Westminster City Council

HC Deb 14 May 1996 vol 277 cc772-870

Madam Speaker

I have selected the amendment in the name of the Prime Minister.

3.45 pm

Mr. Frank Dobson (Holborn and St. Pancras)

I beg to move, That this House deplores the scandalous conduct of the Tory flagship Westminster City Council; calls on the Government to condemn this malpractice on an unprecedented scale; and will regard any failure to do so as further evidence of electorally-motivated support for the council. On Thursday, the district auditor found that leading Tory councillors on Westminster city council, assisted by council officers, the most senior of whom had originally been seconded from the Department of the Environment, had used £31.6 million to promote the electoral advantage of the Tory party at the expense of homeless families, tenants and taxpayers in Westminster. The district auditor concluded that that was unlawful, improper and disgraceful.

This homes-for-votes scandal is the biggest single scandal in the history of any local council, but it was not the only scandal in Westminster, and individuals who were found guilty and surcharged are not the only people involved.

Mr. Jacques Arnold (Gravesham)

Will the hon. Gentleman give way?

Mr. Dobson

No, I will not give way at this time.

The financial scandals in Westminster now total over £100 million, so there are more auditors' reports to come. The Tory party and Government have been involved for a decade with the Tories on Westminster city council in a squalid effort to make sure that Westminster council remains Tory controlled. They have done that whatever the cost in money, in law breaking or in the harm done to homeless families and other people who had a right in law to turn to Westminster council for somewhere decent to live. That is why the Prime Minister and every other leading Tory refuses to condemn what has been going on in Westminster.

The Prime Minister dare not condemn the wrongdoers because the wrongdoing has been known about, condoned and connived at by the Tory party and Government. Not only have the Government condoned the scandals, they have rigged the Government grant system, first to fix the poll tax in Westminster before the 1990 local government elections and secondly to keep down the council tax in Westminster. In recent years, the Government have been giving Westminster at least £20 million a year more than can be justified on any fair criteria. During that time, many Westminster services have been among the most expensive in Britain, but no Government action has been taken and not a word of ministerial criticism has been uttered because the Government have been accessories to what was going on.

In the 1986 council elections, the Tory majority on Westminster council was reduced from 28 to just four. The Tories retained control of the council by a 106-vote majority in Cavendish ward, which borders my constituency. Emerging from that bruising encounter with the electorate, the Tories contemplated worse to come in the 1990 elections, but the Tories in Westminster did not decide to change their performance or their policies—they decided to change the electorate instead. If they could not persuade enough local residents to vote for them, they would get in new people who would vote for them. They did that by concentrating a policy of designated sales of council flats in eight marginal wards. According to the former Tory chair of housing in Westminster, that started with a breakfast meeting between Lady Porter, the leader of Westminster council, and the hon. Member for Croydon, Central (Sir P. Beresford), who at that time was the leader of Wandsworth council, which was, she said: definitely 100 per cent—the beginning of the designated thing—to target marginal wards and the sort of tactics one had to use to go about it".

Several hon. Members

rose—

Mr. Dobson

I shall not give way for the time being.

In September 1986, a secret paper was produced by officers of Westminster council's planning department. Its title gives the game away: "A Strategy for 1990—the Wandsworth Experience". It was a four-year strategy formulated by council officers to win the local elections due in 1990. The paper bemoaned the limited opportunities socially to engineer throughout Westminster, but added: This should remain a longer term objective, but there is an immediate need to socially engineer the population in marginal wards". The paper was written by a council officer, a public official, paid for by the public.

Mr. Jacques Arnold

Will the hon. Gentleman give way?

Mr. Dobson

I shall give way to the hon. Gentleman and then perhaps he will sit down for a bit.

Mr. Arnold

Does the hon. Gentleman recall, in the 1970s, when he was leader of the London borough of Camden, the building of the Branch Hill council estate in Hampstead for four times the cost of what could have been provided elsewhere in the borough, and that the only common denominator was that the estate was in the Conservative marginal seat of Hampstead? Who is he to lecture the House of Commons on gerrymandering?

Mr. Dobson

I am sure that the hon. Gentleman has been briefed by Tory central office, but it should do a little better than that. If we had been trying to gerrymander, we would not have built the estate in the safest Tory ward in Hampstead.

Several hon. Members

rose—

Mr. Dobson

I shall not give way.

The main aim of that election strategy was to gerrymander the electorate by shifting council tenants out of marginal wards into safe Labour wards, and by shifting homeless families out of Westminster altogether. Contemporaneous notes by council officers, revealed during the auditor's investigation, report discussions and decisions by leading councillors in the following words, all of which are accurate quotations: suitable wards for housing the homeless long term, Westminster City Council families in Labour wards", a very hard line on homelessness, try to ship them out how can we get the homeless out of Westminster? homelessness—be mean and nasty determine if more cases can be exported cash to homeless persons to get lost". Those quotations are all from handwritten notes by the council's paid officials. Official papers and minutes, prepared by those same officers, refer to figures being prepared to show which initiatives were most likely to achieve electoral targets and state that the attached target schedules show the target for new electors in each of the eight key wards". The copy of the document containing the last quotation bears a manuscript note from the council's solicitor saying: This paper should not have been written by an officer". He added: This paper shows officers working for a Tory victory". The council officer who prepared the paper confirmed to the auditor that he was working full time on monitoring progress towards meeting the electoral targets in the marginal wards.

From that and much more evidence, there can be no doubt that the whole approach by the Tory leadership of Westminster city council was geared not to the well-being of the people of Westminster, but to the electoral well-being of the Tory party. So there can be no doubt that those councillors set about emptying council flats and selling them, instead of using them to provide decent housing for homeless families and others living in overcrowded and degrading conditions.

Whatever the council may have said in public, in private, it made no bones about this being its top priority. Lady Porter prepared a note for the then Prime Minister, Mrs. Thatcher, which said: We in Westminster are trying to gentrify the City. We must protect our electoral position which is being seriously eroded by the number of homeless we are being forced to rehouse … I feel that the problem is so serious you should look at this yourself … I am afraid that unless something can be done, it will be very difficult for us to keep Westminster Conservative".

Mr. David Nicholson (Taunton)

I have no wish at this stage to defend or excuse Lady Porter or Westminster city council. However, I ask the hon. Gentleman to consider the fact that the same local government finance system that may have benefited Westminster city council also benefited the London boroughs of Lambeth and Southwark, which are very inefficient and incompetent Labour strongholds. Can the hon. Gentleman lay his hand on his heart and say that Labour councils, when they were able to spend vast sums of taxpayers' money on building council houses, never used that money to build the Tories out of marginal wards? In the borough of Islington where I fought three successive elections, Labour succeeded in doing just that.

Mr. Dobson

There is a paragraph or two later in my speech which deals directly with that absurd equivalence that the Tories have invented.

As a result of those policies, homeless families were left living in bed-and-breakfast accommodation and hotels. Other families were left in overcrowded and degrading conditions, while flats that became empty were sold to people who were confidently expected to be Tory voters. To get council tenants to move out, they were unlawfully offered grants by the council. Later, a Government grant scheme designed to get sitting tenants to move out to make room for homeless families was extended in the case of Westminster to induce families to leave so that their flats could be sold. That required the consent of the then Secretary of State, which was given after representations from the right hon. Member for Westminster, North (Sir J. Wheeler). His intervention at that time was understandable, after the former chair of Westminster housing committee had produced a paper for a Tory policy seminar, which specified as an objective: to ensure that as far as possible, Westminster's housing policies achieve the type of social and residential mix that will enable us to retain control of the Council in 1990 and to help retain the Conservative majority in the Parliamentary seat of North Westminster.

Dame Elaine Kellett-Bowman (Lancaster)

The hon. Gentleman dismissed my hon. Friend the Member for Gravesham (Mr. Arnold) too lightly. I have a thorough knowledge of Camden because I was the vice-chairman of the Camden housing committee when the Branch Hill estate came up for grabs. We did not wish to build those expensive houses. We preferred to spend the money on less expensive housing in the borough, which we would have done had we retained control. As it was, Labour was trying to disrupt Lord Finsberg. The Labour-controlled council went on to build 600 houses on tennis courts and woods, which were zones for public open space, simply to get people out of South End ward, which was a Tory marginal. Gerrymandering.

Mr. Dobson

Call me old-fashioned, but I have always believed that living in homes close to Hampstead heath should not be confined to the rich, but preferably should be available to everybody.

The law required Westminster council to give housing priority to persons occupying insanitary or overcrowded houses, large families, people living in unsatisfactory housing conditions and certain homeless families. The council's own policies required it to give priority to what it called category A medical cases. Some of the purchasers who moved into empty flats may have fallen into those categories, but not many. Indeed, the families in those categories of need were exactly those who lost out as a result of the council's designated sales policy.

Before we touch on the question of individual liability, lawfulness or the cost to the taxpayer, I invite the Secretary of State to tell us whether he condemns Westminster city council for ignoring the needs of the homeless and the sick. Is that how he believes a council should behave? The Secretary of State makes no contribution.

The auditor has found that that electorally motivated policy cost a fortune: a total of £31.6 million, made up mainly of such items as selling flats to newcomers at lower than the market value, loss of rent, grants to tenants to move out and the extra cost of providing further temporary accommodation for homeless families. Whatever the cost of each of those items, they were not obscure inventions of the auditor. They are the obvious, predictable losses that were bound to result from such a policy, and so the auditor has found.

Mr. Bernard Jenkin (Colchester, North)

Will the hon. Gentleman give way?

Mr. Dobson

No, I shall not.

It is difficult to exaggerate the huge scale of a total loss of £31.6 million. I have checked the total budgets of every council in England. No fewer than 272 have less to spend on the services that they provide each year for all their local people than the £31.6 million used by the Westminster Tories to win eight wards in a local election.

I should like to cite some examples. Brighton's budget is £23 million, Blackpool's total is £20 million, Basildon's is £20 million, Chorley spends just £8 million, Crawley's budget is £10 million, The Wrekin's £17 million, Corby's £5 million, East Staffordshire's £10 million, Forest of Dean's £7 million, Gloucester's £11 million, and Exeter and Lincoln each have only £10 million a year to spend on services for their local people.

Yet all the areas that I have mentioned, and hundreds of others, are represented wholly or in part by Tory Members of Parliament who cannot raise their voices in criticism of Westminster's scandalous misuse of £31.6 million—far more money than their local councils are allowed to spend in a year on the people whom those Tory Members of Parliament claim to represent.

Mr. Jenkin

rose—

Hon. Members

Give way.

Mr. Dobson

No, I have said that I shall not give way.

Let us remember that the money was spent just for electoral advantage. Just imagine £31.6 million being spent to win eight wards in a council election. The election expenses work out at £4 million a ward.

That was not the only public money that was devoted to keeping Westminster Conservative in the 1990s. Public money was also devoted to that by central Government when they introduced the poll tax during that period. The first exemplifications of the poll tax showed that the poll tax in Tory Westminster would be about the same as in Labour Camden next door, and that it would cost many people more than the rates.

That is of course what happened in many other places, but, by then, the Westminster Tories were getting used to the idea that the law did not apply to them. So they lobbied for the grant system to be rigged to bail them out. Lobbyists were hired and local Members of Parliament went on delegations. The reports and briefings produced by the lobbying firm GJW showed which Ministers were approached. They included the right hon. Member for Suffolk, Coastal (Mr. Gummer), who was then a Minister at the Department of the Environment and is now the Secretary of State for the Environment.

The briefings record: John Gummer is the most alert of Ministers to political nuances … He will be particularly conscious that with safety nets a number of high spending Labour London Boroughs will appear to get 'off the hook' with community charges lower than Westminster". A further report by the lobbyists states: Gummer is said to be angry that the D of E officials had failed to understand the real and political consequences of the redistributive effects of the community charge". The report also referred to a paper entitled, "Electoral Disaster: the effects of safety netted community charge on some households in the City of Westminster", which specifically referred to the effects on what were called 'marginal wards', like Cavendish and Little Venice". The report recorded that the paper had been sent to the right hon. Member for Suffolk, Coastal and that the lobbyists had discussed it with the right hon. Gentleman's political adviser.

The paper referred to the effects of the poll tax on "identified, aspiring Conservative voters" in Little Venice and Cavendish wards, and stated: the electoral consequences are bound to be adverse". The paper also called for the needs assessments in the Government grant to be skewed to help Westminster—and that was a lesson that the right hon. Gentleman certainly learnt. At the end were six tables said to examine the financial impact on some of these groups in the two most marginal wards in the City". The paper explained: It should be stressed that all the households examined are real ones, taken from the electoral and voting records Table 7 extended the analysis of the effect of the community charge on Cavendish ward. It selected all pledged Conservative voters in Great Titchfield street and Hanson street and added: Such voters are the heart of Cavendish Ward and are clearly essential to Conservative hopes to hold the City Council … It should be stressed that the properties in Table 7 are selected solely because they are pledged Conservative voters". So what happened? As requested by Westminster, the Government duly rigged the grant system to give the council enough money to levy only a low poll tax. Tory central Government found about £25 million in extra taxpayers' money to help Westminster win those same eight marginal wards.

The rigging continues to this day. Having artificially kept down Westminster's poll tax for electoral reasons, the Government now artificially keep down Westminster's council tax for the same reasons. According not to me but to the present chief executive of Westminster council, the assistance is equivalent to a Council Tax increase of £197", because the council gets grant to compensate for visitors, yet is also allowed to keep the £20 million or more that those visitors pay in parking charges.

Such is the extra subsidy given to Westminster that if it were applied to the whole country, no more than a handful of councils would need to levy any council tax. Most would be able to pay out annual rebates; Tamworth, Southampton, Redditch, Portsmouth and several other places would be able to pay rebates of more than £900.

That is not the end of the electorally motivated scandals in Westminster. The recently published Barratt report found the council, led by the same prominent councillors involved in the homes-for-votes scandal, guilty of knowingly placing homeless families in asbestos-ridden blocks of flats, and said that that decision had been influenced by considerations of Party advantage". It is hard to think of a worse example of the degenerate nature of the present Tory party than that—putting lives and health at risk for party political advantage. And the scandal goes to the top, because—

Mr. Eric Pickles (Brentwood and Ongar)

Will the hon. Gentleman give way?

Mr. Dobson

I shall finish this passage first.

The scandal goes to the top, because the Prime Minister has refused to condemn the councillors involved in the asbestos scandal. He recently said of Tory policy: it may have hurt but it worked", and apparently that has now become the Tory advertising slogan. It certainly describes Tory policy on homelessness, because it hurts a family to be left in bed-and-breakfast accommodation or in a hostel, and it hurts even more to be placed in an asbestos-ridden flat.

That is what Westminster council called being mean and nasty to the homeless", and it certainly worked. It gave the Tories gerrymandered local election victories in 1990 and 1994.

Mr. Peter Brooke (City of London and Westminster, South)

Because of the general tenor of the Barratt report, will the hon. Gentleman give me the paragraph reference for his specific quotation from it?

Mr. Dobson

I shall give it to the right hon. Gentleman at the end of my speech.

Mr. David Shaw (Dover)

It is not there.

Mr. Dobson

The hon. Member for Dover (Mr. Shaw) has just accused me of lying, but I shall deal with him later.

Of course, the auditor's report covers only the first period of the homes-for-votes scandal. Electors in Westminster have objected to the money wasted by Westminster on the scheme more recently—an estimated further £21 million. There is also the plain and deliberate failure—

Mr. Pickles

Will the hon. Gentleman give way? Mr. Dobson: No, I shall not.

There is also the plain and deliberate failure of Westminster council to bill leaseholders for service charges and for the cost of major repairs—an estimated further £31 million, including interest.

Further examples of wrongdoing are yet to be investigated by the district auditor: between £6 million and £7 million lost on the disposal of property below market value; spending on propaganda in the run-up to the 1990 elections; unlawful capital grants; and environmental initiatives unlawfully concentrated on the eight target marginals.

That is not the end of special Tory funding for Westminster elections. The Tories spent £1.5 million on a council propaganda campaign in the run-up to the 1990 elections. Not satisfied with all that money, Westminster Tories set up a charity—the Foundation for Business Responsibility. It channelled £98,897.96 to a public relations firm, Marketforce Communications, to help the Tories fight the local election. Contributions to that charity came from the Duke of Westminster and from Trusthouse Forte, at £5,000 each; from Taylor Woodrow, at £2,000; and from Allied Lyons, Rank Hovis McDougall, Brooke Bond OXO, Dewhurst, Whitbread and Grand Metropolitan, which all gave £1,000. None of those payments was ever declared. Another contributor was Gerald Ronson's charitable foundation, which gave £1,000. That was, of course, before Mr. Ronson went to gaol. The Westminster Tories were found out and the money had to be repaid. Even under this Government, charities are not allowed to fund political parties—not even the Tory party.

The facts of the scandals are not really in dispute. While Lady Porter and her Tory apologists may dispute the scale of the loss, or even the legality or illegality of what they have done, there can be no doubt about what they have done or why they did it.

So what is the burden of the complaint by the people surcharged and their friends? They complain that the system is unfair to them and that it places too much power in the hands of the district auditor. But that is not what the Tories said in the past about the district auditor. They were happy to give him the powers that he now enjoys under the Tory Local Government Finance Act 1982. They were quite happy to pass that law, which was to apply to every council and to every councillor in the land. I have carefully examined that Act of Parliament, which gave the district auditor his powers, and I am afraid that the Tories forgot to put in a get-out clause to say that it applied to every council except the Tory flagship council, or that it applied to every councillor except fat-cat Tory millionaires. It applies to them all.

Mr. Richard Tracey (Surbiton)

Will the hon. Gentleman give way?

Mr. Dobson

No, I shall not.

In 1989, after the district auditor had started his investigation into Westminster, the Government reasserted their view on the auditor's powers. They said: The auditor must assemble the evidence, and is best placed to decide whether a case exists to invoke statutory sanctions. Transferring the responsibilities from the Auditor would reduce his standing and authority, thereby lessening rather than enhancing his effectiveness. The Government have therefore decided that responsibility for taking action under Sections 19 and 20"— of the Act— should remain with the Auditor"; and they remain there to this day.

Those Tories have been found with their hand in the till for electoral purposes, subsidising a Tory election campaign at the expense of other people, and especially at the expense of the homeless. But neither the Prime Minister nor the Secretary of State will condemn them. The Prime Minister said when the auditor's preliminary report was published: if the allegations are confirmed, I will condemn unreservedly."—[Official Report, 13 January 1995; Vol. 235, c. 331.] The allegations have been confirmed. The auditor's inquiry has run its course and the decision has been made, but still the Prime Minister cannot bring himself to condemn the wrongdoing. Last week he said: I understand that they"— the people who have been found guilty— vehemently contest the auditor's report and that they have said that they will take the matter to court. In the face of such a clear-cut protestation of innocence, I think that any sensible and cautious person would be wise to await the outcome before making a judgment."—[Official Report, 9 May 1996; Vol. 277, c. 362.] How long does this process go on? When is an outcome not an outcome? Lady Porter is a very wealthy woman and can afford to go on appealing and appealing. Should she lose in the High Court, will the Prime Minister tell us that his condemnation must await the outcome in the Court of Appeal? Will he tell us that we have to await the decision of the Judicial Committee of the House of Lords, the European Court of Human Rights or the International Court of Justice at The Hague? When will he condemn this wrongdoing?

The Prime Minister's other excuse for not condemning his friends is that they have protested their innocence. But that applies to everyone who does not accept a verdict. The question that the Prime Minister must ask is, "Have our friends, our Tory friends in Tory Westminster, behaved as if they were innocent?"

People who believe that they are innocent are not afraid for others to know the truth. They say, "Here we are, here are the papers. The papers will prove that everything was above board." But that is not what the Westminster Tories have done. No, they have obstructed the auditor at every turn. Documents were shredded. Attempts were made to erase items from the memory of the council's computers. Documents that the council said that it could not find were easily found by the auditor when he decided to take a look for himself. He also then found significant new documents previously undisclosed by these innocents.

People with the responsibility for investigating the innocent do not usually have to resort to dawn raids on offices or hiring inquiry agents to track down the innocent. Innocent people do not usually have to be sub-poena'd to attend interviews. But all that has been required of the district auditor in his search for the truth. People who are innocent are usually willing to avail themselves of the opportunity to answer publicly questions about what they have done. The hon. Member for Milton Keynes, South-West (Mr. Legg) did that at the auditor's hearing and got off. Lady Porter did not do that, but now complains when she loses her case. Her problem is not that the auditor would not hear her. Her problem is that he did not believe a word that she said.

Innocent people do not usually attack the competence and integrity of the person investigating their case. "Tell the truth and shame the devil" is the motto of the innocent, but it is not the motto of Westminster Tories. They have peddled rumours to the press about the auditor, held press conferences attacking the auditor, complained of delays by the auditor. But as everyone knows—

Mr. Iain Duncan Smith (Chingford)

Will the hon. Gentleman give way?

Mr. Dobson

No, I shall not.

Mrs. Jane Kennedy (Liverpool, Broadgreen)

This is an extremely important debate and I am grateful for the opportunity to ask my hon. Friend to contrast the response of the Labour party in 1985, when 47 Labour councillors in Liverpool were surcharged £106,000, with the response of the Conservative party and the disgraceful way in which it is prepared to sit on its hands when the district auditor records that £28 million has been lost to the public as a result of the conduct of its councillors.

Mr. Dobson

I do not need to repeat the point that my hon. Friend so clearly made.

Mr. Duncan Smith

Will the hon. Gentleman give way?

Mr. Dobson

No, I shall not.

As everyone knows, the auditor has done a very thorough job. He has sifted through tens of thousands of pages of documents. He has carried out a grand total of 135 interviews involving 50 people. Lady Porter was interviewed 12 times, always accompanied by her lawyers and other advisers. On one occasion, there were so many of those advisers that they could not all get in the room. The auditor gave her documentation in advance of the interviews and offered her the right to make written representations. She cancelled appointments and even asked the auditor to fly to Israel to interview her there.

Then there is the question of what the innocent do with their money.

Mr. Duncan Smith

Will the hon. Gentleman give way?

Mr. Dobson

No.

Following the auditor's preliminary report, Lady Porter sold up her personal holdings in Tesco and moved away. Is that the action of someone who is certain of her innocence?

At the time when they were harming the homeless for electoral advantage, the Tories were so ashamed that they kept secret what they were up to. Now they claim that they had legal advice that it was okay. That is just not true. In March 1987, at a Tory seminar that included the right hon. Member for Westminster, North, the then chair of the housing committee warned of the possibility of surcharge. In the same month, the Westminster city solicitor wrote to Lady Porter: Anything which smacks of political machinations will be viewed with great suspicion by the courts … The possibility of surcharge exists. Lady Porter was specifically advised: the advantages of sale have to be considered not from any ulterior motive, but from the standpoint of what is right in view of the Council's role as a housing authority". Two months later, the council consulted a QC, who is certain that he advised that it would be unlawful to target sales on the eight marginal wards and that any disposals of property had to be on legitimate housing and planning grounds. The only response from the Westminster Tories was the smokescreen of extending the policy to cover other wards while still concentrating the sales in the marginal wards, to achieve the electoral targets that they had set. Far from acting on their legal advice, it is clear that Lady Porter and her colleagues acted contrary to it. So much for all the excuses put forward by the Westminster Tories and their friends.

The Prime Minister's other excuse for not condemning the Westminster Tories is that neither he nor his Ministers condemn councils that are being investigated until the process is complete. Clearly, the Prime Minister has either just adopted that new, principled approach or his memory is so faulty that he is not fit to be Prime Minister. Up to now, he has been ever ready to leap to attack any council accused of wrongdoing—provided that it is a Labour council. To give one example, he described Monklands council as a disgrace while it was being investigated by a QC nominated by the Secretary of State for Scotland. On 15 December, that inquiry cleared Monklands council of breaking the law. No apology has been forthcoming from the Prime Minister, nor, for that matter, have we heard one from the hon. Member for Dover, who has just accused me of lying. Yet the report states: David Shaw, MP (Dover), had no evidence of substance to offer, notwithstanding repeated references by him to the large amount of information about the council which he claimed to possess and notwithstanding his having made reference to the council's affairs in Parliament on various occasions from late 1992 onwards … When I pressed him as to whether there was any direct evidence to support what was described as his allegation of nepotism, he said that there was not but that he relied on circumstantial evidence. He explained that in his view, the council were guilty of impropriety in a number of other respects which justified the inference of impropriety in the making of appointments. As his evidence went on, I became increasingly unimpressed by it. I regarded his attitude as irresponsible. Neither the Prime Minister nor any other Cabinet Minister can put together one cogent reason for not condemning Westminster. Neither innocence nor principle nor precedent is on their side. The real reason why they will not condemn Westminster is that the Tory party, from top to bottom, from central office to 10 Downing street, from Whitehall to Westminster, has been in these scandals up to its neck. The Tories are still at it—giving Westminster council millions of pounds more grant than it is entitled to, helping it to cover up and evade responsibility and letting it off discharging its duty to the homeless.

Mrs. Teresa Gorman (Billericay)

Will the hon. Gentleman give way?

Mr. Dobson

No, I shall not.

Some Tories have tried to justify the outrageous conduct of Westminster Tories by saying that Labour councils build homes for party political reasons. In particular, those of a historical bent have claimed that under Herbert Morrison, London county council built homes all over London that were filled by people who felt grateful and therefore voted Labour. Perhaps they did, but there is no equivalence between Herbert Morrison's LCC and other Labour councils on the one hand and the scoundrels in Westminster on the other.

Labour councils used the powers given them by Parliament to provide decent homes for the homeless and for others who had nowhere decent to live. They did it proudly and in public. There is no comparison between them and the Westminster Tories, who decided, shamefully and in secret, to use their powers unlawfully to deprive homeless families and families living in overcrowded, unhealthy and degrading conditions. They decided not to house them but to deprive them of somewhere decent to live. Instead, they left those families to rot in bed-and-breakfast accommodation and hostels. Worse still, they placed some in asbestos-ridden flats—all to help rig a council election in eight wards.

Those terrible decisions were taken by rich and powerful Tories. The victims were homeless families, who are usually poor. Sometimes they include men, but most homeless families consist of a poor woman and the children of that poor woman. What a life for those children—often having to cook, eat, sleep, wash, live, play and try to grow up in one rotten, shabby, infested and overcrowded room. Those children should have been helped by those in authority, but in Westminster they were not. Instead, the Tories ordered council officials to be mean and nasty to the homeless children.

Above the doorway of the Old Bailey, these words, taken from the Book of Psalms, are carved in stone: Defend the children of the poor and punish the wrongdoers. The Tories have reversed those ancient laws, which should guide the conduct of mankind. The Tories now defend the wrongdoers who punished the children of the poor. Their party and Government have sunk so low that they are beyond redemption. The only thing that they can do now is go—and go before they do more harm to more homeless families in our country.

4.25 pm

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

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: notes the publication of the Public Interest Report made by Westminster City Council's appointed auditor, Westminster City Council Audit of Accounts 1987–88 to 1994–1995; approves the action of the Government in insisting on the correct legal process; endorses the independence of the auditor; commends the Government's refusal to prejudge or condemn individuals before the conclusion of the due process of law; respects the view that parliamentary privilege is a powerful weapon for the protection of individuals and should not be used to provide cover for party political attacks; and notes that Westminster City Council provides high quality services at a value for money price.". I will begin by addressing the remarks by the hon. Member for Holborn and St. Pancras (Mr. Dobson) concerning the auditor's inquiry. The auditor to Westminster city council issued his note of provisional findings and views on objections made under section 17(3) of the Local Government Finance Act 1982 on 13 January 1994. They were issued only to the parties to the objections and to the council. The auditor also made a short public statement summarising the process and his findings, which were that 10 former council members and officers should be surcharged—one of whom, Dr. Michael Dutt, has since died—and that seven former council members and officers, including Dr. Dutt, should be disqualified from office.

The auditor invited those to whom his provisional findings were adverse to show cause why he should not take action against them. The respondents requested an oral hearing, which was set for October 1994, to allow the parties to instruct counsel and to prepare their submissions. The full hearing lasted 34 days and was completed on 7 February 1995.

The auditor published his final decision and made a public interest report on 9 May 1996. 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.

The auditor 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.

Those individuals surcharged have 28 days from the date that they receive the auditor's statement of reasons to appeal against his decision to the High Court. I understand that a notice of appeal was lodged yesterday evening.

In my reply to a private notice question from my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) on Thursday 9 May, I made it clear that I was not going to prejudge the outcome of the appeals process that will follow. That remains my position. It would not be right, proper or decent to condemn people until the courts have had their say.

Mr. Gordon Prentice (Pendle)

Will the right hon. Gentleman give way?

Mr. Gummer

I will in a moment, but not now.

I remind the House that Her Majesty's Opposition repeatedly pressed the Government to condemn the 10 former council members and officers to whom the auditor's provisional findings were adverse. If we had followed their advice, the House would have passed judgment on three people in respect of whom objections were not subsequently upheld.

It is not sufficient for Labour Members to defend themselves by suggesting that the auditor was not complimentary about these individuals. Labour Members have stigmatised these individuals as guilty of charges of a most serious kind—charges that the auditor's final report does not uphold. Labour Members, in their rush to judgment, have offended one of our most elementary rules, and one that lies at the heart of the English legal system. They were so concerned to press party political advantage that they did not mind whom they condemned or whether those they attacked had had a chance to put their side of the case.

Mr. Prentice

Will the Secretary of State give way?

Mr. Gummer

I shall give way in a moment—other hon. Members have been able to put their cases clearly, and I wish to do the same.

In particular, the Labour party has condemned an elected Member of the House. It has condemned him unheard for allegations from which the auditor has since resiled. No one can consider that to be treatment in the best traditions of the House—indeed, it is the sort of behaviour that Labour Members would be the first to condemn in others.

