Hinduja Brothers (Hansard, 9 February 2001)

§ Mr. Norman Baker (Lewes)

I welcome this opportunity to raise an important matter that has not been discussed since events moved on at an alarming rate in the past couple of weeks. The last time that I was fortunate enough to have a debate on a Friday afternoon was in 1998, when I raised the issue of the Prime Minister's press office. Perhaps that was not an entirely unconnected subject.

One never knows what is round the corner in politics. When I opened a particular box two or three weeks ago, I had no way of knowing that the contents would explode on exposure to air sometime shortly afterwards.

The Prime Minister has set up an inquiry into some of the events that have been reported in the newspapers. I very much welcome that as a good move; he acted with commendable alacrity. There are two questions that follow that decision. First, can we be sure that the inquiry will be genuine and independently run and not an attempted whitewash? Secondly, does it have the right terms of reference?

Sir Anthony Hammond QC, who has been put in charge of the inquiry, has spent 24 years in the Home Office and, therefore, is familiar at least with one side of the story. He was the lawyer who advised Ministers in the previous Conservative Government to sign gagging orders in the arms-to-Iraq scandal, and he was responsible for drawing up public interest immunity certificates that suppressed information on collusion by the Conservative Government in the sale of weapons-making machinery to Baghdad in breach of the United Nations embargo. He was criticised in the 1996 Scott inquiry into the Matrix Churchill affair over arms to Iraq because of the advice that he had given to Ministers and, allegedly, for a failure to advise the then Minister, Kenneth Baker, properly. He was also involved in attempts to silence the MI6 agent, Richard Tomlinson, and, according to reports in the Daily Mail, he was even sent to Switzerland to attempt to close down his website. Given his record, Sir Anthony is not necessarily the person whom freedom of information campaigners would welcome to chair the inquiry.

However, I went to see Sir Anthony earlier this week and he was kind enough to give me a good deal of his time. He gave me his assurance that the inquiry would be independent and that he had not been subject to any pressure from Ministers. Of his own volition, he has also widened the inquiry to cover the third Hinduja brother. Those steps are welcome. The meeting was fruitful, and the proof of the pudding will be in the eating when the inquiry finally reports. My judgment of how genuine the inquiry is will be suspended until the report is published, which is the only sensible course of action.

It is important that Sir Anthony has the opportunity to speak to all the relevant parties who may be able to throw light on the events of the past couple of weeks. Obviously, that will include the Hinduja brothers, who are prevented from leaving India at present. Can the Minister tell the House whether Sir Anthony will communicate with the Hindujas directly, either by visiting India or by another method such as tele-conferencing?

1252 The Prime Minister announced the inquiry's terms of reference commendably early. Since then, however, several events have taken place and revelations have been made in the newspapers. I fear that if the inquiry concentrates simply on the narrow issue of the passport applications, many questions will be left unanswered. It is in the interests not only of the House but of the Government to ensure that the matter can be put to bed when the inquiry reports, and that no questions linger.

It is important that the inquiry establishes times, dates and details of all ministerial contacts with the Hinduja brothers and between Departments in respect of their passport applications. It is important that we know the identity of all Members who made representations on behalf of, or made contact with, any of the parties. The parliamentary answer to the question that I tabled, which brought the matter to light, referred to other Members. We do not yet know who they are, and we should do.

It is important that the inquiry publishes letters, minutes and transcripts of telephone conversations and any other communications on the matter, otherwise questions will persist. It is important also that it explains how the applications for naturalisation were granted so quickly—within five months in one case—when the normal time scale is between 18 months and two years. What factors enabled those applications to be dealt with more quickly? The inquiry should consider the wider context of communications between the Hinduja brothers, members of the Government, Opposition Members and Members of the House more widely, so that we understand exactly what the Hindujas role has been within the political system. That, I fear, will not be reported. However, those questions need to be answered.

The biggest unanswered questions are as follows. First, how much power and influence have the Hinduja brothers been able to exert in our political system? Secondly, are their methods of carving out influence legitimate in our democracy? Their influence appears to be related to money. I cannot believe that the number and range of contacts that the Hindujas have accumulated in recent years could be achieved by any normal resident of this country or even by a Member of Parliament. They appear to have had access to everybody within the two main parties in the House.

Attempts to use money, position and power to enter the political system are not new. At the last general election, for example, Sir James Goldsmith spent millions of pounds in an attempt to force his agenda on the British public. That attempt was clearly rejected in the election. More recently, Stuart Wheeler felt it appropriate to contribute £5 million to the Conservative party. For a betting man, that seems a rather odd decision. If he put that £5 million into his one-armed bandit, he might get a screen full of lemons when he pulled the handle. Be that as it may, that information is in the public domain, as is the information about Sir James Goldsmith, and people are able to judge those actions accordingly. The same is not true of the Hindujas.

