Macdonald rejects cries of `cronyism'

THE FORMER chairman of Scottish Media Group, Gus Macdonald, will be Industry minister in the Scottish Office for only nine months, it emerged yesterday.

Mr Macdonald, who will enter the House of Lords in November as a life peer, will step down when the new Scottish Parliament takes over the industry brief from the Scottish Office in May 1999.

Opposition had been mounting all day to the appointment of Mr Macdonald who had no recent Labour Party history or Parliamentary seat.

The Conservatives even suggested that Lord Neill, chairman of the Committee on Standards in Public Life, should investigate the matter.

Shadow constitutional affairs spokesman Dr Liam Fox has written to Lord Neill asking his committee to look at the issue, adding: "I would also urge you to inquire into what future rewards, if any, the Government is planning to give Mr Macdonald for taking on the job at the Scottish Office."

"If we are to ensure high standards in public life, I believe it is vital that the Government is held to account over the allegations of cronyism and favouritism surrounding Mr Macdonald's appointment."

Lord Neill's committee does not become involved in individual cases.

Liberal Democrats called for the new minister to appear before the Scottish affairs committee when Parliament reconvenes in mid-October.

Liberal Democrat MP Michael Moore, a member of the committee, said: "There is widespread concern about this appointment and it is vital that we use the opportunities available to us to question Mr Macdonald about his intentions for Scottish industrial policy.

"There must be some means by which Scotland's elected representatives can hold government ministers to account."

And Scottish National Party leader Alex Salmond wrote to Scottish Secretary Donald Dewar urging him to explain "the full circumstances and timescale" of the appointment, announced by Mr Dewar yesterday.

But Mr Macdonald, who gave up his chairmanship this week and will sell his SMG shares, dismissed the row as "a frothy August story for a slow news day".

Tony Blair is keen to put businessmen in his government and has already given ministerial jobs to the former chairman of BP, Lord Simon, and Lord Sainsbury of the supermarket family.

Although Mr Macdonald was on Labour's Scottish executive during the Sixties he has not been a member of the party recently.

He said yesterday that he had little contact with either Mr Blair or Mr Dewar. "I haven't been in Downing Street since the election, and I haven't met the Prime Minister since the election," he said.

Although he lives 200 yards from Mr Dewar in Glasgow he said the minister had never been to his house and he had not been to Mr Dewar's until Sunday when they discussed the job.

"If it's cronyism, it's a very strange definition," he said.

"I am delighted it was welcomed by the Scottish TUC and the CBI in Scotland. I am there to try to bring business and enterprise to the agenda for the Scottish parliament ... for me that is the priority."

More than one MP - including devolution opponent and Labour member Tam Dalyell - has suggested that Mr Macdonald's appointment was a reward for his support for devolution while he was Scottish Media Group chairman

Labour fiercely rejected the charge. A spokeswoman said: "TV stations have a duty to be impartial and there is a code of conduct which Gus Macdonald enforced. It is absurd to make such a claim.

"We now have a team where Sam Galbraith, a neurosurgeon, is Health minister, Henry McLeish, who ran one of the best local authorities in Scotland, is Local Government minister, and we have one of the best industrialists in Scotland as our Industry minister.

"And we are being criticised by a man whose party hasn't got a single MP in Scotland, because voters at the last election told them what they thought of their policies."

There was some speculation that Mr Macdonald will get another ministerial post once the Scottish Assembly is operating.

Mr Macdonald's first task will be to try to shore up Ayrshire's flagging economy following the latest jobs blow there. Mr Dewar announced that Mr Macdonald will chair a meeting to discuss the economic future of the area. The move comes in the wake of last week's announcement by sports retailer Sports Division that about 550 jobs were being axed as well as the closure of several textile companies.

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