CROWN AGENTS (Hansard, 8 December 1977)

§ The Prime Minister (Mr. James Callaghan)
With permission, Mr. Speaker, I should like to make a statement about the Crown Agents.
The Government have taken due note of the general feeling expressed by the House on Monday last that there should be a public inquiry in the light of the facts disclosed by the Fay Report on the Crown Agents. The Government have decided to respond to this view and will place proposals for a public inquiry before hon. Members as soon as possible.
The Government have carefully considered the form of the inquiry and have taken into account the various proposals contained in the Report of the Royal Commission on Tribunals under Lord Justice Salmon in 1966. The Government's conclusion is that the most appropriate form of inquiry in this case would be a tribunal set up under the 1921 Act. The tribunal must identify those responsible for these deplorable events. It should, however, also seek to find a way to safeguard the legitimate rights of innocent people to have their reputations protected from public allegations which may well prove to be unfounded.
The House will be aware that the appointment of a tribunal will effectively prevent criminal proceedings from being taken in the future against any witness and civil proceedings might be affected. The tribunal will have the necessary statutory powers to compel witnesses to attend and give evidence and it would ensure a judicial hearing for those who are subject to criticism. Its terms of reference will need careful consideration not only to achieve its main purpose but if possible to avoid it having to start afresh and duplicate all the work of the Fay Committee.
The Government will make a further statement about this, and the necessary resolutions embodying the proposed terms 1647 of reference will be tabled, for the approval of both Houses, as soon as possible.

§ Mrs. Thatcher
Is the Prime Minister aware that we welcome his decision to set up a tribunal under the 1921 Act? He referred in the statement to the procedural proposals of Lord Justice Salmon about the kind of inquiry that should be held. Is it his intention to apply in detail those protective parts of the Salmon Report designed to protect witnesses before they appear at the tribunal—for example, that they shall know the allegations against them, that they will be able to be represented professionally, and that legal costs shall be met out of the public purse? The Attorney-General will know that many procedural recommendations were made by Salmon and, in so far as they can be applied without statute, we hope that they will be applied in this case.
Finally, is it the Prime Minister's intention to follow the other Salmon recommendation, that the inquiry—now that he has altered the form—should be under a High Court judge?

§ The Prime Minister
The protection of individuals is a matter that concerns us and is probably the major reason that led the Government to make their original recommendation, which the House disregarded. As for the six cardinal principles laid down in paragraph 32 of the Report by Lord Justice Salmon, we shall certainly draw these to the attention of the tribunal. They cannot, of course, be binding on the tribunal, but I hope that the tribunal will take note of those protective principles that are designed to safeguard individuals and apply them wherever possible.
Regarding the person of the chairman, that is a matter to which we must give consideration. I have no answer to give about that this afternoon.

§ Mr. Skinner
Will my right hon. Friend tell us whether, as a result of this collapse and the secondary banks' collapse that occurred at and around that time, part of the investigation will include the Bank of England's involvement or failure to become too involved in the matter, whether it will include the fact that the Exchequer and Audit Department did a thoroughly bad job in this respect, and whether the Treasury, 1648 too, will be made to answer questions on this and other matters? Can we be assured that we can learn by our mistakes to the extent that the Bank of England will institute an inquiry into the whole lifeboat scheme as well, so that we do not fall into that trap in a few years' time?

§ The Prime Minister
The tribunal will be empowered to call any witness that it wishes, whether from the Bank of England, the Treasury or any other Department, including the Department of Overseas Development. It must consider, too, whether it calls private individuals who are concerned with particular companies. The inquiry would not be complete unless it did so.
I hope that my hon. Friend will wait to see the terms of reference, which will need to be drawn up very carefully. I cannot say whether we can produce them in two or three days. They need careful consideration. I think my hon. Friend will find that they will satisfy what he has in mind.

§ Mr. David Steel
On behalf of my colleagues, I welcome the fact that the Prime Minister has decided to set up the 1921-style of tribunal. In view of his earlier answer to the Leader of the Opposition, I hope that the Prime Minister will accept that it is very healthy for the House of Commons occasionally to exert its collective will over the Government and to kick them into actions which they might not otherwise have taken. [Interruption.] I was in the Division Lobby.
Secondly, when the Prime Minister talks about the lack of criminal proceedings which flow from the setting up of a tribunal, does he accept that the public at large will probably take the view that it is far more important for us to get to the bottom of how all this happened, rather than that one or two individuals should spend some time in gaol?

