Directors in cash-for-vaccines row get 680 per cent rise

By Jason Nisse and Jo Dillon

04 August 2002

Powderject, the drug company at the centre of the "cash for vaccines" row, has given its directors pay rises of 679 per cent since Labour came to power.

It also emerged this weekend that the firm – whose boss, Paul Drayson, made a £50,000 donation to Labour just weeks before winning a government contract to supply a smallpox vaccine – also gave the party £50,000 in July 2001, a few months after being awarded a contract for the anti-TB vaccine programme for schools.

Exclusive analysis by The Independent on Sunday and Manifest, a voting agency, shows that in the financial year to March 2002, total pay to Powderject directors was £2.37m, with Dr Drayson the highest paid, receiving £515,000.

In 1997, the year Labour came to power and Powderject floated on the London Stock Exchange, total directors' pay was £304,000. Dr Drayson's share was £144,000. Powderject ranks third among the top 350 companies in the UK for the level of pay rises.

Though the company itself does not fund political parties, Dr Drayson has become a well known Labour supporter and funds Mr Blair's efforts from a family fortune estimated at more than £100m.

A spokesman said it was "frankly ridiculous" to link his private contributions to Labour with contracts won by Powderject. But Mr Blair's opponents insist there is an appearance of "cash for favours" hanging over Labour's links with big business.

Dr Drayson gave £50,000 to Labour in February. In April he won a £32m contract to provide smallpox vaccines to the NHS.

An earlier donation, made in July 2001, came just a few months after Powderject won a contract to supply BCG vaccine in March 2001.

The contract, worth £17m over two years, was four times the value of the previous contract for the vaccine.

The shadow health secretary ,Dr Liam Fox, who complained about the cost of the vaccine at the time, said: "I just think there is an increasingly bad smell about the way that Labour, including the Department of Health, are giving contracts to those who have given them money.

"It seems that this Government's measurement of best value is how much money goes into the party coffers."

Ministers were forced to halt the anti-TB immunisation programme in schools in 1999 after their supplier, Medeva, ran into problems. Medeva was later taken over by Powderject and renamed Evans Vaccines. A new contract was negotiated with the Department of Health – at more than four times the original £2m a year.

Powderject was the only manufacturer with a UK licence to supply BCG vaccine at that time. A Powderject spokesman said: "It was an open and public tender."

The executive pay survey has shown how Dr Drayson's pay rose by 257 per cent over the past five years – 10 times the national average.

However, Dr Drayson was not the biggest boardroom winner. In the past four years, directors have made £10.67m from selling shares given to them by the company. The largest beneficiary was Terry Burkoth, who joined the company just before it floated and now runs its American side. He made £1.91m in recent months from selling shares, taking his total profit from share sales to £4.69m.

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