The state and local government
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| 398 ‘Thus’, as Stoker et al, approvingly conclude, ‘what was discretionary under the 2000 Act, giving leadership power that some councils exercised, will be made mandatory’ by the 2007 Act, under which all but the smallest local authorities have to adopt one of two models of governance either directly elected mayors or leader and cabinet executive.399 Moreover, as Chris Leslie (Director of the New Local Government Network) and Guy Lodge (Head of the Democracy and Power team at the Institute for Public Policy Research) subsequently noted, following the 2007 Act
…council leaders are to be given virtually the same powers as mayors, for instance over appointment, and granted four-year terms. They…will emerge from within the council itself. In other words the government has created indirectly elected mayors.400 Moreover, local authority Leaders' Boards, as provided for in Section 68 of the Local Democracy, Economic Development and Construction Act with ‘a legal duty to consult and engage stakeholders’ – and we all know what that usually means – will reinforce the massive ‘democratic deficit’ at regional level.401 The transformation of English local government into unitary structures, which is discussed in the final section, was also given further impetus by the Local Government Act 2007. The further growth of the ‘quango’ state Under New Labour, the power of the quango state has dramatically increased, diminishing even further the power of the ballot. In 2005/06, the Economic Research Council (ERC) investigated the accounts of 883 listed agencies, advisory bodies, monitoring boards and other public bodies that are all termed "quangos", which spent £167.5 billion – up from £24.1 billion in 1997/98. The study also showed massive pay rises over the previous decade for those running agencies, including the Coal Authority, the British Waterways Board and British Nuclear Fuels. For example, Ken Boston, the head of the Qualification and Curriculum Authority, received £273,000 in annual pay and benefits in kind. In 1998, his predecessor received £43,563. Trevor Beaumont, head of The Tote, was paid £369,000. In 1998, an official received £115,000 to do the same job. Two years before New Labour came to power, Gordon Brown spoke publicly of the need for a "bonfire of the quangos"; and their 1997 General Election manifesto sharply criticised the Tories for allowing their number and cost to soar. But the ERC study revealed that almost 200 new Government agencies had been created in the previous two years alone. They included the Herbal Medicines Advisory Committee, the Thames Gateway Development Corporation and the School Food Trust. The press release launching the ERC’s quango database stated that:
There are six metropolitan areas: West Midlands, Greater Manchester, Merseyside, Tyne and Wear, West Yorkshire and South Yorkshire. Each is divided into metropolitan districts with most of the services being provided by elected metropolitan district councils. These are also unitary authorities, responsible for all services within their boundaries. They are often called borough or city councils. In each metropolitan area there are two joint boards that oversee police, fire and civil defence arrangements. There may also be joint authorities for waste disposal and for transport. The responsibilities of metropolitan district councils are the same as those of unitary authorities. There are very few parish councils in metropolitan areas. There are 55 unitary authorities in non-metropolitan areas of England. In some cases, they have emerged from continuing shire counties – for example, Peterborough used to be part of Cambridgeshire. Others were formed following the abolition of the counties of Avon, Berkshire, Cleveland and Humberside between 1996 and 1998. Each unitary authority sends representatives to a joint board that oversees police, fire and civil defence arrangements across the whole area. These boards are authorities in their own right and set precepts or raise council taxes, but they are not directly elected. There are also joint arrangements in most areas for waste disposal. Some unitary authorities have parish councils in their area.
