HC Deb 09 May 1996 vol 277 cc367-75 3.32 pm
Mr. Peter Brooke (City of London and Westminster, South)

(by private notice): To ask the Secretary of State for the Environment if he will make a statement on the district auditor's report on Westminster city council published today.

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

The appointed auditor for Westminster city council, Mr. John Magill, has today published his findings in relation to the objections to the accounts of Westminster city council, in the form of a "public interest report", made under section 15(3) of the Local Government Finance Act 1982. He has at the same time published a "statement of reasons" on which his decisions are based.

This case is still subject to the due process of law. In these circumstances, it is appropriate for me to inform the House about the auditor's decisions, but not to comment on them. [Laughter.] In that, I am following the traditions of the House.

The auditor's decisions are as follows: he has issued a certificate in the sum of £31,677,064 to each of Mr. Graham England, Mr. Peter Hartley, Mr. Paul Hayler, Mr. Bill Phillips, Dame Shirley Porter and Councillor David Weeks, under section 20 of the 1982 Act. They are jointly and severally liable for that amount. He has decided not to uphold the objections in respect of Councillor Judith Warner, my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) and Mr. Robert Lewis.

The auditor has now issued his certificate. Those surcharged have 28 days from the date they receive the auditor's statement of reasons to appeal against his decision to the High Court. I understand that they intend to do so.

I have made it clear that I would condemn utterly any failure to meet the highest standards of propriety, whenever it is found and whoever is found guilty.

If the decisions in respect of Westminster are upheld by the courts, I shall not hesitate to condemn those responsible as in any similar case, but neither the Government nor the House nor I should prejudge the findings of the courts.

Mr. Brooke

While no subject is higher than the law, will my right hon. Friend confirm, first, that those accused are also subject to the protection of the law until due legal process has been concluded, especially under a somewhat hybrid procedure and when the number of people being investigated has risen as well as fallen during the course of the investigation?

Secondly, although I have never criticised the district auditor—contrary to what has been said by those on the Opposition Front Bench—as the case has now continued for eight years and is not yet concluded, does my right hon. Friend believe that, when it has been concluded, it would be sensible to revisit the procedure because of the strain that it imposes, not only on those investigated and their families but on the district auditor?

Mr. Gummer

I have to say to my right hon. Friend that one of the greatest difficulties in politics is to uphold the integrity of the law while making it clear that, when the law has made its final decision, we must abide by that decision, and that, in all circumstances, however close or distant we may be from those who are condemned, we must condemn them, too. However, that demands of us the reticence of not judging people who still have a case to put. I have not prejudged any case in which Labour councillors have been involved, nor will I until the courts have found. Then I shall join in any rumbustious argument that anyone wants to have.

As to my right hon. Friend's second point, I do not believe that it is right during such a process to comment on the nature of the process or to suggest that perhaps a different process would be better. I have no doubt that people will discuss that afterwards, but this is not the moment to make a decision.

Mr. Frank Dobson (Holborn and St. Pancras)

Will the Secretary of State confirm that the procedure being followed by the auditor in this case was laid down by an Act of Parliament passed by the present Government?

Why will he not condemn the Westminster Tory councillors who have been found guilty of using £32 million of public funds to help a Tory election campaign at the expense of homeless families? Why will he not acknowledge that the scandal was not caused by a few maverick councillors in Westminster, but involved the entire Tory party from top to bottom, including people at Tory central office and 10 Downing street?

Does he accept that Tory Members, including—sadly, as far as I am concerned—the right hon. Member for City of London and Westminster, South (Mr. Brooke), the Minister of State, Northern Ireland Office, the right hon. Member for Westminster, North (Sir J. Wheeler) the hon. Member for Milton Keynes, South-West (Mr. Legg) and the Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford) were all involved to a greater or lesser extent?

