HC Deb 05 May 1936 vol 311 cc1551-80

4.19 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I beg to move, That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say, whether, and, if so, in what circumstances and by what persons, any unauthorised disclosure was made of information relating to the Budget for the present year or any use made of any such information for the purposes of private gain. After the solemnity and the dignity of the proceedings which have just concluded, I very deeply regret to have to ask the House to attend to a matter of a very different character. It is common knowledge among hon. Members that business is often done at Lloyd's in what may be described as speculation upon the outcome of the Budget, and it is not surprising that in the circumstances of the present year some business of that kind should have been undertaken, for although it was not generally anticipated, I believe, that there was likely to he any new taxation, the public had not been without warning on the subject. In particular, the "Manchester Guardian" had prophesied increased taxation, and the bulletins of the Press Association which were issued to the newspapers had more than once indicated that further taxation might be expected. Therefore, there is nothing surprising in the fact of transactions of this kind taking place, and in ordinary circumstances I do not think they could have aroused any concern or given rise to any suspicion that there had been any leakage of Budget secrets—the preservation of which is a matter of tradition, on which we all pride ourselves—which to my knowledge has not occurred for very many years past. But in the course of the week after I had opened the Budget I received a communication from the Chairman of Lloyd's intimating that in his view and that of his colleagues there were some circumstances about the transactions that had taken place this year which indicated the possibility of a leakage of some kind.

I naturally took a grave view of that communication, coming from such an authority, and I thought it best to ask the chairman to come to see me as soon as possible, in order that I might hear from him what was the nature of the evidence which had put in his mind the possibility of such a regrettable occurrence. I saw Mr. Dixey, the Chairman of Lloyd's, and upon what he told me I was convinced that this was a matter which could not be allowed to rest, and which must be probed right down to the very bottom. Accordingly, I asked Mr. Dixey to pursue his inquiries as far as he could, and as soon as possible to let me know what was the result of them. In due course I received an intimation that he was ready to see me, and I saw him on 1st May when he gave me the results of his investigations so far as he had been able to carry them. The results were by no means conclusive—they hardly could be in the circumstances—but they were sufficient, in my view, to constitute a prima facie case for further inquiry, and accordingly, on my so informing my colleagues, the Government decided that a full and impartial inquiry must take place and that the matter must be sifted until either the inaccuracy of the supposition was demonstrated or the fault was brought home to the right quarter. It did not appear to us, on examination of the possible alternatives, that any tribunal could be found more thoroughly impartial in character and more fully clothed with powers to obtain all the information available than a tribunal of the kind which I have indicated, clothed with the powers which would be given it by a Resolution of both Houses of Parliament in the terms of the one I have read to the House.

I do not think it is necessary for me to say much more on the subject, but I must make some allusion to the observations made by the Leader of the Opposition and the right hon. Member for Hillsborough (Mr. Alexander) the other day, which suggested a clear anxiety on their part lest there should be any suspicion in the minds the public that this particular form of tribunal was being set up with the idea that it would be possible for information to be withheld from the public which the public ought to have. I am sure it is the last thing in the minds of the right hon. Gentlemen that there should be any such suspicion in the minds of the public, and I will go further and say that I do not think there could be any such suspicion if the nature of the tribunal and its powers were fully understood, because under the Act this tribunal could only sit in secret under certain conditions, and one of those conditions is that the secrecy must be in the public interest.

Surely no one can conceive that the tribunal would suggest that it was in the public interest that there should be any sheltering of any guilty party in this matter. I only want to add that such a course would be absolutely contrary to the desire and intentions of the Government, and I am myself quite satisfied that there will be no withholding from the public of any evidence which the public ought to hear. The power to sit in private is not confined to this particular tribunal, but is a power possessed by the Courts of Law, though it is only resorted to by the Courts of Law on the rarest possible occasions; and since the tribunal is to be presided over by a High Court Judge well acquainted with the practice of the Courts in this matter I am quite certain that the House need have no anxiety whatever on that point.

4.28 p.m.


The Chancellor of the Exchequer has now moved for a tribunal of inquiry into the alleged Budget leakages. The first point to notice is that it is a fortnight since these occurrences, a fortnight during which this House and the City and the Press have been full of rumours. Everybody knows that those rumours have been floating about. I think it is a pity that the Chancellor and the Government did not resolve to make this inquiry at once. I do not think it is fair to the people concerned that this matter should have been allowed to go on so long. I now gather from the Chancellor that at his first meeting with the Chairman of Lloyds there was matter for suspicion. I do not think that further inquiry should have been left to a committee of Lloyds, who, after all, had no powers whatever, and who were concerned, quite naturally from their point of view, with the question of the losses inflicted on their members. The essential thing which we have to deal with here is the fact that somehow or other there has been a leakage, and a leakage which must have come from a very narrow circle of very highly-placed persons. We all know that Budget secrets are jealously guarded, and that they are confined to a small circle of high officials and to members of the Cabinet. The space of time during which those persons are in possession of these secrets is generally very short. I do not know, but I have been given to understand that the Cabinet, contrary to usage, were informed of the proposals in the Budget before the Easter vacation, and, therefore, there was a much larger period than usual in which leakage might have occurred. Why has there been this departure from precedent? The fact remains now that a. fortnight has gone by with these inconclusive inquiries, and meanwhile, of course, the trail has been thoroughly confused. When a matter of this kind arises, there should be inquiry at the earliest possible moment.

The next point that arises is, What is the best method for dealing with a matter of this kind? Are the Government proposing the appropriate machinery? There, I think, the Chancellor might have told us something more as to why he has chosen this particular tribunal, consisting of a judge and two barristers. After all, we have a great deal of precedent for inquiries of this kind, not, I am glad to say, into Budget leakages. Indeed, leakages of Government information are comparatively rare, though we have had an unusual number during the tenure of this present Government—about one every two months—but, broadly speaking, leakages are extremely rare, and Budget leakages are still rarer. There is, however, abundance of precedents for inquiries of one kind and another.

