HC Deb 22 February 1921 vol 138 cc863-86
Captain LOSEBY

I beg to move, "That this House do now adjourn."

I am fully aware of the gravity of the step that I have taken and of the allegations that I am going to make, and I ask the House to accept my assurance that I did not act until unsought information compelled me to the conclusion that a clear public duty had been forced upon me. Nor did I neglect to take other steps to get an investigation by an impartial tribunal. I hope the House will realise that there is a personal side of this matter. I realise perfectly well that certain information did come to me in a rather surprising manner, and I think the House will bear with me in seeking to explain how that information came into my hands. If, therefore, they will let me just tell the story from the beginning, when rumours first reached me, I shall be glad.

Some time ago, when information of a literally amazing nature concerning the methods of the Accounts Liquidation Committee first reached me, I was unable to believe them. I regarded it as rumour—idle gossip. I did, nevertheless, take the precaution of taking my informant himself to a responsible person in the Ministry of Munitions, who, much to my relief, reassured me. I am not sure now that I ought to have been reassured as easily as I was. A little time after that my original informant, who was an ex-service man—I have been peculiarly in touch with ex-service men, particularly in the Civil Service—came to me bringing with him another who said that he himself was actually present when an order was given him by one, Mr. Sutton, who then was a member of the Accounts Liquidation Committee of the Ministry of Munitions, that is to say, the Committee that dealt with contractors' claims. That order was given to him personally with some 25 or 26 others to destroy the working papers. At that time, in order to come quickly to my point, he made a statement which I have in the form of a statutory declaration which I propose now to read to the House. The House will understand that for obvious reasons at the present moment I have been compelled to introduce fictitious names, though, of course, the affidavit is in my possession sworn by the actual man: I, Thomas Jones, of 17, Bloomsbury Square, in the County of London, Civil Servant, temporarily employed in the ledger accounts Department of the Ministry of Munitions, do solemnly and sincerely declare as follows: I attended a meeting at the latter end of October or early in November"— this was in 1920. Convened by Mr. Sutton and attended by the heads of ledger groups and ledger investigators. After a preliminary discussion as to the reason of the meeting, Mr. Sutton made reference to the manner in which the accounts were to be settled, and gave instructions that all working papers were to be destroyed. He then gave his reason for the order, which was that Exchequer and Audit would be unable to ascertain and find out how the settlements were arrived at. After Mr. Sutton's order, regarding the working papers was given, a certain Mr. de Jersey at the meeting made the remark: 'Do you want us all put in gaol?' Considerable discussion followed, wherein we were given to under- stand that we were to cover up all traces so that Exchequer and Audit would have difficulty in ascertaining the figures comprised in various settlements. I make this solemn declaration, etc. I hold some four or five almost identically similar affidavits from people who were actually present. I hold two affidavits from people who received consequential orders, that is to say, from people who were not themselves present at the meeting but, being subordinates, received the order from people who were present to destroy the working papers. I was unable to understand them. I felt that there must be some explanation, and I went to an important person and asked him to tell me frankly what the reason of it was, that there must be some explanation and I could not understand it, and that person, at any rate, convinced me that he knew nothing about it. He convinced me that the Government knew nothing about it, and he told me that my proper course was to go to the Minister of Munitions. Accordingly, I did so, and I regard the interview that I had with the Minister of Munitions as being of vital importance. I am going to tell the House frankly what happened at that interview. My recollection on the point is as clear as anything could possibly be.

I saw the Minister, who very kindly granted me an interview immediately. I asked him every possible question—I am referring to Lord Inverforth. I asked him if in any conceivable circumstances an Order to destroy working papers could be justified, and the reply I got immediately was, in no possible circumstances. I then stated that I was in a position to prove that such an Order to destroy working papers had been given. I got, of course, the natural answer—that it was quite impossible, and I asked him to accept my assurance that such was the fact, that a responsible person had called together his subordinates and instructed them to destroy working papers. He asked me whether it was before a settlement or after a settlement. He subsequently—and this is important—told me that of course I should understand that the extreme bulk of these papers might make their destruction necessary, and that he could not tell. The Order might have been given by the head of the Department. An official was called in, and an official of whom I had some suspicion, and Lord Inverforth agreed that I should put any question to him. I asked him if at any time he himself had given any Order to destroy working papers. He said "No." I asked, "Have you received any such Order?" He said "No." I asked him if he would have been bound to have known if such an Order had been given, and he said "Yes." Then I said, "You have all your working papers still in your possession?" He said "Yes." I asked him how he found space to house them. He told me that that was a perfectly simple matter and that he had them all.

