HC Deb 04 April 1989 vol 150 cc19-24
Mr. Speaker

Before calling upon the hon. Member for Dagenham (Mr. Gould) to ask a private notice question relating to the publication of the inspectors' report on the House of Fraser, I wish to make it clear that quotations from the text of the report would contravene our sub judice rules. [Interruption.] Order. An appeal on this matter is to be heard in the House of Lords on 10 April. I am aware that the court has varied an injunction so that our proceedings may be reported, but that does not relieve us of the obligation to respect our own rules, and the Chair will not allow the use of alleged texts of the report while questions on its publication remain sub judice.

3.32 pm
Mr. Bryan Gould (Dagenham)

(by private notice): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the publication of the DTI inspectors' report into the affairs of the House of Fraser.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Anthony Newton)

Inspectors were appointed to investigate the affairs of House of Fraser Holdings plc in April 1987. They reported to my right hon. and noble Friend on 23 July 1988. Their findings disclosed evidence of wrongdoing such that my right hon. and noble Friend felt it right to refer the report to the serious fraud office and the Director of Public Prosecutions. The prosecution authorities' inquiries are well advanced, and are proceeding as swiftly as possible under the superintendence of my right hon. and learned Friend the Attorney-General.

Our consistent view has been that publication of the report before those inquiries were completed would interfere with the principle that all citizens of this country are entitled to a fair trial of any criminal charges that may arise from it, and would prejudice the inquiries themselves. The Court of Appeal has unanimously agreed that it was reasonable for my right hon. and noble Friend to decide not to publish the report for the time being. The court's judgment is, however, the subject of a further appeal by Lonrho, which will be heard by the House of Lords next Monday.

In the meantime, as the House is aware, Lonrho is understood to have come into possession of a copy of the report on about 23 March, and The Observer newspaper, owned by Lonrho, published substantial extracts from it in a special edition on 30 March, coinciding with Lonrho's annual general meeting. Both Lonrho and The Observer are fully aware that only my right hon. and noble Friend has the lawful authority to publish the report; that Lonrho's copy was improperly given to it and improperly used by it; and that use by Lonrho and The Observer would amount to a grave breach of confidence and of Crown copyright and might prejudice next week's legal proceedings in the House of Lords.

For all these reasons, my right hon. and noble Friend sought and obtained an injunction on 30 March restraining The Observer and Lonrho from any further publication of the special edition. He is also seeking an order for the return of the remaining copies of the report, and urgent and thorough inquiries are being made to seek to establish how the report came into Lonhro's possession.

My right hon. and noble Friend has made it abundantly clear that the report will be published at the earliest possible moment consistent with the even-handed administration of justice. The first principle in this matter must be to safeguard the proper investigation of possible criminal charges and the fair conduct of any trial should such charges be brought. I cannot believe that anyone in this House would wish to undermine that principle, or encourage others to do so.

Mr. Gould

What conceivable purpose can now be served by a continued refusal to publish the report? Is it not clear that the report has already been substantially published, that its contents are known to all those involved and affected, and that, rather than allow further publication to take place piecemeal and by drip-feed, with only the public kept in the dark, it would be better to come clean now? Is it not also clear that the Government's excuses simply do not stand up? How do they square with the admission by counsel for the Attorney-General that publication would not prejudice criminal investigations? If there were truly any substance in the argument that a fair trial would be prejudiced, bearing in mind the fact that any such trial may be years away, why did that not occur to the High Court when it considered the question? Has the Secretary of State himself not prejudiced the issue already by his admission on the radio this morning that the report discloses serious wrongdoing?

Is not the real reason an attempt to hide from the public the fact that the investigation of important takeover bids was in the hands of officials and Ministers who were incompetent and whose slap-happy attitude was no match for those who were determined to lie to them? If the inspectors' conclusion is that that sort of muddle must not be allowed to occur again, how can it be avoided without the benefit of the report and its recommendations? What confidence can we have in a Government who, instead of making amends for spectacular incompetence by coming clean, prefer to compound their errors by further incompetence and an all-too-typical recourse to cover-up?

Mr. Newton

If there were any wish to cover up, my right hon. and noble Friend would not have referred the report to the serious fraud office within a matter of days of having received it. When the hon. Gentleman suggests that there is no question of prejudicing a fair trial because the High Court made a finding in that respect, it seems to me to call into question the whole basis of the way in which we administer justice, in that three judges in the Court of Appeal subsequently found differently. That is the position at the moment.

As to the issue of serious wrongdoing, it is absolutely clear that, if there had not been evidence of wrongdoing in the report, it would not have been necessary or right to refer it to the Serious Fraud Office. Lastly, the hon. Gentleman asked me what purpose was to be served in view of what has happened. I will tell him what purpose is to be served. It is to seek to protect the fair administration of justice and the rule of law in this country. The Government cannot be absolved from that, nor should the House wish to be absolved from that, by the irresponsible behaviour of those who published the report in the way that they did.

