HC Deb 01 July 1976 vol 914 cc650-8
The Prime Minister (Mr. James Callaghan)

With permission, I should like to make a statement about the disclosure of information in Cabinet papers to the author of the article in the magazine New Society about the child benefit scheme. I apologise for the fact that it will be rather long.

I should first inform the House of the result of the investigation carried out by Sir Douglas Allen and I shall outline the further action that is being taken.

Sir Douglas Allen's inquiry has been very thorough. It has included interviews with Ministers and with all political advisers who had access. All civil servants who had access, including those concerned solely with the custody and handling of the relevant material, have also been interviewed. Sir Douglas Allen has also followed up all the suggestions and leads put to him by those who have been interviewed and most of those that have appeared in the Press. He also interviewed Mr. Frank Field, the author of the article, who refused to disclose the source of his information.

As I informed the House earlier, there is no doubt about the authenticity of the quotations in the New Society article. The manner of the disclosure is, however, more doubtful. Thus, while some of the quotations are accurate, others contain minor textual errors. The article was also wrong in saying that there was a meeting of the Cabinet on 4th May. Sir Douglas Allen considers that the likely explanation is that the author of the article did not possess a copy of the papers from which he quoted, but that someone who had access to them made extensive and possibly rapid notes from them which were subsequently handed over.

Sir Douglas Allen concentrated his inquiry on those who had access to the Limited Circulation Annex recording the discussion which the Cabinet had on 6th May. This record falls into a category of documents which is given a restricted circulation, and very strict rules exist for their handling. Departments are not permitted to copy them, in whole or in part. They are not to be sent to individuals in a Department but must be read, on a strict "need to know" basis, only in the Private Office concerned.

In the case of this particular Limited Circulation Annex, 34 copies were issued, and it was hoped that by concentrating the investigation on it, the scope of the inquiry could be focused on a relatively few people.

Sir Douglas Allen's inquiry revealed, however, that the strict procedures for handling this document were not fully observed by all Departments. Three Departments copied it and in others the original document was shown to individuals outside the Private Office concerned. This failure to observe the rules regrettably made the task of identifying the sources of the disclosure more difficult by increasing the range of access and thus the number of people involved.

However, no conclusive evidence has been found to show that this failure to observe the proper procedures was in itself responsible for the disclosure.

I have to inform the House that, despite his very thorough inquiries, Sir Douglas Allen has been unable to discover the source of this leak.

The problem of leaks is by no means new and it would be misleading to pretend otherwise. They have taken place for many years. They are part of the enduring relationship between Governments and the Press, in the course of which the interests of the two parties will sometimes be different.

What was disturbing about the disclosure to the author of the New Society article was that it involved the unauthorised passing over of extracts from the papers of the Cabinet itself, which the recipients had formally undertaken not to do. This is an abuse of trust which cannot be in the public interest, and it is in a different order of gravity from some of the stories and allegations which have been made about the disclosure of some relatively innocuous documents.

The House will recall that I invited whoever was responsible to come forward to say so. He or she has not done this, with the result that this leaves a large number of persons under suspicion, including one or two whose names have been published in the Press without supporting evidence. I regret this very much.

The following action is therefore being taken. First, one or two matters came to Sir Douglas Allen's attention which could not be wholly explained. I have therefore decided, after consultation with the Attorney-General, to invite the police to carry out an investigation into these matters and into any other material in Sir Douglas Allen's report which may appear to them to justify further probing. This investigation will be directed towards discovering who was responsible for the disclosure.

I informed the Attorney-General of this decision and he has considered the matter. He now informs me that he has had regard to all the relevant factors, including Mr. Field's voluntary admission, and he authorises me to say that he is informing Mr. Field that he will not be prosecuted in respect of any offence under the Official Secrets Act arising out of this matter. He is giving the same undertaking to those concerned with the publication of the article in New Society.

Secondly, there is the matter of the procedures for handling Cabinet documents. As an immediate measure, I am issuing fresh directions that the existing rules are to be scrupulously observed. I think, however, that the rules themselves should be examined by a small Committee of Privy Counsellors. I am glad to inform the House that Lord Houghton has agreed to be chairman of this body and that the other members will be my right hon. Friend the Member for Kilmarnock (Mr. Ross), the former Secretary of State for Scotland, and the right hon. Gentleman the Member for Grantham (Mr. Godber).

