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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.

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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

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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


There was a discussion on 23 September 1986, at the chairmen's group, of a "key policy" of

It was said that

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

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(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.

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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:

Interestingly, on the copy of that paper obtained by the district auditor, the City solicitor has handwritten:

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

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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.

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