§ The Prime Minister
I do not think that the House kicked the Government into action on this matter. The Government took very full action. My right hon. Friend the Minister of State for Overseas Development has been most pertinacious, both in office and out of office. There is a difference of view between the original view of the Government as to 1649 the best form of this inquiry and the view of the House. The Government have acceded to the view of this House. Some people may still hold to their own original opinion as to which was the best way to proceed. But it is my responsibility to accede to the will of the House in this matter, and I hope that it will prove to be right in due course. We shall certainly do our best to make it work.

Several Hon. Members
rose—

§ Mr. Speaker
I shall call the three hon. Gentlemen who are standing.

§ Mr. Spearing
Is the Prime Minister aware that comments have been made on the meetings of the Select Committee on Overseas Development in 1973, when it started to investigate the Crown Agents? Is he aware that my right hon. Friend the Member for Lanark (Mrs. Hart), who was a member of that Committee, subsequently, when she became Minister of State for Overseas Development, established the Fay Committee to investigate? Will the Prime Minister draw to the attention of the Leader of the House the fact that the evidence taken in 1973, although reported to the House, has not been printed? Will the Government consider whether any motion should be brought to the House in that regard?

§ The Prime Minister
I understand that the House would have to pass a resolution to deal with that matter. It is a matter which I shall consider when the resolutions are placed before the House in due course.
It is quite clear that my right hon. Friend the Minister of State for Overseas Development has been most assiduous in the way these matters have been dealt with. The Fay Committee Report—which I hope hon. Member have read—gives a clear picture of what went wrong. I think that my right hon. Friend has satisfied the House in her statements that the structural weaknesses have been put right. I hope that what has now been put right by administrative action will in due course be sanctified by legislation.

§ Mr. Edward Gardner
While bearing in mind the importance of the protective principles to which the Prime Minister has just referred, may I ask him to take steps to see whether there is any way in 1650 which it is possible to make sure whether a mere refusal to answer a question, or, indeed, the acceptance of a question, would provide a means of removing the fear of future prosecution? Will the right hon. Gentleman see whether there is any means of making sure that, in proper cases, a refusal to answer an incriminating question shall not in all instances be followed automatically by a promise of immunity from all future proceedings?

§ The Prime Minister
I shall consider that matter, but, having read Salmon carefully, it is clear that he was of the opinion that in these cases a general immunity should be granted to witnesses. That was another reason, I may add, why the Government were not keen to recommend to the House a tribunal of inquiry. The House has so decreed, however, and so we follow that line.
There would be no question of this issue arising if there were a private inquiry, but we are not to have that. Now we must try to give the maximum protection possible, and I shall ask my right hon. and learned Friend the Attorney-General to consider what the hon. and learned Gentleman has said. But, generally speaking, we must accept that immunity will be granted in cases which would otherwise have gone to prosecution. Indeed, in one case I believe that prosecution proceedings have already been set in motion.

§ Mr. Alexander W. Lyon
May I press my right hon. Friend a little on this issue? Is it not possible to draft the terms of reference so that where criminal proceedings have either been launched or are about to be instituted the conduct of those persons is not the subject of the inquiry?
May I ask, too, whether the immunity principle in Salmon extends to civil servants who might be dismissed as a result of neglect of duty if so found by the tribunal? I ask that because surely it would be absurd if after this Commission has been appointed to consider what ought to be done to those who neglected their duty, it is found that nothing can be done to them because they all have immunity?

§ The Prime Minister
The purpose of a tribunal is to deal with lapses in accepted standards of public administration, and these individual problems arise 1651 That was the case for the private inquiry. Certainly I shall ask my right hon. Friend the Attorney-General to consider all these matters. I do not think that civil servants would be granted immunity in this way, but nor should private individuals if they have to appear before the tribunal.
Regarding the first part of my hon. Friend's question, I should have thought that it would be difficult for somebody who gave evidence afterwards to secure a fair trial because of the facts that would have become known and the conclusions that would have been reached. That is the major reason why Salmon reached the conclusion that immunity should generally be granted in these cases.