§ The following Question stood upon the Order Paper:
§ 56. Mrs. HART:To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has considered the position of the Crown Agents and their relationship with Her Majesty's Government; and if he will make a statement about personal dealings in shares by Crown Agents.
§ The Minister for Overseas Development (Mr. Richard Wood):With permission, Mr. Speaker, I should now like to answer Question No. 56, and I apologise for the length of the answer.
The right hon. Lady the Member for Lanark (Mrs. Hart), when Minister of Overseas Development, asked for a departmental paper on the position of the Crown Agents. When I received it, I decided, with the agreement of my right hon. Friend the Foreign and Commonwealth Secretary, to appoint a Committee to consider the need for any changes in the status, functions and financial operations of the Crown Agents. The Committee began work in the late summer. Its Chairman is Sir Matthew Stevenson. With permission, I will publish in the OFFICIAL REPORT the names of its members and its terms of reference. It would not be appropriate to publish a report, since most of the work of the Crown Agents is now for independent Governments; but I will make a further statement to the House after I have considered the Committee's advice.
I have also examined carefully questions which have been raised about the personal dealings in shares by the two Crown Agents, with the fullest co-operation of them both. Mr. Hayes was a director in his official capacity of a merchant bank, the directors and managers of which were asked to purchase a small number of shares of a new issue sponsored by the bank. He did so after discussion with the then Permanent Secretary of the Ministry of Overseas Development, while giving instructions that the disposal of the shares should be at no gain or loss to himself. I am satisfied that this purchase was not inconsistent with his office.
645 Mr. Morris is a director in his official capacity of Sterling Industrial Securities, in which the Crown Agents have a financial stake. In the summer of 1970 he told his chairman, Mr. Hayes, of his wish to purchase some shares in this company with the gratuity he would receive on retirement in September, 1970. Meanwhile my Department, who had no knowledge of the proposed share transaction, agreed to the chairman's request that Mr. Morris should remain in temporary employment as a Crown Agent for a period after his retirement from pensionable service. Mr. Morris acquired shares in the company in October, 1970.
Last February Mr. Morris became chairman of, and also purchased shares in, a private company which includes Sterling Industrial Securities among its bankers.
Looking back on this whole sequence of events, and taking account in particular of Mr. Morris's retention as a Crown Agent for longer than was originally contemplated, I consider that the Crown Agents should have recognised that these arrangements might not be wholly compatible with Mr. Morris's continuing employment as a Crown Agent. I have discussed this with Mr. Morris, who is coming to the end of a long and devoted career in public service, and, in recognition of this difficult situation, he has undertaken to dispose of the shares without profit to himself.
§ Mrs. Hart:I thank the Minister for that statement and recognise that it needed to be as long as it has been.
May I, first, say that we shall want to study this very carefully, in particular some of the implications of what he has said? Second, may I say that we are glad that the question of Mr. Morris's shareholding has now been cleared up, but that this clearly indicates how important it is to get the constitutional relationship between Government and the Crown Agents right?
Why is he so determined not to publish the report of the inquiry when it is complete? I must tell the right hon. Gentleman that we shall press him on this. I should find it quite wrong if a report on such an important constitutional matter were not to be made available to Parliament. Second, why has it taken so long to make this statement? 646 As the right hon. Gentleman said, I asked for the official departmental look at this in the spring of 1970, yet it is only now —in the summer—that he has set up the Committee.
Lastly, will the Committee, whose names he is about to publish, include representatives of Commonwealth Governments or of the Commonwealth Secretariat, recognising the key role that the Crown Agents play in the economic relationship between trade in Britain and Commonwealth countries?
§ Mr. Wood:On the first of the right hon. Lady's points, on publication, I have taken the view that the relationship between the principals, most or many of whom are independent Governments, and the Crown Agents themselves on the other side, is of immense importance, and that it would therefore he unwise and wrong to publish a report which could possibly badly affect that relationship. That is why I announced the decision that I have.
