Tory peer faces full expenses probe

The Tory Cabinet Minister received the backing of David Cameron yesterday as the pressure mounted following accusations she claimed taxpayer-funded expenses for accommodation in London while staying at a friend’s house rent-free.

A Conservative spokesman confirmed Lady Warsi, who is co-chairwoman of the party, has contacted Standards Commissioner Paul Kernaghan herself after the scandal broke over the weekend.

Mr Kernaghan, a former police chief constable, said yesterday he would carry out “a preliminary assessment” before deciding the next course of action.

Labour has called for Lady Warsi to resign her Cabinet post as the investigation into her conduct gets underway.

Their demand was supported by Parliament’s former sleaze watchdog Sir Alistair Graham, who suggested Lady Warsi should relinquish her ministerial office until inquiries were complete.

But a Downing Street spokeswoman said yesterday the Prime Minister is happy for her to remain in post during any inquiry.

The spokeswoman said Lady Warsi had not offered her resignation to the Prime Minister.

“(Mr Cameron) has confidence in Baroness Warsi,” Number 10 said. “She said she’s very happy to cooperate with any investigation, should there be one.”

Lady Warsi, currently on a Parliamentary visit to Malaysia, insisted her expenses claims were “both in accordance with the law and the spirit of the rules”.

The Tory peer said she would co-operate with any inquiry, but declined to answer questions over whether she would resign.

Speaking from the Far East, she said: “I take these allegations very seriously – it’s why I said right at the outset that I would fully co-operate with any investigation.

“I believe that being a member of the House of Lords is a privilege. I take that privilege seriously.

“It’s why I have always ensured that my conduct, including in relation to expenses and allowances, is both in accordance with the law and the spirit of the rules.”

The row broke out over expenses claims made by Lady Warsi in 2008, when the Conservatives were still in Opposition.

She was claiming Lords subsistence of £165.50 a night while staying at a property in West London.

The peer insists she made an “appropriate payment” to her friend, Tory official Naweed Khan – now one of her aides – for the nights she stayed at the property.

Mr Khan supported her assertion, releasing a statement saying she made a payment each time she stayed.

But the property’s actual owner, GP and former Conservative donor Wafik Moustafa, denied receiving any income from either Lady Warsi or Mr Khan.

In a further embarrassment for Lady Warsi, she was forced to admit failing to declare rental income on a London flat in the Lords register of interests.

She said the omission was due to “an oversight”, adding that she had reported the letting of her Wembley flat in the Register of Ministers’ Interests.

The arrangement had also been declared to the Cabinet Office and HM Revenue and Customs, she said.

It is expected Mr Kernaghan will decide over the coming weeks whether to launch a formal investigation.

“The Commissioner has to do an initial assessment of the allegations and check whether it falls within his remit and see if it needs further investigation,” a spokesman said. “If it does he will launch a formal investigation, but we aren’t at that stage yet.”