Let me make it absolutely clear to hon. Members that, if the auditor's findings are upheld by the courts, I will not hesitate to condemn those responsible. If that condemnation were to come, it would be the more weighty and the more serious because it would be arrived at after the due process of law. Some hon. Members seem to be having difficulty understanding the legal position. Therefore, I shall refer to section 20 of the Local Government Finance Act 1982—a Tory Act.

Mr. Bruce Grocott (The Wrekin)

Will the Minister give way?

Mr. Gummer

I shall give way in a moment.

The Act provides that, if it appears to the auditor that a loss has been incurred or a deficiency has been caused by the wilful misconduct of any person, he shall certify that the amount of the loss or deficiency is due from that person, and he may recover the amount of loss or deficiency that he has identified.

The same section provides that any person who is aggrieved by an auditor's decision under the section may appeal against the decision to the court. In the case of a decision to certify that an amount is due from any person, the court may confirm, vary or quash the decision, and give any certificate that the auditor could have given. Similarly, in the case of a decision not to certify that an amount is due from any person, the court may confirm or quash it and give any certificate that the auditor could have given.

It is perfectly clear that anything I say about the auditor's report could be prejudicial to appeals under section 20, and it is no good hon. Members pretending otherwise, as it happens to be true. The fact is that any prejudgment I make is a prejudgment of a case that we knew to be likely, and now know to be certain.

Several hon. Members

rose—

Mr. Gummer

The hon. Member for Nottingham, East (Mr. Heppell), who was not present on the last occasion, will not want to miss what I have to say before I give way.

That means any appeals. It does not refer only to appeals that have already been announced by those against whom the auditor has found, but also to any possible appeals by the original objectors against the auditor's failure to confirm some of his interim findings. Labour Members should recognise this point, and stop trying to make party political points at this stage in the process.

Any statement about this case could be prejudicial not only to the case of Dame Shirley Porter and those who have been criticised in the report and against whom the objections have been upheld, but also to any case that might be taken against the auditor for not including those whom he had previously criticised. If I were to comment on what the auditor has said, I would prejudice the case against either side in this matter. That is why the only comment that I have made—

Mr. Grocott

rose—

Mr. John Gunnell (Morley and Leeds, South)

rose—

Mrs. Helen Jackson (Sheffield, Hillsborough)

rose—

Mr. Gummer

I will give way to the hon. Gentleman—he need not worry.

I have commented on this issue only by carefully pointing out one thing. Previously, the House was invited to criticise people because they were criticised by the auditor in his preliminary report. If the House had done so, it would have behaved in a way that subsequently, I think the Labour party would agree, would have been a mistake. That is the only thing I have said, and I believe, because I have taken legal advice, that it is not prejudicial. I give way to the hon. Gentleman.

Mr. Gunnell

Is the Secretary of State trying to tell us that we cannot repeat the comments that Mr. Magill, the auditor, makes about the hon. Member for Milton Keynes, South-West (Mr. Legg) because we might then find that the original objectors are taking the auditor to court on account of the fact that he has not included the hon. Gentleman among those whom he is surcharging and taking action against?

Is that what the Secretary of State is trying to tell us? Is that why he says that, although the hon. Member for Milton Keynes, South-West is unlikely to appeal against not being included in these charges, we cannot use those quotes in which the auditor states the things that are known by that hon. Gentleman, simply because we may put the auditor, Mr. Magill, in a difficult position by so doing?

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. Before the Secretary of State answers that question, I point out that interventions must be brief and to the point, and not mini-speeches.

Mr. Gummer

I think that what I said was clear: that if I, as Secretary of State, make a comment on the report, it may—indeed might well—be held to be prejudicial to the interests not only of one side, but of any other side that might want to bring a case to court. That is all I am saying. The hon. Gentleman must judge with his conscience what he should say. I am merely saying that the legal position is clear regarding comments made by me, as Secretary of State, in a matter of this kind.

Mr. Grocott

rose—

Mrs. Helen Jackson

rose—

Mr. Gordon Prentice

rose—

Mr. Gummer

The hon. Member for Pendle (Mr. Prentice) rose earlier.

Mr. Prentice

Is it not an uncontrovertible, recorded fact that section 20 of the 1982 Act allows the district auditor to make a finding of guilt, and that individuals are appealing against that finding of guilt? Will the Minister concede that the six named individuals are guilty?

Mr. Gummer

What the Minister will repeat is that, if I make a comment about this statement, that will be prejudicial in any appeal that may be made on either side. Nothing would please me better than to be able to make a series of statements about this matter, but, when one is attempting to be responsible about such matters, one must take the best advice there is. If I were seeking the best advice, the hon. Gentleman would not be among my first choices.

Several hon. Members

rose—

Mr. Gummer

So that Opposition Members may have something more to say, I will give them a bit more on this subject, because it is important.

First, there is the risk of prejudicing a court case that might take place from any angle, in any circumstances. Secondly, there is the issue of the use of the privileges of the House of Commons. When I answered the private notice question by my right hon. Friend the Member for City of London and Westminster, South, I made the point that we all have a serious problem when considering the nature of the privilege of Parliament.

We are able to say in the House things that cannot put us into court. We have that privilege to protect those who need the protection of the House, so that we can stand up and say things that will lead to proper and due process of law. We know that, in this circumstance, there is to be proper and due process of law. I believe that the use of the privileges of the House of Commons in those circumstances—

Mr. Mike Hall (Warrington, South)

On a point of order, Mr. Deputy Speaker. Is the Secretary of State saying that he cannot confirm that the district auditor has found the six councillors guilty of misconduct?

Mr. Deputy Speaker

That is not a point of order for the Chair. The Secretary of State is responsible for his own speech.

Mr. Gummer

The privilege of Parliament, under which we all speak, demands a degree of reticence from us that is of considerable importance if the House is to live up to its best traditions.

Several hon. Members

rose—

Mr. Gummer

I shall be happy to give way, but I want to finish my thought. I am sure that the House is following me with great care. The reason—[HON. MEMBERS: "Waffling."] If hon. Members think that I am waffling when talking about privilege, they have lost their usual reputation for caring about privilege.

We are able to use privilege as a defence on behalf of those who would otherwise not be able to prosecute their case or to maintain their innocence. In this instance, there is to be a court hearing, as a result of which we shall know the innocence or guilt of the persons concerned. Those who say that they know already about innocence or guilt are prejudging the decision of the court when the appeal takes place.

Mr. Robert N. Wareing (Liverpool, West Derby)

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

I hope that it is a genuine point of order.

Mr. Wareing

There are some who might feel that the Secretary of State is implying that we cannot reasonably comment on the district auditor's report because the matter is sub judice. If it were sub judice, Mr. Deputy Speaker, surely you would not have allowed the debate to have taken place.

Mr. Deputy Speaker

It may be helpful if I advise the House that, after careful consideration, Madam Speaker is satisfied that the sub judice rule of the House, which is drawn much narrower than the terms of the rule commonly used, does not apply in this instance. The rule makes it clear that it comes into effect when a matter first comes before a civil court. That is from the time that the case has been set down for trial or otherwise brought before the court. I understand that, in this instance, an appeal has been lodged, but the issue has not yet been set down for trial. In these circumstances, the House rule does not apply at this stage.

Mr. Gummer

So the situation is clear, Mr. Deputy Speaker. The issue is not sub judice at this moment, but it will become sub judice the moment that the case is set down for hearing.

The Secretary of State's position is simple. He is asked by all precedents not to say anything in the meantime that is prejudicial to the case when it comes before the court. I do not believe that it is in the best traditions of the House to depart from precedents. It does not seem sensible either for a Secretary of State to prejudice a case during a short period when he would not be allowed, by the rules of the House, to prejudice it once a date is set down for hearing. To do so would put me in an intolerable moral position, and not one in which I am prepared to be put.

Mr. Grocott

The Secretary of State says strongly that it would be wrong to make any comments on anything until a final conclusion is reached. He says also that we are in grave danger of infringing or abusing the historic traditions of the House. Am Ito take it that the right hon. Gentleman condemns unreservedly the Prime Minister's decision to condemn Monklands councillors, using the privilege of the House in advance of the completion of an inquiry?

Mr. Gummer

The quotation did not give much strength to that argument. I say clearly to the hon. Gentleman that, if the Secretary of State for the Environment were to pass comment on the Westminster case, I am advised that, without question, it would be prejudicial to any case that came before the courts. I would therefore be acting contrary to my duty to the House, and as a Minister, if I were to comment. I have no intention of doing so.

There is a third element that we must take seriously before we deal with the rest of the matters that are before us.

Mr. David Nicholson

I concur entirely with what my right hon. Friend has been saying so far. However, are there not two conclusions to be drawn from the Opposition's desire to raise these matters at this stage? First, there is probably a case to examine the prejudices in the local government finance system that supports Westminster but has supported also Lambeth, Southwark and other inner London boroughs. More particularly, should not the House be extraordinarily reluctant to return to local government the powers and resources to build council houses wherever it wishes? Those powers were sometimes part of a gerrymandering political and electoral system.

Mr. Gummer

It would not be sensible or proper for me to comment on those matters. It is true, however, that the issue before us is not confined to whether we prejudice a case for either side. If it comes before the courts—and certainly it will come before them as a result of the actions of one side—it is not only a matter of the proper use of privilege: there is a third consideration. It is not unreasonable to judge people by the way in which they treat others in circumstances where those others have still to take a case to court. It would be much more sensible, and would give much more weight to judgment, if we were to wait until judgment had been made.

Several hon. Members

rose—

Mr. Gummer

I shall bring my remarks to an end on this matter, because I want the hon. Member for Holborn and St. Pancras to listen to them. I believe that the weight of the hon. Gentleman's condemnation would be much greater if he waited until that condemnation were, if it were, upheld by a court of law. No court of law has yet heard the case. It would be better for us all—

Ms Hilary Armstrong (North-West Durham)

Will the Secretary of State give way?

Mr. Gummer

Of course.

Ms Armstrong

I wonder whether the Secretary of State will take himself back to the Widdicombe report. The report contained a recommendation that the Government introduce a system of appeals into the process of audit. I shall read a couple of lines from paragraph 6.9 of the Government's response to the report. The Government are commenting on the recommendation to include the power of appeal within procedures. The passage is: Neither the Audit Commission nor the auditors would welcome this change of role. Furthermore, the Government does not consider the Commission, made up as it is of a balance of local authority members and other interests, to be an appropriate body to initiate legal action against particular councils' decisions … The auditor must assemble the evidence, and is best placed to decide whether a case exists to invoke statutory sanctions. Transferring the responsibilities from the auditor would reduce his standing and authority, thereby lessening rather than enhancing his effectiveness. The Government have therefore decided that responsibility for taking action under sections 19 and 20"—

Mr. Deputy Speaker

Order. The hon. Lady is making a very long intervention.

Mr. Gummer

The Government made that decision, and presented a clause to the House that included the right of those who were so announced to go to court on appeal. That is precisely what we are talking about. That which the hon. Lady says makes no difference.

Ms Margaret Hodge (Barking)

rose—

Mr. Gummer

I shall not give way, because I want to get on. I have some interesting things to say about Islington. I have no doubt that the hon. Lady will be interested in them.

It seems that we would all be much better employed ensuring that the due process of law can be carried through, that it is not prejudiced and that we do not use the privilege of this place to prejudge a court case for party political reasons.

Ms Hodge

Will the Secretary of State give way?

Mr. Gummer

No. I shall give way to the hon. Lady later in my speech, when she will have more reason to intervene.

Mr. Tracey

In general terms, can my right hon. Friend inform the House whether a district auditor is bound by legal precedent, and whether the precedent of any other decisions by district auditors should in any way affect the one involved in the current hearing?

Mr. Gummer

I am not a lawyer, so I take advice on such matters. As I understand it, the auditor acts as an auditor and not as a lawyer. [HON. MEMBERS: "Oh."] The Opposition have given themselves away. They find it odd for me to say that the auditor acts as auditor, but throughout the discussion of these matters, they have been talking as if the auditor were acting as a judge or a legal figure. I am suggesting that he acts as auditor, and that it is for the judge before whom the case will be heard to act as a judge.

Mr. Clive Betts (Sheffield, Attercliffe)

Will the Secretary of State give way?

Mr. Gordon Prentice

Will the Secretary of State give way?

Mr. Gummer

I shall not give way to the hon. Member for Sheffield, Attercliffe (Mr. Betts). The hon. Member for Holborn and St. Pancras gave way hardly at all. It would be more sensible to follow the case, as I have suggested.

The position is very clear. It would be wrong for any of us to prejudge the case, not because we are partial to one side or the other, but precisely because both sides could be prejudiced by anything that we might say.

Mr. Betts

Will the Secretary of State give way?

Ms Glenda Jackson (Hampstead and Highgate)

Will the Secretary of State give way?

Mr. Gummer

No.

Having left the auditor's report on one side, the hon. Member for Holborn and St. Pancras repeated his concept that, somehow or other, the standard spending assessment system was rigged, and had distributed central Government grant in favour of Westminster city council. He did so on the basis that, having said it so often, he pretends that everybody knows it. If one continues saying something as often as one can without examining the facts, it is easy to say that everyone knows it.

It would be reasonable and dispassionate, however, if we went through the allegations carefully and saw whether they carried any weight. The hon. Gentleman tends to portray Westminster as a leafy suburb devoid of any problems—

Mr. Grocott

On a point of order, Mr. Deputy Speaker. The Secretary of State has repeated that it would be quite inappropriate and wrong for him, in his high office, to make any comment that might be prejudicial, yet the amendment to our motion, which is in his name, specifically congratulates Westminster city council on the services it provides. The amendment states: Westminster City Council provides high quality services at a value for money price. How can the Secretary of State claim that he is not making judgments, when his amendment does just that?

Mr. Deputy Speaker

The hon. Gentleman knows full well that the Secretary of State is responsible for his own speech, but I have already made a ruling—which I hope the House heard clearly—in respect of the scope of the debate. I have already explained to the House that at this stage debate is not prejudicial to any court hearing.

Mr. Gummer

It is with very great care that the amendment that stands in my name and the names of my right hon. Friends refers to the provision of services by Westminster city council in 1996, or at this moment. That is not prejudicial to anything, because the case before the courts refers to events which, if they occurred, were some time ago, and were unconnected with the amendment before the House. The hon. Gentleman knew that, and that is why it is a pity that he raised the matter again.

The hon. Member for Holborn and St. Pancras referred to Westminster as if it were a leafy suburb devoid of any of the problems that characterise other inner-London boroughs. The hon. Gentleman is living in an entirely different world. I imagine that he is trying to catch up with the right hon. Member for Kingston upon Hull, East (Mr. Prescott), and clearly spends far too much time with his new found middle-class status.

The real Westminster is very different from the well-to-do picture that the hon. Gentleman paints. In his speeches in the House over many months, he has never mentioned north Paddington, Queen's park or Church street; he discusses only Belgravia and Mayfair. Evidently, new Labour talks about only certain parts of Westminster.

Last week, I invited the hon. Member for Holborn and St. Pancras to take a trip with me. I suggested that we might visit all the long-sea outfalls of the United Kingdom to see the effect of water privatisation. The hon. Gentleman did not take me up on that, so I shall propose a shorter trip—one from Westminster to Pimlico. If he would accompany me, he would pass the Peabody Trust's Horseferry road and Old Pye street estates, the Grosvenor and Regency estates, the Millbank estate and the Lillington gardens estate. He would see the estates of some of the most difficult parts of London.

The Government base our assessment not on the hon. Member's general comments, but on the facts. More than 100 languages are spoken in Westminster's schools, and 5 per cent. of Westminster's pupils are refugees. Of course, I am not referring to the hon. Member for Blackburn (Mr. Straw), who moved to Westminster in order to take advantage of its fine services.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

On a point of order, Mr. Deputy Speaker. Has the Secretary of State notified my hon. Friend the Member for Blackburn about his intention to launch that disgraceful attack?

Mr. Deputy Speaker

The Chair knows nothing about that. How the Chair can rule on that, I just do not know.

Mr. Gummer

I am happy to say to the hon. Member for Blackburn that, if he does not live in Westminster, but sends his children to school there, I am sorry that he does not send his children to school in the borough in which he lives.

In Westminster, 17 per cent. of pupils come from homeless families. [Interruption.] The hon. Member for Newham, North-West (Mr. Banks) should listen to the facts, as they might help him to compare his own borough with Westminster.

In Westminster, 45 per cent. of pupils have English as a second language, compared with a national average of below 10 per cent. So when the hon. Member for Holborn and St. Pancras says how ridiculous it is that Westminster gets sufficient resources to deal with those problems, he fails to recognise that 45 per cent. of pupils there have to be taught English. The turnover the pupils at a school such as St. James and St. Michael is 109 per cent. The turnover at Hallfield school is 59 per cent. So let us recognise the difficulties with which Westminster—along with many other London boroughs—has to deal.

Mr. Tony Banks (Newham, North-West)

Will the Secretary of State give way?

Mr. Gummer

I shall give way to the hon. Gentleman in a moment. I look forward to it.

Westminster has a higher density of population than Hackney, Islington, Lambeth or Southwark; a higher proportion of people likely to be from ethnic minorities than Hackney, Islington, Lambeth or Southwark; a higher proportion of people living in overcrowded accommodation than Islington, Lambeth or Southwark; a higher proportion of elderly people over 85; and a higher proportion of elderly people living alone than Hackney, Islington, Lambeth or Southwark.

Therefore, whatever else can be said about it, Westminster—like other London boroughs—clearly requires particular help with its heavy responsibilities and special difficulties. The cheap jibes of the hon. Member for Holborn and St. Pancras suggest that he knows only what he can see of Westminster from the House of Commons, and that does great damage to his reputation as a London Member.

Mr. Banks

I remind the Secretary of State that Westminster also has a higher proportion of bent councillors that Lambeth, Islington or Southwark. I note that he did not mention Newham. Were Newham confronting the problems that he has just read out, these would seem like halcyon days.

Will the right hon. Gentleman also explain why Westminster found it necessary to move large numbers of its homeless people into the London borough of Newham while keeping its own properties empty, waiting to sell them to potential Tory voters?

Mr. Gummer

The reason why I made no comparisons with Newham was that I was making comparisons with inner-London boroughs that were adjacent or opposite to Westminster in order to be as fair as possible, and I shall continue to do so.

Mr. John Fraser (Norwood)

Will the Secretary of State give way?

Mr. Gummer

No. I will give way later to the hon. Gentleman, whom I know well and know to be very interested in London's problems, but I want to continue making what I consider an important point in the context of my argument with the hon. Member for Holborn and St. Pancras.

The hon. Gentleman has said that, for the purposes of grant distribution, the Government treat Westminster as the fourth most deprived place in Britain. That is not true. It is true that Westminster comes fourth on the social index, which is part of the SSA methodology, but it has a much lower score on the other indicator of deprivation, the economic index, on which it comes 64th.

The five indicators that make up the social index are: shared or non-permanent accommodation; overcrowded accommodation; households in rented purpose-built flats; residents born outside the European Community, the old Commonwealth and the United States of America; and homelessness acceptances. Those are the criteria against which every council is measured, in exactly the same way, and it is on those criteria that Westminster is seen to have the problems it has. If the hon. Gentleman wishes them to be changed, I hope that at some future time—obviously, he will want to think about it—he will tell us which of them ought not to be included.

The hon. Gentleman has advanced another argument. He has argued that Westminster ought to receive less money because it is currently benefiting from some special treatment by the Government. I have examined the position very carefully; I do not think that it is possible to act in that way, and, if I thought it possible, I would not think it right.

If the hon. Gentleman had right on his side, he would have to prove the following. First, he would need to show that the system applied to Westminster is different from that applied to other local authorities. Secondly, he would need to explain why, if the current system is rigged in its favour, Westminster did better under the last Labour Government than it does under the present Government. If we have rigged the system, it is surprising that we have rigged it so that Westminster does less well than it did when the hon. Member for Blackburn was advising the last Labour Government.

I note that the Labour party tries to cover that up. I shall repeat it, so that Hansard can record it again. If Westminster is being supported by some unsuitable activity, why does it do less well under the current system than it did under the system used by that earlier Government?

Thirdly, the hon. Gentleman would need to explain why his doughty champions, the Labour leaders of the local authority associations, are not demanding a radical overhaul of the system. Fourthly, he would need to quote significant expert opinion supporting his case. Finally, he would need to promise major changes to the SSA methodology in the event of a Labour Government. If the position is as the hon. Gentleman states, he ought to say publicly that, were there ever a Labour Government, they would change it, and he ought to say how they would change it.

Mr. Michael Stephen (Shoreham)

Will my right hon. Friend give way?

Mr. Gummer

I want to make some more comparisons; then I will give way.

The hon. Member for Holborn and St. Pancras has spent two years working on his argument—the same argument as I have heard throughout the two years during which we have been discussing the matter. Let us see how he is doing. Has he shown that the system applied to Westminster is different from those applied to other local authorities? No, he has not. He cannot, because the same formula is applied to every local authority in the country. The system is completely open.

Has the hon. Gentleman explained why, if the current system is rigged in its favour, Westminster did better under the last Labour Government than it does under the present Government? No, he has not. [Interruption.] I think that the hon. Gentleman needs to listen to this. He knows that his own local authority, Camden, is treated more generously in comparison with Westminster under the present Government than it was under the last Labour Government.

In other words, under the system employed by that Government, the hon. Gentleman's authority did less well than it does now, while Westminster did better. There was a different system, which was better for Westminster and less good for Camden.

Ms Armstrong

Why was that information not included in a parliamentary answer to a question asked earlier this year? A Minister was asked what was the total sum allocated to each English local authority from central Government resources in each year since 1974."— [Official Report, 15 February 1996; Vol. 271, c. 659.] He replied that the requested information was not available before 1990–91.

Mr. Gummer

The reason is that the question was an entirely different one. It asked about totalities; I have been using comparators. I have said clearly that I am comparing two local authorities. The hon. Lady clearly has it wrong.

The amount that went to Westminster under the Labour party's system was proportionately more than the amount that went to Camden, while the amount that went to Camden was proportionately less than the amount that went to Westminster. If that is so, it cannot be true that the Government are fiddling the figures. It seems to me that the only fiddling of figures was done by the Labour party, which did it so badly that, when it left office, the system it had produced would not stand up.

The reason is simple. Labour was able to change the arrangements for one authority as against another, while our system makes it illegal and impossible to change the arrangements for one authority: we can only change them for a whole class of authorities. That is why the comparison must be made by reference to a class of authorities rather than a single authority.

The whole system would have to be rigged—which could not be done without all the Labour councils pointing out that it had been done. The hon. Member for Holborn and St. Pancras is the only person who believes that it was done.

Mr. Stephen

Will my right hon. Friend confirm that, far from being imposed arbitrarily by central Government, the SSA methodology is worked out in careful consultation with the local authority associations, and that, if any change were made, there would be howls of protest from Labour authorities which would lose? Will he also confirm that the people of Scotland and Wales, which are represented mostly by Opposition Members, receive far more subsidy from central Government than anyone living in England?

Mr. Gummer

Such issues are discussed regularly with representatives of all the local authorities, all of which are dominated by Labour, all of which are involved in any change in SSAs, and all of which disagree with one another on every individual case because they want what will help them in particular. I understand that, but we discussed these matters in great detail, which is why so many changes have been made.

Mr. Peter Hardy (Wentworth)

rose—

Mr. Dennis Skinner (Bolsover)

rose—

Mr. Gummer

I want to make an important point. We introduced other measures of deprivation into the index, including the problems of unemployment, specifically because the Labour-controlled local authority organisations wanted us to.

Mr. John McWilliam (Blaydon)

Will the right hon. Gentleman give way?

Mr. Gummer

No.

The hon. Member for Holborn and St. Pancras has failed to produce any evidence that hordes of Labour leaders are demanding changes of the sort he wants. That is probably why he cannot make expert opinion support his case. I know that he would not expect experts to agree with him, because he has said that he does not always agree with them. The hon. Gentleman has said that he never felt compelled to agree with experts. But what do the experts say? They say that this is the most sophisticated system in Europe to give fair and equal treatment to the whole country.

If the hon. Member for Holborn and St. Pancras believes what he says, would he not have got up two years ago, a month ago, or even last Thursday, and said, "We propose a radical change in the share-out system." He did not do that; he left it to the hon. Member for North-West Durham (Ms Armstrong) to say what she thought about it.

The hon. Lady told the Local Government Chronicle that she would not like to promise major changes at this stage. I am glad about that. [Interruption.] I think that, in the same article, she did not promise any radical change, but presumably she agrees with her hon. Friend the Member for Holborn and St. Pancras, who said that this is a major scandal of the Government rigging the arrangements.

If the Opposition believe that, they would promise change, but they do not, because they know that the allegation is untrue. It is only in the House that they can get any vestige of support for their allegation, because they do not have support from the experts or from their friends in local authorities. They have no support from the facts, and they do not believe it themselves.

A few weeks ago, the Audit Commission published a wealth of information comparing the performance of every council in the country. I considered that it was worth looking at Westminster council in 1996, because I thought that the hon. Member for Holborn and St. Pancras would attack that council in his speech. He attacked not just the council that was reported on by the auditor, but Westminster council in general. Indicator after indicator shows that Westminster city council provides a service far superior to that of its closest Labour neighbours—Camden, Hammersmith and Fulham, Islington, and Southwark.

It is worth putting the record straight. I hope that hon. Members will agree that one of a local authority's most important jobs is the collection of council tax. Poor collection means less to spend on services and higher tax bills. According to the Audit Commission, Westminster collected 88.8 per cent. of its council tax in 1994–95.

Mr. Betts

Will the Minister give way?

Mr. Gummer

No. I want to finish my speech, and there is not much time in which to do it.

That compares with a collection rate of 86 per cent. in Hammersmith and Fulham, and in Camden, while Islington managed only 82 per cent., and Southwark managed only 79.9 per cent. Despite having the best collection rate, Westminster spent less per dwelling than Camden, Islington, and Hammersmith and Fulham on collecting the money. It takes longer to get a decision on a planning application for those who live under Labour.

Mr. Betts

rose

Mr. Gummer

No, I will not give way. I want the hon. Gentleman to listen to these figures, because he might learn from Westminster.

Westminster decided on 74 per cent. of household planning applications within eight weeks. Southwark managed 65 per cent., Hammersmith and Fulham 63 per cent. and Camden only 53 per cent. Islington said that it managed 48 per cent., but the Audit Commission has expressed doubts about that council's figures. Even if Islington's figures are correct, it is still the slowest council in London, and the second slowest nationally, in deciding on household planning applications.

I thought that it was worth while looking to see how Islington performed on the council tax. I wondered whether it would be a good idea to consider what would happen to tax throughout the country if every council got the same Government grant per head as Islington. I took the views of the hon. Member for Holborn and St. Pancras on Westminster and transferred them next door to Islington.

Mr. Terry Lewis (Worsley)

Oh, very clever of you.

Mr. Gummer

It was not bad. It took some time, but we have done it. I thought it was also worth while to appreciate that Islington—

Mr. Foulkes

On a point of order, Mr. Deputy Speaker. I can find no reference in the motion or in the amendment to Islington. I understand that it is in order to make passing references to matters that are not in the Order Paper, but the Minister is not doing that: he is rehearsing a whole volume, and I think that you should ask him to sit down.

Mr. Deputy Speaker

I remind the Secretary of State that the amendment states: Westminster City Council provides high quality services at a value for money price. It would be advisable and to the benefit of the House if the Minister would return to that.

Mr. Gummer

Of course I agree, Mr. Deputy Speaker, but I think you will agree that to prove whether there is value for money, it is not unreasonable to compare how ratepayers' money is spent in neighbouring authorities. It is a sort of comparison shopping, as to which provides the better value for money. Value for money is a precise comparator, and it is the one I wish to use. Islington is not dissimilar to Westminster, but it gets more Government grant. If authorities received the same rate support grant per head as Islington, most of them would be able to give a rebate.

Mr. Foulkes

On a point of order, Mr. Deputy Speaker. I tried the Minister's tactics about 10 years ago, and Mr. Speaker rightly ruled me out of order. One can make only passing references to certain issues, but the Secretary of State is dealing with Islington, and comparing it—

Mr. Deputy Speaker

Order. The Chair will decide what is in order.

Mr. Gummer

Westminster council has a lower rate support grant per head than Islington, and is doing better than that council. The Opposition do not want me to speak about Islington, for a good reason. It is a dreadful council, and performs appallingly.

If I were to go through the comparisons, Labour would be extremely embarrassed, but the one thing that I shall not do is to draw attention to, refer to or comment upon the internal report on what has been happening in Islington's social services department and elsewhere. That would be entirely wrong, and I would not do it. Therefore, one ought to rely on the figures. That is what I am doing, and it is quite clear that Westminster does much better than Islington, although it has special difficulties.

In Westminster, 99 per cent. of vital social services equipment costing less than £1,000 is provided within three weeks of assessment. Camden manages 75 per cent., and Southwark only 60 per cent. Hammersmith and Fulham says that it managed 71 per cent., while Islington says that it managed 60 per cent., but again the Audit Commission has its doubts about the figures provided by those last two councils.

Children with special educational needs wait longer to be statemented elsewhere in London. In Westminster, 70 per cent. of special educational needs statements—[Interruption.] I know that Labour Members do not like Westminster comparisons, but it is time that they listened to them, because they do not understand.

In Westminster, 70 per cent. of special education needs statements were prepared within six months. Camden managed 70 per cent. as well. Islington managed 50 per cent., Southwark 32 per cent., and Hammersmith and Fulham only 29 per cent. The hon. Member for Holborn and St. Pancras built himself up to a fury at the end of his speech, but I remind him that, without any allegations, statements or standpoints, in Westminster, 70 per cent. of children most in need were statemented within six months, and that, in Hammersmith and Fulham, 29 per cent of such children were statemented.

All the indicators I have referred to and many more, if I had time to cover them, show how well Westminster does compared with authorities run by the Labour party. People do not pay more for those high-quality services. They have the lowest council tax bills—£295 at band D. That is £430 less than Hammersmith and Fulham, £436 less than Southwark, £484 less than Camden, and a staggering £558 less than Islington, a council that has a higher RSG than Westminster. The issue is therefore clear: people get a better service at a lower cost.