Does the Secretary of State accept that the huge sum of £32 million wasted by those Tories exceeds the annual budgets of no fewer than 272 local councils in England, including places such as Basildon, Milton Keynes, Peterborough, the Wrekin and Plymouth? Does the right hon. Gentleman accept that that sum of money would have built 600 new homes for the homeless or 10 new schools, or would have paid for 1,200 much-needed teachers in the inner cities?

Does the right hon. Gentleman recall that, in the 1980s, he personally helped to rig the Government grant to help Westminster council to keep down its poll tax—or, as the Prime Minister just described it, local taxation? In view of this scandal, the scandal of homeless families being put by the same Westminster councillors into asbestos-ridden blocks, and the scandal of the Government continuing to rig the grants system in Westminster, will the right hon. Gentleman set up a public inquiry into this Tory Government's squalid relations with Tory Westminster over the last 10 years?

Will the Secretary of State take my word for it that, if this cowardly Tory Government will not set up that public inquiry, the incoming Labour Government will do so?

Mr. Gummer

The public will now see how the legal processes would be treated by the Labour party. The public will now understand that Labour will leave nothing unused for party political advantage. Having heard the shameful betrayal of the legal system by the Leader of the Opposition, I was not surprised to hear what was said by the right hon. Gentleman's sidekick and soon-to-be-sacked spokesman on the subject.

One reason that we were given parliamentary privilege was to defend the innocent and to speak up for people who could not otherwise make their case. The hon. Member for Holborn and St. Pancras (Mr. Dobson) has used parliamentary privilege to smear a whole series of my right hon. and hon. Friends. He proved that by his use of the words to a greater or lesser extent"— to be able to say afterwards, when those people have been shown not to be guilty of that which the hon. Gentleman claims, that he meant that they were covered by the word "lesser".

The only honourable way to deal with an issue of this kind is to say that, if someone is found by the courts of law to be guilty, one condemns unreservedly and without question—whoever that person is, however close one is to them, and for whatever party they happen to stand. Until that time, every person in Her Majesty's domains has the right to put his case—whether he is rich or poor, elected or unelected.

Mr. Eric Pickles (Brentwood and Ongar)

Is my right hon. Friend, in resisting commenting on the issue, aware that, if he had not resisted that temptation and condemned the councillors named in the district auditor's provisional report, he would have condemned people who have been exonerated by that report? Is my right hon. Friend further aware that the councillors named in the report took legal advice, and followed it to the letter? Does my right hon. Friend share my belief that people in this country are entitled to be presumed innocent until judged to be guilty?

Mr. Gummer

I think that it is true that Labour Members who jump to condemn on the basis of the interim report must now explain to themselves how it was that they condemned a number of people who are not now under condemnation. It would be good for all of us to be reticent in the way that we approach this report—or the internal report in, for example, Islington, or reports from Hackney or any other boroughs or councils that are, in one way or another, under investigation.

There is no reason for any of us to jump to judgment. What we have to do is to allow the courts to decide and to be clear from the beginning that we will judge everybody equally without fear or favour. That is why I shall make no comment at all about whether people followed the legal advice. That would be to enter the areas that only the courts can, in the end, discuss and decide.

As to my hon. Friend's last point, I suggest simply that the way in which one judges people is whether they stand up for the rights of people they dislike, not whether they stand up for the rights of people they love.

Mr. David Rendel (Newbury)

Does the Secretary of State acknowledge that, whatever the legal position is in relation to the six who have been surcharged, the position of the hon. Member for Milton Keynes, South-West (Mr. Legg) is unlikely to be subject to appeal, and the findings are likely to stand? Those findings, as I understand them, are that the hon. Gentleman knew that gerrymandering was going on and decided not to take any action to ensure that it stopped.

Does the Secretary of State accept that the hon. Gentleman was, in effect, condoning gerrymandering, and that that brings into question his membership of the House? Does the Secretary of State further accept that, if the hon. Member does not resign and the Prime Minister and he himself do not take any action in the matter, they are also condoning gerrymandering?

