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Britain's Home Secretary Jacqui Smith - Source: Reuters -
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British interior minister Jacqui Smith plans to resign, a source
close to her said, the highest profile casualty of an expenses
scandal that has swept through parliament and could yet claim more
big names.
Prime Minister Gordon Brown's Labour party faces a rout in European
and local elections and Brown is expected to reshuffle his team
soon afterwards in an effort to revive his government's fortunes
before a parliamentary election.
Britons are furious that many members of parliament (MPs) have
milked the allowances system, claiming from taxpayers the cost of
everything from duck houses to cleaning a moat at a time when many
voters are struggling in a recession.
Smith's reputation suffered in March when a leaked copy of her
parliamentary expenses claims showed she had charged taxpayers for
her husband's rental of two pornographic movies.
"She spoke to the prime minister at Easter and said she felt it was
the right time to go at the next reshuffle," the source said.
Labour said it had barred four of its MPs from standing as party
candidates at the next parliamentary election, due by June 2010,
after an investigation into their expenses claims.
Brown is running out of time to win back public support and rebuild
trust in the political system, and opinion polls predict a big win
for the centre-right opposition Conservatives.
There has been speculation that Finance Minister Alistair Darling,
who has faced criticism for his own expenses claims, could be moved
from the Treasury to replace Smith.
Foreign minister David Miliband, who was at the forefront of
speculation over a leadership challenge last year, may also be
switched to another role.
"I want to continue in my job as Foreign Secretary," Miliband told
reporters.
"I will continue to support the prime minister, the leadership
that he is offering is important."
Brown has insisted he will not step down despite dismal opinion
poll ratings, saying he has a duty to clean up politics before
calling the next election.
Turbulence at top
Analysts said the turbulence at the top of government was having
little impact on financial markets because a reshuffle was unlikely
to greatly alter the economic outlook or policy.
"I don't think it really matters who is Chancellor (of the
Exchequer) of the country," said David Morrison, a strategist at
GFT Global Markets.
"The situation that we are in is not going to be changed by a
change of Chancellor."
But a Brown ally, schools minister Ed Balls, is tipped as a
possible replacement for Darling, and economic policy could become
more left-leaning as Balls may want to impress the grassroots of
the party he wants to lead.
Some commentators say a poor Labour showing in the elections this
week could lead to a new effort to topple Brown.
Health Secretary Alan Johnson, more media-savvy and
union-friendly than Brown, is seen as a potential
replacement.
"If we did have a new leader, I would expect an election in the
autumn because the idea of a second unelected prime minister is not
going to cut it. But I don't think many in the Labour Party would
want that, so I don't think it will happen," said David Lea,
western Europe analyst at Control Risks.
All the main parties have been hit by a series of disclosures about
their expenses published in the Daily Telegraph over more than
three weeks, and several MPs have said they will not stand at the
next election as a result.
Labour, in power since 1997, appears likely to suffer most in the
polls having presided over a now-discredited system.
An Ipsos MORI poll published in the Sun newspaper put Labour
support at just 18%, level with Britain's third party, the Liberal
Democrats.
It showed the gulf between Labour and the Conservatives widening
to 22 points.
Smaller parties, such as the UK Independence Party, the far-right
British National Party and the Green Party, are expected to benefit
in this week's elections.
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