Finally, this episode has raised once again the question whether the present definition and classification of official secrets, and the arrangements for their protection, is right. This is ground that has already been covered by the Franks Report which the Government have been considering. The Government hope to bring forward their own proposals as soon as possible for reforming the Official Secrets Act in a way which will make its coverage both more limited and more effective.

The House will be informed of the result of these further steps.

Mrs. Thatcher

May I thank the Prime Minister for making this statement? I understand from his last sentence that this is a first report and that he will be making others when he has the reports of the further investigation.

Is he aware that we are very disturbed that, after fairly extensive inquiries over some time, we are no nearer to resolving this abuse of trust, and we therefore welcome his decision to bring in the police to find out who was responsible for these disclosures and how they occurred? Is the right hon. Gentleman aware that we also welcome his decision to set up a Committee of three Privy Counsellors to inquire into the process and procedure under which Cabinet Minutes are circulated.

The statement was very detailed, and we shall wish to study it carefully before making too many comments, but the Prime Minister referred to two matters of very grave concern. The first was that the strict procedures for handling the document were not observed and the second was that the Limited Circulation Annex was shown to individuals outside the Private Office concerned. Were these individuals only civil servants who would need to see the minute for the purpose of carrying out their professional duty in relation to the substance of the minute or was it more serious than that?

The Prime Minister

I am much obliged to the right hon. Lady for her general observations. Of course I shall keep the House informed of further results if I can.

The strict procedures were not observed for what were thought to be good administrative reasons in some cases. But these reasons must be overridden. For example, where a Department has the Minister's office on the north side of the Thames but important elements of the Department are situated on the south side of the river, one can see that the Department might drift into the position of saying "The Minister must see this document. Let us photo-copy it and send it across to him". This is the kind of thing that happened. It is understandable, but rules were broken and that must stop. This will cause certain administrative inconvenience in the case of Cabinet documents. I regret it, but I can see no other way.

The individuals outside Private Offices to whom I referred were not, to my knowledge or the knowledge of Sir Douglas Allen, improper persons. It may have been political advisers or junior Ministers who required to see it and came into the Minister's Private Office to read it. Sometimes it went to their offices and was conveyed to their attention for them to see, probably in the same building, and maybe on the same floor. That is what I meant when I made that reference.

Mr. Grimond

Is the Prime Minister aware that the answer to that supplementary question is extremely illuminating? If the document were of such consequence and secrecy that it ought to be kept to a very small number, it is surprising that 34 copies were made. I hope that the Committee will look at the question of classification very closely.

I also take it not only that the Prime Minister will look at the Official Secrets Act but that his recommendation will be brought in after hearing the recommendations of the three Privy Counsellors who are looking at the whole matter.

Lastly, from the first occasion when it was mentioned that there might have been a criminal offence in connection with this matter, we urged that the police should be called in, and we are very glad that this has now happened.

The Prime Minister

I think that it is not possible to get the number below 34. It might be possible to reduce it by two or three, and if the Committee of Privy Counsellors recommended that, it would be considered. But clearly every member of the Cabinet, as a start, is entitled to know the record of the meetings he attended. Then there are others. I am sure that the right hon. Gentleman can appreciate that. I should have thought that the number of 34 was a very small one.

As to whether the document was properly graded, that is a different matter, but it does not remove the essential offence, which is that someone who had signed a document saying that he would not betray this trust has done so.

Mr. George Cunningham

Admitting that the transgression must be followed up and not forgiven, will the Prime Minister answer these two questions? First, was the document graded as secret or confidential? Secondly, is the Prime Minister satisfied that it was right to treat this document in the extremely secret way in which it was treated, given that no really important interest was involved at all?

The Prime Minister

The document was graded secret. The question whether it was graded properly is a matter of judgment on which everybody can have a different opinion. The fact is that it was graded as secret. People know what the rules are, and those rules were broken.

Mr. Aitken

Will the Prime Minister say what is the crime that is suspected and that the police are being called in to investigate? The Prime Minister has indicated that there is no longer a question of a prosecution under the Official Secrets Act in this matter. He has also indicated that theft is not involved, as the document was copied. Are the police being called in to investigate just a breach of the rules or, if it is a crime, which criminal statute is involved?

