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U.K. Coalition’s Treasury Chief Quits Over Expenses

May 30 (Bloomberg) -- U.K. Chief Secretary to the Treasury David Laws resigned from his position after a newspaper reported he’d claimed more than 40,000 pounds ($58,000) in expenses for renting a room from his long-term partner.

“I can’t escape the conclusion that what I did was in some way wrong,” Laws said in a televised statement from the Treasury in London late yesterday.

Laws is a Liberal Democrat and has been the No. 2 person in the department under Conservative Chancellor of the Exchequer George Osborne in the coalition government formed after the nation’s May 6 general election. Liberal Democrat Danny Alexander will succeed Laws in the Treasury post, Prime Minister David Cameron’s office said in an e-mailed statement.

In a statement, Laws, 44, apologized for claiming the expenses to share a home with his male partner, and said that he will repay the money.

“I’ve been involved in a relationship with James Lundie since around 2001, about two years after first moving in with him,” Laws said in a statement issued through the Press Association after the Daily Telegraph reported that he used public money to pay rent to Lundie. “Our relationship has been unknown to both family and friends throughout that time.”

Budget Deficit

Laws, who was helping lead government efforts to curb the budget deficit, said “at no point” did he consider himself to be in breach of parliamentary rules that define a partner as “one of a couple” who live together and treat each other as spouses.

The resignation comes days after the coalition government announced a plan to cut 6 billion pounds of spending to curb the budget deficit, which swelled to 11.1 percent of the country’s gross domestic product in the fiscal year ended in March. Chancellor of the Exchequer George Osborne promised deeper cuts later this year and Laws told reporters on May 24 “the years of public sector plenty are over.”

Alexander has been Scottish Secretary in the coalition government that took power after the nation’s May 6 general election and was chief of staff to Liberal Democrat leader and deputy Prime Minister Nick Clegg.

Cameron described Laws as a “good and honorable man” in a letter accepting Laws’ resignation and said he hopes Laws will serve in government again. “It is absolutely clear that you have a huge amount to offer our country,” Cameron wrote in a letter released by his office.

Business Secretary Vince Cable today said Laws’ resignation has not damaged the coalition government and said there is “enormous good will” in the country in support of the Conservative-Liberal Democrat agreement.

“It hasn’t damaged the coalition government,” Cable said in an interview with Sky News. “The coalition government will continue, we’ve got a good program, good people and David has been replaced.”

To contact the reporter on this story: Dick Schumacher in London at dschumacher@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net

To contact the editor responsible for this story: Dick Schumacher at dschumacher@bloomberg.net; Mike Millard in Singapore at mmillard2@bloomberg.net

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