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Monday, 18 February, 2002, 22:16 GMT
Ministers need sleaze watchdog - MP
Lakshmi Mittal and Tony Blair
Lakshmi Mittal had a letter of support from Tony Blair
Ministers need their own sleaze watchdog, says a senior Labour MP as the row over donations to his party continues.

Tony Wright, chairman of the Commons public administration committee, says critics often want complaints to "hang in the air" rather than to be investigated properly.

This is now doing enormous damage to confidence in the political system

Tony Wright
Senior Labour MP
The parliamentary standards commissioner already regulates MPs' behaviour but Dr Wright says there should be a similar mechanism for complaints against ministers.

The idea came as Downing Street refused to answer questions about Labour donor Lakshmi Mittal's funding for a campaign in the US to limit steel imports - a move which could threaten British jobs.

'Come up with evidence'

Dr Wright believes such continuing controversies are undermining confidence in politics and is renewing the call made by his committee last year.

Currently, only the prime minister can order an inquiry into such claims against ministers.

Peter Kilfoyle, former Labour minister
Kilfoyle is worried UK workers could be compromised
Dr Wright said: "If people have allegations to make, they should be able to submit their evidence to a public standards commissioner who would decide if there was the basis for an investigation...

"I suspect that some people would prefer to have allegations hanging in the air rather than properly examined, but this is now doing enormous damage to confidence in the political system."

Earlier, the prime minister's official spokesman tried to draw a line under the Mittal row.

'Claims disproven'

Downing Street staff were suffering from "Mittal fatigue" trying to convince reporters there was no conspiracy surrounding the Indian tycoon's links to government, he said.

The original allegations - that Mr Blair had intervened to help Mr Mittal because he had donated 125,000 to Labour funds three weeks earlier - had been thoroughly disproven, the spokesman said.

He said he was not going to get into an academic discussion about how companies like LNM operated in the global market place.

Opposition parties are demanding to know why Mr Blair apparently stepped in to help a foreign company that is in direct competition with British industry.

Job threat

Conservative shadow secretary for Trade and Industry John Whittingdale said: "Unless these questions are answered it leaves question marks over the integrity of this government."

He called for an independent inquiry into Labour's links with Mr Mittal.

Mr Blair wrote to his Romanian counterpart, Adrian Nastase, last year supporting an attempt by Mr Mittal's company LNM - which employs less than 0.1% of its staff in the UK - to buy Romania's state steel industry Sidex.

Adam Price, Plaid Cymru
Adam Price says hundreds of steel jobs are under threat
He said he had written the letter at the request of the British embassy in Bucharest.

It has since emerged that in addition to funding the Labour party, Mr Mittal has supported a campaign in the US to impose tariffs on foreign steel imports.

The US Government is due to make an announcement on steel tariffs - which could be as high as 40% - next month.

Plaid Cymru claims tariffs would cost hundreds of jobs at Corus, formerly British steel.

The party's industry spokesman Adam Price said: "It is absolutely incredible that a British prime minister, at this time for the British steel industry, should be providing support for a foreign competitor."

Former Labour minister Peter Kilfoyle also voiced discontent within his party that the government seemed to have backed a company working against British workers' interests.

'No pressure'

Earlier, the European bank which lent Mr Mittal 70m to buy Sidex told BBC News it received "no obvious pressure" from the British government in support of the deal.

Critics' claims that Clare Short's Department of International Development had also tried to use its influence to promote LNM were denied by European Bank for Reconstruction and Development (EBRD).

EBRD's head of banking, Noreen Doyle, said it had been backing the "creditworthy" winner of a privatisation in Romania.

The EBRD lends money for projects across Europe and has been particularly active in helping former Communist countries in their transition to market economies.

The BBC's Nick Robinson
"The government is perceived as having form"
Tory leader, Iain Duncan Smith
"These are very serious concerns"
The BBC's Mark Mardell
"Behind the bravado, number ten is pretty embarrassed"
Labour donor row: Should there be an inquiry?



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See also:

18 Feb 02 | UK Politics
Blair silent on Mittal's US links
17 Feb 02 | UK Politics
Labour tops sleaze poll
17 Feb 02 | UK Politics
Sleaze watchdog 'nobody's patsy'
17 Feb 02 | UK Politics
Bank behind the loan
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