Sir Keir Starmer has been told to “show some backbone” and launch a full investigation into Rachel Reeves over her rental scandal revelations.

Speaking to GB News, Conservative Party Chairman Kevin Hollinrake hit out at the Chancellor for “changing her story” over the absence of her landlord licence.

Despite breaking housing rules, Sir Keir has opted not to sanction Ms Reeves over the scandal, saying she “acted in good faith”.

A letter to the Chancellor read: “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 accept that you were acting in good faith when you wrote to me last night.”

Criticising the Prime Minister’s decision, Mr Hollinrake told GB News: “The Prime Minister needs to show some backbone and instruct whoever he thinks is the most appropriate to carry out a full investigation.

“Rachel Reeves, his problem here is that her story has changed. And of course, Rachel Reeves in the past has called for others to resign when they’ve broken the law and the story has changed.”

He explained: “On Wednesday, she said she didn’t know she needed a selective license, which not getting one is a criminal offence, and that it was an honest mistake, she didn’t know.

“But then the next day, two emails surfaced saying, actually, we did know, we just didn’t make sure it happened. So there are real questions to answer here for Rachel Reeves.”

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Demanding a “full, independent investigation” into what happened, the Tory Chairman stated: “Why didn’t she give a full account of the situation on Wednesday? She changed her story on that, so we think it’s only right that an independent person carries out a full investigation.

“The Prime Minister is completely within the Prime Minister’s gift to make sure that happens, so that he can say full due process has been followed and we get the transparency he’s always promised us when he’s been speaking about these issues in the past.”

Asked by host Stephen Dixon if Ms Reeves “should be sacked” if a full investigation concludes she has “broken the law”, Mr Hollinrake responded: “It depends on the circumstances.

“If it was an inadvertent error, that she claims was simply that the agent didn’t do what she asked him to do, which is her second version of the story, if it was an innocent mistake, then I personally think that’s not a resigning offence.

“But if it clearly is something that she knows she should have done and just didn’t, there are some real questions to answer.”

Stressing that “all landlords” need a licence to let out their property, Mr Hollinrake said: “These things cost £900. Every other person in that area has to pay them that rents out their property.

“It’s a pool system, so that money goes into a system that then makes sure rogue landlords are properly held to account, and if she avoided doing that, then she is in trouble.”

He concluded: “I think her position becomes untenable if it’s established that she clearly did know and she just didn’t make sure it happened.”

The Chancellor has accepted “it was our responsibility to secure the licence” before apologising for the error.