I am glad to see the Parliamentary Secretary to the Ministry of Munitions in his place, because he will be able to check me in my statement. I eventually came to an arrangement with the Minister by which I should be confronted by three individuals. I knew the names of the people who had been at that meeting. As far as I remember three names were taken at random. Mr. Sutton, who had given the order, was to be one, and it was arranged that same afternoon that I was to be confronted by these three officials. Again I am compelled to give an exact account of what followed. I went for the sole purpose of giving the Minister certain information for his own private ear, but I found when I arrived—it was only courtesy on the part of the Minister—that the Minister himself and the Parliamentary Secretary, and, I think, five highly-placed officials of the Ministry, were waiting for me. I was asked to make my case. Someone used the words that he would tell me something in confidence. I begged him to do no such thing because I was unable to regard that meeting as confidential. I took a careful note in the presence of the Parliamentary Secretary, and I read that note out as I took it and it was checked by the individual. I regarded these witnesses, if I may use a legal phrase, as hostile witnesses, and what was said had to be dragged out of them. First of all Mr. Castell attended, and he stated something to this effect: Upon one occasion the heads of ledger departments were called together by Mr. Sutton, who gave them orders that working papers were to be kept in such a way that Exchequer and Audit were not to have access to them. In reply to further questions he said that undoubtedly such an order would make him suspicious. I asked him, "Suspicious of what?" Then he corrected himself and said that suspicion was not the right word to use. Then the Minister took up the examination and these words were used. "My impression was that we were so to keep things that Exchequer and Audit were not to nose into things too much."

Mr. Sutton, the man who had given the original order, was then called. Frankly, I had hoped that Mr. Sutton would begin by saying: "Yes, I did give that order, and this is my reason for giving the order." He did nothing of the kind. He began by saying, in answer to my question: "I have not at any time given orders that working papers should be destroyed nor any similar orders." I then read out to him what Mr. Castell had said, and in the presence of the Minister and the Parliamentary Secretary, he said, that there was no word "destroy" used there; "I agree that Mr. Castell's version is the correct version." I hope the Parliamentary Secretary will put me right now if my recollection has carried me astray. I am bound to make a serious point here. The Minister of Munitions knows what working papers are; he knows their importance. In his presence a subordinate official ackowledged that he had given orders to conceal vital documents from Exchequer and Audit, but to my amazement it came to my ears something like a fortnight later that that man was still retained in his position, or rather that the Accounts Liquidation Committee had given him a post of still further responsibility. I come now to the nature of the inquiry that I was offered. I do not think I am entitled to give the exact names of the Departmental Committee suggested, for the letter in which they appear is marked "Private."


By all means read the whole correspondence.

Captain LOSEBY

I will explain the reason why I felt it was of vital importance that the matter should not go before this particular Committee. For the names of most of the Committee I have the most complete respect. The Committee were to be: The Parliamentary Secretary (Chairman), Mr. Barrie, the Joint Secretary to the Ministry, the Legal Secretary to the Ministry, the Assistant Secretary to the Ministry and the Secre- tary to the Ministry. In view of the allegations which I think I have made perfectly clear, I cannot see how the Minister of Munitions, upon consideration, could imagine that I would submit my case and my witnesses before that particular Committee. What, in fact, are these papers, and why do I allege that they are of vital importance? The phrase used in every case by the people who swear to the affidavits is a technical phrase, "Working papers." They say, "We were instructed to destroy our working papers." What are working papers? The House and many people outside will be aware that the books kept in the Ministry of Munitions were of the sketchiest possible description. In view of the difficulties of the War, who would blame them for that? When it comes to settling some contractors' claims it is found in fact that the same contractor has books and accounts with different Departments of the Ministry. It is a matter of extreme difficulty to find out precisely what a contractor's claim is. The Ministry very wisely appointed certain people called "investigators" to investigate the accounts of different contractors. They collected the items from the different ledgers, and the bulk items were put into a ledger known as the key ledger, but in practice—and this is the vital point—it was in fact discovered that a very great number of the credits and debits which could undoubtedly be proved were not in any ledger at all. They were not entered upon the key ledger, but they were put upon certain papers called working papers. It amounts therefore to this—and this is the assertion I make—that working papers are certain papers peculiar to the Ministry of Munitions and that they are in fact a kind of supplementary book.

I checked myself upon this with the greatest possible care, and this is my allegation, which I am prepared to submit to any tribunal, that there are certain transactions which appear in working papers and working papers alone, and it is quite obvious that if you destroy these working papers you are destroying papers of vital importance. Of course, I am not suggesting that any particular voucher does not remain, but these working papers serve another purpose. They serve the purpose of entering the credits and debits discovered in search of the settlement. I have seen many of them and compared them with entries in the key ledger, and on these working papers were also entered the summary of the particular contractor's claim for the purpose of the Settlement Committee who had to make the final settlement with the contractor. I think I must give one particular illustration, from memory. I will not give the name, but we will say some aeroplane company. This is what the key ledger showed. It showed only a debit of £33,000. The working papers show, as the result of the investigators' investigation, a debit of £33,000; and then on the credit side: proved claims, £11,000; unproved claims, £11,000; unsupported, very doubtful, £250; say for final settlement, £750. The items £11,000, £11,000, £250 do not appear in anything in the nature of a book any where, but upon the working papers. I could give many illustrations, sometimes debit, and sometimes credit, and if I am giving a wrong illustration, then an investigation will show where I am wrong. This working paper is, of course, then taken to the Committee, which was called the Accounts Liquidation Committee and consisted of three gentlemen, to whom I shall have to refer again—Messrs. Sutton, Hewitt, and Barber—and holding this document in their hands they effected the compromise in regard to what actually—


The Committee to which my hon. and gallant Friend is referring is not the Accounts Liquidation Committee but a Committee subordinate to them.

