Labour plans law to combat sleaze 2/48pt inyes

Labour will bring in a Governance of Britain Act to combat sleaze, the Nolan inquiry into standards of public life was told yesterday.

Giving Labour's evidence to the inquiry, Jack Straw, the shadow Home Secretary, said the Act would put on a statutory footing codes of behaviour for civil servants and all public appointees. It would make the system "more open and subject to more scrutiny".

As reported in the Independent, Labour would also move against Freemasons, forcing holders of public office to declare if they were members of the secret organisation.

Appointments to quangos, Mr Straw said, should be made in the same way as for members of the magistrates' bench, where political affiliations were known but balance was a paramount concern. The Government's insistence of keeping political allegiances secret had got it in "a jam because it pretends politics does not play a part".

The Government's policy of "rolling back the frontiers of the state", Mr Straw argued, had led to a paradox. While the numbers directly employed in the public sector had shrunk by nearly half since 1979, the amount spent by the state had not. Public spending accounted for 44.1 per cent of the national income in 1979, and 44.3 per cent today.

That policy had also created a situation where ministers were avoiding being held responsible for failings within their departments. Too often, Mr Straw said, ministers were skirting parliamentary questions by having them dealt with by the heads of their executive agencies.

Nolan is not inquiring into party political funding, which, Mr Straw said, prevented it from doing its job properly. "The issue is of supreme importance to your work because of the subtle way, in the British political tradition, that favours are obtained."

While it was unusual for payments to be made directly in return for favours, Mr Straw claimed, "what is far more common is a triangular arrangement, in which a substantial donation to the Tory party coincides with an appointment to a quango, and the success of the company or individual in relation to an award of a contract, or other government decision."

This provoked a furious response from Tom King, the former Tory Cabinet minister on the Nolan committee, who accused him of peddling "smear and innuendoes". Mr Straw said because the system was secret that he was unable to provide hard evidence. Later, outside the inquiry, Mr Straw said he would be writing to Jeremy Hanley, the Tory party chairman, asking if Labour could send in accountants to search for the evidence.

A TUC delegation, headed by John Monks, the general secretary, pleaded with the committee to "rehabilitate the concept of public service". It proposed a national college for the public services.