HL Deb 09 May 1996 vol 572 cc211-5

3.36 p.m.

Lord Lucas

My Lords, with the leave of the House, I shall repeat in the form of a Statement the Answer to a Private Notice Question that has been asked in another place about the auditor's report on Westminster City Council. The reply is as follows:

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

"This case is still subject to the due process of law. In these circumstances, it is appropriate for me to inform the House about the auditor's decisions, but not to comment on them.

"The auditor's decisions are that 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 this amount. He has decided not to uphold the objections in respect of Councillor Judith Warner, Mr. Barry Legg MP and Mr. Robert Lewis.

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

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

"If the decisions in respect of Westminster are upheld by the courts I shall not hesitate to condemn those responsible, as in any similar case. But neither the Government nor this House nor I should pre-judge the findings of the courts".

My Lords, that concludes the Statement.

3.38 p.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the Minister for repeating in the form of a Statement the response made to a Private Notice Question in another place. I agree with the Minister that Members on all sides of the House are anxious to preserve the highest standards of propriety in local government. Nevertheless, the district auditor's report confirms that Conservative councillors on Westminster City Council were guilty of unlawfully using £31.6 million of public funds for the benefit of the Conservative Party. They conspired to deny housing to homeless families and instead to sell council flats which fell empty to those who they assumed would he Conservative voters.

The scale of this is enormous. The loss to public funds is difficult to exaggerate: £31.6 million would buy more than 600 new homes or 10 new schools; it would pay the salaries of 1,200 extra teachers. No fewer than 272 councils in England have less to spend in one year on services for all the people in their area than the Westminster Conservatives squandered on this scheme.

This is probably the biggest single financial scandal in the history of local government. But it is a scandal not just about money. It shows how a Conservative council, with the support of massive subsidy from a Conservative Government, conspired to deny decent homes to homeless families; to treat homeless families harshly; and to drive them out of Westminster to be rehoused elsewhere. The report is not just an indictment of the Conservatives in Westminster; it is an indictment of the Tories in government. They will stoop to anything to win elections.

Lord Tope

My Lords, first, I must apologise to the Minister because I missed the Statement. It came rather sooner than I expected but I heard it being made in the other place. I find the Statement predictable but no less disappointing for that. I feel that we are in great danger of allowing the quite proper process to obscure the real issues we should be examining. After many years of investigation, the district auditor has found proven a number of practices which, whether, in the end, found lawful or unlawful, nevertheless fall far below the standards we expect from all parties in local government. That is beyond question, whatever legal technicalities may arise.

The noble Lord, Lord Williams, describes it as probably the biggest scandal in local government. My noble friend Lady Seear whispered to me, "What about Lambeth?" Let us not argue about the scale of how had this is. We are talking about a magnitude of proven and deliberate wrongdoing in local government the like of which we have not seen before. We are not talking about obscure councillors but about leading councillors deliberately using their council for electoral purposes and for gerrymandering to the disadvantage of those least able to help themselves.

From time to time things happen in councils controlled by any of our parties of which we are not proud, although never on this scale. One of the true tests is how the party deals with such issues. Whatever may be the end of the legal process, I hope that the Minister will accept that many in this House and in local government will look to the Conservative Party to see how it deals with an issue where leading members of that party have fallen far short of the standards expected of them.

Finally, I wonder whether the Minister is aware that the district auditor in this case, John Magill, has recently been appointed district auditor to the council which I lead. In the light of that, I wish to conclude by asking the Minister for an assurance that the Government accept that Mr. Magill, my council's district auditor, is without question independent and a man of integrity and that we may accept his judgments because today the Government appear to be casting some doubt upon them.

Lord Lucas

My Lords, I am frankly astonished and greatly disappointed that the noble Lords, Lord Williams and Lord Tope, seem to presume the guilt of those people who are charged. That is frankly disgraceful. People in this country are innocent until proved guilty. They are yet to have their day in court. When that is concluded, we may comment upon their guilt or otherwise. To do so in the terms which noble Lords have used is disgraceful and a discredit to themselves and to this House.

As regards the question which the noble Lord, Lord Tope, asked, I shall certainly not question the integrity of the auditor or the accuracy of his report today. I shall not seek to interfere in any way with the proper process of law or to abuse parliamentary privilege. I am afraid that may rather restrict my answers to questions by Back Benchers but I am sure that the House will understand.

3.44 p.m.

Lord Bruce of Donington

My Lords, as one who many years ago had the opportunity to make some criticisms of the administration of Westminster City Council, I should like to make a few comments on the observations which have fallen from the lips of the noble Lord. I believe, and my colleagues believe, that innocence should be presumed in the absence of satisfactory proof which may culminate in legal action. But the intimation of an intention to appeal does not make the matter sub judice. When the actual appeal is entered and process has begun, then and only then is the protection afforded to the accused.

