The Hamilton Affair: The turning point - Mobil claim was known just two days before trial

The Turning Point

GEORGE CARMAN QC once again lived up to his reputation for producing rabbits out of hats. In this case the "rabbit" was a new claim - that Neil Hamilton had demanded pounds 10,000 from Mobil Oil for trying to alter tax law to benefit the multi-national company.

It may not have had the audience appeal of the Ritz revelations, but it proved devastating. Little wonder the former Tory minister fought to keep the matter out of court. Amazingly, Mr Fayed's lawyers had obtained the new material just 48 hours before the case was due to begin. It led to frantic work through the night to get the evidence ready for court.

Mr Carman sought to show that in his dealings with the multi-national oil company Mr Hamilton was exposing his "corrupt" nature.

"What we submit in this court is this - that the demand for payment to Mobil made by Mr Hamilton in the summer of 1989 was corrupt, just as corrupt as the money he took from Mr Al Fayed for asking Parliamentary questions," the QC told the court.

Mr Carman, giving the background to the allegation, said that in 1989 Mobil and other oil companies were concerned about a clause in the proposed Finance Bill that would adversely affect the amount of tax they might have to pay.

Peter Whiteman QC, a specialist tax adviser to Mobil, suggested to the company that Mr Hamilton, who was on the Commons finance committee considering the Bill and had written a book on taxation - and whom Mr Whiteman had met some years before - might provide some help in Parliament.

Mr Hamilton tabled an amendment to the Bill. If it had succeeded it would have saved the oil company pounds 70m in taxes in just one year. He was later paid the pounds 10,000 although Mr Whiteman said he was "taken aback" by the demand.

The court was told that Mr Hamilton misled the Deputy Prime Minister at the time, Michael Heseltine, the Cabinet Secretary, Sir Robin Butler, and the Chief Whip, Richard Ryder, at a "hanging committee" meeting that led to his resignation as corporate affairs minister. Sir Robin, under a misapprehension, asked Mr Hamilton if he had put down a parliamentary question on behalf of Mobil.

The former MP for Tatton denied this but failed to add that he had, in fact, taken the far bigger step of trying to change a piece of legislation.

In court, Mr Hamilton said he was under no obligation to provide ammunition against himself. The pounds 10,000 payment was not for moving the amendment, he claimed, which would have been a corrupt act, but payment for the tax consultancy work that he had carried out with Mobil.