We have heard a lot about the right hon. Member for Hartlepool (Mr. Mandelson) and the hon. Member for Leicester, East (Mr. Vaz), but much less about the Hindujas. They built up their wealth making deals under the Shah of Iran's regime and entered the billionaires' league with oil deals in the 1980s. Eastern Eye reported in April 1999 that the two London-based brothers were Britain's richest Asians, with a financial worth of around 1253 £1.3 billion, and that the family was estimated to have a worth of about £5 billion, built up through interests including the finance and film industries, oil and telecommunications.

The Hinduja brothers are also noted for their alleged involvement in the arms scandal currently working its way through the Indian justice system. In March 1986, India bought 400 Howitzer field guns from the Swedish arms manufacturer Bofors, at a cost of £800 million, and it is reported that £30 million was paid in bribes to facilitate the deal. The scandal brought down Rajiv Gandhi. India's Central Bureau of Investigation has been investigating it since 1987 and accuses three of the four brothers of receiving commission from Bofors for helping to secure the deal by bribing—allegedly—senior politicians and civil servants. Estimates of the scale of the bribery vary between £5 million and £9 million.

It is reported that the money was paid into secret Swiss bank accounts owned by the McIntyre Corporation, which was a Hinduja front company based in Panama. Receiving commission for arms deals is illegal in Indian law, and if convicted the Hindujas could face up to seven years in prison. They deny wrongdoing and argue that payments from Bofors, which they admit receiving, do not relate to the arms deal. A summons for the brothers was issued in December, and they appeared in court in January. It has taken more than a decade to get them to court, as the battle to get hold of Swiss bank records has taken so long. At present, they are unable to leave India.

On 22 January 1990, investigators at the Indian Central Bureau of Investigation named Gopichand Hinduja as a suspect in the Bofors investigation. On 21 February, less than a month later, both Srichand and Gopichand applied for British naturalisation. They were both turned down. There is an interesting link, which is suggestive, if no more.

In 1997, the Hinduja brothers expressed an interest in contributing to the dome, which was then in the care of the right hon. Member for Henley (Mr. Heseltine). In the same month, he launched something called the list of Britain's richest Asians at the Café Royal in Regent street. On 5 March 1997, Gopichand reapplied for a British passport.

In June 1998, the offer to donate to the dome was repeated by the Hinduja Foundation, and on 2 July 1998 there was a telephone conversation between the right hon. Member for Hartlepool and the junior Home Office Minister, the hon. Member for North Warwickshire (Mr. O'Brien), about Srichand's application. That is the date given by the 10 Downing street website.

On 14 October 1998, the Hindujas formally promised £1 million to sponsor the faith zone, and less than a week later, on 20 October 1998, Srichand made a second application for a British passport. On 29 October 1998, the brothers had a meeting in the House of Lords with Lord Levy about the dome sponsorship. Those dates are not conclusive, but they are at least suggestive.

The links between the Hindujas and the political elite are extraordinary. The Sunday Telegraph on 4 February quoted Srichand as saying: Did I know Lord Falconer? I know everybody. I'm a businessman. So many other businessmen meet these people. Why ask me? 1254 I don't understand why people are asking only about Mandelson, Vaz and Blair …You could name anyone because we have so many contacts. What exactly are those contacts? We know that the Hindujas met the Prime Minister, when he was Leader of the Opposition and subsequently. It is alleged in The Guardian of 2 February that Gopichand spoke to the Prime Minister in connection with the Hindujas bid for Express Newspapers. The article said: GP said they really wanted to buy the Express and had had a long call from Tony Blair". To be fair, the report also said: Downing Street last night denied Mr. Blair had discussed the Express with the family.

We know that the Hindujas met Lord Irvine of Lairg on 22 September 1999 at the Hindujas London headquarters. We know from a parliamentary answer that the Secretary of State for Trade and Industry has met them eight times since April 1999. I commend the Secretary of State for his openness. We know that the then DTI Minister, the hon. Member for Leicester, West (Ms Hewitt), met them four times between February 1999 and July 2000. A further DTI Minister met them once in March 2000. Lord Levy has met them. The Secretary of State for Culture, Media and Sport has met them. We know that the Secretary of State for International Development has met them, as have her officials. Of course, we know that the Minister for Europe, the hon. Member for Leicester East, has met them on many occasions.

Given the openness and honesty of Ministers in announcing those links, on which I again commend Ministers, I wonder why the Ministry of Defence, the Foreign Office, the Prime Minister's office and the Lord Chancellor's Department have refused to announce in response to parliamentary questions whether other Ministers have met with the Hinduja brothers. I urge those Departments to answer questions that have been legitimately asked in Parliament.

