Liam Fox crisis as-it-happened

Follow the crisis around defence secretary Liam Fox with's live blog.

By Ian Dunt

08:46 – Good morning and welcome to the day Liam Fox tries to save his political career. The defence secretary has been at the centre of a storm of allegations since late last week, when questions were raised about his friend Adam Werritty, who sold himself as Mr Fox's adviser despite not being on the public payroll or being security cleared. Fox's day effectively starts with David Cameron reading the preliminary report into the row from the Cabinet Office, which should be happening, well, right about now really. It ends with his appearance in the Commons at 14:30 BST, where he's under intense pressure to give a full account of himself by Labour (he should technically be leading defence questions but that's now an afterthought). If you need to catch up what's been going on here's our story from yesterday, which saw Fox start with denials and end with apologies. Here's his statement of apology in full. And here's our commentator, Dr Matthew Ashton, giving his view on the scandal. We'll be updating the blog throghout the day as new developments come in.

09:07 – There's a slew of new angles in the newspapers today, although none of them move the story on in a significant way. The Guardian reports that political lobbyists were paid thousands to help arrange a meeting between a Dubai businessman and Fox, to which he brought Werritty. The businessman, Harvey Boulter, is a private equity boss alleged to have paid up to £10,000 a month to sort the meeting out. There don't appear to have been any officials present. Meanwhile, The Mail alleges that Werritty tried to cover up the meeting by pleading with Boulter to deny he held talks with Fox. Finally, the Telegraph reports that Werritty was paid with taxpayer funds as a parliamentary researcher. The newspaper also repports that Werritty acted as Fox's personal envoy to Sri Lanka.

09:16 – Yesterday morning, each of the main quality newspapers had some new angle on the scandal, giving the impression of a growing storm. The relatively more subdued approach this morning will give Fox some relief. The language coming out of Downing Street is also noticeably soft. Combined with Cameron's reticence  when it comes to sacking Cabinet secretaries, it suggests No 10 will back the defence secretary. Finally, Labour has stopped well short of demanding his head, although it does want an expanded inquiry and a full statement from the defence secretary in the Commons today. All that makes it look like Fox will make it through the day with his job intact, but I wouldn't be too confident about it.

09:20 – Here's Labour's statement from last night, just after Fox issued the apology. Unusually, it's from a backbencher, Kevan Jones, although he does sit on the defence committee. “This is a remarkable admission. Just 24 hours ago Liam Fox called these allegations ‘baseless’ and now he has apologised, but yet is denying any wrongdoing took place. The defence secretary simply cannot have sensitive meetings behind the back of his officials. This is incredibly serious and this response in incredible.This is a man in denial. We need a full explanation of the very serious questions which remain. There is no need for new procedures, but there is a need for a secretary of state who abides by existing ones. The public will be deeply unimpressed if this obfuscation continues and it is the duty of the prime minister to make sure this is no longer allowed to cloud the character of his government. This inadequate response is exactly why we need a full and proper inquiry led by the Cabinet Office into whether the ministerial code has been breached.”

09:25 – And here's Greg Hands, who's been tasked with defending Fox across the media this morning.  This particular passage is from BBC News: "Let's just establish, first of all, what hasn't happened. Nothing illegal has happened. Dr Fox has made no commercial gain from this. There have been no breaches of national security and Dr Fox has actually apologised for the much smaller matters for which he was at fault. Frankly, there's quite a lot of insinuation, innuendo and smear involved in many of these allegations as reported. The adviser, as such, wasn't present in any of the official meetings and wasn't present when any national security issues were discussed. Dr Fox has apologised, as we know, for any apparent blurring between his professional responsibilities and his personal friendships and that should cover the matter."

09:52 – Bookmakers William Hill just made Fox 8/11  to go before the general election, evens to still be in office and even money favourite to be the next Cabinet minister to leave his post. Hill's spokesman Graham Sharpe said: "The current signs are ominous for Dr Fox and there are very few political punters prepared to bet that he will survive this crisis." As usual, the quote is nonsense and the odds exist as a brazen publicity stunt, but I thought you might be interested anyway.

10:19 – The major development this morning will come at the press lobby briefing in parliament, where we'll get a better idea of Downing Street's attitude to the ongoing row. No 10 has already been highlighting how 'interim' today's report is (the full document has a two-week timetable). These things are a matter of degrees. We already know the defence secretary broke the ministrial code because he effectively admitted it last night. Fox said he had allowed an "impression" of wrongdoing to emerge and that's sufficient for the ministerial code, which insists ministers must "ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests". There are no set-in-stone consequences from breaching the code, however. It is up to Cameron to assess how badly it has been broken and what the consequences would be. As I mentioned below, that arrangement will suit Fox well, because Cameron is disinclined to sack his Cabinet ministers, as Vince Cable and Ken Clarke can testify.

