Expenses scandal

Justice Minister Shahid Malik steps down over expenses

Junior Justice Minister Shahid Malik stepped down on Friday pending an investigation of allegations that he paid below-market rent for a house, the highest profile casualty so far of a growing expenses scandal.

Prime Minister Gordon Brown asked his independent adviser on ministerial interests, Philip Mawer, to investigate allegations about Malik that were made in the Daily Telegraph on Friday.

"Pending the outcome of that urgent investigation, Shahid Malik will be stepping down as minister," Brown's spokesman said. Malik said he had followed the rules on parliamentary expenses and the Telegraph allegations were inaccurate.

Malik is the latest politician to suffer from the fallout of a growing controversy over politicians' perks which has drawn a wave of voter anger that is hurting all the major parties, but particularly the Labour party, in power since 1997.

An MP was suspended from the Labour party and a senior adviser to Conservative leader David Cameron stepped down on Thursday over their expense claims.

An opinion poll published on Friday showed Labour slumping to an all-time low as the government bore the brunt of voter anger over the expenses scandal.

The YouGov survey for the Sun found 22 percent support for Labour, with the Conservatives on 41 percent.

That would give the Conservatives a landslide victory at the parliamentary election Brown must call within the next year.

The controversy has overshadowed the campaign for June 4 local and European elections, when analysts expect many voters either to stay away or vote for fringe parties, such as the far-right British National Party.

Swimming Pools, Chandelier

The Daily Telegraph said Malik claimed more than 23,000 pounds from the taxpayer last year for his London house while securing a three-bedroom house in his Yorkshire constituency at a discounted rent of less than 100 pounds a week.

Mawer will investigate whether Malik broke the ministerial code by failing to declare he was paying a below-market rent.

The newspaper has embarrassed both major parties with daily revelations about how many lawmakers have run up tens of thousands of pounds of questionable expenses -- with some claiming for cleaning swimming pools and moats, installing a chandelier or lightbulbs and buying manure for the garden.

Voters are furious at what they see as MPs milking the system at a time when the deepest recession since World War Two is throwing hundreds of thousands out of work.

Britain's 646 MPs receive an annual salary of almost 65,000 pounds, but also claimed 93 million pounds in allowances last year, an average of 144,000 pounds each.

A studio audience loudly heckled Housing Minister Margaret Beckett when she tried to explain the expenses system during a televised BBC political debate on Thursday.

While the affair is a hot topic in the corridors of power, legislative work is going on as usual, politicians say.

"Members of parliament are hard at work doing what they should be doing. But informally there's a lot of discussion about all this and the way it's damaging the reputation of parliament and democracy," Mike Gapes, chairman of parliament's foreign affairs committee, told Reuters.

Howard Archer, chief UK economist at IHT Global Insight, a leading economic research group, said the affair had had little impact on investors' perceptions of Britain.

"I think they are far more focussed on the economic situation than the political situation," he told Reuters.

(Published by Reuters - May 15, 2009)

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