I express astonishment—this time genuine and not synthetic—at the observations made by the noble Lord. When the affairs of Lambeth and other unfortunate Labour councils were subjected to exactly the same criticism, and public criticism, by auditors, I did not notice any reticence on the part of members of the Conservative Party either in this House or in another place. One thing of which I am sure—and, on reflection, I am sure the noble Lord will have some sympathy with this—is that no Member of this House in his heart of hearts wants anything other than justice to be done. I am hopeful that on reflection, when justice is done and seen to be done, retribution will be served on those who have perpetrated those crimes against society equal to the indignation felt by those on this side of the House.

Lord Lucas

My Lords, I am saddened that the noble Lord, Lord Bruce, should have made those last remarks because up to that point I thought that he was being quite sensible and reasonable. A grave accusation has been made but as yet there is no proof in a court of law that there was a crime, let alone that anyone in particular committed it. That is the right principle under which we all live in this country; namely, that a man is innocent until proven guilty. In this case, it is not even proven that there was a crime. It is clear that we should all try to hold to that principle.

In relation to the other remarks made by the noble Lord, I understand that the matter is not yet sub judice but that does not alter my opinion about how we should conduct ourselves. As regards other councils and misdemeanours, I hope that we have always been restrained in our opinions and remarks until matters are decided in a court of law.

Lord Monkswell

My Lords, I thank the Minister for repeating the Statement. It is obviously a difficult situation for him to be in and he has my sympathy. I must declare an interest as a resident of Westminster. Therefore, I shall not ask the question about the district auditor's surcharge because, as an interested party, it would obviously be improper for me to comment. But I do have a technical question for the Minister regarding the fact that the findings of the district auditor suggest that poor people who became homeless within Westminster and who had a right to be rehoused and carry on living there were denied that right. Does the Minister know whether those people who were refused the right to live in Westminster have any redress for their individual grievances?

Lord Lucas

My Lords, the noble Lord trespasses a little on the principle that we should presume innocence. However, it is quite clear that that accusation is made. No, I do not know what individual remedy these people would have if indeed the district auditor's accusations were correct, but I shall write to the noble Lord on the matter. I should say that the noble Lord is extremely lucky to live in Westminster; indeed, it is one of the best run councils in the country. He has my congratulations.

Lord Richard

My Lords, I am sorry to trespass on Back-Bench time, but very little time has so far been taken on the matter. Perhaps I may try to lay one particular canard to rest. As I understand it, the procedure whereby district auditors investigate the affairs of local authorities is laid down in the provisions of an Act passed in 1982 when, if my memory serves me correctly, a Conservative Government were in power. The purposes of such investigations are to ascertain whether or not public money has been spent properly. The district auditor will, prima facie, investigate the matter—and may, as in this case, take a long time in doing so—and will eventually bring forward his conclusions. Under the 1982 Act that is, in effect, an alternative to judicial investigation. That is the point that the Minister has not grasped.

The legislation also provides for some form of judicial appeal from the decision of the district auditor—I emphasise the word "appeal"—but not a trial at first instance. Therefore, what we have before us and what we are considering today is not just an allegation which is being made against these people; what we have is a conclusion from the district auditor reached in accordance with the provisions of the 1982 Act passed by a Conservative Administration. To hear the noble Lord opposite tell us that that is similar to an indictment in a criminal trial is, frankly, nonsense.

Lord Lucas

My Lords, the noble Lord's memory and imagination serve him well in all but one respect. We have always, I hope, followed the principle that when the district auditor comes out with his conclusions that is not the proof of guilt: the proof of guilt, if it is taken to appeal, is the decision by the court. So far as I know, we have not trespassed on that principle in the many other cases that have occurred under those provisions.

Lord Jenkin of Roding

My Lords, is my noble friend the Minister aware that, from the very moment that the investigation started, the provisions of the 1982 Act mentioned by the noble Lord, Lord Richard, were flagrantly abused by the district auditor? I shall justify that statement. Is my noble friend also aware that the 1982 Act required that a report of a district auditor should not be published without the consent of those named in it? Is my noble friend further aware that the first report was published with the maximum of publicity, and a very highly publicised press conference by the district auditor, with no such consent and that when he was challenged as to why he had failed to observe the law, the district auditor said that it was not his report and that it was merely a draft report that he was minded to make?

Is there not some suggestion that the district auditor somehow got himself hooked on this very early on when he made such public statements? Surely that must cast some doubt as to whether his report is indeed as valid as the party opposite seems to think. The law was not obeyed in the first instance.

Lord Lucas

My Lords, neither I nor the Government will question the integrity of the district auditor, his actions or the accuracy of his report. If we wish to review this particular incident, we shall do so when the process has reached its end; and not before.

Lord Williams of Elvel

My Lords, will the Minister invite his noble friend Lord Jenkin of Roding to repeat the points that he has made outside the Chamber—that is, outside parliamentary privilege—so that the district auditor himself can take account of them?

Lord Lucas

My Lords, I think that the noble Lord, Lord Williams, should be careful of repeating what he said outside the House.