Darling vulnerable as reshuffle rumours grow

Published 02 June 2009

Chancellor set to be replaced as Brown refuses to offer full support

Alistair Darling’s position appeared increasingly vulnerable today after he was forced to pay back part of his expenses and Gordon Brown refused to confirm that the Chancellor would remain in his job.

Yesterday Darling agreed to pay back £668 of expenses claimed on a service charge for his London flat. He had been accused of claiming for his grace-and-favour residence, 11 Downing Street, at the same time and his decision to repay the sum was seen by many as a tacit admission of guilt.

Brown’s failure to support Darling intensified speculation that he is planning to appoint key ally Ed Balls as Chancellor in a forthcoming cabinet reshuffle. Ed Miliband, the Climate Change Secretary, and David Miliband, the Foreign Secretary, were also mentioned yesterday as possible successors.

Asked yesterday if he expected to remain Chancellor, Darling replied: “It is up to the Prime Minister. He has got to decide the team that he wants to be in the next government . . . Gordon and I work very, very closely together but at the end of the day it is his call.”

Darling conceded that he made a mistake when he submitted a £1,004.30 claim for the service charge, covering the months from June-December 2007, before leaving the flat in September. He initially denied that there had been any wrongdoing.

But he continued to deny the more serious allegation that he claimed for two properties at the same time. “What I did, when I was living in my flat in Kennington, is to reclaim the cost of the service charge which is payable over a six-month period,” he said. “I left that flat in September 2007. “I don't want to be seen to be getting any gain from that so I am going to repay the balance of that [£668]. That is the right thing to do. I am sorry about that. I unreservedly apologise.”

David Cameron, the Conservative leader, urged Brown to "back him or sack him". Speaking this morning on Sky News, he added: "we need a Chancellor of the Exchequer who is in charge of the Exchequer, not hanging on a string."

The Liberal Democrat Treasury spokesman, Vince Cable, renewed his call for Darling to resign and said he had lost his “moral authority”.

He said: “I think that in a time of economic, as well as political crisis, it is absolutely right that the person who is in charge of the national finances should be someone who is regarded with moral authority, not just operating within technical rules, by the financial community and the country at large. I don’t think the Chancellor is in that position.”

Gordon Brown is hoping that a cabinet reshuffle, possibly his final one as Prime Minister, will boost Labour’s flagging poll ratings and distract from what are likely to be damaging local and European elections on Thursday.

A poll for Ipsos-Mori today gave the Conservatives a 22 point lead over Labour, with Labour tied with the Liberal Democrats on just 18 per cent.