The first thing that I would say to the right hon. Gentleman is that this is a House of Commons matter. Members of this House may be involved, and this House, after all, is the High Court of Parliament, yet the Chancellor says that this House is unfit to act as a court because of partiality. I do not know when the right hon. Gentleman came to that conclusion. I think it was since the occasion of the Campbell case, in which the right hon. Gentleman and his friends pressed that there should be a Select Committee. It is certainly since the Marconi inquiry, in which again the Conservative party at that time were quite convinced that the House of Commons was the right tribunal to look after a matter which might well involve the honour of its Members, and this is a matter, after all, between the House and the Executive. The Chancellor of the Exchequer spoke in a very detached way, as if something had happened quite apart from the Government, but the Government are responsible. If the leakage should have come through a civil servant, the Government are responsible for the Civil Service; if it has come through a Minister, they are obviously responsible for that Minister; and I think it is without precedent for the Government to come to the House and say, "We suggest that this is the right way of dealing with the matter." They might have sought the opinion of the House. That has been done on several occasions. This House is rightly jealous of the Executive and should keep complete control over it.

When one comes to consider what is the subject matter before us, this is not a matter of dealing with legal rights, it is not a matter that requires special, high, legal qualifications; it is a matter of fact which we are inquiring into. In the Savidge case there was a question of legal procedure involved, but this is a matter concerned, not with law, but with the Administration. In the matter which we are considering, any tribunal has to consider how it is that there has been a serious leakage in a matter of first-class importance, and the question as to the use made of the leakage is another matter. The essential thing we are on is to discover whether there has been a leakage and, if so, where it has come from. It is generally held pretty widely, that there has been a leakage. That has yet to be proved, but there were sufficient rumours running right round the country, a rumour expressing itself in the Press, rumours, I am told, that have even found their way into music-hall jokes. It made it extremely undesirable that there should be any delay, and it made a prima facie case for inquiry by this House, not by a committee of Lloyd's, not, I think, by a judge, but by this House.

Then the next point that I come to—and here the right hon. Gentleman has given us no information—is as to what is to be the method of procedure by this tribunal. The essential method of procedure by a tribunal is where there is a judge, where a case is investigated, and that case is put before him by counsel. Who is going to investigate this case? In other matters where this method has been used there have always been parties to the inquiry, the parties on one side interested in bringing out the facts and on the other side in refuting them, but here we have an inquiry as to whether something has happened, and there is no one responsible as far as we know. I do not know that there is anyone who is entitled to appear by counsel, unless the Government have anybody. We do not know, and I ask the right hon. Gentleman, What is going to be the method of procedure by this judge and these two eminent barristers? How are they going to get at the facts? What counsel will lay the facts before them? Who are instructing the counsel? Will the Attorney-General be conducting this case? It might be extremely awkward if so, and, as a matter of fact, there was some lapse due to one of his colleagues.

I do not think the Government seem to appreciate that the Government are in the dock in this matter. It is all very well for the right hon. Gentleman to say, "We cannot have an inquiry by the House of Commons because there is partiality." Anyone might say that. A person brought before a court of law might say, "I am afraid they will not be quite impartial between me and the Crown." It is all nonsense. This House is concerned for the honour of this House, and I consider that the right hon. Gentleman would have done far better to have proposed an inquiry by this House. I say that in a matter like this, where everybody knows there is suspicion floating around, you must have swift action, you must have action taken in the light of day, ane you must take the greatest possible steps to clear up the whole matter. I think this is a matter which should have been placed in the hands of the Director of Public Prosecutions, who has the necessary machinery to make all the inquiries. The longer a matter of this kind is allowed to run on the easier it is for traces to be hidden, and I consider that the Government in this matter have deliberately flouted the honour of this House.

The right hon. Gentleman the Chancellor of the Exchequer went so far as to say that you could not trust the House or a Committee of this House to be impartial. Well, a great deal of the work of this House is done by Committees which act in an impartial spirit. Does he say the same with regard to our Private Bill legislation? You put Members up there to hear parties and decide questions. Are they not to be trusted because of their partiality? We have matters that pass now and again before the Committee of Privileges, which they have to investigate. Their Members are drawn from one party and the other. Are they not all impartial? I ask the Chancellor of the Exchequer again, When has occurred this change of view on the part of the Government?


The right hon. Gentleman talked of a Royal Commission in the first place. When has he changed his view?


The right hon. Gentleman is always a master of the cheap point. He gets away with this House because generally he winds up a discussion when there is no one to reply to him. He knows perfectly well that I was not using a term of art at the time; I was asking for a full inquiry, and if the right hon. Gentleman had wanted to know what the view of the Opposition was, he might have come and asked. It would have been done, I think, by anybody else. I think those who have any experience of this House know that in a matter involving the honour of this House the usual thing would have been for the Government to have consulted with the leaders of the different parties in the House and the other Members, the old Members, to consider what was the best course. The right hon. Gentleman has not chosen to do that. He has chosen to ride off on a mere verbal point. As a matter of fact, in past times the Conservative Government have stood up very strongly on this very point, that this is a matter concerning this House and that it should be placed before a Select Committee of this House, and I ask why they have changed. I am well aware that the Lord President of the Council opposed the setting up of this kind of inquiry in the Campbell case. Do I understand that the Lord President has converted all the Members of the opposite side since he went over? If so, then so much the worse for them. If the right hon. Gentleman can suggest another reason—we will wait to hear it—as to why a method which has been found good enough for the Conservative party in opposition time and again is not good enough now, we shall be glad to hear it.

4.43 p.m.


We are very glad that this matter is to be investigated, for it is one with which we have been very considerably concerned. We are very jealous of the honour of all parties in the House, and of the Government, and of public officials, who have to be entrusted with secrets sometimes, and who, one would have thought, can be safely trusted with those secrets as an absolute rule. When something occurs which brings suspicion either on Members of the House, or on the Government, or on the public service, it is undoubtedly something which ought to be very thoroughly investigated and the truth established. I think we shall be in a better position to judge some of the matters which have been raised by the Leader of the Opposition when we get the result of the inquiry. For instance, as to whether inquiry has been unduly delayed, and whether the date at which the contents of the Budget were stated to the Cabinet was unduly early. Until then we shall not know whether a leakage occurred owing to that.

