Questions over Fox’s appeal to financier

The call was made the day after Fox’s resignation amid a flurry of revelations involving the financial affairs of Werritty, the politician’s former flatmate and unofficial adviser.

Yesterday it emerged Fox had asked prominent City financier Jon Moulton to bankroll a company run by his friend.

The latest disclosure led to Labour’s shadow defence secretary Jim Murphy raising more questions about Werritty’s business activities and asking whether he had personally benefited from his frequent access to the former Defence Secretary.

“What is the flow of money?” asked Murphy. “Liam treated Adam Werritty as a good friend. Adam Werritty seems to have treated Liam Fox like some sort of franchise to make money from.

“So we need to know, as part of the inquiry, just where’s the money? Why has Liam resigned? Let’s continue to carry out the investigation and, if need be, broaden the investigation further.”

Murphy said Fox’s resignation could not be the end of the matter. “Only Liam Fox knows the truth – the whole country’s entitled to know the truth and that’s what we need to get to the bottom of,” he said.

Yesterday it was confirmed that the report into Fox’s conduct being undertaken by the Cabinet Secretary Sir Gus O’Donnell will continue, despite the Scottish politician’s departure.

The report, which is expected to be highly critical of the former Defence Secretary’s actions, is due to be published early this week.

Fox’s resignation pre-empted O’Donnell’s report, which is expected to raise concerns about Fox’s behaviour and lead to the conclusion that his position is untenable.

Yesterday it emerged that Moulton was approached by Fox. The financier revealed that the Conservative politician asked him to provide funds to a firm called Pargav after the last general election. Moulton said he was told that Pargav was involved in “security policy, analysis and research”.

According to reports yesterday, Pargav was set up as a not-for-profit company by Werritty and was used to fund his jet-set lifestyle, following Fox on engagements around the world.

Despite the furore surrounding Fox, some Conservative backbenchers maintained that he should not have gone and suggested that the Cabinet was weaker for his departure.

Fox has been replaced by Philip Hammond, who has moved from the Transport Department.

Peter Bone, Tory MP for Wellingborough, said: “The test should have been what is in the national interest. There are two major wars going on and whoever replaces him needs to have an understanding of defence, and Hammond is excellent, but it will take some time to get up to speed.

“I don’t think it was a hanging offence. Was there a breach of national security? No. Was there corruption? No.

“I think Liam Fox accepted the ministerial code had been broken and apologised for that.

“The silver lining is the back benches are much stronger now. Parliament needs people in the back benches to scrutinise government and he will strengthen that role due to his experience.”

Hammond’s relative lack of experience was also highlighted by the former First Sea Lord and Labour security minister Lord West.

“I think he [Hammond] is one of these people who does understand money and costs and that sort of thing, but I’m not sure that he’s really a man with a great knowledge of defence.

“I’m sure he will learn because he’s bright, but there must be a bit of a panic in the MoD at the moment about getting him briefed up and teaching him all the things he needs to know to fight the battles for defence over the next few months.”

Fox’s departure from the Cabinet will be met with dismay by the right wing of the Conservative Party. Regarded as a Thatcherite, Fox was admired for his conduct when he contested the Tory leadership against Cameron.

Fox’s admirers believed Fox’s political outlook was a healthy contrast to Cameron’s modernising approach.