Parliament and Politics: MPs trade fraud allegations in councils clash

LABOUR and the Conservatives clashed furiously over council fraud yesterday as Michael Howard, Secretary of State for the Environment, sought a meeting between Lambeth, the district auditor and his department over apparent repeated breaches of competitive tendering rules.

His action followed last week's report by Lambeth's chief executive, Herman Ouseley, stating that at least pounds 10m had been lost through a decade of corruption and mismanagement.

An Audit Commission report on the London council, due next month, is expected to show gross bad management rather than provide clear evidence of corruption.

Earlier, Jack Straw, Labour's local government spokesman, accused Tony Newton, Leader of the Commons, of getting 'into the gutter' by implying on Tuesday that Lambeth illustrated problems in other Labour councils. He said it was 'a wholly unsubstantiated smear' as he listed allegations of fraud, corruption and malpractice in Tory-controlled Bromley, Westminster, Brent, Enfield, Medway and West Wiltshire. Corruption knew no party boundaries, he said. It should be a bipartisan issue.

Any chance of that yesterday exploded in Tory backbenchers' taunts over Labour's record in Lambeth, Liverpool and Hackney, rebutted by Mr Straw's list of Tory irregularities and central government mismanagement.

Betty Boothroyd, the Speaker, had to threaten to suspend the House to restore order after Mr Straw challenged Mr Howard to condemn 'very serious corruption' in Tory authorities and 'freeloaders, former members of your Cabinet, who have had their hands in the till and their snouts in the trough of privatised industries'.

As Conservatives yelled 'withdraw', Mr Straw retorted: 'They don't mind giving it; they don't like taking it.' He added: 'Ten months after Westminster was found guilty of acting unlawfully in selling three cemeteries for 15p, its then leader Lady Shirley Porter ended up with a damehood.'

Mr Howard accused Mr Straw of 'a disgraceful intervention' and 'quite appalling' remarks, adding that it was a Lambeth spokesman who had said the council was dealing with 'potentially unlawful practices on a scale unprecedented in local government'. Mr Straw was trying to 'muddy the waters' in a 'pathetic way', he said.

Earlier, outside the chamber, Mr Straw argued that the Audit Commission and National Audit Office should examine whether councils' internal audit needed to be strengthened, possibly by having it done by the private sector.

Most corruption, he argued, took place around the growing market in contracting out and privatisation. Audit controls there should be examined.

In the Commons, Keith Hill, a Labour Lambeth MP, said there was 'no tolerance' from his side for fraud wherever it occurred, and sought assurances of 'full protection' for honest council employees after reports of intimidation. Mr Howard said he was sure the police would provide protection 'as necessary'.