Mr. Gummer

I say to the hon. Gentleman that I hope that he is never in the position of having to accept the words of someone outside on which he cannot speak for himself. I have no intention of removing from people the right to make their cases and put their positions in whatever legal way they can. I wish that the hon. Gentleman would not fall into his party's usual trap of condemning anybody whether the proof is there or not.

Mr. James Couchman (Gillingham)

While I understand my right hon. Friend's reluctance to revisit the process by which this judgment has been made, does he agree that it is a matter for grave concern for one person to act as investigator, prosecutor, judge, jury and hangman, and to have the power to exact an unlimited fine in penalty? Will my right hon. Friend, when this case is finished, revisit this process and consider introducing a much fairer process, which would be in accordance with natural law?

Mr. Gummer

In the origination of this law, which was indeed passed by the House and proposed by the Government, it was clearly envisaged that those affected had the right of appeal to a court. That is what the law expected, and the very nature of the structure and the system must lead any fair-minded person to accept that people should be able to appeal to the courts, and that—until that appeal has been heard and the courts have judged—it is not proper, right or decent to condemn them. [Interruption.] The seated interventions of the hon. Member for North-West Durham (Ms Armstrong) show, as usual, an atavistic desire to condemn those with whom she disagrees and a refusal to uphold the principle that people are innocent until proved, in a court, guilty.

Mr. Dennis Skinner (Bolsover)

Is the Secretary of State aware that, 24 years ago, a Labour council—as opposed to a Tory flagship council—refused as a matter of principle to put up council house rents in line with the Housing Finance Act 1972? The Clay Cross councillors were incessantly condemned for their actions, day in and day out, by Tory Members of Parliament and Ministers in the House.

The councillors appealed against surcharge and—contrary to the way in which the present matter has been handled, with help from the Government for the Westminster councillors—the Clay Cross councillors were put on a fast track. Within two years, the court procedures had been finished and the councillors were condemned and kicked out of government, not because they took any money or did any gerrymandering, but because they acted on principle.

The truth is that there are double standards. There is one set of standards for Labour councillors and another for Tory councillors. Will the right hon. Gentleman withdraw his statements about not coming to judgment? Labour councillors were attacked day in and day out. The right hon. Gentleman is defending Westminster councillors because the Government have connived with them throughout eight years, a period longer than the second world war. The Government are as guilty as the six over at Westminster.

Mr. Gummer

I would condemn anyone of any party, tendency or attitude who broke the law. I condemn the Clay Cross councillors, who were found in a court of law to be guilty. Unlike the hon. Gentleman, who has excused those councillors throughout—he has said that, as they acted on principle, it did not matter if they broke the law, just as the deputy leader of the Labour party says that the Labour party has not made up its mind whether councils should or should not keep the law in such circumstances—I have made up my mind: all councils in all circumstances should obey the law. If they are found guilty, whatever their political views, they should earn the condemnation of the House, and specifically and particularly the condemnation of those who share their political views.

Mr. William Cash (Stafford)

Does my right hon. Friend note that my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) has been exonerated by the inquiry, contrary to some of the disgraceful remarks of Opposition Members? Will he accept that there is something fundamentally unjust and immoral in requiring someone to pay enormous costs without means of redress when he has been exonerated by such a tribunal? Will my right hon. Friend congratulate my hon. Friend on the fact that he has been exonerated?

Mr. Gummer

It is to rush to judgment to say that our hon. Friend does not have recourse in the courts. That will be a matter for him to consider and decide upon. It behoves everyone to be extremely careful in using the privileges of Parliament to pursue party political attacks. There are many people who have been innocent and who have, on both sides of the House, been accused under the privileges of Parliament. They have not been able to answer.

That is why I say to the hon. Member for Newbury (Mr. Rendel) that I can think of a prominent Liberal who was, under the privileges of Parliament, attacked by Labour Members. In many ways, he was destroyed, because he had no way of responding to what others were able to do under parliamentary privilege. It ill behoves the Labour party, which I understood was created in part to defend those who could not defend themselves, to condemn before others have been found guilty.

