Hazel Blears and Jacqui Smith face the axe in Cabinet reshuffle

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Still smiling: Hazel Blears grinning outside her Salford home today despite rumours she faces demotion

Hazel Blears and Jacqui Smith face the axe in Cabinet reshuffle

Joe Murphy
11.05.09

Hazel Blears and Jacqui Smith were being tipped for demotion in next month's Cabinet reshuffle in a bloodletting to assuage public anger at the expenses scandal.

MPs close to Gordon Brown say the pair will be severely demoted.

There was speculation that Communities Secretary Ms Blears would resign rather than be moved.

Both women have been weakened by political scandals in recent weeks, though Downing Street has expressed "full confidence" in their abilities.

Ms Blears attacked her own side for "lamentable failings", which infuriated Mr Brown.

She came under fresh scrutiny this weekend when it emerged that she escaped £18,000 in capital gains tax when selling a London flat for a £45,000 profit.

Ms Blears sold the property in Kennington in August 2004. It had been designated as her "second home" under Commons rules, but the Salford MP told the taxman it was her main residence, so was exempt from capital gains tax, which is charged at 40 per cent for the sale of a second home.

Her spokesman said: "Hazel has complied with the rules of the House [of Commons] authorities."

She faced calls to quit last week when the Telegraph revealed she received expenses towards three properties in a single year.

Home Secretary Ms Smith was under fire for expenses, including charging porn movies watched by her husband.