VEHICLE AND GENERAL INSURANCE (TRIBUNAL)

HC Deb 20 March 1972 vol 833 cc1239-66

12.9 a.m.

Mr. Emlyn Hooson (Montgomery)

My hon. Friends and I wish to raise the question of the provisions of Class III, Vote 12, sub-head e.2 of the Supplementary Estimates. Under the heading, "Civil Cases", there is an increase in the present provision of £250,000 to the revised provision of £438,000, and by way of explanation, under the sub-head are these words: Unusually expensive cases, particularly the Vehicle and General Tribunal of Inquiry. I understand that in the latter to my hon. Friend the Member for Cornwall, North (Mr. Pardoe), the Prime Minister disclosed that the actual cost of the inquiry was about £150,000 and that the remainder of the balance is taken up by some other sum.

The tribunal was set up under an appointment which appears at the commencement of the report signed by the Home Secretary, where it says that it was established to inquire into a definite matter of urgent public importance. It then set out certain issues in relation to the circumstances leading up to the cessation of trading by the Vehicle and General Insurance Company. There were three paragraphs, the first relating to whether certain documents or other information were improperly disclosed or obtained and whether, should that be shown to be the case, any use was made of such information for the purpose of private advantage.

The second concerned the question whether there was negligence or misconduct by persons in the service of the Crown directly or indirectly responsible for the discharge in relation to those companies, of functions under the Insurance Companies Acts, 1958–67.

The third asked whether there was any evidence that the interests of policy-holders or shareholders were adversely affected as a result of any impropriety, negligence or misconduct found to have occurred.

A very distinguished panel was appointed to serve on the tribunal under the chairmanship of Mr. Justice James, who is renowned, among other things, for his prodigious energy and industry—qualitieswhich were no doubt adequately displayed in the conduct of this inquiry. He was assisted by two very distinguished members of the legal profession. The importance of the inquiry could be illustrated by the fact that the policy-holders apparently lost £10 million and the shareholders lost £10 millions in the cessation of trading of the company. The report discloses that from the 1963 accounts the company was suspect, although the law at that time permitted the Board of Trade action only in the case of insolvency, and therefore no question of negligence arose before the 1967 Companies Act come into force on 27th July, 1967.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

The hon. and learned Gentleman probably realises the difficulty which the House and the Chair are in. I am sure he will have read the letter his hon. Friend the Member for Cornwall, North (Mr. Pardoe) received. It is very difficult to make a speech which will be in order, but I am sure that the hon. and learned Gentleman will try to keep in order. I hope that he will try to observe the terms of the letter, which I will observe to see that order is obtained.

Mr. Hooson

I have these problems very much in mind. I think that I am within the terms of order, as will appear from what I am about to say. The Board of Trade could have acted under the 1967 Act as soon as it came into force, and the inquiry concluded that Mr. Jardine, an under-secretary, was negligent, and that Mr. Homewood and Mr. Steel, two assistant Secretarys, were to be criticised. No other servant of the Crown, whether senior civil servant or Minister, was held to be negligent for not exercising powers under the 1967 Act, and it was pointed out that no such allegation was made before the tribunal.

I hope that you will appreciate the point that I am going to raise, Mr. Deputy Speaker, on the provision under the Vote, because under the Tribunals of Inquiry Act, 1921, no provision is made for the payment of legal representation of people whose conduct may be under review by tribunal. Nevertheless, the tribunal has the right to recommend that ex gratia payments be made to those who are legally represented and I understand that such payments have been recommended in this case. I do not know how many ex gratia payments have been made, and to whom. That is information to which the House is entitled before it approves the Vote.

The gentleman who has been most criticised, and held to have been negligent—Mr. Jardine—was unfortunately not legally represented before the tribunal. No doubt representations will be made to the appropriate authority by the Civil Service Union and those who look after his interests. But it transpires that Mr. Burr, the ex-managing director of the company, also clearly represented to the tribunal that he would have wished to be legally represented. It was clearly important, as the conduct of these two gentlemen was obviously to be reviewed—and might well be reviewed critically by the tribunal—that both should have had independent legal representation to look after their interests. When Mr. Burr indicated that he would like to be legally represented he made it a kind of precondition that he would like a guarantee from the tribunal that all his legal costs would be met. We can understand a private individual's requiring such a guarantee, because the cost could have broken him, as the tribunal went on for a long time.

The Financial Secretary to the Treasury (Mr. Patrick Jenkin)

I think that the hon. Gentleman said "Mr. Burr." I wonder whether he meant Mr. Hunt.

Mr. Hooson

I am greatly obliged to the Financial Secretary for putting me right on that point. I meant the ex-managing director, Mr. Hunt.

The tribunal did not have the power to give the guarantee. Therefore, Mr. Hunt was not legally represented. Nobody looked after his interests. Mr. Jardine, the civil servant who was criticised and found negligent by the tribunal, had nobody to look after his interests. It is true that learned counsel were briefed on behalf of the Department of Trade and Industry, but we can conceive of circumstances in which the interests of the Department might well clash with the interests of an individual employed within it. It might well be in the interests of the Department that blame should attach to an individual within it, yet the Department generally be cleared. Counsel appearing for an individual working within a Department might in certain circumstances find it prudent in the interests of his client to widen the scope of an inquiry on a particular point. That might well have happened if Mr. Jardine had been separately represented.

This was a very important inquiry, involving investigation into the lass of a great deal of money and the professional conduct of civil servants and, we would think, also the political conduct of certain Ministers—although no Ministers were called as witnesses—and into the professional behaviour of people who had held important positions in the company. It is therefore of the greatest importance and interest to the public to know what ex gratia payments for legal representatives have been made. I am not particularly interested in the amounts, but I want to inquire to whom they were made. Does the Financial Secretary think that the tribunal was right in telling Mr. Hunt that no guaranteee could be given that his legal expenses would be met? One would have thought that if he were going to be represented he would want to know before he incurred the bill who was going to meet it.

