BRISTOL SIDDELEY CONTRACTS: THE WILSON REPORT

HL Deb 29 May 1968 vol 292 cc1113-72

2.55 p.m.

VISCOUNT DILHORNE rose to draw attention to certain aspects relating to the Wilson Report on Bristol Siddeley and action taken thereafter; and to move for Papers.

The noble and learned Viscount said: My Lords, I beg to move the Motion standing in my name. There are one or two things I should like to say and to make quite clear at the outset. First of all, I did not table this Motion at the request or instigation of anyone connected with Bristol Siddeley. I hold no brief for any interested party. I believe I once met Sir Reginald Verdon-Smith and Mr. Davidson many years ago, but I cannot claim to know them except by reputation, which was of the highest.

Since tabling this Motion I have received some information from Sir Reginald, for which I am grateful. I tabled the Motion on my own initiative for I feel a great deal of concern about the procedure followed by the Wilson Committee. So far as I am aware, they did not provide the individuals whose conduct was criticised, and who have been publicly condemned as a result of the publication of their Report, with proper opportunities for answering the charges made against them. So far as I can see, they did not provide those individuals with any of the safeguards which any accused person in this country has, or with any of the safeguards for the individual recommended by the Royal Commission on Tribunals. The result may be that injustice has been done and that some of these individuals have been found guilty of conduct when that would not have been the verdict had they had proper opportunity to defend themselves.

I do not want to advance any personal criticism of Sir Roy Wilson and his two colleagues. I have no doubt that they thought that the procedure that they followed was best suited for their task. The Minister of Technology said in another place: The Wilson Committee in its initial work in preparing this procedure had not expected that its findings would be as they were. Although they did not expect that, it is, I think, clear that at the outset they realised that their Inquiry might disclose improper conduct, and I understand a memorandum was handed to each civil servant witness before he gave evidence in which the third paragraph read as follows: In the unlikely event of our coming across evidence which suggested that an individual had been guilty of improper conduct, this would be the subject of a separate report to the Permanent Secretary.

I must confess I find that a most curious paragraph. When I read the terms of reference of the Wilson Committee I was under the impression that the Report of that Committee contained all their conclusions. I did not appreciate that civil servants were to be treated differently from other individuals, and it strikes me as odd that the Wilson Committee which sent out this memorandum, knowing that reflections on individual civil servants would not be made public, took the course of making them public on those who were not civil servants.

I should be interested to know, and I hope that the noble and learned Lord the Lord Chancellor, or the noble Lord, Lord-Shackleton, will be able to tell us, what was the reason for saying this in relation to civil servants. Was it because it was realised that it would be unfair to them to expose them to public condemnation by mentioning them and their conduct in the Report? And if that was the reason, why was a different course taken with those who were not civil servants?

My Lords, just as the Wilson Committee did not expect at the outset that their findings would be as they were, I do not suppose for one moment that Bristol Siddeley at the outset ever thought that the Inquiry would lead to the condemnation of individuals. The procedure adopted was to follow that followed by the Lang Committee in its Inquiry into the Ferranti affair. The Report of that Committee, although it may have contained references to individuals who might conceivably have been identified, did not single out a number of individuals clearly identifiable for blame as did the Wilson Committee's Report.

My criticism is not of the procedure originally adopted, but of the failure to adapt that procedure when they realised that individuals might be guilty of misconduct, and in some cases of very grave misconduct. Once they realised that, it was, in my opinion, incumbent on them to give the individuals concerned proper opportunities of defending themselves, and on the information in my possession I feel I must frankly say to the House they do not appear to have done that.

I do not propose in this debate to challenge their conclusions. The Committee were appointed on April 24, 1967, and they reported nine months later, on January 26, 1968. Sometimes in this House, and I think more frequently in another place, attempts have been made to retry a case decided in the courts. Indeed, I remember the Leader of the House, when in Opposition, initiating one of them, a court-martial case. I do not propose to follow the bad example that he set then.