Mr. Ivan Lawrence (Burton)

Does not my right hon. Friend agree that the prior publication of evidence, for no better reason than to sell a newspaper or to pursue a personal vendetta, should never be a substitute for the proper prosecution of persons who are alleged to have committed criminal offences? Is it not disgraceful how often Opposition Members side with those arrogant portions of the media who seek to place themselves above the law of the land?

Mr. Newton

I very much agree with the general tenor of my hon. and learned Friend's remarks. I must say fairly and squarely to the Opposition Front Bench that I do not believe that they would wish to prejudice the administration of justice. I hope that they will consider carefully the extent to which they may do so.

Mr. Gerald Bermingham (St. Helens, South)

Perhaps the Minister will be kind enough to explain to me why, if the trial or potential trial of the A1-Fayeds could be prejudiced by the publication of the report, the same argument was not used in the case of the Guinness scandal or in the case of Mr. Ryan?

Mr. Newton

The issues arising from such a report must be considered in the context of the circumstances of each report, and they have been so considered. The issue of prejudice does not relate merely to proceedings on criminal charges should they be brought, but also to the hampering of current inquiries. Only last week there were signs that the publication of the report might make it impossible for inquiries to continue.

Mr. Jonathan Aitken (Thanet, South)

Will my right hon. Friend confirm that, under section 437 of the Companies Act 1985 the Secretary of State has an unfettered discretion to publish the report? If that is the case, does my right hon. Friend believe that it was wise for the noble Lord, Lord Young, to rely yesterday in the House of Lords on the statement that the prosecuting authorities would have to stop their inquiries if the report was published, when counsel for the Attorney-General said on the record in the Court of Appeal hearing that it was not true that prosecutions would have to be stopped as a result of publicity? Are we not in some confusion and in danger of entering into a second "Carry On, Spycatcher" saga?

Mr. Newton

The statement made by my right hon. and noble Friend in the House of Lords yesterday about the position of the prosecuting authorities was based on the latest statements which they had made to him and to the Department about what they thought would be the likely outcome of publication. I do not think that my right hon. and noble Friend can or should be absolved from taking that into account as a very important factor in exercising the discretion referred to by my hon. Friend.

Mr. Stuart Bell (Middlesbrough)

Will the Chancellor of the Duchy not accept that there is a discrepancy between what he is telling the House today and what the noble Lord, Lord Young, told the House yesterday? The noble Lord made no reference to the prejudice to inquiries connected with criminal investigations; he simply said that there could not be a proper jury trial if the report was published. Is the Chancellor of the Duchy accountable to the House or to the Director of Public Prosecutions? Is the Chancellor telling the House that the report will not be published while criminal proceedings are pending, if the proceedings begin and if there are appeals? Is he telling the House that there is no prospect of forming a jury from all our citizens of jury age and status to hear the evidence in this case who have not read the report on the Fayeds' case?

Mr. Newton

I am saying to the House that it is not my right hon. and noble Friend's view that the report should be published in circumstances in which it could hamper inquiries, prevent inquiries being pursued or prejudice a fair trial following the outcome of those inquiries. That remains the position. With regard to the first part of the hon. Gentleman's question, I am afraid that he simply has not studied the statement made in the other place yesterday. My right hon. and noble Friend referred to the danger of inquiries being hampered and to the risk, at worst, that they might be brought to a halt by publication.

Mr. Richard Page (Hertfordshire, South-West)

While one has to admire the determination of Mr. Rowland, does my right hon. Friend agree that as the noble Lord, Lord Young, has referred the matter to the serious fraud office, there is no intention of covering things up or putting them under the carpet? Does he also agree that to give in to the pressure to publish would set a precedent which others would follow when the Government's time scale does not suit their purpose?

Mr. Newton

Yes, I do, and I believe that that is the real issue which the House should address.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

Is it not ironic that a company which was once branded as the "unacceptable face of capitalism" has now, through its immense power and wealth, been able to further confirm what many people now regard to be the unacceptable face of the Government—a combination of shabby secrecy and downright inadequacy where the rigours of the marketplace are concerned? Far from hiding behind all the rhetoric about justice, is it not the case that, were it not for the fact that Lonrho could devote so many millions of pounds and call on its considerable influence and power in this country, many of the details would not have emerged in the first place? Where does individual justice in this country stand in that context?

Mr. Newton

The hon. Gentleman is simply not right to suggest that the details in this report will not at some stage emerge. The only issue is at what stage it is appropriate to publish a report in a way which is consistent with the basic principle of the fair administration of justice. If the hon. Gentleman does not adhere to that, I do not know what he is doing here.

