HC Deb 23 March 1967 vol 743 cc1923-32
The Secretary of State for Scotland (Mr. William Ross)

With your permission, Mr. Speaker and that of the House, I should like to make a statement about the Highlands and Islands Development Board.

In reply to a question by the hon. Member for Moray and Nairn (Mr. G. Campbell), on 17th March, I undertook to let him have information about the assistance given to businesses in which members of the Board have an interest it I obtained the consent of the businesses concerned. Having obtained that consent I can now give the following details:

On 24th March, 1966, the Board approved a loan of £7,500 to R.T.S. (Potatoes) Ltd., who rent a building from Mr. John C. Robertson.

On 12th May, 1966, the Board approved a building grant of £1,500 and a loan of £23,500 to Polyscot (Polycast) Ltd., of which Mr. Frank Thomson is one of the two principal shareholders.

On 23rd December, 1966, the Board approved a loan of £4,000 to Shetland Knitters Association, in which Mr. Prophet Smith holds 10 £1 shares.

On 26th January, 1967, the Board approved a building grant of £1,687 10s. to Buchan Meat Producers Ltd., in which Mr. Robertson holds 100 £1 shares.

In each of these cases the member concerned declared his interest and I am satisfied that throughout these transactions the Board not only complied with the statutory requirements governing pecuniary interests, but acted fairly and objectively in the discharge of their duties.

Having given this information in the very special circumstances created by the recent spate of innuendo and rumour, I hope I carry both sides of the House with me in emphasising how vital it is to the Board's operations in the field of financial assistance for private industrial and commercial projects that those who come to the Board for assistance should be able to rely completely on the confidentiality of their dealings with the Board. This is a cardinal principle and it would be nothing short of a tragedy if the splendid work the Board has done and is doing in this important field were to be impaired or frustrated.

I would also like to say something about the Board's examination of the possibilities of petrochemical and associated development in the Invergordon area. Clearly, this could be a highly desirable project and could contribute greatly to the economy of the Highlands. I must emphasise, however, that a great deal of study and investigation will be required before the technical and commercial feasibility of such a major project can be established, and there will be important issues to be considered by the Government.

Various studies and investigations are proceeding, and whether or not the development will prove feasible cannot be decided until these are completed. I must, therefore, make it clear that there has not been, nor can there be at present, any commitment by the Government in this matter.

I now turn to Mr. Frank Thomson's position. When I appointed him to be a part-time member of the Board I was aware of his other activities, including his active desire to encourage a major petrochemical project in the Invergordon area. I accept that in the Board's study and exploration of the possibilities, Mr. Thomson played his part with genuine regard to the well-being of the Highlands.

While he is a member of a partnership which owns Kincraig Farm and House, in the vicinity of Invergordon, he has sought the agreement of his partners to withdraw from it. He is, however, also Chairman of Invergordon Chemical Enterprises Ltd. and in that capacity he has an interest in the petrochemical development should it go ahead. Mr. Thomson told me that, in that event, he would take steps to see that he did not derive any profit from either of these interests; and that he would not take any financial interest in the new enterprise.

But Mr. Thomson was not able to assure me that he would not accept an appointment in the enterprise should it eventuate. In all the circumstances, he has decided that in order to avoid any possible misunderstanding he should now resign from the Board and I have accepted his resignation. I do so with regret, knowing as I do the enthusiasm, concern and effort that he has put into the development of the Highlands.

Mr. Noble

I thank the right hon. Gentleman for his statement, but there are one or two questions which the House would wish him to answer.

First, the right hon. Gentleman has said that the Board approved the various moneys to different people, but did the Secretary of State himself approve proposals which appear to have given more than 10 per cent. of the money paid out by the Board to companies in which Board members were directly involved, those members themselves having been appointed by the Secretary of State?

Secondly, has the right hon. Gentleman satisfied himself that no private commercial benefit accrued to members of the Board as a result of the Board's decision to develop, if possible, a big chemical complex at Invergordon? The right hon. Gentleman's statement seemed to make it clear that Mr. Thomson had considerable interest in this development and that it was his intention to develop his own personal interest as well as that of the Highlands and the Board. He has now resigned, but has his resignation, in the Secretary of State's view, removed the very difficult position that he was clearly to some extent using the taxpayers' money and his position on the Board to develop an interest in which he had, in the past at least, an intention of taking a considerable part?

Thirdly, does not the Secretary of State think that the delay in making this full and frank statement has done serious damage to the reputation of the Board? Was it not the Secretary of State himself who, through his own office, took so long to clear up the whole of this position? Does he not therefore think that, in view of the complex nature of many of these things, it would be wise to publish in a White Paper a full statement of all the documents in this case?

Mr. Dalyell

On a point of order. I am sure that the right hon. Gentleman the Member for Argyll (Mr. Noble) did not mean it, but certainly my understanding of what he said was an innuendo that the Secretary of State himself had some- how benefited by the appointments. Could this be cleared up?

Mr. Speaker

The hon. Member must not seek innuendoes, especially when they are not there.

Mr. Ross

I do not think that a White Paper is essential. There has been far too much paper already about this matter. If I asked everyone whether he could swear that he had not seen confidential and private documents which were really the property of the Board, I would get some surprising answers.