10:53 – Liam Fox is our Issue of the Day. Just minutes until lobby starts, but Downing Street has been briefing journalists to play down any expectation of a decision today. It looks like we're going to be waiting for that final report later this month.

11:39 – The lobby has just broken up. The PM's spokesman said Cameron has "full confidence" in Liam Fox. Back in New Labour's day that was the last thing you heard before you got fired. Under Cameron, it might plausibly be taken at face value. There was considerable support from No 10. "[Fox] inherited a dept which was in a real mess and he has made great strides in tackling that," the spokesman said. The prime minister has not actually recieved the interim report, however. Looks like Sir Gus O'Donnell was too busy enjoying his Sunday to write it up in time. It was supposed to be on Cameron's desk this morning.

11:51 – Nick Clegg on the Fox crisis: "He has recognised and apologised for blurring profesional and personal issues. This matter is now being looked into by officials and the report wil be provided to the prime minister shortly and I won't provide a running commentary beyond that."

12:02 – Cameron has just made a statement. "Of course there are a series of questions that need answering. He answered last night. He gave a good account of himself. He will answer in the House today." I think it's pretty clear now that Fox will survive the day but there's a clear sense that Fox is on probation until that report is delivered in two weeks time. It won't happen today, but that doesn't necessarily mean Fox will be in government in November. Also – this gives journalists more time to dig up dirt.

12:24 – Fox will still be conducting defence questions at 14:30 BST but he is also now tabled to offer a statement to the Commons at 15:30 BST, it has been confirmed.

12:57 – Now Cameron has been on Sky, where he's been giving Ken Clarke a lot more trouble than Fox. On cat-gate, he has slapped down the justice secretary again, despite Therea May being wrong about the details of the immigration case she referred to in her speech. "The facts are clear, that the cat was a factor in this case. It drew attention to a larger problem, which is that article 8 of the European convention on human rights has been abused by some people who want to stay in the UK," Cameron said. On Fox, he commented: "I think it is very important in politics and in life to be scrupulously fair and Liam is an excellent defence secretary and he does a very good job. He is answering these questions and allegations. I am happy for them to be answered in the right way, in the right time. I don't run these things according to newspaper deadlines or press pressure. Let's get the answer to these questions, then let's move ahead with Liam doing a very good job." In a minute or so Cameron will give a speech on immigration. If you want some idea what's in it read this link.

13:32 – In case you're interested, here's Cameron's immigration speech

13:35 – Cameron is now being asked questions, and we can expect Fox to come up.

13:36 – "It's right to give explanations, to apologise where necessary and he's done that," Cameron replied to a question about Fox. "You can't rush this process because there's more information required – more detail needed. As someone who has given great service to the government and the country he deserves my support while we answer these questions. I'm determined to avoid having artificial deadlines imposed on this and make sure we do this in a rational, sensible way. It's good done in a sensible and ordered way."

14:33 – Ok we've got an hour of defence questions and then Fox's statement. I'll stick around live blogging it on the basis that we don't know what might end up getting said, although Fox will presumeably bat away comments on his own problems until the statement.

14:39 – Fox is noticeably relieved to be addressing defence questions, even when they're hostile. It must make a welcome change from his personal life. Matthew Hancock compliments Fox on his work dealing with a particular policy area. Perhaps it's over-reading, but it seems as if Tories pay the compliment, then pause, then bring in the specific area, as if they're communicating their support with each point. Anyway, Fox has built up some confidence now. He's looking much more assured. Those Labour benches are packed though.  He knows what's coming. An answer confirming British business interests overseas is met by laughs from the opposition. Lots of standard Commons innuendo.

14:46 – Fascinating. Iain Duncan Smith is standing at the bar of the House, like a statue symbolising government support. MPs have been good enough to the defence secretary to avoid any mention of the scandal. Gerald Howarth, who really does look awfully like John Redwood, is answering the questions for the time being.

14:50 – Peter Luff, defence minister, is now giving the answers. He's so enthusiastic I feel like wearing sunglasses. There was a joke from the Labur benches just now that saw them explode with laughter. I didn't catch it, unfortunately. Fox diligently looks down at his notes as he scribbles away. Harvey hands Fox his pen after it runs out of ink.

