Ministers furious at new lobbying 'scandal'

Byers, Hewitt and Hoon face sleaze inquiry over 'cash-for-access' allegations

Three Labour former cabinet ministers face a sleaze investigation after being filmed offering to exploit their government connections for money. Stephen Byers, Patricia Hewitt and Geoff Hoon were caught by an undercover reporter posing as a US company executive recruiting MPs for lobbying work. Mr Byers, a former Trade and Industry Secretary, was recorded describing himself as a "sort of cab for hire" with rates of up to £5,000 a day.

John Lyon, the parliamentary commissioner, will today be asked to examine possible breaches of rules governing MPs' conduct. The former ministers, who are all stepping down at the election, could all also be investigated for breaking the ministerial code. They all strongly deny any wrong-doing or that they have breached any rules.

Privately ministers are livid at the alleged conduct of the three Blairite ministers and fear it could undermine Mr Brown's chances in the forthcoming election. The Conservatives will today table parliamentary questions into claims by Mr Byers that he successfully influenced two current cabinet ministers over policy. David Cameron, the Tory leader, described the allegations as shocking. He added: "The House of Commons needs to conduct a thorough investigation into these [former] Labour ministers, but also the Prime Minister would want to get to the bottom of the allegations being made about his government."

The Government was hugely embarrassed by the claims, with ministers describing the behaviour of their former cabinet colleagues as "appalling" and "ridiculous". In an attempt to limit the fall-out from the "cash for access" allegations, Labour was forced to rush forward the announcement of plans for a crackdown on lobbying by former ministers.

According to Channel 4's Dispatches, which worked on the joint investigation with The Sunday Times, Mr Byers told an undercover reporter he had secured secret deals with ministers, could get confidential information from Number 10 and was able to help firms involved in price-fixing get round the law. It said Mr Byers boasted he had struck a secret deal with Lord Adonis, the TransportSecretary, to terminate a rail franchise contract for a client, National Express.

He also claimed to have helped to persuade Lord Mandelson, the Business Secretary, to amend regulations on food labelled on behalf of Tesco. But the day after he was filmed, Mr Byers retracted his claims, insisting he had "never lobbied ministers on behalf of commercial interests" and had exaggerated his influence. Lord Mandelson and Lord Adonis strongly denied Mr Byers' assertions.

Mr Byers, who served as Transport Secretary and Trade and Industry Secretary under Tony Blair, said he was confident he would be cleared by any investigation. He said: "I have never lobbied ministers on behalf of commercial organisations and have always fully disclosed my outside interests."

Channel 4 said Ms Hewitt, a former Health Secretary, claimed to have obtained a seat on a government advisory group for a client paying her £3,000 a day. She said she "completely rejected" the report and added that she was only discussing work that she would have done after she left the Commons.

Mr Hoon, a former Defence Secretary and Chief Whip, was reported to have wanted a £3,000-a-day fee for work that would allow him to turn his political knowledge and contacts "into something that frankly makes money". He said later: "At no stage did I offer, nor would I attempt to, sell confidential or privileged information arising from my time in government."

Of 20 politicians contacted by the programme-makers, 15 agreed to meet and 10 were invited for interviews. Nine of those were covertly filmed, of whom six are in the documentary. One is the Labour MP Margaret Moran, the MP forced to repay £22,500 she claimed in expenses to treat dry rot at a house 100 miles from her Luton constituency. She reportedly said she could ring a "girls' gang" of Labour colleagues – including the party's Deputy Leader Harriet Harman – on behalf of colleagues. The other two are Labour peer Baroness Morgan and the Conservative MP Sir John Butterfill.

Alistair Darling, the Chancellor, said it was ridiculous that the former ministers had fallen for the sting. He told BBC1: "The best answer when you get a call like that is to put the receiver back down again. It's obvious. Really, what on earth did they think they were doing? And equally for a company, you don't need a lobbyist. If you've got something to say, go directly to the Government department and make your case."

David Miliband, the Foreign Secretary, said he was appalled. He added: "There is absolutely no room for anyone to trade on their ministerial office."

Nick Clegg, the Liberal Democrat leader, said: "It's just very, very sleazy and I think people are so fed up with the way in which money and greed is corrupting our politics. It's why I have always argued that we need to go far further than reforming MPs' expenses; we need to reform the whole rotten system from top to toe."

Labour sources said there was no evidence that any of the filmed MPs was guilty of wrongdoing and tough action would be taken against any MP abusing their position. They added that the party manifesto would feature proposals to create a Statutory Register of Lobbyists. A voluntary code is already in place.

The rules: What's allowed, what's not

*Sitting MPs are not banned from working for corporate clients. But they must declare any payment in the register of Members' interests

*Any paid work taken by a former minister within two years of leaving office must be cleared by a panel of MPs, the Advisory Committee on Business Appointments *MPs cannot table amendments or vote on Bills in exchange for payment and are normally banned for 12 months from becoming lobbyists in the fields in which they served as ministers

*All three main parties say they want the rules tightened to prevent ex-ministers exploiting their contacts for personal gain

'Cabs for hire' Ex-Cabinet ministers and their private consultancy work

*Stephen Byers

Mr Byers is non-executive chairman of ACWA Services – a water treatment firm based in North Yorkshire, and holds the same position at Yalta European Strategy, a company aimed at promoting closer ties between Ukraine and the EU. The former trade and transport secretary was paid a fee of up to £5,000 for speaking at last year's Ukrainian Investment Summit – the same sum he is alleged to charge for lobbying the Government on behalf of clients. Byers also acts as a consultant to Consolidated Contractors International, a construction company based in Athens.

*Geoff Hoon

The former defence secretary stood down from Cabinet last year when it was revealed that he had avoided paying capital gains tax on his second homes. Mr Hoon, who built up a £1.7m property portfolio during his time as an MP, is reported to have been offered a highly-paid position as the chairman of a foreign defence firm. Mr Hoon lectured in law at Leeds University the University of Louisville, Kentucky in the 1980s, before returning to Nottingham to practice as a barrister. He became an MEP in 1984 and an MP in 1992.

*Patricia Hewitt

The former health secretary was paid up to £50,000 by Alliance Boots – owner of the high street pharmacy chain Boots – to "provide advice and attend meetings" as a special consultant. Ms Hewitt earned an additional £59,475 from her role as a senior independent director and chair of BT's Remuneration Committee and Pensions Review Group, and was paid up to £60,000 as a senior adviser to buy-out firm Cinven. She is also a member of an advisory committee at Barclays Capital.