Cowboy Prescott failed to declare gifts to Customs

'IoS' investigation reveals a third breach of the ministerial code

John Prescott broke the rules on ministerial conduct at least three times when he accepted gifts and hospitality from a US billionaire.

The Deputy Prime Minister, already reeling after a damning report by the parliamentary watchdog, was dealt a fresh blow yesterday, as he admitted that he failed to declare to Customs the gift of a cowboy outfit from Philip Anschutz.

The confession piles the pressure on Tony Blair, who is refusing to investigate Mr Prescott's conduct in secretly staying on the ranch of the Millennium Dome's owner and receiving presents from him.

The obligation to declare overseas gifts to Customs "on importation" is clearly set out in the ministerial code, the rule-book against government sleaze.

Mr Prescott's office sought to deny the latest breach, insisting that he did not want to keep the Stetson, belt, spurs and cowboy boots, and thus didn't owe any tax.

But his defence was mocked by Opposition MPs who are demanding that Mr Blair act before leaving his deputy in charge while he has a holiday this summer.

Sir Philip Mawer, the Parliamentary Standards Commissioner, criticised Mr Prescott for failing initially to register his stay at Mr Anschutz's ranch and for not reporting the gifts to his senior civil servant.

Despite the unprecedented criticism from the standards watchdog, Downing Street claimed that the matter was now "resolved".

But Mr Blair's efforts to save Mr Prescott began to unravel last night as a third breach of the code came to light. Section 5.25(d) reads: "Gifts received overseas worth more than the normal travellers' allowances should be declared on importation to Customs & Excise who will advise on any duty and tax liability."

A spokeswoman for Mr Prescott said the gifts had not been declared, but that the omission was because officials knew he did not want to keep them and therefore did not owe any duty.

She said: "The rules as set out by HMRC [Revenue & Customs] state that no customs duty or tax is payable on gifts received by ministers on visits overseas, where the gifts are retained by the relevant government department. If a minister wishes to retain a gift, then he or she would be liable for any tax or duty, and Customs would advise accordingly. In this case, the gifts had been retained by the department and thus no tax or duty was liable on them. It is a nonsense therefore to suggest that the code has been broken."

But Tory MP Hugo Swire said: "We found out on Friday that Mr Prescott failed to tell his permanent secretary about these gifts. Now we discover that he failed to declare them to Customs, as he clearly should have done. It is not for Mr Prescott to decide which sections of the code he observes and which he ignores.

"Sir Philip Mawer, who had to write to Mr Prescott twice to establish the truth about these gifts, said he did not find the DPM's procedures for handling gifts 'reassuring'. [Last night's] revelation can only add to the doubts.

"If this Government wants to cling to any pretence of integrity, Tony Blair must now ask Sir John Bourn, the independent adviser on the code, to investigate without further delay."

Full details of Mr Prescott's gifts from Mr Anschutz, whose firm AEG bought the Dome and sought a license to run a super-casino nearby, emerged in the appendix to Sir Philip's report.

On 14 July, the DPM wrote to the standards watchdog saying he was "initially provided with the items" so he could go on a horseback tour of Mr Anschutz's Eagles Nest ranch near Denver.

"Some time after my departure from the ranch, they were sent on by Mr Anschutz to my departmental office," he added. The Stetson, he said, was worth about £97, the boots £120, the belt £207 and some spurs £185.