In conclusion—[HON. MEMBERS: "Hooray."] Labour Members want me to stop because it is hurtful and embarrassing to them. The more the figures come out, the more the comparisons are shown and the more we see what it is like under Labour, the more Labour Members are embarrassed and the more the public recognise that that embarrassment is caused by what is happening now. That shows why Labour Members have to pretend that there is a plot to support Westminster. Otherwise, they could not explain away how bad Labour local government is in London.

Ms Glenda Jackson

Will the right hon. Gentleman give way?

Mr. Gummer

I will not give way to the hon. Lady.

In London, Labour councils are charging more and delivering less—we see that on the facts of the case. The reason is that Conservative councils run their business more efficiently, and therefore are more able to help people most in need.

Before anyone starts talking about homelessness, I point out to the hon. Member for Holborn and St. Pancras that the rough sleepers initiative, which I have promoted, pressed and protected, is one of this country's most successful operations, and that it has dramatically reduced the number of people who sleep rough, it has found homes for a large number of them, and it is widely supported by organisations and voluntary movements which are not Government supporters, but which believe that our approach to homelessness has been right, generous, determined and continued.

If the Labour party spent its time trying to explain to the country why, today, Labour councils cost people more and deliver less, it would be in a better position to condemn, if and when a court has made its decision. I will not condemn in advance, but if the court were to find that any of the people who have been named are guilty of what they have been named for, I would be the first to condemn. My condemnation will be weighty because it has waited for the evidence of a court of law.

5.24 pm

Mr. Robert N. Wareing (Liverpool, West Derby)

Some of us must feel speechless after that exhibition of sanctimonious gobbledegook from the Secretary of State for the Environment. He tells us that he does not want to prejudice the appeal to the court, yet he spent the last part of his speech doing precisely that by defending Westminster city council's record and the crooks who have been found guilty by the district auditor. Why are they appealing?

Mr. James Couchman (Gillingham)

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to refer to the people in Westminster as crooks?

Mr. Deputy Speaker

It is not out of order, but I remind hon. Members that they should be moderate in their expressions.

Mr. Couchman

Further to that point of order, Mr. Deputy Speaker. As my right hon. Friend the Secretary of State for the Environment has been at great pains to tell us throughout his lengthy speech, these people have recourse to the courts of law, they have not been found guilty in the courts of law and, therefore, they should not be called crooks. [Interruption.]

Mr. Deputy Speaker

Order. So far, the debate has been in order or the occupant of the Chair would have ruled that it was not.

Mr. Skinner

Further to that point of order, Mr. Deputy Speaker. As mention has been made of whether it is parliamentary to use the word "crooks", may I remind you that, in my time as a Member of Parliament, Tory Ministers and Tory Back Benchers have several times accused people in Labour local government, some involved in surcharge, some not, of being crooks and that they were never once pulled up by the occupant of the Chair. The Secretary of State for the Environment has never apologised for it.

Mr. Deputy Speaker

Order. Hon. Members will not have been pulled up because they were not out of order. I have ruled in a similar way.

Mr. Wareing

It is strange to hear such interventions from a Tory Member. I wonder what Lady Porter and the crooks in Westminster are appealing against if it is not the fact that they have been found guilty. I have never heard of anyone appealing against being found not guilty.

I was intrigued by the comments of the hon. Member for Gillingham (Mr. Couchman) because, following the statement of the Secretary of State for the Environment last Thursday, he said 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".—[Official Report, 9 May 1996; Vol. 277, c. 370.] Where was the hon. Gentleman on 14 February 1986 when my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) introduced the Surcharge and Disqualification of Councillors (Abolition) Bill, which sought to restrict district auditors' powers? My hon. Friend was seeking to ensure that councillors should be removed not by an unelected district auditor, but only by electors—in that case, the electors of Liverpool. However, when Liverpool, Lambeth and, going further back, Clay Cross were being criticised, Conservative Members were not reticent in their criticisms. They did not wait to hear whether Liverpool, Lambeth or Clay Cross were going to appeal to a court of law. They were quick to step in and to attack people, who, far from committing the sins of Lady Porter and the crooks in Westminster, were seeking to help people. Those councils were not pushing poor vulnerable people into asbestos-ridden flats. They were not selling cemeteries for 15p a time. We can argue about whether they were misguided in their financial methods, but they were trying to provide decent homes. They provided more homes between 1983 and 1987 than probably any other local authority in Britain.

Mr. Skinner

Is there a distinction to be drawn between what happened under that squalid bunch in Westminster and what happened in Liverpool, Clay Cross and Lambeth? In those three instances, the Labour councillors did what they did openly—there was no secrecy. They wanted the world to know what they were doing. They were involved in a political act because they believed that more money should go to local government. In effect, they were trying to stem the Tory tide of money being taken away from democratically elected councillors and being given to quangos. It was an overt act.

Mr. Wareing

My hon. Friend is absolutely right. They built good solid homes, bungalows for elderly people, sports centres for the youth and the first municipal park to be built in an urban area for decades.

Of course, the Labour party did not excuse misdemeanours at the time and, although I did not agree with everything he said in his speech to the Labour party conference at Bournemouth, we should contrast the courage of Neil Kinnock with the mealy-mouthed words of the Secretary of State and the Prime Minister.

How low the Tory party has sunk. There are one or two honourable exceptions. After the publication of the provisional auditor's report, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said that he would condemn the council. He saw that this was the biggest outrage facing a Conservative Government over the acts of Tory local authorities. There were even a few honourable exceptions within Westminster city council. Councillors such as Patricia Kirwin, Tony Prendergast and Angela Killick were willing to give evidence. They did not have parliamentary privilege, but they condemned what was being done and gave some of the most important evidence to the auditor. Who defends them from the Tories?

There was a time, perhaps during the days of Harold Macmillan, when Tory Ministers would not have tabled an amendment such as that before us today defending a council so rotten in its attitude to decent yet poor people. My friends in Liverpool who suffered the surcharge of £106,000 apiece were not millionaires like Lady Porter. In the main, they were poor, honourable and decent people who wanted to do good for those whom they were elected to represent. They were not getting anything through the till. They were certainly not benefiting from any fiddles from a Tory Government. In fact, they took the actions they did precisely because they were being starved of funds by the Tory Government.

Mr. McWilliam

Will my hon. Friend reflect on the fact that no judge who has to deal with the case would, under any circumstances, be able to set aside the evidence that Westminster council under Lady Porter was deliberately leaving council houses empty, putting council tenants into unfit properties and shifting council tenants into other boroughs for party political purposes? Those are things no judge could challenge because the auditor has produced the evidence of that under the duty laid upon him. Does my hon. Friend think that the correct response from the Government should be a condemnation of corruption in local authorities, regardless of political complexion?

Mr. Wareing

If they were an honourable Government, that is what they would be doing. They would be saying that they want to clean up local government without any view to party political advantage.

I suspect that there has been some collusion between the Secretary of State and the Government and Westminster city council because some of the actions of the council required the sanction of central Government. Certainly, the Government have shown sympathy today for the actions of that recalcitrant local authority.

There is a big difference between the actions of Westminster city council and those of Labour local authorities such as Liverpool which have fallen foul of the auditor. It is the difference between somebody pulled up for speeding and a serial killer. That is the difference between Lady Porter and the local authorities in Liverpool, Lambeth and Clay Cross.

Mr. David Shaw

Will the hon. Gentleman repeat the comment about the serial killer for the media?

Mr. Wareing

Perhaps I should repeat it now because the hon. Gentleman will not be here after the next election, that is for sure.

In the flagship authority of Westminster, the so-called designated sales of property involved no less than 40 per cent. of the total stock—9,360 properties were to be sold off to what Lady Porter believed to be potential Tory voters.

Some Tory Members have said in interventions that whenever council housing was built, that was some form of gerrymandering too. In Liverpool, in the days when the Tory party was at least honourable, even though one might have disagreed with its politics, it built council estates throughout the city. Was that gerrymandering? I was brought up in one such estate. In fact, that policy was good for beer sales because the chairman of the Tory party in Liverpool in those days was also the chairman of Bents brewery. If one wanted to know where a council estate was to be built, one had only to look over the fields and suburbs of the city to see where a public house appeared and one would know that a council estate would soon follow. That is a bit different from the gerrymandering we have seen.

How can the Tories defend this? We had a lengthy speech from the Secretary of State in which he hid behind the idea of sub judice. We were told by you, Mr. Deputy Speaker, that this case is not sub judice. These people have been found guilty of a heinous crime against those whom they were elected to represent. When people come to see us in our surgeries, we do not say, "Did you vote for me? Did you vote Labour or Conservative?" When we are elected, we are elected to represent all the people in our constituency. When Tory councillors were elected in the marginal wards in London, they were elected to represent all the people in those wards. They were the councillors to whom people could go, but what was the reward for going? Their reward was to be put into asbestos-ridden flats. Their reward was to have their needs ignored. Their reward was councillors who were guilty of being crooked and have been found to be so by the auditor.

Mr. David Shaw

Serial killers!

Mr. Wareing

I said that there was a difference between what had happened in Liverpool, Clay Cross and Lambeth, and what happened in Westminster: the difference between a serial killer and somebody who drives over the speed limit.

I think back to the arguments in the Chamber 10 years ago, when Tory Members were attacking Labour councils such as Liverpool and Lambeth, and I say to those Tories that the chickens have come home to roost. A Tory council has been found out, and in a very big way. I have as much sympathy with Lady Porter today as Lady Porter had with Liverpool 10 years ago: none.

5.41 pm

Mr. Peter Brooke (City of London and Westminster, South)

Once upon a time, my school headmaster told me that in an essay paper on gases that he was reading, one of the candidates had said of a gas that it had the unique capacity for seeking out the crooks and the nannies. It is a pretty conceit, and I am impressed that the hon. Member for Liverpool, West Derby (Mr. Wareing) has the same quality—although if I possessed it, I think that I would keep it to myself.

The trigger to this debate was the publication on Thursday of the district auditor's report on Westminster city council, on which I asked my right hon. Friend the Secretary of State for the Environment a private notice question, although the ostensible grounds for the Opposition changing today's business were the replies given in the House on Thursday by my right hon. Friends the Prime Minister and the Secretary of State. Conservative Members had been looking forward to an Opposition debate on standards in education, and we shall continue to look forward to it—when the Opposition have sorted themselves out on child benefit, which, incidentally, they will clearly have to do by Friday.

My experience of preparing for this debate afforded me some sympathy for the Opposition's preparation for the Scott debate, although they had twice the amount of time. The pagination of the Magill report was already more extensive than that of Scott, but one's reading needed to be extended to the 642 pages of the Barratt report, given the Leader of the Opposition's somewhat gratuitous reference to asbestos on Thursday, to which I have been unable to detect any reference in Magill.

The Opposition have been accurate in describing the procedure that the district auditor has followed as being the product of a Conservative Act. One Westminster Labour councillor inquired whether I had been the Whip on the Bill, to which I incorrectly assented, confusing the local government Bill in 1980 with the one in 1982. I repeat what I said on Thursday in the House. Although I have been critical of the process, I have not been critical of the district auditor himself.

I mention that because the hon. Member for North-West Durham (Ms Armstrong) said on 6 December 1995 on Second Reading of the Audit (Miscellaneous Provisions) Bill that the stories heard about local Members of Parliament vilifying the district auditor and the Audit Commission were a disgrace.

Ms Armstrong

I said that it was a disgrace that Members of Parliament were supporting councillors who were saying that. That statement arose from knowledge that the right hon. Gentleman attended a press conference arranged by a group of Westminster city councillors on 22 February 1995, entitled, "Westminster Conservatives Accuse Auditor of Paralysing Council".

Mr. Brooke

The hon. Lady is perfectly correct about the subject of the press conference and perfectly correct to say that I was responsible for acting as its host. It was a debate about what risk councillors would be under as a result of taking decisions that they had been advised were legal. Indeed, many journalists who attended agreed in private conversation afterwards that it was a reasonable subject to raise. Again, I am talking about the process. Her warning that she might say what she said did not reach me until after the debate, and I do not remotely criticise her for that. I was not present to challenge her at the time and mention it now only to set the record straight.

On the process, my right hon. Friend the Secretary of State for the Environment said in answer to my supplementary question on Thursday that it was not 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 do not dissent from that, but shall remind my right hon. Friend when he returns to the Chamber that he said when we visited these matters after the provisional report: 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 changes that I would wish to recommend."—[Official Report, 13 January 1994; Vol. 235, c. 347.]

Mr. McWilliam

Since I led for the Opposition in Committee on part III of the 1982 Act, I assure the right hon. Gentleman that he was definitely not the Whip. Does he accept that that Committee had plenty of opportunity to explore those areas of the process about which Lady Porter and others are now complaining? We tabled amendments on those areas, and they were all defeated by the Government.

Mr. Brooke

I am perfectly happy to agree that one can, from time to time, make mistakes in legislation. I do not dissent from that for a moment. On Thursday, my hon. Friend the Member for Stafford (Mr. Cash) alluded to the exoneration of our hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) and the costs that our hon. Friend had incurred to secure that exoneration. To make the point that the issue is bipartisan, I should say that it is a commonplace in Westminster that the objectors, too, feel that the necessary costs to pursue the process have been excessive.

Far from criticising the district auditor, and having read the narrative element of his report, I think that he has been meticulous. I come to such a judgment with high family standards, for my brother was one of the inspectors on the Department of Trade and Industry report on Harrods, thus earning en série the hostility, first, of Mr. Rowland and then of Mr. Al-Fayed.

Mr. Magill's meticulousness has compared favourably in these matters with that of some of the press. I shall not go into the legal conclusions—not least because I am not a lawyer and they will be tested in the courts—but the Opposition's apparent dismissal of the stage in the High Court has rung oddly given that background briefing by the press has shown that, in the past, a district auditor's judgment has been overturned in the High Court.

No one in the House is more conscious than myself of the cruelty that television can inflict, but I found myself subject to a pang of distaste on Thursday night, when the cameras of the BBC's "Question Time" fastened on the hon. Member for Redcar (Ms Mowlam), the shadow Secretary of State for Northern Ireland, when she was clapping enthusiastically a young man who said that Dame Shirley should go to prison. It would be a mistake for the Opposition, in presuming as they have that Dame Shirley has behaved illegally, to be too careless of the niceties of the law themselves.

The hon. Member for Holborn and St. Pancras (Mr. Dobson) was good enough to omit me from his speech today, just as he said that he was sad to include me in his questions on Thursday. I thank him for both. The Evening Standard had forewarned me of what the hon. Gentleman had said about me at his press conference, and on Friday, The Independent said that Labour sources had been playing the same card on Thursday evening—presumably in the Lobby.

The hon. Member for Holborn and St. Pancras is my parliamentary next-door neighbour, and we get on every bit as well as most neighbours do. Thursday was real-time stuff. Had it been played at a more relaxed pace, I would have leaned over the fence and asked him what on earth he was on about.

In fact the issue had arisen earlier, at the time of the provisional report in January 1994. As is recorded in column 349 of Hansard for 13 January 1994, the then shadow Secretary of State for the Environment, the hon. Member for Blackburn (Mr. Straw), had alluded to the fact that "Panorama" had claimed that I attended a meeting in 1989. I had never concealed the fact that I attended that meeting, although I corrected the hon. Gentleman the next day and pointed out that it actually took place on 3 March 1988. I remark in passing that no reference to that meeting occurs in the Magill narrative.

On 21 January 1994 The Observer asked me what other party meetings I had attended. Although I was visiting Manchester that day on Department of National Heritage business, I furnished the paper with a full account. Of a meeting on 13 December 1986, I said that I had no recollection of the agenda, but remembered that its raison d'etre was to look back at the council elections of 1986 and forward to those of 1990.

The Observer said that the meeting on 13 December 1986 was highlighted in the district auditor's inquiry as one of a series in which the alleged gerrymandering was developed. In fact, now that the district auditor's report has been published it contains no reference to that meeting. In the absence of such a reference, I cannot tell who placed the spin on the significance of the meeting for The Observer.

As for the meeting on 3 March 1988, although The Guardian of 15 January 1994 said that the document, "Keeping Westminster Conservative", which underlay the meeting, included details of what it called the £21 million "homes for votes" strategy, in fact, as I said in 1994, the document made only a passing reference to designated sales—half a sentence in a 15-page, closely typed document—and contained no indication that the policy was not city wide, as indeed in overall terms it was. The Guardian also said that I was the chairman of my party when Westminster city council set its housing policy. That, too, was not so.

Two days after the article in The Observer, when he had seen my statement in that article, on which he had in turn commented to The Observer, the hon. Member for Blackburn wrote to me. He reiterated the same questions as The Observer had asked me about meetings—questions that I had already answered. The following day, 26 January, as is recorded in column 302 of Hansard, the hon. Gentleman referred in the House to an intention to change the electoral base in 18 wards, rather than in the eight to which the Magill report referred. I have long regarded all as being fair in love and war, but there is also some obligation to be attentive to detail.

As for "Panorama", I have twice been interviewed about Northern Ireland by John Ware, a journalist whom I greatly respect—once at great length and once more briefly. For whatever reason, he did not seek to interview me about Westminster city council on either of those programmes.

I apologise for wearying the House with so much detail, but as a consequence of the statement by the shadow Secretary of State to the Evening Standard at the press conference, and of his subsequent allusions in the House last Thursday, constituents have been ringing me up to inquire after my welfare or otherwise. Given where the issue arose, the simplest method of response has been to answer those allusions likewise, in the House.

In seeking to widen their net, the Opposition have demonstrated how long they have been out of power. Throughout the relevant period of Mr. Magill's narrative, give or take a few weeks, I was serving in the Treasury. I also spent part of the time as chairman of my party. There is no way in which someone who holds such offices can also keep track of a local authority as complex as Westminster, and of a narrative as dense as that which Mr. Magill unfolded.

It is perhaps an index of that fact that the only references to me that I could detect in the report, in paragraphs 771 and 772, refer to a time when I had gone to the Northern Ireland Office, and a letter was being drafted to me as the local Member of Parliament. Of course, throughout such events one continues to be the local Member of Parliament, and to an inner-city Member, "building stable communities" had an immediate attraction.

At the 1983 general election my constituency had the lowest turnout in the country. In 1987 we moved up eight places, overtaking six seats in or near inner London, and two in Northern Ireland. In 1992 we moved up a further eight seats, overtaking the most inner-city seat in each one of a series of other British cities.

There is something about an inner-city seat that makes for transience—hence the attraction of stable communities. In the High Court the law will take its course on such matters, but the instinct in favour of stable communities was a good place in which to start. Westminster has a disproportionate amount of low-income housing, but also a social cohesion that is immensely worth preserving, which is why people like living here.

Against the housing mix in 1977, when I first became the local Member of Parliament, and that in 1987, when the critical housing committee meeting took place, the logic of designated sales was sensible. If, as the hon. Member for Blackburn said, the policy had a political implication, so did Herbert Morrison's programme, and so did Camden's purchase of private properties between 1965 and 1968 under Labour, under Dr. Ruth Glass's tutelage, which, as vice-chairman of finance, I had to help clear up after my party won in 1968. To neither of those programmes do I attribute illegality.

Mr. Tracey

My right hon. Friend has mentioned the approach in several other cities. Does he share with me some disquiet at the fact that the district auditor investigating Westminster has taken a view completely different from that of the district auditor investigating Birmingham, where similar events happened?

Mr. Brooke

My hon. Friend is right in that observation, but I understand that, according to the process under which such matters are run, district auditors are not subject to precedents set by the behaviour of other district auditors. We still have to ask ourselves, however—

Ms Armstrong

Perhaps I can help the right hon. Gentleman. Allegations were made in the press about Birmingham, and the leader of the council, Councillor Theresa Stewart, invited the auditor in to examine the policy, which no one had said was gerrymandering. In his report the auditor concluded that expenditure arising from "Meeting Needs" was lawful", and that the initiative was not primarily an attempt to win votes".

Mr. Brooke

I understand that the treatment in certain wards was not necessarily paralleled elsewhere in the city. But we do not want to have a long argument about such matters; the point that has been established is that the pattern of district auditors' thinking does not have to match on a precedent basis throughout the country.

When I was serving at the Department of National Heritage, the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), who is an Etonian, once called me a patrician. One of my grandfathers was a clergyman and the other a professional illustrator, and my father was a politician in the House. Pace the Register of Members' Interests, there is no money in any of those callings. However, I would not regard being called a paternalist as an insult, so, the law apart, I have to ask myself whether I regret anything about Mr. Magill's narrative.

Contrary to what the late John Smith said on "Channel 4 News" on the night of 13 January 1994—the date of the provisional report—designated sales were not a method for flooding Westminster with votes from outside Westminster, as the hon. Member for Holborn and St. Pancras half suggested. Nor does the Magill narrative say that that was in fact a consequence of the policy.

Given the inherent stability of parts of Westminster, it would be silly if I had had no reservations about selling off quite so much of the stock, when I wanted the next generation to be able to live here in Westminster, for reasons implicit in Peter Townsend's seminal work on the lives of old people. As I said on Second Reading of the Housing Bill, I had similar concerns about the policies that the Peabody trust was pursuing at the same time.

When eventually I learnt of the human cost in prolonging the time that homeless people spent in short-term accommodation, I was not at ease about that cost. The Leader of the Opposition raised that subject during Prime Minister's questions last Thursday, but the right hon. Gentleman must allow me to say that I hear the distant grinding of double standards.

According to paragraph 60 of the Magill report, in September 1986, Westminster city council had 330 homeless in hotels in Westminster, while other boroughs were using hotels in Westminster for 1,000 homeless—or three times as many people.

In paragraph 383 of the report, there is a moving passage, prior to the critical housing committee meeting in July 1987, in which Shelagh Laslett O'Brien of the Bayswater Coordinating Group addressed the committee. She stated that she wished to respond to the committee's apparent change of policy in transporting homeless families outside the borough—in other words, as an initial act. She stated that one of the positive aspects of the city council's practice had been that families who became homeless in Westminster had not been placed in accommodation outside the borough. It is an irony that other authorities had been placing their homeless in Westminster for years. But it was not simply a matter of location.

Given the Leader of the Opposition's strictures last Thursday about putting the homeless in what he described as appalling bed-and-breakfast accommodation",—[Official Report, 9 May 1996; Vol. 277, c. 362.] it is worth recalling that, according to paragraph 825 of the Magill report, on 31 March 1989, six out of the 10 inner London boroughs—Camden, Hammersmith, Islington, Lambeth, Southwark and Tower Hamlets—had more than 1,000 homeless households, ranging in number from 1,164 to 1,690, in temporary accommodation. That is the process that the Leader of the Opposition condemned last Thursday.

On that same day, Westminster had 709 homeless families in the same condition. It was an era in which the Department of Social Security office, now the Benefits Agency—[Interruption.] That was a period in which those who were statutorily homeless were being kept in short-term accommodation. I am saying that a great many more people were being kept in such accommodation by the six boroughs I mentioned than by Westminster.

That was an era in which the Benefits Agency office in Lisson Grove told me that an Irish family had only to arrive at Euston and call the Ealing housing department to be accepted as homeless and then deposited in Westminster. Such use of Westminster's facilities, while of course legal, may have affected events in Westminster, including the pattern of voting.

I conclude my speech by considering the observations about Westminster's finances made by the hon. Member for Holborn and St. Pancras, although I suspect that even he would not argue that designated sales had been responsible for the Conservative victory in Westminster in 1990—with an increase in the majority from four to 30 on a day when Conservatives were otherwise being defeated.

The hon. Member for Holborn and St. Pancras has to fall back on Westminster's community charge—indeed, he has done so—but he has done so by reference back to Government assistance. I noted that, in his quotations of GJW lobbying, he did not allude to their lobbying of me as a Treasury Minister. What I recall more vividly is that, prior to my voting against the Government on St. Bartholomew's hospital, the only time that I have not voted for my party was when the Labour Government gave Westminster its rate support grant settlement in 1978.

As for services, Westminster continues to vote Conservative not only because of the level of the council tax but because of the quality of services. I cannot recall whether it was the hon. Member for Holborn and St. Pancras or the hon. Member for Hampstead and Highgate (Ms Jackson) who claimed that Camden's efficiency was characterised by its low cleaning charge as compared with Westminster's higher one. But one has only to visit the boundary between Camden and Westminster the day after a snowfall, when Westminster's streets are clean before the start of the working day and Camden's are still snow ridden at the close of the working day, to see where the differences lie.

Attention to one's public does pay dividends. Westminster has been voted the cleanest borough in London despite a scenario in which, if I shake the hand of someone on the street during a general election, I have only a one in 20 chance of shaking the hand of someone who has the right to vote for me. My right hon. Friend the Secretary of State has listed similar comparative performance in other fields.

Finally, on asbestos, the Opposition have given me two separate references for their quotation from the 642-page report. Tomorrow I shall compare the quotation of the hon. Member for Holborn and St. Pancras with the text. I agree that Mr. Barratt concluded that the council failed to exercise proper standards of management of the asbestos, but he also provided a coda to his report—in a letter to the Westminster chief executive, on 3 May—in which he confirmed that he had found no evidence of any intent whatsoever by any person deliberately to endanger the health of the flats' occupants.

6.4 pm

Mr. David Rendel (Newbury)

The Conservatives on Westminster city council have cheated. They have cheated their electorate, they have cheated the people of Britain and, above all, they have cheated the homeless. To pick on someone weaker than oneself is the mark of a bully, but to pick on the homeless is despicable.

There have been many efforts in this debate to claim that no one has yet been found guilty. But the six people concerned have now, we have been told, gone to appeal. One cannot appeal against a finding of guilt until there has been a finding of guilt. Moreover, the six have been sentenced—the surcharge certificate has been sent to them. One cannot be sentenced until one has been found guilty.

So let us be clear about it. The proudest symbols of British conservatism have been found guilty of gross misuse of public funds, of sacrificing the homeless and, worst of all, of seeking to subvert the democratic process.

This country's system of local government, sadly, has cracks that leave it open to abuse. Westminster's Tories have hammered wedges into those cracks. They have exploited the system to the full, and they have turned the abuse of power into an art form.

What has been the response of senior members of the Conservative party in the House? They have sought simply to sling so much mud around that the general public have been left with the impression that those who have been found guilty are no worse than everyone else.

Let us be clear about what the Prime Minister and the Secretary of State could and should have done. They could have denounced what has happened in Westminster, declared that such outrageous misconduct was entirely unacceptable and thrown those who have been found guilty out of their party. By their failure to do so, they have brought their whole party into disrepute.

Mr. Couchman

Does the hon. Gentleman think that it is right that people should be condemned and subjected to an unlimited fine without due process of law?

Mr. Rendel

The point, which appears to be missed by the Conservative party, is that there has been due process of law. That has continued for the past seven years, and a finding of guilt has now been made.

The Conservatives' attempt to make out that what has happened in Westminster was no worse than what is happening elsewhere—throughout local government—is dangerous and sickening. What the guilty councillors and council officers did in Westminster has, in effect, been condoned by the Conservative party, by the Secretary of State and by the Prime Minister. So much for it being the party of law and order.

By failing to recognise the judicial standing of the auditor's inquiry, the Government have sought as never before to mislead the public about the significance of the auditor's findings. They have not done so in the interests of justice but purely for their electoral benefit. They have wriggled and they have squirmed, but the fact is that six people have been found guilty of wilful misconduct.

Mr. Pickles

The hon. Gentleman talks about wriggling and squirming. Suppose that the court overturns the auditor's judgment when this matter goes to court. Who will have had the better judgment: my right hon. Friends, who have waited until they have heard what the court has to say, or the hon. Gentleman, who has condemned people before they have exhausted the judicial system?

Mr. Rendel

I can only repeat the point, which apparently the hon. Gentleman has not listened to, that these people have been found guilty by due process of law set up under his Government. If he does not understand that, he had better go back and read Mr. Magill's report.

Mr. David Shaw

I hate to disagree with an old Etonian, but I should be grateful if the hon. Gentleman could point to anywhere in the district auditor's papers where the word "guilty" is used. In the paragraphs that I have been reading, I certainly cannot find the word "guilty".

Mr. Rendel

That intervention is not particularly relevant. May I direct the hon. Gentleman to page 674 of the report, where the district auditor clearly says: I have found as a fact that the Council was engaged in gerrymandering. If I am not allowed as a result of that sentence to say that the council was guilty of gerrymandering, the hon. Gentleman is misusing the word "guilty".

Let us consider rather more closely what the inquiry has been all about. The process of the inquiry that the auditor pursued is that established by a Conservative Government. Under the Local Government Finance Act 1982, the auditor was appointed to make his inquiry as long ago as 1989, following objections made by a local doctor that people in need of social housing for medical reasons were not being found secure accommodation. At the same time, Westminster city council was selling just such housing, not to tenants but to the relatively well-off from outside.

Two years ago the auditor produced his preliminary findings, based on 100,000 pages of documentation and countless interviews with councillors and officers. Seldom can a more detailed and careful report have been prepared. It should be said that some Conservative councillors and council officials went out of their way to obstruct the inquiry from the very beginning. That obstruction included the shredding of vital documents after they were known to be likely to be needed for the inquiry. I assume that that would have led to a criminal prosecution if the inquiry had been into criminal rather than simply civil misconduct.

Following the provisional findings, the respondents had every opportunity to put their case and refute the allegations made against them. Now, after seven long years, the auditor has produced his final verdict. Six people have been surcharged. Of course they have the right to appeal. I understand that they are taking up that right. However, for the Government to argue that they cannot comment on any legal case where the verdict may be subject to appeal in a higher court is sheer nonsense. What if the people lose their case in the High Court and take their appeal to the Appeal Court, then perhaps to the Lords or even as far as the European Court of Human Rights?

Are the Prime Minister and the Secretary of State seriously telling the House that they will not comment on any unlawful conduct by anyone where there remains any possibility of further appeal to a higher court? By the time the Government get round to condemning any wrongdoing, we shall all be long since dead, or at least—I suppose that this is really the point—it will be after the next general election.