I also want to know whether anyone who applied to the tribunal for an ex gratiapayment for his costs to be met was refused. It is very important to know on what grounds a refusal is based. Or is it becoming a virtual convention that where one is legally represented and clearly has some kind of interest in the proceedings there will almost inevitably be a recommendation by the tribunal that an ex gratia payment should be made? Does the ex gratia payment meet the total cost incurred by the applicant? Are there any cases where, after a recommendation for an ex gratia payment has been made, the Treasury has refused to meet the payment? We have a right to have answers to all these questions.

I would like to widen greatly the scope of my probing, but I concede that within the scope of the letter that was directed to my hon. Friend it would be difficult for me to do so, and I know that my right hon. and hon. Friends too would like to probe the matter further. The preliminary information that I have sought would be of the great importance, and would also serve to enlarge our range of knowledge for the much wider debate which inevitably must come on this subject.

Clearly, the country is disturbed not at the findings so much as at the way in which the findings are achieved under a tribunal of inquiry of this kind. As you know, Mr. Deputy Speaker, from your long experience in this House, some politicians have had reason to complain about the findings of a tribunal of inquiry, but on this occasion it is probable that the civil servants have done most of the complaining; it is they who feel that they have ground for complaint, and it is of considerable signifiance that a finding of ultimate responsibility was made concerning a civil servant who occupied the position of under-secretary but that no Ministers and few senior civil servants were called. All these matters can be investigated in the future, but it would greatly help us in our inquiries into this matter if we could have answers to the questions that I have posed.

12.23 a.m.

Mr. Jeremy Thorpe (Devon, North)

I seek to raise only one matter briefly, Mr. Deputy Speaker. You have courteously indicated that you have taken into consideration the letter that the Public Bill Office was kind enough to send to my hon. Friend the Member for Cornwall, North (Mr. Pardoe) setting out the position which, in your view, restricts the debate. I do not seek to challenge your ruling, but I believe that unless we put on the record the views that we have on the legal position of tribunals set up under the 1921 Act we shall, in effect, be making case law which may be binding on the House of Commons for the future. It is very important that we should see these things in perspective.

Two things are taken from "Erskine May". In reverse order, there is, first, the reference to page 725 of the 18th Edition, from which I do not in any way dissent. It virtually says that when the conduct of a Minister or a senior civil servant is in doubt, or is subject to criticism, it can be debated only on a substantive Motion of the House. There is, secondly, the reference to pages 361 to 362 of "Erskine May", in which the same principle is related, namely, that one can question the conduct of a judicial court only by substantive Motion. I ask rhetorically, because I think this terribly important, that we should establish whether we are dealing with a judicial court.

The tribunal to which my hon. and learned Friend the Member for Montgomery (Mr. Hooson) referred was set up by the Home Secretary and assigned by him on 28th April, 1971. It was set up pursuant to Section 1 of the Tribunals of Inquiry (Evidence) Act. That is a very short Act. In effect it says that when Parliament has resolved that there is a matter of definite importance a tribunal may be set up and—I paraphrase, I hope accurately—in order that it may discharge its functions it shall be given certain powers—powers to compel the attendance of witnesses and examine them on oath, to compel the production of documents, and to take evidence abroad. Then a very interesting passage follows. If a witness who is summoned refuses to appear, defaults in attending, refuses to answer questions or to produce any document required of him, or does anything which, had the tribunal been a court of law, would have been a contempt of court, the tribunal has power to refer those matters to a court of law to deal with as that court thinks fit. In other words, the tribunal is invested with many of the powers of a court of law in order to make effective its deliberations, but by the very definition of the 1921 Act it is not a court of law, and there is no case law in my experience, nor is there any statutory authority, for saying that it is a court of law.

If that be so, it follows that the reference on page 361 in "Erskine May" to a court which may not be questioned save by substantive resolution cannot and does not apply in this case. The mere fact that an eminent member of that tribunal happened to be a High Court judge is purely coincidental. He was sitting not as a puisne judge but as a distinguished lawyer, empanelled for that purpose. I therefore think it very important that—perhaps not at this stage, but for the future—before the Public Bill Office comes to the decision that a tribunal set up under the 1921 Act is a judicial court, it should consider the matter very carefully, because, in my submission, although it is a tribunal invested by the 1921 Act with many of the powers of a court of law, the mere fact that it has to refer alleged contempt to a court of law is proof positive that it is not a court of law in its own right.

Mr. Deputy Speaker

I am obliged to the right hon. Gentleman, and I am very interested in his exposition. The matter ought to be put the other way, because my interpretation of the Act is that it is a tribunal vested with all the powers of a High Court except in one respect that the right hon. Gentleman has mentioned which takes away those powers. Otherwise the words are: The tribunal shall have all such powers, rights and privileges that are vested in the High Court, or in Scotland, in the Court of Session. It is a question of what we take this to mean. I think that I am bound to put it the way I am putting it to the right hon. Gentleman, and I hope that he will accept it from me.

Mr. Thorpe

I am grateful, Mr. Deputy Speaker. I do not wish to argue that point at this stage, save to say that it is not, with respect, taking away those powers. Under the 1921 Act I accept that a tribunal is granted many powers which one would normally expect of a judicial court, but it is expressly excluded from having the power to commit for contempt, and therefore it is not what is taken away. If you were given learned advice on that basis it is as fallacious as the first advice that we submitted.

This power was deliberately not granted by Parliament because Parliament determined that this tribunal should be a forum with lesser powers than a judicial court, for which reason the final power of sending a man to prison for contempt or for fining him was expressly denied to the tribunal, because it was not to have all the powers and trappings of a judicial court. They were still to be retained in the hands of the judicial courts.