It is also true to say that there have been meetings between the Hindujas and the Conservatives. In March 1999, a reception was held for the right hon. Member for Richmond, Yorks (Mr. Hague) by the Hinduja brothers. He was guest of honour. A week after the event, Conservative officials sent letters to some of those present to offer them meetings with members of the shadow Cabinet in exchange for a £1,000 donation.

We know about Timothy Kirkhope from the newspapers recently. During the election period, he wrote round on Conservative party paper, when he was Minister with responsibility for immigration at the tail end of the Parliament, in connection with the passport application, saying that he was able to move things forward in a helpful way. We know that there was contact with the hon. Member for Bexhill and Battle (Mr. Wardle) in 1994, although he seemed to give the Hinduja brothers pretty short shrift.

When Baroness Thatcher was leader of the Conservative party, the Hindujas paid £25,000 for a bottle of House of Commons whisky autographed by the then Prime Minister during a party fundraising ball. Interestingly, the brothers are teetotal. Baroness Thatcher also attended one of the Diwali parties that the Hindujas threw each year. We know of close links with the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), who has fully admitted his close links with the Hindujas.

1255 Is it appropriate for anyone to inveigle themselves into the political system just because they have connections and money in such a way as to gain access to the leading figures in both main political parties in this country? I believe that there have also been superficial contacts with my party—before any hon. Member makes that comment. It is not a party point that I am making. It is wrong that people can use power and influence to gain access. It is insidious and invidious, and it needs to be challenged.

We need to review the ministerial code. A number of things have come out in recent weeks that are worrying and unacceptable. For example, the Minister for Europe used Foreign Office premises to deal with an insurance claim by a Soho restaurateur. The story that we are given is that that is in line with the ministerial code. I do not know whether that is true, but if it is, it should not be. It is an abuse of Foreign Office premises for a matter that has nothing to do with foreign policy or the Foreign Office. The Foreign Office should not be used in that way.

I sympathise with the Minister for Europe, who has had tens of journalists chasing him in recent weeks. They have not come up with a killer fact, but they have come up with a picture that is slightly unsavoury. It would be helpful to the Minister and to other Ministers if the code was tightened up, which was after all the recommendation of Lord Neill, who has referred to these matters clearly.

The BBC website says: Lord Neill, chair of the Committee on Standards in Public Life, said the prime minister should make clear his commitment to the government's ministerial code of conduct in the light of the Hinduja passports affair. He said the code should be rewritten to include a declaration by the prime minister that he is personally responsible for ministers' conduct. Lord Neill said the code should set out what punishment would be meted out to transgressors. The ministerial code is not clear, and in the interests of Ministers, the House and democracy, it needs to be tightened up. I hope that the inquiry that Sir Anthony Hammond is conducting will answer legitimate questions that have been posed in recent weeks by journalists and Members of Parliament.

I do not want to get the issue out of balance: we are by and large talking about an excess of spin by the Government, not sleaze. However, as any cricketer knows, spinning too much can cause one to be hit for six, which is unfortunate. The events that Sir Anthony is to investigate are not comparable with those that occurred during the years of Tory sleaze—we had the A to Z of sleaze, with Jonathan Aitken, Jeffrey Archer and Michael Ashcroft comprising only the As. The current Government have got themselves into a mess as a consequence of carelessness and reacting badly. It is important that the inquiry is a full one, that all information is published and that the questions that have legitimately been asked are answered. If that is done, the Government might yet emerge with some credit.

§ The Minister of State, Home Office (Mr. Paul Boateng)

The hon. Member for Lewes (Mr. Baker) has chosen for today's debate a subject that has been of considerable public interest for the past two weeks. I am grateful for the opportunity to outline the current position from the Government' s perspective, set out the action that we have taken and respond, in so far as I am able, to the concerns that he has voiced.

1256 The specific issue that initially attracted the interest of the hon. Gentleman and others was the applications for naturalisation made by Mr. G P Hinduja and Mr. S P Hinduja and any representations related to those received from my right hon. Friend the Member for Hartlepool (Mr. Mandelson) and the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leicester, East (Mr. Vaz). As the hon. Gentleman is aware, my right hon. Friend the Prime Minister announced on 24 January that he had asked former Treasury Solicitor Sir Anthony Hammond QC to review the full circumstances surrounding approaches made to the Home Office in connection with the possibility of an application for naturalisation by Mr. S P Hinduja in 1998. It is worth reminding the House of the terms of reference of the review as announced by the Prime Minister. They are: To establish what approaches were made to the Home Office in 1998 in connection with the possibility of an application for naturalisation by Mr. S P Hinduja, and the full circumstances surrounding such approaches and the later grant of that application; and to report to the Prime Minister

Sir Anthony Hammond began his review on 25 January. After an initial reading of the papers, Sir Anthony has decided that to fulfil the terms of reference of his review of the application for naturalisation of S P Hinduja, it would be appropriate for him to look at the circumstances of the granting of naturalisation in respect of G P Hinduja, because the circumstances of both applications are so closely related. For the same reason, as the hon. Member for Lewes mentioned, Sir Anthony has also decided that it would be appropriate for him to look at the circumstances surrounding the inquiries about naturalisation in respect of Prakesh Hinduja.