The auditor's findings were the result of three main lines of inquiry—the failure to fulfil statutory duties to the homeless, the misuse of public funds and the gerrymandering of elections. What the auditor has found on each of those matters demands greater public exposure. The report is some 2,000 pages long and costs £20—good value perhaps, but it will not be widely read. Let us consider the three aspects one by one.

First, the question of homelessness. Mr. Graham England, the director of housing, in a briefing note to Councillor Porter dated 18 March 1987, is quoted by the district auditor in volume 3(A), page 438 of the report as saying: the effect of selling all vacancies and transfers in the key wards would be to lose 490 vacancies per annum. If 490 lettings were taken out of the equation then there would be 576 left to allocate. It can be seen from the table of demand that there would not be enough vacancies to house those people for whom we have a statutory obligation under the Homeless Persons Act. It would also not be possible to deal with high priority medical cases and community building schemes which could be considered to be politically sensitive. As the Council has an obligation to provide shelter for the homeless it would not be possible to reduce the number coming in without a change of legislation and therefore more and more people would be kept in temporary accommodation awaiting a smaller and smaller number of empty properties. That is pretty clear advice as to where the Conservatives' obligations lay.

As the auditor himself put it on page 439, Councillor Porter knew that there was no professional justification for what was proposed and understood that those proposals were considered by the Director of Housing to be inconsistent with the Council's statutory obligations to the homeless. Yet the Conservatives stepped up their outrageous plan for dealing with the problem of homeless people upsetting their electoral apple cart.

In June 1987, in the Tory seminar document called "Setting the Scene", by Councillor Porter herself, she said: The electoral register for the 1990 elections will be compiled in just over two years time. Some very ambitious policies must be implemented by then: providing a great deal of affordable housing in key areas; protecting the electoral base in other areas (for example, by controlling the impact of homelessness)". What more evidence does the Conservative party want? We now all know that the Conservative vision for controlling homelessness included, sadly, placing homeless families into blocks of flats riddled with exposed asbestos—flats that the council knew were unfit to live in. That particular practice moved Mr. John Barratt, in a separate inquiry commissioned by Westminster city council, to write: Despite the availability of the clearest advice to the contrary, those acting on behalf of a public body took risks, for a variety of reasons, with the health of the people who ought to have been entitled to assume that such risks were not being taken. So it is important to stress the seriousness of Westminster city council's lack of care.

Conservative policy in Westminster was not just social engineering. It was evidence of the Tories' obscene and callous disregard for the needs and rights of homeless people, simply on the basis that they did not vote Conservative. As that is the way in which Conservatives treat those people who do not vote for them, perhaps the scandal at Westminster helps to explain the Tories' national philosophy of sponsoring the haves in our society and leaving the weak, the vulnerable, the old, the sick and the homeless to fend for themselves.

Secondly, the auditor has gone into great detail about the misuse of public funds by Conservative councillors. His report shows the full scale of the scandalous designated sales policy. The auditor's figures include the misuse of capital grants, £2.5 million; the cost of keeping dwellings empty, £1.6 million; losses arising from the disposal of dwellings, £38.5 million—including £4.2 million for the additional cost of housing the homeless in substitute accommodation such as bed-and-breakfast hostels—staff and professional costs, £2.1 million; and interest on those losses, £5.2 million. That brings the total of public money misused purely for the benefit of the Conservative party to a staggering £49.8 million. It is only because of the assumed interest of £15.2 million plus some other minor savings and service charges that the surcharge figure is brought down to £31.7 million. That hardly represents financial prudence, leaving aside the political motives involved.

Let us examine the capital grants. Payments of £15,000 were made to council house tenants to move out of their social housing so that their homes could be sold not to someone in need but to someone more likely to vote Conservative. The waste of public funds by Westminster city council has been shown to be of a different order of magnitude from that in any comparable local government scandal which has come to light. The council which the Conservatives called their flagship has turned out to be the single most wasteful council in the whole country.

Thirdly, and most importantly, there is the question of gerrymandering. Conservative councillors did not only waste millions of pounds of public money and fail to fulfil their moral and legal duty to the homeless. The real disgrace is that it was all done purely for the electoral interests of the Conservative party. To any democrat, gerrymandering is a most serious offence. It is subversion of the very democracy upon which our society is based. The auditor could not be more clear. Conservative councillors have been found guilty of gerrymandering.

Such gerrymandering would be pointless, if not impossible, if we used a proportional system of voting rather than first-past-the-post. The present system lends itself to attempts to gerrymander marginal wards, which would not exist in the same way under a proportional system. A change to proportional representation would immediately insulate the democratic process from people who seek to abuse their political power.

Mr. Pickles

What about the single transferable vote system and the multiple transferable vote system in operation in Italy, which both readily lend themselves to gerrymandering?

Mr. David Shaw

And corruption.

Mr. Pickles

And corruption.

Mr. Rendel

I am not sure what arguments the hon. Gentleman has to back up his assertion. He has given none. There is plenty of corruption in Italy, but it does not involve gerrymandering the electoral system.

Of Lady Porter, on page 417 of the report the auditor concludes: I find as a fact that she was concerned to secure an increase in the number of home owners and a reduction in the number of homeless households accommodated in marginal (or key) wards by 1990, in order to increase the number of likely Conservative voters in those wards in the 1990 local government elections. For her, the designated sales policy was a means to that end.

Mr. Shaw

Can the hon. Gentleman say how it is possible in designated council house sales—a policy that I have supported—to determine whether the people moving in, or the existing residents if the house is sold to them, are Conservative or Labour voters? How is it possible to know that Labour voters have turned into Conservative voters as a result of the contract of sale?

Mr. Rendel

Once again the hon. Gentleman misses the point. The policy was not meant to turn Labour voters into Conservative voters but to ensure that people who were more likely, in the nature of things, to be Conservative voters lived in certain wards and that those who were more likely to be Labour voters lived in other wards where their votes did not matter. It is not a question of turning people's votes or knowing about each individual voter or house owner.

On page 418 the auditor states: On 5th June 1986, in response to a request from Councillor Lady Porter, Councillor Kirwan produced a note 'covering the possibilities of balancing the social mix in Westminster', having regard to 'a number of factors contributing to the drop in "our" natural support.' These included the cost of housing and the growth of hotels and hostels catering among others for 'homeless/down and outs, who are not our natural supporters.' On page 419, the report states: On 24th June 1986, Cllr Lady Porter, accompanied by Cllrs Weeks and Legg, attended a meeting of the Chief Officers' Board, at which they informed the Chief Officers that the majority [Conservative] party intended to win the next election, that this would be the focus of their attention and that majority [Conservative] party objectives included, 'Social engineering including Housing'. On page 422, the auditor states: Councillor Kirwan also presented a paper to the Conservative Party seminar held on 6 September 1986. Her paper entitled, `Westminster's Housing 1986–1990' specified the objective as: `to ensure that as far as possible, Westminster's housing policies achieve the type of social and economic residential mix that will enable us to retain control of the Council in 1990 and help to retain the Conservative majority in the Parliamentary seat of North Westminster'. The evidence is damning and public and in the auditor's report for all to see and form a judgment on. The fact that six people were found guilty of wilful misconduct in their misuse of taxpayer's money does not exonerate others who received stinging criticism for their failure to put a stop to malpractice. In that, we must include, sadly, the hon. Member for Milton Keynes, South-West (Mr. Legg). The auditor has made it clear that the hon. Gentleman knew that gerrymandering was going on and did nothing about it and that he should have taken action to stop it. He is excused from any surcharge on the ground that he did not realise that he had a duty to stop the gerrymandering.

Mr. Duncan Smith

The hon. Gentleman has continued this ridiculous line about my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg), who was exonerated in the report. If he cared to look, he would find that it was clear, and accepted by the auditor, that my hon. Friend accepted the legal opinion given by the Westminster solicitors that what was taking place—and this may still be proven to be so—was legal. On that basis, we have only an opinion of the auditor in hindsight but it does not change his overall finding. It is time that the hon. Gentleman withdrew that line.

Mr. Rendel

The relevant section of report states: The legal advice, of which Councillor Legg was aware, gave no support for targeting designation in the key marginal words to promote the electoral advantage of the Conservative party. The case is clear.

The question that we and the hon. Member for Milton Keynes, South-West have to answer is whether a man whose moral judgment allows him to take no action to put an end to malpractice is a fit person to be a Member of the House? The only honourable course for a Member so heavily criticised for his poor behaviour in public office is to resign. The hon. Gentleman has condoned gerrymandering and so undermined the basis of our democracy. He should go.

Mr. David Shaw

The hon. Gentleman is a councillor.

Mr. Rendel

No I am not.

Mr. Shaw

The hon. Gentleman was a councillor. Will he confirm that his Liberal group on the council never took a political decision?

Mr. Rendel

I am staggered by that question and do not quite know how to answer it. All political groups are in the business of taking political decisions. It is an amazing question. I shall continue and perhaps not take any more interventions.

Mr. Gunnell

Will the hon. Gentleman give way?

Mr. Rendel

I hope that this intervention will be more sensible than the previous one.

Mr. Gunnell

It was not the taking of a political decision that was wrong but the decision to use council money for the illegal purpose of gerrymandering. That is the auditor's charge. Of course the Westminster Tories are entitled to take political decisions but the auditor must decide whether they were reasonable.

Mr. Rendel

That is correct and I thank the hon. Gentleman. Every decision taken by any council or by the House must be classified as political. If we did not take political decisions, we would have no purpose whatever. Some members of the public may think that, but hon. Members like to think that we have some purpose.

To continue on a more sensible note, if Conservative Ministers showed signs of remorse for what their colleagues did in Westminster, it would be easy to be more charitable and to regard the matter as a problem caused by a small clique going awry.

The Prime Minister and the Secretary of State for the Environment have thrown back their opportunities for repentance and have shrugged off the findings of the seven-year inquiry. To them, a guilty verdict means nothing. Such is their arrogance in power that they feel impervious to the judicial system. That senior Conservatives committed the offences that they did for party political gain is a scandal—but the indifference of the Prime Minister and of the Secretary of State to that misconduct and to the process of law is truly shameful. By their failure to take action to remove the hon. Member for Milton Keynes, South-West from the Conservative party and from the House, they too are condoning gerrymandering. They have brought dishonour to the House and to their party, and they too should go.

6.29 pm

Mr. James Couchman (Gillingham)

Last Thursday, and again this afternoon, the House was treated to a shameless and cynical display of what I can only refer to as humbuggery rarely equalled even by its author, the hon. Member for Holborn and St. Pancras (Mr. Dobson), on those two occasions. I am disappointed not to see the hon. Gentleman in his place, for there is the true inheritor of the mantle of Herbert Morrison. The hon. Gentleman accused the erstwhile members of Westminster city council of heinous municipal misdeeds. The hon. Member for Liverpool, West Derby (Mr. Wareing) went even further and described them as crimes. He will be disappointed to learn that gerrymandering—unattractive though it may be, and it occurs in the hon. Gentleman's party as in others—is not a crime or a criminal offence.

The hon. Member for Holborn and St. Pancras accused leading members of Westminster city council of being in cahoots with the city's officials and with the whole Tory party, from top to bottom—including Conservative central office and No. 10 Downing street. The hon. Gentleman's promise last Thursday that an incoming Labour Government would establish a public inquiry rings hollow when one recalls the rich heritage of local government waste, incompetence, chicanery and gerrymandering presided over by Labour-controlled councils since the early years of this century.

The hon. Member made much of Herbert Morrison's motives for building council houses in London, but he said precious little about Herbert Morrison's famous phrase: I will build"—

Ms Armstrong

Will the hon. Gentleman give way?

Mr. Couchman

No, not at this time. Herbert Morrison said: I will build the Conservatives out of London.

Ms Armstrong

When did he say that?

Mr. Couchman

He was leader of the Labour London county council between 1934 and 1940. Between 1934 and 1939, 84,000 council houses were built in London, and the Conservative party did not control London for another 30 years. Herbert Morrison was remarkably successful. The man who became Lord Morrison of Lambeth set out deliberately to ruin areas that he judged to be middle class, suburban and hostile to the Labour party. Did I say Lambeth? There is a resonance. It is the acme of appalling loony left councils.

Ms Armstrong

Will the hon. Gentleman give way now?

Mr. Couchman

No, I want to make some progress. The hon. Lady has already made several speeches this afternoon, and doubtless we shall have to listen to her again at half-past nine.

Who was Herbert Morrison? He must have been old Labour—but in a straight dynastic line, old Labour gave way to new Labour. Herbert Morrison passed down his Tammany skills to his grandson, the hon. Member for Hartlepool (Mr. Mandelson)—that Rasputin of new Labour.

The hon. Member for Holborn and St. Pancras, playing the part of Captain Humbug to perfection, failed to remind the House of his time as leader of Camden council. He failed to tell us about the report in The Observer in 1975, which calculated that Camden had the highest spending on housing per head of population of any area in the country, by far the highest Government housing subsidies per head of any other area, the highest management costs in the country, by far the largest housing revenue account deficit per head of any other area, the highest rent arrears in the country, the largest programme of buying up already tenanted and adequately run blocks of flats, and by far the most council housing schemes. I wonder why the hon. Gentleman failed to tell us all that? He is probably embarrassed by comparisons between Camden and other councils, which my right hon. Friend the Secretary of State described at length.

Mr. Betts

On a point of order, Madam Deputy Speaker. The hon. Gentleman has spent a long time talking about Camden, Herbert Morrison and other issues that I cannot find in either the motion or the amendment. Will you give consideration to whether the hon. Gentleman is in order?

Mr. David Shaw

Further to that point of order, Madam Deputy Speaker. When Madam Speaker was in the Chair, and Mr. Deputy Speaker before you, the Opposition cited Liverpool and a number of other councils, including Monklands. You ought to be aware, Madam Deputy Speaker, that the debate has gone extremely wide.

Madam Deputy Speaker (Dame Janet Fookes)

As I understand it, the hon. Member for Gillingham (Mr. Couchman) was making comparisons, which is in order. It would not be in order if no reference was made to the subject under discussion. I am not aware from my short time in the Chair that that has been the case.

Mr. Couchman

Are you saying, Madam Deputy Speaker, that I have not mentioned Westminster city council?

Madam Deputy Speaker

On the contrary: from the short time that I have been in the Chair this evening, I am not aware that the hon. Gentleman—by the token that I have just given—has been out of order. In other words, the hon. Gentleman is in order.

Mr. Couchman

Thank you, Madam Deputy Speaker.

Camden is at the heart of folklore about bad local government. It not only rivals Islington, Hackney, Haringey and Lambeth—it is probably ahead of them in its grants to way-out groups in the name of political correctness and in neglecting its social service responsibilities. As a former chairman of social services, I deprecate that appalling lack of responsibility.

Ms Glenda Jackson

If the hon. Gentleman is not out of order, he is way out of time. I presume that he is referring to Camden in 1975. We are now in 1996, debating corruption in Westminster city council. Is the hon. Gentleman aware that the Department of the Environment persistently praises Camden for its management of housing stock and for the way in which it deals with its lets? Camden has also received a citizens charter mark for the speed and efficiency with which it runs its housing benefit office.

Mr. Couchman

I was referring to Camden not in 1975, but in 1994 when a report about children in the care of Camden's social services department was made public. That report revealed that there were no coherent policies in place and that Camden's expenditure was among the highest in London. The money was spent to such poor effect that in some cases the council's records did not show where the children had been placed. The district auditor himself had to track down one child. Adoptions were not progressed—some had stalled three years. Many children had not been sent to school, and children were not prepared for adult life. One child approaching 18 had not been seen since 1988. Camden also appears to have been profligate in purchasing a computer system for £1.5 million, which it obviously did not use during those years.

Mr. David Shaw

If there has been so much child abuse in Camden and Islington, why has no district auditor found the basis for surcharging the Labour councillors responsible?

Ms Glenda Jackson

On a point of order, Madam Deputy Speaker. The hon. Member for Gillingham (Mr. Couchman) made no reference to child abuse in Camden or Islington. Is it in order for the hon. Member for Dover (Mr. Shaw) yet again to show that his turpitude is matched only by his ineptitude in so grossly maligning local authorities in relation to a matter that is not on the Order Paper and which has not been raised by the hon. Member for Gillingham?

Madam Deputy Speaker

Order. I am not responsible for the content or accuracy of the speeches made by hon. Members. I have already explained that I will allow a certain latitude in drawing comparisons between councils. However, I expect hon. Members to return to the substance of the debate.

Mr. Couchman

I do not want to go into the detail of the extraordinarily high tax bills laboured on the ratepayers of Camden, as we are here to discuss Camden council's neighbour, Westminster council—which runs its affairs much better, as my right hon. Friend the Secretary of State for the Environment has made clear. What a sorry tale the comparisons of those two neighbouring councils have been.

I hold no brief for those people in Westminster council who may have abused or misused their elected positions if the courts find them culpable. However, the hon. Member for Newbury (Mr. Rendel) was at pains to condemn them as though the due process of law had been exhausted, but the due process of law has not begun. The district auditor is not a lawyer and the courts will decide whether his findings are correct.

Mr. Gordon Prentice

Has the hon. Gentleman been listening?

Mr. Couchman

Yes, I listened very carefully to the speech of my right hon. Friend the Secretary of State. It is entirely proper that the people who have been named by the district auditor have the right to take their case to the courts, to be heard and to have their case examined by the due process of law.

Ms Hodge

Of course those people have the right to appeal, but this is a report in the public interest. Does the hon. Gentleman agree, therefore, that the members of Westminster council, under their statutory obligations, will have to discuss this report in the public interest? They do not have the privilege that hon. Members have in the House. If it is a duty for them to discuss the report, how can it not be a duty for hon. Members also to discuss it?

Mr. Couchman

I presume that the former leader of Islington council—the hon. Lady obviously spoke from experience—wishes to deny the due process of law to the six people involved. The appeal to the High Court of Justice, followed by a possible appeal to the Court of Appeal and beyond represents the continuation of the due process of law. The district auditor is no substitute for a magistrates court or a Crown court; he is an accountant. In the case of the Westminster inquiry, I am certain that he is a distinguished accountant, as he is a senior partner of Deloitte Touche. I believe that he is a part-time district auditor because he retains his responsibilities with that firm of accountants.

As I said to my right hon. Friend the Secretary of State last Thursday, I am concerned by the process that has brought these people—whom some would call the Westminster Six—to their predicament. I am extremely concerned that the accountant district auditor has acted in the roles of investigator, prosecutor, judge, jury and hangman.

Mr. Rendel

The hon. Gentleman is saying that the auditor is merely an accountant and not a lawyer. He is casting a great slur on magistrates who are not lawyers.

Mr. Couchman

I am not casting slurs on magistrates. My wife is a magistrate and I respect her integrity. Magistrates rely on the advice of lawyers and their decisions can be appealed. I am concerned that we have asked the same person to have the multiple roles that I have just described. That is against the principle of natural justice. I am worried that the Government prescribed those roles to the same person in the Local Government Finance Act 1982.

The hon. Member for West Derby asked me where I was on 14 February 1986 when his hon. Friend the Member for Liverpool, Garston (Mr. Loyden) introduced his Disqualification and Surcharge of Councillors (Abolition) Bill as a private Member's Bill. He will be amazed to hear that I can actually tell him: I was in my constituency speaking to some 200 people about the Government's proposals for Sunday trading. Had I been here, I would have expressed my concerns.

Although my right hon. Friend the Secretary of State cannot introduce any measures to revisit the 1982 Act while the Westminster case is proceeding, it seems to me that this is a most unsatisfactory process—the fact that the investigator, the prosecutor and the adjudicator is the same person and has the power to impose an unlimited fine, for that is exactly what the surcharge is. The auditor has suggested an enormous sum in this case.

Mr. Gordon Prentice

Public money has been lost.

Mr. Couchman

We shall see whether that claim is upheld by the courts. I am not convinced by the process used by the auditor to compute the sum. I accept the figures that the hon. Member for Newbury read out—I have read the same figures—but I am not convinced that that computation will stand up to proper scrutiny.

Mr. Heppell

The hon. Gentleman has queried Mr. Magill's role in a number of areas and is now querying his role as an accountant. As an accountant, Mr. Magill has counted the cost—surely that is one thing that we can rely on.

Mr. Couchman

I believe that Mr. Magill has also relied on other judgments. As an accountant, he has computed all sorts of curious figures which I do not have in front of me.

Mr. David Shaw

My hon. Friend may be aware that three firms of chartered accountants disagreed with Mr. Magill, and they said so at the inquiry. There is some doubt about the accountancy methods used.

Mr. Couchman

I defer to my accountant hon. Friend, who will understand the doubts that I have about Mr. Magill's computation in this case. My concern about this process is that it may have an impact on the future recruitment of able and qualified council candidates. As a former London councillor, I know that if I had read the report and if I had seen what has happened in this case I would have been extremely concerned. The people concerned relied on advice that they were given by the city's lawyers.

Mr. Betts

indicated dissent.

Mr. Couchman

We are assured by those who are most intimately concerned with this case that they relied on the city's lawyers.

Mr. Gordon Prentice

Will the hon. Gentleman give way?

Mr. Couchman

No, I have given way enough and I wish to draw my remarks to a close. If this sort of thing happens time and again we should be worried for the future of local government. My local authority is to become part of a unitary authority and I wish to see next year's elections take place between candidates who are of a good quality across all the parties. This case will have a considerable effect on the willingness of people to stand as elected members of councils.

6.48 pm

Mr. Neil Gerrard (Walthamstow)

This has been an astonishing debate and, in fact, we have heard astounding comments since the district auditor's report was published. There has not been a single word of apology for anything that went on in Westminster; there has been denigration of the auditor and his report; and there has been denigration of other councils on completely irrelevant matters—they have nothing to do with anything that has gone on in Westminster or that is covered in the auditor's report on Westminster. The Secretary of State, who refuses to comment, made a nauseatingly sanctimonious speech about why he could not comment and spent the rest of his speech rubbishing other councils on matters irrelevant to the motion on the Order Paper.

Mr. Brooke

In my speech, I referred to the observations of the Leader of the Opposition, and in following up those remarks by the Leader of the Opposition I compared the behaviour of Labour councils in putting homeless people into short-term accommodation with that of Westminster. If the hon. Gentleman considers that that is irrelevant, he is doing a disservice to the leader of his party.

Mr. Gerrard

I believe that the right hon. Gentleman is the only Member on the Opposition Benches who has made a real attempt tonight to address the contents of the report. I shall come later to the points that he made about placing homeless families. I accept that he tried to address the issues, and he was unique, in speaking from the Opposition Benches, in doing that tonight.

Mr. Brooke

The opposite Benches.

Mr. Gerrard

From the opposite Benches. It will be the Opposition Benches soon.

Ministers and most of the other Tory Members who have spoken have made no attempt to justify or apologise for what was done and to account for it politically or morally, even if they wish to pretend that what Westminster did was legally correct or argue that it may be proven legally correct. No one has denied what happened—what happened to homeless families, to flats that were kept empty, and to the taxpayers of Westminster, who have ended up losing large amounts of public money as a result of the policies that were followed in Westminster. The victims of those policies were, first, Westminster taxpayers and secondly, and most important, homeless people.

Some of the quotations from the district auditor's report demonstrate the callous disregard that was shown towards the rights of people who were homeless in Westminster. We are told that there were notes from the director of housing, of meetings during which there were discussions about finding suitable wards for housing homeless long term and how can we get the homeless out of Westminster City Council". There was a discussion on 23 September 1986, at the chairmen's group, of a "key policy" of permanent rehousing of homeless outside Westminster City Council". It was said that Officers should adopt a tougher policy". As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, that decision was reported to the chief officers' board on 25 September 1986 as, "be mean and nasty".

Undoubtedly, as the district auditor said in his report, it is obvious from the housing strategy that was proposed after May 1986—concentrating activity in marginal wards and increasing designated sales—that the objective of the leadership of the majority party was to rehouse homeless people outside the marginal wards, which the Conservative party was especially concerned about.

As has been mentioned several times, homeless families were put into flats containing asbestos, but that was done for more than one reason. The Barratt report says that there was advice. The hon. Member for Newbury (Mr. Rendel) quoted a sentence from that report. A further paragraph refers to the decision in 1989 to accommodate homeless families, and states that that in particular, appears from contemporary in house documents to have been seriously flawed in terms of lack of proper process … improper objectives, and … known asbestos risks being overridden. Mr. Barratt made it clear that there were additional reasons.

One of the things that was going on at that time was that on the Waterton and Elgin estates, which is where the flats were, Waterton and Elgin Community Homes, the tenants' organisation, was trying to take control of that estate, using legislation that had been introduced by the Conservative Government with the intention that it be used in Labour councils. The Government were taken aback to find that one of the first places where it began to be used was in Westminster, on the Waterton and Elgin estates.

Placing homeless families in the blocks on the Elgin estate was part of the strategy to fight off the attempt to take control by the tenants' association. Flats were deliberately left empty that could have been used.

It is true, as the right hon. Member for Westminster, North said—

Mr. Brooke

South.

Mr. Gerrard

As the right hon. Member for City of London and Westminster, South (Mr. Brooke) said, there was a period when homeless people from many London boroughs were in bed and breakfast in Westminster. At one time, many local authorities used bed and breakfast and families were scattered across London.

Gradually, over several years, negotiations took place between the London boroughs. Agreements were made to rationalise, so that homeless families would not be placed in bed and breakfast. Boroughs also wanted to reduce costs to a reasonable level, because it was very costly for the boroughs for all the homeless families to end up in bed and breakfast.

Towards the end of the 1980s, and especially in the early 1990s, most boroughs were gaining control of that position, but Westminster maintained a clear policy of shipping people out of the borough. The only borough that approached Westminster's record of shipping out homeless families at that time was Tower Hamlets, which was then under Liberal Democrat control and caused considerable problems for other councils in east London by shipping out homeless families.

When those homeless families were dumped throughout London, the councils in the areas where they were dumped ended up paying much of the bill—the education and social services costs. Those families were often then made homeless in the borough to which they had been moved, which often ended up paying to rehouse them.

Boroughs such as my own, Waltham Forest—one of two London boroughs that actively completely avoided using bed and breakfast during the 1980s—ended up paying the cost of Westminster dumping its homeless families on us, at the same time as Westminster city council was keeping flats empty in Westminster to sell to try to retain political control of Westminster.

The district auditor will not consider the cost to other boroughs. The £31 million does not include the extra costs of having to tackle that problem, which were passed on to other boroughs.

Another part of the strategy that has not been mentioned much in the debate was the creation of what was called the Westminster Housing Trust. That was all part of the strategy of building stable communities. It was an attempt at social engineering—an attempt to manage the planning system with the intention that certain developers would acquire sites in the key wards and build expensive properties on them, in the expectation that the bulk of the people who moved in would be more likely to vote Tory than Labour.

It quickly became obvious that that strategy alone would not be terribly successful. A report referred to what was intended. In a paper produced by a council officer in August 1987, when the council had been considering the target schedules for new electors in the wards, we read: The overwhelming message from these figures is that the Council will have to rely very heavily on the housing trust/private sector and planning gain routes to achieve the electoral objectives in the key wards. Interestingly, on the copy of that paper obtained by the district auditor, the City solicitor has handwritten: This paper should not have been written by an officer. Much more subtle approach required. This paper shows officers working for a Tory victory. That is the last thing that any council officer should be required to do.

Trade-offs were part of the deal. One of the key people in the Westminster Housing Trust was Mr. Richard Loftus, the original proposer of the trust. Over the next three or four years, the company of which Mr. Loftus is a director was able to secure some significant planning permissions in Baker street. Those permissions overturned deals that had been done previously to keep properties in a conservation area. The permissions overturned also a decision by the then responsible Secretary of State in 1981. A great deal of money has been made in the Baker street area as a result.

No doubt has been cast during the debate, or previously, on any of the documentary evidence that has been uncovered by the auditor. None of it has been challenged. No suggestion has been made that it is false. The documentary evidence stands. If individuals adopt certain actions, they must face the consequences. Conservative Members do not do much good by complaining about the 1982 legislation, including the power that it gives to auditors. Conservative Members did not complain when Labour councillors were being surcharged.

Surcharging is a mechanism that should be discontinued. It applies only to councillors. How many bankrupt Ministers would we have had over the past few years if they had been surcharged for illegal decisions? The Home Secretary would probably have been bankrupted six times over by now. What about the Ministers who made the illegal decision on the Pergau dam? If a councillor makes such a decision, however, he is personally surcharged. I do not hold any brief for the surcharging system. It is too late, however, for those who introduced it to complain about it.

I accept that councillors who break the law should face the legal consequences of so doing. They should be taken before the courts and disqualified. I am not suggesting that councillors should be free from the strictures of the law. As I said, I do not believe that surcharging is necessarily the best way in which to proceed.

Local government power was being used in Westminster for purely party political ends. We are all, of course, elected on political programmes. We all make promises about programmes that we want to put in place. We all do that in the hope that we shall win votes, win the next election and retain power to continue putting programmes into practice. We all understand that process. But that is not what happened in Westminster.

There was not an open process in Westminster, with individuals putting forward legal programmes and trying to win support and electoral success on the basis of everyone being aware of what was being discussed.

Mr. David Shaw

The point that the auditor makes in his report is that Westminster councillors made not a legal decision, as he alleges, but a political decision. The hon. Gentleman and the hon. Members for Newbury (Mr. Rendel) and for Holborn and St. Pancras (Mr. Dobson) have all told us that they have been members of council groups that have made political decisions.

Mr. Gerrard

We are politicians and we make political decisions. But political decisions that are made by local authorities must be made within a laid-down legal framework. That framework makes it clear that political decisions must not be made behind closed doors for party political purposes. Public funds should not be used for purposes that the law does not allow. The district auditor is saying that public money was misused.

Ms Hodge

Does my hon. Friend agree that Conservative Members are deliberately getting things wrong? The primary purpose of the Westminster decision was political. [Interruption.] The purpose of other decisions that were taken in a political context was electoral advantage. [Interruption.] The by-product of such decisions is electoral gain, but it is not the primary purpose.

