HC Deb 13 January 1994 vol 235 cc347-62

4.6 pm

The Secretary of State for the Environment (Mr. John Selwyn Gummer)

With permission, Madam Speaker, I wish to make a statement in response to the question raised during points of order yesterday—whether the Secretary of State has powers under the Local Government Finance Act 1982 to direct the auditor to publish the information that he has obtained in the course of his audit.

The issue arises out of the provisional findings of the district auditor in relation to allegations of misconduct at Westminster city council. Those findings were set out in a statement issued by him earlier today.

The district auditor is, by statute, independent. He is appointed by the Audit Commission to carry out an external audit of a local authority's accounts but, once appointed, he is not subject to direction by the Government or, except in certain limited circumstances, by the commission. He acts wholly independently. This is the most important democratic safeguard. His duties are laid down in statute and amplified in the code of audit practice which is approved from time to time by the House.

One of his duties is to consider objections made by electors against an authority's accounts. In the present case, he received objections in relation to decisions taken by Westminster city council during 1987 on its designated sales programme. It is alleged that decisions taken by the council and expenditure incurred in pursuing those decisions were unlawful. It is alleged in particular that the purpose of the council's policy was to retain political control of marginal wards.

Those are very grave allegations. It is right that they should be treated with the utmost seriousness, but the district auditor has made it clear that his view of the allegations is provisional, and that all the interested parties have an opportunity to challenge that view. If the allegations are proved, I shall have no hesitation in condemning the behaviour. In the meantime, the rights of those accused must be protected. I repeat, none the less, that, if the allegations of unlawful expenditure and wilful misconduct are ultimately upheld, I will condemn that behaviour in this case, as I would in any other, and the law will and should take its course.

The hon. Member for Blackburn (Mr. Straw) asked yesterday that I should direct the auditor to publish the information gathered in his inquiries. My hon. Friend the Minister for Local Government and Planning promised that he would take that request away and take legal advice. He has since written to the hon. Member explaining that I have no powers to direct the auditor to do so. A copy of my hon. Friend's letter is in the Library.

I am happy to assure the House that, when the case is complete, I shall consider again the issues that the hon. Gentleman has properly raised to see whether there are any changes that I would wish to recommend.

Mr. Jack Straw (Blackburn)

I thank the Secretary of State for coming to the House to make a statement in response to my point of order yesterday. Although we believe, as I think he does, that current law on the publication of the report is wholly unsatisfactory, we acknowledge that it exists, and we believe that it should be the subject of an urgent review.

The Secretary of State is already aware that I have made it clear outside the House that the respondents mentioned in the report are of course entitled to defend themselves under due process. He should also be aware, however, that the district auditor who carried out the report said today that this was the most wide ranging and comprehensivc inquiry ever conducted by a local government auditor". Since no one appears to dispute the auditor's description of the events, surely the Secretary of State should now be able to condemn the designated sales policies, lawful or otherwise, which led to hundreds on housing waiting lists and hundreds of homeless people in Westminster being denied houses and homes in Westminster, as Westminster city council mocked their need by boarding up decent homes and then trying to sell them on the open market.

Surely, given the Conservative party's attitude on law and order, it is possible to condemn a crime now without prejudging the issue of who was guilty of committing the crime. Why does not the Secretary of State practise what he and other Ministers preach on the issue of law and order?

Does not the Secretary of State accept that, if the findings are upheld, this will be a case of political corruption and gerrymandering on a scale unknown in modern Britain? [HON. MEMBERS: "Come off it."] There is no parallel—Conservative Members had better understand this—for corruption on this scale. If the findings are upheld, it will also show that the Conservative party in Westminster is rotten and amoral to the core, and has abandoned the most basic principles of public morality.

Does not the Secretary of State also accept that his party and Government should bear substantial responsibility for—

Mr. Iain Duncan Smith (Chingford)

On a point of order, Madam Speaker. Today, on the radio, there was an investigation into—[HON. MEMBERS: "This is not a point of order."] It is a legitimate point of order.

Madam Speaker

Order. Hon. Members might let me do my job. If a point of order is raised, I have to listen to decide whether it is indeed a point of order—and let me tell the hon. Gentleman that I hope it is.

Mr. Duncan Smith

It is, Madam Speaker. Today there was an item on the radio about Tameside council, in which serious allegations were levelled against that council on the basis of the district auditor's account. Therefore, I would ask you, Madam Speaker —

Madam Speaker

Order. What is the point of order for me?

Mr. Duncan Smith

I am coming to it. I ask you, Madam Speaker, to urge the Secretary of State to make a statement about the district auditor—[Interruption.]

Madam Speaker

Order. That would have been a good business question to put to the Leader of the House a few minutes ago, but it is not a point of order for me.

