No favours for Russian tycoon, claims Mandelson

Published on Sunday 26 October 2008 20:48

PETER Mandelson has insisted that he gave no favours to a Russian aluminium baron whom he met as EU trade commissioner, before a tariff-slashing agreement was brokered.

Lord Mandelson – who has been ennobled since being recalled to Westminster to be installed as the Business Secretary – denied that he had given any perks to Oleg Deripaska, the controversial businessmen at the centre of a row engulfing both Labour and the Conservatives' shadow chancellor, George Osborne.

It has emerged that Lord Mandelson first met Mr Deripaska in 2004 – a year before the EU Commission reduced tariffs on Russian aluminium.

Lord Mandelson signed off the cut, from 6 per cent to 3 per cent. It concerned aluminium imports and was reportedly worth tens of millions of pounds a year to Mr Deripaska.

The former EU Trade Commissioner's spokesman had said that there was no conflict of interest because the pair had not met before the change.

Initially, he claimed they had met at "a few social gatherings in 2006 and 2007".

But Lord Mandelson this weekend clarified that the pair had in fact met in 2004. This was the same year as he proposed that tariffs on aluminium imports be cut.

Amid continued pressure on the Business Secretary, Lord Mandelson began a four-day trade trip to Moscow yesterday.

Before departing for the Russian capital, he said: "A lot has been said about the relationship I have with one particular Russian businessman. All I would say about that is that he has never asked for any favours, I have never given him any favours and that is what the European Commission in their examination of the issue have very firmly put on record."

The spotlight returned to the Business Secretary after Mr Osborne was pursued all week about whether or not he solicited donations from Mr Deripaska for the Tories during a meeting on board Mr Deripaska's yacht in Corfu, a suggestion he has flatly denied. Sources close to David Cameron, the Conservative leader, have reportedly said he believed Mr Osborne had acted like a "prat" over the controversy.

Yesterday, William Hague, the shadow foreign secretary, who is being lined up to replace Mr Osborne should he step out of line again, admitted his colleague had to learn lessons.

But he contrasted how Mr Osborne had documented and published all his meetings with Mr Deripaska with Lord Mandelson's hazy recollection.

"George Osborne has been absolutely right to set out all his contacts with Mr Deripaska – what happened at them, what they discussed. I think it's important for Peter Mandelson to do the same because this drip-drip revelation gives the impression there's something to hide."

Gordon Brown, the Prime Minister, yesterday gave his support to Lord Mandelson, saying his actions as EU Trade Commissioner had been "above board".

He said: "When these things are investigated by the authorities – and the authorities say there's nothing to look at, nothing causing a problem – then unless people have any other evidence, it should be left."