The Cabinet minister charged with rescuing the Government’s finances has used taxpayers’ money to pay more than £40,000 to his long-term partner, The Daily Telegraph can disclose.
David Laws, the Chief Secretary to the Treasury, claimed up to £950 a month for eight years to rent rooms in two properties owned by his partner. The claims could be against parliamentary rules governing MPs’ second home expenses.
On Friday night, Mr Laws apologised and announced that he would “immediately” pay back tens of thousands of pounds claimed for rent and other housing costs between 2006 and 2009. He also referred himself to the Parliamentary Standards Commissioner.
Mr Laws said: “I regret this situation deeply, accept that I should not have claimed my expenses in this way and apologise fully.”
His controversial claims were not uncovered by an official inquiry into MPs’ expenses last year because Mr Laws did not admit that his landlord was also his long-standing lover.
The disclosure is the first big setback for the Coalition. Mr Laws, a Liberal Democrat, has the task of implementing public-sector cuts worth more than £6 billion.
He has already drawn up tough new rules limiting the pay and perks of hundreds of thousands of public sector workers. However, his hard-line approach could be undermined by the disclosure of his own controversial use of public money.
The Daily Telegraph’s Expenses Files show that between 2004 and 2007, Mr Laws claimed between £700 and £950 a month to sub-let a room in a flat in Kennington, south London. This flat was owned by the MP’s partner who was also registered as living at the property. The partner sold the flat for a profit of £193,000 in 2007.
In 2007, Mr Laws’s partner then bought another house nearby for £510,000. The MP then began claiming to rent the “second bedroom” in this property. His claims increased to £920 a month. The partner also lived at the property. Mr Laws’s main home is in his Yeovil constituency. The arrangement continued until September 2009, when parliamentary records show that Mr Laws switched his designated second home and began renting another flat at taxpayers’ expense. His partner remained at the Kennington house.
Mr Laws’s partner is James Lundie, who is thought to work for a lobbying firm. The Daily Telegraph was not intending to disclose Mr Laws’s sexuality, but in a statement issued in response to questions from this newspaper, the minister chose to disclose this fact.
“I’ve been involved in a relationship with James Lundie since around 2001 — about two years after first moving in with him. Our relationship has been unknown to both family and friends throughout that time,” it read.
“James and I are intensely private people. We made the decision to keep our relationship private and believed that was our right. Clearly that cannot now remain the case.
“My motivation throughout has not been to maximise profit but to simply protect our privacy and my wish not to reveal my sexuality.”
John Lyon, the Parliamentary Commissioner, will now have to scrutinise whether any rules have been broken.
Since 2006, parliamentary rules have banned MPs from “leasing accommodation from… a partner”.
Mr Laws said: “I claimed back the costs of sharing a home in Kennington with James from 2001 to June 2007. In June 2007, James bought a new home in London and I continued to claim back my share of the costs. I extended the mortgage on my Somerset property, for which I do not claim any allowances or expenses, to help James purchase the new property.
“In 2006 the Green Book rules were changed to prohibit payments to partners. At no point did I consider myself to be in breach of the rules which in 2009 defined partner as ‘one of a couple … who although not married to each-other or civil partners are living together and treat each-other as spouses’.
“Although we were living together we did not treat each other as spouses. For example we do not share bank accounts and indeed have separate social lives. However, I now accept that this was open to interpretation and will immediately pay back the costs of the rent and other housing costs I claimed from the time the rules changed until August 2009.”
Friends of Mr Laws said that the decision to disclose his sexuality was an “immense decision”.
“Anyone who knows David, knows he is someone of great integrity,” one friend said. “He has been very private about his life. But he absolutely wants the public to understand the reasons for this arrangement, it has not been about making a profit. He has decided he wants to be absolutely clear. His integrity is obviously very important.”
Mr Laws’s claims for a series of other expenses are also now expected to come under scrutiny. Between 2004 and 2008, he submitted regular claims, in rounded figures, for service and maintenance, repairs, utilities and other items.
He typically claimed between £50 and £150 a month for utilities and £100 to £200 for maintenance. Receipts were not provided to back up the claims.
However, in April 2008, the rules were changed and MPs had to provide receipts for any claims above £25. Mr Laws’s expense claims dropped sharply. For example, he claimed only £37 a month for utilities.
Mr Laws, a former investment banker who is said to be independently wealthy, has been an MP since 2001 and represents Lord Ashdown’s former constituency.