Lord Simon: in the eye of a political storm

Row over DTI Man Brings Stricter Rules for Ministers

When Lord Simon took up his unpaid Government post he agreed not to trade in his £2.5 m worth od BP shares.

However he placed the shares in an off-shore trust -- the sort of tax avoidance arrangement of which, according to the Tories, the Chancellor, Gordon Brown, has been so critical.

Now the Government has unveiled a new tougher code of conduct for ministers according to the Minister Without Portfolio Peter Mandelson.

He told BBC News that the new rules will "make life harder" for ministers. The code imposes strict limits on gifts and hospitality which ministers can accept, give ministers advice on their financial affairs and ensure that they are fully accountable to Parliament.

Whilst the Tory attacks on Lord Simon's behaviour rumbled on in the Commons, Mr Mandelson revealed the core of the MP's code of conduct. From now on ministers:

"...must avoid any danger of an actual or apparent conflict of interest between their Ministerial position and their private financial interests."

Mandelson accuses the Tories of sour grapes

Peter Mandelson interviewed on Today Dur 10 mins

He said the aim is too tighten standards -- not to let ministers slip into the slack standards of the previous Tory government. Other measures in the revised code allow ministers to write newspaper articles (unpaid), and will force all ministers to clear interviews with Number Ten.

But he put up a vigorous defence of Lord Simon, insisting he had not broken any rules, and rounded on the Opposition. "They're simply trying to cast a slur on Lord Simon because it suits them politically to do so," he said.

Mr Mandelson insisted Lord Simon was not allowed to trade or dispose of his shares for a certain period of time after stepping down as BP chairman to take a job in the Government. Lord Simon's shares would be reviewed again after six months - in January - when his insider knowledge would be deemed exhausted, according to Mr Mandelson.

He said Lord Simon was not allowed to see documents, or make any decisions, relating to BP in any way.

In the Commons Shadow Trade Minister John Redwood followed up his party leader William Hague's attack on the Labour Party over 'sleaze'. But Margaret Beckett, President of the Board of Trade dismissed Tory accusations.

"It was plain from the day of my noble friend's appointment that he would not be able to deal and would not deal in matters that relate to BP or in matters in which BP has a competitive advantage. That is all quite clear." she said.

Mr Mandelson was dismissive of Tory complaints over Lord Simon: "We have seen a stream of synthetic twoddle motivated by spite from the Opposition. They hate the idea of a prominent, successful businessman coming in to work in the public service for a Labour Government."

Lord Simon was, Mr Mandelson insisted, an asset to the Government: "We benefit, our country benefits, our trade, our competitiveness in Europe benefits enormously from a first-rate mind, a man who has enormous experience and clout in Europe. It is good for Britain and that's why he's there and that's why he's going to remain there."

A Downing Street spokesman later dismissed talk of ministerial resignation. He described the idea as "total fantasy". He said that if Lord Simon had disposed of his shares, Mr Redwood would probably have demanded a Stock Exchange inquiry into possible insider dealing and it would be said that the peer had gained by leaving his job.

The row over Lord Simon's shares erupted at Prime Minister's Questions in the Commons on Thursday.