Mr. Straw

The country will see the way in which Conservative Members are so windy about the disclosure of corruption and maladministration in Westminster on a scale that has never occurred before in modern Britain that they try gratuitously to disrupt the proceedings of the House. [Interruption.]

Hon. Members

Shut up.

Madam Speaker

Order.

Mr. Straw

Does the Secretary of State accept that, because of the climate that his Government and the Conservative party have created, they must bear a substantial responsibility for what happened in Westminster? In 1990, the Conservative Government were gerrymandering grant to Westminster, just as the Conservative party in Westminster was seeking to gerrymander housing to gerrymander votes.

Surely the House and the country are owed an explanation—now—of the involvement of senior Conservative politicians and Conservative central office in the designated sales policies in Westminster.

Since the allegations were fully made public by the objectors as long ago as 1989, did Ministers really know nothing of them when, as my right hon. and learned Friend the Leader of the Opposition said at Prime Minister's Question Time, in 1990 the present Secretary of State for Employment referred to Westminster council as a "stunning success"? What are we to make of the statement that the Prime Minister made to the House on 21 February 1991, in which he said: We should be happy to have Dame Shirley's advice on the issue of the poll tax or on many other matters"? He went on to say that Westminster council was certainly an example to other authorities and I hope that they will follow that example."—[Official Report, 21 February 1991; Vol. 186, c. 432.] Did the Prime Minister know what was going on in Westminster when he said that, and, in the light of today's alarming revelations, how many authorities have taken his advice and followed Westminster's example down the road of corruption and maladministration?

Does the Secretary of State believe—I have given him notice of this—that the Secretary of State for National Heritage needs publicly to offer his explanation about the meeting that "Panorama" claimed he attended in 1989, where the designated sales policy was fully discussed? What else did he know about that policy, and what steps did he take to prevent it from being followed?

Does the Secretary of State understand that, in the past 14 years, there has been a most serious decline of standards of probity and public morality, and that measures must now urgently be put in place to prevent such a systematic deception and fraud of the electorate and misuse of public funds from ever happening again?

Mr. Gummer

If we are to take seriously the allegations that have been made, we will do best to confine ourselves to those matters, rather than to use the opportunity for a general rant. I therefore say to the hon. Member for Blackburn (Mr. Straw) that I am taking the matter very seriously indeed.

The auditor's description of events is in front of us, and when those who have been criticised are given an opportunity to make their points, they will no doubt do so clearly, after which the auditor will make his decisions. Other legal remedies will then be available to them.

In the end, if any of the allegations are found to be true, I will, as I have said unreservedly and without distinction between political parties, condemn them, but there is no possible way in which I can comment on bits of the various statements, or indeed refer to references in other documents which I do not have, and which the auditor specifically has insisted that I should not have.

I believe that the House should uphold two specific and clear principles.

Mr. Bruce Grocott (The Wrekin)

Law and order.

Mr. Gummer

The first is law and order.—[HON. MEMBERS: "Hear, hear."]—and the second is the right to put one's case and not be judged guilty before one has done so. That second principle is one that the House has always held especially dear.

I have two things to say to the hon. Member for Blackburn about his references to my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke). First, my right hon. Friend is not mentioned in the document before us. Secondly, I take the same view of my right hon. Friend as I do of the hon. Member for Blackburn —I do not believe that the hon. Gentleman is responsible for the policies of Blackburn council, but I would not find it surprising to hear that from time to time he has met members of that council. Unless it suddenly becomes impossible for either of those to be reasonable positions for Members of Parliament, I do not believe that my right hon. Friend has anything to reply to.

I must be careful about the length of my reply, but I must tell the hon. Member for Blackburn that he ought to think carefully about the whole history of local government all over the country before he starts believing that he can take a party political view of this.

Mr. Robert B. Jones (Hertfordshire, West)

First, may I welcome very much indeed my right hon. Friend's robust defence both of due process and of the independence of the auditor? Since he is intent on looking at what lessons may be learnt and on reviewing the legislation governing district auditors, may I ask him to look particularly at the regulations governing the publication of reports, the length of time it takes to produce reports, and the length of time there is between the dates of the accounts to which objections are made and the final investigation by auditors?

May I also ask my right hon. Friend to look at the balance between two different types of accounting? Traditionally, of course, these matters were looked at in terms of financial accounting in order to try to detect, for example, embezzlement. We have moved from there to a position where accounting is very much value-for-money accounting, which of course brings into account much more political judgment and of course value judgments. Is it not therefore important to see that there are guidelines so that the proper process of democratic accountability is not undermined by the accounting process itself? Finally, may I totally dissociate myself from the comments of the hon. Member for Blackburn (Mr. Straw)?

It seems to me grossly distasteful that someone who has a Front-Bench colleague who has been a disqualified councillor should speak in such a sanctimonious way.

