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Mr. John Bercow (Buckingham): To whom exactly will the ethical standards officers be accountable?

Mr. Loughton: That is an interesting question. Although, on the face of it, they will be accountable to the standards board, the exact terms of their operation are still to be defined. In Committee, we asked many times for a definition of their roles and powers and whether those powers could be capped. We were not given answers.

I served on the Standing Committee that dealt with the Financial Services and Markets Bill, which provides for similar regulatory officers with immense powers. In this Bill, we are setting up another phalanx of investigation officers, whose accountability is questionable. Certainly, the link between their accountability and the local electors has not been established.

Mr. Dafydd Wigley (Caernarfon): The hon. Gentleman referred to the immense powers conferred in the Bill. Does he agree that the essential prerequisite is, therefore, an adequate appeals system? That is now a prerequisite under human rights legislation. To what extent does he feel that that aspect has been covered by the Bill?

Mr. Loughton: The right hon. Gentleman makes a good point. If he had been a member of the Standing

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Committee, he would have heard me mention the European convention, in particular article 6, and whether it applies to these activities. We are talking about a body that has the power to levy uncapped penalties--fines or suspension from a council role--and there are potential implications for conflict with the European convention on human rights. In Committee, I asked the Minister to clarify that matter, but she was unable to do so and promised to come back to me. I fear that she has not yet done so. The matter is as relevant today as it was then. The functioning of the regulatory procedure of ethical standards officers and the standards board--the powers of tribunals--could conflict with the ECHR, in which case the Bill will be undermined.

I am grateful to the right hon. Member for Caernarfon (Mr. Wigley) and I reiterate his question to me to the Minister. What is the role of these officers and of the other powers in the conduct of investigations as regards article 6 of the convention?

To get back to the point, a 10-year lapse is necessary because officers may have been with a council for many years before that. The world of local government is relatively small. Surely 10 years is the minimum safeguard. That is the basis of amendments Nos. 42 and 43.

Amendment No. 44 deals with reports from ethical standards officers. As it stands, they can inform virtually everyone about the outcome of an investigation and give them a copy of the report, other than the person against whom the investigation was launched. It would seem to be a grave injustice if the target of the report is the only person not to be able to see it. In Committee, the Minister for Local Government and the Regions described a similar Opposition amendment as a worthy ambition that would produce some difficulties. Again, she promised to come back to us on Report. I notice, however, that the Government have tabled no amendments on that subject.

The right hon. Lady offered the excuse that the report might contain sensitive information about the perpetrators of a complaint and that, if the matter was not referred further--if the person was cleared of any misdoing--it might damage the person who made the allegations. Surely, the person who was sneaked against--to put it mildly--is due some human rights protection from potentially vexatious complainants.

There is no detail about any compensation that might be due to someone who was the victim of such vexatious complaining. A person who was the subject of inquiry might even have been penalised along the way for not complying with the handover of documents and so on, even if it was found that there was no case to answer. It appears that there is a presumption of guilt until proven innocent. That too seems to breach the European convention.

The amendment provides that the ethical standards officer must inform the subject of the investigation of the outcome and that that person is entitled to see a copy of the report. In Committee, the right hon. Lady said that she would continue to consider the matter and that she would try to ensure that the framework was right. I should like to see some evidence of that, because it is not apparent in any of the 115 Government amendments before us.

Amendment No. 45 deals with the decisions of case tribunals and with appeals--a matter to which the right hon. Member for Caernarfon referred. When a councillor

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has been accused by the Standards Board, has taken the case to appeal--a facility added by the Government--and the case is pending, we suggest that the councillor should not be suspended, given that the period of suspension could be lengthy.

In Committee, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Stretford and Urmston (Ms Hughes), said that the Government would introduce the right of appeal and that she was willing to reconsider the matter, given that a by-election could be triggered when councillors were disqualified from standing while an appeal was pending. While the appeal had still not been heard, a councillor could lose his or her place on the council; a by-election could be held and, as he or she would not be entitled to stand, someone else could take the seat. If the Court of Appeal found that the person was not guilty--that the charge did not stand up--there would be no compensation. That accused councillor would have lost his or her seat. Thus, it is only right that, while an appeal is pending, a councillor should not be disqualified. The amendment would provide that safeguard.

Mr. Bercow: Does my hon. Friend agree that, in arguing that case--with which his right hon. and hon. Friends will assuredly agree--he can invoke the precedent of experience in the House? The hon. Member for Newark (Mrs. Jones) was rightly able to prove at appeal her innocence, and thereby remain a Member of the House. That prevented a situation in which, otherwise, a by-election would have been triggered. She was properly able to exercise her rights. Councillors, too, should be afforded such rights.

Mr. Loughton: My hon. Friend offers an interesting and helpful example. I should be interested to hear the Under-Secretary's response. The ethical standards officers and the standards board seem to have been afforded heavy investigatory powers. Those powers suggest too great a presumption of guilt.

We were promised further information from the Minister and from the Under-Secretary, but it has not been forthcoming in the Government amendments tabled on Report. Will the Under-Secretary address those matters in the few minutes left for debate on this group?

10.15 pm

Ms Beverley Hughes: We have had a rehearsal of many of the issues that were raised in Committee. I shall deal with them as comprehensively as I can in the time that I have left for this section.

On new clause 3, it was made clear to the hon. Member for East Worthing and Shoreham (Mr. Loughton) in Committee that, although we were in sympathy with the spirit of what his new clause sought to achieve--that councils should be able to pursue losses arising to the authority from criminal misconduct by councillors--we felt that sufficient provision was already available to courts considering criminal cases that might arise from misconduct to issue a compensation order or provide for financial restitution. That still stands; we have not changed our view.

I can offer the hon. Gentleman reassurance on the particular point that he made. Separate action by a local authority will not be necessary to invoke any of the

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powers in cases involving a criminal conviction. The court hearing the criminal case can order that restitution be made to the local authority. So the Bill does not impose on the local authority the additional burden of seeking compensation or restitution. The courts have those powers available to them. There is therefore no need for any special provision for such cases other than that which already exists and is available to the criminal courts.

The hon. Member for East Worthing and Shoreham tabled a raft of amendments on the size and composition of local authority standards committees. We believe in striking a balance between setting appropriate parameters and allowing councils of different sizes and with different functions some flexibility in the composition of their standards committees. We think that the balance of representation between independent members and members of the council is about right. It is after all right that councils should have some discretion.

The hon. Gentleman reminded me that I had used the term "ownership". I make no apology for that. It is important that councils should own the local body that is entrusted with establishing its ethical framework and code of conduct. The hon. Gentleman is confused about the responsibility for the code of conduct, as opposed to the investigation of specific allegations. Local authority standard committees will not be responsible for investigations, so the hon. Gentleman's point that we are introducing self-regulation is not one that stands up to scrutiny. Local authorities will not be regulating themselves. The standards committees will have a different function. It is important that members of the council should own that function and be part of the apparatus that sets in place the code of conduct and ensures that the council's procedures for enforcing it are robust, but investigation of issues will be a matter for the ethical standards officers.

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