Alistair Darling. Photo: Martin Argles/GuardianChancellor says he will pay back cash claimed for a service charge on London flat when he was living in grace-and-favour Downing Street residence
- guardian.co.uk, Monday 1 June 2009 12.22 BST
Alistair Darling today agreed to repay around £700 to the parliamentary authorities after being accused of claiming for two properties at the same time.
The move will intensify speculation that Darling will be replaced as chancellor in the cabinet reshuffle Gordon Brown is expected to hold shortly after Thursday's local and European elections.
Darling's move is particularly embarrassing because the chancellor issued a statement last night denying claiming on two properties at the same time and this morning, in an interview on BBC Radio 4's Today programme, Brown said there was "no foundation" to the allegations.
Later, in a television interview with Sky News, Brown said that Darling "had been" a good chancellor and refused to say whether he would be in his post in 10 days' time.
At the regular briefing for lobby journalists, the prime minister's spokesman said that Brown had full confidence the chancellor, but refused to be drawn on what could happen to Darling in the reshuffle.
Today the Daily Telegraph reports that in July 2007 Darling submitted a claim for £1,004 for a service charge on his south London flat for the subsequent six-month period, during which he moved into the grace-and-favour residence of the chancellor in Downing Street.
It also said that during the six months after July 2007 he started claiming expenses relating to his grace-and-favour apartment in Downing Street, meaning that there was an overlap period when he was apparently contravening parliamentary rules saying that MPs should only claim for one second property at any one time.
Although a spokesman for the chancellor said last night that the allegation that Darling had been double-claiming was "simply untrue", this morning the Treasury announced that Darling would repay around £700 to cover the costs of the service charge on his London flat from September 2007 – when he moved into Downing Street – until December.
In a statement Darling said: "The allegation I claimed for two houses at the same time is untrue.
"I became chancellor in June 2007. In September I moved from my London flat to live in Downing Street. I made no further claims on that flat.
"In October 2007 the flat was let and the tenant moved in. The service charge was paid in advance in six-monthly intervals. When I reclaimed the cost of the service charge on July 1, I was living in the flat.
"However, because the service charge covered the period beyond September until December, I will repay the service charge from September to December."
Downing Street would not say whether Brown knew that Darling was going to repay some money when he defended the chancellor in his interview on the Today programme.
But the prime minister's spokesman said Brown supported Darling's decision to act in the way he did.
"There clearly was this specific issue about the pre-payment of the service charge covering some of the period he was renting out the property and therefore the chancellor has decided that, for the avoidance of doubt, it's right to repay that money, and the prime minister agrees with that," the spokesman said.
"What the chancellor is doing by repaying this money is making it absolutely clear that he does not gain personally from this transaction and he wanted there to be absolutely no doubt about that.
Yesterday, before the latest allegations about Darling were published, Nick Clegg, the Liberal Democrat leader, said Darling ought to be sacked for profiting from his parliamentary expenses.
Clegg told BBC Radio 4's Broadcasting House yesterday morning: "He [Darling] needs to enjoy the public's trust when it comes to issues of financial probity, of money, of managing our nation's finances. And, given that very unique responsibility that he has, it's simply impossible for him to continue in that role when such very major question marks are being raised about his financial affairs."
Vincent Cable, the Liberal Democrats' Treasury spokesman, also called for Darling's dismissal, accusing him of having been "caught with his fingers in the till".
Darling was reported by the Daily Telegraph last week to be among ministers who had paid accountants thousands of pounds of public money to complete personal tax returns, with his bills totalling £1,400 over two years. Ministers insisted the accountancy bills were in relation to their work as MPs and that the claims were allowable as parliamentary expenses.
It was also reported that Darling "flipped" the location of his second home four times in four years, allowing him to claim thousands of pounds towards the cost of his Edinburgh home and a London flat.
A spokeswoman for the chancellor said the Lib Dem criticisms were "untrue".
She said: "As Mr Darling consistently explained, he paid for personal tax advice himself. The accountant's fees claimed were for preparing his office accounts to ensure the correct amount of tax was paid. That's an allowable claim. The accountant's fees were fully declared for tax purposes and he paid tax on the benefit.
"The allegation that he changed addresses for personal gain is untrue. He changed the designation of his second home when his circumstances changed in accordance with the rules. He also pays tax on the benefit of living in Downing Street, and pays the council tax there."
Speaking at the Guardian Hay festival yesterday, Cable said he did not want to be chancellor under a Labour government. Asked if he would step in if Brown invited him to be an interim chancellor until the general election, Cable said: "No, I'm not interested in being co-opted. I'm part of a team, not acting as an individual."
He refused to say whether he thought other senior Labour figures, including Hazel Blears, Geoff Hoon and Jack Straw, ought to stand down after being accused of financial irregularities. "That's not my patch," he said.
"I shadow Alistair Darling; that's why I'm focusing on him. He has no moral authority to run the economy in this time of crisis when he's been accused of flipping homes, accepting a grace-and-favour apartment and charging the taxpayer for accounting bills."
The calls for Darling to go came amid growing speculation over the future of the chancellor, with reports at the weekend that the prime minister wants to replace him with the schools secretary, Ed Balls.
A reshuffle is expected after the local and European election results at the end of this week, or early next week. Sources inside Downing Street have confirmed that Balls is in the running for Darling's job.
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