[a] includes City of London and Greater London Authority; [b] includes Isles of Scilly Source: K. Edkins, 2008 and 2009 Table 6.2: Responsibilities of councils by type
Source: LocalGov.co.uk, 2009 Greater London In Greater London, there are 32 London boroughs and the City of London: which, as Table 6.2 shows, are responsible for all services except passenger transport. The City of London is a tax haven for the super-rich – leaving neighbouring boroughs cash-starved. The basic structure of the City has existed unchanged since AD 886: when it was preserved by William the Conqueror to maintain a degree of autonomy for European merchants. ‘But the City is more than just a tax haven’ as Patrick Ward points out, and to ‘really make sure that there is nothing in the way of wealth accumulation, several elements of regular local authorities must be kept at a distance. These elements include democracy’.407 In a parliamentary debate in November 2002 the then Tory MP (now ex-New Labour minister) Shaun Woodward said: The City of London is indeed unique – unique in its national role, in its size, its population, its local finance, its responsibilities, its work in the arts and its charitable work. The City is unique too, in having an electoral system that was unaffected when, in 1969, the non-residential vote was abolished for local government elections.408 Labour chancellor James Callaghan, as Ward also reminds us, argued through this exception to the rule. While the 7,800 residents of the square mile have the vote, business based in the City can appoint a further 32,000 voters. In November 2002 a private act of parliament, submitted by the City of London itself and gushingly (and arguably unconstitutionally) endorsed by Tony Blair, doubled the business vote from 16,000. The City of London Corporation is governed by three institutions: the Court of Aldermen, the Court of Common Council and the Lord Mayor. Residents and business are allowed to vote for the 25 aldermen and the 130 Common Councillors, but only "freemen" are able to stand for election. You can become a freeman either by "servitude" (apprenticeship to another freeman), by appointment by the part-ceremonial, part-business associations of the Livery Companies, by heredity, or by payment of a £30 "freedom fine" (if the sitting Common Council accepts you). If you want to be an alderman you must also have the blessing of the Lord Chancellor. The Lord Mayor must have previously been a sheriff, and sheriffs are appointed by the Livery Companies. The non-domicile law was introduced 209 years ago as an incentive to those who had benefited from the spoils of imperial conquest. The recent government proposal, which originated in Tory headquarters before the autumn election-that-never-was, was for non-domicile capitalists in Britain to pay either a one off sum of £30,000 or have their overseas income declared and taxed. Yet when the hapless Alistair Darling attended a dinner held by the "Worshipful Company of International Bankers" (a Livery Company of the City of London) at which he eulogised in his speech about how great and good the super-rich are, the reaction was an attack on government tax policies and regulation from the Lord Mayor of London and for the 450 diners to bang their tables and jeer. There followed a series of U-turns as the chancellor "clarified" (that is, watered down) his position.409 The Greater London Authority Act 1999 created The Greater London Authority and mayoral system. The Mayor and the London Assembly constitute a unique form of strategic citywide government for London. The Mayor’s powers are as follows:
The Greater London Authority Act 2007 gave the Mayor new lead roles on housing and adult skills; a strengthened role over planning in the capital; and additional strategic powers in a wide range of policy areas including waste, culture and sport, health, climate change and appointments to the boards of the functional bodies (that is discretion to appoint political representatives to the Transport for London Board, appoint the Chair of the Metropolitan Police Authority or assume the role of Chair and appoint two members of the London Fire and Emergency Planning Authority Board, and to direct and issue guidance to the Authority). Hence Greater London’s directly-elected Mayor has far fewer powers than the 10 directly-elected local authority mayors and Stoke-on-Trent’s indirectly elected mayor. Moreover, both mayoral systems are designed to reduce local democracy – which is why Ken Livingstone originally opposed directly-elected mayors – though his ability to reverse this showed the potential to use any remaining element of democracy against capital if there is organisation and conscious class direction. There are 27 counties in England where there are two and often three levels of local government. Each county has an elected county council providing strategic and more costly services like social services and education. Each county is divided into several districts, each with its own elected district council providing more local services such as the collection of council taxes and non-domestic rates, housing benefits, health and housing. Some of these councils are called borough or city councils. Many district councils are further divided into elected parish or town councils. A town council is a parish council with a mayor. Most parish or town councils are found in rural areas. Parishes deal with services and problems such as allotments, for which they have a statutory responsibility, footpaths, bus shelters and litter.