9.0 P.M.

Captain LOSEBY

It is the body that in fact arranged with the contractor in a vast number of cases the exact terms upon which the settlement would be made, and signed in their own names the official agreement. I would go further, and I would tell the Parliamentary Secretary something else, that although this particular committee of three was allowed to settle a vast number of accounts, no fewer than 15 to 20 individuals and subordinates settled those accounts practically alone; and I will give the Parliamentary Secretary particulars of them, and they were countersigned by some other subordinate. What, in fact, would the effect be of the destruction of such documents? I repeat, with a full sense of responsibility and unhesitatingly, that they are a kind of supplementary book. This is my suggestion: First of all, that these documents are unusual documents, peculiar to this particular Committee, the Accounts Liquidation Committee of the Ministry of Munitions, and their absence would not necessarily excite comment by Exchequer and Audit, if they did not see anything of them. I assert—and this on investigation will be found to be the fact—that without working papers, the books of the Ministry of Munitions being what they are, the audit is a matter of extreme difficulty; in fact, it would be an impossibility. I say that any Members of the Committee have only to do this—they have to make the endeavour to audit their books, call for working, papers, and when working papers are forthcoming, audit them, and then to make the attempt to audit them without these additional books, the results in some cases of days and weeks of work recorded nowhere else, and they will realise in an hour's investigation what their vital importance is.

I am going to venture to give the House a reason for their destruction, because possibly it might not be what some hon. Members have come to the conclusion that it must be. I have stated that the books of the Ministry of Munitions were in an almost impossible condition. Therefore, I suggest that two things would occur to any business man, and the Committee responsible for settlement know that auditors would ask this. I say that two things would occur—first of all, that, where it is fair to do so, contractors must be put to the strictest possible proof of their claim. Secondly, where that is not fair to do so—and in some cases it would obviously be not fair—then it is the duty of any settlement committee to make use of any documents in the possession of the Ministry for the purpose of checking those claims. In fact, in this particular instance, an investigating body will discover that much was not done owing to the hurry and the rush to settle these accounts. Contracts for settlement and cheques in final settlement were given before the result of investigators had come in, and before inquiries had been made from three vital Departments, namely, material supplied on repayment, loans to contractors, and re-issues.

What is the result of that? I will give one particular account. It is the account of Allan and Symonds. After a month—we will say the month of November—that particular firm wrote stating that the indebtedness of the Government to themselves was £9,000. One month later than that, so far as I can ascertain, without any intervening transaction, they were paid the sum of £18,000 in final settlement, and within a week a voucher for £6,000 came into possession of the Accounts Liquidation Committee. I believe that an investigating committee will find in very many cases documents showing great indebtedness on the part of contractors to the Government which have not even been entered upon the working papers for which cheques in final settlement have been given. It is perfectly obvious that, under these circumstances, possibly realising that an audit had to be faced, the particular individual had every reason in the world for destroying or concealing vital documents recording actual transactions, and showing that payments had been made without the advice, or against the advice, of investigators and greatly in excess, in certain cases, of those amounts.

I do not want to place it too high, and I think at this point I should make this statement, that anybody who has inquired into the working of this particular Accounts Liquidation Committee during the past three months must realise that the public themselves, and I am not sure this House itself, must accept some responsibility for this sinister and culminating instance. There is no doubt that, with the closing down of that Ministry threatened and forced upon them, I freely agree this particular Accounts Liquidation Committee adopted methods that would at no time be tolerated—because I have got details—in order to effect something like a massacre of these accounts which were standing in the way of the closing down of business. Of this there is no doubt, first, that this highly wrongful order was given; secondly, that the working papers, an order to destroy or cancel which was given, are vital documents.

Lieut-Colonel J. WARD

How many of them were destroyed?

