Mark Stuart: A fall from grace that will shake this coalition

Only last week, Laws was basking in a media glow, after his bravura performance in the House of Commons. As he dealt admirably with the heckling of Dennis Skinner, he must have thought that he was at the peak of his powers. How quickly politicians fall from grace these days.

It's clear that Laws was in technical breach of a House of Commons rule introduced in July 2006 preventing MPs from renting their second homes from partners or relatives.

But my own view about this affair is that the scale of the punishment should have fitted the relatively modest nature of the crime. After all, Laws had apologised, agreed to pay the money back, and had referred himself to the Parliamentary Standards Commissioner. "As far as I am concerned," as David Walliams used to say in the cruellest of Little Britain sketches, "That is the end of the matter."

Except it wasn't. In so many respects, David Laws was no ordinary member of this Tory-Lib Dem coalition. For a start, he was the most "Tory" of Liberal Democrat MPs, having co-edited a Right-wing tract, The Orange Book back in 2004, where he condemned the "soggy socialism" that had characterised the leadership of Charles Kennedy. Three years later, Laws was even targeted as a possible defector to the Conservatives by George Osborne. Laws respectfully declined.

Not only was Laws the most important negotiator on the Liberal Democrat side in the original coalition talks; more significantly, as Chief Secretary to the Treasury he was now one of its vital linchpins, the man charged with shaving billions off high-spending government departments in the next few years. At that very moment,

the idea that the self-styled "axeman" of the government was raiding the tool shed on the sly just wouldn't have washed with a public still angry over MPs' expenses.

Laws must have come to the same conclusion himself, producing that rare thing in politics nowadays – an honourable resignation.

David Cameron will feel the impact of this resignation keenly. The Prime Minister knows that if this fragile coalition is to work, then Liberal Democrat hands have to be metaphorically dipped in the blood just as much as Conservative ones. That's why the Cameron and Clegg double act has settled on another Liberal Democrat Chief Secretary to the Treasury in the shape of Danny Alexander, Clegg's former chief of staff.

The consequences of Alexander's appointment will be most keenly felt in Scotland. Just over a fortnight ago, David Cameron pulled off the immensely difficult trick of parading Alexander as his "Governor General" in the most hostile northern outpost of the Tory-Lib Dem Empire.

By being forced to shift him from the post of Scottish Secretary so quickly, replacing him with a nondescript Borders MP, Michael Moore, the Prime Minister risks sending a dangerous signal that he regards his Scottish appointments as expendable, and Scotland generally as an afterthought.

On a personal level, I feel a great deal of sympathy for David Laws. He is yet another public figure who did not feel able to be open about his sexuality. Who can really blame him? For all the tolerance that society now accords to gay relationships, its limits are constantly exposed.

Laws need look no further than a fellow member of the coalition – Chris Grayling – who made dreadful comments just before the General Election about B&B owners having the right to turn away gay couples.

Why would an intensely private man such as Laws really feel able to come out, given that such prejudice towards gay people continues at the very heart of government?

What should also be questioned about this whole affair is the Daily Telegraph's motivation in reopening their expenses file, especially given their high-profile campaign against the coalition Government's capital gains tax proposals. Along with the Daily Mail, sections of the Tory press seem determined to choke the life out of this fledgling coalition before it has even been allowed to take flight.

On the day that the new government was formed, I vividly recall an interview on the BBC with a German commentator, a seasoned observer of coalition governments in his home country. Asked how he rated the British coalition's chances of survival, he remarked that the British press is geared to confrontation, and was likely to drive the coalition apart.

For the sake of the broader national interest, let's hope our German friend's prediction is wrong.

Mark Stuart is a political writer from York who has written the biographies of Douglas Hurd and John Smith.