I do not argue it further. I accept that view at the moment, but I respectfully suggest that if this contention is persisted in it is bad law. It is not an interpretation which I suggest any lawyer would put on the Act after mature consideration, and I hope that it is a precedent which will not be persisted in. If, for the purposes of the debate, I accept this—although intelectually I reject it—I am entitled to ask, first, the question put by my hon. and learned Friend the Member for Montgomery (Mr. Hooson). To what extent was that £150,000 money that we are expected to vote, taken up with ex gratiapayments to persons represented at the tribunal? Secondly, bearing in mind this large sum of money, does the House feel that the taxpayer has had value for money?

I appreciate that I cannot go deeply into this matter, but the House is entitled to ask whether the tribunal felt that it had sufficient staff and accommodation to enable it to call on the witnesses it wished to see. Why, for example, when no less than six senior Ministers were involved, was not one called to give evidence or to give his own account? Why, when 18 senior civil servants were involved, were only a handful called to give an account of their responsibilities, and why did the tribunal not feel able, before it passed severe judgment on one civil servant, to confront him with the charges of negligence that it subsequently found against him without giving him an opportunity—

Mr. Deputy Speaker

Order. I will have to find that remark out of order. Up to then the right hon. Gentleman was in order.

Mr. Thorpe

Having accepted your ruling, Mr. Deputy Speaker, may I say that we are entitled to ask whether the taxpayer has had value for money. The Financial Secretary may feel that he cannot go into these matters as fully as he would wish, owing to the restricted rules of order. I hope that he will be able to say that even though he feels restricted tonight, when the Government have considered the various representations which have only recently been received and in respect of which it is desirable to allow them time for the fullest consideration, they will come before the House and give a full account not only of how this money was spent and why this increase of £150,000 is necessary, but also of the whole conduct of this tribunal which, frankly those of us on this bench find disquieting in the extreme.

12.35 a.m.

Mr. John Pardoe (Cornwall, North)

We are debating the Second Reading of a Bill which authorises past and future expenditure of £1,630 million which, even by comparison with tomorrow's gifts and goodies, is a large sum of money and therefore important. Within that total we are referring in this debate to Class III, Vote 12, e.2 of the Supplementary Estimates and to the rise in the provision for civil cases of £188,000, from £250,000 to £438,000. We are asking what exactly that expenditure consists of, what has it been spent on, and whether it is right for us to support that expenditure.

A note contained in the Estimate refers to unusually expensive cases, particularly the Vehicle and General Tribunal of Inquiry. That mention enables us to raise this matter tonight in spite of the terms of the letter that I received from the Public Bill Office. I recognise that there are difficulties in the narrowness of the debate.

How much did the tribunal cost? My right hon. Friend the Member for Devon, North (Mr. Thorpe) and my hon. and learned Friend the Member for Montgomery (Mr. Hooson) have mentioned a letter which I received from the Prime Minister. When the Prime Minister made his statement on 16th February I asked him specifically if he would tell us the cost of the tribunal, and he said that he would let me know in due course. This he did in a letter dated 6th March, in which he said: Final figures are not yet available but it seems likely that the cost of the tribunal and of the printing and publication of the report will be of the order of £150,000. This figure does not include expenditure on the payment of salaries which would have fallen on the Government in any case. We are entitled to ask whether the taxpayer had value for money by that expenditure. I am well aware of the limitations that have been placed on the scope of the debate, but we nevertheless have a duty to probe the value-for-money angle, and it is impossible to do so without asking far-reaching questions about the tribunal and its report.

I have been informed that it would not be in order to discuss the procedure or findings of the tribunal, as to do so would be to question the decision or conduct of a judicial court, and such matters can be raised only on a substantive Motion. My right hon. Friend and my hon. and learned Friend have already quoted the relevant passages from "Erskine May", including the passage which relates to a judicial court. The assumption is that the tribunal is a judicial court, and I do not wish to follow my hon. and learned Friend down the legal path of defining exactly what is a court, although anyone who thinks that the definition of "court" given in Halsbury applies to this tribunal is an extremely clever person with immense powers of imagination.

Surely a judicial court would ensure that those brought before it were charged at the commencement of proceedings. I have always understood that one characteristic of a judicial court was that no charges were made until the last few days, and then only by inference, yet persons were found guilty and one was found guilty of negligence—

Mr. Deputy Speaker

The hon. Gentleman is beginning to get out of order. I hope that he will manage to follow the excellent example of his right hon. and hon. and learned Friends and stay within order.

Mr. Pardoe

Not being a lawyer, I am not sure of the exact definition of a judicial court. I am not implying any criticism of the tribunal, which I gather I am not allowed to do. I am saying that certain things that it did would not be done by a judicial court. Therefore, I ask in the logic of the layman—though not perhaps in the logic of the lawyer—can it be a judicial court? Since you have requested that I shall not pursue that matter, Mr. Deputy Speaker, and in view of the promises that we have made that we shall not raise points of order all night and will set a good example to others, I shall seek to pursue as lightly different course.

We have been told that this matter can be raised only on a substantive Motion, and there is no doubt that we would have preferred this debate to be on a substantive Motion in which we would have been happy to ask the House to reject the report and its findings. We have been denied a debate on a substantive Motion—not tonight, but we have pressed in the last few weeks for a debate and have been met with a straight bat and a pained glance.

