MR. JOHN POULSON (BANKRUPTCY PROCEEDINGS) (Hansard, 18 July 1972)

§ The Prime Minister (Mr. Edward Heath)
With permission, Mr. Speaker, I should now like to make the further statement which I promised last Thursday on matters arising out of the public examination in bankruptcy of Mr. John Poulson.
My right hon. and learned Friend the Attorney-General has this afternoon issued the following statement: The Inspector General in Bankruptcy has forwarded to the Attorney-General, the Lord Advocate, and the Director of Public Prosecutions the Official Receiver's Preliminary Report of his investigations into the conduct and affairs of Mr. J. G. L. Poulson. After consultation with the Attorney-General and the Lord Advocate, the Director has requested the Metropolitan Police to conduct an investigation and to report to him. That is the end of my right hon. and learned Friend's statement.
The police investigation will enable the Director of Public Prosecutions to decide whether there are grounds for instituting any criminal proceedings.
In these circumstances, it would clearly be wrong for the Government to establish any other form of inquiry, at least until the outcome of the police investigation is available and a decision has been made upon any prosecution.
In addition to the thorough inquiries which the police will now undertake, the Department of Trade and Industry will be able to use its investigatory powers under the Companies Acts.
Mr. W. G. Pottinger Secretary of the Department for Agriculture and Fisheries for Scotland, is being suspended from duty for the time being. I understand that Mr. 403 E. G. Braithwaite, Secretary of the South-West Metropolitan Hospital Board, is also being suspended.
In this connection there is one other matter of which I should inform the House. I have received a letter from my right hon. Friend the Home Secretary, who has asked me to read the following extract from it to the House: We discussed the assertions made by Mr. Poulson during his bankruptcy hearing. Among them there was one referring to myself, to the effect that before I accepted his invitation to become Chairman of an export company, for which post I took no remuneration, he had made a covenant in favour of a charitable appeal which had my support. I do not regard this as matter either for criticism or for investigation. However, there are matters not relating to me that do require investigation, and I entirely agree that this should be carried out in the normal way on behalf of the Director of Public Prosecutions. The difficulty arises that the task must fall upon the Metropolitan Police, and in my particular office as Home Secretary I am Police Authority for the Metropolis. We agreed that it would not be appropriate for me to continue to hold this office while the investigations are being pursued, in view of the fact that my name has been mentioned at the Hearing. My right hon. Friend's letter continues: You were good enough to suggest that I might for the time being hold some other office in your Government, but this I do not wish to accept. For more than twenty years now I have held office continuously, as a Minister, or a member of the Shadow Cabinet. I think I can reasonably claim a respite from the burdens of responsibility and from the glare of publicity which, inevitably, surrounds a Minister and, inexcusably, engulfs the private lives even of his family. I have replied to my right hon. Friend that, though I understand and respect the reasons for his decision to leave the Government, it is only with the greatest reluctance that I have accepted it.
I believe that right hon. and hon. Members on both sides of the House will share not only my deep regret at my right hon. Friend's going now but also my hope that it will not be long before he is able to resume his position in the public life of this country.
The Queen has been pleased to approve the appointment of my right hon. Friend the Lord President to be Home Secretary. He will hold this office in conjunction with the office of Lord President and Leader of the House.

§ Mr. Edward Short
I thank the right Gentleman for his statement. May I 404 say how very sorry we are to hear the reference to his right hon. Friend? I am sure that I carry the whole House with me in saying that in this his right hon. Friend has acted in the best traditions of the public service in this country.
We think it perfectly right and proper that if the Law Officers and the Director of Public Prosecutions think that there are matters to be investigated they ought to be investigated first by the police. Would the right hon. Gentleman confirm that this investigation will not prejudge the question whether at the end of it, there is a full public inquiry if that is considered necessary, because, clearly, there may be matters in this affair which, while not founding a prosecution, nevertheless require further investigation in the public interest?
Finally, may I say to the right hon. Gentleman that we fully recognise that there is considerable public concern and anxiety on this matter which ought to be allayed, but at the same time we do not think that it ought to be allowed to degenerate into a witch-hunt of any kind?

§ The Prime Minister
I am grateful to the right hon. Gentleman—in the absence of the right hon. Gentleman the Leader of the Opposition, which he has personally explained to me—for the kind things he has said about my right hon. Friend. It was, indeed, in the highest traditions of the public office. I think that the House will appreciate what a deep personal blow this is to my colleagues and myself.
Regarding the right hon. Gentleman's question, no action which is taken by the Director of Public Prosecutions in any way precludes a later inquiry if that should be deemed necessary.

§ Mr. Thorpe
Is the Prime Minister aware that I and my colleagues, who have unashamedly and unreservedly pressed for an inquiry into this matter, welcome the nature and the throughness of the inquiry that the Prime Minister has mentioned? Is the right hon. Gentleman aware that we respect the decision of the Home Secretary in this particular matter, where the important factor is that there should be a thorough and swift inquiry to clear those who are entitled so to be cleared and to ascertain the facts? Is he aware that it is the view of the whole House that at the end of the day two things will happen: the 405 facts will be established, and, without prejudging the issue, we hope that the resignation of the Home Secretary will be seen to have been of a purely temporary nature?

§ The Prime Minister
I thank the right hon. Gentleman for the last part of his remarks. I ought, perhaps, to emphasise to the House what many will already recognise, which is that this is a very complicated matter, and however swiftly those who are making the inquiries work, I am afraid that it will take a considerable time.

