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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.

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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

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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),

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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--


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:


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:


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 :


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:

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    "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:


a council officer--


Shirley Porter, who sat at the centre of that web of deceit wrote:


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:


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.


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