SALFORD MP Hazel Blears announced last night that she would pay back £13,332 she made by avoiding capital gains tax when she sold one of her homes.

Brandishing the cheque for the taxman, she said: “I’ve heard absolutely the outrage and the anger the public feel about what has been going on.”

The Communities Secretary avoided paying tax on the sale of a London property, which she designated her second home, by telling HM Revenue and Customs it was her primary residence.

'Trust'

She said: “I’m doing this really to see what I can do to try to get those first steps to rebuild this trust.
“I see it’s not enough to say I complied with the rules because people just don’t accept that.
“It affected me personally, what people said in Salford where I and my family live.”

'Insistence'

“The only reason that my Salford home was designated my second home was at the insistence of the fees office, who said that when you become a minister you live in London.”
Leaked expenses claims showed Ms Blears told Commons authorities a flat in London was her
second home, so she was able to claim back thousands of pounds in mortgage interest and running costs.

Windfall

Yet when she sold it, at a profit of £45,000, she paid no capital gains tax on the windfall, indicating the flat was simultaneously registered with the taxman as her primary residence.
CGT is charged at 40 per cent when a property not regarded by the taxman as a main residence is sold, so she
could have been hit with a maximum £18,000 bill when she sold the Kennington property in Kennington in August 2004 for £200,000.

'Determined'

Asked whether she had decided to pay the money at the prompting of the prime minister or Chief Whip, she said:
“I have decided to do this. I have talked it over with my family.
“My position is that I’m the MP for Salford and I’m absolutely determined to make sure that my reputation, and my
relationship with the people that sent me here to speak up for them, is rebuilt and that’s the most important thing to me.”

'Right thing'

Gordon Brown said: “In fact, Hazel did not break the rules, but she accepts that it was the right thing to do that she did not have a personal gain from the sale of that (flat).”
I think the issue here with Hazel Blears is about the sale of a house where CGT could or could not have been paid.” Mr Brown said.
“She has looked at what has happened, I have talked to her, she has repaid the money.”

Concerns

Mr Brown said Ms Blears was not the only member of his party who was planning to hand over money in the wake of concerns.
“Some Labour MPs havealready announced that they are repaying things that inretrospect they should not have received,” he said.Earlier David Cameron has ordered members of his shadow cabinet to pay back expenses claims or be sacked.

'Excessive'

He ‘named and shamed’ MPs with ‘excessive’ claims – including some of his closest allies – who have agreed to repay taxpayers’ money.
He also announced the creation of a new internal scrutiny panel to rule on contentious expenses claims by Tory MPs – backed by the threat of expulsion from the party if they failed to comply.

'Scrutiny'

“Conservative MPs that have made excessive expense claims will have to go in front of that scrutiny panel and pay back the money agreed or they will no longer be Conservative MPs,” he said.
Mr Cameron did not spare himself, promising to return the sole maintenance claim he had made in his eight years as an MP – £680 for removing wisteria and other repairs at his Oxfordshire constituency home. He said: “I want to start by saying sorry, sorry that it has come to this, sorry for the actions of some Conservative MPs.
“People are right to be angry that some MPs have taken public money to pay for things that, frankly, few can afford. You have been let down.

'Unethical'

“Politicians have done things that are unethical and wrong. I don’t care if they were within the rules, they were wrong.”
He said that in future Conservative MPs would claim only what was ‘reasonable’.
The list of shadow ministers who will are to make repayments includes was headed by shadow children’s secretary Michael Gove who will return £7,000 paid for furniture, and shadow leader of the House Alan Duncan who is to pay back almost £5,000 which he claimed for gardening.

Tennis court

Shadow health secretary Andrew Lansley will repay £2,600 for home improvements and the chairman of the party’s policy review Oliver Letwin £2,000 to for the repair of a leaking pipe under his tennis court.
Mr Cameron’s high-risk strategy marked a bold attempt to seize the initiative over the expenses issue.