Rachel Reeves appeared to be on a collision course with Keir Starmer today as she refused to rule out forcing landlords to freeze rents for a year.

The Chancellor told MPs she would use 'every lever we have' to help people with the cost of living, amid claims she was preparing a left-leaning sop to voters ahead of local elections expected to be disastrous for Labour.

Directly asked about reports she was looking at a 12-month freeze she refused to rule it out, saying: 'We have already introduced the Renters Rights Act, and whilst for people in who have mortgages, they have seen cuts in their mortgage rates since we came into office. 

'We will do everything we can to also help people in the private rented sector, because we must ensure that this conflict in the Middle East does not result in our constituents being poorer.'

The proposals would form part of a significant cost-of-living package set to be launched in the next few weeks to combat the effects of the war in the Middle East and the closure of the Strait of Hormuz.

But at the same time as she was speaking in the Commons, No10 told reporters there were 'no plans to implement' a freeze.

They also backed up Education Secretary Bridget Phillipson, who told Times Radio this morning: 'That is not the approach we'll be taking.'

Sir James Cleverly, the shadow housing secretary, said: 'Rent controls would be completely disastrous for tenants. 

'Even Labour's housing minister has acknowledged that. But with the party struggling, Rachel Reeves is reaching for failed socialist policies.

'Labour's red tape and higher taxes have already forced up rents and reduced choice for renters. A rent freeze would just drive more landlords from the market and lead to further big hikes in rents for new tenants, as seen in Scotland.

'Instead of rent freezes, Labour should start delivering the new homes they promised, and follow the Conservatives' lead by scrapping stamp duty to get the market moving and release more homes to rent and buy.'

The National Residential Landlords Association warned the move could backfire and push up rents for new homes.

Chief executive Ben Beadle said: 'Any hope of growing the market– or even retaining the homes that millions of families rely on – would be lost.

'There is no evidence to suggest that it would make rents more affordable. In fact, the impact on supply would inevitably drive new rents still higher. Such a move would run completely counter to good economic sense and the Government's own prior decision to rule out such measures.'

Ms Reeves resisted introducing rent control in Labour's Renters' Rights Act, which will come into force on Friday, and previously said she was not in favour of a 'blanket approach' to rent control.

But ministers are worried about the impact of the war and the Treasury is said to be considering exceptional measures to limit the impact on household budgets and mortgages, according to the Guardian.

Discussions are thought to be at an early stage with Ms Reeves pondering a number of interventions in the rental markets to reduce housing costs.

Ms Phillipson today ruled out a rent freeze, telling Times Radio: 'That isn't something that we are actively considering. 

'Just to be completely clear, that is not the approach we'll be taking. 

'But as you'd expect, the chancellor is concerned, as we all are, about the impact of the conflict in the Middle East on family finances and is looking at what more might be required to help families to get through this, but not that.'

Later, the PM's spokesman told reporters: 'We have no plans to implement this, our focus remains on cutting bills and backing renters alongside lower energy prices from this Friday. 

'The RRA comes into force which is the biggest change to renting in a generation, it will give 11 million renters greater security, ending no fault evictions while also tackling affordability by stopping bidding wars, limiting how often rents can be increased and making it easier for tenants to challenge unfair hikes.'

Labour is expecting heavy losses in May's local elections and the Government is looking for quick plans to ease the cost-of-living.

Rent controls have been criticised for worsening the housing shortage by forcing landlords out of the private rented market.

Some claim it discourages developers from building more properties and worsens the shortage in the long run.

Robert Colvile, head of the Centre for Policy Studies, described Ms Reeves' plans as 'a mind-boggling scale of intervention in the private market'.

He said: 'If the Government wants to bring rents down it should build an awful lot more houses.'

But George Bangham, head of social policy at the New Economics Foundation thinktank, said: 'We have an affordability crisis in the private rented sector, which dates back to before the pandemic. Other countries in western Europe already do this, and England used to from 1915 until 1989.

'We know rent controls can fix an affordability crisis if done carefully, we just need to be willing to impose them.'

A rental freeze, which would last a year, is said to be the Chancellor's favoured option to keep rent prices down.

New build properties are thought to be excluded from the freeze so as to not limit work on new homes.

Labour has promised to build 1.5million homes by 2029 although they appear to be lagging behind that target by a third.

The Chancellor is considering a package of support to help household energy bills which could be introduced this summer.

She is also under pressure to cancel a planned rise in fuel duty as petrol costs surge.

Ms Reeves last month claimed that any bailout for Brits being battered by the Middle East crisis will be targeted rather than universal. 

In a Commons statement, Ms Reeves said the 2022 support under the Tories was a 'mistake' because much of the £40billion went to the 'wealthy'.

She said she would focus funds on 'those that need it most'. 

Ms Reeves also outlined plans to prevent price 'gouging' during what she admitted would be a 'significant' cost-of-living storm. 

The latest proposal comes as the High Street suffered its worst month for more than 40 years as the Iran war hits households already reeling from higher taxes under Labour. 

The Confederation of British Industry (CBI) said retail sales volumes have fallen by the most on record. 

Some 77 per cent of firms surveyed reported that sales volumes were lower this month than in April last year while just 9 per cent saw a rise. 

The balance of minus 68 was the lowest since 1983. The sales slump came even as retailers slashed prices – sparking warnings that shoppers are yet to feel the 'full force' of the war. 

The closure of the Strait of Hormuz has sent petrol and diesel prices soaring and threatens to push up energy and food bills. Employers are also grappling with hikes in the minimum wage and business rates bills on top of last year's national insurance tax raid.

Tory business spokesman Andrew Griffith said: 'These figures show the true scale of the April Armageddon caused by the combination of the Chancellor's policies and global uncertainty. Yet rather than act, the Government keeps piling on more tax and red tape.'

But a separate British Retail Consortium report found shop prices rose less than feared – up 1 per cent on last April, but down from a 1.2 per cent rise in March, with food price inflation dipping from 3.4 per cent to 3.1 per cent.

Labour hopes a the rent freeze could ease pressure on Keir Starmer with the party expected to suffer significant losses next month.

Sir Keir is mounting a rearguard action tonight ahead of a crunch House of Commons vote over the Peter Mandelson scandal. 

The embattled Prime Minister has been rocked after Lindsay Hoyle, the Commons Speaker, granted a debate on whether he should face a parliamentary probe. 

The showdown – to be held tomorrow – means Labour MPs will be forced to decide if they will line up behind their floundering leader.

A formal inquiry by the Commons' privileges committee will be launched if Tuesday's motion is passed.

Labour whips are said to be ringing round backbench MPs to plead with them to block an investigation into whether the PM misled Parliament over the appointment of Lord Mandelson as Britain's ambassador to the US.

An increasingly desperate Sir Keir - who addressed the Parliamentary Labour Party in person on Monday evening - also drafted in ex-PM Gordon Brown to implore MPs to back him.

The former premier called on Labour's ranks to 'put the needs of the country first' amid the Middle East crisis and Ukraine war, despite the 'parliamentary games at Westminster'.

Sir Keir himself lashed out at tomorrow's debate as a 'stunt' and signalled he would whip Labour MPs to back him. He also revealed his wife Victoria is urging him to fight on and remain in Downing Street, despite growing calls for him to quit.

A HM Treasury spokesperson said: 'We do not comment on speculation.'