David Cameron should suspend Conservative party chairman Grant Shapps over his external business affairs after the police said one of his companies may have been guilty of an "offence of fraud", Labour said last night.
Shadow Cabinet Office minister Michael Dugher yesterday wrote to the Prime Minister calling for Mr Shapps to be suspended from his Cabinet post and an investigation launched under the ministerial code of conduct. But the Tory party said the "case was closed" in relation to Mr Shapps and that comments by the police had been taken out of context.
Police looked into allegations that How To Corp Ltd, a company co-founded by Mr Shapps under the alias Michael Green, was selling "plagiarising" software which helps firms boost profits by breaching Google's rules. A letter from the Metropolitan Police's Homicide and Major Crime Command to Mr Shapps said there was no case for a criminal investigation and that it had "now closed the matter". But Labour seized on a line earlier in the police letter that said: "Legal advice was sought which concluded that the selling of the software may constitute an offence of fraud."
In his letter to Mr Cameron, Mr Dugher said: "In the light of the facts that are known and are effectively unchallenged, and in the light of the police's statement that a fraud may have been committed, it appears that, as a minimum, if standards in public life are to be maintained, a proper investigation must now be carried out on your behalf to determine whether Mr Shapps has been guilty either of a crime or of discreditable conduct … The Prime Minister can use the Independent Adviser on the Ministerial Code to conduct the investigation.
"In many cases a decision by the police not to proceed further would close a matter, but not where the police, as in this case, specifically and unusually assert that a fraud may have been committed."
But a Conservative spokesman said: "The [police] letter speaks for itself. The case is closed. There is no case to answer."
A Tory source said: "If there are further allegations, put them to us or the police. To suggest there are allegations left unchallenged is actionable."