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Wednesday, December 23, 1998 Published at 14:09 GMT


UK Politics

Second minister quits in loan row

Peter Mandelson: The architect of New Labour has resigned

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Paymaster General Geoffrey Robinson has become the second minister to quit the government following Peter Mandelson's resignation hours earlier.

Mr Robinson resigned from his Treasury position on Wednesday afternoon.

In his resignation letter to the Prime Minister, Mr Robinson said that after enduring 12 months of "a highly charged political campaign" he had reached the point where it was right to go.

Hours earlier, Mr Mandelson quit as trade secretary after it emerged he borrowed £373,000 from Mr Robinson, a self-made multi-millionaire.

The row gained impetus because the Department of Trade and Industry is now investigating alleged irregularities in Mr Robinson's business dealings.


[ image:  ]
Opposition MPs have been calling for Mr Robinson to resign for months after he was forced to apologise to the Commons for not properly declaring numerous business interests.

Mr Mandelson wrote to Prime Minister Tony Blair, saying: "I should not, with all candour, have entered into the arrangement.

"I should, having done so, have told you and other colleagues whose advice I value and I should have told my permanent secretary on learning of the inquiry into Geoffrey Robinson, although I entirely stood aside from this."

It emerged on Monday evening that Mr Mandelson had failed to declare the loan given to him by his colleague and friend Mr Robinson when the pair were still in opposition.

Mr Mandelson, who used the loan to buy a house in London's fashionable Notting Hill two years ago, quit after a telephone conversation with the prime minister on Wednesday morning.

Cabinet Office Minister Jack Cunningham said: "It is a great pity, a great sadness, for me and the government that this year has ended in this tragic, sad and unacceptable way.

"I think that what we've seen here is a minister taking within 24 hours of this matter breaking the right and honourable decision to hand in his resignation to the prime minister.

"That's very different to the way Conservative ministers hung on and refused to go."

Earlier, Conservative leader William Hague insisted the prime minister should have fired Mr Mandelson and Mr Robinson.

"If these people were on my frontbench I would have sacked them," he said.


[ image: Loan was used to buy house in exclusive Notting Hill Gate]
Loan was used to buy house in exclusive Notting Hill Gate
The low-interest loan had been kept secret from the prime minister and key officials for two years until last week.

Mr Hague had previously written to Mr Blair, saying Mr Mandelson was clearly in breach of the parliamentary rules on conflict of interest.

Mr Robinson has come under repeated pressure to stand down as a minister.

Conservative deputy leader Peter Lilley said: "Mandelson's decision to resign was the only option left to him.

"He has spent over 18 months deceiving people about his financial position. And both the prime minister and he have spent the last 48 hours unsuccessfully trying to cover up this whole matter, claiming he had done nothing wrong."

On Tuesday, Mr Mandelson repeatedly stated he had done nothing wrong and there was no conflict of interest.


[ image: Geoffrey Robinson: Business affairs under investigation]
Geoffrey Robinson: Business affairs under investigation
Mr Robinson and Mr Mandelson's resignations now bring the number of minister's to quit the government to five.

Mr Mandelson, best known as the party's arch spin doctor, is one of the architects of new Labour and a close personal friend of Mr Blair, while Mr Robinson is known to be very close to Chancellor Gordon Brown.

Mr Mandelson is replaced at the DTI by Treasury Chief Secretary Stephen Byers, whose job is taken by Health Minister Alan Milburn.

Culture Secretary Chris Smith takes over responsibility for the Millennium Dome.


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UK Politics Contents

A-Z of Parliament
Talking Politics
Vote 2001

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23 Dec 98 | UK Politics
The Mandelson File

23 Dec 98 | Your Money
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Cheaper than a mortgage





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