Secretary David Laws resigns after paying £40,000 of taxpayers’ money to gay lover

In a proper democracy, a government official resigns when accused of serious wrongdoing. Thus Mr David Laws, the Treasury Minister in charge of cutting public spending, quit after it was revealed that he had directed more than £40,000 of taxpayers’ money to his secret gay lover. Although Mr Cameron had privately made clear that his job was safe in the short term, millionaire Mr Laws was so devastated by the combined impact of disclosures about his sexuality and his financial probity that he felt he had no option but to go.


Announcing his decision to stand down from the Cabinet, the Liberal Democrat MP said: ‘I do not see how I can carry out my crucial work on the Budget and spending review while I have to deal with the private and public implications of recent revelations.’


David Laws

David Laws announcing his resignation at the Treasury this evening after it was revealed he had claimed expenses for rent paid to his gay lover

His decision after 17 days in the job means Mr Laws had the shortest Cabinet career in modern political history. And the resignation came despite frantic last-minute efforts by Lib Dem leader Nick Clegg to talk him out of it.

Downing Street immediately announced that Lib Dem Scottish Secretary Danny Alexander will take over as Chief Secretary to the Treasury, with fellow Lib Dem Michael Moore stepping in at the Scottish Office.


James Lundie: David Laws’ partner

In his resignation letter to Mr Cameron, Mr Laws wrote: ‘The last 24 hours have been very difficult and distressing for me, and I have been thinking carefully about what action I should take in the interests of the Government, my constituents and – most important of all – those whom I love.

‘I am grateful for the strong support which I have received from my friends, family, and from you, the Deputy Prime Minister and the Chancellor. 

This support has been incredibly important, but nonetheless, I have decided that it is right to tender my resignation as Chief Secretary to the Treasury.’

In response, Mr Cameron told Mr Laws he was a ‘good and honourable man’.

He wrote: ‘The last 24 hours must have been extraordinarily difficult and painful for you.

‘I am sure that, throughout, you have been motivated by wanting to protect your privacy rather than anything else. Your decision to resign from the Government demonstrates the importance you attach to your integrity. I hope that, in time, you will be able to serve again as I think it is absolutely clear that you have a huge amount to offer our country.’

Chancellor George Osborne last night expressed his sadness at Mr Laws’s  resignation, saying it was ‘as if he had been put on Earth’ to do the job of Chief Secretary, while Mr Clegg said Mr Laws had made a ‘very painful decision’ to resign after his privacy had been ‘cruelly shattered’.

Mr Laws was left in turmoil after it was revealed that for eight years

from 2001 he had claimed up to £950 a month to rent a single room in properties owned by his partner, lobbyist James Lundie.

Since 2006, MPs have been banned from claiming back the cost of renting a property from partners.

Mr Laws initially attempted to explain the arrangement on the grounds that although he and Mr Lundie were living together, ‘we did not treat each other as spouses – for example, we do not share bank accounts and have separate social lives’. 

New Chief Secretary to the Treasury Danny Alexande

New Chief Secretary to the Treasury Danny Alexander

He admitted the couple had been in a serious relationship for nine years but said he had wanted to disguise the fact because his situation was ‘unknown to both family and friends’.

Mr Laws issued an immediate apology for his actions on Friday evening, promising to pay back the money and referring himself to John Lyon, the Parliamentary Standards Commissioner.

Mr Cameron then issued a short statement saying that he had been ‘made aware’ of the situation, and agreed with Mr Laws’s actions.

Overnight on Friday, friends of Mr Laws say his mood turned increasingly bleak. They said he had found it hard to deal with ‘coming out’ – it is thought he had never discussed his sexuality with his family – while facing claims he had abused his expenses.

Senior Tory sources insisted that Mr Cameron had not placed Mr Laws under any pressure to resign. ‘The feeling was that he should be allowed the time and space to reflect on his actions, and wait for Mr Lyon’s verdict if necessary,’ said one. ‘

But the view is that Laws has behaved in an extremely honourable fashion, and there will always be a way back for a man of his ability.’