Mr. Gerrard

I agree that—[Interruption.]

Madam Deputy Speaker

Order. There is an increasing tendency for seated interjections, which are not confined to one side of the House. From whichever side they come, I deplore them.

Mr. Gerrard

There is a deliberate attempt to misunderstand. There are many Members who have been in local government. They understand the constraints within which local government works. They understand also the difference between making a decision that it is hoped will be electorally popular and making a decision improperly. There are clear distinctions between the two approaches.

Ms Armstrong

Is not the real issue that the Westminster city council solicitor told the then leader of the council that the advantages of sale have to be considered not from any ulterior motive but from the standpoint of what is right in view of the Council's role as a housing authority."? That was the council's primary duty as a housing authority. Therefore, the needs of the homeless had to come first, whatever the political considerations.

Mr. Gerrard

Absolutely. That is an exact example of the legal constraints within which councils must work. Westminster was operating in a completely different league from other councils. Events in Westminster were the culmination of the Tory attitude to local government over some years. Since the Government took office in 1979, local government powers have been reduced. Local government spending has been cut. There has been increasing pressure on local authorities. Any local authority that was not Tory-controlled was regarded as an enemy, as an authority to be crushed. It was felt that it should have as little power and influence as possible.

As we have seen fewer and fewer Tory councils—Westminster is the flagship council among them—the attitude of hanging on at all costs has prevailed. The Tories think, "It does not matter what we do because it is vital that we stay in control. Never mind whether what is being done is immoral or illegal. Those considerations must be subjugated in our determination to retain political control." That is what was going on. If Ministers are not prepared to condemn what took place in Westminster, ultimately they will be condemning themselves.

7.7 pm

Mr. David Shaw (Dover)

Before commenting on Westminster city council, I shall take up some of the remarks of the hon. Member for Holborn and St. Pancras (Mr. Dobson), who referred to my involvement in Monklands. Before my involvement in that area, wrongdoing was suppressed and covered up. Subsequent to my involvement, the people were told a great deal about what went on.

People were told about an ombudsman's report that found against the council. There was a council housing fiddle, and a councillor's friend had precedence over a disabled elderly couple. They were told also about two industrial tribunals before which hearings had gone against the council because councillors had conducted secret meetings. We have been told that Labour councillors do not meet in secret, but that is what happened at Monklands.

The people of Monklands were told about a taxi licensing fraud. They were informed of two police investigations.

Ms Armstrong

Is this in order?

Mr. Shaw

The hon. Member for Holborn and St. Pancras referred to my work in Monklands. I am replying to his comments. The hon. Gentleman was held to be in order.

Ms Armstrong

Is the hon. Gentleman denying the words of the judge who was called in by the Secretary of State for Scotland, who said of the hon. Gentleman: As his evidence went on, I became increasingly unimpressed by it. I regarded his attitude as irresponsible. How does the hon. Gentleman expect us to take him seriously?

Mr. Shaw

I thank the hon. Lady for repeating what the hon. Member for Holborn and St. Pancras said earlier. I shall return to that, but the hon. Lady has interrupted me in the middle of pointing out my success in terms of uncovering what went on in Monklands. The reference she quoted was from a report solely on employees. It did not refer to the ombudsman's report on housing, industrial tribunals, taxi licensing fraud or the two police investigations in Monklands.

In addition, I personally uncovered losses of £6 million over three years in five council-owned companies in Monklands. With interest, those losses will rise to about £30 million over the next 10 years.

Ms Glenda Jackson

Will the hon. Gentleman give way?

Mr. Shaw

Not for the moment; I shall make some progress.

When costs are included, those losses of £30 million in Monklands will probably exceed any surcharge in Westminster. We need to put the Westminster surcharge into perspective. No councillors in Monklands have yet been surcharged, despite all the political decisions that were taken by Labour party groups behind closed doors.

Labour party rules in Monklands stipulate that, if a decision is taken by a Labour group behind closed doors, every Labour councillor must abide by that decision or be thrown out of the local Labour party. Such a rule is common among Labour parties up and down the country. The Labour whip is enforced rigidly on political decisions.

We need no lessons in Westminster supporting the argument that a political decision was taken. Labour councillors make political decisions every day of the week, and they enforce them rigidly. In many cases, those decisions result in financial losses. For some reason, however, the district auditor in Westminster has taken a different view of a particular political decision from the views of district auditors elsewhere in the country, who do not surcharge Labour councillors who lose vast amounts of money.

In Lambeth and other councils, the Labour party has lost vast sums of money—far more than Westminster—yet, for some reason, the district auditors seem to leave those Labour councillors alone. However, the public know the truth.

The Labour party in Monklands has backed me, as it has barred every Labour councillor in Monklands from holding office in the new council. The Labour party backed me in Monklands, because it finally had to admit that I had been right all along.

I now turn to the QC's report. A QC decided that, although the council employed 45 family members of councillors, he could not find anything wrong. He did not determine in his report that there was nothing wrong or that my evidence was wrong. He said that he simply could not find anything wrong.

Mr. Gordon Prentice

On a point of order, Madam Deputy Speaker. Surely the hon. Gentleman's speech cannot be in order. He has not made a passing reference to Monklands; his whole speech is about Monklands.

Madam Deputy Speaker

I understand that allusions were made to the hon. Gentleman's role in Monklands. In those circumstances, he has some right to make his own case, but not at enormous length. However, he should now return to the main subject of the debate.

Mr. Shaw

My comments on Monklands would have been shorter but for the intervention by the hon. Member for North-West Durham (Ms Armstrong) and the point of order that has just been raised.

In conclusion, in his report, which cost the taxpayer £50,000, the QC said that he was unable to go along with my suggestion of proving his findings by reference to other councils' practices. It is a strange lawyer who does not look at precedents.

I should like to turn to Westminster council, but before doing so, I make a declaration. I understand from the rules of the House that I am under no obligation to make the following declaration, but it could be relevant to the debate. I have always wanted to make very full disclosure. I should like to make it clear to the House that I have known John Porter for some 14 years, and I have had business connections with him since before I entered the House of Commons. I have had very little contact with his family.

The House should also know that, much to my surprise, I have known a former Labour councillor on Westminster council. I knew him at a social event that I attended in the past few years. I have also known one or two Conservative councillors on Westminster council. In my experience, none of the people involved in the case are serial killers or should be compared with them, as the hon. Member for Liverpool, West Derby (Mr. Wareing) said earlier in the debate. None of the people I have just mentioned has asked me to make a speech; nor have they been involved in its preparation.

I lived in Westminster for four years. I voted in the 1990 council elections, and I voted for a policy of selling council houses. Westminster had a low proportion of home ownership, and the council owned far too many houses. During the four years that I lived in Westminster, it was a clean, well-run council, and there was a high turnout in council elections.

We retained control of Westminster council not because of gerrymandering, but because people did not want Labour in power. There was one of the highest turnouts in council elections that many people had seen for many years. For various reasons, I now live in Lambeth, and I am saddened by the fact that in Lambeth even the road signs are gerrymandered. Lambeth has red road signs. The Labour party is trying to put its party colours all over Lambeth, along with the council flats and the unemployment that it has gerrymandered into Lambeth.

If the surcharge imposed on Westminster councillors is confirmed by the High Court, it will be in complete contrast to all previous cases. Legal advice has been taken from eminent QCs at every stage. Officers were most careful, as were members of the council. After the initial decision to sell council houses—which I understand was a political policy decision similar to those made in every political party group on every council—the officers were the only people involved in the detailed implementation of the policy. They quite properly prevented councillors from interfering with individual sales, and restricted them to policy decisions.

I shall address the main part of my speech to the objectors. Who are the objectors to the accounts that set the district auditor going? At one time, there were 13 objectors to the accounts of Westminster city council, but now there are only four. Nine of the objectors have pulled out. The ordinary members of the public have pulled out, and there are now only four Labour activists: a Labour councillor, a former Labour councillor, an activist in the Labour party, and a lifelong Labour party member.

Those four Labour activists are financed by the trade unions and Labour party supporters through the Westminster Objectors Trust. The trust is run by Sir David Puttnam, the millionaire film director who helps the media-friendly image of certain people's actions, Baroness Jay, and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). It is a totally Labour-run activity.

Let me turn to the quality of the objectors. One objector who has withdrawn was the former girl friend of the main objector, Neale Coleman, but as soon as he dumped her, she ceased to object to the accounts of Westminster city council. That is how strong her objection was: as soon as she was dumped by the original objector, she was no longer interested in objecting herself. That is very relevant, because, as I shall demonstrate, the objections are based on corruption, and there is no substantive backing for them.

According to one of the objectors, £200,000 has been raised from trade unions and Labour party supporters to fight the battle. That battle is being fought on political grounds, which is one reason why two churchmen withdrew their objections: they did not want to become involved in the heavy politics of Labour party trade unionism. I understand that Unison, the Labour-supporting trade union that does not encourage Labour Front-Bench spokesmen to declare their donations, has donated £21,000 to the Labour battle—as it is seen—in Westminster.

All four of the Westminster Labour objectors are company directors as well as being Labour party activists. The primary objector, Mr. Neale Coleman, is a former Labour Westminster councillor who has a company—No. 2502022—known as Paddington Consultancy Partnership Ltd., with Mr. Stephen Hilditch, secretary and director of the Westminster Objectors Trust. Councillor Peter Bradley, another objector, owns company No. 2844795, which goes by the name of Millbank Consultants Ltd. In due course, I shall explain how those companies and their actions are involved.

Mr. Gunnell

Perhaps the hon. Gentleman can explain why it is in order for him to use his privileged position in the House to attack the objectors personally, when it seems that it is not possible at this stage to comment on those who—in my view—have been found guilty by the district auditor.

Mr. Shaw

That shows that the hon. Gentleman is approaching the matter on a political basis. The motion tabled by his party refers to wrongdoing on Westminster council; what the hon. Gentleman does not like is the fact that I am about to expose wrongdoing on the part of Labour members of that council.

The three objectors to whom I have referred—former Westminster councillor Mr. Neale Coleman, Mr. Stephen Hilditch, and Councillor Peter Bradley—own companies which, in the past few years, have earned £1 million in fees from planning consultancy political work obtained through their membership of the Labour party.

Ms Armstrong

So what?

Mr. Shaw

The hon. Lady clearly could not care less about Labour corruption.

Ms Armstrong

What is corrupt about a company that is legally registered, does work and is paid for that work, given that all that is declared, open and above board?

Mr. Shaw

Perhaps the hon. Lady would like to intervene again. Would she like to tell us that none of those companies, and none of the individuals involved, has ever earned those fees from Labour councils as a result of Labour decisions made in those councils?

Ms Armstrong

Is the hon. Gentleman saying that any company that earns money from a political party, or from a council run by a particular political party, is, by virtue of obtaining the contract involved, corrupt? That is what he seems to be alleging.

Mr. Shaw

The hon. Lady is missing the point. The point is the word "favours", as I shall explain.

Mr. Gordon Prentice

If the hon. Gentleman suspects wrongdoing and corruption, what steps has he taken to refer the matter to the auditor? If he suspects criminal behaviour, what steps has he taken to refer it to the police?

Mr. Shaw

If he is patient, the hon. Gentleman will hear more. Indeed, he will hear something of great interest to him about the people who booted him out of the leadership of the council with which he was involved.

The hon. Gentleman should recognise that £1 million in fees from lobbying and political consultancy work is more than any Conservative Member has earned recently. We have been criticised by the Opposition: we have had to take some stick from them. But, when £1 million in fees for consultancies—political quid pro quos and backhanders—is floating around the Labour party, Opposition Members suddenly say that that cannot possibly be wrong if Labour is involved.

Mr. Prentice

Get in touch with the police.

Mr. Shaw

The hon. Gentleman may want to do that when I have finished my speech, but perhaps he will stop interrupting. He is clearly very worried when anyone raises any concerns about the Labour party. Earlier today, we heard from Labour how perfect it is on this issue—how perfect it is when it wants to criticise people if there is any wrongdoing. The hon. Member for Pendle (Mr. Prentice) should wait and see; he can decide whether he wants to criticise people when I have finished my speech.

The objections to the accounts of Westminster council are not due to any concern for the residents of Westminster. Those people are using Westminster in order to operate within the Labour party in furtherance of their own financial interests. Let me start with Mr. Neale Coleman. He was born Dennis, but I understand that—much to the upset of the hon. Member for Bolsover (Mr. Skinner)—"Dennis" is no longer fashionable, and Neale prefers to be known as "Neale". He was the original objector to the accounts of Westminster council, but, strange as it may seem, the district auditor refused to call him as a witness at the recent hearing.

Mr. Coleman was offered as a witness by the QC, Andrew Arden, acting for the objectors trust, but when it became apparent what questions he would be asked, Mr. Arden suddenly withdrew him.

Mr. Betts

That is irrelevant.

Mr. Shaw

It is very relevant to what was said earlier. Earlier, Opposition Members said that there should be full disclosure—that everyone should volunteer information and appear as a witness—but the Labour party did not allow its own member to be called as a witness. Labour and the district auditor did not want him to appear, and he did not appear in that last hearing that led to the district auditor's final report.

Mr. Neale Coleman has a business that declares in its report and accounts that it is involved in council and voluntary organisation consultancies. He comes from a political family, closely connected with the Labour party. For example, his father ran the Ann Summers chain of sex shops, his mother is currently Labour mayor of Barnet and his brother Iain is currently a Labour political adviser on Islington council and leader of Labour-controlled Hammersmith and Fulham council, which I understand booted out the hon. Member for Pendle. Apparently, this political adviser on Islington council intends to become the non-political mayor of Hammersmith and Fulham council, on £12,000 a year.

Interestingly, Mr. Coleman might be stopped by the Local Government and Housing Act 1989, which states that political advisers on one council should not be councillors on another. That, however, is the way in which the Labour party keeps tabs on what is going on.

We should perhaps admire Neale Coleman in some respects. He is running a successful company: over the past two years, it achieved £400,000 in turnover from council and voluntary organisation consultancies. He uses Stoy Hayward as his auditor, and seems happy with it; but, funnily enough, Stoy Hayward is one of the auditors that Dame Shirley employed to disagree with the district auditor's assessment. It is strange that Mr. Coleman seems both happy and unhappy with Stoy Hayward.

The House might also like to know that, when PC Blakelock was murdered at Broadwater Farm estate, Neale Coleman was there as a political activist. When Dr. Michael Dutt, a councillor at Westminster, took his own life, Neale Coleman was there, also as a political activist. That is the man who is the principal objector to the accounts of Westminster council, a man who is present when people lose their lives in unhappy circumstances.

Ms Glenda Jackson

On a point of order, Madam Deputy Speaker. If I understand the hon. Gentleman correctly, he alleges that, at the scene of what the police discovered to be a suicide, another person was present. Surely that could not possibly be the case. To place such a slur on an individual with absolutely no evidence is surely not in accordance with the history of how the House exercises its undoubted privilege.

Madam Deputy Speaker

It cannot be a point of order for the Chair, but perhaps it is an issue on which the hon. Lady would wish to intervene.

Mr. Shaw

The hon. Lady is deliberately trying to obfuscate what I am saying, and is so concerned that it might hit home that she is constantly trying to intervene. I made it clear that Dr. Michael Dutt—[Interruption.] Will you listen for a change instead of rabbiting on like a stupid woman?

Madam Deputy Speaker

Order. The hon. Gentleman must remember that he is addressing me and that he cannot address me in that fashion and get away with it.

Mr. Shaw

I would never accuse you, Madam Deputy Speaker, of doing what I have just accused the hon. Member for Hampstead and Highgate (Ms Jackson) of doing. I made it clear that Dr. Michael Dutt took his own life in tragic circumstances. I also make it clear that Dr. Dutt took his life because Neale Coleman started the ball rolling when he made the complaint to the district auditor. I shall give further information on his business details in due course.

In 1989, Neale Coleman's partner, Mr. Stephen Hilditch, worked for Labour-controlled Hammersmith council on a restructuring study. Iain Coleman, the brother of Neale Coleman, is a councillor on Hammersmith council and held that position at the time the contract was awarded to Stephen Hilditch. In a letter to The Guardian, Stephen Hilditch complained about the difficulties of finance for the Westminster Objectors Trust. He is a director of a company that is pulling in £200,000 a year from local government consultancies. I shall shortly give more information about how those consultancies are obtained.

Neither Neale Coleman nor Stephen Hilditch believes in paying tax on that money. Like some Labour people I have come across, they avoid tax; their accounts show that hardly any money has ended up with the tax man. That is the character of the people who are making accusations about Westminster council. However, they find money to pay sub-contractors' fees.

I do not know whether hon. Members have ever contemplated what happens when political consultancies pay sub-contractors' fees and do not disclose to whom they are paid. Stephen Hilditch and Neale Coleman paid £75,000 in such fees in each of the past two years and donated £2,000, and they have not disclosed in their accounts to whom or what that donation was made.

Councillor Peter Bradley is Labour's parliamentary candidate for The Wrekin and a Westminster councillor, but he does not disclose in the council's register of interests the names of his clients and their interests in the Westminster area. Here is new Labour, with no disclosure at all of councillors' financial interests in a council's register of interests. New Labour means no disclosure. But Mr. Bradley is well known to the fraud squad, which has recently been feeling his collar because he was interviewed as a result of his non-disclosure.

On Westminster's planning committee, Councillor Peter Bradley tried to stop a proposed Waitrose shopping development that would have been near the store of his client, Safeway. He did not declare the interest that he is retained by Safeway: he decided that people should not know about that if it could be avoided. If it had not been for one or two people who did a little investigative work, no one would have known that he was retained by Safeway.

We may wonder why Safeway thinks that Councillor Peter Bradley, a man with no professional qualification whatever, should be so valuable that it pays him tens of thousands of pounds. Can it be because he is the deputy leader of the Labour group on Westminster council, a Labour activist and a Labour prospective parliamentary candidate, or is it because, as exposed by Andrew Pierce in The Timesin January 1995, Councillor Bradley has been involved in gerrymandering in Camden's Chalk Farm ward?

Camden has 15,000 unemployed and it needs jobs, but what did Councillor Peter Bradley gerrymander? He produced social housing. He helped Safeway develop social housing and a Safeway store. Hon. Members may wonder why two other proposals, one for the creation of 500 jobs and the other for 700 jobs, were defeated. Councillor Bradley engaged in a fiddle for Safeway in Camden—a gerrymander that the Opposition plainly do not like, because they have been rabbiting on throughout my speech. They are clearly sensitive on this issue, and must feel that there are possibilities for corruption.

Single-handedly, Councillor Peter Bradley obtained planning permission for Safeway, and provided only 200 jobs, although there were alternative schemes for 500 or 700. Some 500 people will live in 202 social housing units. They will be unemployed because no jobs will be created, and they will live near the noise and vibration of a railway line.

Who would propose to build social housing in an area that is scheduled for industrial use unless he intended to gerrymander? Obviously, the railway line will interrupt the peaceful nights of people living there. They will have to put up with noise and vibration, and, because of that and the inconvenience of an industrial area, their children will not be able to play outside.

Mr. Couchman

In whose constituency is Chalk Farm? Is it in the constituency of the hon. Member for Holborn and St. Pancras (Mr. Dobson)?

Mr. Shaw

My hon. Friend makes an interesting intervention. Although it is in the constituency of the hon. Member for Holborn and St. Pancras, the boundary commission attempted to attach that ward to the constituency of the hon. Member for Hampstead and Highgate. That would have meant that she had more Labour voters, and that was behind the gerrymandering.

The Labour party was not just worried about the ward remaining in Holborn and St. Pancras, but thought that it would go to Hampstead and Highgate under the boundary commission recommendation, and that they had better build some social housing quickly to increase the Labour majority in Hampstead and Highgate.

Ms Glenda Jackson

On a point of order, Madam Deputy Speaker. Is it in order for the hon. Gentleman deliberately to misinform the House? The boundary commission proposed to add Chalk Farm ward to Hampstead and Highgate, but my constituents countered that proposal; the boundary commission found in their favour, and the commission gave my constituency another ward.

Madam Deputy Speaker

I have explained to the House and to the hon. Lady before that the occupant of the Chair cannot be responsible for the accuracy or otherwise of hon. Members' words. Normally, there is an opportunity for hon. Members either to intervene to challenge what they regard as an inaccuracy or to make a point later in their own speech, if they catch the eye of the occupant of the Chair.

Mr. Shaw

I am grateful to the hon. Member for Hampstead and Highgate for her helpful intervention. She has confirmed what I have said: the ward was possibly going to go into her constituency, and the Labour party was at work gerrymandering it before it went in. It wanted to ensure that, if the Boundary Commission had gone along with the proposal to put it in her constituency, it would have been gerrymandered. That is precisely the point that I was trying to make.

The other point that I am making is that a Labour councillor on Westminster council was acting for Safeway in the gerrymandering process. I hope that, if any of my hon. Friends are going shopping in Safeway—if they ever do after my speech—they will consider that Safeway's directors are paying tens of thousands of pounds to a Westminster Labour councillor, who has no professional qualifications and no known skills that enable him to do the job, other than the fact that he mixes in Labour party circles.

Councillor Peter Bradley, the Westminster councillor, has one other extremely dubious achievement in property circles. In Richmond upon Thames, he has succeeded in helping London and Edinburgh Trust to get out of—

Mr. Grocott

Will the hon. Gentleman give way?

Mr. Shaw

I will in a minute. May I make just this point? [HON. MEMBERS: "He has just walked in."] I know.

Councillor Peter Bradley has acted on behalf of the London and Edinburgh Trust to get it out of a £20 million commitment to Richmond upon Thames's residents. That is what a Westminster councillor is up to in his spare time. He got the trust out of that commitment and, mysteriously, the council lowered the trust's commitment to £2.5 million. The trust saved £17.5 million, and Richmond upon Thames's residents lost on the deal that they were expecting from developers in the region. How was the money for that shady deal reduced from £20 million to £2.5 million, and how much was Councillor Peter Bradley, a man who had no professional qualifications, paid?

Mr. Grocott

Will the hon. Gentleman give way?

Mr. Shaw

The hon. Gentleman has just come into the Chamber. He must listen to the whole of a speech.

Mr. Grocott

On a point of order, Madam Speaker. I have just walked into the Chamber and heard the hon. Member for Dover (Mr. Shaw) make all sorts of accusations about an individual who is not, of course, in a position to respond. May we have guidance from you on whether it is an abuse of hon. Members' privileges to attack individuals who cannot reply? More specifically, may we have a ruling from you on whether the hon. Member for Dover, who will not be with us much longer, is prepared to repeat verbatim, outside the House, what he has just said? Will he please answer that question?

Mr. Shaw

rose—

Madam Deputy Speaker

Before the hon. Member for Dover continues, may I say that, in the view of the occupant of the Chair, each Member for Parliament is responsible for what he or she says.

Mr. Grocott

Will the hon. Member for Dover answer the second question, then?

Mr. Shaw

First, if he had any courtesy or any feeling for the House of Commons and its procedures, the hon. Gentleman would have been here for the debate. Secondly, if he had been here, he would have heard Conservative members of Westminster council accused of being serial killers, crooks and other things. What I am calling some of these people is mild in comparison.

Mr. Grocott

rose—

Mr. Shaw

Sit down. You have had a little bit too much outside in the places where you should not be.

Madam Deputy Speaker

Order. I remind the hon. Member for Dover for the second time that he is addressing me.

Mr. Shaw

rose—

Mr. Ken Livingstone (Brent, East)

On a point of order, Madam Deputy Speaker. The House definitely just heard the hon. Member for Dover (Mr. Shaw) say that my hon. Friend the Member for The Wrekin (Mr. Grocott) had had a little bit too much outside. I understand that that is contrary to the rules of the House.

Madam Deputy Speaker

It was not clear what it was.

Mr. Shaw

Absolutely. Obviously, the hon. Members for The Wrekin (Mr. Grocott) and for Brent, East (Mr. Livingstone), who have just come into the Chamber, should be less sensitive and less worried about what is going on.

Mr. Grocott

Will the hon. Gentleman give way?

Mr. Shaw

I am not going to give way, because I want to finish my concluding points.

I want the House to consider these people.

Mr. Grocott

Will the hon. Gentleman give way?

Madam Deputy Speaker

Order. The hon. Gentleman knows the rules of the House well enough. If an hon. Member does not give way, the other hon. Member must resume his seat.

Mr. Grocott

On a point of order, Madam Deputy Speaker. What protection is there for people outside the House who are being libelled by the hon. Member for Dover, who, even now, will not answer a simple question: will he repeat outside the precise statements that he has made? If he will not, clearly he is using the protection of parliamentary privilege to abuse and libel other people.

Madam Deputy Speaker

The fact is that parliamentary privilege exists.

Mr. Shaw

I thank you, Madam Deputy Speaker.

The consultants whom I have spoken about, Councillor Peter Bradley, former councillor Neale Coleman, and Stephen Hilditch, have a strange way of conducting their business. They do not advertise for business. They do not appear in any directory of consultants that trade in local authority work or any other work. The House of Commons Library has been unable to find any reference to their consultancy businesses other than in the telephone directory. They are not in any local government directory, they do not have professional qualifications, and they do not issue publicity material. It is strange how such people can get business; it appears that the only way in which they can do so is through their Labour party connections. In the past five years, that has given them £1 million-worth of business.

I refer briefly to the fourth objector, Dr. Richard Stone, a company director on Pensioners Link Ltd., the Mangrove Trust, Charta Mede Ltd. and the Foundation for the Care of Victims of Apartheid. Dr. Richard Stone also comes from a traditional Labour family. His father was personal physician to Harold Wilson. He appears regularly on television as a neutral political doctor. He is supposed to be neutral, as he claimed in 1992 on Independent Television News, but he was wrong on two counts. First, he had retired as a doctor and therefore should not have been giving medical views on television at the time; secondly, he was a Labour party member and had been one throughout his active life. I believe that ITN was severely unimpressed about being misled by Dr. Richard Stone.

Those are the four objectors: a misleading doctor who has been in the Labour party all his life and whose family has always been in the Labour party, and three odd consultancy operators who get £1 million-worth of fees in a few years from Labour party connections.

Three firms of accountants have disagreed with the district auditor's figures. I have considered his figures, and, although I have my doubts, I not going to say whether I agree or disagree with them today. Unfortunately, however, the district auditor has a problem of a conflict of interest, which I do not believe has been reported.

The district auditor's company, Touche Ross, has a connected company, Braxton Associates. One of its employees is a former Labour Westminster councillor, Mr. David Pitt-Watson. He is a close political friend of the main objector, Mr. Neale Coleman, because they shared a ward, so the district auditor's connected individual, who works in the group of companies that the district auditor is involved in, is a friend of the main objector.

Mr. Pitt-Watson a still active in the Labour party in Westminster. He was a Labour candidate at the council elections in 1994. He would have had a Labour constituency recently, but he was defeated by an all-woman short list—my colleagues will be upset for Mr. David Pitt-Watson on that basis. The district auditor's conflict in this instance is that the more Mr. Pitt-Watson's friend, Mr. Neale Coleman, objects to the accounts, the more Mr. Pitt-Watson's employing partnership profits through more work for the district auditor. The more Labour objects to the accounts of Westminster through the friend of one of the employees of a subsidiary of Touche Ross, the more the district auditor's income goes up. As one chartered accountant to another, I must tell Mr. Magill that he has an impossible and appalling conflict of interest.

The four objectors left out of the original 13 are Labour activists. The district auditor has a conflict of interest. The objections are all political and are not founded on a sound or solid legal basis. Three out of the four Labour objectors are earning money through Labour party and Labour council connections. That is appalling. This is not the way to run an audit of any council.

7.50 pm

Mr. John Gunnell (Morley and Leeds, South)

We have just been treated to the most disgraceful speech I have ever heard in the House. I have never heard a speech which was less to the point. It concentrated entirely on vilifying the objectors. The hon. Member for Dover (Mr. Shaw) has shown why he has been labelled the vilest man in the House—a label of which I believe he is proud. He has demonstrated that fully and I am appalled that a person can use his privilege as a Member of the House in that way.

Mr. Dobson

Does my hon. Friend agree that anyone who listened to the speech of the hon. Member for Dover should bear in mind the statement of Mr. Nimmo Smith QC who inquired into the things that the hon. Gentleman said about Monklands councillors? He said: Mr. David Shaw MP (Dover) had no evidence of substance to offer, notwithstanding repeated references by him to the large amount of information about the Council which he claimed to possess, and notwithstanding his having made reference to the Council's affairs in Parliament on various occasions from late 1992 onwards. Was not his speech tonight part and parcel of the smear campaign with which he has

Madam Deputy Speaker

Order. That was a rather long intervention.

Mr. David Shaw

On a point of order, Madam Deputy Speaker. That point has already been made twice by the Labour party in sheer desperation. The hon. Member for Holborn and St. Pancras (Mr. Dobson) has just returned from whatever he was doing outside the Chamber to make the point a third time. He did not listen to my speech. Could you—

Madam Deputy Speaker

Order. That is not a point of order for the Chair.

Mr. Gunnell

I can see that it is a little difficult to get into this debate.

I agree with my hon. Friend the Member for Holborn and St. Pancras. As it happens, the quotation has been used before. The hon. Member for Dover spent at least the first 10 or 15 minutes of his speech dealing with Monklands council rather than Westminster council. We should concentrate on matters which affect Westminster council.

Like the Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford), I have experience of the Audit Commission. I want to comment on the charge made by the hon. Member for Gillingham (Mr. Couchman) that the auditor acted as investigator, prosecutor, judge and jury. I would have expected the Government to have been stronger in their defence of the Audit Commission, which they set up. In my view it has an unparalleled record. It is amazing that no Minister has spoken in favour of the procedures and that it has been suggested that the procedures were weak.