Table 6.1 shows that 44 councils (seven county councils and 37 district councils) were replaced by these nine new unitary councils with a combined population of 3.2 million on 1 April 2009, which the Department for Communities and Local Government described as: the biggest shake-up in local democracy in one single day since the seventies…Nearly two thirds of England, as a result will be under 'unitary' governance – like Scotland and Wales – with the North East being the first English region to be fully unitary…Combined, the new unitaries will ultimately make £100m annual savings through less duplication. Senior positions will be slashed by over 300 posts saving around £22m. There will be nine Chief Executives instead of 44.411 The total number of councillors, moreover, fell by 1,312 (64 per cent) from 2,037 to 725.412 Hence all of Scotland and Wales – where councils are responsible for all services except revenue collection (see Table 6.1 and Table 6.2) – and nearly two thirds of England now have ‘unitary’ governance. Several of the successful applications for unitary status were accepted despite local opposition, however. In Durham local referenda in some now to be abolished district councils firmly rejected takeover by the unitary county. Moreover, councillors in Northumberland received a letter from the former local government minister warning them not to hamper the creation of the new unitary council in the region. John Healey said he was concerned about ‘indications’ that some councillors appeared to be ‘impeding the creation’ of the new council.’ He also drew attention to an apparent overspend of the district councils, for which the implications would be ‘very serious indeed’, if restructuring was not occurring.413 East Devon DC (EDDC) appealed against a High Court ruling which found it had acted in ‘haste’ in challenging a Boundary Committee recommendation in support of a Devon unitary council. In February 2009, the former Secretary of State for Communities and Local Government, Hazel Blears, announced Boundary Committee proposals for new unitaries in Devon, Norfolk and Suffolk would be delayed until 15 July. On 25 March, 2009, the Appeal Court supported most of EDDC’s grounds for appeal – although the Judges stopped short of calling for the whole process to start again. The Boundary Committee had to pay its own costs for both the December and February hearings and one-third of the appellants’ costs for both hearings.414 The Conservatives were against these proposals and pledged, if they were elected at the next general election and the process was not too far advanced, ‘to halt the expensive and unnecessary Devon/Norfolk/Suffolk restructuring’.415 Hence the Queen’s speech on 25 May 2010 setting out the Tory-Lib Dem administration’s plans for legislation, said a Local Government Bill would revoke the previous government’s ambitions for new unitary councils in Exeter, Norwich and Suffolk.416 The delay was also supported by an alliance of three districts in Suffolk. Leaders of Waveney, Forest Heath and St Edmundsbury issued a joint statement claiming the Boundary Committee should use this time to listen to the people of Suffolk.417 Conversely, the chief executives of both Ipswich and Norwich City opposed the delay on the grounds that they had already faced three years of uncertainty and ‘couldn’t consult any more if’ they ‘tried.’418 J. A. Chandler argues that over ‘the 10 years of New Labour Governments, without any fanfare of policy pronouncements, there has been a revolution in the relationship between central and local government’.419 The creation in 1997 of a single Local Government Association (LGA) for England and Wales led local authorities themselves relate to central government with a more coherent voice; and with ‘the development following the 2007 Local Government Act there will be fewer major authorities with chief officers and leaders who can have individually and collectively a far stronger voice within Whitehall’.420 Moreover, as Professor John Stewart emphasises, the LGA’s working relationship, their day-to-day practice…make them part of the village of Whitehall and they come to accept the assumptions of the village of Whitehall over time. Obviously they have to have a working relationship with Government but at times they have gone too far in accepting the views of central government. They have….almost become part of the village.421 The result of this ‘growing corporatism’ is that ‘policy makers in Whitehall and the local authorities have far more of a common culture and outlook and will be prepared to work together to involve local authorities within the framework of partnership with other major agencies and private sector companies to steer local policy’.422 In other words, New Labour’s move towards a uniform local government structure composed of fewer unitary authorities with fewer chief officers and leaders with a common pro-market neo-liberal ideology further undermines local democracy in the interests of big business. Moreover, although the 2007 Act permits the creation of area committees and allows unitary authorities