As the right hon. Gentleman knows, the Secretary of State's approval is not required—and he will remember his own speech on the Bill—which provided that the Board could act up to an expenditure of £25,000 on its own initiative, except in exceptional cases—when he said that the figure should be at least £50,000 to give the Board freedom, prestige and the like.

It is the Board's job to develop. It was set up to be able to assist in the exploitation of the resources of the area. The right hon. Gentleman should appreciate that in this case the Board is not undertaking the development: it is a private investor, I do not know which, who might or might not do so.

As to the suggestion that the taxpayers' money has been used for a private purpose, the right hon. Gentleman is quite wrong. There must be few members of the Board who have sent in fewer expense accounts than Mr. Thomson. There has been no delay in this respect, and the right hon. Gentleman should appreciate that it would have been quite wrong for me to make any announcement about this last week without the consent of the businesses concerned.

Mr. Willis

Is my right hon. Friend aware that some of us are very seriously concerned at the manner in which certain persons with certain interests have impugned the integrity of members of the Board—who are very good public servants—in their vicious pursuit of Mr. Frank Thomson? Is he also aware that we have been very seriously concerned at the apparent willingness to sabotage the whole conception and idea of the Board in order to carry out this vendetta against Mr. Thomson? Is he also—

Mr. Speaker

Order. Questions must be brief.

Mr. Ross

We all know how they started. No one in this House could agree with, or justify, the leakage of information through someone who had been employed by the Board, but had not given it the loyalty that it merited. There is no doubt of the effect that the attacks upon the Board will have upon its work if they continue. The Board is the first instrument which has shown itself prepared to take action in the Highlands. I ask the House to give support to the Board to ensure that its work goes on at a good rate.

Mr. Stodart

The right hon. Gentleman has agreed that there has been rumour and innuendo, and far too much of it. Will he therefore answer two perfectly straight questions? The first is, did Mr. Frank Thomson have a controlling interest in a travel agency handling the Highland Board's account, and, secondly, can he explain why the firm, Timber Systems Ltd., which is one of Mr. Thomson's, was the only company given a commission by the Board to prepare a possible hotel project, without any other company being allowed to quote?

Mr. Ross

Mr. Thomson does not have a personal interest in the travel agency. It is owned, I think, by a trust. This was the only travel agency in Inverness, and the Board was using the travel agency before he became a member. As to the contract given for the timber houses, I can assure the hon. Gentleman that the Board's idea is to support industries and firms in the Highlands. This firm is in the Highlands, and he should not read too much into this. This was a perfectly suitable and reasonable way of doing this job. The cost in respect of this was about £300.

Mr. Russell Johnston

Is the right hon. Gentleman aware that everyone welcomes his unequivocal statement that there has been no improper activity by any member of the Board? None the less, would he agree that the lesson to be drawn from this sorry story is that no Board member should be in a position where he may be suspected by the public of having obtained private gain through public activity? This is particularly true where one has a Board involved in risk enterprise. Would he agree that the lesson is that Board members henceforth ought to be full-time, and ought to be asked to sever all business connections?

Mr. Ross

I would not accept that. This was debated very fully when the Bill went through. It was in respect of full-time and part-time membership that one important change was made to the Bill. If the hon. Gentleman casts his mind back to the discussion we had, and the speech of the hon. Gentleman the Member for Moray and Nairn (Mr. G. Campbell), he will remember that this was envisaged as one of the possibilities and likelihoods, and it was faced as being inevitable. At that time the Committee and the House took it to be, as I still think, properly covered by the statutory declaration of interest.

Mr. Maclennan

Would my right hon. Friend accept that this statement has cleared the air and has been a great service to the future of the Highlands? Does he agree that the resignation of Mr. Frank Thomson is nothing more than a step to protect the future good name of the Board, and that there is no implication of impropriety which the House can draw from it?

Mr. Speaker

Order. We cannot have long questions.

Mr. Ross

I entirely agree with my hon. Friend that this is to clear the air—I hope that it will clear the air. I would draw the attention of the House to how the air was muddied. To my mind, this is one of the most disgraceful episodes in the Highlands. According to reports I have read, information has been deliberately passed to everyone except Ministers. As to what my hon. Friend said about the imputation, this is perfectly true. Mr. Frank Thomson had declared his interests in these matters which I covered in my statement.

Mr. Alasdair Mackenzie

Would the Secretary of State be assured that his statement, putting the position of the petrochemicals project at Invergordon into perspective, will cause much satisfaction in that area? Will he also ensure that in future people who are intimately concerned in the area will be given adequate information and thus prevent rumour and speculation? Would he also be assured—

Mr. Speaker

Order. Briefly, please. I think that that is enough.

Mr. Ross

The point is essential. People should be adequately and accurately informed, and the source of information has been far from accurate. That is why I went out of my way to stress that there has not been and at this stage can be no Government commitment in respect of this.

Mr. Dewar

Would my right hon. Friend accept that the most useful contribution that could now be made to the work of the Board and the future of the Highlands will be the co-operation of both sides of this House in ensuring that no encouragement is given to any irresponsible element outside the House which might be tempted to continue a useless and stupid witch-hunt upon a gentleman who has now been exonerated by investigation?