§ Sir H. Legge-Bourke
On this very melancholy occasion, will my right hon. Friend rest assured that I would claim no monopoly for the sympathy which a great many hon. Members on both sides of the House will have to him personally in having to make this very grievous announcement? Does my right hon. Friend agree that the nobility of the extracts he has quoted today from the letter of my right hon. Friend the Member for Barnet (Mr. Maudling) is typical of what we know him to have been ever since we had the honour of serving with him in the House from the day he came to it?

§ The Prime Minister
That is certainly true. Both letters will be published in full in the customary way.

§ Mr. Callaghan
With respect to the Prime Minister, there is a matter of concern in this, and that is the relationship between the Home Secretary and the Metropolitan Police. Is it not the case that from time immemorial the Director of Public Prosecutions takes his own decision on these matters as to whom he should prosecute and, indeed, as to whether a prosecution should be undertaken? Is it not further the case that the Home Secretary, in his capacity as police authority, which is certainly concerned with matters of payment and uniform, and that sort of question, has no relationship with the Metropolitan Police as to what police action is taken in an individual case? Therefore, in those circumstances, why did the Prime Minister accept the Home Secretary's resignation? Without prejudging the issue, would it not have been preferable for the Home Secretary to have retained his position, for the constitutional position regarding the Home Secretary and his 406 relationship with the Metropolitan Police to have been explained, and for us all to have tried to avoid what my right hon. Friend called a witch-hunt until the facts are established, instead of going through this process, which I dare say may result in the Home Secretary returning to the Government?

§ The Prime Minister
My right hon. Friend considered this matter carefully, as indeed I considered it myself, and both of us took the best advice available to us. My right hon. Friend came to the conclusion in the public interest that it would not be understood if he remained Home Secretary while an inquiry of this kind was taking place. I suggested to him, as he stated in his letter, that any difficulty could be avoided by his accepting another office in Her Majesty's Government. For the reasons which he explained in his letter, he decided not to accept.
The constitutional position was most carefully examined, but my right hon. Friend himself decided, in the interests of the public service, that it was right that he should not continue to be Home Secretary while the inquiry was carried out.

§ Mr. William Hamilton
What machinery has the Prime Minister in mind for dealing with the Civil Service side of this matter? He has announced that Mr. Pottinger has been suspended, but he will know that other civil servants' names have been mentioned in the Poulson matter and related matters. Will the right hon. Gentleman enlighten the House on this matter? Will he further impress upon his right hon. Friend the Leader of the House, now Home Secretary too, the vital importance of having a debate in the House about a Select Committee on Members' Financial Interests? The right hon. Gentleman's statement today makes no contribution to the solution of that particular aspect of the problem.

§ The Prime Minister
Those members of the Civil Service who are involved in this case will be subject to the examination carried out by the Director of Public Prosecutions, and I have been advised by the Head of the Civil Service as to the kind of action which should be taken in the case of each of those involved. On the last part of the hon. Gentleman's 407 question, my statement was dealing solely with the matters of this case. The position remains, as the Leader of the House has told the House that he is prepared to accept representaions on this matter and to consider a debate.

§ Mr. Ross
Do I understand that the Director of Public Prosecutions will conduct the inquiry himself in Scotland? The right hon. Gentleman will know that the rôle played here is the rôle played there by the Crown Office and by the Lord Advocate? Does this inquiry extend to Scotland? How will it be conducted? Surely it will not be conducted there by the Metropolitan Police and the Director of Public Prosecutions?

§ The Prime Minister
I said in my statement that the Lord Advocate had been fully consulted on this matter, and he has advised on any matters affecting Scotland. As I think the right hon. Gentleman and the House know, the examination in bankruptcy was carried out in England and, therefore, the inquiries will be carried out by the Director of Public Prosecutions with the help of the Metropolitan Police. Naturally, if inquiries are required in Scotland the necessary arrangements can be made.

§ Mr. Harper
As Mr. Poulson is a constituent of mine and my constituency has received adverse publicity in relation to this matter, does the Prime Minister agree that it is now time for the air to be cleared, and would that not best be done by holding a public inquiry under the Tribunals of Inquiry Act, 1921?

§ The Prime Minister
I gave very careful consideration to that, but when the recommendation was that the Director of Public Prosecutions would institute police inquiries, I concluded that it would be absolutely wrong to have any other form of inquiry taking place at the same time. I suggest to the hon. Gentleman that he reads the report of the Royal Commission on Tribunals and the relevant part first, paragraph 64, which states: It has long been recognised that from a practical point of view it would be almost impossible to prosecute a witness in respect of anything which emerged against him in the course of a hearing before a Tribunal of Inquiry. I think that the hon. Gentleman will know that normally at any tribunal all those who give evidence are immediately 408 granted immunity. Therefore, that would exclude any possibility of prosecution, if found to be desirable. I believe, therefore—I think that the House will agree—that it is right that the law should take the normal course, and, as I have said in answer to the Deputy Leader of the Opposition, this does not preclude any later form of inquiry should that be desirable.

§ Sir Elwyn Jones
Did the Prime Minister say what will be the nature of the liaison between the Metropolitan Police and the investigating staff of the Department of Trade and Industry during their inquiries? Will they be working separately? Is the Prime Minister aware that I think I am reflecting the views of the House as a whole when I say that the course of action taken by the former Home Secretary was in the circumstances the right course as it was the honourable course?

§ The Prime Minister
I thank the former Attorney-General for the views he expressed in the last part of his supplementary question.
As to the question of liaison, all the information which becomes available to the Department of Trade and Industry will be made available to the Metropolitan Police investigation. I would prefer not to go into the details of this at the moment, for reasons which the right hon. and learned Gentleman will understand.