Mr. Harry Barnes (North-East Derbyshire)

The privileges of the House were used to condemn Clay Cross councillors, who had not reached a final position within the courts. They were attacked viciously within the House. The second lot of Clay Cross councillors, after the first lot was debarred, was surcharged severally for £2,000. For that £2,000, the councillors were then debarred from office. They were kept out of office for five years before they could return. I am talking about school caretakers and other such people, not the sort of person who is involved in the Westminster case. It is not unreasonable that we should be interested—

Madam Speaker

Order. I must have a question. I have not heard one yet.

Mr. Barnes

Is it not therefore reasonable that constituents in Clay Cross, people who were hit in that way, should be looking with interest at what has occurred here? If it is said that they are after a pound of flesh, they are not; they are after £31 million-worth of flesh.

Mr. Gummer

The House will have noticed that the hon. Gentleman seemed to suggest—although I hope that he did not—that we should have more concern for the rights of a school caretaker than of someone who happens to be better off. I happen to take the view that the business of equality means that everyone—everyone—is equal before the law, and that we should behave in that way.

I also say to the hon. Gentleman very simply this. I have been prepared to condemn wrongdoing by anyone in any circumstances. I merely remind the House that the Labour party is still claiming that the Clay Cross councillors, who were found guilty in a court, were in fact not guilty, but were acting under the pressure of principle. I hope that the country outside recognises that the Labour party believes that Tories who have not been found guilty must be condemned, but that socialists who have been found guilty must be excused.

Mr. Jacques Arnold (Gravesham)

Does my right hon. Friend recall the practice of municipalisation whereby the Labour-controlled Greater London council used millions of pounds of ratepayers' money to purchase houses for Labour voters in marginal Tory wards?

Mr. Gummer

What I may or may not recall is not a matter for today. What is a matter for today is for the House to live up to its reputation of the one place above all others where people can expect to be upheld until they are found guilty.

Mr. John Gunnell (Morley and Leeds, South)

As a former member of the Audit Commission, appointed by the present Deputy Prime Minister, I was present when section 15 reports about Liverpool city council and Lambeth council were read. Those reports were acted on. The people paid the surcharge that was due.

Why should that not happen in this case, where a far greater sum is involved, where gerrymandering is involved, which the district auditor, a private sector auditor from Touche Ross, described as disgraceful, and when the district auditor has given an account of how various people on the council thwarted his investigation?

That is why the proceedings have taken so long: people destroyed the papers. Can we not condemn the fact that the people involved delayed the proceedings by destroying the evidence? Is that not a matter that we can condemn, without having to come to a judgment about the judgment that the district auditor has reached?

Mr. Gummer

There is no doubt that, if the courts find that what the district auditor has said is true, those people will be condemned, and they will have to pay the money which is charged. But I say to the hon. Gentleman simply this. I have been in the position, as I am sure he has, of hearing one side of a case and thinking how clearly it points to the innocence or guilt of a particular party. It is only in the next day's newspaper that I read the alternative, and I say to myself, "That's interesting." A final decision can be made only by the court, and I have no doubt that the court will make that decision.

Again, I shall only take lessons from the Opposition when they say unreservedly that, in all circumstances, including the case of the Clay Cross councillors—including the case of a surcharged councillor who sits on their Benches today, including the case of an Opposition Treasury spokesman who asked people not to pay their poll tax, including the case of a deputy leader of the Labour party who said that the Labour party was ambivalent about whether councils should obey the law—they condemn breaking the law. When they do that, they will have some reason to speak.

Mr. Walter Sweeney (Vale of Glamorgan)

Given that the district auditor has cleared my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) of any misconduct, will my right hon. Friend join me in condemning all Opposition Members who, under the cloak of parliamentary privilege, have attacked my hon. Friend and damaged his reputation in the eyes of the public? Will my right hon. Friend urge those Opposition Members to apologise, and to make clear their support for my hon. Friend?