to form urban parishes, decentralisation schemes are not mandatory: and parish and town councils will only be able to undertake more initiatives with ‘the support and funding of the unitary or county authorities in which they rest.’423 For, as Chandler also points out, New Labour is ‘more favourable to the creation of organisations such as Local Strategic Partnerships that act in partnership with, but remain outside, the local authority’; and ‘this tendency may be leading to a relatively small number of unitary local governments operating under much the same framework as the many ad-hoc regulatory agencies…424 Northern Ireland In Northern Ireland prior to 1970 around 73 urban and rural councils served a population of approximately 1.5 million. In 1970 the Macrory Review recommended that service responsibility should be divided between a regional level and a district level.425 At the regional level the Stormont government was to have responsibility, whereas, at the district level, 26 district and borough councils were to provide locally based services. However, following the abolition of the Stormont government in 1972 under the Northern Ireland Constitution Act 1973, regional services – that is, the major functions of education, housing and social services – were ‘centralised’ within the Northern Ireland Office, ten departments and a range of bodies that included boards, trusts, quangos and agencies. The 26 district council areas are therefore responsible for only a limited range of community and environmental services (see Table 6.2). Following the 1998 Agreement and the subsequent devolution of power it was decided that there should be a fundamental review of public administration in Northern Ireland. During the 2005 Review of Public Administration (RPA) Consultation, the Northern Ireland Public Service Alliance, the Northern Ireland Committee of the Irish Congress of Trade Unions and UNISON all stressed that ‘[t]here should be no privatisation of any aspect of public services’; and the private contractors argued for ‘[s]ignificantly fewer councils’ and ‘[m]uch greater involvement of the private sector in the delivery of public services’.426 On 13 March 2008 Arlene Foster, then Democratic and Unionist Party Minister of the Environment in the Assembly, indicated that local government in Northern Ireland would at last be structurally reorganised to further meet the needs of the private contractors – as it had already in England, Wales and Scotland – when she announced that: The current 26 local government districts will be rationalised to create 11 new local government districts…to deliver important services to communities in an efficient and effective manner…a range of functions will be transferred to the new local councils. These include aspects of planning, as well as rural development, the public realm aspects of local roads functions, urban regeneration and community development, a range of housing related functions, and local economic development and tourism.427 Arlene Foster emphasised ‘efficient and effective’ delivery of services as the motive for the reorganisation. Conversely, the 2005 RPA consultation document was much more explicit: The review also envisages that the private sector will have an expanded role in the provision of public services. Already the role of the private sector has moved from one of a provider of infrastructure and back-up services to partnership in the delivery of more core services through Public Private Partnership (PPP) and Private Finance Initiative (PFI) arrangements. The RPA of itself will not impact on these developments but the two-tier model of public administration provides a platform for the creation of a system that will facilitate the envisaged roles and harness the strengths of the different sectors in a mixed economy.428 The 2011 council elections in Northern Ireland, however, will still be based on the current 26 districts because the present Environment Minister Edwin Poots decided the cost of restructuring the councils would have exceeded the financial benefits. Hence local government in Northern Ireland is still "left with fewer services to deliver to their citizens, than any council in Europe".429 New Labour has increased the democratic deficit Table 6.3: Local Government Scale and Representational Ratio: Britain and Europe 2009
