Minister 'broke Cabinet rule' over business

Jamie Doward and Mark Townsend
Sunday February 22, 2004
The Observer

One of Tony Blair's closest allies, Lord Sainsbury, was fighting for his political life last night after he was accused of breaching strict government guidelines over his business interests.

Leaked minutes obtained by The Observer reveal that the Science Minister, who has extensive business interests in the biotechnology sector, was at a key Cabinet meeting which drew up a top-level strategy to promote the fledgling industry, a policy shift from which Sainsbury could reap large dividends.

At the meeting Sainsbury was tasked with asking the Prime Minister to use his influence with European leaders to promote the biotech industry. By doing so Sainsbury is accused of contravening Article Six of Cabinet Office guidelines that stipulate: 'Ministers must ensure that no conflict arises, or appears to arise, between their public duties and their private interests.'

The news last night triggered calls for the Minister to be sacked. Former Labour Ministers and Britain's biggest green groups described his position as 'untenable'. Today the Liberal Democrats will write to Blair demanding Sainsbury is removed from the Government and describing his behaviour as unacceptable.

Sainsbury has given more than 11 million to the Labour Party and remains its biggest single donor. His investments in the biotech industry include Diatech, a company that holds a number of patents for GM products and was placed in a blind trust when he became a government Minister.

Through the trust he also has a sizeable stake in another company, Innotech Investments, which has a stake in a US-based firm that seeks out new drugs to cure major health issues. Paradigm Genetics describes itself as having 'advanced research capabilities in biomarker-enabled drug discovery, with an internal focus on diabetes and obesity'.

Also, through his Gatsby Charitable Foundation, Sainsbury has injected millions of pounds into the study of plant genetics at the John Innes Centre, which conducts research into GM crops.

The cabinet minutes show that, in accordance with government guidelines, Sainsbury was absent from the first part of the committee meeting - which discussed GM issues - but attended the second part, focused on biotechnology.

Critics of Sainsbury say that the leaked minutes, from a science and biotechnology committee meeting held earlier this month, show for the first time the clear conflict of interest between the Minister's business interests and his political position.

At the meeting, Ministers discussed a number of key ways to support the UK's biotechnology sector. These included limiting the EU's ability to raise ethical issues surrounding biotechnology, launching an awareness campaign to change MPs and the public's perception about the industry, and encouraging European leaders to push its potential benefits on their health Ministers. Sainsbury seemingly played a crucial role during the meeting, with Foreign Secretary Jack Straw tasking the Science Minister to contact the Prime Minister on ways to win support within the EU for the biotech industry.

A spokesman for the Dep artment of Trade and Industry - rejected any accusations of wrongdoing, arguing that Sainsbury's role was to promote the industry and he was entitled to be at the meeting.

'There is no way it would be unfitting or that it would breach any guidelines for him to be present and active in discussions on the biotech industry. It would be very odd if he wasn't,' he said.

However, Norman Baker, the Lib Dem environment spokesman, said Sainsbury's position was indefensible. 'He is clearly arguing for an unannounced government promotion of the biotech industry using public funds which, if successful, would benefit him in his personal capacity.

'He should not have been part of that discussion in the first place and his position is clearly untenable as a result. Lord Sainsbury should be reshuffled from his present position at the very least.'

Last night former Environment Minister Michael Meacher echoed the call, saying: 'This is a serious conflict of interest that must be addressed immediately.'