Plan to pay Liz Truss’s chief of staff through firm is dropped after criticism

The decision to pay Liz Truss’s new chief of staff, Mark Fullbrook, through a private company has been dropped after criticism from within the Conservatives as well as from opposition parties.

The government admitted over the weekend that Fullbrook would be paid through his lobbying firm, a move that could have helped him avoid paying tax. He had previously claimed the firm had stopped all commercial activities.

It subsequently emerged that Fullbrook had been promised a lucrative contract to run Truss’s next election campaign as well as being made chief of staff.

But the government made a U-turn after an outcry from the opposition and some Tory MPs, with one saying it did not “smell right” after tax changes in the budget making it easier to pay less tax if paid through a self-employed company.

On Tuesday, a No 10 spokesperson said: “While there are established arrangements for employees to join government on secondment, to avoid any ongoing speculation Mark Fullbrook will be employed directly by the government on a special adviser contract.

“All government employees, including those joining on secondment, are subject to the necessary checks and vetting, and all special advisers declare their interests in line with Cabinet Office guidance.”

Previously the government had said the arrangement was properly vetted by the propriety and ethics team.

Fullbrook had previously claimed to the Guardian that he had stopped all commercial activities of the lobbying company as of 31 August this year.

The lobbying firm was only set up earlier this year, and has previously counted as clients Libya’s controversial “parliament”, which has twice attempted to overthrow the UN-established government of national unity in Tripoli, and Sante Global, formerly Unispace Health, which was awarded a £680m PPE contract in 2020.

Fullbrook is already facing questions over his government role after it emerged he was questioned as a witness as part of an FBI inquiry into alleged bribery in Puerto Rico.

At the time, Truss’s spokesperson said she was backing Fullbrook, who did not travel with her to the UN general assembly in New York last week.

The prime minister herself declined to say whether she had been told about his cooperation with the FBI before his appointment, saying only that it had gone through the “proper process”.

A Downing Street spokesperson said the prime minister stood 100% behind Fullbrook and he had “her full support”.

The FBI investigation relates to allegations that Julio Herrera Velutini, a financier and Conservative party donor, promised to help the former governor of Puerto Rico get re-elected if she dismissed an official investigating a bank he owned there. He has denied the charges against him.

In relation to the FBI investigation, a spokesperson for Fullbrook said: “As has been made repeatedly clear, Mr Fullbrook is committed to and complies with all laws and regulations in any jurisdiction in which he works and is confident that he has done so in this matter.

“Indeed, Mark Fullbrook is a witness in this matter and has fully, completely and voluntarily engaged with the US authorities in this matter, as he would always do in any circumstance in which his assistance is sought by authorities.

“The work was engaged only by Mr Herrera and only to conduct opinion research for him and no one else. Mr Fullbrook never did any work for, nor presented any research findings to, the governor or her campaign. There has been no engagement since.

“Mr Fullbrook understands that there are active legal proceedings against other individuals and entities. It would therefore be inappropriate to comment further.”