14:56 – Denis MacShane, Labour MP for Rotherham, was the first opposition member to ask a question, but he avoided the scandal. On Twitter he explains why: "Leaving Fox to the hounds and asked about Chinese military build-up while UK doesn't even have aircraft carriers under Fox's ''leadership." You know its a rough day when these are your allies.

15:04 – Jim Murphy, shadow defence secretary,asked  questions. No sign of him tackling the scandal though – he's asking what can be done to convince other countries to join the fight in Afghanistan. Chris Bryant asks what the UK is doing to stop the Americans using cluster bombs. "Our ability to control the US is no greater now than at the time of the convention [on cluster minutions]," Harvey replies.

15:15 – As you may have guessed, there'll be no mention of the scandal for defence questions.  It's all being left for his statement at half three. I'm keeping my ear on it just in case though.

15:19 – Lib Dem Julian Huppert asks about "cases of defence lobbyists acting in a shady and disreputable manner" with an enormous grin on his face. Lots of happiness on the Labour benches. We're now on topical questions. All of George Osborne's team are there to defend the defence secretary, including Greg Hands and Matt Hancock.

15:24 – Some interesting little tit bits here. Fox answered Murphy's question on Libya by talking about Afghanistan, prompting frowns on the opposition benches. nerves? Distraction? Meanwhile, Tory MPs are trying to protect Fox, with Julian Lewis getting a laugh by mentioning a firm alleged to have a connection to Murphy.

15:29 – Osborne himself is now on the front bench. It really is hard to understand what's going in Downing Street. Yesterday it stressed the initial findings, suggesting this thing would be cut short this morning. This morning it turns out they haven't read the report but IDS, Cameron and Osborne make plain their support. They must have seen something that means they won't end up with egg on their face in a couple of weeks. Or is it just personal loyalty and political cock-up? Statement should be any second now.

15:33 – Ok, here we go. Big cheer of support for Fox. He admits it was a mistake to allow personal and professional responsilities to be blurred. He starts on Dubai, where Werritty accompamnied him to meet Boulter. Again, he says they bumped into him in a restaurant and then arrangaed a meeting the next day. Bercow shuts up Labour MPs. Fox says there was a general discussion but at the end Boulter mentioned the dispute with 3M. There was no further discussion of the case. That night Boulter sent emails claiming he had chatted about a knightood for his legal opponenents. They've now retracted that. Fox says it was his fault the meeting happened and it was wrong. 

15:37 – Ok its time to address Werrity. He's never been paid by Fox while in government. He has not been paid for defence procurement. They have a long friendship, including family holidays, Fox says. Three meetings were in Sri Lanka, however. In June he found out about the business card and asked him to stop. They did not discuss defence matters in private meetings. "I accept with the benefit of hindsight that I should have taken greater care", he says. "I accept my personal responsibility." The permanent secretary is making sure "such a seperation of powers in the future will exist". Werrity will not visit the MoD again in the future, he says.

15:39 – On Sri Lanka: Fox talks about a project to encourage projects in Tamil opporutunities, which the two men assisted with. he admits Werrity came to a bilateral meeting, so the Sri Lankans knew the project would continue once he left it. They had more meetings, once in a hotel. Werrity was personal firends with some of these figures. Fox says he wants to be as transparent as possible. "I accept where I have been at fault," Fox says. He will cooperate with the Cabinet Office inquiry. 

15:42 – Murphy is up. He says he and Fox were working well together until this. "It's not a partial apology we want. It's full disclosure." Some would question what sort of friend would compromise his friend like this. Some will question his judgement for allowing it to happen. Murphy then quotes that section of the ministerial code I cited. Fox's apology in itself admits he breached the code. The only question is on how many grounds and on how many occassions. Murphy raises doubts about whether that Dubai meeting happened by chance. How did Werrity know Fox's diary. Why were civil servants excluded from the meeting. Did he seek civil service advice, and if so will be publish it. Potentially ruinous stuff from Murphy here.

15:46 – Murphy cites several clauses of the ministerial code that have been breached, His reluctant tone makes the attack more effective. "We may never know what got the secretary of state into this crisis, whether it was arrogance, naivety or hubris," he says. “'The British people expect the highest standards of conduct… We must be…transparent about what we do and how we do it. Determined to act in the national interest, above improper influence'. Not my words but those of the prime minister in the ministerial code. The prime minster must now apply those standards to the secretary of state otherwise the ministerial code is not worth the paper it is written on."