Mr. Gummer

I shall seek to learn whatever lessons about the conduct of auditors need to be learnt as a result of the case, when such lessons can be learnt without interfering with the due process of auditing or of the law. I shall also take into account what my hon. Friend has said, but I do not expect to do so in such a way as to remove from the auditor his prized possession of independence, part of which depends on his ability to decide what reports he is to make, and where and when.

That is an area of great sensitivity, and I should be loth to make or to recommend any changes that would detract from the auditor's independence. The temptations to rush to judgment are great, but it would be better for all of us if no one were to do so.

Mr. David Rendel (Newbury)

At various times during his statement, the Secretary of State referred to "allegations" and their seriousness. Everybody in the House, and in the country, will accept that the matter is very serious and has been properly investigated. However, surely we have got beyond talking about allegations. We now have findings—admittedly provisional, but none the less findings—by the district auditor. It is much more serious now than it was when they were merely allegations that had not yet been investigated.

The case is especially strong because, as has already been mentioned, the auditor's investigation has been lengthy, detailed and expensive, and therefore gives extra strength to the provisional findings that have been announced. Does the Secretary of State feel that the time has come to make it clear that those are provisional findings and not merely allegations?

There are two sets of people whose rights have been damaged by the failure to publish the full report straight away. First, the people in Westminster, who are facing elections shortly—

Madam Speaker

Order. I regret to interrupt the hon. Gentleman, but I am seeking brisk questions and brisk answers. I have heard one question after a long statement from the hon. Gentleman. Will he now conclude with a question?

Mr. Rendel

Does the Secretary of State feel that immediate action is necessary to reform that part of the law which has prevented the district auditor from giving his full report in public now, and ensure that the rights of the people of Westminster and the Members of the House who are also clearly concerned in the matter are redressed?

Mr. Gummer

The reference to the report is based on the words of paragraph 36, which states: My Note of provisional findings…does not constitute any decision or finding adverse to any individual. In other words, the auditor himself does not support what the hon. Gentleman says. I wish that he had read the report more carefully and had seen that my statement had been accurate in that respect.

It is not my decision that the auditor has decided not to print and publish his report. That is his decision, and any determination to force him to do so would seem to be unsuitable in the context of a single case. When the case is complete, it will be perfectly proper for the House to consider that matter on recommendations placed before it.

Mr. Graham Riddick (Colne Valley)

Bearing in mind the fact that Labour-controlled Hackney council's housing department is surrounded by allegations of corruption and incompetence, that Labour-controlled Monklands council stands accused of nepotism, incompetence and corruption, and that Lambeth council has £173 million outstanding in debt and arrears, is it not unsurprising that the Labour-supporting Tribune magazine has described Labour councils as lacklustre, incompetent, ineffectual and rotten?

Mr. Gummer

I do not believe that it is helpful in the House to rush to judge. Much as I am tempted by my hon. Friend's references, I shall try, if I may use a quote that you, Madam Speaker, know well, to "yield not to temptation". I hope that one or two other people will try to do so as well.

Mr. Dennis Skinner (Bolsover)

Has not the Secretary of State got more than a little cheek to tell us not to rush to judgment on that case affecting a Tory council when, a few years ago, Minister after Minister stood at the Dispatch Box and attacked the Clay Cross councillors because they had the guts to fight the Tory Local Government and Housing Act 1989 long before it went to the High Court? The same was true of Lambeth and Liverpool, and all those who refused to pay the poll tax on principle.

The Secretary of State and this lousy rotten Government will not condemn Westminster council because it is Tory-controlled, and because, throughout those years, the Government were working in harness with it, giving it money—loads and loads of money—to win those safe areas and wards.

The Tory Government stand condemned just as much as Lady Porter and all her mob.

Mr. Gummer

The hon. Gentleman shows his usual disregard of the facts and desire to make a party political point at all costs. I merely say to him that perhaps he would accord to others the freedoms which he would jealously demand for himself and his own side.

Mr. Roger Knapman (Stroud)

The Opposition parties seem to think that there are some moral issues at stake. Can my right hon. Friend say what sort of morality it is that allows such allegations and accusations to be made before the full report is known?

Mr. Gummer

My hon. Friend will agree with me that we should leave the judgments until we have some conclusion as to guilt or innocence. When we receive those judgments, we should condemn unreservedly what needs to be condemned. We should not act before we are so able to do, if we are so able.

Mr. Peter Shore (Bethnal Green and Stepney)

I understand why the Secretary of State says that he wants to reserve judgment on the serious allegations made against named individuals in the auditor's report, but this matter also raises, as my hon. Friend the Member for Blackburn (Mr. Straw) pointed out, serious policy issues, the most important to which is the inability of Westminster city council to perform its proper functions as a housing authority and to deal with the scandalous problems of the homeless and those in need of urgent medical priority rehousing.