Mr. Teddy Taylor (Southend, East)

Will the Minister make it abundantly clear whether it is the intention of the Government to publish this report after the serious fraud office inquiries, which may be a few weeks, or the determination of any possible trials and appeals, which may be four or five years? Will the Minister also say, in view of the magnitude of the lies and deception referred to in the report, how he can possibly justify not referring this again to the Monopolies and Mergers Commission which was alone in having the right to recommend this investment? Finally, does he not think the points he makes about a fair trial undermine the very fair points the Government made, with the full support of this House, to Belgium and Eire, in exactly the contrary directions about Father Ryan?

Mr. Newton

My hon. Friend will be aware that my right hon. and noble Friend made a statement at the time that he decided not to refer the matter to the Monopolies and Mergers Commission and gave indications of why that would not be appropriate. He also indicated, though, that it might be appropriate in due course for other steps to be taken in the light of the inspectors' report.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

How does the Minister respond to the statement of Lord Justice Dillon that there is a public interest in knowing that the principal shareholders of the House of Fraser are fraudulent rogues, and a public interest in knowing how Ministers came to be deceived in 1985? Does the Minister intend to invite the Governor of the Bank of England to censure Kleinwort Benson for negligence, to invite the Law Society to censure Herbert Smith for incompetence, to invite Ministers to censure civil servants for naivety and to invite the Prime Minister to censure Ministers for negligence, incompetence and naivety?

Mr. Newton

The basic public interest in this matter is in the proper investigation of any offences such as the hon. Gentleman assumed had taken place, for proper decisions to be taken about whether criminal charges should be brought, and the proper hearing of those criminal charges should they be brought. That is what the Government are seeking to bring about.

Mr. Ian Gow (Eastbourne)

Since this exceptionally well-researched and detailed report has been in the possession of the police and the Attorney-General for more than seven months, when may we expect a decision to be taken on whether or not there is to be a prosecution?

Mr. Newton

I cannot be absolutely sure about that. The inquiries are being undertaken jointly by the serious fraud office and the Director of Public Prosecutions, with the help of the Metropolitan police. It is well known that investigations of this kind can take a great amount of time. I am encouraged, however, by the evidence that already exists that the establishment of the serious fraud office has significantly speeded these things up by comparison with what would have happened in earlier periods.

Several Hon. Members


Mr. Speaker

Order. I remind the House that this is a private notice question and we have a busy day ahead of us, with a Bill under a guillotine; I will therefore allow two more questions from either side.

Mr. D. N. Campbell-Savours (Workington)

Is it not true that in 1976 Tiny Rowland and Lonrho went begging to the Department of Trade and Industry asking that the report on sanctions-busting and bribery in the case of Lonrho be not published? Why is it that the Lonrho broadsheet has refused to publish that particular information at this stage? Secondly, what business was it of the DTI inspectors to examine the family background of the A1-Fayeds? Surely their terms of reference only related to whether they had the money to purchase the store. Is it not true that, despite all the discussion in the Lonrho broadsheet, Mr. Tiny Rowland and Mr. Donald Trelford have not produced one shred of evidence to date that the money to buy the House of Fraser was not the property of the A1-Fayeds alone? They have not produced that evidence. Indeed the report that was published equally states that the inspectors were unable to establish what the facts were. Does the Minister agree that that is the case?

Mr. Newton

The first half of the hon. Gentleman's question should be addressed to Lonrho rather than to a Minister at the Dispatch Box. The rest of the hon. Gentleman's question—I understand why—clearly seeks to draw me into commenting on what the hon. Gentleman says are the contents of the report. He will understand that, for reasons inherent in my statement, I am not prepared to be drawn into such comments.

Sir Anthony Grant (Cambridgeshire, South-West)

Is not the disturbing aspect of the affair not so much the unsavoury shenanigans about the ownership of a shop as the fact that it is yet another dismal example of dishonesty or gross negligence by the public servant who leaked the report? Does my right hon. Friend have the smallest hope that his inquiries will lead to the culprit?

Mr. Newton

The appropriate inquiries are well in train. I am afraid that I am not prepared to speculate about the timing or nature of the outcome.

Mr. Doug Hoyle (Warrington, North)

The Chancellor talks about prejudice, but does he agree that the Secretary of State for Trade and Industry prejudiced the case by saying that the report contained evidence of wrongdoing? Will he stop hiding behind a smokescreen, publish and be damned, whatever may be the consequences for former Ministers or officials?

Mr. Newton

No, I do not for a moment accept that. As I said earlier, if it were not plain that the findings of the report show possible wrongdoing there would have been no need to refer it to the serious fraud office and the DPP in the first place. That is clear.

Mr. James Arbuthnot (Wanstead and Woodford)

Is my right hon. Friend aware that the view of many, including myself, who read last week's special edition of The Observer is that it showed a surprising lack of objectiveness? Does he agree that, even on The Observer's own account, there was nothing in the report for the Monopolies and Mergers Commission, but there may have been something in it for the serious fraud office, and that is the department which is now considering it?

Mr. Newton

Yes, my hon. Friend makes a fair point.