Hazel Blears resigns from Cabinet

James Kirkup, Political Correspondent
Daily Telegraph

Her departure comes hot on the heels of the resignation of Home Secretary Jacqui Smith, who revealed on Tuesday that she will quit in the coming reshuffle, expected within the next few days.

Miss Blears has come under pressure after it was disclosed by The Telegraph that she did not pay capital gains tax when selling a property on which she had claimed the parliamentary second homes allowance. She later repaid £13,000 to HM Revenue and Customs.

In a statement released today, Miss Blears urged voters to back Labour tomorrow at the local and European elections and said she wanted to "return to the grassroots (where I began), to political activism, to the cut and thrust of political debate".

Miss Blears said: "Today I have told the Prime Minister that I am resigning from the Government.

"My politics has always been rooted in the belief that ordinary people are capable of extraordinary things, given the right support and encouragement.

"The role of a progressive Government should be to pass power to the people.

"I've never sought high office for the sake of it, or for what I can gain, but for what I can achieve for the people I represent and serve.

"Most of all I want to help the Labour Party to reconnect with the British people, to remind them that our values are their values, that their hopes and dreams are ours too."

It came as Gordon Brown, the Prime Minister, already faced a major Cabinet crisis after the resignation on Tuesday of three of his senior ministers, throwing the Government into disarray on the eve of critical local and European elections.

Jacqui Smith, the Home Secretary, dealt the most serious blow to the Prime Minister’s authority on Tuesday. It emerged that she will step down from the Cabinet when Mr Brown reshuffles his team after what Labour fears will be its worst performance at the polls for a generation.

She had been under pressure for weeks over expenses claims made by her husband on her behalf, including for two pornographic films. However, the public disclosure of her departure before tomorrow’s elections threw Mr Brown’s reshuffle off course.

Sources close to Downing Street suggested that Miss Smith’s decision only became public after it was leaked by friends of Miss Blears, who was criticised by Mr Brown over her expenses claims.

Miss Smith’s friends said that she had been troubled by the exposure of her husband’s claim for adult movies. She had also been under pressure after designating her main home as a room in her sister’s London house, allowing her to claim expenses on her family home.

It was unclear who leaked the news of her departure which was only known by two other people in Cabinet, including the Prime Minister.

The other was thought likely to have been Miss Blears, a friend of Miss Smith.

A Whitehall source said that the news may well have been leaked by someone who wants to “destabilise Gordon Brown”.

Miss Blears fell out of favour with the Prime Minister, after writing an article in which she mocked his recent appearance on YouTube. He then criticised her publicly for failing to pay capital gains tax on the sale of her second home. She later repaid £13,000.

She is also widely expected to be demoted in the reshuffle or sacked. One senior Labour figure said: “Hazel should wait until Friday morning then announce she’s leaving the Cabinet and standing for the leadership.”

On a tumultuous and chaotic Tuesday at Downing Street, it was also announced that Beverley Hughes would move aside from her job as Children’s Minister and not stand at the next election and that Tom Watson, the Cabinet Office Minister and key ally of Mr Brown, would leave the Government.

With speculation intensifying that Alistair Darling, the Chancellor, will become the most high-profile victim of the reshuffle, and that David Miliband might also be replaced as Foreign Secretary, it raised the prospect that the three great offices of state could change hands.

But in a sign that Mr Brown may face a mutiny if he tries to overhaul all of his key personnel, Mr Miliband said he wanted to stay in his post. Mr Brown is reportedly toying with the idea of replacing him with Lord Mandelson, the Business Secretary. William Hague, the shadow foreign secretary, said that the Government had “lost all authority and the ability to govern”.

Labour sources said that many of the party’s MPs were in a state of panic. A private meeting of the Parliamentary Labour Party was described by MPs as “emotional and jittery,” with several backbenchers openly accusing Mr Brown of lacking leadership and direction.

Some Labour MPs reported that a list could be circulated soon with names of those who want Mr Brown to stand aside for the good of the party.