Mr. Ross

I entirely agree.

Mr. G. Campbell

Is the Secretary of State aware that my criticism is of him, and not of the Board? Was this not an unwise appointment, an error of judgment on his part, not only because of the known commercial entanglements but also because Mr. Thomson had, shortly beforehand, publicly declared his full support for the Labour Party? Is he aware that this caused a great deal of criticism in the area of a political connection?

Mr. Ross

I can assure the hon. Gentleman that I was not aware of his full support for the Labour Party when I made him a member of the Board. I did not get an indication of that in relation to a "McPuff" campaign which was going on very much earlier, when I was concerned. The hon. Gentleman says that it was an unwise appointment. That is open to everyone to say. I can assure the hon. Gentleman that very few appointments are made which are recognised by everyone as being wise. This particular appointment was praised by the very people now participating in this vendetta.

Mr. Dalyell

When will the feasibility studies at Invergordon finish? May I invite the right hon. Gentleman the Member for Argyll (Mr. Noble) to explain to the House precisely what he meant by his references to appointments—that needs to be explained.

Mr. Speaker

Order. We have dealt with that.

Mr. Ross

I cannot give my hon. Friend accurate information as to when these feasibility studies will be concluded.

Mr. MacArthur

In view of the interest of certain Board members, did the Secretary of State approve these loan and grant arrangements under Section 8 of the Act? If not, should he not have done so? If he did so, was not his judgment wholly wrong? In either case, is not the best protection which he can give the Board to resign himself?

Mr. Ross

I think that that is quite wrong. Part of the criticism of the Act when it was going through Committee— we had better look up the hon. Gentleman's speeches about this—was that I should give the Board as much freedom as possible. I think that I have been able to exercise the right kind of judgment on how it has been conducting its business. There has been a searchlight on a very small part of the Board's work. I hope that when we get the Board's report next month—and, I hope, debate it— we shall get properly into perspective the wonderful work that the Board is doing, which is fully appreciated in all parts of the Highlands.

Mr. Rankin

Would my right hon. Friend agree that if the Highlands are to be properly and fully developed we can no longer rely merely on the supply industries like hydro-electricity, afforestation, and so on, and that development like a petrochemical project at Invergordon is absolutely necessary if the Highlands are to be modernised?

Mr. Ross

I think that we can take it that if the Highlands and Islands Board had ignored the possibilities it would have been under even severer criticism by other people. We must appreciate that there are many people who do not want it to do anything.

Mr. Noble

While Members on both sides of the House are entirely in favour of any development in the Highlands, does not the right hon. Gentleman realise that the question of people whom he has appointed to the Board is very different from the question of the ordinary allocation of money by the Board? In these special cases should not they go to the Secretary of State for his personal approval, because these are the sort of cases which cause troubles of the kind which we have had? In spite of what the Secretary of State has said today, I feel that in the particular circumstances of the Invergordon chemical enterprise there is a great deal of information which the Secretary of State, I know, has and which, as he said, may have come from a leak sent to the Scottish Office as well as to the Press. [Interruption.] I accept the right hon. Gentleman's assurance, but this is what Members have been told.

Mr. Ross

It is not true.

Mr. Noble

If it is not true, I accept what the right hon. Gentleman says. Since Board documents were involved, is it not wise that they should be published in the form of a White Paper?

Mr. Ross

No. It is quite wrong of the right hon. Gentleman to assume— and I should like to know from where and from whom he got his information— that these pirated documents which have been spread around the Highlands were sent to me or to other Ministers. Did the information come from the sender? The right hon. Gentleman should watch his words very carefully. He should appreciate that the difficulties which have arisen would arise with anybody in the area who was actively engaged in business.

It might well have arisen—and we debated this and considered it—when we were making appointments in relation to the man who went before Mr. Frank Thomson. But I can assure the right hon. Gentleman that we felt that this was covered. This difficulty was faced and discussed fully by the Committee. It felt at that time that it was covered by the Statute.

Several Hon. Members


Mi. Speaker

Order. I must protect the business of the day.

Mr. Buck

On a point of order. Would it now be in order if a Minister were to make a request to you, Mr Speaker, to make a statement about a matter which has arisen during this week?

Mr. Speaker

It would not be in order.

Mr. Dalyell

On a point of order. We know that the right hon. Member for Argyll (Mr. Noble) is a very honourable Member for the House. But I am still under the impression, as are some of my hon. Friends, that he made an innuendo against the Secretary of which should be clarified. May he have the opportunity to clarify it?

Mr. Speaker

I heard no such innuendo. Political criticism of the Secretary of State is quite legitimate in the House of Commons.

May I announce what I propose to do about the Adjournment debates? I gave the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) an hour, and I gave the hon. Member for Rugby (Mr. William Price) an hour. I have solved the problem of the time which we have lost by cutting back those two debates to three-quarters of an hour. I hope that hon. Members who have subjects to raise on the Adjournment will keep to the times. I have had the new times posted up in the "No" Lobby.