancellor’s rugged determination to stick with them which saved her skin.

The current imbroglio over Reeves’ law-breaking, when she neglected to secure a licence from Southwark council in south London to rent her home, might have proved immediately fatal were the Chancellor not all that stands between Labour and a market implosion.

Confidence in the Starmer government, and its steerage of the economy in particular, hangs by a gossamer thread.

That is almost certainly why the Prime Minister and ethics adviser Sir Laurie Magnus were quick to defend the Chancellor on Wednesday after this paper’s disclosure of the error.

The potential cost of her mistake is placed at £38,000, funds which Southwark and the tenants in her family property could claim back were they so minded.

That is not a dissimilar sum to the capital gains tax liability of £40,000 which cost Angela Rayner her job.

As the keeper of the public purse, it is risible to think that the Chancellor relied on her estate agents for advice on the lettings.

Anyone who has dealings with estate agents will know that integrity is not high up an agenda when there is commission to be had.

A family member has recently been let down by an estate agent who failed to disclose to buyers of the property the declining length of a lease on an apartment.

The disputed cost of renewing that lease currently is in danger of bringing a

four-link chain, in a fragile London area residential market, crashing down, leaving all parties lumbered with legal, survey and other transaction costs. The current imbroglio is not Reeves’ only act of neglect.

The Chancellor’s book ‘The Women Who Made Modern Economics’ had to be amended after the FT revealed that chunks had been lifted without change or acknowledgement from Wikipedia.

As an author of several books of political economy I know the importance which publishers attach to proper attribution.

Reeves’ CV also required adjustment because of a series of factual errors. In the commercial sector the mistakes might have been viewed as a disciplinary offence.

None of this might matter if the Chancellor had delivered the growth promised.

When she was in opposition I was among journalists attending informal briefings, which were later incorporated in the Labour party’s election manifesto, who were told how Reeves intended to unleash output in the UK by building 1.5m homes in its first term.

This week it was revealed that, in a private letter to the Office for Budget Responsibility, housebuilders warned

that weak demand and costly environmental and safety regulations mean that target is over-optimistic.

It is a huge paradox that the housing Chancellor could not navigate complex regulation in her own suburban neighbourhood.