I want to try to retrace the history of the matter. On 15th February the report was published and on 16th February the Prime Minister made his statement, in which he said I do not propose to add any further comments on the report today. It is long and necessary intricate and requires time for study. In particular, the officials concerned and their staff associations need to have an adequate opportunity to consider it, and to make observations to my right hon. Friend the Secretary of State for Trade and Industry. When this has been done, should any further statement be necessary, it will, of course, be made to the House. I did not read anything into that remark other than straightforwardness. Perhaps I should have suspected more. His statement neither accepted nor rejected the report—a £150,000 report involving the loss to shareholders of £10 million and the loss to policy holders of another £10 million. Yet the Prime Minister was not sure whether there would be need for a further statement. Then, in the next column, the right hon. Gentleman the Leader of the Opposition said that hon. Members may want a debate."—[Official Report, 16th February, 1972; Vol. 831, cols. 423–4.] Perhaps I am being too suspicious in reading into that remark that it might be convenient for people on all sides if hon. Members did not want a debate.

Nothing more was heard. We left the matter for the three weeks for which the Prime Minister had asked, and still nothing was done. On 9th March we tabled Early Day Motion No. 247—not, alas, a substantive Motion—which mentioned certain aspects of this matter and called for a debate. I raised the matter at Business Questions on that day and was told by the Leader of the House: I certainly appreciate the importance of what the hon. Member says, particularly about this affecting the staff, which is, I accept, a grave matter. I cannot say when a statement will be made, nor the time when it will be debated. My right hon. Friend the Prime Minister promised a debate on this matter in Government time, and there will be a debate. However, I will refer what the hon. Gentleman says to my right hon. Friend the Secretary of State for Trade and Industry."—[Official Report, 9th March, 1972; Vol. 832, col. 1670.] Another straight bat! By last Thursday we had still not heard anything further about a debate, and there was nothing in the business statement. I tried to raise the matter again, and in fact it was raised by a Conservative Member. Much the same answer was given to him by the Leader of the House. That is the posi- tion in which we find ourselves, and it is the reason why my right hon. Friend, my hon. and learned Friend and I have found it necessary to raise this matter, so far as we are able, on the Bill.

The Government come to the House on the Bill to ask for money to pay for this tribunal. They are asking for it without sufficient explanation. They are asking for money for a report which they have neither accepted nor rejected. They have not told us what they intend to do about it, or about its recommendations.

How do we know whether the public should pay for this report? We are left to draw our own conclusions and, having looked through the report, our conclusions are not favourable. Since it cost £150,000, we must first ask whether it did what we asked it to do. I remind hon. Members that it was this House of Commons which asked the tribunal to do certain things. The preamble to the report says: Whereas it has been resolved by both Houses of Parliament that it is expedient that a Tribunal be established … Paragraph (b) of its terms of reference says: Whether there was negligence or misconduct by persons in the service of the Crown directly or indirectly responsible for the discharge, in relation to those companies, of functions under the Insurance Companies Acts 1958–67. The question which immediately arises out of that is how it could possibly decide whether there was negligence or misconduct by persons in the service of the Crown, directly or indirectly responsible, if it never asked a large number of those persons to appear before it. That is the point that my right hon. and hon. Friends have made already. Not one Minister was called before it—

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman, but that is a criticism of the findings of the court, which is out of order.

Mr. Pardoe

I accept your point immediately. I am not endeavouring to criticise the findings of the tribunal—

Mr. Deputy Speaker

I include the actual proceedings before the tribunal comes to its findings.

Mr. Pardoe

Of course—and if more than £150,000 had been spent, no doubt additional persons would have been called to give evidence. Undoubtedly Mr. Jardine would have been represented if he had been promised that he would be awarded his costs, and any counsel for him or for other individual members who were blamed in the report, partially or otherwise, would have sought to widen the debate and ensure that other people were questioned. Certainly no counsel for Mr. Jardine could have done other than call Ministers to give evidence.

Mr. Thorpe

Would it not also be in order not merely to ask whether we had value for money but whether, having regard to what we have got, the tribunal had enough money to do the job properly, or whether there will be another Supplementary Estimate?

Mr. Pardoe

I am sure, Mr. Deputy Speaker, that you would rule that that is in order. I cannot conceive that it is out of order to query whether enough money was spent. Had all the civil servants who were involved at the end of the inquiry been represented a great deal more money would have been required.

I shall not continue to press the point about the calling of Ministers. I ask one simple, basic question: who made the decision about not calling Ministers? I do not blame the tribunal. It may not have been its decision. It may have been the decision of leading counsel for the tribunal—

Mr. Deputy Speaker

Order. I am afraid that that is out of order, too. It is impossible to be in order and to criticise the work of and what was said by counsel in the case.

Mr. Pardoe

I am aware that it might be out of order to discuss the work of the Attorney-General in connection with the tribunal. But he is the leading Law Officer in the service of the Crown, which may have been one reason why he was called to be the senior counsel for the tribunal.

On the question of awarding costs, it seems to me that the Prime Minister's letter does not go very far. I hope that the Financial Secretary will be able to clear up many of the points that have been raised. As has been indicated already, the Tribunals of Inquiry (Evidence) Act, 1921, gives power to authorise a person to be legally repre- sented, but gives no power to award him costs from the State, and legal aid is not available, of course.

For that reason, if for no other, the eventual scapegoat—scapegoats, I suppose; Mr. Jardine, Mr. Homewood, and Mr. Steel—were not legally represented. I shall not go into the other reasons why they were not represented. They would be out of order in this debate. In debate they will come up later. The Department was represented. The tribunal no doubt thought that that was fair representation for the individuals.

I reiterate the question—did the tribunal recommend an ex gratia payment to anyone, and, if so, to whom? Was it offered to Jardine? If not, why not? If it had been, it undoubtedly would have led to increased cost: the £150,000 would not have been sufficient. Indeed, as the Prime Minister has indicated in his letter to me, that sum may not be sufficient now, because he says that it is not necessarily a final figure.