Implicit in the way in which the Audit Commission works is that auditors are asked to judge on non-audit activity. The Audit Commission was set up with specific aims, one of which was to integrate the district audit service with private sector auditing and to bring private sector auditing into local government work. It has done that. Mr. Magill now works for Deloitte Touche and has been involved in local government audit for a considerable time. He has handled matters in Westminster other than that under consideration.

When one starts to say that the Audit Commission is responsible for economy, efficiency and effectiveness in local government, one is widening the judgments that auditors are asked to make. They are asked to discuss not just the economy of services or the financial aspects but to consider and report on matters of effectiveness. On those terms, one cannot reach a judgment purely on financial probity. The way in which the Audit Commission has been set up means that auditors must act in that way.

It is regrettable that the hon. Member for Dover attacked the auditor in this case. John Magill is a senior partner with Deloitte Touche. He has been the firm's legal partner on Audit Commission work since its formation in 1983 and has been appointed auditor to several councils. He has been with the firm since 1969 and became a partner in 1975. He has been the partner in charge of the firm's professional standards function. He has demonstrated his ability in the auditing profession. He does not need the additional work that Westminster has given him over the past few years. I am sure that it makes no difference to what he or his company earns. I believe that the hon. Member for Dover's words were an unmitigated slur.

It is for the Government to say that the Audit Commission has acted properly and to stand by it. John Magill has been amazed by the amount of vilification that he has received from Conservative Members. He was described by someone involved with Westminster as 'a thin, gaunt man with narrow-rimmed spectacles' inflicting a `Kafkaesque nightmare' on Westminster Tories. He has done nothing of the sort. He has tried to discover the truth. In discovering what he believes to be the truth and reporting on it he has clearly upset many people, some of whom are in the House.

As I have said, I expected the Government to be stronger in their support of the Audit Commission. They set it up and it operates according to the rules that they set for it.

Do we need to revise the procedures? I was present as a member of the Audit Commission when section 15 reports were laid down on Liverpool and Lambeth councils. I regretted the decisions those councils made about setting a rate, but I believed that it was right to issue a report which was in the public interest.

There was an earlier report in the public interest on Westminster and the sale of three cemeteries for 15p each. That report came from the same auditor. Those reports are in the public interest. My hon. Friend the Member for Walthamstow (Mr. Gerrard) made it clear that people were directly affected by the policy. Those affected have a right to a report on what happened and why. It is clear that the ratepayers of Westminster have a direct interest in the report. It is right that we should be able to debate the contents of a report that is issued in the public interest.

The Government have said consistently that they cannot comment on the report or the guilt of those concerned because it is going to appeal. The issuing of certificates to the Lambeth and Liverpool councillors took place on 6 September 1985. The Lambeth appeal was not heard in the House of Lords until 5 March 1986, and further judgments on Liverpool councillors were not made in the House of Lords until 1987. Did the Government find that they could not comment on the guilt of Liverpool and Lambeth councillors while the matters were on appeal?

In reply to a private notice question on 2 December 1985, the right hon. Member for Mole Valley (Mr. Baker) said: I should be willing to meet a delegation of members from Liverpool city council when they behave reasonably and legally".— [Official Report,2 December 1985; Vol. 88, c. 24.] He was therefore saying that they had behaved illegally. As a member of the Audit Commission, I believed that they had behaved illegally. Certainly, that was what their Lordships felt. Yet if the Government were consistent, they would not have commented on the matter. The same inconsistency was true of Lord Elton, then a Minister in the Department of the Environment, when he spoke in the House of Lords on 11 December 1985.

Mr. Robert G. Hughes (Harrow, West)

Is not the essential difference that those Liverpool councillors always accepted that they were acting illegally, but believed their action to be proper from a political point of view? There was never any doubt that they were acting illegally and the then Secretary of State was therefore right to say what he did.

Mr. Gunnell

It is a question of double standards. There is no doubt that the Liverpool and Lambeth councillors suggested that, on principle, they would not set a poll tax rate because they did not think that they should, given the effect that it would have on the work forces concerned.

Several hon. Members

rose—

Mr. Gunnell

Since other hon. Members want to speak and the hon. Member for Dover has taken up rather a lot of the debate, I shall not give way further. The Government were prepared to express clear condemnation in the House, although I agree that there is a difference in the nature of the charges. Is it wise to go to court on such issues as those who have been charged in Westminster by the district auditor have chosen to do? Their behaviour may not only be a local government sin but a crime against the citizens of Westminster.

On Lambeth and Liverpool councils' appeals, the Government took further action—to expedite those appeals. Will the Government take action to expedite the Westminster appeal? Since the matter has gone on for so many years, it is important that it be brought to a conclusion as rapidly as possible. As a member of the Audit Commission, I was told that every possible means was being used to conclude matters concerning Lambeth and Liverpool as speedily as possible. I want to be sure that the Government are acting in the same way—I trust that the commission will act in the same way, too—over Westminster city council and that they will do their level best to expedite proceedings so that we may receive the sort of answers that we want.

We should remember that Westminster city council was already very experienced in matters affecting the district auditor as a result of the cemeteries case, which found that, as such, Westminster council had not acted improperly. The auditor found that there was a regrettable handling of the sale for which members and officers were responsible, a regrettable lack of commercial awareness, and that council officers were so overawed by certain council members that they did not feel that they could say unpalatable things that council members did not want to hear. That is relevant to this Westminster case as well.

We should not judge the result of the appeal in advance, but the Government could make it very clear that they expect people who are under investigation by auditors to co-operate. The ways in which the council was deliberately unco-operative in the investigation have been obvious because they have been catalogued by the district auditor. The Government should condemn that.

The details of notes that were passed—they are certainly included in John Magill's 2,000-page report that the right hon. Member for City of London and Westminster, South (Mr. Brooke) may have read but to which others have not had access—referred clearly to actions that were thought to be illegal. Indeed, the officers who wrote of them said that they had to be made legal. I shall confine myself to only a few examples of that.

In 1987, Lady Porter made it clear that the "donkey work" for the designated sales had been done, and said: all I had to do, as I had the personality, was to get it through the Committee". It was said that it was her intention to gain electoral advantage by selling more properties in marginal wards.

At a strategy weekend, probably at Oxford, which was attended by officers, a paper written by Lady Porter entitled "Setting the Scene" was discussed. In that, she stated: We face a tremendous challenge. The electoral register for the 1990 elections will be compiled in just over two years' time. Some very ambitious policies must be implemented by then: providing a great deal of affordable housing in key areas; protecting the electoral base in other areas … There is very little time to achieve these radical policy objectives. I agree that people take political decisions, but it is clear that people should not use council money to implement such decisions. Council money was used to empty properties and allocate grants, and rehouse people in bed-and-breakfast accommodation. I can easily imagine that there will be disputes about the actual figure, but it is indisputable that it runs into many millions of pounds. I am certainly prepared to accept that John Magill is better at arithmetic than we are in the House.

I accept the figure of £31.6 million, which is a staggering amount to be spent in the pursuance of the policy. What is illegal is that council resources were used to fund a politically driven policy to achieve electoral gain. People will say at the appeal that they were not responsible for the policy, but they cannot contest the fact that the policy was pursued or that the things written about it were not written. The appeal will have to consider the notes, who were the authors, who was responsible and who was implicitly involved in the policy.

I think that the matter will go to the Court of Appeal. I hope that the Government will expedite matters to help it proceed as rapidly as possible. The Government should support the district audit service and make clear that the district auditor has in no way behaved differently from how we would expect him to behave. Hon. Members should be praising him for the meticulous way in which he has examined—despite the obstructions—all the affairs and reports in detail, as the right hon. Member for City of London and Westminster, South has said. The right hon. Gentleman said that the district auditor's work was meticulous. He is the only person who has made it clear that the work has been very good. I would have hoped that the Government could assert that whoever is in political control, it is the role of the district audit service to make it clear that there is probity in local government. That was allegedly the reason why they set the Audit Commission to work—to extend the concept of financial probity to cover an examination of services in terms of value for money.

According to those terms, Mr. Magill has found that Westminster city council's policy was pursued for electoral advantage, and we must accept that that is the case. That being so, it is up to the courts to decide who was personally guilty of perpetrating that policy and foisting it upon the council.

8.9 pm

Mr. Eric Pickles (Brentwood and Ongar)

It is a great pleasure to follow the hon. Member for Morley and Leeds, South (Mr. Gunnell), who has a distinguished record both in local government and as a member of the Audit Commission. It is entirely typical of the hon. Gentleman that he managed to cut through much of the froth surrounding the debate and get to the central problem. He asked why Conservative Members were reluctant to condemn the people named in the report, and why there may seem to be some inconsistency between our position now and our attitude to the former Liverpool councillors.

The exchange between the hon. Gentleman and my hon. Friend the Member for Harrow, West (Mr. Hughes) went to the heart of the problem: the difference is that the Westminster councillors say that they are not guilty. They do not believe or accept that they have broken the law, whereas the former Liverpool councillors accepted that they were deliberately breaking the law. They did so on principle, because they did not believe in the law or support it. That is the difference.

The hon. Member for Barking (Ms Hodge) seemed bemused, and asked about our reluctance, but I have given her the answer, although I cannot put it in quite such elegant terms as did the hon. Member for Morley and Leeds, South. We are unhappy about Opposition Members' determination to nail those six people to the tumbrils, and even more unhappy because they seem to want to throw in some extra bodies for good measure.

We prefer to wait until the court system is exhausted before we attribute guilt. The exchange between the hon. Member for Newbury (Mr. Rendel) and my hon. Friend the Member for Dover (Mr. Shaw) also went to the heart of that problem, because when the hon. Member for Newbury said that the people concerned were guilty, my hon. Friend rightly asked, "Where does it say guilty?" The hon. Member for Newbury could not tell him.

At that point I thought that I heard the hon. Member for Cardiff, Central (Mr. Jones), who was on the Opposition Front Bench, say that that did not matter. He said something like "So what?" But guilt does matter; it is important, and it is only right that we should condemn people only when the legal system has been exhausted.

It is a shame that great works of literature are sometimes over-quoted in the Chamber. People so often refer to an "Alice in Wonderland" situation that when that description is precisely applicable to something, one sounds a little coy when one uses it. But it describes exactly what is happening now. In the great trial scene in "Alice in Wonderland", with the Red Queen, we read words to the effect of "We don't want to hear the evidence or the judgment; we want the sentence first. Let's have the sentence before we look at the evidence." And that is what we hear now: "Never mind about the trial, the evidence or peoples' civil rights. Let's have the verdict."

We have heard how upset Opposition Members were when my hon. Friend the Member for Dover named Labour members of Westminster council. We have the same feeling about naming the people in the report. They are entitled to a fair hearing at a fair trial.

Mr. Brooke

I am sorry that the hon. Member for Newbury (Mr. Rendel) is not in the Chamber now, but he did not give way to me during his fairly vicious attack on Ministers. Does my hon. Friend recall the debate in the Liberal Cabinet over the Marconi scandal, when it was said that the Tories were too stupid to take advantage of it? Winston, who of course had previously sat on the Conservative Benches, said, "Yes, some of them are too stupid"—then he paused for a moment and thought, and added, "But all of them are too nice."

Mr. Pickles

My right hon. Friend's knowledge of contemporary history far exceeds mine, but that story has the ring of truth about it. I certainly thought that the hon. Member for Newbury brought some light to fairly dark proceedings when he suggested that the whole procedure could have been avoided if only there had been proportional representation. My mind went back to an old sketch from "Not the Nine O'Clock News", in which a "Question Time" audience was told that the world was about to end. The Liberal spokesman said that the real tragedy of Armageddon was that millions of people would die without ever having had the opportunity to enjoy a fair voting system.

The added ingredient in the story has been Lady Porter. After all, she was the nemesis of the Labour party in London. She did not suffer fools gladly, and was not a quiet retiring leader; she was prepared to take the Labour party on. Ratepayers in London benefited to the tune of millions of pounds because of Lady Porter's willingness to stop the Greater London council spending large sums in its last few days of existence—the so-called "tombstone funding".

It seems distasteful that people should be judged and convicted without a hearing, and without an opportunity to defend themselves.

Mr. Livingstone

May I put the record straight? Lady Porter took the GLC to court to object to the fact that we intended to give £100 million to voluntary organisations. She won the case, so we gave the money to housing associations.

Mr. Pickles

I think that the hon. Gentleman's recollection is wrong, because Lady Porter lost the case, but still stopped the council giving the money away.

Mr. Robert G. Hughes

I was in court when the injunction was obtained, and although the case was not won, the point was, because by the time the injunction had been cleared the GLC had been abolished, the law had gone through, and the council could not and did not give the funding out, so the ratepayers got the money back.

Mr. Pickles

I am grateful to my hon. Friend for that intervention.

What I find distasteful is the way in which the Labour party is using the system to crush six individuals. What adds the extra spice is no doubt the fact that we are talking about the Tesco heiress, whom the hon. Member for Holborn and St. Pancras (Mr. Dobson) described as a fat cat.

The law should apply equally both to the Tesco heiress and to the person on the checkout at Tesco. The hon. Member for Holborn and St. Pancras quoted the words written over the door of the Old Bailey, but the last time I looked at the Old Bailey there was a lady standing on top of it—the symbol of justice. She carries the symbols of justice in both hands, and her eyes are blindfolded. It is important that everybody has the right to justice, regardless of his or her means.

During proceedings on the private notice question last week, the hon. Member for Holborn and St. Pancras pledged that a future Labour Government would hold a public inquiry, although he did not repeat that pledge today. I think that he is nodding, acknowledging that to be true. However, what I thought he was offering was a political show trial. It was clear to me that he was not interested in the evidence or in justice, but simply in seeing the individuals concerned twist in the wind.

Mr. Dobson

If the hon. Gentleman had been listening last Thursday, when the private notice question was asked, he would know that I was concerned not about the six individuals—they should be dealt with under the law passed by the Government in 1982 to apply to anybody, whether a person has a lot of money or none—but about the relations between central Government and Westminster, which have been corrupt throughout.

Mr. Pickles

I refer the hon. Gentleman to column 368 of Hansard for 9 May, in which the context of what he suggested is clear. He might not have intended to do so, but he advocated a political show trial.

If those six people are ultimately found guilty by a court, I make it absolutely clear that I will condemn them, the Conservative party will condemn them and, I have no doubt, the Secretary of State will condemn them. But I am totally certain that we will not have any business about trying to change the law retrospectively—such as we had in 1975 with the housing finance special provisions, when an attempt was made not only to remove the disqualification of councillors but to remove some of the financial burdens placed on them. The Conservative party will not do that if the appeals fail.

We are told that the right of appeal is unusual. We are told that, because it is unusual, we have a right to comment. But it is unusual for people to appeal in civil cases and it is unusual for people to go for judicial reviews against decisions of the Secretary of State, but they still do it. One cannot pray in aid the judicial service when it suits and dismiss it when it is inconvenient.

Mr. Duncan Smith

Does my hon. Friend agree with me that the purpose of the judicial appeal mechanism in this case is that the auditor is not legally qualified and it is not a judicial process? It is, therefore, necessary to confirm that through the judiciary when it is not agreed.

Mr. Pickles

My hon. and learned Friend, who is a distinguished lawyer, is quite right on that point.

I support the points made about Mr. Magill by my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke). But just because one has doubts about the way in which he proceeded does not in any way strike at his professional competence. I have the mildest of criticisms of Mr. Magill. I think that it was a mistake to hold that press conference during the preliminary hearing. I think that it was an error of judgment and that it tainted his impartiality. I was very pleased that he did not repeat the same mistake at the full hearing. We all learn from our mistakes, but I am not sure that that undid the damage. On matters of investigation, form is just as important as substance.

Sir Irvine Patnick (Sheffield, Hallam)

My hon. Friend is knowledgeable about local government. Is it normal for a district auditor to hold a press conference before he has completed his report? Possibly the hon. Member for Morley and Leeds, South (Mr. Gunnell), a former member of the Audit Commission, is aware of previous cases in which a press conference has been held by a district auditor.

Mr. Pickles

It is a very unusual situation and, as I said, I think that it was a mistake. I am sure that the district auditor did not intend it to turn out in the way that it did and that it is a lesson for future district auditors on how they must conduct themselves.

We have heard of Westminster council's excellent record on provision and taking care of applications from the homeless.

I should like to talk a little about politics in local government, because I think that that goes to the heart of this inquiry and raises questions as to whether politics are inappropriate in local government and whether political parties should use their office to pursue popular political policies.

If one starts with the parish council, it is possible not to have political parties involved and to run them with some pragmatism. Their functions, budgets and geographical areas in which they deal are very limited. I regret those areas of the country in which politics and the politicisation of parish councils have become commonplace. But with larger councils, such as the metropolitan authorities and the county councils, some of their budgets are larger than the total budgets of many of the states in the United States of America. A policy of steady as she goes—or, put slightly more poetically by Alexander Pope: For forms of government let fools contest; Whate'er is best administer'd is best"— is simply not satisfactory.

Politics means choice in local government. We should not be ashamed of offering political choice to the electorate. Each party has its view, puts candidates up for election and it is supported or it is rejected. I should like to compare that against three popular policies.

If the previous 17 years are marked by anything, it should perhaps be by the extension of share ownership. That extension was brought about by the Conservatives to persuade more people to vote Conservative, to increase the number of share owners and to accomplish the aim of a property-owning democracy with shares. We now have more share owners in this country than we have members of trade unions. That was a blatantly political act to get votes and to increase the number of people who were Conservatives.

The right to buy goes at the very heart of the problem. It was a great touchstone between the political parties in the 1970s and the 1980s, although it is less so now. Implementing that policy was bitterly fought out. It was an attempt to persuade more people to vote Conservative than Labour. The same is true of the great debate taking place on grant-maintained schools.

We are pursuing the grant-maintained policy because we believe that it is right for schools, but we also believe that the more parents have their children educated at grant-maintained schools the more likely they are to vote Conservative. There have been some references to the Birmingham case. When the Labour group was challenged about its policy document "Meeting Needs", the district auditor said that it was lawful and that the Labour group was indeed trying to improve its standing with the electorate following poor results in May 1992, but we find nothing wrong with this principle in a democratic system. It is normal for any political party to revise its policies to reflect the views of the electorate as expressed in the ballot box. He went on to say: The crucial test is whether all such schemes were subsequently properly authorised by committee or by Chief Officers under delegated powers. We are satisfied that the overall budget of £7.2 million was properly authorised and that most of the schemes were approved by the service committees. So when is it not appropriate to have politics in local government? I think that it is inappropriate to determine whether one will help someone on the basis of how they voted. The hon. Member for Liverpool, West Derby (Mr. Wareing) spoke about that matter earlier. When people come to my advice bureau, I do not ask them how they voted. I do not look them up on our mark register to check how they voted. I certainly do not say to them, "You didn't vote for me—I'm not going to help you." In Brentwood and Ongar, I represent the whole community: Conservatives, Liberal Democrats, Labour voters and those who voted for the Green candidate.

I can recall that there was a trend in local government when Labour councillors would say that they did not represent Tories in their wards, and say "I represent my class on council. I represent the working class, and those who are not working class cannot come to me for help." That is an example of when politics is inappropriate.

Mr. Rendel

Will the hon. Gentleman give way?

Mr. Pickles

We are pressed for time. It is not that I do not like the hon. Gentleman, and it is nice to see him back in the Chamber, but we are pressed for time. The Labour Whip is getting a little anxious, and I am coming to my conclusion—but we can, all of us, have a chat afterwards.

I also believe that it would quite wrong to design a service just to service those areas that voted for one. That is absolutely and completely wrong. It is wrong to designate the way in which dustbins are emptied or schools allocated purely on the basis of how an area votes. That is an area in which politics is inappropriate.

We have a system of local government and not of local administration. Government means choice; politics means choice. There is a right for the electorate to make those choices. I believe that this appeal, when it goes to court, will give us an opportunity to firmly establish the right of politics in local government.

8.29 pm

Mr. Clive Betts (Sheffield, Attercliffe)

I wish to refer to matters in the district auditor's report, a report that was drawn up through due process according to an Act passed by the House, introduced by this Government. We understand that the reason why the six people are appealing to the courts is that the district auditor came to a decision which is legally enforceable. The decision now stands that they misused funds, that they did it for the purpose of gerrymandering, and that in the course of doing so they ignored their responsibilities to homeless families.

However, this is not just a little local difficulty for people in Westminster or Westminster councillors or officials. It is a matter for the Government. Whether or not they choose to deal with the issues now, at some stage the Government will have to come back to the House and explain their part in this sorry process. Throughout the period of the policy on which the district auditor reported the Government knew about the policy, they were advised of it and were consulted about it. They were asked for and gave approval about certain aspects of the policy.

It is clear that, apart from the up-front issues, which we can discuss because they are on record, Westminster councillors and officials and local Members of Parliament did a great deal of lobbying behind the scenes with Ministers, their advisers and civil servants. It is on record that the right hon. Member for Westminster, North (Sir J. Wheeler) was involved in those discussions.

The basis of local authorities' housing programme strategies is the housing investment programme statement. The Government obtain information from local authorities to draw up the statement. I have been looking through the statements submitted by Westminster council for the end of the 1980s and the beginning of the 1990s. They are interesting documents. They show a change of policy following the discussions in Westminster and the decision that the council took in July 1987. They show a clear change from a policy of simply selling properties to one of social engineering. That was the purpose. Of course, they did not mention political gerrymandering. That gives the lie to those who say that Westminster was merely behaving in a political way. None of the issues of gerrymandering came up front. They were all in hidden, secret documents.

The public documents certainly talked about social engineering and trying to help a middle group of people within Westminster, even though at the same time the council was using its planning policies to ensure that private developments were built not for middle-income families but for rich and affluent families.

Sir Irvine Patnick

Will the hon. Gentleman give way?

Mr. Betts

I am sorry. Much as I should like to, I shall not give way to the hon. Gentleman because I am on limited time and I wish to allow my colleagues who have been sitting here throughout the debate an opportunity to speak.

As well as outlining the change of approach, the strategy statements outline the increase in the target to 500 sales per year and the general intention to sell 1,800 properties per year. They also outline the cash incentive scheme as well as the designated sales scheme. That information was all passed on to the Government. They were consulted about it. They were asked for at least tacit approval, in the sense that they made their HIP allocations on the basis of those strategy statements. Indeed, the Government gave extra allocations to Westminster and sought to justify them by pointing to Westminster's appropriate and successful policies. That is how the Government were involved throughout the process.

However, despite the sales policy, homelessness in Westminster was acute. The strategy documents reveal that more than £7 million per year was being spent on housing homeless families in temporary accommodation. Even in 1989, there were more than 700 families in temporary accommodation. That more than doubled in a five-year period once the homes-for-votes programme got under way.

There was a recognition that there was a problem of homelessness and that people had to be exported to other boroughs. Letters were written to the Secretary of State advising that Westminster could not cope under the homeless persons legislation and asking the Government to change it. Requests were made for special capital allocations to provide hostels outside the borough. The most famous such allocation was the Government's attempt to give, outside their own guidelines, more than £1 million to provide a hostel in Croydon for Westminster's homeless families. It never got off the ground because there was a political row with the then leader of Croydon council about putting the hostel in his ward.

A letter from Westminster to the Department of the Environment said:

To embark on such a large scale property designation we will reduce the number of properties available to meet the demand for social housing … If the designation policy is to be pursued alternative solutions to the homelessness crisis in Westminster will have to be found. So all the information that the Government received showed that the sales policy that Westminster was pursuing was causing it a real problem in coping with its homelessness and that it would require action from the Government to solve that difficulty.

Despite all that information, under section 32 of the Local Government Act 1985 the Government approved the designated sales policy. They argued about the sell-on values of properties, but they gave approval. They specifically approved allowing the right-to-buy discounts that would be available to a family if they bought the house that they lived in to be passed on if the family bought one of the properties in the designated blocks. They approved that change to the normal approach.

The Government had issued guidance to the effect that where grants were given to families to buy a vacant property under any sales policy, the properties vacated by families who came from other council properties should be given to homeless families. That guidance was also broken by the Department of the Environment. It never bothered under its monitoring procedures to pull Westminster up and say that the net result of its policy was to deny homeless families homes instead of releasing vacant properties to house them.

Westminster began to operate the cash incentives policy under section 137 powers. It was advised by its own lawyers that the policy was illegal. It continued the policy under section 129 of the Housing Act 1988. Implementation of the policy required specific consent from the Government. The district auditor's report is full of a series of correspondence between Westminster and the Government between 17 July 1987, when Westminster first asked for approval, and August 1988, when it was given approval. The reason for that correspondence, and why initially the Government refused to give approval but eventually did, was that Westminster had to get round the words in the legislation.

Under the cash incentives scheme, where people were given a cash grant to move to another property, the property which they left had to be let to a homeless family. The Government colluded in getting round the words. They produced a review in 1990–91 of what happened to the cash incentives scheme. It showed that fewer than 40 per cent. of the properties vacated under the scheme went to homeless families. More than a third went neither to a homeless family nor to a council tenant in Westminster who moved over, as the Government's policy should have required.

Despite that review, the Government gave Westminster council £4.5 million of extra capital allocations in the early 1990s to follow that policy through. The policy was operated contrary to their own guidance, but the Government gave consent to Westminster to do so under powers in section 129 of the Housing Act 1988. Nothing was done, despite the fact that the Government were providing housing subsidy to implement the policy.

So the Government knew what was happening through information that they received under the housing investment programme. They gave extra capital allocations. They gave consent to the cash incentive grants. They gave consent to the grants to purchase vacant properties. They gave consent to a £1.3 million allocation for a hostel to house homeless families in another borough because Westminster complained that it would not have anywhere to put homeless families because it was selling the flats in which such families should have been housed.

At the same time, the Government, tolerant of that waste of money and the fact that homeless families were being ignored, entered into discussions to set up a Westminster housing trust, even though officers advised councillors that it was illegal. The purpose was to subsidise private landlords to gentrify blocks of flats and let them on to residents of Westminster or others, according to a process which would be controlled by the local Conservative party through the trust. That, too, was discussed actively with Ministers.

While all that was happening, the head of the policy unit in Westminster was a Mr. Phillips, who was on secondment from the Department of the Environment. No one could believe that he was not reporting back to his masters in the Department of the Environment about the policies that he was pursuing. Mr. Phillips eventually became the managing director and was replaced by Mr. Reiter, another appointment from the Department of the Environment, in furthering those policies.

There is no doubt that throughout all this business, the Government knew what was happening. They had the information. They were lobbied; they gave approval; they monitored what was happening by reports such as that to which I referred and they did nothing about it. No doubt they will eventually claim that they did not know everything that was being done. Despite having the evidence, they never put any concern on the record or took any action to stop the abuses that were so apparent to everyone when they were happening in Westminster.

The Secretary of State told us that it is not the right time to condemn Westminster. He will wait for the rest of the legal process to be worked through. While he is waiting, perhaps he could consider carefully the role of his Department and the Government. When it is time for the Government to apologise for what Westminster council has done, perhaps we can have an apology for their actions in this sorry and sordid mess.

8.40 pm

Mr. Iain Duncan Smith (Chingford)

I shall be brief because I know that other hon. Members wish to speak. There are so many facts flying around that I do not intend to follow all of them—especially, hon. Members may be pleased to hear, those raised by my hon. Friend the Member for Dover (Mr. Shaw), notwithstanding that some of his most illustrative facts will stay in our memories for some time to come, not least because of the way in which he made his points.

Like my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), who made an excellent speech, I wish to discuss one or two points. First, there is the process enacted by the House in 1982, which has been so devalued during this case, and the effect of the application of the auditor's report. That is a three-stage process. The Government are right to wait to apportion final judgment and blame because the key point is that the process was set up with a final judicial element so that if those accused did not agree, they had the full right to take their case to the judiciary and get a fair, impartial final hearing. After all, the person who sat at the oral hearing was the same person who had carried out the investigation. The difference from the cases of people who have been accused in the past is that many of them did not disagree with the finding of illegality.

As regards stage one, the auditor's provisional report, the most important thing—apart from making the mistake of giving a press conference—is that when the initial findings were made available they were made available only to the accused and those who had brought the original charges. It is important to note that the findings in the provisional report were covered by criminal sanction, quite rightly, because they were provisional. Otherwise, it would have been impossible for those who were accused to mount any sort of defence if they were vilified in public. However, immediately on the night the provisional findings appeared, in the media—and especially on "Panorama"—direct quotations were made from the report, which was covered by this criminal sanction.

I have serious questions for my hon. Friend the Minister as to what was going on with the Law Officers when it was clear that a provisional report was being breached and quoted selectively in the media and by members of public. From that moment, my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) and others who were accused had the most difficult uphill task to pursue their defence because of public vilification in the media and by hon. Members who should have known better. That all happened despite the fact that specific elements from the report were covered by a criminal sanction—and nothing was done about it.

It is important to note the role of the Opposition Front Bench spokesmen, the hon. Members for Durham, North-West (Ms Armstrong) and for Holborn and St. Pancras (Mr. Dobson), in concerting much of the vilification. I hope that at some stage they will have the decency to accept that my hon. Friend the Member for Milton Keynes, South-West was exonerated and that they were wrong to attempt to concert such vilification on the back of provisional report charges that have not stood in the final report.

The most important point about stage two, the public inquiry and findings, in which my hon. Friend the Member for Milton Keynes, South-West has been exonerated, is that there has been no apology. The most important charge was whether he should have been surcharged. In the final findings, his name has been deleted from those who have been surcharged. There has been no mention of that fact. The Opposition have been winding around it, each trying to find an angle from which to accuse my hon. Friend.

The hon. Member for Newbury (Mr. Rendel) made one of the nastiest and most vicious speeches that I have heard in this place. It was unnecessary and ridiculous because he attempted to malign my hon. Friend the Member for Milton Keynes, South-West on the basis of a report that the hon. Gentleman had not read in full. I draw his attention to pages 383 to 412, which contained the detailed legal advice. If he had read them, he would have found that the matter was very complex. The selective piece that the auditor used at the end is open to serious criticism, but that is something with which others will deal.

