The Westminster Scandal: Labour rebels paid high price: The Surcharges

SURCHARGING of councillors over their failure to carry out their legally held duties is a concept more familiar to Labour politicians attempting to buck the line laid down by the government of the day than their Tory counterparts.

The most celebrated cases came just as the Labour Party nationally was trying to rebuild its image to turn it into a credible electoral force in the mid-1980s. Its rebellious councillors did nothing to enhance the process.

Most significantly were two figures who loomed large in Conservative demonology: Derek Hatton on Liverpool City Council, and Ted Knight, of the south London borough of Lambeth.

They were not alone, of course. A total of 80 Labour councillors were surcharged more than pounds 200,000 by the High Court in 1986 for their failure to set a rate by the start of the financial year in April.

The councillors in both Liverpool and Lambeth had reasoned that they should have received more money from central government grants and had delayed for many weeks until June that year in the hope of this money coming through.

The three High Court judges agreed with the district auditors who had maintained that not to set a rate within weeks, or possibly even within days of the deadline, was unreasonable.

It was held that the councillors had taken the decisions for extraneous and improper reasons to do with 'mere political posturing' in an effort to put pressure on the Conservative government.

Each group of councillors - 48 from Lambeth and 32 from Liverpool - was to be surcharged pounds 106,000 which Liverpool and Lambeth councils' coffers had lost through failure to establish a rate.

Those who failed to pay the surcharge were declared bankrupt and barred from local authority office for five years.

But the then Labour leader, Neil Kinnock, refused to become embroiled in the matter, despite calls that if the Labour Party came to power he should retrospectively indemnify the councillors, aware of the damage the row over the surcharging of Clay Cross members 11 years earlier.

In that case, 11 Labour councillors on the Derbyshire council, including the brother of Dennis Skinner, the MP for Bolsover, had also failed to implement rent increases in line with the Housing Finance Act. They were eventually declared bankrupt, owing the princely sum of pounds 6,985.