To us it seems that the proposed inquiry ought to rest on five principles, namely, speed of getting to work, freedom from any sort of partiality, certainty that every material matter will be thoroughly and skilfully investigated, the greatest possible amount of publicity, and, lastly, absence of any opportunity for anyone to make political capital out of the conduct of the investigation. As to speed, impartiality, thoroughness, and publicity, procedure by a Commission such as is proposed will be quite as satisfactory, it seems to us, as procedure by a Select Committee. There are several High Court judges who have not been Members of this House, who would do the work admirably, and whose preference, apart from what is laid down in the Statute, will all be in favour of publicity, whenever publicity can be properly maintained. For the last reason which I gave, I think that procedure by a judicial committee will be better than procedure by a Select Committee, which has been suggested from above the Gangway. It is a very serious matter and the further it can be separated from the possibility of any Member of the House coming into the limelight as a party to the inquiry, the better it will be for everybody concerned.

If the Government, as the Leader of the Opposition said, are in the dock, is it not better that they should be tried by a judge, who is accustomed to trying people who are in the dock? It will be possibles for the judge, assisted by eminent counsel, to consider the whole procedure and decide upon the best course to take at the inquiry. With regard to the Amendment that is to be moved, to bring in the Director of Public Prosecutions, I know very little about the law but, surely, that officer acts only on information given to him by persons such as the chief officer of the police district or other proper persons, and only in regard to alleged indictable offences. Surely, no less appropriate person could have been suggested to conduct a sort of all-round fishing inquiry for the information of the tribunal. If the judge wishes any help from the Director of Public Prosecutions or anybody else he will be quite capable of asking for it and getting it. The Director of Public Prosecutions is not the officer concerned with investigating matters of this sort, as if it was a matter for the Criminal Investigation Department. For these reasons, we shall support the Motion and not the Amendment.

4.49 p.m.


The Leader of the Opposition is regarded generally as a fair-minded man, but I think that he has been less than fair to the Government and to the House in the statement that he has made. Therefore, I propose to make some criticism of what he has said. But before I do so, may I say that his speech illustrates a fact which is known to those of us who have been for many years Members of this House, that an incident, or an alleged incident of this kind produces a perfect miasmic swamp of rumours and suspicions, and the mere fact that it does so makes it the more necessary that this matter should be considered by a judicial and impartial tribunal? I hope that if there be an incident it will be cleared up as soon as possible. It would be an ill service to the House of Commons if we were to return to the atmosphere of political and personal animosity and acerbity which disgraced this House in the three or four years before the outbreak of the War. One of the most pleasant things to those of us who are elder Members of the House is—and it is a tribute to hon. and right hon. Members opposite and also to the Prime Minister and hon. and right hon. Members on this side—that to-day the feeling between the two sides of the House is infinitely better than in the past. An incident of this kind, if allowed to drift, undealt with, might easily lead to all sorts of accusations being hurled across the Floor of the House. None of us wants to return to that sort of thing. Compared with what happened before the War, from 1911 onwards, even the most controversial debate in the House to-day is like a pleasant Sunday afternoon, with the Prime Minister in the role of the dear vicar.

I must make some comment on the speech of the Leader of the Opposition. He seemed to waver between two views. He spoke in one portion of his speech of a leak, and in another he said that no leakage was proved, but he complained of delay. Surely, the common-sense view is that, at the outset at any rate, there was no prima facie case for investigation by any body other than Lloyds, who were immediately affected, and it would have been impossible to find out whether there was a prima facie case proved until the expert body immediately concerned had had its investigation. I do not think that there is much in the right hon. Gentleman's point—I am sure it was made perfectly genuinely—that if there be a culprit he has covered up his tracks. I do not think that is so. I think the result of Lloyds investigation will be a considerable benefit, to the judicial tribunal that is to be set up. As the right hon. Member for North Cornwall (Sir F. Acland) pointed out, if it be indeed true that the Government are in the dock—a pretty strong term for the Leader of the Opposition to use in connection with a case which has not yet even been proved—then there is even more reason for not having sitting on them their normal political opponents or their supporters.

Let me here interpolate a remark, which may not be received with favour in all parts of the House—that a good many of us at that time heard with a sense of distaste and almost disgust, which I have never experienced before in the whole of my political career, the discussions which took place on the report of the Select Committee on the Marconi Inquiry. What were the charges made from one side of the House to the other? The opponents of the Government said that the supporters of the Government on the Committee had deliberately tried to shield those in high places, and equally supporters of the Government accused those sitting on our side of the House who were on the Committee of having deliberately exaggerated the case in order to try to bring a charge which could not be proved. Exactly the same thing would happen in a matter of this kind if it were found that in the slightest degree, by implication or in any other way, any Member of the Government were concerned.

Finally, the right hon. Gentleman opposite said that we had deliberately flouted the honour of this House and had suggested that the House was not to be trusted in a question of this kind. It is not a question whether the House is to be trusted but a question of which is the most convenient and the most appropriate tribunal, and I should think that the proper tribunal always in cases of this kind is a judicial tribunal. It cannot be expected that Members of the House have the exact knowledge in cases of this kind which is possessed by a High Court judge. There is every reason to believe that if this tribunal is properly conducted, as it will be conducted by the eminent, member of the judicial bench who will preside over it, it will be discovered whether, first, there has been any leakage; a fact which has not yet been proved. It is assumed that there has been a leakage and that there is a prima facie case, but the law of coincidence is a very curious one and there may have been no leakage.

