Housing Secretary Robert Jenrick was in close contact with the businessman behind a controversial planning case while preparing to decide whether to approve it, official documents show.
Private messages show Mr Jenrick texted Richard Desmond before giving the go ahead for a housing development against advice from officials.
Labour said it showed “discrepancies” in Mr Jenrick’s account of events.
But Downing Street said Boris Johnson now considered the matter “closed”.
The documents were released after Labour claimed Mr Jenrick’s approval of a massive housing development on the site of the former Westferry Print Works in east London raised suggestions of “cash for favours”.
Mr Desmond made a personal donation of £12,000 to the Conservative Party 12 days after the minister overruled government planning inspectors to approve the development.
The decision to approve the development was later challenged by Tower Hamlets Council, forcing the secretary of state to say what he did was “unlawful by reason of apparent bias”. It is now being handled by another minister.
The housing secretary insists he had no knowledge of Mr Desmond’s donation and that his decision to overrule the inspectors was “not unusual”, motivated by a desire to see more homes built.
A billionaire with a planning problem finds himself sitting next to the cabinet minister responsible for planning, at a Conservative fundraising dinner.
The two later exchange texts and planning permission is granted in the nick of time, just before the developer would have found himself on the hook for a whopping tax bill.
The billionaire then makes a donation – albeit a small one – to the Conservative Party.
Little wonder this has caused Labour and others to ask loads of questions about what on earth was going on.
It looks bad. That’s not my judgement – but that of Robert Jenrick.
Mr Jenrick changed his mind and rescinded the planning permission, as it was “unlawful by reason of apparent bias”.
Note the word “apparent.”
The Minister insists he wasn’t biased, he declined to visit the proposed building site, and he has always been committed to and driven by ensuring more houses are built.
Oh, and there is still no permission for the building work to start.
Notably, Labour is not calling for Robert Jenrick to resign and the Prime Minister says the case is closed.
So, for now at least, Mr Jenrick appears safe.
It is clear from the emails and letters released on Wednesday evening that Mr Jenrick supported the housing project – in the face of opposition from his officials – and was keen to make rapid progress with the decision.
The papers include personal correspondence between the minister and Mr Desmond, owner of property developers Northern & Shell, in the run-up to the planning permission being granted on 14 January.
Mr Desmond, the former owner of Express newspapers, had been lobbying for the proposed 1,500-home development to be approved before the local council, Tower Hamlets, introduced a new Community Infrastructure Levy (CIL) to pay for local services.
In a text message to Mr Jenrick in November 2019, with an apparent reference to the Labour council, Mr Desmond wrote: “…we appreciate the speed as we don’t want to give Marxists a load of doe [sic] for nothing!”
In one of the papers, a civil servant wrote, “On timing, my understanding is that the SoS is/was insistent that the decision issued this week i.e. tomorrow – as next week the viability of the scheme is impacted by the change in London CIL.”
Mr Jenrick approved the scheme on 14 January, by which Mr Desmond avoided paying £40m for the levy.
Business Minister Nahim Zahawi told BBC Radio 4’s Today programme: “Getting stuff built is important to Robert Jenrick, that was his motivation.
“But when there was a perception of bias, he pulled back on this, pulled the plug on it and will now allow a different minister to decide the scheme.
“The access didn’t buy this billionaire a decision.”
The papers also show Mr Jenrick asked a member of his staff to arrange a meeting with Mr Desmond the day after he sat next to him at a Tory fundraising dinner, at which the businessman showed him a video of the planned development on his phone.
But on the following day, Mr Jenrick said by text that they should not meet again to avoid “any appearance of being influenced”.
The arranged meeting appears to have been cancelled nearly a month later because Mr Jenrick had to be in Parliament for the Queen’s Speech.
The opposition said Mr Jenrick also overruled his advisers to reduce the amount of affordable housing required in the development, potentially saving Mr Desmond a further £106m.
Labour’s shadow communities secretary, Steve Reed, said he was “far from satisfied” with Mr Jenrick’s explanation of events, claiming the text exchanges with Mr Desmond were “highly inappropriate” and “not in the spirit of the ministerial code of conduct”.
“The housing secretary needs to explain these discrepancies as a matter of urgency: the public must be reassured that there is not one rule for the Conservatives and their wealthy donors and another rule for everyone else,” he added.
The UK’s top civil servant Sir Mark Sedwill has rejected opposition calls for an investigation into Mr Jenrick’s conduct – and whether he had broken the ministerial code – saying he had given a “full and factual account” of his actions.
Under the code, ministers must “declare and resolve any relationships”, report any social contact with interested parties and “take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias”.
John Biggs, Labour Mayor of Tower Hamlets, said: ”The revelations about the Westferry Print Works decision have blown apart confidence in our planning system under Mr Jenrick.
“The documents he was forced to release are damning and it looks like he rushed through the decision to help save the developer money and short-change my residents.
”The minister referred to our borough as ‘rotten’, and messages from the developer called our council ‘Marxist’. This name calling says more about them and their disregard for my residents whose borough it is, and who rightly want much needed affordable homes and money for local services.”
The view from Tower Hamlets
By Steve Swann, BBC News
It is the timing of the decision to approve the development which is the greatest cause for concern among those living close to the east London site.
It came the day before a new community infrastructure levy was introduced, saving the developer an estimated £40m that could have been spent on schools, transport, hospitals and sports facilities.
“I really feel that I’ve been a bit cheated to be honest with you,” says local resident Ruth Bravery, who runs a charity that helps the destitute in East London.
“That meant that the local people are really going to lose out as a result.”
Speaking in the Commons before the documents were released, Mr Jenrick said the accusations were “not simply wrong but actually outrageous”, adding the decision had been made on its merits after a thorough process.
But he admitted “things could and should have been done differently”, saying: “On reflection, I should have handled the communication differently.”
Conservative backbencher Sir Bernard Jenkin backed Mr Jenrick to stay in his job and told BBC Radio 4’s Today programme that while there had been a mistake there was “no sign of actual maladministration”.