Sir Keir Starmer’s Labour government has suffered a fresh blow with the resignation of its homelessness minister, Rushanara Ali, after it emerged she had served her tenants with an eviction notice before re-listing the property at a rent £700 higher—behaviour her own department is poised to make illegal.
Rushanara Ali, the MP for Bethnal Green & Stepney, confirmed on Thursday evening that she was stepping down, following mounting outrage over her handling of a four-bedroom property near the Olympic Park in east London.
From March 2024, Ali rented the house to four tenants for £3,300 a month. But in November, they were informed by email that the lease would not be renewed and were given four months to leave. Weeks after they moved out, the same property reappeared on the rental market at nearly £4,000 per month, according to an investigation by the i newspaper.
Ali’s actions have been condemned across the political spectrum, with critics accusing her of “staggering hypocrisy” for engaging in conduct that her department’s forthcoming Renters’ Rights Bill is designed to prevent.
Under Labour’s proposed reforms, landlords would be banned from re-letting a property for six months after terminating a tenancy, and so-called “no-fault evictions” would be abolished. Ali herself had previously described such evictions as “one of the leading causes of homelessness”.
In a resignation statement, Ali insisted she had “followed all relevant legal requirements” and that she “took my responsibilities and duties seriously”. Nonetheless, she conceded: “It is clear that continuing in my role will be a distraction from the ambitious work of the government.”
Her departure deepens a growing perception of double standards within Starmer’s ministerial ranks. It follows the resignation of energy minister Anna Dixon earlier this summer after she was found to have misrepresented a directorship in an offshore renewables firm. Before that, immigration minister Imran Hussain came under fire for attending a private lobbying dinner with law firm partners just weeks before a government legal services contract was awarded.
The latest controversy has struck at the heart of Labour’s housing reform agenda. One of Ali’s former tenants, Laura Jackson, a restaurant owner, reportedly said: “Trying to get that much money from renters is extortion. It’s deeply disappointing to see someone in her position behave like this.”
A Liberal Democrat spokesperson said: “Rushanara Ali fundamentally misunderstood her role. Her job was to tackle homelessness, not to increase it. At a time of widespread political disillusionment, her actions were staggeringly irresponsible and only added insult to injury after years of delay for renters’ rights reform under the Conservatives.”
Kevin Hollinrake, chairman of the Conservative Party, said: “She’s spoken out about exploiting tenants, about providing more protections to tenants. You can’t say those things, then do the opposite in practice, as a landlord.”
No 10 had offered no public comment on the situation prior to Ali’s resignation. However, Chancellor Rachel Reeves defended her colleague, stating that Ali had acted “within the law”.
In her resignation letter to the Prime Minister, Ali emphasised her contributions over the past year, including efforts to repeal the Vagrancy Act and improve protections for public officials facing harassment. “I am proud to have contributed to the change this government has delivered,” she wrote.
Starmer, in his reply, thanked Ali for her “diligent work” and said her efforts would “leave a lasting legacy”.
He added: “I know you will continue to support the government from the back benches and represent the best interests of your constituents in Bethnal Green & Stepney.”
Privately, Labour MPs have expressed frustration over the timing and avoidability of the scandal.
One senior backbencher said “We’ve had a string of self-inflicted wounds from ministers who should know better. These things sap public trust, even when they’re technically within the law.”
Charities have called on Labour to urgently restore credibility on housing, and critics have also questioned whether MPs with substantial property interests should hold portfolios that directly affect housing and tenant law. While Ali properly declared her rental income in the Commons register of interests, opponents argue the optics were always politically risky.
The Labour leadership is now expected to accelerate the passage of the Renters’ Rights Bill in an effort to salvage its agenda and demonstrate that it remains on the side of tenants.
But the broader damage may already be done. As one government aide put it: “When we came in, we promised integrity and higher standards. People expect us to walk the talk—not just tick legal boxes.”
A replacement for Ali is expected to be appointed within days, though sources suggest that Starmer may opt for a lower-profile figure to avoid inviting further scrutiny.
Whether that will be enough to calm public unease remains to be seen.
Main Image: – https://members-api.parliament.uk/api/Members/4138/Portrait?cropType=ThreeFour Gallery: https://members.parliament.uk/member/4138/portrait