Captain LOSEBY

That I am unable to say. I know that the order was given. No general countermanding order was given. They may have been or they may not have been. I ought to have explained to the House that at that particular meeting, when the order was given, there was an immediate hubbub by the sub- ordinate persons, who wanted to know where they came in, and I believe, although I am not clear upon this, that the particular phrase of "Concealing, covering up your traces, losing—anything you like, so long as the Exchequer and Audit do not get at them," was given. It is hard to believe that it is possible to recover them all. There is no doubt whatever that this particular act of grave importance was taken. It was not done without a reason. The House, first of all, will say, "How could it be possible that one individual should call together thirty other individuals and then make this damning confession?" Of course, the answer to that is that, most unfortunately, this Official Secrets Act does make certain Civil servants think it is impossible to do anything to get outside these laws, and, undoubtedly, in this particular case, the false security given by the Official Secrets Act led to this particular order. I have been anxious not to make insinuations. I have been anxious not to make my case too high, or to act prematurely, but it is clear to any thinking person that such a grave order was not given without some very sufficient reason, and I ask for this investigating committee not only to inquire as to whether this particular order was given or not, but to look right into some of these settlements affected by the Accounts Liquidation Committee. There cannot be, I am sorry to say—and I myself know enough to be able to say—any doubt as to some of the lamentable things they will discover. Much more than that, I do venture most respectfully to urge upon the House that in the interests of the Civil Service itself—and this has appealed to me vastly more than any sums of money which may have been lost—I say that this kind of thing would debauch the whole Civil Service, and I cannot help feeling it is not a bad thing to have this right out in this House itself. Everyone knows there is not one person in this House on the Government Benches or elsewhere who would have this continued for one moment, but, I repeat, things have been done—I do not know-through the fault of anyone—but things have been done in our country during the past five years that made one think we were sinking to the level of some of the Continental Powers.

I feel that at all costs it is time for a clean sweep up. One word more in regard to this particular question. I feel that the Government will grant this Committee for which I ask, and I do hope that it will be of a satisfactory nature and really be able to find out what this House wants to discover. I hope some person of high judicial experience, possibly an ex-judge, possibly an officer of this House such as the Controller and Auditor-General, and one senior Member of this House would form an adequate tribunal. I frankly acknowledge that owing to the peculiar political position I hold the facts of this case have come to my knowledge through certain ex-service men at present holding responsible positions in the Ministry of Munitions. I hope the House will realise the great courage and the great public spirit shown by these men, who are not scandal-mongers, nor whisperers, and latterly would not tolerate what they felt they were in certain cases expected to do. They had everything to lose and nothing to gain by their action. Whatever the Leader of the House is able to promise me as a result of this Debate I am confident that he will promise this: that none of these men for whom I personally have the most complete admiration—because I am convinced their public spirit alone has actuated them—shall suffer. I am afraid I have presented this case inadequately, but I am sure the House will acquit me of anything but a desire to do what I believed to be my public duty.


I beg to second the Motion. I have had the opportunity of going through and testing a great deal of the evidence which has been adduced in the form of sworn affidavits, and I say unhesitatingly that the volume of that sworn evidence is such as to justify the setting up of a strong tribunal of investigation—in the interests of honest and pure administration. Frankly I was disappointed this afternoon with the statement made by the Leader of the House. I was more than amazed knowing what I know in this matter when he got up and gave the assurance of the Minister of Munitions that there was no foundation for the allegations which were implied in the questions of my learned and gallant Friend. I knew the circumstances beforehand, when that meeting, which has been given in some detail by my hon. Friend, and was arranged, which took place before the Minister; and it seems to me to be an amazing thing that he denied what that particular individual, Mr. Sutton, there admitted, that he had given an order for the concealment of these vital papers from the only people who in the interest of public purity mattered, the Exchequer and Audit Department of the Treasury. I only want to use that—because I am not going to take up the time of the House—for the purpose of saying it is an impossible and unthinkable proposition after that assurance from the Minister that there should be a Departmental inquiry and only that, and that that Committee should be from the Department over which the gentleman I have named presides. I say prima facie the thing is exceedingly ugly. This Committee to which reference has been made has had the settling of contracts for money amounting to a great many millions. Secondly, they have not, in many of these settlements, had before them the investigators which they themselves appointed. Thirdly, they have not, in many cases, before them the working papers from these investigators, but they have settled behind closed doors without the investigators, or the working papers, and without the sworn statements which are now in existence. I do not suggest, looking at the thing from a very human point of view, and with some experience of what happens in cases when people destroy or conceal papers, that what happened behind those doors ought to be investigated, and will show the exact motive for not having the investigators present, and for telling investigators either to destroy these papers or conceal them from the Audit Department of the Treasury.

This matter is spread over a great many weeks, and I attach very great importance indeed to these sworn statements. The House will bear in mind that these statements are sworn to by officials in the Department. If these statements to which they have sworn are untrue, it not only means that they are going to lose their positions, but it also means that they have laid themselves open to be prosecuted for perjury. Yet, in spite of these things, a large number of the subordinate officials in this Ministry have come forward and have sworn affidavits. I say that I have seen them. I say frankly to the House of Commons that, with those facts in their minds, and with the responsibility of our trusteeship for the honesty of administration in this country, and particularly of the Government, who are supremely responsible, there is no alternative but to grant without delay a judicial inquiry that shall be above suspicion to investigate to the very dregs the allegations that are implied in this case.