I agree with my right hon. Friend the Member for City of London and Westminster, South that Mr. Magill has been meticulous at each stage of the three-stage process. He has pursued the job that he was given with the utmost care and his report has every imaginable detail in it. The charges that he makes on the back of that can now be examined by an impartial adjudicator. The question is not whether he was meticulous or behaved correctly—I have no doubt about that—but whether he should be able to act throughout as judge, jury and, ultimately, executioner. That is our real problem. I was not here in 1982, but I have long had considerable reservations about what we did in changing the nature of the relationship of councillors to the job that they are elected to do. The process is fine when guilt has been admitted, but when it has not we are in great difficulty. My criticisms of the system are for the Government to note for the future.

The report took some seven years to produce, and all sorts of assumptions and innuendoes have been made during that time. It cost £3 million. Unlimited costs were available to the auditor, but not to those who stood accused.

Mr. Couchman

Will my hon. Friend give way?

Mr. Duncan Smith

If my hon. Friend will forgive me, I do not wish to take long as other hon. Members wish to speak.

The auditor had unlimited money at his disposal, but that was not the case for those who stood accused. If they disagreed with it, as many did, they faced great costs both in the original investigation and when they appeared before the inquiry after the provisional findings. They had to engage extremely expensive legal advice. That is not necessarily wrong, but it is almost unique that they have no chance of getting back any of the money used in respect of the findings and the inquiry when they are proved innocent of the charges. That is contrary to natural justice.

Ministers should not forget Dr. Dutt, who committed suicide, according to the notes that he left behind, because he could not see how he could afford to defend himself. Intriguingly, Judith Warner, a co-vice chairman, has subsequently been exonerated. That is a human tragedy which we may at some stage need to consider.

The real problem with the system, and I say this to Ministers in a constructive spirit, lies in the process from the provisional finding to the final report. The public inquiry stage is where the auditor goes into a quasi-judicial process without being qualified so to do. The problems lie in the cost structure in the period between provisional and final findings. We should make certain that auditors produce reports which are not provisional but can be acted upon in the courts. Reports should not serve as a quasi-judicial stage between provisional and final findings, which is where most of the difficulties lay. When we look back over these events, we shall see that the media managed to make ridiculous allegations, many of which have been proved to be unfounded during this period.

It is important to acknowledge that my hon. Friend the Member for Milton Keynes, South-West has been exonerated, on which I congratulate him, and that the third stage of the process must now be engaged. The accused individuals have said that they are not guilty. They must be subject to the due process of law. If they are found guilty, they should be sanctioned accordingly. If they are not found guilty, I hope that members of the Opposition Front Bench and others will have the decency, as they should, to apologise

8.50 pm

Mr. Gordon Prentice (Pendle)

I have been sickened by the debate. Conservative Members do not have the guts to condemn the events in question, and all Conservatives are implicated. The district auditor proved that there had been gerrymandering to win the 1990 council elections. The right hon. Member for Mole Valley (Mr. Baker), a previous Secretary of State for the Environment, was chairman of the Conservative party in 1990 and masterminded the national strategy. In the right hon. Gentleman's book, "The Turbulent Years", published in 1993 and now remaindered, he wrote: We"— meaning the Conservative party— focused especially on the high-profile councils of Westminster and Wandsworth, where the Tories were led with verve by Shirley Porter and Paul Beresford. With spirit and imagination both had cut back expenditure but had improved services. They were the flagships of efficiency in local government. There is too much riding on the credibility of the Conservative party for it to do what is right and to condemn corruption.

On 9 May Conservative central office published a paper to brief Conservative Members for this debate. It is an apology for what happened, and it tells Conservative Members that they should raise this key point: The allegations in the report concern events which took place almost a decade ago. What about the families who were moved into asbestos-ridden flats? They do not care whether those events occurred a decade or 20 years ago. The brief continues: The specific allegations in the report are a matter for councillors and officers concerned, the Council, the Auditor and the electors of Westminster, and not for the Government. That is untrue—the Government are up to their elbows in it. Most astonishing of all, the brief advises Conservative Members to tell the House: This is not a party political issue. But it is.

The auditor found six individuals guilty. There has been much ignorant talk by Conservative Members, including lawyers who should know better. The hon. Member for Gillingham (Mr. Couchman) ludicrously described Shirley Porter and the others as "the Westminster Six", as though we should feel sorry for them. The hon. Member for Chingford (Mr. Duncan Smith) is also a lawyer. I refer both hon. Gentleman to the Government document "Spending Public Money" published in March—not by the Department of the Environment, but by the Chancellor of the Exchequer, the Chancellor of the Duchy of Lancaster and the Financial Secretary to the Treasury.

That command paper specifically examines surcharging in local government. It draws a distinction between section 19, which concerns unlawful expenditure that can be referred to the courts, and section 20, which concerns wilful misconduct. The auditor found the six guilty of wilful misconduct. Under section 20, it is possible for the auditor to bring in a finding of guilt. Let us not quarrel about semantics. The auditor said that Shirley Porter and the other gallery of rogues at Westminster were guilty of unauthorised behaviour to the detriment of local taxpayers. The auditor's report runs to five volumes. I have not been able to read through them all, but I dipped into enough of the report to realise that the six are guilty. If they want to exercise their right to appeal, the law allows that—but let us not resile from the auditor's finding, to which Ministers will not admit, that the six were guilty.

The auditor unearthed a bundle of documents. I will offer a couple of key quotations. Shirley Porter stated: A key element in building stable communities must be to attract home owners into Westminster. This means finding innovative ways of ensuring that the right sort of housing is available to the right sort of buyer or tenant. And it must be available by October 1989. What is the significance of October 1989? That was when the electoral register for the 1990 council elections in London was closed.

We heard an infantile contribution from the hon. Member for Dover (Mr. Shaw), whose facts are constantly wrong. He said that the councillors dealt with matters of grand strategy and that the details were handled by council officers. It is a pity that the hon. Gentleman is not in his place to hear this. Notes unearthed by the auditor report an informal meeting on 1 September 1987 of chairmen of council committees—the people who were not supposed to deal with detail. One note stated: Agreed: Officers to look at the implications of emptying Bruce House as quickly as possible and disposing of the property through the Housing Trust for conversion into 'Yuppie' flats … Agreed: (a) Head of Policy Unit"— a council officer— would make sure that the 'right people' in the 'right' Housing Associations were identified. Shirley Porter, who sat at the centre of that web of deceit wrote: What is gentrification? In short it is ensuring that the right people live in the right areas. The areas are relatively easy to define: target wards identified on the basis of electoral trends and results. The council's officers picked up the message that they were supposed to behave as Shirley Porter and the rest decreed, which is why there were appalling memorandums from people who should have known better. One from the special chief officers board, dated 25 September 1986—to which my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) referred—stated: Homelessness. Be mean and nasty. Westminster council was a flagship that the Conservative Government could not see sunk, but it is now holed below the waterline. The Conservatives won the 1990 election because of a massive manipulation of the grant system, which is why the council could introduce a low poll tax. I shall cite a set of statistics in this regard. In 1990—the year of the election that Shirley Porter and the others wanted to gerrymander unlawfully and improperly—my local authority, Pendle council, received £856 per head in total external support from the Government, and that is in an area which experiences deprivation and poverty.

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford)

It is totally unlike Westminster.

Mr. Prentice

No, it is not. These are figures from the House of Commons Library and from the Department of the Environment. If anyone is ignorant of the facts, it is the Minister. In 1990, Wandsworth council received £1,424 per head in total external support from the Government. In 1990, Westminster council—where the corruption took place—received £1,638 per head in total external support from the Government. That is why Westminster council was able to bring in a poll tax of £195, compared with £300 in my authority, in that crucially important year of 1990.

It is a sorry tale, and the thing that disappoints me more than anything is that Conservative Members have been steeped in sleaze for so long that they fail to identify it when it is staring them in the face. It is all very well for the Minister to wrinkle his brow and shake his head. I invite him to go to the House of Commons Library and to read the five reports of the district auditor. They describe the guilt of those six people.

8.59 pm

Mr. Barry Field (Isle of Wight)

I had not intended to speak in the debate until I heard the putrescent piece of politics that emanated from the hon. Member for Newbury (Mr. Rendel) when he attacked my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) last week. It was the most disgraceful behaviour that I have seen from any Liberal Democrat since I have been in this place—and I have seen quite a few examples over the years.

When I entered this House I discovered that when the Conservatives took control of Medina borough council the constituency secretary of my predecessor, Stephen Ross—who had a lot to do with housing—had been chairman of the housing committee of the council. When tenancies were allocated to residents of Medina borough council they regularly received a letter which led them to believe that their Member of Parliament had obtained that allocation for them. Councillor Ian Morgan—the leader of the council in those days—took me to see some of the tenants to discuss it with them because they were convinced that their Member of Parliament was allocating the housing tenancies. I did not complain about that. It was a wonderful wheeze actually: catch as catch can.

The hon. Member for Newbury attacked my hon. Friend the Member for Milton Keynes, South-West, who has been exonerated by the report. The attack was quite horrific. When we took control of Medina borough council we found that some starter homes had been sold off in a great big rush, so much so that the councillors came to see me and asked whether there should be a district auditor's report.

A number of the people who bought the starter homes already had homes on the Isle of Wight. I knocked on three doors and found that people who had been sold starter homes at a discounted price already had dwellings or tenancies elsewhere on the Isle of Wight. When I asked them why they had taken them on, they said that the price might appreciate and they might make a profit.

As often happens when there is a change of political control, there is an air of "We are in charge now," and it was all forgotten, but it should have been the subject of a district auditor's report. As the hon. Member for Newbury knows perfectly well—because I have written to the leader of the Liberal Democrats—there was a district auditor's report into the council on the Isle of Wight. He sits there smirking smugly, but he made an unpleasantly vicious attack on a colleague in the House. His party had refused to publish the report. He should wash his mouth out because we are fed up with that kind of putrescent politics from the Liberal Democrats.

When I was chairman of the housing committee I bought a large estate from the Greater London council when it was being wrapped up. I have watched this sort of process over the years. I put a lot of effort into getting that housing transferred to the housing association as I did not want to allocate the tenancies. I do not want to gerrymander the system. I want for my constituents the best possible housing service, the best repair record and the fewest voids. The person who objected to that was the leader of the Liberal Democrats. Why? It was because he realised that a transfer of responsibility for housing was a transfer of power, and the Liberal Democrats wanted power over people's lives. They like gerrymandering: housing tenancies represented votes in wards that were crucial to them. That is why the Liberal Democrats did not like responsibility for housing being transferred to an independent body that would allocate homes, not on that basis, but on merit, and which would run things properly. Everyone, bar a few really ideologically motivated characters, now agrees that it is a great improvement.

I say to my hon. Friend the Minister that one thing has really surprised me in the debate that has taken place last week and this week in the House and in the national press. Some of us are old enough to remember when the Greater London council promised that it would build out Conservative majorities using housing around London and with the Greater London council seaside homes policy. The sum involved was not £31 million. If my memory serves me right—I have eaten a lot of beef lately, so it might be failing me—it was about £300 million to £500 million. That was an enormous scam; it was gerrymandering in the crudest sense of the word and it was stated to be so. Such scams are as old as time itself. Remarkably, we have not heard a dicky-bird about that GLC policy in the debate on this issue.

Mr. Livingstone

If this was all a wicked Labour plot by the Greater London council to build houses around the suburbs and in the south-east, why did the Conservatives continue those estate developments when they won control of the council in 1967? They did so for the simple reason that the previous Labour administration had done so. There was a vast waiting list in London, and in those days all political parties were competing to build more council houses because they believed in doing justice for tenants who needed places to live.

Mr. Field

The hon. Gentleman was wrong once tonight, and he is wrong again. As he well knows from his long experience of local government, a council cannot put the brakes on existing contracts overnight. He also knows how popular our policy on the right to buy has been; and my goodness, if anything will put a stop to all this gerrymandering and nonsense and total waste of taxpayer's money, it is that.

My final point touches—I hope that I shall not be ruled out of order—on the sub judice rule. A new process has occurred in our legal and quasi-legal system in this country. The matter that we are discussing is obviously not fully within the judicial ambit, but it will be when it is brought to court. The Guinness trial dragged on and on. I firmly believe that the individuals involved in it were almost ground down by the system. We have witnessed a similar process in what is happening with the Maxwell brothers. That is why I said I hoped that I would not be ruled out of order, Mr. Deputy Speaker. I shall not refer to that again.

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I am afraid that the hon. Gentleman's hopes have been dashed. Anything to do with the Maxwells is sub judice.

Mr. Field

There you go, Mr. Deputy Speaker; it just goes to show that my crystal ball is not so cloudy after all.

There is a similar situation in the Westminster case. The report was seven years in the making. No one who is not reliant on public funds or legally aided could sustain that, never mind the nervous energy and tension that such things create and the constant pillorying by the press. Look at what my hon. Friend the Member for Milton Keynes, South-West has put up with from the press week after week and what it has cost him, and we then hear that Members of Parliament are all supposed to be on the make. It is appalling. If there were any sense of decency left in the media, they would start to blow the whistle at that point, because seven years of such a process is a form of torture that no citizen of this country, whether they be the heiress or the check-out lady, should have to endure.

As the Parliament which represents the people and defends their rights, we must ensure that those matters are dealt with far more swiftly and reasonably in future.

9.9 pm

Ms Margaret Hodge (Barking)

I, too, will be swift. I know that other colleagues wish to speak.

In preparing last night for the debate, I referred to the words that I thought would be used most. The first was gerrymander. Gerrymandering was a word that came about in 1812 in Massachusetts, when Elbridge Gerry redrew the boundaries in that area to look like a salamander, hence gerrymander. There was party political advantage for his party. Secondly came Tammany hall, which has not been referred to as often as I expected. The term arrived a little later than gerrymandering, in the 1870s. It was a reference to the headquarters of the Democratic party in New York city, which had become a rather corrupt and powerful influence on that city. Ironically, Tammany, for the interest of right hon. and hon. Members, stems from societies that sprang up at the time of the American revolution as patriotic anti-British organisations. St. Tammany became the patron of the sons of liberty clubs.

Dame Shirley Porter can claim a unique achievement. She has managed to bring together gerrymandering and Tammany hall. She has in so doing probably created a new word for the political lexicon, which is portmander. I wonder what a political lexicographer would make of that departure in public administration. Will it be said that to portmander is a verb pertaining to the movement of electors, using taxpayers' money to influence the outcome of elections, frequently done without regard to the public health implications of a planned move—for example, into unsafe housing—and acting in pursuit of such advantage for a political party in a manner that is recklessly indifferent as to whether it is right or wrong?

We have heard much tonight about the procedure that has been used to find members and officers of Westminster city council guilty. I agree that the procedure needs reform. I look forward to the Government—or to us, the Labour party, when we come into government—reforming the procedure. To pretend, however, that the procedure has not been fair and has not ended in a finding is at best naive and at worst rather obscurantist with the truth.

The procedure is semi-judicial. We know that many Queen's counsel and a great deal of money have been involved in implementing it over a long period. Tony Child, the Audit Commission's solicitor—I am not greatly fond of the man, given the trouble that he has caused many of us in local government over the years—is an expert lawyer. He advised the auditor in the Westminster case throughout the proceedings.

It is worth referring to the summary of the report, because much nonsense has been said about there not being a guilty finding. There is such a finding. One passage reads: My view is that the Council was engaged in gerrymandering, which I have found is a disgraceful and improper purpose and not a purpose for which a local authority may act. Later, the report states: I have at all times borne in mind the grave consequences for any individual of a finding of wilful misconduct, and such a finding should only be made on the most cogent evidence. I have adopted the approach endorsed by Lord Justice Lawton in the Court of Appeal. Lord Justice Lawton said: It should take a lot of evidence to tip the balance in favour of a positive finding because the accusation is serious and the consequences of such a finding are grave. I believe that Mr. Magill has acted with absolute diligence and total meticulousness in a semi-judicial manner. He conducted 135 interviews. The hearing lasted 32 days. His final report—I have read only the summary—covers 2,000 pages. He had information comprising 10,000 pages. It is absurd for Conservative Members to suggest that it is anything but a proper finding.

It is worrying that Conservative Members will not accept the finding. Their attitude adds to the indictment that what is happening among the Tories in Westminster city council is in too many ways uncomfortably like what is happening among the Tories in the Palace of Westminster. Both are no longer able to distinguish between the public interest, the national interest and the Tory interest. For both, the end truly justifies the means—any means—and if it helps to keep the Tories in power, it must be right.

As time is short, I should like to make two or three points that have not been mentioned. I condemn the council members involved. Dame Shirley Porter acted disgracefully throughout. She demonstrated her own guilt in an article in The Independent last Friday, in which she claimed to be completely innocent. She wrote: Naturally, Labour hated our plans. They feared it would encourage former Labour voters to support the Tories. In saying that, she gave the game away. She was pursuing a policy to ensure that she could gerrymander that borough and retain it for the Conservatives. If she was so convinced of her innocence, why did she cancel appointments? Why did she not exercise the right to give evidence in public? Why did she shred evidence and why did the district auditor have to employ agents to find people to interview? Why did they have to look for evidence in the basement of Westminster city hall? Why did she not provide the documents on which the policy was based?

One of the most disgraceful aspects of the whole affair is the role of the officers of Westminster city council. We have to consider why such a scandal could have occurred. Had information been made freely available to all members of the council, it would not have happened and we would not be talking about the biggest scandal of political corruption for almost 30 years—since the Poulson affair.

I find it particularly disgraceful that the director of housing, whom the district auditor has found guilty of misconduct, is still employed by Westminster council in a different job. We have to consider carefully the role of officers. They have a duty to ensure that all members of the council act in the public interest and that there is no illegality.

I am extremely concerned about the implications that others outside Westminster council in the political parties knew what was happening. Let me quote briefly from a letter to the Prime Minister. I believe that the scandal and corruption probably went higher and further than Westminster, as that would explain the reluctance among Conservative Members to discuss the matter. The note to the Prime Minister from Shirley Porter on 19 December 1986 said: We in Westminster are trying to gentrify the City. We must protect our electoral position which is being seriously eroded by the number of homeless that we have been forced to house … Both I and my Chairman of Housing Committee have constantly lobbied successive Secretaries of State with very little result. I feel that the problem is so serious you should look at it yourself … I am afraid that unless something can be done, it will be very difficult to keep Westminster Conservative! Of course, politics plays a part in local government. On the whole, if local councillors get their policies right, they are re-elected. The district auditor accepts that in his report. What went wrong in Westminster was that the political advantage was not a by-product of the policies; it was their primary purpose. Unless Conservative Members understand and address that point, we shall have bad democracy.

We owe the objectors an enormous debt, and the speech by the hon. Member for Dover (Mr. Shaw) was outrageous. If the objectors had not pursued the case with such diligence, it would not have been thrown into the open, and we would not have the evidence that is now before us and from which we should learn.

We hear much from Conservative Members about the victims of crime. In this case, the victims were the homeless, who were either put into asbestos-ridden flats or came to places such as Barking courtesy of the Peabody housing trust. Barking is an hour's journey from Westminster. Those people were miles from their roots, their children's schools and their jobs and they became a financial burden on my local council in terms of social services.

The Conservatives have got their politics wrong. If they wanted a proper debate allowing understanding of the issues at stake, it would not drag on. By refusing to comment now, they are allowing this ghastly political corruption to drag on, and failing—as representatives of a nation, and as a democracy—to learn the real lessons of a dreadful experience.

9.19 pm

Ms Glenda Jackson (Hampstead and Highgate)

I share the sense of nauseated disgust described by my hon. Friend the Member for Pendle (Mr. Prentice). I also endorse everything that was said by my hon. Friend the Member for Barking (Ms Hodge). I have little doubt that the corruption inherent in the scandal goes much higher than Dame Shirley Porter and members of Westminster council. Despite protestations to the contrary by Conservative Members, this must be one of the most shameful performances from a party that is undoubtedly degenerate in supporting those whom it regards as rich and powerful while neglecting those for whom it should speak in the House—the weak and vulnerable.

We have heard much about millions of pounds. We have heard weasel words from Conservative Members. We have observed the Secretary of State attempting to walk a fine line, refusing either to condemn or to support the guilty Westminster council. The voices that we have heard remarkably little of are those of some of the victims to whom my hon. Friend the Member for Barking referred. We all know what started this gross scandal. According to Dame Shirley Porter, it was "building stable communities" or BSC. A more appropriate translation of that acronym would be "bovine spongiform conservatism", given the inordinate damage that such diseased policies have created.

Let me refer to a family in my constituency. The father was a Westminster resident for 16 years; for six years, he, his wife and their two children were tenants of a flat in Westminster. One day, out of the blue, they received a letter from the council enclosing a glossy brochure and asking whether they would like to move to an estate in Staines where there would be a garden and a better quality of life. I understand that the development had been financed partly by Westminster council under the business expansion scheme.

The family went to see the property. They had to make a decision in three days, and they duly moved to the estate. Under the same scheme, more and more families from Westminster moved to it. There were many children, and a large proportion were young teenagers. The estate was entirely inappropriate for young men, as there was virtually nothing for them to do there. It was a comparatively restricted area; there was nowhere for the children to play without causing huge disturbance to the other residents. To cut a fairly long story short, my constituents suffered severe harassment, to such an extent that they had to leave the estate. The wife, who is dark of hair and skin, was subjected to racial harassment, and her children were subjected to verbal abuse.

Having moved away from the estate, my constituents re-presented themselves to Westminster council, which they deemed to be their local authority and to be responsible for rehousing them. Westminster sent them back to Staines, and the same pattern was repeated yet again. By that time, my constituents were unable to live together: the father was living with his mother, and his wife and the children with friends. The marriage has now broken up. The mother and her two children are in a hostel in my constituency, having been placed there by Westminster council. There have been endless hearings and applications to Westminster council, which categorically refuses to take my constituents back although its pressure forced them to move from a home in which they had been happy, contented and a family.

That is the one real scandal—or one tiny part of that real scandal: the destruction of human lives, and the break-up of a family. The two young children are suffering; the daughter is suffering especially severely, because of the break-up of her family and the fact that they have no secure home. I have letters from teachers in her school saying that, despite the move to Staines, when the children returned to the school that they had known since nursery age they readapted and were absorbed easily and speedily. That is no longer the case.

It behoves the House to realise that Westminster council's practices and its gerrymandering, which was mentioned by my hon. Friend the Member for Barking, for clear political advantage and with no regard whatever for taxpayers or for individuals or their families, were a scandal and a disgrace. Even more disgraceful is the way in which Conservative Members have, in a way, endorsed Westminster council's activities. The speech by the Secretary of State for the Environment, who has twice refused to condemn the council, was scandalous, but his inability to speak for the people of this country pales into insignificance compared with the speech by the Prime Minister more than a week ago on this issue.

This is the House of Commons, and we are sent here to represent people whose basic interests are to live in peace and quiet in a home that they can call their own and in security with their children. Conservative Members significantly failed to speak for those people in a debate about what is surely one of the most outrageous and corrupt scandals in local government that the city of London has had to bear for generations. That is an utter disgrace, and I sincerely hope not only that the people of London will remember what failed to emanate from Conservative Benches, but that every voter in the country will remember it.

9.26 pm

Mr. Ken Livingstone (Brent, East)

I thank those hon. Members who have helped me to get a couple of minutes to speak. I used to be the Greater London council member for Westminster, North and I had many contacts with Dame Shirley Porter. She is the only person I have ever met in whom I can think of not a single redeeming feature. It is inconceivable that someone can amass such vast personal wealth and still have a chip on her shoulder. I found her one of the most remarkably stupid people I have ever come across in public life.

Why do we have this great scandal? It is because, as the GLC was drawing to its end, those of us in Westminster Labour party looked at the electoral map and saw that in a normal year, which is what 1986 was likely to be, if not a good year, Labour could win 27 of the 60 seats. We decided to concentrate on three Conservative wards, which in a normal year we would never have a chance of winning. Instead of putting our best candidates into safe Labour wards, we put them into those three Tory marginals and worked them as we had never worked them before.

We thought that by putting much effort into the election and getting people out who had not been out before in those wards, we might have just one chance of snatching a couple of them and taking control of the council. We said among ourselves, "We shall get only four years. We shall catch the Tories only once because they will canvass afterwards and rebuild those neglected wards." We failed to take the wards, but we came within a few hundred votes.

After the election, we thought, "That is it. They will never let us creep up like that on them again." In our wildest dreams, it never occurred to us that Dame Shirley Porter would assume that the election result was an indication of some vast permanent shift to the Labour party. We had just had a damned good election campaign and it never occurred to us that she would set aside £31 million of public money, rig the entire local government system and browbeat and harass every local government officer who dared to say, "I think that this might be illegal, ma'am."

Such happenings seem inconceivable. Any local government leader with an ounce of sense—I see many such people in all parts of the Chamber—would have looked at the result and said, "They will not catch us in that way again." All that Dame Shirley Porter had to do in 1990 was to get out, do a bit of canvassing and conduct a few ward surgeries. She did not need to rig the entire system but, as I say, she is not very bright.

I do not join my colleagues in condemning the whole Tory party for supporting Dame Shirley Porter. Many Conservative Members approached me today and said, "They wanted me to speak in the debate, but I told them that I would not." A few people have been put up to bang the drum and they will live with the shame of that for the rest of their political careers. I am sure that their Labour opponents will make good use of it in the general election. By their absence tonight and by their refusal, when asked by their Whips, to justify this, many Conservative Members have shown that they are as disgusted as we are.

Corruption is not a matter simply of Westminster. We have had corrupt Labour councils and Labour figures; we have just had Robert Maxwell, for God's sake. Let no one say that all the bad apples are in one barrel, but when he realised that the game was up, at least Robert Maxwell topped himself and saved the public a trial. Dame Shirley Porter has dragged it out for 10 years and burnt the documents, and when has a district auditor ever had to do a dawn raid on the leader of the council's office? The woman is a disgrace.

My only worry is this. Dame Shirley Porter has bunked off to Israel, so I hope that we have an extradition treaty with it. If not, I know the enthusiasm of the Secretary of State for Defence. He could give the Special Air Services the job of going in and bringing her out.

9.30 pm

Ms Hilary Armstrong (North-West Durham)

I was about to start by saying that this is one of the saddest debates in which I have taken part in the House, but I enjoyed the contribution of my hon. Friend the Member for Brent, East (Mr. Livingstone). In his normal way, he has reiterated what Labour Members have said many times. It is not up to us to condone or to tolerate corruption and malpractice in any council, wherever it happens. In event after event, we have sought democratically to tackle, both through our party machinery and in the House, corruption and malpractice, wherever it has arisen.

I have been horrified today to listen to Conservative Member after Conservative Member move around trying to avoid saying, "Whether this was legal or not, it was wrong." That is what we are here to do. We are not here as lawyers, even those of us who are lawyers. We are here as the public's representatives. Because of that, more is expected of us than is expected of accountants, lawyers, doctors or anyone else.

We have a trust that is so precious, it is granted only through the ballot box and occasionally. In many countries, people are fighting and dying because they are not given that trust. Hon. Members are now abusing that trust. The debate is about how public representatives maintain the trust of the folk they seek to represent.

I am happy to admit that I am not an expert in legal matters, but I have a sense of what is right and of what is wrong and of how we, as public servants, are duty bound to behave. In that regard, the House has had one of its saddest days.

Mr. Jacques Arnold

rose—[Interruption.]

Ms Armstrong

It is all right. I am not bothered by the hon. Gentleman. He can stand there all night.

We are sent here to fulfil that trust, and we have shown that some people have taken that trust and abused it dreadfully. As I say, it is a question not of what is legally right or wrong, but what is right or wrong.

Mr. Arnold

Will the hon. Lady give way?

Ms Armstrong

The hon. Gentleman has not been in the debate, and I need to respond to several hon. Members who have.

I do not include the right hon. Member for City of London and Westminster, South (Mr. Brooke) in that criticism. He was trying hard to say that the report contained things that he was uncomfortable with and that he did not like. I understand his difficult position, but he was prepared at least not to exonerate all the things in the report.

The district auditor's report does find that Tory councillors on Westminster council were responsible for using £31.6 million-worth of taxpayers' money for party political gain. The report states quite clearly that councillors deliberately set about a course of action that not only wasted public money, but denied desperate homeless families permanent homes while decent housing was left empty until it could be sold. All that was done for party political advantage. Despite the shredding and all the other things that were done to try to prevent the auditor from gaining access to the facts, that evidence was carefully and painfully uncovered, and has been clearly outlined by several of my hon. Friends.

I think that today will go down in the House's history. Hon. Members have refused to face up to the problems in the report, and have questioned the legality of the process. The Opposition are bound to have a little difficulty with that, because the process does not come from us; we did not create it. It did not come from on high. It came from the Government. They worked out the process and put it into legislation. They then defended it when the Widdicombe report recommended that the process should have some semblance of appeal within it. As I said earlier, in their response to Widdicombe, the Government said that that would undermine the authority of the auditor.

Today we have heard Conservative Members—not all of them—seeking to undermine the authority of the auditor. That is sad, because it is our job to ensure that the integrity of people such as auditors is not undermined, and that they are trusted. We have asked them to work on our behalf. We have given them the job and outlined the process. It is our duty to trust them to get on with that job. The auditor has cleared that with the Audit Commission, made incredible attempts to ensure that natural justice was followed, and bent over backwards to ensure that justice in its smallest degree was offered to those involved in the report.

It is strange that some hon. Members say that the hon. Member for Milton Keynes, South-West (Mr. Legg) has been exonerated by the report. I have read what the final report says about the hon. Gentleman. If that is exoneration, I would hate to see what condemnation and wrongdoing would look like. I would not want any of that written about me and the way I have conducted my public affairs.

I am quite happy to concede that the hon. Gentleman has been taken off the surcharge list, but that does not mean that it is not clear in the report that he did things that he should not have done and that he was let off because he did not understand that it was his duty to inform others about what was happening. I do not think that that is exoneration. It is not exoneration in the language and values that I understand. It is surprising and disappointing that the hon. Gentleman is not here. I should have thought that he would want to defend himself before the House, but apparently he is not able to do that.