Secondly, the inquiry will prove, if there has been a leakage, to whom it is due, and if it is proved that any particular person or persons who has or have been guilty of a leakage occupy official positions, then, quite obviously, the opinion of the House and the country will demand that they be treated, as they should be treated, under the Official Secrets Act with the utmost rigours of the law. If, on the other hand, it be found that there has been no leakage of information and therefore as a result there has been no improper disclosure of information, I hope that the Public Prosecutor will consider taking action in the case of those persons who have been spreading rumours about more than one person in high positions throughout the City and in the House. If no one is proved guilty, then the statements that have been made are undoubtedly of a criminally libellous character. I hope we shall have the fullest investigation, and I support what I believe to be the only appropriate tribunal for the purpose.

4.55 p.m.


It was my very unpleasant duty to raise this question in the Budget discussions last Thursday week. May I say that I thoroughly and heartily welcome the action which has been taken by the Government with regard to setting up the inquiry? I had a very short time in which to make my inquiries and I thought, to use a phrase which has been used this afternoon, that there was a prima facie case to bé raised in the House of Commons. The Chancellor of the Exchequer now thinks that there is a prima facie case for an inquiry. From what I have heard on Lloyds I am sure that they welcome most heartily the form of the proposed inquiry. It has been suggested by the Leader of the Opposition that there should be an inquiry by a Select Committee. I was not a Member of the House at the time of the Marconi Inquiry, but the Noble Lord the Member for Horsham (Earl Winterton) was. There are only 30 Members of the present House of Commons who were in the House at the time of the Marconi case, in 1912. At that time I happened to be actively interested in political affairs and was a Parliamentary candidate, and I remember very well outside the House of Commons the most unfortunate effect that that inquiry caused. Charges were bandied about in regard to the Chairman of the Commituee and the Members of the Committee, and those of us who are old enough to remember those things do not want that sort of thing to take place again in our Parliamentary life. If the facts are investigated and fully gone into, that is all for which we can ask.

There was a time many years ago when political petitions in regard to the unseating of Members of the House of Commons were discussed and decided by the Members of the House, but it was found better that they should be treated judicially, and I suggest that that analogy applies in the present case. This is clearly a case for a High Court judge, preferably one who has never had any political predilections, so far as are known. So far as Lloyds are concerned, opinion there cordially welcomes the proposed inquiry and the form it is to take. It is usual when a Member has raised a question in which he may have personal interest, for him to make a public disclosure, and I take that opportunity of doing so. This risk was offered to the syndicate in which I have an interest on Monday, when the rate was 10 guineas per cent., and was also offered on the Tuesday morning, when the rate was 40 guineas per cent. I am glad to say that it was not accepted.

4.59 p.m.


In this matter I am in agreement with the Leader of the Opposition. I listened with some surprise to the comments of the right hon. Member for North Cornwall (Sir F. Acland) and the Noble Lord opposite. Both of them seemed to think that Lloyds are a body which possesses the necessary qualifications for making an investigation. When this case was brought to their notice, why was the Public Prosecutor not notified? If it is proved that there has been a leakage, that is a criminal matter, and in criminal matters it is not customary to send for Lloyds or a committee but for the Public Prosecutor, in order that the proper people shall make the inquiry immediately. I admit that I may be unduly suspicious, but I do not believe that judges are so much better than Members of the House of Commons. It is said that judges are not political people, but they have political appointments. Every judge was appointed by political people and many of them have taken active part in politics. The Lord Chief Justice was placed in his position because he was an active politician. Every one of them was appointed by the Chief Law Officer of the Crown of the political party in power for the time being.

What guarantee have we that judges will be more impartial than Members of the House of Commons? I cannot follow hon. Members who think so little of their colleagues and so much of the judges. The average Member of the House of Commons is quite as capable of performing his duties upon a committee with credit to himself, impartiality and honour, as any other member of the community. I have had only one experience of this kind and it was in Glasgow, when an inquiry was set up. At the end of the day those who were interested in the matter were not satisfied because of the form which the inquiry had taken. Somebody has to state a case. I do not know whether I should say this or not, but if the person likely to be responsible for the leakage is a highly-placed civil servant, or a Member of the Cabinet, may I ask who is to make out the case that there was a leakage? Who will produce the evidence that on such and such a date Stock Exchange transactions took place? Who is to prove the case? In any other case somebody says: "We have made inquiries, and we propose to try to prove our case to the judge," but in this inquiry there can be nothing of that kind There will be three judges sitting on a bench. Who is to give evidence that the Chancellor of the Exchequer, for instance, gave Budget information to his colleagues upon a certain day? Who is to produce evidence that the rates rose from so much per cent. to a much higher percentage? Nobody. Rumour has been running round the House of Commons and circulating in the country that somebody made money on the Stock Exchange through a leakage in the Cabinet. That is what the judges have to discuss. What is the evidence? There is nobody who can say a single thing.

On the question of publicity, I am not so sure as the Chancellor is that the judges will consider everything in public. We must remember that the Labour party are the great Opposition party in this country. With one exception, no judge, so far as I know, belongs to that party. Every judge is associated with Liberal or Tory polities. It is said that this is not a party mattes; of course it is a party matter. It may become a party matter upon which an election may have to be settled. The public have some rights in the matter. Have hon. Members above the Gangway no rights in the matter at all? Have they no right to say: "This is a man in whom we have absolute confidence to carry out the work and to see that it is done properly"? The judges carry no confidence at all in wide circles outside. I have the feeling that they are proposed not so much to pull out the facts as to cover them up with legal jargon.

I cannot see an answer to the observation of the Leader of the Opposition that any other party in Opposition would have been consulted about the form which the inquiry was to take. This is not solely a Government matter, it is a matter for the whole House of Commons. The Chancellor of the Exchequer should consult the Opposition up to a point, and the House of Commons as well, as to who the judges are to be and as to the terms of the remit. This is not a good start. An inquiry is to be made into secrets and problems which are vital matters, and already a large section of the House of Commons has not complete confidence in the committee of inquiry. It is a tremendous pity, and it would have been better if the Chancellor had taken the course of consulting those who hold an opposition position in the House in this matter. The subject has been approached from a wrong angle.

5.9 p.m.