The Secretary of State must be aware that in London we have suffered for years now, in particular during the past seven or eight years, from the scandal and shame of cardboard city and homeless people lying in the doorways up and down the Strand, only a few hundred yards away. We have to suffer these outrages at a time when hundreds of dwellings that would otherwise have been available for homeless people and people in need of urgent medical priority rehousing have been denied them because of the policies pursued by the council most particularly responsible—Westminister city council.

Incidentally, it is not only Westminster city council, but other councils, including the Stepney neighbourhood council and Tower Hamlets council, that insist on selling empty local authority properties, despite having huge requirements for dealing with homeless people and those in urgent need of medical priority rehousing.

Will the Secretary of State now issue new guidance to local authorities, telling them that, in areas where there are lots of homeless people and people in need of urgent medical rehousing, it is against national policy for them to sell off their homes simply to raise money and for private ownership purposes?

Mr. Gummer

First, the right hon. Gentleman has experience of these things, and he will remember that, when he was doing my job, he was unable to satisfy people on his own side with the housing programmes that he introduced because they were not as good as the ones that we are putting forward.

Secondly, the right hon. Gentleman will know that we have reduced to one third the number of people who are homeless at night on the streets in London; that every single one of them every night has a bed provided, because we have seen to that; that we are providing between £70 million and £80 million over the next three years to complete this programme's next stage; and that the voluntary bodies which are concerned in this are supportive of it.

My next point comes hard for me, because it may seem to be a remark favourable to the Liberal party, but it would be an odd argument for the right hon. Gentleman to suggest that the Government should extend their controls over local authority decisions and tell two neighbourhood councils that they do not know best how to solve the homelessness problems in their area.

I am rather on the side of those who believe that we should do our best to move further towards subsidiarity, rather than against it. I hope that the right hon. Gentleman will not push me down the road he suggests. I say that in circumstances in which I do not find the housing policy of Tower Hamlets right—I have a number of things that I would like to see Tower Hamlets do differently—but when the right hon. Gentleman uses this occasion to make a gratuitous parliamentary political comment about his local council, he lowers himself.

Madam Speaker

Order. I have appealed to all hon. Members to be brisk with their questions and answers. Many hon. Members are seeking to raise questions.

Mr. David Shaw (Dover)

Can my right hon. Friend tell the House whether it is against local government finance law to buy votes by refusing to collect rents and council taxes? Is it against local government finance law and other local government laws to buy support and votes by employing one's relatives if one is a councillor? Do we not have to stop Labour councillors from doing that sort of thing?

Mr. Gummer

If there is an activity which is against the law, that would be properly reported to the district auditor, who will take the proper action. I am sure that my hon. Friend is referring to a range of activities, to which many others might be added, which many people would want to think about. But I would not want them to think about those activities without taking due note of the seriousness of the issue that is in front of us.

Mr. John Gunnell (Morley and Leeds, South)

As a member of the Audit Commission at the time that Liverpool city council was investigated and surcharged, I know that the commission took two views which seemed to be relevant, and I wonder whether the Secretary of State would agree.

The first was that every member of the council was entitled to the fullest information about the investigations that were taking place. Indeed, it was the responsibility of the commission to see that all members of the authority in question had the fullest information. The second was that investigations carried out on behalf of the commission which revealed faults should be given the widest publicity so that everyone in local government was aware of what had gone wrong and could learn from those lessons.

In those circumstances, does the Secretary of State think that every member of the council is entitled to the 235-page report referred to in this report and to the fullest documentation? Does he agree that, clearly, the nature of the investigation and what it has revealed should be made public, so that everyone in local government and public office can learn from the events which have occurred? They will then know when someone steps over the line, if anyone does. Clearly, in this case the auditor provisionally thinks that the line has been broken.

Mr. Gummer

The hon. Gentleman raises perfectly proper questions. First, I can assure him that all Westminster councillors have the full findings of the auditor. Secondly, the auditor has the right at any time to issue what he would call a public-interest report. If he decided that that was what he wanted to do before the end of any investigation, he would be able to do so. Of course, he could do it after the end of the investigation, and that might seem to be the best point at which to do it. It would be entirely up to him to make that judgment. I am sure that he will bear in mind precisely the sort of issues that the hon. Gentleman has raised.

Sir Paul Beresford (Croydon, Central)

Does my right hon. Friend agree that, in cases of gross incompetence or considerable incompetence by a local authority, in the armoury of the district auditor and the Audit Commission they can only place a report and a recommendation, and that many millions of pounds of council taxpayers' money is being wasted? If the auditor is undertaking a review, consideration should be given to firming up the powers of the Audit Commission for the sake of many residents in areas such as Lambeth, Southwark, Islington and many of the incompetent Labour authorities where he is powerless effectively to act.