[a] includes City of London and Greater London Authority Source: Wilson and Game, 2006, p. 263; House of Commons Communities and Local Government Committee, 2009b, p. 190 Under New Labour British citizens became even more under-represented in local government due to the reduction in the number of councils and councillors: with average population size per local authority at 140,000 the highest in Europe; and the average of 2,900 persons per councillor being far higher than in any other European country except Ireland (see Table 6.3).430 Therefore, as INLOGOV argues: ‘If we want a revival in local democracy, reflected in turn-outs in elections…then we have to have smaller councils and give them more power’.431 And, as also proposed in Chapter 14, more councillors – to bring us into line with other comparably sized European advanced capitalist countries. Recent officially commissioned research on public attitudes to local government shows that most people have only a fairly hazy knowledge of the services it provides, how it works and is financed; are frequently cynical and contemptuous of councillors; think that most of what is done locally is effectively determined by ministers and central government; and see voting in local elections as largely a waste of time. INLOGOV considers that the latter alienation stems directly or indirectly from local government’s exceptional scale. They further point out that, although when a DCLG Minister he frequently referred to the need for “local self government” and a new role for parish and town councils, the structural reform David Miliband began for more and larger unitaries has increased the “democratic deficit”. For example, in the early 1970s the Northumberland area had 22 councils with 647 elected councillors whereas since April 2009 it has had only one council with 67 members.432 New Labour’s ‘local governance’ project began by concentrating on changing the internal management of councils to meet the needs of capital: because – unlike in Northern Ireland – the structure of local government in England, Wales and Scotland had already been reorganised by the Conservatives to meet the needs of big business for privatised services. Its policies have also, as shown above, resulted in even fewer services being provided directly by local government, which has become the delivery arm for those services that have remained. Nevertheless, although New Labour until recently made only minor structural changes, the anti-democratic drive to massively reduce the number of councils and councillors, has always been central to its project, which is near to fruition now that all of Wales and Scotland and nearly two thirds of England have unitary authorities. Since 1997, moreover, as Professor George Jones in 2009 emphasised: ‘The Government has been fudging, in its rhetoric, by speaking out for decentralisation to local government and to communities and people, but the reality…is that it is still dominated by the desire to control what local authorities are doing’.433 Tory-run Westminster and Hammersmith and Fulham will now become the first councils in the country to jointly run all schools in the area. Hammersmith leader Stephen Greenhalgh said: “We will lead the radical revolution in local government that our nation's finances require. This is a blueprint for delivering more for less.”434 Three Labour councils – Lewisham, Southwark and Lambeth – are drawing up plans to share back office and administrative functions. Local government secretary Eric Pickles said: “There is great potential for more locally led joint working, the sharing of back office functions and greater co-operation both between councils and between councils and other local public bodies.”435 Hence the number of London boroughs – with the financial crisis as the pretext – could therefore be reduced in a very short time from 32 to 12 or less and the total number of directly elected councillors to perhaps 200 or so – 10 per cent of their present number. They will probably, as Peter Spalding has also predicted for several years, 'be called Assembly Members – to mimic the GLA – rather than councillors: and they will almost certainly only have scrutiny powers rather than decision making powers. Their (well paid) role will simply then be to scrutinise the contracts to private contractors for out-sourced services. Democratic input will effectively be removed from the provision of public services'. 436 Chapter Seven US-style executive mayors in local government Chapter 6 argued that the New Local Government Network is the main group influencing New Labour’s ‘local governance’ project. Chapter 2 critically analysed the work of NLGN leader Gerry Stoker – the major theorist and apologist for New Labour’s local ‘governance’ project. Since the early 1990s Stoker has advocated the introduction of US-style executive mayors in Britain. For example, in 1991, 1992 and 1997 – drawing on US experience – Stoker argued that such mayors in Britain could lead to more dynamic and influential local government.437 In 2002 the NLGN published Beyond SW1: Elected Mayors and the renewal of civic leadership with an introduction by Stoker and contributions by Peter Mandelson and Lord Rogers of Riverside.438 However, none of these essays address the crucial issue of the relationship between privatisation and the mayoral project. Conversely, as shown below, private contractors such as Capita have no such inhibitions about the link between the two. Nor do any of the Beyond SW1 contributors acknowledge that NLGN’s call ‘for elected mayors to be forced on major cities’ during this period contradicted their ‘renewal’ rhetoric.439 Stoker and the NLGN also omit any reference to Jacques Chirac – the former French president protected throughout his two terms of office by constitutional immunity from being tried for corruption – who on 30 October 2009 