His resignation is particularly damaging to the three-week-old coalition because Mr Laws had emerged as a star performer, an effective hatchet man who was masterminding Mr Cameron’s programme of public spending cuts.

Mr Lyon’s investigation will continue, with his remit including an examination of whether Mr Laws paid his lover a reasonable market rent. 

Typical rooms in the area of South London where the couple live could be rented for about £600 a month over the period in question, £350 less than the maximum Mr Laws paid.

Between 2001 and 2003, when the couple first started living together, Mr Lundie was deputy Press secretary to the then leader Charles Kennedy.

Mr Lundie left the party’s payroll in 2003 to join the lobbying firm Edelman, but did not tell his employers about his relationship with the Cabinet Minister until the story was about to break on Friday. 

Embarrassingly for the company, last month Mr Lundie posted gushing reports about the Lib Dems’ performance during the Election campaign without having declared an interest.

In September, in the wake of the expenses scandal, Mr Laws changed his arrangements by claiming for a separate flat not owned by Mr Lundie.

David Laws

Mr Laws’ position was not be made any easier by the righteous tone he struck on the issue of expenses

Shortly after the Treasury alerted No10 to the story about Mr Laws on Friday morning, Mr Cameron contacted Mr Clegg and the two men agreed on a joint plan of action. But Downing Street was alarmed yesterday when Mr Laws did not appear in front of the media, as had been agreed, to explain his actions.

Mr Clegg spent most of the day trying to persuade a ‘distraught’ Mr Laws not to quit, but as criticism mounted, it became increasingly clear it was a futile task.

A Treasury source said that Chancellor George Osborne had also spoken to Mr Laws several times. ‘He wanted David to have as much time as possible to reflect on his decision, and accepts his explanation that his actions had been motivated by privacy not profit.


Laws outside his Yeovil home 


Born in Surrey in 1965, he was educated at the Roman Catholic fee-paying school St George’s College in Weybridge.

After graduating from Cambridge with a double first in economics David Laws swooped into the city and a successful career as an investment banker.

He worked in fixed income first for JP Morgan and then Barclays de Zoete Wedd.

He left in 1994 to become economic adviser to the Liberal Democrats and just three year later was the party’s director of policy and research.

It was his second attempt at Parliament in 2001 that saw him succeed Paddy Ashdown as MP for Yeovil, winning with a majority of 3928.

Laws was re-elected in Yeovil constituency with an increased majority of 8562 at the General Election in 2005 – the highest share of the vote of any MP in Somerset, Dorset, Devon and Cornwall.

Following his re-election Laws was appointed as Shadow Secretary of State for Work and Pensions in 2005, putting pressure on the then Government to overhaul the tax credit system and reform the CSA. 

A Cabinet re-shuffle in 2007, after Gordon Brown took up the job as Prime Minister, saw Sir Menzies Campbell make Laws the Shadow Secretary for Children, Schools and Families. 

Laws was part of the team that negotiated the coalition deal between the Lib Dems and the Tories and the hard work paid off. 

He was one of only five Lib Dems to get a Cabinet position and is now Chief Secretary to the Treasury.  

‘Replacing him with Danny Alexander is all about putting the Liberal Democrats at the heart of the crucial decisions on cutting public spending.’

Tory Right-wingers, while sceptical about much of the coalition programme, had supported Mr Laws’s efforts to cut expenditure and maintained an uncharacteristic silence, although other Tories were less wary.

Before Mr Laws’s announcement, David Heathcoat-Amory, who lost his Wells seat after being ordered to repay nearly £30,000 of gardening and cleaning costs, said Mr Cameron would risk accusations of ‘hypocrisy’ if he did not sack Mr Laws. 