Mr. Gummer

It seems to me that it is for Labour Members to bear it in mind that, in rushing to judgment on the interim report, they have found themselves making a blanket condemnation which turns out to be, at the very least, variable. They should recognise that they need to be reticent today as well.

One of the properties of parliamentary privilege is that it is a privilege, and privileges need to be respected. I think that the public will recognise that Labour Members—including those who have spoken from a sedentary position—do not respect parliamentary privilege as a privilege, but use it as a mechanism for party political advantage.

Mr. John McWilliam (Blaydon)

Does the Secretary of State accept from a former commissioner for local authority accounts in Scotland that, if Westminster had been in Scotland, the case would not have dragged on for so long, and there would have been no interim report? There would have been one report, and the Secretary of State would have had a duty to implement it.

Does the right hon. Gentleman also accept that, during the Committee stage of the Bill that became the Local Government Finance Act 1982, the Government opposed amendments tabled by Opposition Members, including me, that would have made it clear that those investigating the matter—the district auditor and his staff—were responsible for producing a report to which the Secretary of State would have had a duty to reply? The Government, however, amended the Bill to provide for an appeal to the court. Would not someone in Scotland who did what is alleged to have been done in Westminster have been surcharged long ago? The Government have weakened the legislation.

Mr. Gummer

I thought it better to be consistent in not discussing whether the process could be improved. I do not think that it would be proper to do that while the matter was being investigated, for obvious reasons.

I cannot claim to be an expert on the details of the Scottish procedures, but I think that most people would agree that, when we are dealing with a clear statement from someone who, in this context, has been able to act as judge and jury, it is not unreasonable for an appeal to take place. That appeal has been granted by the House, and I feel that the House owes it to itself—let alone anyone else—to respect the procedures it has created, and to allow those concerned to proceed to court—with the clear undertaking that, if they are found guilty, they will be condemned by all of us, irrespective of the party to which we belong.

Mrs. Teresa Gorman (Billericay)

Will my right hon. Friend confirm that Mr. Magill, whose report we are considering, is an accountant, not a lawyer, and that his proper duty was to examine the financial aspects of the case, rather than seeking to make inflammatory statements in judging those involved?

Will he please look into the issue of the inordinate length of the proceedings? That placed appalling pressure on officers and elected members, which led to the suicide of an elected member whose death has been shown to be unnecessary—in the sense that he left a suicide note saying that this matter was the cause of his suicide. Opposition Members are gloating, but we should remember the pressures that these people were under.

Mr. Gummer

The allegations against these individuals are extremely serious. If they are found guilty, they will be guilty of serious misdemeanours. These matters take time, and I am not one of those who immediately rushes to judgment, even on the terms and the time that has been taken by the auditor. It will be for the courts to decide on this matter. However, I agree with my hon. Friend that, in such circumstances, we all ought to pay a little heed to the fact that to attack those who are later found innocent is to undermine our standing with the public in general.

Mr. Clive Betts (Sheffield, Attercliffe)

May I take the Secretary of State back to the comments of my hon. Friend the Member for Bolsover (Mr. Skinner) and ask him to reflect on the Government's knowledge and involvement in this matter? First, will he confirm that, throughout the time that Westminster council operated its homes sales policy, each year a housing investment programme statement containing details of that policy would have been submitted to the then Secretary of State and his officials for consideration and consultation? Therefore, the Government knew all about the policy.

Secondly, will he confirm that certain aspects of the designated sales policy would have needed—and, indeed, received—the civic approval of the Secretary of State at the time? Therefore is it not true that Ministers are also up to their ears in this sorry and sordid mess?

Mr. Gummer

I know of no circumstances that would cause a difference between the treatment of Westminster and that of any other council of any other political kind. I notice that the Labour party is busy trying to spread a smear as widely as it can on grounds that are self-evidently nonsense. The hon. Gentleman, with his experience in Sheffield and his dealings there, should be ashamed of himself.

Several hon. Members


Madam Speaker

Order. This matter must now be brought to a close and we must move to our next item of business.