was ordered to stand trial on embezzlement charges over accusations that he rewarded cronies with payments for non-existent jobs when mayor of Paris from 1977 to 1995.440 Chapters 3 and 5 discussed the reasons for the failure of Michael Heseltine’s US-style executive mayor proposal.441 Chapter 6 analysed the New Labour legislation relating to US-style directly-elected mayors. This Chapter therefore focuses in depth on the main arguments against directly-elected local government US-style executive mayors and recent developments regarding the mayoral project. Power in the hands of one person leads to cronyism, patronage and corruption The current legislation is modelled on the USA where corruption has always been a serious problem Professor Melvin Holli’s study of the ten “worst” and the ten “best” American mayors, covering 732 mayors from cities of more than 200,000 population between 1820 and 1993, ‘found more sinners than saints in county hall’.442 New York’s City mayor Fernando Wood (1855/58, 1860/82) set the pattern for the institutionalised corruption that plagued nineteenth century New York politics. Wood – the prototype of the machine politician – was a Tammany Hall Democrat who had ties to the criminal underworld and dabbled in large-scale graft and vote fraud. New York City’s mayor Abraham Oakey Hall (1868/72) was a front man for the infamous Tweed Ring that fleeced the city of millions of dollars. Hall, although always acquitted, was indicted and tried three times for corruption. Chicago’s mayor William Thompson (1915/23, 1927/31) was rated the “worst” mayor. He received campaign funds from Al Capone; and $1.5 million was found in his safe-deposit box after his death. New York Mayor James Walker (1926/32), who presided over an orgy of corruption, fearing a possible trial and imprisonment fled to Europe. Boston mayor J. Michael Curley (1914/17, 1922/25, 1930/33, 1946/49) was jailed twice for corruption. Jersey City mayor Frank Hague (1917/47) grew up as a street hoodlum. His early life was a far cry from the tax-payer supported luxury he later enjoyed in two different summer and winter palatial homes and in a private suite at the Waldorf Astoria, which he used when he was not sailing on luxury liners to European vacations. He was an urban tyrant who used strong-arm tactics, the police and the courts to physically and legally intimidate his opponents into submission. Over 50 former US mayors – mainly Democrats – are currently in prison for corruption. There are 93 federal prosecutors in the USA appointed by the President. Just one of the latter – Christopher J. Christie Jr. appointed by ex-President George Bush in 2002 as US Attorney for New Jersey and a prolific fund-raiser for him in 2000 who resigned in November 2008 to run as governor in 2009443 – by early 2008 had won convictions or guilty pleas in more than 125 political corruption cases involving state and local public officials from both main parties, without losing a single case.444 However, according to Donald Shields, of the 154 cases of public corruption Christie had investigated by April 2008 75 per cent involved Democrats.445 Donald Shields and John Cragan showed that – out of the 375 elected officials investigated and/or indicted by the offices of the US Attorneys between January 2001 and December 2006 – seven times more Democratic officials were investigated than Republican officials: which ‘exceeds even the racial profiling of African Americans in traffic stops’.446 Conversely, data on the national party affiliation of elected officials at the time showed that 50 per cent were Democrats, 41 per cent Republicans and 9 per cent Independents.447 Recent examples of corrupt US mayors include:
Corruption in Britain before the Local Government Act 2000 In the 1970s, in Newcastle-upon-Tyne – where the first council manager was introduced in Britain – it took the police over three years to obtain the necessary evidence to convict ex-Trotskyite leader T. Dan Smith of corruption: and ‘it was either supposed’ as Raymond Fitzwalter and David Taylor note, ‘that the police had unearthed so much corruption that it would take years to deal with it, or that they would not get anywhere in the North-East as long as Alderman Andrew Cunningham remained Chairman of the Durham Police Authority.’457 Cunningham was also head of the North East Region of the General and Municipal Workers Union (now the GMB), Leader of Durham Council, an elected Labour Party National Executive member of enormous power and authority in every sphere of the party and region. His son Jack Cunningham – the former New Labour minister now Baron Cunningham of Felling in the County of Tyne and Wear458 – is the City of London Corporation’s political adviser: and was investigated by the House of Lords disciplinary panel following a complaint that he failed to declare this consultancy.459 Smith received £156,000 (an astronomical sum in the 1960s) from the firm of architect and freemason John Poulson, in return for contracts on a number of Newcastle housing projects; and was eventually jailed for bribery in 1974, along with Andrew