The former Tory Minister said: ‘I find it very surprising that the Prime Minister, who was very keen on disciplining his own party over expenses, is prepared to tolerate somebody from another party.’

Sir Alistair Graham, former Commissioner for Standards in Public Life,

had earlier said that Mr Laws should remove himself from office during the investigation.

‘I think all of us hoped that we would be in a new era of transparency and cleanliness as far as our politics are concerned. Now there’s a bit of a question mark,’ he said. ‘At a minimum [Mr Laws] should step aside while the Parliamentary Commissioner for Standards carries out his investigation.’

It is believed that the shortest Cabinet career was that of George Nugent Temple Grenville, who was Foreign Secretary for three days in 1783.

Until now, the politician with the shortest Cabinet career in recent times appears to be Lord Mandelson, who was forced to resign after barely six months in 1998. He later returned to the Cabinet but had to resign a second time.

David Mellor lasted just five months as Heritage Secretary in 1992 but had been Chief Secretary to the Treasury, the same post Mr Laws held, for two years before that.

One former Labour Minister said that Mr Laws’s departure had left ‘a massive hole’ in the Government, adding: ‘It’s a seven on the Richter scale. Laws was crucial to their joint approach on cutting public spending.’

Last night’s announcement was mired in confusion as the traditional exchange of letters between the Prime Minister and the departing Minister was delayed by two hours after political journalists had been told to expect the resignation. 

It was understood to have been delayed by frantic talks over how to replace Mr Laws and how to present the news.


‘I cannot now escape the conclusion that what I did was in some way wrong’

David Laws’s dignified resignation statement came at 7.50pm, after more than two hours of extraordinary behind-the-scenes confusion.

Political journalists had been warned shortly before 6pm that ‘the situation is about to change dramatically’ – Whitehall code for a ministerial departure – but the official announcement was delayed by chaos among Liberal Democrat media handlers as they tried to arrange for the BBC to record his calmly delivered words in a Treasury foyer.

The film was then made available to other media outlets – by which time the internet was already awash with rumours of his demise.

This is his statement:

The last two days have been the longest and certainly the toughest of my life and I am very grateful indeed for the strong support which I have received from friends, from family, from colleagues and from constituents. 

I am also extremely grateful to David Cameron, Nick Clegg and George Osborne for the very strong support which they have given me at this very difficult time. The support of others is, of course, incredibly important but ultimately I alone have the main responsibility for deciding how I react to recent events.

I have therefore today spoken to the Prime Minister and to the Deputy Prime Minister to inform them of my decision to stand down from my role as Chief Secretary with immediate effect.

This is my decision alone. I have reached this difficult decision for three reasons.
Firstly, I do not see how I can carry out my crucial work on the Budget and Spending Review while I have to deal with the private and public implications of recent revelations.

At this important time, the Chancellor needs, in my own view, a Chief Secretary who is not distracted by personal troubles.

I hardly need say how much I regret having to leave the Treasury and such vital work which I feel all my life has prepared me for.

Secondly, while my recent problems were caused by my desire to keep my sexuality secret, the public is entitled to expect politicians to act with a sense of responsibility for our actions. 

Responsibility cannot simply be for other people. I cannot now escape the conclusion that what I have done was in some way wrong even though I did not gain any financial benefit from keeping my relationship secret in the way that occurred.

Finally and most importantly, I have an overriding responsibility to those I love most and who I feel I have exposed to scrutiny in this way.

I have pursued a political career because of my sense of public duty but I have too often put this before the interests of those I love most and it is time to redress that balance.

I want to apologise to my constituents for falling below the standards which they are entitled to expect of me. The job of being a constituency MP is no less important to me than my Cabinet responsibilities.

I shall ensure I co-operate fully with the Parliamentary Standards Commissioner in the review which I have requested.

I intend to consider carefully over the period ahead how I can best serve the interests of my Yeovil constituency which I care about so passionately.

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