Mr. Gummer

My hon. Friend rightly points to the fact that there are many ways in which local residents and taxpayers may find themselves damaged financially, not just by the misuse of powers but by the less than competent use of powers. I would suggest to my hon. Friend that it would be better perhaps to consider the points which he has made after the completion of the proceedings. We may then examine them without prejudice to those concerned.

Mr. Bob Cryer (Bradford, South)

Has the Secretary of State troubled to request—not force—the district auditor to publish the report? Is the right hon. Gentleman worried about libel proceedings? Is it not true that the auditor has qualified privilege by virtue of his office and that anybody seeking to take action for libel would have to prove malice against the auditor to justify such a course?

Is it not also true that the Government are determined not to have the report published, and that they are determined to do nothing that would give the House and the wider public information? Is that not because they want to try their best to cover up the whole shoddy affair, so we cannot be clear whether Dame Shirley Porter is the biggest crook of the decade or of the century?

Mr. Gummer

I am sure that the hon. Gentleman, with his characteristic fairness, would accept that it would be better for a decision on that matter to be made by the man who has all the facts at his fingertips. He has gone through 100,000 pages of documentation, and he has produced a large report. It seems to me that it is up to him to make that judgment.

I wonder whether the hon. Gentleman's question would have been that which he has just asked if I, as a Minister, had asked the auditor to change his mind. Would not the hon. Gentleman have asked why, when the auditor had decided to do one thing, I as a Minister had sought to get him to change his mind? I suspect that that would be precisely what the hon. Gentleman would have asked and, what is more, the hon. Gentleman knows that.

Dr. Keith Hampson (Leeds, North-West)

Does my right hon. Friend accept that two issues which are raised by a reading of the provisional report into Westminster are the reports of the Poulson affair and the extraordinary examination given by the BBC this morning of the nepotism, gross incompetence and corruption in Tameside? Is it not a fact that the distinguished presenter of "Today" reminded the nation of the way in which Labour councils grossly manipulated their housing policies when he was a local government reporter in the 1950s?

That raises the question whether it is inherently virtuous to establish more responsibility and more resources in the hands of local councillors. Are not more resources needed for an auditing process which is more speedy, regular and comprehensive across all councils, which the hon. Member for Blackburn (Mr. Straw) knows are currently primarily under his party's control?

Mr. Gummer

My hon. Friend will allow me to excuse myself from answering the first part of his question and come to the points about the changes which he might like. Those are precisely the issues which I would have thought proper to consider with great care when the due process is complete. It is obviously true that anybody looking at the matter would want to consider speed and the ability to audit effectively, and also the way in which such procedures could be made more relevant. Those are precisely the issues which I will examine at a point when those issues would not prejudice the present process.

Mr. Andrew F. Bennett (Denton and Reddish)

Does the Secretary of State accept that the circumstances in Tameside council and the running of its homes are totally unsatisfactory? However, the trustees of the care trust—of which I am a member, as declared in the Register of Members' Interests—and the council asked for independent financial advice as soon as they were aware of any irregularities. When that independent financial advice did point to irregularities, they then asked the district auditor to carry out a full investigation. The district auditor carried out that investigation and his report was published.

Following the publication of that report, the council also published a report since additional information was needed. Therefore, it made every endeavour to get the whole issue into the public domain. Following that, steps were taken by the directors to take disciplinary action. While the whole situation is unsatisfactory, the attempts to clear it up were done with complete openness. I hope that there will be now the opportunity for those homes to be run efficiently.

Mr. Gummer

I am pleased that the hon. Gentleman had the opportunity to make those points. I am sure that he would expect that all those who are involved would have the opportunity to put their case, and to do so without prejudice. I believe that that ought to happen whenever such a situation occurs. That is why I make no comments in condemnation or otherwise about the case to which the hon. Gentleman refers, any more than I do about the case about which I made the statement.

Mr. Patrick Nicholls (Teignbridge)

Will my right hon. Friend confirm that he has adopted exactly the same approach to this matter as he has adopted towards the case of Hammersmith, and the financial scandals which happened there at a time when Hammersmith council was led by the hon. Member for Pendle (Mr. Prentice)? Would not the logical conclusion from what we have heard from the Opposition today—

Mr. Gordon Prentice (Pendle)

On a point of order, Madam Speaker. The hon. Gentleman made reference to my time as leader of Hammersmith and Fulham council. There was an audit investigation which completely exonerated all elected—

Madam Speaker

Order. That is not a point of order. I will try to call the hon. Gentleman if he makes some movement during this cross-questioning.

Mr. Nicholls

Will my right hon. Friend confirm that it would be entirely wrong for the Labour party to condemn the hon. Member for Pendle before the final investigations are known, as what is sauce for the goose is sauce for the gander?

