Clause 255 - Disqualification from office: local government

Enterprise Bill – in a Public Bill Committee am 6:15 pm ar 14 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Mr Harry Barnes Mr Harry Barnes Llafur, North East Derbyshire

The same principles apply to clause 255, which concerns councils. There are, however, some extra considerations that need to be taken into account. Councillors, unlike Members of Parliament, are blocked by decisions made in Parliament, which include statutes, regulations following statutes and ministerial circulars. When, for instance, they deal with planning matters, they have to be very careful about how they handle them and ensure that they are not publicly taking sides because they operate in a semi-judicial capacity. They are subject to investigation by the district auditor, and can be surcharged for supporting illegitimate expenditure by their authority. A surcharge can lead to their debarment from a council.

Earlier, I referred to Clay Cross, where Biwater was situated. As a consequence of the Local Government Act 1972, in the early 1970s, two teams of councillors in Clay Cross were removed from office because of the surcharge provisions. One was removed for refusing to raise rents according to provisions contained in the 1972 Act. It was claimed that what the team was doing

was not illegal because a housing commission could have been sent in. In the end, however, it lost out. A number of its members went into bankruptcy in connection with the surcharge. They were excluded from being able to stand for office during the period of the bankruptcy, and were excluded for an extra five years in relation to the surcharge provision.

Fresh elections were held in Clay Cross, where 11 seats were elected for the council. Labour, which had had 11 out of 11 in the first team, now took 10 out of the 11 seats. They were in office for only a month or so and then became a parish council under local government reorganisation. The local government legislation had a knock-on effect and it was claimed that the first team had been caught by other measures.

In order to get them surcharged, the district auditor dealt with them jointly and severally. The debts were just over £2,000, the amount by which one could be surcharged under the debarment provision. Should there be joint provisions? Some members had to get out of their bankruptcies and serve another five-year period before they could seek to return to local government office. One who did that is now the highly respected leader of North East Derbyshire district council, but he went through a period when his actions made him look as though he were beyond the pale.

Are councillors sufficiently safeguarded by the bankruptcy restrictions order procedure? The clause improves their position considerably, but if they are caught up in measures that seem to be outside their control and they become benign bankrupts, will they be catered for? The Clay Cross councillors were clearly political advocates on behalf of their community. They had strong support within the community and there were massive turnouts at the second election, although the community was divided. They did not take all the seats, only 10 out of the 11.

The quotation that I gave from Sir Robert Peel related to councils. According to the report of that debate in 1835:

''Sir Robert Peel thought that if we reposed so much confidence in the electing body as to fix no qualification for a councillor, on the same principle we ought to allow of the election of a person who had been a bankrupt if the electors thought that the individual had acted with integrity.''

One could say that however they made that judgment, whether it was a matter of integrity or not, that person was the one they wanted to represent them.

In view of the rather controlled nature under which councillors already function, and even though there is an extension of the bankruptcy restrictions order that limits the people involved, I wonder whether they are safeguarded enough. What would have been the decision in the Clay Cross case? They may have been quite willing to face the debarment and the five years from the surcharge provision. Although some survived, other local political careers were virtually ruined by that development, despite the support in the community.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

Those in local government often feel that they have even greater restrictions placed upon them than Members of this House. Historically that has

been the case, although perhaps less so with some of the regulations imposed on Members of the House of Commons over the past six or seven years since the Neill committee and various other restrictions.

We have discussed at some length the relation to the interim order. I appreciate that in the discussions on schedule 20 the Under-Secretary confirmed that such orders would be made only when there is a prima facie case for a fully fledged bankruptcy restrictions order. But what if, after the interim order is made, the BRO does not come to pass? Would a councillor subject to an interim order, perhaps for only a few weeks, then have to resign and a by-election be called? Is there some opportunity by which the interim order can be done away with?

Under clause 255, an interim order would be enough for the disqualification to come into effect. Would that disqualification be declared void? What would take effect? In local government, the wheels of bureaucracy might move more quickly than in national Government. There was a high-profile case, in different circumstances, in the Newham constituency during the previous Parliament, where a disqualification order was subsequently declared void by the High Court. It is likely that the process will be accelerated with local government.

I should be interested to know whether consideration has been given to when an interim order is not upheld for some reason; whether it is intended that councillors should be disqualified and a by-election held; or whether some time mechanism will be put into place to ensure that the process is not so accelerated that an interim order alone would result in disqualification.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

Similar issues were raised on earlier related clauses. This clause enacts a parallel provision for councillors to that we have been discussing for Members of Parliament and Justices of the Peace. It does not necessarily follow that bankruptcy makes individuals unfit to serve as local councillors. There might be circumstances under which they were able to continue. There is the same distinction with those subject to bankruptcy restrictions orders.

The interim order requires a prima facie case before it is made. I confirm that a councillor subject to an interim BRO would have to resign. That may not be the answer the hon. Gentleman seeks, but there has to be a good prima facie case in the first place for an interim BRO to be issued. The kind of eventuality he contemplates is therefore unlikely to occur.

Question put and agreed to.

Clause 255 ordered to stand part of the Bill.