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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

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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:

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:

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    "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

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:

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:

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

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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.

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