Mr. Gummer

It would be inappropriate for me to comment on a case which is currently before the courts, in precisely the same way as it would be inappropriate for me to comment on the details of a process which has not even reached the first of its public hearings.

Mr. Prentice

The Minister invited the House earlier not to rush to judgment. Is it not the case that, as far as Westminster council is concerned, the Conservatives never make any judgments at all? Was there not a deafening silence at the time of the 15p cemetery deal, and nothing was heard from the Government when Dame Shirley Porter was sacking senior officers right, left and centre?

What will people think of the nauseating double standards of this performance? Is it not the case that we are invited not to pass judgment where the Conservative flagship of Westminster is concerned, but that the Conservatives rush to judgment at the merest tittle-tattle about any Labour authority?

Mr. Gummer

Anybody hearing this exchange would notice that a single standard of judgment—saying that people are innocent until they are proved guilty—has been clearly used by the Government, and by most sensible people throughout the House.

Mr. David Wilshire (Spelthorne)

Does my right hon. Friend agree that one definition of nauseating double standards could be a person who has not yet read a report, but makes a judgment on it; who has not yet learned a final legal decision, yet comments on it; who has not yet heard the views of the person who has been criticised, but condemns them; and who has a Front-Bench spokesman who has been disqualified? Is that not a good definition of nauseating double standards?

Mr. Gummer

I would prefer to keep to the details of the report and to try to ensure that the due process is continued.

Mr. Peter Kilfoyle (Liverpool, Walton)

Does the Secretary of State recall that, eight years ago, 47 Liverpool councillors were at a similar stage in the process with the district auditor? Does the right hon. Gentleman also recall that the crime for which those 47 Liverpool councillors were surcharged and disqualified at that time was that they had failed to set a rate on the due date? It was a mistake, and that mistake cost the city council £106,000. Does the right hon. Gentleman also recall that nowhere in the report was there any suggestion of corruption, gerrymandering or of improper action, other than ineptitude in setting that rate?

Further to the comments of my hon. Friend the Member for Bolsover (Mr. Skinner), will the Secretary of State encourage his colleagues on the Government Front Bench to make the type of comments that were made all the way through the process during which those councillors fought the surcharge up to the House of Lords? Why are his colleagues so reticent about Westminster city council when, for almost two years, they damned Liverpool city councillors over that fundamental error?

Mr. Gummer

I should not like to comment on the nature of a mistake which means that one Misses the date for fixing the rates. I have made a clear statement that, if the allegations were proved true, I would utterly condemn the actions, and I would expect the due process of law to continue to its proper end. I cannot think that any sensible person could say more in the light of what the district auditor says in the document which he has issued today. That is a position which the hon. Member would have expected in any circumstances. I hope that he will take the same position today.

Mr. Bernard Jenkin (Colchester, North)

Will my right hon. Friend confirm that Westminster council remains one of the best housing authorities in London compared with its neighbours, which have a sorry record in dealing with homelessness, dilapidation, arrears and empty properties? Will he confirm that it has never been the intention of Government legislatiion to make it a crime to increase home ownership and improve diversity of tenure in our council housing estates?

Mr. Gummer

I think that I ought to keep clearly to what I said and not make any specific comments about Westminster. I am proud that 1.8 million people now own their homes who would not have owned them if it had not been for the right to buy. The right to buy was fought tooth and nail by the Labour party until Labour Members found opposing it politically so disadvantageous that they had to agree with it. Except for those general comments, I ought to keep myself free of any comments on Westminster.

Mr. Paul Boateng (Brent, South)

Regardless of the individual culpability of members of Westminster city council, and bearing in mind the district auditor's findings on the management, control and administration of the housing department of Westminster city council, will the Secretary of State instruct his officials to review the interpretation that the council has traditionally put on its obligations to house the homeless?

Will he bear in mind the attitude of that council over many years, including the period in question, which has been to offload its responsibilities towards the homeless on to neighbouring councils, including my own? Will he show the same regard for the rights of individuals who are homeless as he shows for the rights of Dame Shirley Porter and his Conservative colleagues?

Mr. Gummer

Of course there is a good deal of movement into Westminster from outside. I have already announced that, during this month, I shall publish a consultation document on homelessness. The fact that it is to be published has been welcomed by Shelter and other organisations. I am sure that the hon. Gentleman will then be able to see the terms and conditions under which we shall be operating.

Mr. Raymond S. Robertson (Aberdeen, South)

Can my right hon. Friend tell the House whether the same rules apply in Scotland? Does the Audit Commission have the power to investigate the nepotism, the jobs for the boys and the allocation of funds on the basis of religion, all of which are so rife in Monklands district council?