The Prime Minister

I feel that some of these questions should be addressed to the Attorney-General, as it is after consultation with him that I have taken my decision. But, in regard to the general issue, people have signed a declaration, and that declaration has apparently been breached. That is what the police will be investigating.

Mr. Arthur Lewis

The Prime Minister has referred to the amendment of the Official Secrets Act. I assume that he means Section 2 thereof. Is it not the case that the introduction of a freedom of information Act would abolish the necessity for half of this unnecessary secrecy on subjects that really do not matter? Will he not agree that a freedom of information Act would stop all these leaks—official, unofficial and semiofficial?

The Prime Minister

I think that on that question the Government will have to reach their own conclusions and produce them. In the light of this matter I am having to change my own mind about the Official Secrets Act. I have been against any reform of it, for reasons that I will not go into now, but probably I shall have to desert that position and bring forward some proposals.

The Attorney-General has asked me to mention a matter that I omitted to answer. Perhaps the hon. Member for Thanet, East (Mr. Aitken) did not quite hear me at the time, but immunity has been extended by the Attorney-General only to Mr. Frank Field and those on the New Society magazine.

Mr. Hugh Fraser

I am sure that the whole House will welcome the great frankness of the Prime Minister's statement this afternoon, and welcome what he proposes to do. I should like, however, to ask him one important question. It concerns the positive vetting of the 24 political advisers who are now inside the Government machine. I must ask the Prime Minister whether these gentlemen or ladies are subject to the same precise positive vetting of their backgrounds to see whether they are politically reliable as applies to all civil servants.

The Prime Minister

The answer to that question, to my knowledge, is "Yes". If I am incorrect I shall communicate with the right hon. Gentleman.

Mr. Whitehead

Is my right hon. Friend aware that his decision to extend immunity to the two journalists, Mr. Barker and Mr. Field, will be widely welcomed, as they were doing no more than printing material which was apparently given to them?

Will my right hon. Friend say what the position will be if the police inquiries turn up an alleged culprit, and such a person is prosecuted? Is there any possibility of contempt proceedings being taken against these journalists if—as they would have to continue to do—they refused to reveal sources?

The Prime Minister

This is a matter on which I would prefer the Attorney-General to answer, when questions are put to him. As to what would happen if the police were to find whoever betrayed this trust, we must wait and see what circumstances are revealed.

Mr. Stanbrook

As a matter of public policy, is it wise to grant immunity to the publishers? After all, if there were no recipients of stolen property there would be no thieves.

The Prime Minister

This is not my decision, and I do not wish to comment on it. It is a decision of the Attorney-General, and I think it must properly be left there. I have not sought to influence the Attorney-General in any way. I understand that it is not uncommon—the hon. Gentleman will know this from his legal experience, no doubt, and will correct me if I am wrong—to grant immunity in certain circumstances in order to assist inquiries. But I should prefer these questions to be dealt with not by the Government on a political basis but by the Attorney-General.

Mr. Heffer

Is my right hon. Friend aware that it is very refreshing to hear any Prime Minister admit that he ought to change his view on something? I trust that that will be followed by other Ministers.

Will my right hon. Friend perhaps spell out a little more clearly the terms of reference of the Committee of Privy Counsellors? Will the Privy Counsellors be looking into the question of non-attributable discussions that take place between the Press and Ministers? This has a bearing on the issue that we have just been discussing.

The Prime Minister

I have tried to give the House the quickest report I could, in view of the complaint last Monday. As the House knows, I returned to this country only on Tuesday, and was away yesterday; therefore I have not yet agreed the terms of reference of the Privy Counsellors. I hope that my hon. Friend will understand that. Basically, they will be concerned with looking at the procedures for handling papers and handling documents inside the Government, to see whether there is any weakness in the machine that ought to be tightened.

I am glad to be able to acknowledge that I changed my mind. Perhaps that might encourage my hon. Friend to do that sometimes.

Mr. Lawson

In the light of possible future occurrences of a still more serious nature, does the Prime Minister think that in the course of his general review it might be a good idea to extend to Sir Douglas Allen the Draconian investigatory powers given under Schedule 6 of the present Finance Bill to ordinary tax inspectors; and, if not, why not?

The Prime Minister

I do not know.

Several Hon. Members

rose—

Mr. Speaker

Order. This matter will obviously have to come up again.