Shirley on the scaffold

The District Auditor's final verdict on Westminster council may rob John Major of his majority.

The District Auditor's axe is poised. At last - after having announced his judgement on Westminster council in January 1994 and then having gone back and considered it all once again - John Magill has Shirley Porter and colleagues on the scaffold. Come Thursday, barring last-minute judicial intervention, her head looks likely to fall under a multi-million pound surcharge and disqualification.

At this low ebb in Tory fortunes, the Westminster council scandal hands another hefty piece of ammunition to Labour. The auditor's conclusions will be matched with those of Sir Richard Scott's Iraq report. Put crudely, it's a message that says the Tories cannot be trusted with power. More subtly - since both Scott and Magill were called in to tidy up after that late Eighties period of Tory hegemony when arrogant politicians gave little thought to the niceties of proper procedure - the lesson is that the more politicians feel they walk on water, the more dangerous they get.

The Westminster affair is also to do with amateurism and political paranoia. Lady Porter was always an exotic. She came late to politics and never really understood, let alone sympathised with, the local democratic system. Her fate confirms, perhaps unhappily, that modern British politics is a place for specialists alone.

As a local authority, the City of Westminster has a specific character, from which one should not generalise too far. It is the only council to have a permanent Security Service liaison. (Westminster's permission is needed to allow MI5 to check manholes on the routes around Buckingham Palace.)Letting City Hall in Victoria fall into Labour hands seemed akin to giving away the Crown Jewels.

Lady Porter was genuinely anxious prior to the 1992 London boroughs election; her worry about Labour taking over precipitated (says the auditor) the illegal policy of weeding out those who rented council property and the homeless.

To understand why, it has to be remembered that she came into politics when London Labour was at its most extreme. Though Westminster Labour has always been a mixed and rather moderate bunch, what she saw on looking at the Opposition benches was the potential triumph of Ken Livingstone.

Lady Porter, rich as she is, well-lawyered as she is, can defend her own reputation. The voters of Paddington, Mayfair and Pimlico will have the chance in 1998 to vote out those of whom they disapprove - though on past form Tory dominance in Westminster will continue. Is it all just another PR disaster for Brian Mawhinney and crew to try to sweep up?

There is more to Westminster than that. The Opposition will tout Tory ineptitude, yes, but there are bigger issues. For a party committed to cutting government and reducing its power, what Westminster exposes is the extent of the Tories' failure to master the mechanics of government (and there is a warning there for Labour). Lady Porter has been skewered not by socialist legislation or some Labour plot, but a system created and strengthened by Conservative ministers. If she falls, it will be as a martyr to the Tory state.

Take the bespectacled figure of John Magill, now Lady Porter's nemesis. District Auditors were never meant to prosecute Tory councillors. The District Audit Service was established by Neville Chamberlain in the 1920s to ensure that cloth-capped Labour councillors did not spend too much ratepayers' money. They were intended to do what Chris Woodhead hopes HM Inspectors of Schools will do - swoop down and wield the rod.

By and large that is what the auditors did. It was the District Auditor who killed municipal socialism - and inadvertently helped to make the world safe for new Labour - by surcharging and disqualifying Ted Knight in Lambeth and Derek Hatton in Liverpool.

It was the Conservatives who created the Audit Commission - under the auspices of which the auditors work - to tighten up procedures. And to bring in the private sector. Imagine: John Magill is only an auditor on contract; he works in the City for Ernst & Young, a company grown fat during the Tory years.

According to the Tory script, auditors were needed for Camden and Southwark and Labour big spenders. As for Tory councils, auditors would check the books for trivial hand-in-the-till corruption, then sign off. But when Labour objected to Westminster's annual accounts, John Magill - whatever his conservative accountant's instincts may have said - had no option but to investigate in depth.

What he discovered required him to make a powerful judgement on the motives that elected politicians bring to their committees and cabals. To understand what he has done in Westminster, you would have to imagine the National Audit Office arraigning Lady Thatcher for going ahead with privatisation on the grounds that it would create a predisposition on the part of voters to vote Tory.

To her horror, Lady Porter has been put in the dock for wanting, physically, to ensconce the Tory position in Westminster. In the late Eighties, the clique running Westminster decided, according to the auditor's provisional report, to do some social engineering, using the borough's housing stock. In principle, it is what umpteen Labour councillors have sought to do, more or less consciously, by building council estates in traditionally Tory areas. The Cabinet archives for the early Fifties show that Harold Macmillan had similar thoughts in trying to steer the location of his massive housing programme.

In Westminster, the Porter group sought to get rid of renters and bring in owners. Her sale of council housing was perfectly legal. The problem is not really even the impact of the designated sales policy for Westminster's homeless, denied access to the flats being sold off and forced (at Westminster's expense) into short-run accommodation.

The auditor has found - provisionally, at least, until Thursday - that the council-designated sales policy was contrary to law because it was designed with party advantage in mind. If you ask who made that law, the answer is the Conservatives have authored more than 100 pieces of local government legislation during the past 17 years.

Thursday is not by any means the end of the road for Lady Porter and colleagues. All the auditor is doing is making his final judgement: he then has to go to court to get a judge to make an order of surcharge and disqualification. Magill vs Porter could run and run.

It will run on into the philosophy books as well as the legal texts. Once upon a time, the Tories' intellectual pin-up was Fritz von Hayek, who wrote persuasively about the need to limit government - he was, he never tired of telling them, a liberal, never a conservative. The Austrian would have a problem with Westminster. On the one hand, he would find appealing the idea of legal restraints on what politicians can do. On the other, the fact that those restraints have been "discovered" after the event by a bureaucrat (even a private-sector bureaucrat on contract) would alarm him.

Magill has come up with a doctrine that at its starkest says: thou shalt not pursue party advantage in government. It is one that would probably win a hearty public endorsement even if - or perhaps because - taken to its logical conclusion it spells the end of party politics. Many would welcome that result in the town and county halls, but what would it entail for British democracy if applied to Parliament?