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Christopher Booker's notebook

(Filed: 18/09/2005)


Defra's dishonesty costs taxpayer 20m - but court keeps ruling secret for a year

Only now, a year late, has it become possible to report a devastating High Court judgment, under which - thanks to the dishonesty and incompetence of the Department for the Environment, Food and Rural Affairs - taxpayers will be footing a bill for more than 20 million.

For three years Defra sought to evade paying 13 million due to Ruttles, a Lancashire plant-hire firm, for work done during the 2001 foot and mouth crisis - one of a long succession of such cases, where Defra went to extraordinary lengths to avoid paying its contractors.

Under the ruling by Mr Justice Thornton in September 2004, Defra not only has to pay the firm what it is owed, but all legal costs, amounting to millions of pounds, and 6 million due in interest, at 12 per cent. For Defra it was a shattering defeat. Yet all the parties involved were ordered to keep silent about the case until the judgment was posted on the Lord Chancellor's website. Although this remains unposted, permission has now been given by Court Services to report it.

As the Ruttles case confirms, Defra officials - presumably on ministerial instructions - used every possible ruse to avoid paying the contractors, accusing them of fraud, questioning every invoice, even for as little as 35p, and enmeshing them in thousands of hours of paperwork.

Mr Justice Thornton's judgment in the Ruttles case - as when he had previously found in favour of another firm, JDM Accord - was excoriating. He dismissed Defra's allegations of fraud out of hand. He found that its officials had repeatedly lied about what happened in 2001; that their own systems and paperwork were chaotic or non-existent; and that their claims to have investigated the case internally were largely fraudulent. On 26 points he found that Defra was in breach of contract, and that it must not only settle but pay an additional sum in interest, totalling nearly 50 per cent of the claim.

Both cases represent a remarkable victory for the Forum of Private Business (FPB), the Cheshire-based association that has been campaigning on behalf of the foot-and-mouth contractors for three years. It was particularly gratifying to the FPB that the judge ordered Defra to pay the 12 per cent interest on its debts, under the Late Payment of Commercial Debt Act 1998, since the FPB also lobbied for the "statutory right to interest" created by that Act, which the Government cannot have anticipated would soon be turned so damagingly against itself.

Hundreds of firms fell foul of Defra's decision in 2002 to avoid paying its foot and mouth debts. Many, under Defra's remorseless pressure, eventually agreed to settle for a fraction of the money owed, under "confidentiality" agreements forbidding them to discuss their case. Some 10 large claims are still outstanding. The FPB hopes that, now the humiliating outcome of the Ruttles case can be revealed, Defra ministers will order that these be settled as soon as possible.

Labour assault on constitution

Ministers are said to be so alarmed by the latest twist in the row over the legality of automatic penalties - the billions of pounds raised each year by parking fines, penalties for late tax returns and so forth - that they are considering emergency legislation.

This extraordinary story began with a ruling by Lord Justice Laws in the "Metric Martyrs" case that certain Acts of Parliament, such as the Bill of Rights Act 1689, are "constitutional statutes" which cannot be overridden by subsequent legislation, unless this is made "expressly clear". It was on this point that the judge decided that the Metric Martyrs, including the late Steve Thoburn, should be found guilty.

But a central provision of the Bill of Rights is that no one can be fined except by the judgment of a court. For more than a year therefore, Neil Herron, the Metric Martyrs campaign director, has been questioning the legality of the automatic parking fines imposed by the 142 councils that operate "decriminalised" parking schemes under the 1991 Road Traffic Act, since motorists penalised under these schemes have no recourse to a court. Their only appeal is to the National Parking Adjudication Service, which is run on behalf of and financed by the councils involved, and which is anyway on record denying that it is a court of law.

Sunderland city council -which originally seized Mr Thoburn's scales - had so many motorists using the "Bill of Rights defence" to justify non-payment of these automatic penalties that it sought legal advice. Eleanor Sharpston QC said that, since it was the intention of the 1991 Act that the Bill of Rights should be set aside, the penalties are legal.

Here, however, Miss Sharpston is impaled on a hook, because it was she who represented Sunderland in the metric case, which she only won because of Laws's ruling; and Laws was unequivocal in saying that the Bill of Rights can only be overridden where Parliament makes this "expressly clear".

The 1991 Act does nothing of the kind. The only way Miss Sharpston can defend her latest opinion is by rejecting the very ruling that won her the case. If she is right, the Metric Martyrs' case should be quashed.

So many people are using the "Bill of Rights defence" to justify non-payment of automatic penalties - HM Customs has backed down more than once over refusal to pay surcharges for late VAT returns - that, according to Birmingham city council last week, Government lawyers are considering emergency legislation to override the Bill of Rights.

But, as Mr Herron points out, the Bill of Rights itself only enshrines the Declaration of Rights, which was a solemn contract between Sovereign and People, and which Parliament has no power to undo. When those Sunderland officials seized Mr Thoburn's scales in 2000, they can little have guessed what a constitutional can of worms they were about to open.

Arms and the lord

Lord Drayson is the businessman who, after landing a Government contract for smallpox vaccine in 2002, donated a large sum to the Labour Party. Last year he was made a peer and gave Labour a further 500,000. Then in December he donated yet another 500,000 to Labour funds and was made Minister for Defence Procurement in May.

Last week, in a speech to the Royal United Services Institute, Lord Drayson tried again to counter charges that the Ministry of Defence is attempting by stealth to integrate Britain's Armed Forces with those of the EU, not least by placing most of its big equipment contracts with European rather than US firms. He insisted that the MoD is "buying European" only "on merit", and said we must "not forget" that some of these contracts have been "extremely successful".

It was perhaps unfortunate for Lord Drayson's case that the example he cited was the Storm Shadow, a French-designed cruise missile originally built by Matra for the French air force and eventually intended for use in the Eurofighter. Britain has paid 981 million for 900 of these missiles, at a price tag of more than 1 million each.

As I reported previously, however, had we waited for the equivalent US JASSM missile, built by Lockheed Martin, which is lighter and longer-range than the French version, we could have bought these for only 167,000 each, saving in total 830 million. If this is what Lord Drayson views as an "extremely succcessful' deal for UK taxpayers, it is hardly surprising that so many of the MoD's other EU-centred defence projects are beginning to arouse astonishment and outrage.


Call this democracy?

If Mr Blair is ever troubled by the fact that he governs with the support of less than 25 per cent of the electorate, he might take cheer from the example set by Camelford town council in north Cornwall. Last month it staged a referendum on whether motorists should be charged for using the town's main car park, until now paid for by a modest percentage of local rates.

No fewer than 88 per cent of the votes were in favour of retaining the present system, and 75 per cent specifically against introducing pay-and-display. The town councillors, however, have voted by seven to one to reject the people's verdict and to impose a charging scheme. They explained that there had been only a 31 per cent turnout (about the same as that which elected them) and that all those who stayed at home "might well have voted for pay-and-display".

Since charging was introduced, traders have reported a significant drop in takings, as people take advantage of free parking in nearby towns. Angry residents now hope, at the next election, to replace their councillors with some who better grasp the meaning of the word "democracy".