It is clear that the area of common agreement in the House this afternoon is very much larger than the area of difference. I am sorry that on points about which we differ a certain amount of heat has been displayed. In the matter of common agreement, we all want an inquiry that will effectively discover and make public the facts. As to the tribunal, I confess that my sympathies are with the Opposition rather than with the Government. I regret that the House of Commons has not been used and asked to perform the function that would formerly have been regarded as a normal part of its duty. After all, we are the High Court of Parliament, and we have semi-judicial functions. I do not like the thought that our duties in that respect are likely to be discarded because we have neglected opportunities to perform them. It is like a weapon put upon a wall and never used again; it grows rusty.

We are entrusted with the functions of High Court of Parliament, and this, I submit, is an occasion on which we should have used them. Not only for theoretical reasons but for practical ones, I do not feel at all convinced that the judicial tribunal will be as effective as a select committee would be. It is true that the Marconi Committee was a disastrous precedent in some respects. Like the Noble Lord, I remember the controversies that were aroused by it, and they were not pleasant in the result, and not creditable to the House or to the Parliamentary feelings of those times. Then, as the Noble Lord observed, party feelings were extremely heated, but in these days a select committee would, I believe, work effectively without such disturbing partisanship.

On purely practical grounds, I see that a judicial committee might find grave difficulty in discovering the facts. I believe that I am senior member of Lloyd's in this House. I certainly have recollections, over 30 years ago, of underwriting this kind of business. I know the technique of it. I assure the House that, so far as Lloyd's are concerned, any form of inquiry will be effective, because Lloyd's would most certainly realise to the full their public obligations and would give every assistance in discovering the truth. The difficulty will not begin at Lloyd's. It will begin after you have got what information Lloyd's can give and you are up against the screen or series of screens that then lie between you and the truth. It may well be that serious difficulty will then be found in reaching the malefactor, assuming that there is a malefactor. The screens may, for example, be almost inpenetrable until it is made quite plain that certain policies will not have claims paid upon them. I can conceive a situation in which the High Court of Parliament, with its very varied range of powers and its supreme authority, could act with a decision for which a mere judicial tribunal would not have adequate powers.

For those very practical reasons I should have preferred a Select Committee, but the difference is relatively small. I have hopes that the tribunal which the Government propose will reveal the facts and, sharing the common hope that truth will prevail and facts will be revealed, I do not desire to resist the proposal.

5.14 p.m.


I agree with the hon. Member who said that the House of Commons was merely deciding what was the more appropriate instrument, but from the practical point of view referred to by the hon. Member for Central Leeds (Mr. Denman), the Government recommend to the House that the procedure should be adopted which was sketched out by the Chancellor of the Exchequer. I want to remind the House of one result which would follow the procedure by way of Select Committee. I have no doubt that all of us would do our duty upon the Committee, but political feelings are strong, especially if it is the case, as was suggested by the Leader of the Opposition, that the Government are in the dock, or if, as was suggested by the hon. Member for Gorbals (Mr. Buchanan), we may be dealing with a, matter on which the next General Election may turn. I acknowledge the extreme impartiality and detachment of spirit of everybody on all sides, but I think that, if these are the prospects, we have to consider how the Select Committee would be composed.

According to all convention, it would be constituted with a Government majority. Out of, perhaps, 21 members, it would contain 13 or 14 avowed supporters of the Government. No doubt there would be a Member or two from my hon. Friends below the Gangway, for whom the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) spoke just now, and, as I thought, spoke very good sense. The result would be that you would not have a body which, so far as its antecedents were concerned, would approach this question—which we are told is a question in which Government credit is concerned, and in which, possibly, electoral interests may be involved—you would not have a body constituted of carefully chosen people who have nothing to do with the matter; it would be a body which, before it began, had been constituted on a particular basis with a Government majority.

I am one of the very few Members of this House, like my Noble Friend the Member for Horsham (Earl Winterton), whose Parliamentary memories go back to the Marconi days. No one can have gone through that business—I was Solicitor-General at the time—without being utterly sick of the way in which things developed, whatever one's views may have been; but who will deny that there were very honourable gentlemen serving on that committee? I do not deny it at all. I cannot believe, if I may take the test of my hon. Friend the Member for Central Leeds, that as a practical matter the best way in which to create a tribunal which may be trusted to act with complete aloofness from all political considerations, is to constitute a Select Committee. I say that without any sort of reflection against the good faith of anyone; but all of us here are politicians, and, except for that curious kind of politician who takes a special pleasure in always fouling the nest of his own side, there is a tendency—hon. Gentlemen opposite would not be the candid men they are if they did not admit it—to champion the point of view which, if it turns out ultimately to succeed, will, as a matter of fact, justify the faith that is in us.

I do not for a moment suggest that the Leader of the Opposition is not approaching this matter with the desire that we all have, that it should be properly handled, but I am entitled to remind him that even at this stage he was guilty just now of the observation, "There has been leakage." He made that observation with emphasis, and it was cheered by hon. Members behind him. What sort of judicial body is going to be appointed to investigate whether there has or has not been a leakage, when some of us are already making a declaration of that kind? While that is so, I quite agree that there are one or two very fair points of debate which may be raised as regards the tribunal suggested. The hon. Member below the Gangway put it very fairly when he said, quite truly, that, after all, we want to have this thing well done, that the material has got to be collected and presented in some orderly way. You cannot have a body that is going about in a vague sort of way, on the chance or in the hope that it will hit the right point. But may I point out that as a matter of fact that arrangement has got to be made whether you have a Select Committee or not? There is no public prosecutor who would appear before the Select Committee and say to them, "Allow me to explain the case to you." You have to find a suitable machinery for doing this in either case.

There is this to be said about a tribunal presided over by a High Court judge with two perfectly impartial, well-trained colleagues, that they are themselves, from their experience, all extremely familiar with the way in which an orderly inquiry is conducted. I do not expect that there are many Members of the present House of Commons who could pass an examination on the actual machinery of Lloyd's underwriting. My hon. Friend below the Gangway could, because he is a member of Lloyd's; my hon. Friend the Member for East Lewisham (Sir A. Pownall) could, because he also is a member of Lloyd's; and two or three of us who have from time to time practised in the Commercial Court may claim to know a little about it. But I have no doubt that, if you want to have someone presiding over this inquiry who really is able competently to conduct and control the whole thing from that point of view, you could not possibly make a better choice than a High Court judge. It really is not the case that there are not plenty of High Court judges who are not only, as I believe all judges to be, perfectly impartial, but who have actually no connection, past, present or future, with any conceivable political association.

