Politics: MPs scent blood and hypocrisy over minister's pounds 12m trus t

The Tories are demanding a statement in the Commons today after the disclosure that Geoffrey Robinson, the Paymaster General, has a blind trust worth pounds 12m in an offshore tax haven. Colin Brown, Chief Political Correspondent, says all sides agree it is not illegal - and that there is whiff of hypocrisy on all sides.

British tax authorities have no jurisdiction over the pounds 12m put into a blind trust in the tax haven of Guernsey for Mr Robinson by a Belgian woman, one of his Treasury colleagues said yesterday.

Alistair Darling, the Chief Secretary to the Treasury, insisted Mr Robinson had done nothing illegal, and was not holding the Orion trust to avoid paying British taxes. "This is money that was put into a trust by a Belgian lady living in Switzerland and over whom the UK tax authorities could have had no jurisdiction," he said on BBC television.

The Independent on Sunday reported that Joska Bourgeois was a family friend who made a fortune exporting Jaguar cars. Mr Robinson met her when he was the head of British Leyland's Italian subsidiary.

Mme Bourgeois died in 1994, and Mr Robinson is reported to have become her heir. Downing Street last night denied Mr Robinson had broken the ministerial codes of procedure by allowing pounds 12m to be put into a trust. Mr Darling insisted: "The money in this trust was not in the UK. It was not taken out of the UK and put into this trust... so it isn't actually avoiding UK taxes."

Mr Robinson was accused of hypocrisy by Peter Lilley, the Tory spokesman on Treasury affairs, who is demanding a Commons statement. Mr Lilley plans to embarrass Labour's front bench by quoting the words of the Chancellor, Gordon Brown, to the Labour Party conference in 1996 when he said: "A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax-havens." Mr Lilley said: "Since the election we have discovered that no fewer than two of his own ministers are millionaires with trusts in offshore tax-havens. The sheer hypocrisy of New Labour is breathtaking. The fact that their arrangements have to be dragged out of them bit by bit merely compounds the offence."

Lord Simon, the Trade Minister, had to sell his stake in BP earlier this year after declaring his holdings in a blind trust.

However, some Tories believe there is some hypocrisy about the spectacle of the Opposition pursuing allegations of sleaze. The party chairman, Lord Parkinson, showed disdain for the attack on Mr Robinson on GMTV. Alan Clark, the MP for Kensington and Chelsea, said he did not believe Mr Robinson had done anything wrong. Mr Clark said on Sky TV's Sunday Programme: "It's perfectly legal, I don't see any problems, no."

Liberal Democrat MP Nick Harvey said: "I think if he's had advice from the relevant authorities and it's all within the law, I can't see how anyone can really find any objection to it."