Laws Exit 'Won't Halt the Cuts'
Byline: Tim Shipman and Karl West
DOWNING Street launched a frantic damage limitation exercise yesterday to reassure voters and the markets that the resignation of David Laws will not derail government plans to tackle the economic crisis.
Senior officials stressed that public spending cuts will go ahead despite the resignation of the Treasury axeman, caught funnelling at least [pounds sterling]40,000 of public money to his secret gay lover.
Cabinet heavyweight Ken Clarke was wheeled out to calm fears that Mr Laws's replacement, Scot Danny Alexander, who has no experience in the City, is up to the job. Financiers expressed fears yesterday that the government team has been damagingly weakened by the arrival of the 38-year-old former press officer as the man who will bring in the cuts.
His position was further undermined by claims that Lib Dem Energy Secretary Chris Huhne was 'sounded out' for the job and that Business Secretary Vince Cable could have taken the post in a 'dual role'. Both men declined the offer.
Mr Laws stood down on Saturday night, a day after it emerged that he paid rent to his partner James Lundie in breach of Commons expenses rules.
He claimed he had concealed the arrangement because he did not wish to admit he was gay. He also referred himself to the Parliamentary sleaze watchdog.
While David Cameron said Mr Laws could return to the Government, friends said he might stand down as an MP and leave public life. It was revealed yesterday that he could have breached the Ministerial Code of Conduct by failing to tell senior civil servants that Mr Lundie is a corporate lobbyist.
Downing Street officials claimed that Mr Laws's downfall, far from weakening the coalition, had proved to be a 'bonding moment' between Tory and Lib Dem staff in No 10. But they were conscious of the need to shore up support for his replacement before markets reopen tomorrow. Unlike Mr Laws or Mr Huhne, who both made fortunes in the City, or economist Mr Cable, Mr Alexander has no experience of finance - and just five years ago was a press officer for the Cairngorms National Park.
Justin Urquhart Stewart, director of Seven Investment Management, warned that Mr Alexander's elevation from Scottish Secretary will not gain the confidence of City investors. 'He is an unknown to us,' he said. …