As I have had just a little connection with questions of this kind as Chairman of the Public Accounts Committee, although, of course, I have not been concerned with my hon. Friends in this case, and know nothing about it at all, I think it will be right for me very briefly to put the House in possession of what has come before the Public Accounts Committee, and may be germane—I think all my colleagues on the Committee would agree it is germane—to matters put forward this evening. First of all, one has to make clear the sort of attitude which Departments are concerned in concluding these big War contracts have got to the Audit Office. If, for instance, it were the practice of the Audit Office to be over meticulous and exacting and bothering in their methods of auditing and probing, then perhaps there would be in the minds of some people at any rate some justification for an attitude of trying to conceal papers. It so happens that at the beginning of the Session before last the Chancellor of the Exchequer, speaking after dinner somewhere—I have not looked it up, and I do not intend to make any sort of suggestion against the Chancellor of the Exchequer, but he was dealing with the question whether the staffs of departments winding up after the war were worth their salaries and whether the winding up processes were really time well spent—made something which seemed to me almost a suggestion that there might be staffs of accountants under the Comptroller and Auditor-General who might try to make too detailed a survey and to spend money without finding out anything worth discovering. Therefore, as Chairman of the Committee, I made it part of my duty as each accounting officer came before us, to ask whether, in his experience or that of his officers, the officers of the Comptroller and Auditor-General had acted in that way, and whether he thought in his department that the necessity of answering all the Audit Office queries which might be made on these matters was really vexatious business which meant reading a large number of papers which might probably be destroyed or going into a lot of minute papers? With one voice, and I was almost tired of asking the question, they said they had no complaint to make as to the method in which the staff of the Audit Office discharged the very necessary duties imposed on them by this House.

It must be borne in mind that on the whole these winding-up Departments were working in close sympathy with, and harmony with, the Audit Office staffs which were employed in those Departments. Coming closer to the point, I think it is within my recollection that this particular Department in the Ministry of Munitions was held by the Comptroller and Auditor-General and his officers to have been doing particularly good work. It was very difficult work, very technical work. It was very difficult indeed to bring some of these accounts to anything that could be called a satisfactory conclusion. The Comptroller and Auditor-General held, and the Public Accounts Committee held, that the appointment of these investigating staffs was necessary to co-ordinate all the different items of claim and counter-claim between these contractors and the Government, and that the whole of the operations of the investigating departments were thoroughly welcomed by the Comptroller and Auditor-General and all the members of his staff. I can imagine, although I do not know the details of the method, that these papers on which all the different claims and counter-claims were finally considered, and the papers on which these investigators did the work, would be really very essential, and that their careful examination would be very essential. It was a fact, owing no doubt to the speed with which the Ministry of Munitions had to be evolved and built up during the War, that there was no proper method of bringing together in one and the same ledger the different personal transactions with firms so that they could really be seen on the ledger account. There were different departments responsible for placing a contract and issuing supplies of the material with which the contract had to be carried out. There were cases which came before us where loans to contractors had not been properly entered, and were not known to the Department which actually made the contract, and so on. There was no blaming anybody. A great deal of material had to be brought together from the different departments of the Ministry and different officers before any of the final bills of these contractors could be settled. I can quite imagine that no ledgers kept currently would contain all the proper items, but only the final work of these very expert people, who were created specially, could bring all the claims and counter-claims, with materials and loans and re-issues, and the rest of it, into one general conspectus in order to arrive at the final settlement. If these papers seem likely to have been really important, and to have been the only papers which could really show how a settlement was arrived at; if a Department of this kind were working in the most friendly way generally with the officers of the Comptroller and Auditor-General in effecting these settlements; if the officers of the Comptroller and Auditor - General realised, as well as hon. Members of this House realise, that there must be a certain amount of give and take, and that you cannot have an absolutely definite settlement, but you must set one thing against another; if they realised that as well as the officers conducting these negotiations, what justification can there be for anyone in this position, who had anything to do with these special investigations, suggesting to any of his staff that papers must be concealed, or that they should not come under the purview of the Audit Office officials?

That is the point. It is not as if the Audit Office offici[...] were doing anything hostile, or did not understand perfectly the necessity of bringing this together on some general conspectus, and settling it on a give and take method, or were not thoroughly alive to the necessity of having the thing over and done with and settled somehow, and the papers very likely burned and got out of the way when they were working with the Departments and helping them to arrive at this settlement. There was, therefore, no justification for any officer of the Department doing anything without regarding the officers of the Audit Office as his very best friend. I am perfectly certain if any officer of the Department had applied at any time to Sir Henry Gibson, the Comptroller and Auditor-General, or any of his staff, and had said: "Have you done with these papers; are you satisfied that you will never want to look at these papers again; may we burn and destroy these papers?" Sir Henry Gibson would have given a perfectly satisfactory and commonsense answer, and would have said, "Certainly, I am the last person who wants to insist on the meticulous keeping of papers I do not want to lock at again."