Reference was made to the Director of Public Prosecutions, and he is also referred to in the Amendment which the hon. and learned Member for East Bristol (Sir S. Cripps) has on the Paper. He may or may not move that Amendment later; I cannot anticipate; but I would make this observation, as an old Attorney-General who has dealt with these matters at close quarters, that the Director of Public Prosecutions is an official whose work begins when a primâ facie case has been established against some named person; and there are other officials of the administration—people connected with Scotland Yard and others of that sort—who in practice have to carry out various kinds of inquiries; but the Director of Public Prosecutions acts under the instructions of the Attorney-General—he has no independent or automatic power. I have not the slightest doubt—indeed, I know—that, in order that the whole case may be most rapidly presented and examined in an orderly and effective way, my hon. and learned Friend the Attorney-General is already preparing himself, with the assistance of all the proper Departments, in order that he may give his assistance to the Tribunal as soon as ever it is constituted.

I imagine, judging from previous cases, that what will happen will be that the presiding judge will have complete authority to indicate this, that or the other direction in which he desires further information, and the whole machinery of the State will be at his disposal for the purpose. There is no reason at all why other interests should not apply to be represented before him and assist in. any way that they like. I venture to suggest that the matter will proceed in this way much more rapidly than is likely if the proposal were adopted of an inquiry by some 21 Members of the House of Commons. Therefore, I think that in all the circumstances the House will see that as a practical matter this is really the better machinery, and the Government have no other object in view at all except to choose the best machinery. Had we not better adopt this well-established machinery, provided for by the Statute Book itself, and get the facts through it without further delay?


To-day we heard from the Chancellor of the Exchequer a statement that nothing would have been known about this business had he not received a letter from Lloyd's. We have since heard a great deal of talk about how the procedure is to take place, and where you are going to get the first grip. Might I ask whether the first procedure is to be, or whether there is any other procedure, to summon the individuals that Lloyd's represented as having been, or as being likely to be, in possession of information of some kind that led them to become suspicious of certain transactions?


The hon. Member will, of course, appreciate that we must none of us anticipate the discretion which will rightly rest on the presiding judge, but I do not see that I can do any injury if I state what is quite plainly the commonsense point of view, and my own understanding of the matter. In the first place, I should conceive that the proceedings would probably begin—I should trust almost immediately—by the tribunal having before it, with, of course, actual witnesses for them to examine, all the material so far ascertained by the Chairman of Lloyd's. That might lead to further inquiries, and the whole machinery of the law will be available to make them effective. The Government, through the Attorney-General, will place the whole machinery of the law at the service of the tribunal, and will themselves forward the investigation of the truth in every way that they can. I cannot see that there is any better way. If that be so, I would ask the House to adopt this Resolution, and put in the hands of three impartial persons the business of finding out the facts, whatever they may be.

5.27 p.m.


I beg to move, in line 6, at the end, to add: and it is expedient that the Director of Public Prosecutions should forthwith make all inquiries and investigations for the purpose of laying all material evidence before the said tribunal. I think the speech of the Home Secretary illustrates the extreme misfortune that in this case the Opposition were not consulted in the usual way with regard to the procedure that should be adopted in a matter which does not touch parties, but touches the House of Commons. Hitherto it has always been the practice, I understand, in matters of this kind, to take the leaders of all parties into consultation, to make to them the sort of explanation that the right hon. Gentleman has just made, and then in consultation with them, to decide upon what is considered to be the most appropriate course. Unfortunately, the Chancellor of the Exchequer did not see fit to do that in this case. I think that that is most unfortunate, and I am sure that now he regrets that he did not take these steps to consult the appropriate parties in the House of Commons at an earlier time, and that therefore it is necessary for us to discuss in the House all the merits of these various methods which might have been discussed with much fuller information, such as the right hon. Gentleman has given to us, with regard to what the Attorney-General is doing, what Government Departments are doing, and so on. Those matters might have been discussed with much fuller knowledge outside the House, and some arrangement come to.

As the matter is, it seems to me to be very unfortunate that the House of Commons should be regarded by the Government as a body which is incompetent and unsuitable to carry through the inquiry into this matter. Everyone knows that Members of the House of Commons are just as much human beings as judges, or eminent lawyers, or anyone else; they all have their biases and their predilections; but I should have thought that a Select Committee of this House would be just the type of jury that should try this case. It is not a case primarily to be tried by the expert; it is a case to be tried by a jury; and I should have thought that, in a matter which touches the honour, perhaps, and the competence of Members of the House of Commons, the jury of a Select Committee would be the right body, as it has always been considered hitherto to be the right body, to deal with such a question.

It is all very well for the right hon. Gentleman to say what a marvellous thing it is to get this complete impartiality from a judge and two members of the legal profession. I have had many discussions with many eminent members of the legal profession at the bench of my inn on many political matters and I have never found that they are less political than I am. I do not know which of these paragons of impartiality is to be chosen. That will be a matter for the Chancellor of the Exchequer. But I shall be extremely surprised if he can find one as to whose political opinions I cannot give him a very fair idea. If this is to be judged by political impartiality, there is really no better case for this committee of three than there is for a Select Committee of the House. There is a worse case because in a Select Committee of the House you get all political opinions represented. That is a certainty. They may be violent, they may be strong, but they will all be there, whereas in this committee of three there is no guarantee that you will get any representation of any except one political opinion.

