TERMINATION OF DISQUALIFICATIONS FOR FAILURE TO IMPLEMENT HOUSING FINANCE ACT 1972. (Hansard, 4 August 1975)

§ Mr. Crosland
I beg to move, That this House doth disagree with the Lords in the said amendment.
Clause 4 was the clause which lifted the disqualification from the only councillors who had actually been disqualified for their failure to implement the Housing Finance Act, namely, those at Clay Cross. They alone had suffered an extraordinary audit, and in their case alone had the district auditor completed his proceedings. On grounds of consistency it seems to us right to lift the disqualification here, in the same way as the Bill removes the threat of it elsewhere.
Since we debated this matter on Report the situation has altered. The same Clay Cross councillors and some others were surcharged in April for about £50,000 on account of matters wholly unconnected with the Housing Finance Act. But they had the right of appeal. At the time of the Report stage on 14th May we still did not know if they intended to exercise that right of appeal. So in defending Clause 4 on Report, I made it clear that I did not want in any way to prejudice any appeal which these councillors might make against this second surcharge.
On 28th May, after the Report stage in this House, the six-weeks' time-limit for an appeal against the new surcharge ran out. The 11 councillors concerned decided not to appeal, and my expert legal advice is that there is now no practical possibility of their finding a way of upsetting the surcharges in the court. That means that they are disqualified for a further five years, and Clause 4 becomes of nil effect. The new disqualification will outrun the original disqualification by about 18 months.
So Clause 4 is now what the lawyers call otiose. If we restored it to the Bill, it would have no practical effect. As far 156 as the Government are concerned, therefore, it makes no practical difference whether the clause is restored to the Bill or not. The matter has become one on which individuals make up their minds on quite different grounds. That is why my right hon. Friend the Leader of the House announced that the decision on how this side of the House should vote would be taken freely after a meeting of the Parliamentary Labour Party.
After serious debate last Wednesday—

§ Mr. Crosland
I shall not give way. The hon. Gentleman is making his first appearance for tonight. We are pleased to see him.
After serious debate last Wednesday, that meeting was swayed by two arguments. One was the argument about internal consistency deployed by my noble Friend the Lord Privy Seal in another place.
Secondly, although the clause will not allow the Clay Cross councillors to stand again for office until the period of their second disqualification has expired, there was thought to be advantage in making it explicit for what reason they are now disqualified—that is, the legislation should provide that they are not disqualified for what took place under the Housing Finance Act.
I therefore ask the House to reject the Lords amendment.

§ Mr. Raison
Having heard that speech, I honestly do not know whether to laugh or cry. As the House knows, the issue before us is simple: should the disqualification of the Clay Cross councillors stand? As we know, that issue has now become purely one of principle—or, rather, abandonment of principle. The Secretary of State told us that the Clay Cross councillors concerned have subsequently been resurcharged and are disqualified for events unrelated to the Housing Finance Act, and this clause, in his words, has become otiose. I put it to him that it still has consequences far greater than he suggests.
Clause 4 was deleted in the other place on a "stand part" vote by 148 to 41. I am sure that all hon. Members recognise 157 that by any standards the turn-out of Labour peers in the other place was thin. Many appear to have abstained, and Baroness Burton of Coventry spoke and voted against the clause, saying that it was a wrong thing that the Lords were being asked to do.
The Secretary of State knows full well that this is a wrong thing that the House of Commons is now being asked to do. One is tempted to say that it is farcical—we know that it has no practical effect—but it is worse than farcical. It is contemptible.
We know that the Secretary of State wished to drop the clause but, on his own admission now, the matter was put before the Parliamentary Labour Party to decide. What an astonishing insult to our Parliamentary system. [Interruption.] I can state categorically that we on this side have never behaved in this way. I assure hon. Members opposite who are laughing that, when the vote comes, they will see that not all their colleagues are happy with what they are doing tonight. It is a contemptible action.
Why did the Secretary of State agree to this matter being put to the Parliamentary Labour Party? Why did he not have the guts to take his own decision? The only matter throughout all these proceedings on which the Secretary of State has taken a stand on principle was the decision not to remit the original £7,000 surcharge. But this, too, is a weird story. After over a year's delay, the writs on the councillors have now been pressed and bankruptcy proceedings are apparently under way. We are entitled to ask the Secretary of State what has happened to the famous Labour Party fund to pay this money off.
In his statement on 4th April 1974 the Prime Minister indicated that the Labour Party was to consider how to raise the money. In Committee the hon. Member for Manchester, Ardwick (Mr. Kaufman), then Under-Secretary of State for the Environment, said: I understand that steps are being taken to raise the £7,000, even though it is not yet finally available. From what I understand, I would certainly expect it to be forthcoming in the not too distant future."—[Official Report, Standing Committee D, 24th April 1975; c. 278.]

§ Mrs. Jeger
As a member of the National Executive of the Labour Party, 158 I must tell the hon. Gentleman that the only appeal which we have made was for money to pay legal expenses. The Labour Party has never asked for any fund to deal with the situation otherwise. The only appeal has been for legal expenses.

§ Mr. Raison
That is contrary to the impression given by the Prime Minister and the Secretary of State.
On 14th May the Secretary of State said, on Third Reading, that he understood that this money was likely to be available fairly soon. In the event, apparently nothing was raised. The money was not paid off, and the Labour Party was not able to raise this paltry sum of money in support of the Clay Cross councillors.