Sleazebuster 'lacks genuine power'

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Tony Blair was involved in yet another sleaze row last night after MPs protested that the terms of reference for a watchdog on ministerial interests were designed to stop awkward inquiries into major departmental blunders.

The terms of reference for Sir John Bourne, the recently-appointed independent adviser on ministerial interests, which were tabled in the Commons by Sir Gus O'Donnell, the Cabinet Secretary, ensure the Prime Minister keeps the power to decide whether a minister should be sacked for breaching the rules. They also allow the Prime Minister to keep secret the advice he gets from Sir John.

But they limit Sir John to investigating whether ministers have breached financial rules over a conflict of interest. They do not allow Sir John to investigate major cases of Whitehall maladministration by ministers and officials, such as the release of foreign prisoners without being deported.

Grant Shapps, a Tory member of the Commons Select Committee on Public Administration, which is leading a sleaze inquiry, said the terms of reference were a "cause for concern".

He said: "If you are a minister and you don't declare your air-miles, or if there is a problem with your mortgage, you may lose your job. But if you do something fairly serious like allowing tax credit to be overpaid by £2.2bn or presiding over chaos at the Child Support Agency, not only do you not lose your job, there is no investigation."

Tony Wright, the Labour chairman of the committee, also expressed alarm. He told Sir Gus it was odd that Charles Clarke, the former Home Secretary, would have had people "jumping up and down" if he had failed to declare airmiles, but if there was a "monumental maladministration at the Home Office, we have no mechanism for a proper forensic inquiry".

The terms of reference, which The Independent has obtained, say that under section 5 of the ministerial code, ministers are required on appointment to each new office to provide their permanent secretary with a full list in writing of their financial interests which could give rise to a conflict of interest.

The terms of reference still leave the final decision to the Prime Minister over whether ministers who breach the rules should be sacked. Some MPs want that power to shift to Parliament, but Mr Blair has resisted this.

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