Finally, with all the difficulties, which I fully appreciate—I have endeavoured to keep within the rules of order—we are being asked in the Bill to pay £150,000 for the convenient finding that an Undersecretary was negligent—an Undersecretary who had so conveniently already retired from the Department. We are being asked to pay £150,000 for a report which, in paragraph 343, exonerates everyone in sight except three people. We are being asked to pay £150,000 for a report which recommends that acts of the Government watchdog which by its own admission was feeble in the extreme, cannot be held responsible for the loss suffered by shareholders and policy holders. In short, we are being asked to pay £150,000 for a bucket of whitewash mixed by a Star Chamber Court.

Mr. Thorpe

On a point of order, Mr. Deputy Speaker. Can you help us on one matter. Page 725 of the Eighteenth Edition of "Erskine May" states: The administrative action of a department is open to debate, but the necessity for legislation and matters involving legislation can only be discussed in Supply on a substantive motion. Will you give the House guidance, Mr. Deputy Speaker, on whether it is in order, as I submit, to ask whether it was as a result of the administrative action of a Department that the decision was taken that no Ministers should be called? Surely that is a question which it is perfectly in order to ask. If the answer is that it was not an administrative action, in fairness to the Department we are entitled to know upon whose advice that action was taken.

Mr. Deputy Speaker

Perhaps the right hon. Gentleman would give me a minute or two to consider the point. Meanwhile, I call Mr. Steel.

12.53 a.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I begin on a serious note, and make it clear to the House that my namesake in the proceedings before the tribunal is no relation of mine. Indeed, I believe that he spells his name differently.

The House is in a genuine difficulty over the ruling that you have given, Mr. Deputy Speaker, that the tribunal is itself a court. It would appear from the original Act that that cannot be so, because, unlike an ordinary court, this tribunal was set up specifically by Parliament to report to Parliament. It therefore must be presumed that the report laid before the House is open to some form of inquiry and comment by the House thereafter.

If it is argued that that is so, but that it can be done only on a substantive Motion, we on this bench in particular are entitled to express the point of view, as regards a substantive Motion, that we have pressed for a debate, but have not so far been granted one, and that we are entirely in the hands either of the Government to provide time for a debate or, indeed, of the Opposition to provide time for a debate on a Supply Day.

Mr. Deputy Speaker

Order. I do not wish to interrupt the hon. Gentleman, but in order that he may be able to refer to this matter if he wishes, because his right hon. and hon. Friends have already spoken and they cannot speak again, I will state that it would be in order to speak about the administrative details which led up to a decision involving some expenditure, but to take it further than that would be out of order.

Mr. Steel

I am grateful to you, Mr. Deputy Speaker, but I think, nonetheless, that you will accept my point that in order to have a wide debate on the subject without straining your patience and that of the House it is necessary, according to your previous ruling, to have a substantive Motion. I am making the point that, such a Motion having been suggested by hon. Members on this bench, we are in the hands either of the Government or the Opposition to place such a Motion for debate.

The public are aware that we are dealing with a matter concerning the administration of a Department under Ministers or both the present and the previous Government, and if no such debate is forthcoming members of the public will be entitled to exercise their suspicions.

Mr. Deputy Speaker

Order. I have every sympathy with the hon. Gentleman and his right hon. and hon. Gentlemen, but it is not really a matter for me. I have to rule upon that question before the House now, and I think that the point which the hon. Gentleman has made has been made very well, not only by him but by his right hon. and hon. Friends. It will have sunk home with the Government and I think that we ought to leave it there.

Mr. Steel

I hope that you will not think that I was criticising the Chair, Mr. Deputy Speaker. I was merely reiterating the point that we agree that this must, of necessity, be a narrow and unsatisfactory debate from the point of view of the public, and it is the public interest with which we are concerned.

Although the sum of £150,000 has been mentioned frequently by my right hon. and hon. Friends for the purpose of maintaining themselves in order, much more than £150,000 is at stake. I do not know whether, among my constituents, I had any shareholders in V & G, but I did have policy holders among them. I doubt whether any hon. Member here did not have V & G policy holders among his constituents, and a matter which concerns the loss by policy holders of £10 million, and the loss by shareholders of a further £10 million cannot be anything but of the gravest public importance.

We are frustrated on two counts—first, by the lateness of the hour and of the debate, for understandable reasons and, secondly, by the narrow confines of the debate. We are therefore entitled to put it to the Government that although, in the absence of the Leader of the House, they cannot speak on the question of a wider debate in future, we should like to know whether it is their intention that we should be able to probe this matter further.

Although we can argue tonight on the narrow point whether the public got value for this sum of £150,000, it is the question of the loss of £20 million and the competence of successive Governments in safeguarding the public and the public interest that is really at stake. We are prevented from pursuing that in too great detail, but the public will conclude that £150,000 is in itself a great deal of money to spend on what my hon. Friend the Member for Cornwall, North (Mr. Pardoe) has rightly described as a bucket of whitewash. We are entitled to expect much more than that for that sum of money.

12.58 a.m.

Mr. Marcus Worsley (Chelsea)

The four Members from the Liberal bench have shown great ingenuity, but I do not think that the exercise in which they are involved is worth carrying out. If I do not follow them in what they have said it is not because I am not concerned with this matter. It happens that Mr. Jardine is a constituent of mine. I have therefore been taking up the case, and am very interested in it.

I appreciate that important matters are raised by this case. All that I am saying to the Liberal Members is that they are not helping a bit by bringing the matter up in this way at this time. The Leader of the House has undertaken that there shall be a debate. It is much better that that debate should take place when the Government have had time to consider all the implications of this tribunal and are able to give a considered judgment on it.

When there is a substantive Motion before the House we can consider these important matters fully and properly. It is for that reason and not for any lack of concern about the issues raised that I do not intend to follow the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel), but intend to reserve my position for the wider debate.

