Minister kept cash in offshore tax haven

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Indy Politics

Lord Drayson, the vaccine tycoon made a defence minister by Tony Blair last week, kept his fortune in an offshore trust until just six months ago.

Lord Drayson, the vaccine tycoon made a defence minister by Tony Blair last week, kept his fortune in an offshore trust until just six months ago.

The businessman, one of Labour's biggest donors and a loyal supporter of Mr Blair, was given ministerial responsibility for Britain's armed forces in the post-election reshuffle.

The controversial appointment appeared to rebound on the Prime Minister last night as the peer admitted, after being approached by The Independent on Sunday, that he had until recently kept some of his cash in a tax haven.

The tycoon and his family are estimated to have pocketed up to £90m from the sale of vaccine manufacturer Powderject.

The value of the company rose sharply after it secured a government contract to supply smallpox vaccine without competition.

About half of the proceeds of the sale were diverted into three trusts - in the name of Lord Drayson, his wife and his father-in-law - based in the Isle of Man, a popular destination for those seeking to avoid paying full UK taxes.

A spokesman for the peer said he had wound up the off-shore trusts on entering public life. "When Lord Drayson was an active businessman some of his and his family's financial interests were held in trusts offshore.

"However, since entering public life, Lord Drayson took steps to ensure the trusts came onshore and would be taxed accordingly, with the full knowledge of the Inland Revenue. This move was completed last autumn."

The revelation will embarrass a Labour government that has stressed the need to close tax loopholes.

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