Mr. Gummer

I shall have to ask my right hon. Friend the Secretary of State for Scotland to be in touch with my hon. Friend on that matter. I think that in general it is true that, if any local elector, ratepayer or council taxpayer feels that there has been some misuse of funds, he can ask the district auditor to investigate. That is the position, and that is what we in the Department of the Environment in England certainly recommend when there is such a complaint.

Mr. Harry Barnes (Derbyshire, North-East)

It would be bad enough if we were dealing only with matters of local government finance and homelessness—serious as those matters are—but we are dealing with matters of gerrymandering and electoral fiddles and fixes. They are not isolated. There are reports which show that 4 million or so people are missing from electoral registers in the United Kingdom. Most of them have disappeared from the register during the period of operation of the Government.

That position should be examined. The reason why we should have the report in front of us is that we as a House should have special responsibility for matters of electoral registration, electoral rights and equity between electoral areas. That is what the report has revealed is wrong, and what we should see the details of.

Mr. Gummer

I find it difficult to understand how the hon. Gentleman can suggest that a report which he cannot have read because he does not have a copy since the report went only to those whom the auditors suggested, reveals or proves anything. The auditor himself has said that this is a preliminary report.

We in the House have a particular responsibility to ensure equity. On the completion of these processes, no doubt the House will want to examine whatever the final reports say in great detail. One issue which will be of considerable importance is the one raised by the hon. Gentleman. I raised it and mentioned it specifically in my statement.

Mr. Andrew Robathan (Blaby)

Is my right hon. Friend aware that the director or possibly the deputy director of Westminster city council housing department attended and addressed a meeting at the end of last year of the all-party homelessness group, of which I and many Labour Members are members? He explained many of the difficulties of Westminster city council housing, particularly the influx of people from outside the capital and outside the country.

Madam Speaker

Question, please.

Mr. Robathan

I am coming to the question, Madam Speaker.

We were impressed by the speech. I think that that goes for hon. Members from all parties. Does my right hon. Friend agree that the record of Westminster city council in housing homeless people is extremely good and bears comparison with that of any other council in the country?

Mr. Gummer

I have already taken the self-denying ordinance that I will not comment on the history of housing in Westminster.

Mr. Bill Olner (Nuneaton)

Is the Secretary of State aware that many people will be watching his response to questions on his statement? Is he further aware that his statement and comments and his closing around and cocooning the problems in Westminster—not allegations, but reported facts—will cause much distress to councillors of all political persuasions? There will be distress that he has not more roundly condemned the atrocious goings-on at Westminster city council. There is no doubt whatever that empty properties were boarded up and had steel doors put on them to prevent them being let to tenants. It is an absolute disgrace, and he should know it.

Mr. Gummer

I have said clearly that, if those allegations are true, they must be condemned in the roundest and fullest possible way. However, I do not believe that there is a councillor in the country who would want himself or herself to be condemned on the basis of a statement by a district auditor who has specifically said that it does not constitute the type of findings to which the hon. Gentleman refers. It is no good the hon. Gentleman making that point. He is here to defend the rights of individuals to be heard. They must first be heard; then justice may be done. He will join me in ensuring that justice is done.

Mr. Rod Richards (Clwyd, North-West)

Will my right hon. Friend confirm that several Lambeth borough councillors have been surcharged and disqualified, including the hon. Member for Stoke-on-Trent, North (Ms Walley)? Is he aware that the right hon. and learned Member for Monklands, East (Mr. Smith) has appointed the hon. Lady to be the Opposition spokesman on transport and London? Does not that suggest a double standard on the part of the Leader of the Opposition?

Mr. Gummer

At most I think that that is tangential to the issue under discussion.

Mr. David Winnick (Walsall, North)

Will the Secretary of State confirm that the Prime Minister was wrong when he said that we were dealing with "allegations" today? We are dealing with the provisional findings of the district auditor. Is the Secretary of State aware that not one person in this country will believe that he would have made such a softly, softly, approach if he were not dealing with a favoured Tory council at a time when it is led by one so close to the Tory party leadership?

Why does he not admit that, time and again, Labour Members gave warnings in the House about what was going on in Westminster—the sale of cemeteries for 15p and other malpractices—but the Tory Government, including the Secretary of State, were not interested? No doubt they were hoping that the council would be able to get away with it. Now that it has been found out, he has a chance to condemn those malpractices, which are some of the worst committed by a local authority.

Mr. Gummer

I am reminded of the comments of the former Member for Huyton about the hon. Gentleman's judgment. The district auditor himself says: My Note of provisional findings…does not constitute any decision or finding adverse to any individual. I have to keep to what the auditor says if his independence is to be upheld by a House that insisted upon it in the first place. We have heard the hon. Gentleman's speech in various versions before, and it was as silly then as it is now.