1 a.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

I agree with the hon. Member for Chelsea (Mr. Worsley). Unfortunately, when I decided to attend this debate, I was unaware of the letter which had been sent to the Liberal Member. Naturally, this makes one extremely inhibited.

But despite these major inhibitions, which are almost fatal to any intelligent discussion of this matter, I want to raise one or two questions on the narrow consideration of value for money—the basis on which, I know as a city councillor for 20 years, we have always conducted our business in local government.

I do not know whether I am unique among hon. Members in having attended meetings of this tribunal, but I certainly did not see any of my colleagues present. It gave the impression of being a tribunal, and not a court of law, and as such it might have had some very serious shortcomings. I began as an arch-enemy of the Under-Secretary of State for Trade and Industry, but having heard him defending the reputations of his civil servants I concluded my attendance feeling profoundly sorry for the civil servants involved.

As I wanted to take an intelligent interest in the tribunal I was affronted when the secretary to the tribunal answered my request for a copy of the proceedings by asking me to forward a cheque for £140. That was before our recent salary increases, and I did not have such a cheque. This seems a strange situation for an M.P. to be placed in.

I understand that ex gratia payments were made to people representing either the policy holders or the shareholders. Did the tribunal, the Department or the Treasury lay down conditions for the conduct of these people at the tribunal? More important, if these payments were to allow the interests of the policy holders or shareholders to be properly represented, may we take that as a precedent? If so, some of the imperfections of our law will be remedied to a minor degree. I should like some information about that.

Another aspect raised by the Leader of the Liberal Party was the question whether this sum might have been increased by requiring Ministers to give evidence. Was this countermanded at any stage in the proceedings leading up to the tribunal itself?

In effect, the tribunal—I am not criticising it in the slightest—found that the Department had no legal liability for the losses sustained by the shareholders and policy holders. No doubt that is correct, and I should not want to disagree. But surely that does not preclude a consideration—this would mightily increase the Supplementary Estimate—of ex gratia payments not to the shareholders, but to the policy holders—the innocents who were massacred on such a grand scale by the incompetence not so much of the Department as of those who conducted the business of the Vehicle & General Insurance Company. This is a matter on which I might ask the Financial Secretary, for an answer, even in the limited confines of what we are discussing tonight. It would have a profound effect upon the future, because I am sure that we shall see more casualties amongst insurance companies of this kind.

I do not know whether I should still be in order, Mr. Deputy Speaker—I have a terribly instinctive feeling that I should not be in order—in saying that in the early stages of this tribunal one had to listen to a great deal of discussion—which must have cost a tremendous amount of money—on the question of the leak and the way in which the poor lady in question was handled—

Mr. Deputy Speaker

Order. The hon. Gentleman's suspicions are correct. If he proceeds along those lines he will get out of order.

Mr. Cant

Although this point may reflect on the conduct of the Department I feel that I must make it. We had a situation in which a considerable sum was being spent by the Government, paying lawyers, and so on, in investigating whether there had been a leak. To my mind, that money could be well and truly justified if it were established that there had been a leak, but that it led to a situation in which there would be no further leaks.

The Secretary of State made a statement that on the basis of the experience of this leak there would be no further leaks. Yet, in answer to two Questions which I put down later, he confessed that on 23rd October—at the very time when statements were being made in the most dogmatic terms that the lesson of experience had been learned—this further leak had taken place. We were told that although the document in the second case had been sent to the chairman of the company who acknowledged that he had received it, he said that he would send it on to his legal adviser, who said that he had lost it.

Mr. Deputy Speaker

Order. The hon. Gentleman is getting into deep water. He would be wise to leave that argument.

Mr. David Steel

Bearing in mind Mr. Deputy Speaker's earlier ruling, that we might discuss the administrative arrangements which led to the spending of £150,000, may I ask the hon. Gentleman to say, having attended the tribunal, whether he got the impression that it suffered from no Ministers having been called?

Mr. Cant

Yes, in two respects. It suffered, first, in terms of the efficiency of the operation and, secondly—not being a lawyer I must use layman's language—in terms of inequity; people were seriously disadvantaged. Although I agree that the large sum of £150,000 was spent, it would have been justified in terms of justice if these two factors had been met. That was brought home to me as time went on.

Accepting that this is a large sum, we must also accept that we are living in a society in which the problem of negligence on the part of companies in particular and in general is on the increase. The same applies to fraud. In fact, this is our fastest-growing crime. One would therefore not object to the expenditure of even larger sums if this growth could be arrested or diminished.

This whole issue will have to be debated at some stage. From my six years' experience in Parliament I am always suspicious when debates are promised for the future. I appreciate that many serious issues occupy the time of the House, but this is a continuing economic and social problem with which we shall have to grapple, perhaps when some of the other problems have faded from the headlines.

In the meantime, I will tax your patience no longer, Mr. Deputy Speaker. I suspect that I should soon be called to order if I continued along that path. I suffer from massive frustration, having prepared a magnificent speech which I am unable to deliver. However, even on the narrow issues of the debate we are entitled to some revelations from the Minister.

Mr. Deputy Speaker

Before calling the Financial Secretary to reply to the debate, may I say that I am greatly obliged to hon. Members for the admirable way in which they have restrained themselves?

1.15 a.m.

The Financial Secretary to the Treasury (Mr. Patrick Jenkin)

Of necessity the debate has been heavily circumscribed. Indeed, I was inclined to agree with my hon. Friend the Member for Chelsea (Mr. Worsley) that it had an aura or artificiality. Hon. Members from the Liberal benches have complained in the politest possible way of the restrictive ness of the ruling which has depended upon the precedents in "Erskine May", and they have complained about the precedents themselves. But what they really ought to complain about is that they have chosen the wrong occasion to raise this matter. If they wanted to raise the matter and make the kind of speech made by the hon. Member for Cornwall, North (Mr. Pardoe) in his last couple of sentences, this was not the occasion to do it—[Interruption.] I gather that the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) has not been aware of what has been said.