Therefore, if one is going to judge this thing, as I should have thought was undesirable, on the basis of political impartiality, let us be quite frank in the knowledge that whatever body you get will have its subconscious political bias, and it is better to see that there is a political bias of every sort of kind and colour. That, I should have thought, was a very strong argument and it is, no doubt, the argument that has weighed in the minds of many statesmen and Gov- ernments in the past when they have set up Select Committees and when, as the late Lord Oxford did, they pressed for Select Committees in matters like the Campbell affair. They realised that, though there may be disadvantages, there are also strong countervailing advantages.

The question that is raised by the Amendment is one with which the right hon. Gentleman has already dealt with to some extent and it may be that, if the explanation that he has given had been given to the Leaders of the Opposition at an earlier time, it might have been unnecessary to put the Amendment on the Paper. But the necessity arises for this reason, really the very reason that the right hon. Gentleman has so emphasised in his speech: The two people who are going to be in control of these proceedings henceforth are these three Olympically impartial persons. It is essential that, if they are to be impartial, they should not meddle in any way with the preparation of the case. They should investigate the matters that are put before them, but they must not follow through what may be only vague suspicions, and yet, as the right hon. Gentleman knows better than I do, it is these vague suspicions in the first instance which lead you to the quarry at the end. What I want to ask the Government is, Who is going to perform that function?

Let us realise the sort of matter that is being inquired into. First of all, of course, a prima facie case has to be made out—and the Chancellor is satisfied that that has been done—that there has been a leakage. That prima facie case for a leakage is being referred to this tribunal. Whether or not there is a leakage will, of course, depend on the volume of the business that has been done. You cannot get anything except circumstantial evidence of the leakage until you have found the person who has leaked and, therefore, the first part of your inquiry will be entirely one of circumstantial evidence. Let us assume that the tribunal comes to the conclusion that the case that satisfies the Chancellor satisfies them, because there will be no opposition to the prima facie case. There will be no one to protest against it being a prima facie case because there is no defendant. At that period presumably they would be satisfied that there is a prima facie case.

What does the investigation involve? A number of transactions have been done by Lloyd's and the Stock Exchange in tea shares, transactions which tend to show that someone has information. It is easy enough to get from Lloyd's the transactions. It is easy enough to get from Lloyd's the nominees who put the transactions through. It is easy enough to get from the stockbrokers and jobbers, if one can discover who they were, the names of the various firms with whom they dealt. Once you get to that point you get into an almost impenetrable difficulty unless you have means of carrying through a really skilled investigation in criminal matters, because one thing is certain. If there has been a leakage it has been very carefully concealed. No one is going to give away a matter of this sort, if they are going to give it away, and not arrange a number of defences for themselves so that they shall not be discovered. Therefore, one can immediately premise that this matter will have passed through a great number of hands before you get back, if you ever get back, to the origin of the story.

How is that investigation to be carried out? I have put down in this Amendment that the matter should be referred to the Director to carry through that investigation, but I am prepared to alter it to anyone else who is a suitable person. But it seems to me that it is going to be impossible for the tribunal itself to meddle in that investigation. It would at once be deprived, or would be suspected of being deprived, of impartiality if it followed up a clue which looked as if it led in a certain direction. It would have the appearance of following a certain quarry, perhaps because someone might suggest that there was some reason quite other than the evidence why that quarry should be followed. It is perhaps a little awkward for the Attorney-General to be the person in charge of this investigation, because the Government is in the dock. The leakage can only have been from a member of the Government or a very high member of the Civil Service, for both of whom they are responsible. I thought myself it would be better to put someone who is quite impartial and, although technically under the Attorney-General, conducts his business quite apart from the Attorney-General, someone who is accustomed to investigating matters of this sort and, although it is true that the Director of Public Prosecutions generally gets the case when it is any way strongly suspected that an individual has committed a crime, everyone knows that he has very many means of making inquiries which no other individual has.


It is a mere matter of information. Inquiries of that sort at that stage are nearly always made from Scotland Yard.


The Director uses the Scotland Yard staff. He is the person who very often co-ordinates many inquiries. I am sure the right hon. Gentleman will agree that there are many cases in which he has co-ordinated inquiries once suspicion has been fixed on an individual. Take the Ruxton case. It was not proved that Ruxton was guilty when the Director came in. It is true that the Lancashire police had done a good deal of inquiry but there was a good deal left to be done when the Director came into the case. It seems to me that someone of that kind is required if this tribunal is going to get the assistance that it needs in this case. I am not in the least concerned with who gives that assistance, provided we can be assured that the tribunal is not going to be left in this case, having followed the case through a certain distance, having got to what is apparently a blank wall—Mr. John Smith, who sent an order to William Jones, who sent an order to a broker—and then not be able to find out anything beyond Mr. John Smith which, maybe, can only be found out by detective methods and by the investigation of a great many banking accounts with which John Smith may eventually be linked up.

That is the class of inquiry that we are going to find ourselves embarked upon, this following of individuals through a long chain until you get back to the responsible individual. I ask the right hon. Gentleman to say that, if he does not accept my Amendment, he is prepared to see that some person is put in charge of these investigations, Scotland Yard or anyone else he likes, who has the power, the knowledge and the authority to carry through this type of investigation, which, of course, cannot be done by the right hon. Gentleman's proposal but which can be done quite impartially, and simply put the matter in their hands and say, "Carry through the investigation and what you find bring to the tribunal." I think my hon. Friends would be satisfied if we got an assurance that some such scheme will be carried through in this case.

5.42 p.m.

The ATTORNEY - GENERAL (Sir Donald Somervell)

There is one statement of the hon. and learned Gentleman that I should like to correct at the outset, though I am not sure that he used it in the sense in which it might be understood. He said he understood that I was going to direct the investigation. That, of course, is not so. The investigation is and must be directed by the judge who presides over the tribunal. He is in charge of the proceedings and he has full power to say how the investigation shall be conducted.


What I understood was that the preliminary matters are being directed now by him in order that the relevant matters may be ready to lay before the tribunal.