As for delay, I suppose that perhaps we have all been rather slow in getting round to this. The Crown Agents have now existed since 1833—therefore, for about 140 years. The Labour Party, the Conservative Party and the Liberal Party perhaps could have acted a little earlier in considering what should be the proper relationship between the Crown Agents, in new circumstances, and the Government. But in comparison with those 140 years, the period between the right hon. Lady's initiation of this examination and the report of the Stevenson Committee will probably be a little less than two years, and therefore rather insignificant beside the length of life of the Crown Agents over the centuries.
As for the members, I will publish their names, as I have said, in the OFFICIAL REPORT. This is a small committee, which does not contain the membership which the right hon. Lady suggested, but it will, I hope, satisfy the House of Commons that these matters will be very carefully looked into.
§ Mr. Dalyell:For what reason did the Department not have knowledge of the share transactions?
§ Mr. Arthur Lewis:Could the Minister tell us whether this arose as a result of the scandal which was revealed by the Sunday Times and Private Eye? If so, will the right hon. Gentleman pay a tribute to the Sunday Times and Private Eye for starting this scandal? After all, Private Eye is very rarely praised in this House, and it might make a change to do so.
§ Mr. Wood:If the hon. Gentleman will show me the reports which appeared in the Sunday Times and Private Eye, I will see whether they deserve a tribute.
§ Mr. George Cunningham:Will the right hon. Gentleman bear in mind that, despite this regrettable incident, the Crown Agents have a very high reputation throughout all aid donors in the world for providing facilities in developing countries which no other donor can equal?
Will the report, if it is not to be published, at least be given to the overseas principals which use the Crown Agents so that they can be sure that things have now been put right inside the Agency?
§ Mr. Wood:I am glad that the hon. Gentleman made the first point. I should like to have made it myself. I think that the confidence of the principals in the activities of the Crown Agents is shown by the amount of business that they place with the Crown Agents.
As I explained to the right hon. Lady, I have taken the view that the report should not be published. As the report is about the desirable relationships for the future between the Crown Agents, on the one hand, and Her Majesty's Government, on the other hand, I have naturally kept the various principals fully in the picture so that they will know what is happening, and I am certain that the existence of the Committee will not impair the relationship between the Crown Agents and their principals.
§ Mrs. Hart:May I press the right hon. Gentleman a shade further on the question of publication. As he will appreciate, my concern was that the constitutional relationship in this case between a Minister and the Crown Agents whom he appointed but who had no other responsibility whatever, either financial or otherwise, to government seemed unsatisfactory. To the extent that the inquiry is 648 directly concerned with this constitutional relationship, I believe that this is a matter which it would be perfectly proper to make public knowledge. We do not have other constitutional relationships between Ministers and inside bodies or public bodies which are not known fully to Parliament.
§ Mr. Wood:The right hon. Lady will understand that the Committee will have to consider in some detail the relationship between the Crown Agents and the principals as well as the relationship between the Crown Agents and Her Majesty's Government. That is why I promised to make a further statement to the House when I receive the Committee's advice in the light of what the Committee thinks should be the future relationship between the Crown Agents and Her Majesty's Government. However, I do not think it right to publish the report. I do not think the report could be nearly as useful if I did not make that statement.
Following is the information:
The Committee's terms of reference are to consider whether there is a need for any changes in the status, functions and financial operations of the Crown Agents, including particularly their relationship to Her Majesty's Government, having regard to:Developments which have taken place in recent years in the nature of their functions and in the constitutional status of their principals;
and to the United Kingdom's own interests including the needs of the remaining dependencies;
and to make recommendations on the nature of any such change. The Chairman is Sir Matthew Stevenson, K.C.B., C.M.G., and other members are:
Sir Glyn Jones, G.C.M.G., M.B.E.
Mr. M. J. Verey.
Sir Charles Whishaw.