Mr. David Steel

Yes I have.

Mr. Jenkin

The hon. Member was obviously at one stage inclined to look at his hon. Friend's copy of HANSARD.

But perhaps the restrictive nature of the debate was not altogether unanticipated and, perhaps, my presence at the Dispatch Box is some evidence of its nature, although my hon. Friend the Under-Secretary of State for Trade and Industry is present. Class III, Vote 12, sub-head e2 is a Treasury responsibility and, as such, I am replying to the debate.

The first and perhaps the most important function which I can perform is to assure the House that there will be a full debate after Easter. My right hon. Friend the Lord President, during Business questions on 9th March, said absolutely clearly: My right hon. Friend the Prime Minister promised a debate on this matter in Government time, and there will be a debate."—[Official Report, 9th March, 1972; Vol. 832, c. 1670.] I was astonished by the statements of hon. Gentlemen saying that they had asked for a debate but would not get one. There will be an opportunity to discuss the very important issues of principle and of procedure to which the report and the tribunal give rise.

Mr. Steel

As the hon. Gentleman has said that the debate will take place after Easter, do we take it that that means before Whitsun?

Mr. Patrick Jenkin

Perhaps I can come to that point shortly. The reason why we have not been able to have a debate earlier than this was made very clear by my right hon. Friend the Secretary of State for Trade and Industry when he replied to a Question from my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) on Thursday last, 16th March. My hon. Friend had asked my right hon. Friend when he proposed to make a further announcement about the report of the Vehicle and General tribunal. My right hon. Friend replied: What I expect to be the last of the comments made by the staff associations and some of the witnesses was received at the end of last week. These comments, which are very extensive, are being studied as urgently as the highly technical nature of the subject matter allows. A further statement will be made in the debate which the Government has undertaken to arrange as soon as is practicable after the Easter Recess."—[Official Report, 16th March, 1972; Vol. 833, c. 185.] That has been in Hansard since Friday and I hope that hon. Members will accept that as seriously intended and that they will find that their hopes in this regard will be amply fulfilled.

Serious questions have been raised by the staff associations in the Civil Service and by the particular witnesses who gave evidence at the Tribunal. It is very right and proper that D.T.I. Ministers should take ample time not only to hold full discussions with the staff associations but also in considering the representations made to them and the implications to which they give rise.

I realise that it is difficult and, indeed, distressing for those whose conduct has been criticised by the tribunal to have to wait. But it is perhaps more important that Ministers should reach the right decisions and should put the right decisions to the House in the debate. There will be a debate as soon as practicable after Easter.

The second point which the debate enables me to deal with is to answer the questions asked by hon. Members which fall within the rules of order and the main one is the question of costs. The hon. Member for Cornwall, North (Mr. Pardoe), raised this at the beginning when my right hon. Friend the Prime Minister announced the results of the tribunal's inquiry on 16th February. My right hon. Friend wrote very soon after to the hon. Member and gave the figure, as he put it, "of the order of £150,000". I shall be in a position to be more specific as we are now a fortnight further on. Some of the costs are not yet finalised and some are not ascertained and even the figures I shall be giving are of the nature of estimates. Some are certain. The Treasury Solicitor incurred and either has paid or will pay counsel's fees amounting to £33,000. There are the fees of the two tribunal members, other than Mr. Justice James, which came to £7,000. There was the cost of the shorthand writers and the transcripts—hon. Members may think a high figure in the circumstances—£5,500. But the hon. Member for Stoke-on-Trent, Central (Mr. Cant) who was asked £140 for a complete transcript, perhaps gave the best answer for this. This hearing lasted 56 days and it was essential that the work should be of a very high order and very swiftly produced. That was the cost.

There was also the small sum of £2,000 witnesses's expenses and loss of earnings though there is additional expenditure not included in this estimate because it falls on the Departments concerned. There was some £23,000 for the Department of Trade and Industry's counsel, a figure estimated at about £18,000 for accommodation and other similar services which falls on the Department of the Environment vote, and there is about £16,000 for certain other common services most of it to the Stationery Office, which will include the cost of printing and publishing the report.

There is one other major matter. The figures that I have given come to about £104,000, but there is an estimated figure in the Vote which we have put in provisionally at £40,000 to cover ex gratia payments in respect of third party representation costs. The position on these ex parte representation costs is a matter with lies wholly within the discretion of the tribunal. The payments are ex gratia. I know of no case where a tribunal has recommended that payments are made where there has been any challenge by the Treasury or any other Department. The tribunal has not yet met to consider the question of ex gratia payment costs, but it will do so in due course. I can answer the question about what payments have been made. The answer is that none have yet been made and none have yet been authorised because the tribunal has not yet expressed its view on them.

The rule about these various expenses is that the costs lie where they fall. Where there are costs—there have been the salaries of civil servants, and so on—they are covered by the vote of the appropriate Department. The salary of the judge fall on the Consolidated Fund and the cost of the accommodation falls on the appropriate Vote. All the others, which come to something under £100,000 come on the Law Charges Vote, which is the Vote on the particular Supplementary Estimate that we are considering, Class III, Vote 12, sub-head e.

I was asked whether we received value for money. That is an almost impossible question to answer. The costs of this tribunal were high but it is certainly not the highest since the war. It has not been possible to obtain detailed figures of the Lynskey Tribunal. The Bank Rate Tribunal in 1957 was extremely inexpensive, costing only about £5,000, though it was perhaps rather more expensive in reputations. The Aberfan Tribunal, in 1966, cost £140,000. That is not very different from the tribunal that we are considering. It sat for 56 days of public hearings, considered a vast mass of documentation, and heard expert witnesses. There were not fewer than 10 teams of counsel to represent many of the interested parties. One is entitled to submit that the costs are certainly justified by the importance of the issues raised. What I cannot discuss tonight is those issues. That comes on another occasion.