I think the right hon. Gentleman will agree that the only person who was the proper judge whether these papers were necessary or pertinent to the case at all was the Comptroller and Auditor-General.


That is why, in that instance, and in that instance only, I mentioned his name.


He is the only one.


Yes, I ought not to have said members of his staff.


And no one in the spending Departments. It was not for the spending Departments, but for the Comptroller and Auditor-General alone.


I quite agree, and that was really the purport of my remarks. I wanted to point out the fact that application had only to be made to the Comptroller and Auditor-General and he was the proper person. If the conditions were as I have described, I cannot conceive that he would vexatiously refuse his consent, or do anything to unduly burden or worry officers of Departments. We seem to have had a primâ facie case made out that some officer in the Ministry of Munitions has doubtless suggested to his subordinates that matters should be in some way concealed from the Audit Office officials, who are officers of this House, and I join with hon. Members in thinking that that is a matter which requires something more than an enquiry before a Committee consisting solely of officers of the Department concerned. I do think that as the matter has been raised before this House, and as it is one which closely concerns officers of this House like the Comptroller and Auditor-General and his staff, it would only be right if the Government would still like the Chairman of the Enquiry to be the Parliamentary Secretary to the Ministry of Munitions because the House would trust him absolutely, that there should be associated with him other hon. Members of this House, such as experienced members of the Public Ac- counts Committee, like the hon. Member for West Dorset (Colonel Sir R. Williams) the right hon. Gentleman the Member for the Scottish Universities (Sir H. Craik) or the hon. and gallant Member for Norwich (Lieut.-Commander Hilton Young) who have already done very valuable work, and they might have joined to them as assessors to assist them, the Comptroller and Auditor-General, who can say at once whether certain records were regarded as necessary by his Department; and there might also be with them one of the junior officers of accounts (Mr. Watson) who is well acquainted with these investigations. I only make a definite suggestion in order that the Government should not be able to say that no definite suggestions have been made. If the Government would substitute for a Committee consisting only of departmental officers, a Committee formed on some such lines as I have suggested, I am sure their findings would carry more conviction to the House.


My first acquaintance with this matter was about a couple of hours before I answered the question put to me to-day, and I did not have it before me in time to have more than a very few minutes' conversation on the subject with my Noble Friend Lord Inverforth. The result was that I was informed that there was no foundation for the allegations made by my hon. and gallant Friend (Captain Loseby). At question time I expressed the view that obviously if a primâ facie case could be made out for the allegations of my hon. and gallant Friend, it is clearly the duty of the Government to have an inquiry which would satisfy the House of Commons. I felt that at once, and it is for this reason that I am addressing the House now, instead of asking the Under-Secretary to do so. I am sure it will be agreed that, obviously, it is impossible for the House of Commons to judge of the value of the case presented by my hon. and gallant Friend. Anyone who has had a long experience of the House of Commons in cases of this kind, or who has even a layman's knowledge only of the law, knows that a case, if put with ability and fairness, as this was, is absolutely convincing until you hear the other side.

It would be quite imposible for us to judge the merits of this question as it stands. The real question is whether or not a sufficient case has been made out for granting the kind of inquiry for which my hon. and gallant Friend has asked. I am not complaining, and I know that my hon. Friend did communicate with the Ministry of Munitions, but I should have liked him to have given me a little more of the primâ facie evidence which convinced him. Had he done so I think it is quite possible that some kind of Committee like that suggested by my right hon. Friend (Mr. Acland) would have been quite sufficient to meet the case; but since my hon. Friend has brought the matter forward in this formal way before the House of Commons, and it will appear in the Press and will make a primâ facie case in the eyes of the public, it is necessary to meet it. The mere fact of this discussion makes it in the interests of the Minister of Munitions that there should be an inquiry which will satisfy everybody.

