Health Secretary Matt Hancock is being accused of “cronyism at the heart of government” by Labour after it was revealed he has been given shares in a family firm that has done business with the NHS.

Mr Hancock has declared in the Commons register of MPs’ interests that he now owns shares in Topwood Ltd, a waste disposal company owned by his sister and other family members.

It was reported this week that the company had been awarded two contracts worth £300,000 by NHS Wales, for which Mr Hancock has no responsibility, as health is devolved to the Welsh government.

But the Health Service Journal has now reported that Topwood was also awarded a “framework deal” to provide services to the NHS in England in 2019, as well as its contracts in Wales.

The HSJ also claims Mr Hancock has omitted to declare his connection to the company in the relevant register of interests, an accusation rejected by the Department of Health and Social Care (DHSC).

In the register of MPs’ interests, Mr Hancock says he received a “gift” of 15% of the issued share capital of Topwood Ltd, his sister’s company, under a “delegated management arrangement”.

Responding to the HSJ report, shadow health secretary Jonathan Ashworth tweeted: “Shocking, but sadly I suspect no one is surprised any more at the cronyism at the heart of this government.”

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But insisting the health secretary has done nothing wrong, a government spokesperson told Sky News: “Mr Hancock has acted entirely properly in these circumstances.

“All declarations of interest have been made in accordance with the ministerial code. Ministers have no involvement in the awarding of these contracts, and no conflict of interest arises.”

Whitehall sources have also told Sky News that the health secretary has no active participation in the running of the company and neither he nor his department had any involvement in the awarding of the contracts.

It is understood Mr Hancock discussed with the DHSC’s top civil servant, permanent secretary Sir Christopher Wormald, that he would be gifted these shares before accepting them.

Whitehall sources also claim Sir Christopher was confident that were any conflicts of interests to arise, they could be appropriately handled in line with the ministerial code.

And one source told Sky News: “These shareholdings are only known about because Mr Hancock has followed the transparency rules in the full and correct way.”

The allegations come after Sir Keir Starmer told Boris Johnson at Prime Minister’s Questions it was time to “clean up the sleaze and cronyism that’s at the heart of this Conservative government”.

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The Labour leader told MPs: “The Greensill scandal is just the tip of the iceberg – dodgy contracts, privileged access, jobs for their mates. This is the return of Tory sleaze.”

Shadow health minister Justin Madders added: “It is now clear this Conservative government has been infected with widespread cronyism and is unable to identify where the line is drawn between personal and departmental interests.

“It’s one rule for them, another for everybody else.

“There are serious questions to answer from Matt Hancock and there needs to be a full inquiry and immediate publication of all documents relating to Topwood’s acceptance onto the framework contract in 2019.”

Mr Hancock has previously faced criticism over a former neighbour and landlord of his local pub being awarded coronavirus PPE contracts worth £30m.

He has also claimed it was just a coincidence that COVID contracts worth about £2bn were handed by his department to firms linked with Conservative Party members or donors.