Lamont's legal fees lead to rule-change

GUIDELINES on the use of public money for ministers' legal expenses are almost certain to be changed after an inquiry into the pounds 4,700 paid to lawyers acting for the Chancellor, Norman Lamont.

The Cabinet Secretary, Sir Robin Butler, is expected to propose a revision of the rules in the New Year to clarify the position.

The inquiry by the Comptroller and Auditor-General, Sir John Bourn, followed revelations that public money was used to pay part of Mr Lamont's legal bills after publicity that he had rented his London home to a 'sex therapist' when he moved into No 11 Downing Street. Sir John's findings will be presented to the Public Accounts Committee, probably at its first scheduled meeting of 1993 on 13 January.

The payment - part of the pounds 23,000 incurred in handling press inquiries about the matter and the subsequent eviction of the woman - was approved by the then Permanent Secretary at the Treasury, Sir Peter Middleton, on the grounds that it was necessary to protect the Chancellor's public reputation.

Some MPs have questioned the use of private solicitors in the case, arguing that if the matter was one of public interest, Treasury lawyers should have been used. New guidelines, which would normally have to be approved by the Prime Minister and possibly the Cabinet Offfice, are likely to clarify the boundary between public and purely private litigation.

Gordon Brown, the Shadow Chancellor, said yesterday: 'I will be calling on the Prime Minister to consult Parliament on new guidelines. It is clear that the existing guidelines are inadequate.' Mr Brown said he was worried that the rules were being framed by those who operated them. It was crucial that Parliament should oversee any change.

Sir John has been looking at previous cases in which taxpayers' money was used to pay the personal legal bills of ministers. These include Lord Young of Graffham and Nigel Lawson, although neither instance involved their personal life.

Mr Lamont's allies are convinced that his and his officials' conduct will be shown to have been within the current guidelines. Any changes in the rules would not reflect on his case.

Meanwhile, the Select Committee on Members' Interests is investigating whether Mr Lamont should have declared further help with his legal bill from private sources on the Register of Members' Interests - a declaration all MPs are obliged to complete. Anonymous Conservative sources donated pounds 18,414 to cover the balance of the Chancellor's costs.

Ministers are prevented by regulation from accepting gifts of more than pounds 125. The Cabinet Office and the Treasury argue that the rules are intended to encompass one-off cash payments to ministers 'in their official capacities'. The pounds 18,414 donation to cover the Chancellor's legal bill was a private matter and therefore not covered by the pounds 125 ceiling, they say.