LONDON, May 31 (Reuters) – British Prime Minister David Cameron’s new coalition government is committed to cutting a gaping budget deficit despite the resignation of a finance minister over his expenses claims, officials said on Monday.
They said the loss of Chief Treasury Secretary David Laws, number two at the finance ministry, would have no impact on the Conservative-led government’s plans to push through tough austerity measures in an emergency budget on June 22.
“I think in the first three weeks the government has now clearly demonstrated its commitment to getting on with tackling the deficit and debt,” Justice Secretary Ken Clarke told the BBC in an interview.
Clarke, a former Conservative finance minister, said it was obvious around the cabinet table that there was no division of opinion between Cameron’s Conservatives and their Liberal Democrat partners.
At the weekend Cameron appointed Danny Alexander, a former close aide to Liberal Democrat leader Nick Clegg, to replace Laws as number two to Conservative Chancellor of the Exchequer George Osborne.
“Danny has all the intelligence, ability, potential, required for the task,” said Clarke.
The Financial Times quoted an unnamed aide to Cameron as saying: “I can safely say the strategy and direction (of the coalition government) will not change at all.”
The coalition is drawing up cuts to rein in Britain’s record peacetime budget deficit, which exceeds 11 percent of gross domestic product.
Laws resigned on Saturday within 24 hours of a newspaper reporting the Liberal Democrat politician had claimed tens of thousands of pounds in parliamentary expenses for rent he passed on to his long-term male partner.
The loss of Laws occurred less than three weeks after the formation of Britain’s first coalition for 65 years. The coalition took power after a May 6 election ousted the Labour Party from 13 years in office.
Laws, an economist with a background in London’s financial services industry, was a key player in striking the coalition accord and appeared to have struck up an effective relationship with Osborne.
He had won the respect of his Conservative colleagues and his willingness to make cuts had reassured markets worried about a deficit forecast to top 160 billion pounds this year.
Alexander will now take over the role of seeing through a series of tough austerity measures needed to save Britain billions of pounds.
The loss of Laws is an unwelcome distraction for a new government eager to focus on the economic challenges and to start a new chapter after a scandal over parliamentary expenses that dogged the final months of the previous Labour government.
Cameron had promised a new, open administration that abides by strict rules of conduct.
Alexander, who is 38, was little known outside parliament before the election. [ID:nLDE64S0IE]
He rose to prominence during the election campaign as Clegg’s chief of staff and as a negotiator in the days of talks that led to the formation of Britain’s first coalition government since World War Two.
The coalition agreement is a delicate balance of the two parties’ policy priorities. By appointing another Liberal Democrat to replace Laws, Cameron has been careful not to upset the party balance in the coalition cabinet.
(Editing by Ralph Gowling)