Mr. Richard Tracey (Surbiton)

Is my right hon. Friend aware that Westminster city council has expressed extreme surprise at the provisional findings of the district auditor and has also regretted the non-publication of the report to the public and the media? Indeed, in a public statement, the council said: It would have preferred the subject to be dealt with in an open manner, consistent with the highest standard of probity. Is my right hon. Friend also aware that, as recently as the beginning of this week, the council implored the district auditor to publish this report in full?

Mr. Gummer

I thank my hon. Friend for those statements. I still believe that, in defending the independence of the auditor, it is right for the House and for me as the Minister responsible for local government to allow the auditor to use his powers as he thinks fit. When he has done so, and we have come to the conclusion of that process, it would be proper for the House to consider the circumstances and decide whether a better way could be found or whether we wish to confirm the present system.

It is perfectly reasonable for Westminster city council to comment, but the House should remember that the auditor operates under rules that have been confirmed by the House, and that it ought not to change them except at the end of a process rather than in the middle of it.

Mr. Paul Flynn (Newport, West)

Why do Conservative Back Benchers insist that all councils are innocent until they are proved to be Labour councils? What will the Secretary of State do about the people who have been badly wronged—the homeless and the unhoused in Westminster? We have had a fortnight of allegations and proof of the most dreadful misconduct by members of the Government. When will we hear a single syllable of remorse, humility or penitence from the Conservative side?

Mr. Gummer

There have been one or two cases of Labour councils not reaching the highest standards known to man. Indeed, there are cases in which they have been attacked not only by Conservative Members but by Opposition Members. The hon. Gentleman is therefore being a little naive in making that comment.

I maintain that, when the district auditor has specifically said that his findings do not constitute decisions or findings adverse to any person, it would be very odd if those of us who do not have access to the 100,000 pages of documentation to which he has had access should try to second-guess him. I have condemned any action which has been shown to be wrong, and have said that, if the allegations turn out to be supported and are proved, no one will be tougher than I in his opposition to them or his insistence that the law should take its full course.

Mr. Nigel Spearing (Newham, South)

Does the Secretary of State agree that up to 9,000 dwellings were designated by the housing committee of Westminster city council and endorsed by it? Does that not suggest that up to 30,000 people who were not thereby housed could be homeless? Does he have the figure for the number of persons involved? If he has not got it, will he undertake to find out from the council the number of people rendered homeless in London or dumped on other boroughs as a result of the matters mentioned in the Magill report?

Mr. Gummer

I have been careful not to be led to discuss the nature of Westminster's housing policies by some Conservative Members, because I cannot see a way in which I could do so without detracting from the independent position that the district auditor has enjoined upon all. I shall therefore do the same in the hon. Gentleman's case as I have done with my hon. and right hon. Friends.

Mr. Ken Eastham (Manchester, Blackley)

As we understand it, the inquiry has taken four years, and some of the figures published today seem to intimate that £21 million might be involved. It is reasonable to suppose that, with further delays and as time goes on, considerable extra interest will accrue. It is quite possible that the surcharge could even be £25 million by this time next year. Would it not be in the interests of the people who are going to be surcharged to get the matter sorted out, rather than their having to face a bill for £25 million as against £21 million today?

Mr. Gummer

There is no doubt that the district auditor has calculated the interest, and I am sure that the hon. Gentleman will agree that that issue is likely to have been drawn to the attention of those concerned on both sides. I think that he will agree that, ultimately, it is up to the auditor and to those concerned to see that the due process of law is carried through, and also that they take such advice as is reasonable for anyone in such circumstances.

Madam Speaker

We now come to the allocation of time motion—

Mr. Straw

On a point of order, Madam Speaker, about the conduct of the hon. Member for Teignbridge (Mr. Nicholls). Earlier this afternoon, during these questions, the hon. Gentleman made a very serious allegation in respect of my hon. Friend the Member for Pendle (Mr. Prentice), without having given him any notice of his intention to do so.

First, will you confirm that, although it is not a rule of the House, it is an important convention that, when such allegations are going to be made by an hon. Member, notice is given? Secondly, since the allegation was wholly inaccurate, can the hon. Gentleman be given the opportunity to withdraw it?

Mr. Nicholls

rose—

Madam Speaker

May I deal with the first question? Of course it is the custom in this House that, when another hon. Member has been named and is not actually in the Chamber, he or she should be given notice. It is not the case when the hon. Member is in the Chamber. In this case, I gave the hon. Member for Pendle an opportunity to answer immediately.

Mr. Nicholls

Further to that point of order and your ruling, Madam Speaker. The second point that I would have made was that in no sense did I make an allegation against the hon. Gentleman. I said that it would have been as wrong to condemn him on the basis of a preliminary report, as it would have been to condemn present council members—[Interruption.]

Madam Speaker

Order. I think that I have dealt with that matter.