The hon. and learned Member for Montgomery (Mr. Hooson) asked about the representation of the individual civil servants whose conduct was impugned during the tribunal—Mr. Jardine, Mr. Homewood, and Mr. Steel. My information is that they were advised strongly by the Department not to seek individual representation but to allow their case to be handled by the Department's own team of lawyers. Some accepted that advice readily, some rather more reluctantly, but they did accept it.

The hon. and learned Gentleman asked about Mr. Burr. I think he meant Mr. Hunt, because Mr. Burr was represented. Mr. Hunt was not. The matter is referred to in the latter part of paragraph 10: On this occasion the Government has invited us to advise as to the costs of persons represented and we shall tender advice as to the cases in which justice requires that an ex gratia payment in respect of costs should be made from public funds, and as to what proportion of the reasonable costs incurred the contribution should in each case represent. Mr. Hunt was informed that this was our intention and offered legal representation on that basis but he declined to avail himself of the opportunity. The hon. and learned Gentleman asked whether payments are now automatic. I cannot say categorically that that is so, but I know of no case where a payment has been recommended by a tribunal and refused by some other Department.

The right hon. Member for Devon, North (Mr. Thorpe) asked a number of questions, some of which are not for me but for the Chair. He wondered whether we felt that the taxpayer had had value for money. It is perhaps too soon to answer. As the hon. Member for Cornwall, North said, the Government have not yet indicated whether they have accepted the report. I spent a happy weekend reading it, rather unexpectedly. It is a complex report, and it raises major issues. We are not in a position to judge its value until the House has had an opportunity to debate it and my right hon. Friend the Secretary of State has conveyed to the House the Government's view of it.

The right hon. Gentleman asked why the tribunal did not confront the civil servants with the charge. That is not for me to answer. No doubt it will be raised in the debate after Easter.

In an intervention which I took to be seriously intended, the right hon. Gentlemans also asked whether enough money had been spent on the inquiry. I take the point. He was, I think, referring to the fact that the civil servants might have been separately represented and that therefore the figure of £40,000 for ex gratia payments might have been bigger. But I think I have commented sufficiently on that.

It was clearly and categorically the Tribunal's own decision that no Ministers were called. There is no one else whose decision it could conceivably have been.

Mr. Pardoe

Would the hon. Gentleman confirm or deny whether he knows that an announcement emanating from the Attorney-General to the effect that the Prime Minister would not be called appeared in more than one newspaper three days before the tribunal ever sat?

Mr. Jenkin

We at this Dispatch Box have made it clear that we have no responsibility for what appears in newspapers. The hon. Gentleman must make his own inquiries.

Mr. Thorpe

The hon. Gentleman has made a statement which I may not have understood aright but which it is important to have on the record correctly. Is he suggesting that which witnesses would or would not be called was entirely a matter within the discretion of the tribunal? There was no suggestion that it was so advised, even on evidence supplied by counsel. If so, it would be an unusual procedure.

Mr. Jenkin

I could not begin to express a view one way or another as to what advice the tribunal may have had or from what sources. It had its own solicitors and also the advice of a strong team from the Treasury Solicitors' Department. Any final decision on this matter must have rested with the tribunal and could not have been taken by anyone else.

The hon. Member for Stoke-on-Trent, Central, raised the question whether the estimate could not have been bigger—I think he said, very much bigger—if it had made provision for meeting the liability to policy holders. I noticed that he expressly excluded the shareholders. This was dealt with in a few words by the tribunal itself, in paragraph 350. It said: The exercise by the Department of its powers would have resulted in the exposure of the defects of the Company referred to in this Report … the Department cannot be held liable for the loss attributable to these defects. My right hon. Friend the Prime Minister on 16th February, after referring to that passage, said: That is the finding of the tribunal, and it is a very clear conclusion."—[Official Report, 16th February, 1972; Vol. 831, c. 428.]

Mr. Cant

Surely there is the distinction, which I think we shall hear a great deal more about in the more general debate we shall have, between acceptance of liability on behalf of the Department and a willingness in circumstances of this kind to make ex gratia payments.

Mr. Jenkin

If we do hear a great deal more about it that will be the occasion on which to hear a great deal more about it. I would not wish to go further than that tonight. The hon. Gentleman also raised the matter of the later so-called "leak", which was adequately explained within a few days, if not hours, in that a junior secretary had put a document into the wrong envelope which did not relate to the insurance company at all.

Mr. Cant

The hon. Gentleman may, of course, not recall that although the Secretary of State said that the legal adviser had stated that he had not received them, someone told him that the legal adviser had this leak document in his possession. When I asked the Secretary of State whether he had taken steps to recover it, he said, "Yes, he did."

Mr. Jenkin

I am not sure to which case the hon. Gentleman is referring. Perhaps, as I am not wholly briefed on the matter that he raised in the debate, we can leave it there.

The real lesson of the debate is that these are important issues which raise very important implications for the relationships of civil servants with their Departments and the public and the relationship of Departments as a whole with the public in operating the legislation which this House accords to them to assist them in carrying out their functions. But these are matters which do not fall to be considered on the Second Reading of a Consolidated Fund Bill. I will not go so far as to say that the debate has been a waste of time; that would be a discourtesy and also untrue, for it has enabled me to make clear what the costs were and how much of them appear on the Vote. But having listened to no less than two-thirds of the Parliamentary Liberal Party trying to keep itself in order on a matter of major importance on an occasion for which it was clearly wholly inappropriate, I do not think that it is going too far to say that perhaps the time of Parliament might have been better spent.