My hon. and gallant Friend who moved this Motion made no suggestion, no personal suggestion, against my Noble Friend Lord Inverforth, and I must say quite frankly that if the granting of the inquiry had been considered in any degree as a reflection upon the Minister, I would have taken any consequences rather than intervene. But that is not the case. I am not going to argue the case put by my hon. and gallant Friend, but I think it right to say that my Noble Friend, with whom I dismissed the question, says he has been told that this order to destroy the papers was not given. I know my hon. and gallant Friend (Captain Loseby) has given us an account of a conversation, and I am sure he is repeating exactly what in his view took place. That conversation, however, lasted an hour or two, and recollection of the exact words is very difficult to be sure of, when no note was taken. My hon. and gallant Friend thinks the case is exactly as he has stated it, but my Noble Friend assures me that there is not a single case of any kind connected with those accounts for which all the working papers are not available. My Noble Friend may be mistaken, and if so there is nobody will be better pleased to have the whole thing cleared up than my Noble Friend if he has been misled; but he does not think he has been misled. With all respect to my hon. and gallant Friend, I think it is possible that, in spite of the good faith he has advanced of all those who have given him their testimony, it may be found that there is really no substance in them, and certainly I should not be prepared to risk any money on the allegations which have been made, because I have heard many cases of this kind before. That, however, does not alter the matter as regards the House of Commons. The fact is that this is a serious charge, a very serious charge. I am glad that my hon. and gallant Friend suggested that there might be other motives besides corruption, and that it might have been due to carelessness. That is quite possible. But even if that were the reason, it does not make it any the less reprehensible on the part of those responsible for conduct of this kind.

Under these circumstances, I am perfectly ready to grant an inquiry, and I think it is better to do it—in spite of what my right hon. Friend has said—now it has gone so far—better to do it somewhat on the lines suggested by my right hon. Friend; and I say this, not only to satisfy the House, but because the Minister of Munitions himself is very anxious that, since there is to be an inquiry, it should be one that will command confidence in all quarters. What I propose is such a Committee as was set up before by this House in a similar case—a Committee consisting of a judge, if we can get one, and I have one in my mind, whom I shall try to get, who is well known to Members of this House. There ought also to be a well-known business man, who is above suspicion in cases of this kind, and the third member—I do not think there should be more than three—should be a good public accountant. As to the terms of reference, I do not think it possible to give the exact wording to-night, but, in substance, they will provide for an inquiry into, and a report upon, the allegations contained in my hon. Friend's question.

I can assure the House that nobody is more anxious than are the Government, if there has been irregularity, to find it out, and to ascertain the steps adopted by those responsible. It is perfectly true that during the War the Ministry of Munitions had a gigantic task, and started with a system of book-keeping which would not have been allowed in ordinary times. That point has been discussed on a number of occasions, and although there has been a great improvement in this respect, it may be that something of the old methods may still obtain in regard to contracts going back a long period of years. I am quite sure that a Committee such as I have suggested will look at a question of this kind with a broad mind, taking into account all the circumstances before coming to a decision.


Will it not be necessary to have a Bill empowering the Committee to take evidence on oath?


I think not. My right hon. Friend may perhaps remember another Committee of exactly the same kind in connection with which the same difficulty was raised, where in fact it was found it could get all the evidence it desired without having statutory powers.


Two facts emerge from to-day's proceedings which will be generally acceptable to the country. The first is the readiness of this House of Commons, immediately it hears serious allegations being made, to promptly give further opportunity to the hon. Member making them to raise the issue, and the second is satisfaction that the Government should have met the demand in the way it has. This is a charge against civil servants. There is no department of public life and no body of public servants in this country whose reputation this House of Commons ought more jealously to guard than the Civil Service. Therefore, something having been said which reflects upon that service, of which we are all so proud, we are entitled to say that the first opportunity should be given it in order to clear itself from the charge if possible. I am sure my right hon. Friend did not intend to overlook one important condition, and that was that just as the Government is desirous to court full and frank and open inquiry, it is equally anxious to protect those who believe that they are serving the public interest by giving the facts which they have disclosed. In other words, it should be made abundantly clear that no man, high or low, whatever his position may be, will suffer for giving evidence before the inquiry. I am quite sure my right hon. Friend will be ready to acquiesce in this suggestion. My hon. Friend who brought this matter forward is to be congratulated on his action and the Government are equally to be congratulated on the prompt steps they have taken to meet the charge. I hope that a fair and impartial inquiry will be held, an inquiry which will deal with the facts, and that there will be a clear and definite understanding that people are free to give evidence without fear of suffering in any way whatever for so doing.


While I congratulate the Leader of the House on the way in which he has met my hon. Friend, I cannot but express some doubt whether the Committee which he has sketched out is sufficiently large. No doubt the presence of a Judge as Chairman will ensure that great confidence is felt in it. I am glad also that it should contain a good business man, but I venture to suggest to my right hon. Friend the Chairman of the Public Accounts Committee that we have seen there has been in some of the accounts submitted to us a considerable neglect of the older traditions of the Civil Service, and we have also found that those accustomed to ordinary business transactions sometimes neglect the severer, more methodical, and more secure rules that prevail in the Civil Service. I think, therefore, it would be a great pity if within the Committee there were not included someone representing the Comptroller and Auditor-General, or someone acquainted with the conditions and scrupulous habits of care and regularity which are considered essential in keeping public accounts. A business man in business life may adopt some course of procedure convenient to himself and the course of his business, which may be perfectly legitimate, but he may also forget what is present to the man who is accustomed to the administration of public offices, that rules must be strictly obeyed, that they cannot be put in force for one occasion only, and that a breach of precedent constitutes a very great danger. The Committee sketched by the Leader of the House is considerably lacking, in that there is no provision for anyone who will be acquainted with those traditions, either through the Civil Service, the Comptroller and Auditor-General, or the Committee on Public Accounts.

