David Laws: A Laws Unto Himself

THE house, built of honey-coloured bricks, is in a quiet street in south London, shaded by trees and adjacent to a common of neatly manicured grass.

One morning last week, as London cooled down after the sizzle of a heatwave, the telephoto lens of a press photographer was trained on the white-washed front door.

As a smartly-dressed, middle-aged man – impeccably-attired in a pale blue suit, crisp white shirt and a purple tie, tightly knotted – strode out the front door, the photographer clicked the shutter and the first political scandal of the new coalition government began to unspool.

The man was David Laws, the Lib Dem MP who, was Chief Secretary to the Treasury, is responsible for 6 billion of public sector cuts, the first stitch in a long repair job to the burst and broken public purse. The house belonged to James Lundie, a lobbyist, his former flat-mate and secret lover for the past nine years. And the camera? It was in the service of the Daily Telegraph, which yesterday revealed that Laws had paid more than 40,000 in rent to Lundie, which could be against parliamentary rules governing MPs' second home expenses.

Last night, Laws, 44, despite apologising for his mistake and immediately vowing to pay back tens of thousands of pounds, was forced to resign from the job he said he had waited for all his career. The premature end to a starring role at the very forefront of British politics came when he realised that his position was no longer tenable and risked serious damage to the new Clegg-Cameron coalition.

It was Sir Alistair Graham, former chairman of the committee on standards in public life, who set the ball rolling yesterday morning, when most senior politicians from all parties ducked for cover. Graham was unequivocal in his view that the minister – tipped on Friday by one political blogger as a future prime minister – was in serious breach of the rules. He said it was "staggering" that this information had only just come to light. "I'm genuinely shocked that somebody who is now Chief Secretary to the Treasury is faced with disclosure of this nature, where he clearly hasn't told the full truth to the people dealing with expenses in the House of Commons."

Yet as friends continued to flock to Laws' defence last night, they argued that these were not the actions of a man anxious to dip his snout in the public trough, but of a deeply private individual anxious to maintain a veil of secrecy over his sexuality and love-life.

In his resignation statement, Laws made clear that it was the damage to those he "loved" that was one of his main reasons for stepping down. "Most importantly, I have an overriding responsibility to those I love most, and who I feel I have exposed to scrutiny in this way," he said. "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. It is time to redress the balance."

Commentators rushed last night to make it clear that sexuality is not an issue in the House of Commons. All the main parties have, or have had, openly gay front benchers. Yet Laws went to great lengths to conceal his relationship with Lundie, even from his own family.

Last week started well for Chancellor George Osborne's right-hand man, who made a barnstorming speech on public sector cutbacks that was well-received by his Conservative colleagues. He had been expected to represent the government on Question Time on Thursday night, but pulled out, ostensibly because the opposition was represented by Alastair Campbell, dismissed as an "unelected official". During filming, Campbell held up a framed photograph of Laws and said he had "bottled it." Yet it appears the minister had other more pressing concerns than a lame snap from Labour's retired "attack dog".

Earlier that day, during an interview with the Times, he had been asked what his family situation was and he replied: "single". Asked whether he had a partner he said: "No". It was an answer he would have cause to regret. The next day he was contacted by the Daily Telegraph with questions about his living arrangements and, in particular, thousands of pounds of rent he had paid over a number of years to his covert boyfriend.

It was in 1999 that Laws, then policy director of the Lib Dems, began renting a room in Lundie's two-bedroom flat in Kennington. Over the next two years a bond grew between the pair and, in 2001, they began a relationship which they kept entirely confidential. In June of that year, Laws won Paddy Ashdown's former seat in Yeovil.

Although independently wealthy – he became a millionaire by the age of 28 while vice-president of JP Morgan – Laws began to claim rent, as was his entitlement, for the room in the London flat, at a rate of 700-780 per month. His main home was in his constituency in Somerset.

The first obstacle to the arrangement appeared in 2006, when the Green Book parliamentary rules were changed and MPs were banned from "leasing accommodation from … a partner." A meticulous character, who when reading documents annotates them with a tick, if he approves, an "x" if he disagrees and a large "?" if he considers something "mad", Laws studied the rules and, mentally it appears, put a large tick beside his current arrangement.

As he later explained in his statement on Friday: "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."

The system also had the benefit of camouflaging his sexuality, allowing him, if he wished, to say "of course I live with a man, he's my landlord".

The relationship deepened the following year, when Lundie sold his flat for a 193,000 profit and bought a new home in Kennington for 510,000. He was able to secure the property because Laws extended the mortgage on his constituency home and passed the money on to his partner. Laws then began to claim 920 a month rent for a "second bedroom" in the new property.

During the expenses controversy of 2009, Laws adopted a righteous tone. In a press release he declared that because he rented accommodation in London he had made "no gain from buying a property with help from the taxpayer".

However, by that point, his boyfriend had already made substantial capital gains on properties that the taxpayer had helped to fund. Laws also decided not to seek guidance on whether the arrangement was permissible at the time of the inquiry into parliamentary expenses by Sir Thomas Legg.

To do so would have meant admitting to a sexual relationship with Lundie, which he did not wish to do. As a result, Legg, unaware of the full facts, reported in his findings that "David Laws has no issues".

In September last year, Laws moved out and began renting a separate flat, although it is not known if this was as a result of a split in the relationship, or concerns about the ethics of his claims.

Last week, when made aware of the Daily Telegraph's plans, Laws rushed out a statement in which he offered to pay back the money and refer himself to John Lyon, the Parliamentary Commissioner, who will decide if rules have been broken, and stated that his actions were to protect his privacy and not for personal profit. He said: "I realise that I have made a serious mistake, because of my failure to be honest about my sexuality. Today has been the most difficult day of my life and I apologise to James, and to all my family, friends and constituents who I have not been honest with about who I am over all the years of my life."

There are few who doubt that this has been a serious blow to the new coalition's credibility. For both Cameron and Clegg it is embarrassing that the public face of the government's cutbacks is now known for having claimed tens of thousands of pounds in potentially improper circumstances.

As one Labour MP said last night shortly before Laws made his emotionally charged resignation statement: "It would be tremendously damaging to lose him, but they know he is tremendously weakened. His moral authority is shot."