The hon. Member for Dover (Mr. Shaw) is no longer in the Chamber, and I am not surprised. I came across the hon. Gentleman on many occasions when I was Parliamentary Private Secretary to the right hon. and learned John Smith. At that time, I thought that he was the one person in the House who was prepared to say anything knowing that he could not back it up. He was prepared to see the worst in anybody and to say the worst about anybody. He was always prepared to find the worst in anybody. [Interruption.] I am trying to deal with the facts and the hon. Member for Dover's smears. He smeared and libelled people under the guise of privilege. We were lectured by the Secretary of State for the Environment about privilege, but then we heard the most disgraceful abuse of it.

The hon. Member for Dover smeared the name of Peter Bradley. He told us that he had done all the research himself, yet, strangely, it all coincided exactly with the smears levelled by Lady Porter's henchmen in The Times. Peter Bradley was mentioned in an article in The Times in January 1995 written by Andrew Pierce, in which allegations were made about gerrymandering in Camden and Peter Bradley's so-called involvement.

It is strange that the hon. Member for Dover failed to remember and tell the House that an apology and a retraction were printed in The Times, and that all the expenses of my friend, who I think will be the Member for The Wrekin one day, were reimbursed by the paper, which accepted that all the allegations were untrue.

Lady Porter's henchmen tried again. They went to the Director of Public Prosecutions saying that Mr. Bradley had been involved in corruption with regard to Waitrose. The fraud squad told Lady Porter and those who had levelled accusations that it was outraged by the obvious smear, there was no case to argue, and would they please not repeat the accusations elsewhere.

I invite the hon. Member for Dover, who, as I have said, is not here—he really understands the courtesies of the House—to say such things outside the House. If he does, Peter Bradley will more easily be able to pay for his election campaign. That would be putting the hon. Member for Dover to good use.

Many things need to be said in this winding-up speech, but I do not have time. I wanted to ensure that my hon. Friends were able to speak. I find it very strange that Conservative Members have sought to undermine the role of the district auditor, and not tried to uphold the auditor's words. They have also sought deliberately to misunderstand the legal process. Of course a member has the right to appeal; anyone has the right to appeal—if they have the money—against any judgment that is made of them at any stage in our legal process, whether through audit or in the courts.

It seems that it does not matter what happens in Westminster, no matter how low the council sinks—we do not hear a word of condemnation from Tory Members of Parliament. It is little wonder that politicians have sunk so low in the public's esteem. The failure to put public duty before party interest undermines not only the standing of the Conservative party but politicians in general. I resent that, and I hope that the Minister puts another gloss on matters.

We are waiting for the Government to express some sorrow for the victims of the scandal in Westminster. That is what I cannot understand. Yes, they may want to defend their friends, but surely they recognise that, when wrong has been done, whoever has done it, we in the House ought to express some feeling for those who have suffered because of it.

We have had a remarkable debate, but a sad one. The Secretary of State ran away from the issues and tried to blame other people. It is never an answer to try to blame other people for one's own sins, or to say that one wrong can be outdone by another. No one here has sought to defend wrongdoing in any council—[Interruption.] I am being asked who the Secretary of State has blamed. In the past week, he has blamed the Labour party and the press—[HON. MEMBERS: "No."] Oh yes, he has. In his statement last week, he blamed the Labour party and said that it was scandalous of us to raise such matters.

Mr. Gummer

Will the hon. Lady give way?

Ms Armstrong

No, I will not.

Mr. Gummer

The hon. Lady may remember that I have blamed nobody. I have merely said that decent people wait for the due process of law before they condemn. I always hoped that the hon. Lady would be a decent person, but this evening she has shown herself unable to do that.

Ms Armstrong

I am delighted that I gave way—because decent people recognise wrongdoing and say, "We shall not tolerate it; we are going to deal with it."

Whatever the rights and wrongs of the individuals in the case before us, the council and its policy were wrong. Whether that policy was legal or not, it was wrong. Anyone who has read the Magill report cannot help being disturbed by it. I know that the right hon. Member for City of London and Westminster, South was disturbed by it; indeed, we all were. I even think that the Minister who is about to reply was disturbed by it.

This is the time for the House to say, enough is enough. It is in all our interests to clean up the Government and to recognise the responsibilities of public representatives. Perhaps the Tory party should meditate on the words of a former Conservative Prime Minister, Benjamin Disraeli: All power is a trust; that we are accountable for its exercise; from the people and for the people all springs and all must exist. I hope that the Tory party will return to that sentiment, and that we shall all be able to hold our heads high because we know that we are determined to insist on the utmost probity. But I do not believe that the Tories are capable of that—and if they are not, they must go.

9.46 pm

The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry)

I agree with the quotation that the hon. Member for North-West Durham (Ms Armstrong) used, about all power being a trust—but it is a trust that must be exercised indiscriminately. It is irrelevant whether we like people or not, and whether they are on our side or on somebody else's side. It is irrelevant by what process they have arrived at their positions. What matters is that their rights should be defended without favour and without colour.

When the hon. Lady says that we have a trust by virtue of having been elected via the ballot box—in other words, that we have obtained our jobs by a unique method—I agree with her. But equally, it is part of our trust to ensure that, when people stand charged with serious misconduct, they have the right to defend themselves as far as the law will permit.

When people are proved wrong beyond reasonable doubt—those are the terms in which the verdict of a court is expressed—they are condemned, and pay the price. So I agree with the hon. Lady that, when wrong is done and proven beyond reverse, it should be condemned, and I would be the first to condemn it.

I wish to make one thing clear to the hon. Lady, because I do not want her to suffer from any misunderstanding. We may well have arguments about parts of the subject before us, but I want to define carefully where they lie, and also where there is no argument.

My right hon. Friend and I have no argument about the role of the auditor. The auditor was acting according to statute accepted by the House—and, as a matter of record, introduced by the Government. I want to make it absolutely clear that I do not impugn the auditor's integrity or the auditor's method.

I do not impugn the Audit Commission—to which the auditor is in a sense responsible, because appointments are made by it. My right hon. Friend the Secretary of State and I have done our best to ensure that the Audit Commission is reinforced by the quality of the people who serve it, and in the range of activities that it can perform.

I will not accept an accusation that I want to level charges against the auditor, against him personally or in respect of his function. I should also like to make it clear that I do not do so in relation to the process, of which I am conscious there have been criticisms. We know that there are criticisms, because we have heard them. I do not believe that it is right, in the course of this debate and this investigation, that we should bring into the discussion the question of the procedures. Such a discussion would not be right, and I do not intend to bring it into dispute between us.

What is clear is that six people have been named in the auditor's report. The auditor has upheld the objection to the accounts in relation to those six people. The same section of the statute under which the auditor has issued his certificates provides for appeal to anyone aggrieved by the decision. That provision is available to anyone who is aggrieved, whether they are aggrieved about charges levelled against them or about the fact that the auditor may not have pursued some of the charges that were made. That provision is laid down clearly in the statute.

Notice of appeal has been lodged. It is therefore apparent that further legal process will take place. It is self-evident that that legal process could endorse the auditor's conclusions in their entirety—that is one possible outcome—in which case the councillors and the officials will stand condemned. They will merit that condemnation, and they will receive it from the Government, as they will from all the others who will no doubt level it.

It is equally self-evident that the court could disagree with the auditor, because there are exceedingly complex issues of interpretation of the law and of interpretation of motive at stake. My right hon. Friend the Secretary of State and I are not prepared to judge that outcome.

In a debate that has ranged from, occasionally, the banal to the speech of my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke)—who reminded us of the gravity of the social circumstances and problems in Westminster that we must tackle and of the real nature of Westminster, which penetrates beyond College green—some very curious arguments have been levelled. I have already stated that I do not seek to impugn the auditor, and I place that very clearly on the record.

One curious argument that has been made is that there is some moral variety in this matter, and that it is all right for one to act in some ways if it is done publicly. So, if one does something that is wrong but it is done openly, that misgovernment al fresco is all right; but if one does something else, it is absolutely wrong.

I again agree with the hon. Member for North-West Durham—which is rather embarrassing for both of us, because there are a great many issues on which we agree—that, when we seek to get a system of honest, fair local government that is run on a basis of probity, everyone is part of the democratic process. A great many hon. Members on both sides of the House have experience of local government, although I am not one of them, and they know the importance of ensuring that that first level of democracy is one in which people can endow their trust and for which they can show respect. We all know that there have been difficulties and problems, that those have to be cleaned up, and that it is in the interest of everyone who votes to do so.

The hon. Member for Liverpool, West Derby (Mr. Wareing) spoke about the difference between speeding and serial killing. That was hyperbole, and I at least give him credit for choosing perhaps the two greatest extremes possible. His comments seemed to introduce a note of exaggeration into the debate that does not help the genuine cause of those who are concerned about good government.

The hon. Member for Sheffield, Attercliffe (Mr. Betts) made one point which I should like to clear up for him. He said that somehow all the webs came back to the Department of the Environment.

I wish to make it clear to the hon. Gentleman that he is absolutely wrong in this regard. We receive from Westminster, as we do from all authorities, annual HIP submissions which include strategy statements. They contain descriptions of housing practices. There was never any suggestion in Westminster's HIP submissions that the council used its policy on council house sales for improper purposes.

It is equally true that, since 1952, irrespective of party, Governments have given general consents for voluntary sales into owner-occupation. The consents apply to all local authorities, not just Westminster. It is for each local authority, acting reasonably and in accordance with the law, to decide whether to sell. Routine statistical returns to the Department do not reveal the details of locations or purchasers. That applies to all authorities.

Mr. Betts

Will the Minister give way?

Mr. Curry

No, because the hon. Member for North-West Durham did not give way, and I have only five minutes to cover some wide ground. The hon. Gentleman will undoubtedly wish to return to the matter, and I shall be willing to do so.

The hon. Member for Holborn and St. Pancras repeated his frequently made charge that we rig the system in favour of Westminster. If what I am about to describe is rigging, it shows a degree of incompetence on my part which I repudiate. In every year since 1991–92, the changes in SSA per head for Westminster have been less favourable than for the average of London authorities. If that is rigging, it is an extremely idiosyncratic form of it. The fact of the matter is that the SSA for Westminster increased by 19.5 per cent. in 1991–92, but the inner London average was 22.6 per cent. In every year up to the most recent year, exactly the same phenomenon is repeated.

Under the damped need assessments—the calculation used by the last Labour Government—Westminster did a great deal better than it has done under the Conservative Government. So that again is a curious form of rigging. I do not wish to accuse the Opposition of rigging in favour of Westminster, because that really would be incompetence on their part, but the figures show that the pound-per-head need assessment for Westminster when the Labour Government were in power was £487, compared with £454 for Tower Hamlets, £453 for Hackney, £343 for Manchester and £327 for Liverpool.

The differential between all those authorities and Westminster is narrower now than when the system invented by the Labour Government was in operation. So if that is rigging, it is a curious form of it. It would have been a curious thing for a Conservative Government to do, but it was done not by them but by the Labour party. The Labour party's system shows that, even when Labour intends to target, it cannot manage it.

If the system is so wicked, one wants to know what the Opposition would do about it. The hon. Member for Holborn and St. Pancras speculates. He says that perhaps a Labour Government will change to a grants system. When he talks to Labour party conferences, he makes it up as he goes along. The hon. Member for North-West Durham prevaricates. Every article that she writes about the new framework for Labour consists of about 700 words of strictly nothing. It is written in elegant prose, but it is devoid of content.

The hon. Member for Holborn and St. Pancras goes around the country telling councils how much they would get if they received the same level of grant as Westminster. What he omits to say—this is the important point—is that, if we dished out grants per capita, we would have the most unjust, unfair, anti-social and perverse system of grant distribution that any Government could deliver. Unless grants follow need and deprivation, and unless they are designed to enable councils to tackle the real problems which face them, we will not have a system which can be defended.

I meet dozens of local authorities year on year. Both Labour and other local authorities come to talk to me. In the force of circumstances, it is mainly Labour authorities that come to see me. Not one says that I am rigging the system for someone else. They do not say that we have got the whole thing upside down. They say that they understand that we are trying to run a system that distributes grant according to need. They want changes because they want a system that benefits them rather than other councils. There is not a single council that does not come along with objective ideas that just happen to benefit the particular requirements of that council. That is all part of the game, and I accept that.

What I will not accept from the hon. Member for Holborn and St. Pancras is the idea that I sit thinking of how I can rig the system for one council or another. I do not do it; I have never done it; I will not do it. If I tried to do it, it would become so obviously transparent that every council that came to my office would start with that accusation. Not one council does. The hon. Gentleman is unique in his obsession.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 267, Noes 288.

Division No. 127]	[21.59 pm
AYES
Abbott, Ms Diane	Campbell, Mrs Anne (C'bridge)
Adams, Mrs Irene	Campbell, Menzies (Fife NE)
Ainger, Nick	Campbell, Ronnie (Blyth V)
Allen, Graham	Cann, Jamie
Alton, David	Carlile, Alexander (Montgomery)
Anderson, Donald (Swansea E)	Chisholm, Malcolm
Anderson, Ms Janet (Ros'dale)	Church, Judith
Armstrong, Hilary	Clark, Dr David (South Shields)
Ashton, Joe	Clarke, Eric (Midlothian)
Banks, Tony (Newham NW)	Clarke, Tom (Monklands W)
Barnes, Harry	Clelland, David
Battle, John	Clwyd, Mrs Ann
Beckett, Rt Hon Margaret	Coffey, Ann
Beith, Rt Hon A J	Cohen, Harry
Bell, Stuart	Connarty, Michael
Benn, Rt Hon Tony	Cook, Frank (Stockton N)
Bennett, Andrew F	Corbett, Robin
Benton, Joe	Corbyn, Jeremy
Bermingham, Gerald	Corston, Jean
Betts, Clive	Cousins, Jim
Blunkett, David	Cox, Tom
Boateng, Paul	Cummings, John
Bradley, Keith	Cunliffe, Lawrence
Bray, Dr Jeremy	Cunningham, Jim (Covy SE)
Brown, Gordon (Dunfermline E)	Cunningham, Rt Hon Dr John
Brown, N (N'c'tle upon Tyne E)	Dafis, Cynog
Bruce, Malcolm (Gordon)	Dalyell, Tam
Burden, Richard	Darling, Alistair
Byers, Stephen	Davies, Bryan (Oldham C'tral)
Cabom, Richard	Davies, Chris (L'Boro & S'worth)
Callaghan, Jim	Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)	Jowell, Tessa
Davis, Terry (B'ham, H'dge H'l)	Kaufman, Rt Hon Gerald
Denham, John	Keen, Alan
Dewar, Donald	Kennedy, Charles (Ross, C&S)
Dixon, Don	Kennedy, Jane (L'pool Br'dg'n)
Dobson, Frank	Khabra, Piara S
Donohoe, Brian H	Kilfoyle, Peter
Dowd, Jim	Kirkwood, Archy
Dunwoody, Mrs Gwyneth	Lestor, Joan (Eccles)
Eagle, Ms Angela	Lewis, Terry
Eastham, Ken	Liddell, Mrs Helen
Etherington, Bill	Litherland, Robert
Evans, John (St Helens N)	Livingstone, Ken
Ewing, Mrs Margaret	Lloyd, Tony (Stretford)
Fatechett, Derek	Llwyd, Elfyn
Faulds, Andrew	Loyden, Eddie
Fisher, Mark	Lynne, Ms Liz
Flynn, Paul	McAllion, John
Foster, Rt Hon Derek	McAvoy, Thomas
Foster, Don (Bath)	McCartney, Ian
Foulkes, George	Macdonald, Calum
Fraser, John	McFall, John
Fyfe, Maria	McKelvey, William
Galbraith, Sam	Mackinlay, Andrew
Galloway, George	McLeish, Henry
Gapes, Mike	Maclennan, Robert
Garrett, John	McMaster, Gordon
George, Bruce	McNamara, Kevin
Gerard, Neil	MacShane, Denis
Gilbert, Rt Hon Dr John	McWilliam, John
Godman, Dr Norman A	Madden, Max
Godsiff, Roger	Maddock, Diana
Golding, Mrs Llin	Mandelson, Peter
Gordon, Mildred	Marek, Dr John
Graham, Thomas	Marshall, David (Shettleston)
Grant, Bernie (Tottenham)	Marshall, Jim (Leicester, S)
Griffiths, Nigel Edinburgh S)	Martin, Michael J Springburn)
Griffiths, Win (Bridgend)	Maxton, John
Grocott, Bruce	Meacher, Michael
Gunnell, John	Meale, Alan
Hain, Peter	Michael, Alun
Hall, Mike	Michie, Bill (Sheffield Heeley)
Hanson, David	Michie, Mrs Ray (Argyll & Bute)
Hardy, Peter	Milburn, Alan
Harman, Ms Harriet	Mitchell, Austin (Gt Grimsby)
Harvey, Nick	Moonie, Dr Lewis
Hattersley, Rt Hon Roy	Morgan, Rhodri
Henderson, Doug	Morley, Elliot
Heppell, John	Morris, Rt Hon Alfred (Wy'nshawe)
Hill, Keith (Streatham)	Morris, Estelle (B'ham Yardley)
Hinchliffe, David	Morris, Rt Hon John (Aberavon)
Hodge, Margaret	Mowlam, Marjorie
Hoey, Kate	Mudie, George
Hogg, Norman (Cumbernauld)	Mullin, Chris
Home Robertson, John	Murphy, Paul
Hood, Jimmy	Oakes, Rt Hon Gordon
Hoon, Geoffrey	O'Brien, Mike (N W'kshire)
Howarth, Alan (Strat'rd-on-A)	O'Brien, William (Normanton)
Howarth, George (Knowsley North)	O'Hara, Edward
Howells, Dr Kim (Pontypridd)	Olner, Bill
Hoyle, Doug	Orme, Rt Hon Stanley
Hughes, Kevin (Doncaster N)	Parry, Robert
Hughes, Robert (Aberdeen N)	Pearson, Ian
Hughes, Roy (Newport E)	Pendry, Tom
Hughes, Simon (Southwark)	Pike, Peter L
Hutton, John	Pope, Greg
Illsley, Eric	Powell, Ray (Ogmore)
Ingram, Adam	Prentice, Bridget (Lew'm E)
Jackson, Glenda (H'stead)	Prentice, Gordon (Pendle)
Jackson, Helen (Shef'ld, H)	Prescott, Rt Hon John
Jamieson, David	Primarolo, Dawn
Janner, Greville	Radice, Giles
Jenkins, Brian (SE Staff)	Randall, Stuart
Jones, Barry (Alyn and D'side)	Raynsford, Nick
Jones, Lynne (B'ham S O)	Reid, Dr John
Jones, Nigel (Cheltenham)	Rendel, David

Robertson, George (Hamilton)	Sutcliffe, Gerry
Robinson, Geoffrey (Co'try NW)	Taylor, Mrs Ann (Dewsbury)
Roche, Mrs Barbara	Taylor, Matthew (Truro)
Rogers, Allan	Thompson, Jack (Wansbeck)
Rooker, Jeff	Timms, Stephen
Rooney, Terry	Tipping, Paddy
Ross, Ernie (Dundee W)	Trickett, Jon
Rowlands, Ted	Turner, Dennis
Salmond, Alex	Tyler, Paul
Sedgemore, Brian	Vaz, Keith
Sheerman, Barry	Walker, Rt Hon Sir Harold
Sheldon, Rt Hon Robert	Wallace, James
Shore, Rt Hon Peter	Wareing, Robert N
Simpson, Alan	Watson, Mike
Skinner, Dennis	Welsh, Andrew
	Wicks Malcolm
Smith, Andrew (Oxford E)	Wigley, Dafydd
Smith, Chris (Isl'ton S & F'sbury)	Williams, Rt Hon Alan (Sw'n W)
Smith, Llew (Blaenau Gwent)	Williams, Alan W (Carmarthen)
Snape, Peter	Wilson, Brian
Soley, Clive	Winnick, David
Spearing, Nigel	Worthington, Tony
Spellar, John	Wray, Jimmy
Squire, Rachel (Dunfermline W)	Wright, Dr Tony
Steel Rt Hon Sir David	Young, David (Bolton SE)
Steinberg, Gerry
Stott, Roger	Tellers for the Ayes:
Strang, Dr. Gavin	Mr. Eric Martlew and Mr. Jon Owen Jones
Straw, Jack

NOES
Ainsworth, Peter (East Surrey)	Carttiss, Michael
Aitken, Rt Hon Jonathan	Cash, William
Alexander, Richard	Channon, Rt Hon Paul
Alison, Rt Hon Michael (Selby)	Chapman, Sir Sydney
Allason, Rupert (Torbay)	Churchill, Mr
Amess, David	Clappison, James
Arbuthnot, James	Clark, Dr Michael (Rochford)
Arnold, Jacques (Gravesham)	Clarke, Rt Hon Kenneth (Ru'clif)
Ashby, David	Clifton-Brown, Geoffrey
Atkins, Rt Hon Robert	Coe, Sebastian
Atkinson, David (Bour'mouth E)	Colvin, Michael
Atkinson, Peter (Hexham)	Congdon, David
Baker, Rt Hon Kenneth (Mole V)	Coombs, Anthony (Wyre For'st)
Baker, Nicholas (North Dorset)	Coombs, Simon (Swindon)
Baldry, Tony	Cope, Rt Hon Sir John
Banks, Matthew (Southport)	Cormack, Sir Patrick
Bates, Michael	Couchman, James
Batiste, Spencer	Cran, James
Beggs, Roy	Currie, Mrs Edwina (S D'by'ire)
Bellingham, Henry	Curry, David (Skipton & Ripon)
Bendall, Vivian	Davies, Quentin (Stamford)
Beresford, Sir Paul	Davis, David (Boothferry)
Biffen, Rt Hon John	Day, Stephen
Body, Sir Richard	Deva, Nirj Joseph
Bonsor, Sir Nicholas	Devlin, Tim
Booth, Hartley	Dicks, Terry
Boswell, Tim	Douglas-Hamilton, Lord James
Bottomley, Peter (Eltham)	Dover, Den
Bottomley, Rt Hon Virginia	Duncan, Alan
Bowis, John	Duncan Smith, Iain
Boyson, Rt Hon Sir Rhodes	Dunn, Bob
Brazier, Julian	Durant, Sir Anthony
Bright, Sir Graham	Dykes, Hugh
Brooke, Rt Hon Peter	Eggar, Rt Hon Tim
Brown, M (Brigg & Cl'thorpes)	Elletson, Harold
Browning, Mrs Angela	Emery, Rt Hon Sir Peter
Bruce, lan (South Dorset)	Evans, David (Welwyn Hatfield)
Budgen, Nicholas	Evans, Jonathan (Brecon)
Burns, Simon	Evans, Nigel (Ribble Valley)
Burt, Alistair	Evans, Roger (Monmouth)
Butcher, John	Evennett, David
Butler, Peter	Faber, David
Carlisle, John (Luton North)	Fabricant, Michael
Carlisle, Sir Kenneth (Lincoln)	Fenner, Dame Peggy
Carrington, Matthew	Field, Barry (Isle of Wight)

Fishburn, Dudley	Jopling, Rt Hon Michael
Forman, Nigel	Kellett-Bowman, Dame Elaine
Forsyth, Rt Hon Michael (Stirling)	Key, Robert
Forsythe, Clifford (S Antrim)	King, Rt Hon Tom
Forth, Eric	Kirkhope, Timothy
Fowler, Rt Hon Sir Norman	Knapman, Roger
Fox, Dr Liam (Woodspring)	Knight, Mrs Angela (Erewash)
Fox, Rt Hon Sir Marcus (Shipley)	Knight, Rt Hon Greg (Derby N)
Freeman, Rt Hon Roger	Knight, Dame Jill (Bir'm E'st'n)
French, Douglas	Knox, Sir David
Fry, Sir Peter	Kynoch, George (Kincardine)
Gale, Roger	Lait, Mrs Jacqui
Gallie, Phil	Lamont, Rt Hon Norman
Gardiner, Sir George	Lang, Rt Hon Ian
Gamier, Edward	Lawrence, Sir Ivan
Gill, Christopher	Legg, Barry
Gillan, Cheryl	Leigh, Edward
Goodlad, Rt Hon Alastair	Lennox-Boyd, Sir Mark
Goodson-Wickes, Dr Charles	Lester, Sir James (Broxtowe)
Gorman, Mrs Teresa	Lidington, David
Gorst, Sir John	Lilley, Rt Hon Peter
Grant, Sir A (SW Cambs)	Lloyd, Rt Hon Sir Peter (Fareham)
Greenway, Harry (Ealing N)	Lord, Michael
Greenway, John (Ryedale)	Lyell, Rt Hon Sir Nicholas
Griffiths, Peter (Portsmouth, N)	MacGregor, Rt Hon John
Grylls, Sir Michael	MacKay, Andrew
Gummer, Fit Hon John Selwyn	Maclean, Rt Hon David
Hague, Rt Hon William	McLoughlin, Patrick
Hamilton, Fit Hon Sir Archibald	McNair-Wilson, Sir Patrick
Hamilton, Neil (Tatton)	Madel, Sir David
Hanley, Rt Hon Jeremy	Maitland, Lady Olga
Hannam, Sir John	Malone, Gerald
Hargreaves, Andrew	Mans, Keith
Harris, David	Marland, Paul
Haselhurst, Sir Alan	Marlow, Tony
Hawkins, Nick	Marshall, Sir Michael (Arundel)
Hayes, Jerry	Martin, David (Portsmouth S)
Heald, Oliver	Mates, Michael
Heath, Rt Hon Sir Edward	Mawhinney, Rt Hon Dr Brian
Heathcoat-Amory, Rt Hon David	Mellor, Rt Hon David
Hendry, Charles	Merchant, Piers
Heseltine, Rt Hon Michael	Mills, Iain
Hicks, Robert	Mitchell, Andrew (Gedling)
Higgins, Rt Hon Sir Terence	Mitchell, Sir David (NW Hants)
Hill, James (Southampton Test)	Moate, Sir Roger
Horam, John	Monro, Rt Hon Sir Hector
Hordem, Rt Hon Sir Peter	Montgomery, Sir Fergus
Howard, Rt Hon Michael	Needham, Rt Hon Richard
Howell, Rt Hon David (G'dford)	Nelson, Anthony
Howell, Sir Ralph (N Norfolk)	Neubert, Sir Michael
Hughes, Robert G (Harrow W)	Newton, Rt Hon Tony
Hunt, Rt Hon David (Wirral W)	Nicholls, Patrick
Hunt, Sir John (Ravensbourne)	Nicholson, David (Taunton)
Hunter, Andrew	Norris, Steve
Hurd, Rt Hon Douglas	Oppenheim, Phillip
Jack, Michael	Ottaway, Richard
Jackson, Robert (Wantage)	Page, Richard
Jenkin, Bernard	Paice, James
Jessel, Toby	Patnick, Sir Irvine
Johnson Smith, Sir Geoffrey	Pattie, Rt Hon Sir Geoffrey
Jones, Gwilym (Cardiff N)	Pawsey, James
Jones, Robert B (W Hertfdshr)	Peacock, Mrs Elizabeth

Pickles, Eric	Sykes, John
Porter, David (Waveney)	Tapsell, Sir Peter
Portillo, Rt Hon Michael	Taylor, John M (Solihull)
Rathbone, Tim	Taylor, Sir Teddy (Southend, E)
Redwood, Rt Hon John	Temple-Morris, Peter
Renton, Rt Hon Tim	Thomason, Roy
Richards, Rod	Thompson, Patrick (Norwich N)
Riddick, Graham	Thornton, Sir Malcolm
Robathan, Andrew	Townend, John (Bridlington)
Roberts, Rt Hon Sir Wyn	Townsend, Cyril D (Bexl'yh'th)
Robertson, Raymond (Ab'd'n S)	Tracey, Richard
Robinson, Mark (Somerton)	Trend, Michael
Rowe, Andrew (Mid Kent)	Trotter, Neville
Rumbold, Rt Hon Dame Angela	Twinn, Dr Ian
Sackville, Tom	Vaughan, Sir Gerard
Sainsbury, Rt Hon Sir Timothy	Viggers, Peter
Scott, Rt Hon Sir Nicholas	Waldegrave, Rt Hon William
Shaw, David (Dover)	Walden, George
Shaw, Sir Giles (Pudsey)	Walker, Bill (N Tayside)
Shephard, Rt Hon Gillian	Waller, Gary
	Ward, John
Shepherd, Richard (Aldridge)
Skeet, Sir Trevor	Wardle, Charles (Bexhill)
Smith, Sir Dudley (Warwick)	Waterson, Nigel
	Watts, John
Smith, Tim (Beaconsfield)	Wells, Bowen
Soames, Nicholas	Whitney, Ray
Spencer, Sir Derek	Whittingdale, John
Spicer, Sir James (W Dorset)	Widdecombe, Ann
Spicer, Sir Michael (S Worcs)	Wilkinson, John
Spink, Dr Robert	Willetts, David
Sproat, Iain	Wilshire, David
Squire, Robin (Hornchurch)	Winterton, Nicholas
Stanley, Rt Hon Sir John	Wolfson, Mark
Steen, Anthony	Wood, Timothy
Stephen, Michael	Yeo, Tim
Stern, Michael	Young, Rt Hon Sir George
Stewart, Allan
Streeter, Gary	Tellers for the Noes:
Sumberg, David	Mr. Derek Conway and Mr. Gyles Brandreth.
Sweeney, Walter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House notes the publication of the Public Interest Report made by Westminster City Council's appointed auditor, Westminster City Council Audit of Accounts 1987–88 to 1994–1995; approves the action of the Government in insisting on the correct legal process; endorses the independence of the auditor; commends the Government's refusal to prejudge or condemn individuals before the conclusion of the due process of law; respects the view that parliamentary privilege is a powerful weapon for the protection of individuals and should not be used to provide cover for party political attacks; and notes that Westminster City Council provides high quality services at a value for money price.