15:48 – Fox looks dejected. On Dubai he says he's explained how the meeting happened, what was said and what wasn't. He's really accusing Boulter of being a liar. "It is rather difficult to take when a man involved in a blackmail case is feeding information to the media. Fox says Labour took £10,000 from the same company. "I've answered as many questions as I can – perhaps he wants to answer some of those I have for him."

15:51 – Dennis Skinner, Labour flagwaver, says the right wing press has turned against Fox and that's his problem, no matter how much the government front bench supports him.  "It's certainly possible to keep a good bottle just a little bit too long Mr Speaker," Fox replies. Excellent line.

15:54 – The old guard, including Rifkind and Arbuthnot, have been busy offering Fox their full support. I have to say that unless something else comes out of this it looks like he might have made it through safely. That would also help explain Downing Street's reaction to this thing. Nadine Dorries tries to ask Murphy about declaring his interest. Had he declared that before today? Potentially dangeroous question but thankfully he doesn't have to answer it, given that the questions should be directed at the govenrment not opposition benches. "It's on the record," Bercow says. Labour's Paul Flynn asks if Fox is "a fit person" to make life or death decisions for our troops in Afghanistan. Brutal. "If he has a substantial charge to make," Fox replies, "let him bring it out into the open". 

16:02 – Gisela Stewart asks when Fox was first made aware of the business cards. He says by the time the permanent secretary brought it to his attention he already knew about it. Flash of turgid fear in his eyes there for a moment. He's surviving this but there is a definite nervousness there. Ian Lucas (Lab) said the Werrity meetings were on defence matters, in which he had interests. Fox says there was no interest that he was aware of, but if he knows of them he should bring them to the attention of the Cabinet secretary. 

16:06 – David Davies says Fox has acted "properly and honourably". He laughs that Fox is attacked for having no minutes of meetings, but New Labour turned it into a "whole system of sofa government". Fox is actually quite dismissive of the intervention, saying its right that an inquiry on his actions takes place and that he must be seen to behave properly. 

16:09 – Click here for Murphy's response to Liam Fox in full

16:15 – Bryant says Fox is "stretching our credulity" to suggest that it's normal Werrity was there for 18 seperate trips. Obviously that's true. He's only been in power for 18 months. 

16:21 – Kevin Brennan, Labour, asks if his officials were passing on details of Fox's diary to Werrity who then passed it on to others. Fox says that was not the case. Dan Byles, Conservative, says troops risking their lives in Afghanistan would be bewildered what Labour finds important. That was extremely disingenuous, frankly. Whatever else you think about it, this was a legitimate matter of concern.

16:26 – Asked what his reaction was to being told to get rid of the business cards, Fox says Werrity regretted having done it, would not have done it in retrospect and decided to get some new cards. Fox assures the House once again he got no access to cinfidential information. The national security accusations are "utterly baseless". 

16:33 – And with that, the session ends. This morning it was touch and go whether he would survive the day, this afternoon it looked like we wouldn't know Fox's future until later in October. But now the good money is surely on him surviving. The confidence of the government ministers, Fox's reaction to questioning and the inability of Labour to go from troubling assumptions to solid accusation all suggest the defence secretary is here to stay. The taint is with him, of course, and will be highly relevant if he ever finds himself in trouble again. Those 18 trips are, as Bryant pointed out, difficult to swallow. But without prooof, the inquiry will exonerate him.

16:39 – Well I was about to sign off but Downing Street just sent in its response to the initial inquiry. It's along the lines of what you would expect, given what I outlined. Here it is in full: "The prime minister has now seen the interim findings of the Ministry of Defence's permanent secretary review into Liam Fox's relationship with Mr Adam Werrity, and discussed them with the Cabinet secretary. It is clear, as Liam Fox himself said yesterday, that serious mistakes were made in allowing the distinction between professional responsibilities and personal loyalties to be blurred – and this has clearly raised concerns about impropriety and potential conflicts of interest. While the permanent secretary's initial conclusion is that no classified or other defence related official information was discussed with or given to Mr Werrity by the secretary of state or the department, it is clear that much tighter procedures are needed within the department to ensure that the ministerial code is properly adhered to in future. Following these interim findings the prime minister has asked the Cabinet secretary to work with the permanent secretary to complete the report, addressing all the remaining questions that have been raised by this issue."

16:44 – And if you want to read the initial report click here

16:45 – Phew. Ok, well that ends things nicely. I'll take that oppourtunity to shut the blog down now. Join us on Wednesday for our regular PMQs blog. See you then.