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The position deteriorated when, on 20 April, the director of education wrote to the leader of the council, saying that the management committee of the centre had asked for £20,000 of the grant money to be vired from revenue to capital purposes and for the money to be released in full in one lump sum. The leader was asked to approve that under delegated powers and did so two days later, returning the signed approval for money.

On 26 April, the director of the voluntary sector team wrote to the director of education, requesting approval for his decision not to release the full set of reports into the expenditure of the 1991 grant to the Irish centre. Subsequent letters from the director of education to members of the public who had complained confirmed his decision that the reports would not be made available, although the chief executive had said that they should be in the public domain. On the same day, the director of education sent a fax to the director of the voluntary sector team, instructing him to release £70,000 immediately. For those people who have the misfortune to live in Brent and who die of old age waiting for a reply to any letter, such speed would be inconceivable.

Four days later, a leaflet was circulated in a marginal ward in Brent, where Councillor Sayers was seeking re-election, slandering the Labour candidate. It is clear that the leaflet had been drafted by Brendan Mulkere. It has all his style. It was, of course, completely illegal--it was not declared on anyone's election expenses--and had an impact on what is the highest concentration of Irish people in the Brent area. The matter was immediately raised with the police, who started an investigation.

Everyone denied that the leaflet had been produced. It is quite clear that it was a pay-off for loyal support. When Brent officers wrote to Mr. Mulkere asking what on earth was going on, he denied that any such leaflets had been issued by Brent Irish centre, but confirmed that he had recently written personally to Councillors Sayer, Wall and Moore, to thank them for their assistance. And well he might: they had supported every one of his moves to manage the finances of the centre, in their imaginative way. They voted to get rid of anybody who complained, and used their position on the council to get a favourable hearing from the leader of the council to the needs of Brendan Mulkere.

On 18 May, the Charity Commissioners wrote to the chief executive of Brent expressing concern that they had had a telephone call from the director of the voluntary sector team, Mr. Lye, in which he had said that he could not see why they needed to continue their investigation into the matters. Three days later, the director of the voluntary sector team--no doubt after an interesting conversation with Brent's chief executive--sent a letter to the Charity Commissioners saying that the telephone call was meant to be helpful and explaining that, in his view, none of the allegations had any substance. If there is no substance to the allegations, a vast amount of police, Customs and Excise and Charities Commission time is being spent investigating them.

I do not have the slightest doubt that Mr. Mulkere is a crook. In the 25 years that I have been an elected representative on various local authorities and subsequently in Parliament, I have never been more certain of any sentence that I have uttered. I have seen copies of some of the witness statements by people

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involved and I have not the slightest doubt that Mr. Mulkere will be arrested and, if there is any justice, will go to prison. What is more in doubt is where the issue moves away from Customs and Excise. I especially want to make the point that Customs and Excise should pass the information that it holds to the Government's auditors-- perhaps the district auditor who has been doing such sterling work in Westminster--to investigate. Mr. Mulkere could not have got away with his criminal activities without the backing of the three councillors.

I want to make it absolutely clear that those three councillors are not representative of the Tory group, any more than they are representative of Brent as a whole. When I raised a matter relating to another councillor, I was delighted when the Tory group took action to remove him from his post. The vast majority of Brent councillors, Labour and Conservative, are completely honest, but the three to whom I referred clearly are not. Perhaps Mr. Moore was led by the two older and more senior members of the committee. Councillor Blackman, recognising the political importance of the support of the Irish centre in a key marginal ward in a tightly fought election, is perhaps more to blame. The auditors should investigate the matter in exactly the same way that other abuses of power have been investigated. I suspect that the money stolen from the taxpayer through VAT fiddles and the money that I suspect has been stolen from Brent council tax payers has been milling around in a slush fund and may have been used to fund the illegal election leaflet which appeared.

I do not have one moment's doubt that Councillor Wall and Councillor Sayers knew exactly what was going on and covered it up at every stage. Councillor Blackman, as leader of the council, intervened to change the grant and to do everything possible to assist Mr. Mulkere with a speed and enthusiasm for which I can find no parallel in my experience of local government. It was an unusually close personal relationship and I cannot seriously believe that someone as clever as Mr. Blackman was not aware of what was happening. I believe that he consciously knew that public money was being used to bribe a crook--Mr. Mulkere--to try and influence an election. As a quid pro quo, Brent council would not become involved in exposing the fraud in which Mr. Mulkere was involved.

I repeat that I am not making a general slur on the Tory party. Three or four individuals deserve to go to prison for what they have done, but they no more represent the generality of Conservative councillors than they do the generality of public officials. If we do not deal with them, it will reinforce what half the public already think--that any politician is in it for what he gets out of it. 2.52 pm

The Paymaster General (Mr. David Heathcoat- Amory): I reply to the debate as the Minister responsible for Customs and Excise, but not as the Minister responsible, even indirectly, for many of the events and allegations described by the hon. Member for Brent, East (Mr. Livingstone). I am sure that he appreciates that point.

The hon. Gentleman referred extensively to events at or concerned with the Brent Irish centre, which is a club run by a committee through a limited company called the Brent Irish Cultural and Community Association Ltd. I shall refer to it in future by the acronym BICCA. The company is registered for VAT at the South Bank VAT

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office in the London South collection office of Customs and Excise. That company is at the centre of inquiries by Customs and Excise. The case is complicated, and as inquiries are in hand, it is not possible for me to comment on allegations. However, I shall give some background information.

Over a period, Customs and Excise officers at the South Bank local VAT office became aware of potential VAT irregularities concerning BICCA. Officers performed normal validation checks on purchase invoices recorded in BICCA's records by cross-referring to the suppliers in question. Mismatches were uncovered, and further more specific inquiries were initiated.

Customs required the original invoices to substantiate any successful action, and accordingly made an unannounced visit to BICCA on 19 December 1994. The officers were informed that the majority of the books and records had already been taken to Brent council's internal investigation team. It is thought that the council investigators are looking into the possible misuse of council funds. Customs officers contacted the council investigation team and arranged to collect books and records from it. On 19 December 1994, contractors who had supplied materials and services to BICCA during building works

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in 1991-92 were also visited, and various sales records relating to that period were uplifted. Customs was able to confirm that some invoices listed in BICCA's records did not appear in the corresponding supplier's records.

I should make it clear that the somewhat separate issue of dealings between BICCA and Brent council or between BICCA and the GLC that was, is not a matter for Customs and Excise, unless VAT irregularities are involved. Some of the matters surrounding the case and described by the hon. Gentleman appear to be for the district auditor or the police. The hon. Gentleman said that a police investigation is under way. Customs and Excise is concerned not about how building work is funded or how trading is carried out, but about whether VAT is properly accounted for.

Certain individuals have been interviewed, and statements have been taken. There, I am afraid, the matter must rest. Customs inquiries are at an early and delicate stage, and disclosure of its future actions might prejudice the companies and individuals involved. I hope that the hon. Gentleman will understand that further comment by me at this stage might damage innocent people, or, if fraud has taken place, might imperil the workings of justice.

Question put and agreed to.

Adjourned accordingly at three minutes to Three o'clock.

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