As I conceive it, the functions with which I am entrusted are, very shortly, to collect the information that is at present available, to be in a position to inform the tribunal of the nature of that information and what witnesses are available and, indeed, to collect as far as possible everything which in our opinion is relevant and proper to be put before the tribunal. The hon. and learned Gentleman went on to ask what might happen if certain conclusions seemed to be pointed at or a certain position arose. Speaking for myself, this seems to be one of those matters in which there are a large number of eventualities that may arise and which, when they arise, one must be ready to meet and deal with. We are perfectly prepared to say what our understanding would be, should the sort of circumstances that the hon. and learned Gentleman referred to arise. He said that you might get to a stage at which, in order to arrive at relevant truths, some detailed investigation of a criminal character had to be undertaken. I can assure him that if that situation arises, investigation will be undertaken, and I ask the House to trust me to see that it will be undertaken.

With all respect, though I agree that it might be suggested superficially, there is no embarrassment about the matter. I am being entrusted with a certain function to investigate facts. When it has been developed it will become obvious in what direction relevant facts are or may be available. It is a matter of performing the sort of functions I have been used to performing. It is the following up of evidence and of seeing whether this, that or the other person should be called. If in the course of that process it is necessary to call upon the police authorities or upon any other instrument available to the Government, the House will trust me to call upon them, and that assistance will be brought in. As I see it my function at present is to be ready to put the tribunal in possession of such information as is at present available. We do not in the least know whether other parties will apply to be represented and whether the tribunal will wish to see them. One will have to see as the thing develops what the exact procedure and the appropriate time for that really are. I undertake these duties with the fullest intention of carrying out the intention of the Government expressed from this Box, and our only aim and desire is to see that this matter is sifted to the bottom.


I hope that the House will not pass from this matter as if it had now become a contest between learned counsel as to the proper method of procedure. If we do that, we shall lose sight of the fundamental issue which is involved. The serious thing about the matter is not that a few people may run the risk of losing a certain amount of money on Lloyd's—that is an entirely secondary matter—but that certain matters should have been communicated to anyone before they were communicated to this House or should appear to have been communicated by some responsible person before we heard of it. I join with my right hon. Friend the Leader of the Opposition in feeling that the real seriousness of the matter is that it is one of a series of leakages that have taken place. It does not concern me very greatly whether this may have involved some financial loss in the nature of gambling transactions or not. That is a very small part of the matter. It is regrettable that no Member of the Front Government Bench has thought fit to quote to us any precedent for this kind of tribunal being set up to discuss this matter. This House is very old and has grown very wise in the course of acquiring antiquity in the way in which it deals with the great public services. We are here really investigating an allegation.


On a point of Order. Are we discussing the Amendment?


Is the hon. Member soon coming to the Amendment?


I was in this difficulty, that I rose before my hon. and learned Friend spoke, but I was not called. I desire to discuss the main Question, and should like to know whether there will be an opportunity of doing so after the disposal of the Amendment.


I shall put the main Question again after the disposal of the Amendment.


I beg to ask leave to withdraw the Amendment in view of the statement which the hon. and learned Gentleman has made.

Amendment, by leave, withdrawn.

Main Question again proposed.


This House has grown very wise in dealing with such a matter, and in the course of the centuries it has had to deal with it in many forms, and there have been many occasions upon which this House has appointed a Committee of its own Members to conduct cases as tribunals. No one can forget the great lines of Macaulay in describing the trial of Warren Hastings and the fact that during the course of the trial the Committee that was appointed to commence it broke up and ended with very diverse views. I see the learned Attorney-General smiling. He may think that it is a very unfortunate precedent to quote, that any tribunal should take seven years to discuss this particular matter. I cannot help thinking that an inquiry into the leakage of Budget secrets would be likely to take less time than the inquiry into the whole Government of India in the 18th century.

I hope the House will say that in this matter the investigation should remain in our hands and that the question is not, Did somebody lose something at Lloyd's but, How is it that this House, which through the centuries has established its position as the body to whom the great public services are responsible, has during the past few months, on more than one occasion, found, on reading in the Press and hearing in rumour, that there were matters of great public importance that should have been first communicated to it? It is a matter of some surprise to me that the first occasion on which it is suggested that there is the necessity for a tribunal is one on which some trifling financial loss, comparatively speaking, has been made in the matter. I regret very much that this House is being asked by the Chancellor of the Exchequer to set aside a position that it has managed to establish for itself during the centuries.


The learned Attorney-General stated just now that it is the desire of the Government to probe this matter to the bottom. That being the case, I cannot understand why they have not adopted the usual practice in this House of appoining a Select Committee. I admit that a judicial tribunal of the kind which they suggest is competent to find out whether a leakage has occurred on the facts before them. Having got the first point of proving that a leakage has existed—I do not admit that myself until it is proved—another problem comes before us. If a leakage exists, you know that it comes from among a certain group of people. It either comes from certain people in the Treasury or from Members of the Cabinet itself. It is definitely the fact that out of 30, 40 or perhaps 50 people comes the source of leakage, and you have to find it out. Surely, a judicial tribunal is not the body to find out; it is a question rather for the police to find out who is innocent and who is guilty. Speaking with all responsibility as a Member of this House, and in defence of its position, I do not want to foul the nest in which I am at the moment existing, but it is no good disguising from ourselves the fact that all over this House a certain name has been mentioned.


It is very improper to suggest anything of the kind.


As far as I know, without the slightest evidence whatever, a certain name has been mentioned, and we all know it, and the honour of the House is involved. Surely the honour of the House should be in the keeping of the House. The ordinary way is for a Select Committee to investigate the matter and find out whether it is so or not. I would ask the Prime Minister, who has just come into the Chamber, whether he will not consider that matter. If accusations are made against Members of this honourable House we should be the judge of whether the accusations are true or not, and it should not be passed over to a judicial authority. That is all I have to say. I feel that a Select Committee would do justice as between every Member of this House, whether accused or not. They are the body to find out and to penetrate into the source of the leakage, if such a leakage, for which I say that there is no evidence at all up to now, took place.

Resolved, That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say, whether, and, if so, in what circumstances and by what persons, any unauthorised disclosure was made of information relating to the Budget for the present year or any use made of any such information for the purposes of private gain.