10.0 P.M.


I am sure that all the Members of this House will appreciate the readiness of the right hon. Gentleman to accept the fullest inquiry into the charges and allegations that have been made. My hon. and gallant Friend has not come to make this matter a coward's castle. This question has exercised his mind for weeks. He consulted many of those with whom he is associated, and his feeling was so strong that he was prepared to bring the matter forward entirely on his own account, in order that a thorough inquiry might be undertaken. Apart from the satisfaction that the acceptance of such an inquiry gives to those who desire a clear Civil Service, there are two reasons why I am glad that this inquiry is going to take place. I hope that the right hon. Gentleman will give us an assurance that, whatever may be the form of the Committee, it will be a Committee that can take evidence on oath. If not, its value will be to a large extent vitiated, and the public will not accept it with the same confidence and assurance that they would feel if all the evidence were taken on oath. My first reason for wishing this to be a searching official inquiry is the protection of the Civil Service as a whole. Rumours have been current in every direction that there has been corruption in certain Government Departments in the handling of great sums of money, and those rumours should be laid low on behalf of that great body of Civil servants which we are proud to know is honest and can be trusted. It is rumoured that, under the stress of war, the old tradition of the Civil Service has been destroyed. A new element has been brought into the Service, and it is in regard to that new element, largely, that these allegations have been made. Therefore, on behalf both of the old Civil servants and of that new element which has been brought in from great commercial undertakings, a searching inquiry is essential. Hon. Members of this House have told us times without number that what we wanted was a business Government. The greater proportion of those gentlemen who have been brought in to undertake the duties of civil servants, especially in the new Departments, were gentlemen trained in over commercial undertakings, and men of business capacity. Therefore, an inquiry should be held to protect and re-establish the good name of our old civil servants, and at the same time, if the allegations are wrong, we can say that not only the old civil servants, but the men who came in to assist the country in the trying times of war stand as high in regard to honesty and probity as those who served us before the War. My hon. and gallant Friend has done a public service in bringing this matter forward; but I feel that that service would not be effective unless the right hon. Gentleman can give us the definite assurance to-night that the inquiry will be such as to permit of the evidence being taken upon oath. If that is done, I am sure that the Mover and Seconder of the Motion, and, I think, the whole House, will be satisfied to await the findings of that inquiry.


I asked the right hon. Gentleman a short time ago whether it would not be necessary to have an Act of Parliament in order to enable the Committee which he is going to set up to take evidence on oath. The right hon. Gentleman replied that he did not think that that was necessary. I have, however, in the meantime put the question to distinguished lawyers, and I think I am right in saying that without a Bill it will be impossible for the Committee to take evidence on oath. I venture to suggest to the Leader of the House that he could without any difficulty, after 11 o'clock on any evening, pass a Bill through all its stages to enable the Committee to take evidence on oath. I do not think that there would be a single dissentient voice in any quarter of the House. In the interests of the Civil Service itself, I feel that, unless this Committee is able to take evidence on oath, its findings, whatever they may be, will not have the weight in the country which they ought to have. If there is anything wrong—I do not say for a moment that there is—it should be probed to the bottom, and I venture to appeal to the Leader of the House to accede to the request which has been made by the hon. Member who has just sat down.


I think hon. Members will feel that I have tried to meet their wishes, and give them full weight. I remember that precisely the same kind of discussion took place with regard to another Committee of the same kind, and I am sure that the difficulty suggested was not found to occur in practice. At the same time, I have no objection to what is suggested, if it can be arranged; and if the House will leave it in that way, I will consult with my right hon. Friend the Attorney-General as to what difficulties there are in the way, and also as to whether it would not be possible to pass with the same facility a short general statute dealing with the matter.

Captain LOSEBY

I beg to thank the right hon. Gentleman, and to ask leave to withdraw the Motion.


Might I, with your permission, Mr. Speaker, ask the right hon. Gentleman the Leader of the House whether at this late hour he proposes to go on with the next Order, which is the question of the railway agreements? I do not think, if my right hon. Friend the Minister of Transport undertakes that duty at 5 minutes past 10, he can very well do justice to himself or to his subject under 40 or 50 minutes, and we should not start to-morrow under anything like the same favourable conditions.


Of course, one does not like to lose any Government time, but I am inclined to agree with my right hon. Friend that it is undesirable to take this Order to-night, particularly in view of the fact that it is necessary to take the Unemployment Insurance Bill to-morrow. It would be obviously still more inconvenient if my right hon. Friend made his speech to-night, and we went on with the discussion the day after to-morrow.

Motion, by leave, withdrawn.