Labour accuses Tory placemen of 'blowing windfall tax off course'

THE CONSERVATIVES have failed to levy a multi-million pound windfall tax on the privatised utilities because at least 15 senior Tories have been hired by the new private sector companies, Labour claimed yesterday.

The list of MPs and peers released by the Shadow Chancellor, Gordon Brown, includes one present and two former Conservative Party chairmen, and a total of five former Cabinet ministers. Mr Brown said: 'We are unearthing a scandal that has to be dealt with by the Government.'

He accused Tory politicians of creating their own vested interest by first privatising utilities, then accepting lucrative positions in the new and profitable private-sector companies. These links, Mr Brown said, prevented the Government from backing Opposition proposals for a multi-million pound windfall tax on excessive utility profits to finance a jobs initiative.

Labour's latest bid to highlight declining standards in public life comes ahead of a report this week from the select committee on members' interests which is investigating the payment of pounds 4,700 of public money to meet part of the legal fees of the Chancellor, Norman Lamont. The report is expected to focus on inadequacy of procedures rather than criticise the Chancellor.

Mr Lamont will make his last big interview before the Budget on breakfast television today.

Mr Brown's list includes most of the largest privatised companies, ranging from the National Freight Consortium, of which Sir Norman Fowler, the Conservative Party chairman and a former Secretary of State for Transport, is a non-executive director, to British Gas, of which Lord Walker, a former Secretary of State for Energy, is a director.

Cable and Wireless has recruited Lord Young, former Secretary of State for Trade and Industry, Kenneth Baker, former Conservative Party chairman, and Sir Michael Marshall, a former industry minister. Giles Shaw, a minister at the DTI when steel was privatised, is now a director of British Steel.

Mr Brown's list, culled partly from the Register of Members' Interests, does not include recent additions, such as Michael Clark, a Conservative member of the Trade and Industry Select Committee, who is expected to join British Gas as an adviser later this year. Mr Brown said: 'The Tories are incapable of attacking what has become a new and invidious vested interest because so many former cabinet ministers are now on the boards of the companies they privatised.'

The Shadow Chancellor, who this week launches a 'Budget for jobs', argues that a tax on the utilities' pounds 25bn 'profiteering' should be used to create jobs.

The first Thatcher government established a precedent for one-off taxes by once levying a special tax on major banks.

Paddy Ashdown, leader of the Liberal Democrats, yesterday called on modernisers in the Labour Party to join his party in a campaign to achieve electoral reform.