Sir Anthony aims to complete his review as quickly as possible, consistent with the need to conduct a thorough investigation, and I understand that, on the information currently available to him, Sir Anthony hopes to complete the review by the end of February. The report will be published and copies will be placed in the Vote Office and the Library.

I am sure that the hon. Gentleman will understand that it would be inappropriate for me to pre-empt the outcome of the review through any comments that I make today. He has been good enough to signify his assent to that proposition. I understand that he has written to Sir Anthony—the hon. Gentleman has been good enough to furnish me with a copy of the letter—with a list of specific questions, several of which he has outlined this afternoon, that he would like the inquiry to address. Sir Anthony will, I am sure, respond to those questions in the manner that he deems the most appropriate. I also understand that the hon. Gentleman has already met Sir Anthony to discuss the events and issues surrounding the inquiry.

Despite the limitations on what I am able to say, I shall take the opportunity to set the record straight about one aspect of the inquiry which has been the subject of some public comment. It is the issue of disclosure. There have been calls from some quarters to release specific documents or transcripts relating to the issues being examined by the inquiry. It is important to emphasise that Sir Anthony has access to all relevant papers. The open government code of practice specifically excludes the release of 1257 information whose disclosure could prejudice the administration of justice (including fair trial), legal proceedings, or the proceedings of any tribunal, public inquiry or other formal investigations (whether actual or proposed) or whose disclosure is, has been, or is likely to be addressed in the context of such proceedings.

I emphasise once again that my right hon. Friend the Prime Minister has given a clear commitment to publish the report when it is completed. I believe that the arrangements that we have in place will best ensure that the proceedings of the inquiry are not prejudiced or hindered in any way, while providing as much information to Members and the public as is proper in the circumstances.

The hon. Gentleman also raised questions about the Hinduja brothers' support of the millennium dome, and in particular whether the sponsorship of the faith zone by the brothers led in some way to their improper access to Ministers. Negotiations on the sponsorship of the faith zone, as with all other sponsorship of the dome, was the responsibility of the New Millennium Experience Company. My right hon. Friend the Member for Hartlepool, as shareholder of the dome and the Minister with responsibility for the project, was, quite appropriately, kept fully up to date with sponsorship issues. He would also, again quite properly, have met sponsors to be kept aware of any concerns that they had. However, the detailed negotiations were carried out between the chief executive of NMEC and would-be sponsors, and not by Ministers.

The hon. Gentleman spoke also about the ministerial code and raised questions about the role of my right hon. Friend the Prime Minister in enforcing the code, its ability in its current form to hold Ministers properly to account for their actions, and the need as he sees it to review and update its provisions. It is important that we all understand that the ministerial code is the Prime Minister's personal guidance to his Ministers. Although it is not enforceable by Parliament or any external agency, in introducing the code my right hon. Friend has made it 1258 absolutely clear that he expects Ministers to work within the letter and spirit of the code. However, as paragraph 1 of the code makes clear, it is for individual Ministers to determine their actions and to account for those actions to Parliament.

In formulating the code, my right hon. Friend took account of the Nolan recommendation that it will be for the Prime Minister to determine whether or not Ministers have acted with propriety in any particular circumstance". A similar recommendation was made by the Neill committee in its report entitled "Reinforcing Standards", which was published in July 2000. However, my right hon. Friend believes, as did his predecessor, that it must be for individual Ministers to ensure always that they act in such a way as to uphold the highest standards and exercise their judgments accordingly. It is always important to ensure that the responsibility of individual Ministers to account for their own actions is not blurred.

While we are discussing the subject, I feel that it is worth pointing out that the Government accepted recommendation 11 of the report, that the code should be amended to clarify the need for individual Ministers to take full responsibility for their decisions, and accepted recommendation 12 that no new office for the investigation of allegations of ministerial misconduct should be established.

I hope that my remarks have been of some help to the hon. Gentleman—he is good enough to signify his assent to that proposition, too—and to the House. I have of necessity been constrained in what I have been able to say by the on-going investigation into matters related to the Hinduja brothers. I end by saying that we look forward to receiving the final report of Sir Anthony Hammond's inquiry, which I hope and expect will illuminate further many of the issues that the hon. Gentleman has raised during the debate.