Whitehall defends Lamont payment

(First Edition)

NORMAN Lamont's performance as Chancellor was affected by media coverage of the fact that he had unwittingly let his London home to a 'sex therapist', MPs were told yesterday, writes Nicholas Timmins.

Its impact was used by three of the most senior civil servants to defend vigorously their decision to spend pounds 4,700 of public money on helping Mr Lamont to deal with the publicity.

Sir Peter Middleton, Permanent Secretary when the story broke in April 1991, told the Public Accounts Committee that the story ran for days, with the press 'trying to make a connection' between the tenant and Mr Lamont.

'It was undoubtedly affecting his official business and his ability to perform his official duties. It was taking up time and it affected his reputation'.

That was why, Sir Peter said, he had advocated that the Treasury pay the costs that the taxpayer finally met of the law firm Peter Carter-Ruck for handling media inquiries over the weekend the story broke, and for getting an expedited hearing to evict Sara Dale. Sir Peter, now chairman of BZW, had suggested the Treasury should meet those costs and part of the eviction costs, arguing that the Chancellor would not have needed to evict Ms Dale had he been a private citizen because the lease ran out in September.

That proposed payment was scaled down to just Carter-Ruck's initial handling of the media, after Brian Fox, the principal finance officer at the Treasury, argued the case for paying the other costs was 'weak'. Sir Peter said he was not surprised Mr Fox recommended a lower payment which his successor, Sir Terence Burns, approved. 'He is paid to take a sceptical view of things.'

Sir Peter, Sir Terence and Sir Robin Butler, the Cabinet Secretary, all firmly defended the payment and took exception to suggestions by MPs that there had been 'a cover-up' in the way the payment was recorded in a vote totalling pounds 53m.

Civil servants' defence, page 7