Cunningham. ‘While Watergate was dragging American politics into the gutter’, as Martin O’Neil notes, ‘T. Dan Smith’s corruption trial provided a shabby British counterpoint’.460 Another productive Poulson contact was Scottish Office civil servant George Pottinger, who in the late 1950s was put in charge of a £3 million redevelopment of Aviemore as a winter sports complex. Poulson gave Pottinger gifts worth over £30,000 over six years, and was appointed by Pottinger as architect in charge of the Aviemore project. Pottinger also had a degree of political knowledge and skill which Poulson lacked and drafted political speeches for the architect. Poulson's connections with the National Liberals began to give him political advancement in the early 1960s. He was Vice-Chairman of the Executive Committee of the National Liberal Council from 1961 and frequently hosted National Liberal events in London at which he met senior government ministers, where Pottinger's speeches were impressive. He also made contact with the Labour MP Albert Roberts, for whom Poulson designed a house (free of charge). Roberts had useful contacts with the Portuguese government and was offered a consultancy by Poulson at £2,500 per annum. Poulson was increasingly interested in obtaining commissions outside Britain in the mid-1960s. This required making more contacts. The Conservative MP John Cordle had extensive contacts in West Africa and after helping on several small contracts, in 1965 became a consultant to Poulson at £1,000 per annum. However, Cordle's approaches to governments in Nigeria, The Gambia and Libya proved unfruitful. Cordle unwisely wrote a letter outlining everything he had done for Poulson, which was ultimately to doom his Parliamentary career. Another contact was the then Shadow Commonwealth Secretary Reginald Maudling, whom Poulson knew from his National Liberal activities. Maudling was anxious to build up a business career to keep up his income and Poulson needed a big name as Chairman of one of his companies, Construction Promotion. In 1966 Maudling accepted an offer to be Chairman for £5,000 per annum. In addition, Maudling's son Martin, who had left Oxford University without taking a degree, went to work for another Poulson company. Poulson agreed to donate large sums of money to a charity patronised by Maudling's wife. In return, Maudling helped to bring pressure on the government of Malta to award a £1.5 million contract for the new Victoria Hospital on Gozo to Poulson. In Parliament, Maudling vociferously opposed the plans of the Labour government to reduce the amount of defence spending and number of UK troops on Malta. He traded on the goodwill this created to bring extra pressure, and also changed Conservative Party policy so that overseas development assistance to Malta would be 75 per cent grant and 25 per cent loan instead of the even split which the Labour government had introduced. Poulson's business model was initially highly successful and, at its apogee, was making an annual turnover of £1 million; he himself admitted to being a millionaire. However, it was consuming more contract work than was becoming available, and Poulson resorted to tackling these difficulties by bribing and corrupting local councillors, local authority officials and civil servants at all levels. This was an expensive strategy and Poulson later estimated that he "gave away" about £500,000 in the last few years of his involvement in the business.
It swiftly became apparent that Poulson was at the centre of a massive corruption scandal, and in July 1972, the Metropolitan Police began an investigation for fraud. This precipitated the resignation of Reginald Maudling, then Home Secretary and notionally in charge of the police. On June 22, 1973, Poulson was arrested and charged with corruption in connection with the award of building contracts. Following a 52-day trial at Leeds Crown Court which was widely reported in the press, he was convicted on February 11, 1974, of fraud and jailed for five years (later increased to seven years). Sentencing him, the judge called Poulson an "incalculably evil man". For his part, Poulson denied the charges, saying "I have been a fool, surrounded by a pack of leeches. I took on the world on its own terms, and no one can deny I once had it in my fist". Many of Poulson’s contacts, notably George Pottinger, T. Dan Smith and Andrew Cunningham were similarly convicted and jailed, though not the three MPs: since it was found that there was a legal loophole through which MPs could not be considered as in charge of public funds. The Poulson scandals did much to force the House of Commons to initiate a Register of Members' Interests. A subsequent Select Committee inquiry which reported in 1977 found that all three had indulged in "conduct inconsistent with the standards which the House is entitled to expect from its Members". Cordle was forced to resign although the Commons then voted only to 'take note' of the Committee's report rather than endorsing it.461 Yüklə 5,87 Mb. Dostları ilə paylaş:
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