The Tory spokesman on trade and industry wrote to Margaret Beckett, President of the Board of Trade, insisting that she had failed to answer questions about Lord Simon's tax breaks.
"She said Lord Simon would not avoid tax, and he would pay income tax. I had never thought Lord Simon would avoid income tax.
"The reason why you put investments in a Jersey trust is to avoid capital gains tax."
Mr Redwood is determined to keep up the pressure on the Lord Simon, in spite of misgivings among senior Tory MPs and peers. Mr Redwood has led the Tory criticism over the alleged conflict of interests in Lord Simon's job as a trade minister and his private BP shares.
One former Cabinet minister is upset at the style of the attack on Lord Simon, and there have been rumblings of discontent in the House of Lords among Tory peers at the pursuit of Lord Simon, one of Britain's top businessmen, who yesterday refuted the charges.
William Hague, the Tory leader, who led the attack in the House on Wednesday, is backing Mr Redwood and has order- ed the Tory ranks in the Commons and Lords to fall into line.
Lord Parkinson, the chairman of the Conservative Party, also appeared uncomfortable, when he joined in the attack on the former chairman of BP.
Lord Parkinson denied he was joining a "witch hunt" against Lord Simon. "I know it must be very difficult for somebody like Lord Simon. You've only got to look at the average company chairman who meets his shareholders once a year, and they are entitled to ask a few stilted questions, and that is about as far accountability goes.
"Parliament isn't like that. If you throw your hat into the ring you have to be prepared to be questioned and to answer. I think it's unfortunate. I have a lot of respect for him. I admire what he did. But this isn't a very satisfactory state of affairs."
Lord Parkinson said he was not "cowed" by the Government's threats of libel action. "I am not interested in witch hunts or throwing mud at very distinguished businessman. He has gone into politics. He has to be available for questioning, and be prepared to answer," Lord Parkinson said on BBC radio.
Conservative Party vice-chairman Alan Duncan later accused the Government of "confusion" after deputy Prime Minister John Prescott said that suggestions of libel action over the Lord Simon affair were merely newspaper speculation.
"The disarray at the heart of the Government demonstrates why important and unanswered questions remain about the role of Lord Simon," he said
Howard Davies, the new city regulator at the Securities and Investment Board, will show support for Lord Simon tomorrow in the LWT London Programme. Mr Davies says: "I think the key is always disclosure - to make it clear what you've done, and what you've got, and what you've done with it, and then let people make up their own mind."Reuse content