Fox to leave with a rebuke... and a ￡17,000 payoff despite breaching ministerial code
Cabinet Secretary Sir Gus O’Donnell will rule that Dr Fox did not personally profit from his globetrotting with best man Adam Werritty.
But he will condemn the conflicts of interest that arose because Dr Fox’s friend was funded by rich donors with defence interests.
The Mail can also today reveal that one of Mr Werritty’s major backers was working for Britain’s biggest defence company.
G3 Good Governance Group paid ￡15,000 to Mr Werritty’s company Pargav and also has an ongoing contract with BAE Systems, which has ￡520million of Ministry of Defence contracts.
But despite Sir Gus’s findings, Dr Fox is entitled to three months’ money from his ￡68,827 Ministers’ salary after he resigned as Defence Secretary on Friday – a total of ￡17,206.
The Cabinet Office said: ‘The Independent Top Salaries Review Body recommended that on losing office for whatever reason, members of the Commons should receive a severance payment based on three months’ net loss of income.’
The payoff provoked outrage last night and calls for Dr Fox to return the money.
John Mann, the Labour MP for Bassetlaw, said ‘It’s outrageous that a shamed and discredited ex-Minister gets such a huge pay out. It’s for Dr Fox to now take the honourable route and immediately re-pay this money to the Exchequer.’
Sir Gus’s report, which is around seven pages long, will be published in full today after No10 gave in to demands for full disclosure. But it is thought it will not go into great detail about the sources of Mr Werritty’s funding.
‘It is more a study of ministerial misconduct,’ said one Whitehall official.
David Cameron will face claims today that Sir Gus’s report in no way answers all the unanswered questions about Dr Fox and Mr Werritty.
Sir Gus has not made an in-depth study of the funding and activities of Dr Fox’s former charity Atlantic Bridge. His report will not provide a list of other Ministers who met Mr Werritty, as Downing Street had originally suggested. Nor does he plan to name the as-yet-unknown donors to Pargav.
The revelation that G3 was working for BAE Systems will intensify calls for the Electoral Commission to open its own investigation into Dr Fox.
The watchdog will decide this week whether to open a probe into whether he broke laws on political donations by failing to declare the sources of Mr Werritty’s funding, when he was effectively acting as an unofficial adviser.
BAE is the Ministry of Defence’s biggest contractor, with around 13 per cent of the MoD’s ￡4billion procurement budget. It builds flagship defence platforms such as the Type 45 destroyer and the Eurofighter Typhoon jet aircraft.
A source at BAE confirmed that the company has an ongoing relationship with G3 to provide consultancy support for a project in Oman, where BAE is designing military training courses. It is understood G3 has also hired a former MI6 officer called Moira Andrews, whose husband Ian Andrews was until 2009 the second most senior civil servant in the MoD.
No10 is also resisting making a ministerial statement on the scandal, but Mr Cameron could still be dragged to the Commons.
Labour is set to ask Speaker John Bercow for an urgent statement and he is understood to be sympathetic.
On the link between BAE and G3, Labour’s Armed Forces spokesman Kevan Jones said: ‘This is further evidence of the perceived conflict of interest which arose at the heart of the MoD on David Cameron’s watch. He needs to answer questions.
‘Without a full examination of Mr Fox and Mr Werritty’s activities, including all business connections, David Cameron will not be living up to his promise of open, transparent government.
‘At a time when the Armed Forces has had to swallow a pay freeze and thousands of troops have been told they are being made redundant to cut costs, Liam Fox’s redundancy payment will provoke a lot of anger.’