Chancellor defends 'brilliant' Geoffrey Robinson

The Chancellor, Gordon Brown, yesterday came to the aid of his beleaguered Paymaster-General, Geoffrey Robinson, who is at the heart of a political storm over his private finances, arguing that he had done nothing wrong.

Mr Robinson, who is under fire for his role in an offshore tax-avoidance trust, was a "brilliant minister" who brought business expertise to the Government and was pushing through big reforms at the Treasury, he insisted. "People must begin to recognise that Geoffrey Robinson has given up a business career to come into politics, that he is working as a minister with no ministerial salary and he has done everything according to the rules that was asked of him," he said.

Coming after Tony Blair's public statement of support for the Paymaster- General earlier in the week, Mr Brown's backing will be seen as a ministerial closing of ranks behind Mr Robinson, who yesterday faced fresh accusations from the Conservatives of behaviour "incompatible with the ministerial code of conduct".

Peter Lilley, the shadow Chancellor, published a letter from Sir Terry Burns, Permanent Secretary to the Treasury, which said that Mr Robinson had disclosed the existence of his Orion family trust that "offered similar protection to a blind trust" of the kind into which his UK shares had been placed, and "there was no reason to consider it further".

The Orion Trust, of which Mr Robinson is a discretionary beneficiary, is based in Guernsey, the home of tax- avoidance vehicles. Set up by a Belgian national, Joska Bourgeois, it owns more than pounds 12m-worth of shares in Mr Robinson's company TransTec, which could be sold without attracting capital gains tax.

Mr Lilley accused the Paymaster-General of not telling the whole truth to Sir Terry; but, asked if Mr Robinson had been as frank as he should have been to the Permanent Secretary, Mr Brown said flatly: "Yes."

He added: "Geoffrey Robinson has made clear to me he pays his taxes in the UK, just like everyone, and he has acted according to the rules governing ministers' conduct. The letter from Terry Burns is conclusive in saying that he did everything according to the rules. It is an amazing proposition that the letter is somehow an attack on Geoffrey Robinson. The Conservatives are trying to misrepresent the position, as one has come to expect."

The Paymaster-General spent much of yesterday trying to claw back his credibility, stating in a string of Sunday newspaper interviews that he had paid pounds 1.5m in income tax over the past five years. Though the existence of Mr Robinson's offshore trust was first disclosed in the Independent on Sunday two weeks ago, Mr Robinson's friends believe that Rupert Murdoch's newspapers have begun a crusade to oust him from office.