THE PAYMASTER GENERAL (LORD SHACKLETON)

My Lords, may I interrupt the noble Lord? If he is going to dig back into the past for some advantage, all my Motion asked for was an inquiry.

VISCOUNT DILHORNE

My Lords, those were the terms of the Motion, but the substance of it was to ask this House really to retry the case. But personally I do not think that it is one of the func- tions of this House, sitting as it is, to attempt to retry cases or to investigate in one day's debate, and without hearing any of the evidence, the conclusions of a Committee. I should regret it if to-day's debate turned into a debate of that character. I am not going to argue that the conclusions of the Wilson Committee as to individuals were right or that they were wrong. I realise that the terms of my Motion may have led some noble Lords to suppose that I might do so, and they may have prepared their speeches on that assumption. I hope, however, that as I am not taking that course they will not avail themselves of the opportunity to make personal reflections and criticisms of any individuals concerned with Bristol Siddeley. But if it be the case, as I think it is, that the individuals condemned were not given the opportunities of defending themselves that they should have had, then one must have, I submit, grave doubts as to whether justice has been done. There have been many instances in our courts of a conviction being quashed, not on the ground that the verdict was wrong, not on the ground that the convicted man was innocent, but because something went seriously wrong at the trial so that the trial was not fair.

From the findings of the Wilson Committee there is no appeal. The individuals concerned cannot, no matter the extent to which they were not given opportunities to defend themselves, get those findings and the public condemnation which followed quashed. This, unfortunately, is not the first time that an inquiry into what has gone wrong has led to the blaming of individuals, nor is this the first debate that has been initiated in this House pointing out how unfair the procedure can be to an accused man. Sometimes the inquiry is by a tribunal appointed under the Tribunals of Inquiry (Evidence) Act 1921, sometimes by a Departmental Committee, and sometimes by a committee such as the Wilson Committee. But, my Lords, whatever be the form of the tribunal or committee, surely when it appears that the conduct of an individual is likely to be impugned the individual concerned should enjoy the same safeguards.

Only a few months before the Wilson Committee was appointed the Royal Commission on Tribunals reported. Its Report was presented to Parliament in November, 1966. Lord Justice Salmon was Chairman, the noble Lord, Lord Goodman, was a member, and one of the reasons for the appointment of this Royal Commission was the concern expressed in this House and elsewhere about the position of individuals blamed by tribunals and their opportunities for defending themselves. That Royal Commission recommended: … certain alterations to the present procedure to improve its efficiency and particularly to safeguard persons called to give evidence before the tribunals. I have no doubt that they would have said that the same safeguards for individuals were just as necessary when the inquiry was before a committee, and that natural justice requires those safeguards. As I shall seek to show, those safeguards do not appear to have been observed by the Wilson Committee.

In paragraph 28 of their Report the Royal Commission said this: The inquisitorial procedure "— and of course the Wilson Committee's procedure was inquisitorial— is alien to the concept of justice generally accepted in the United Kingdom. The Royal Commission recognised that there were exceptional cases in which such procedure must be used, and I do not suggest that the Wilson Committee was not one of them. But when a procedure alien to the concept of justice generally accepted in this country is followed, it is surely most important that there should be adequate safeguards for the individual who is in peril.

Paragraph 32 of the Report of the Royal Commission is headed in black type: The six cardinal principles". What they said is, I submit, just as applicable to investigations by Committees as it is to those conducted by tribunals. They said: The difficulty and injustice with which persons involved in an inquiry may be faced can however be largely removed if the following cardinal principles are strictly observed. I will read the material parts of the principles they enunciated which apply to this inquiry before this Committee. Their second cardinal principle reads as follows: Before any person who is involved in an inquiry is called as a witness, he should be informed of any allegations against him and the substance of the evidence in support of them. In the Vassall Inquiry the Royal Commission said, and again I am quoting from their Report: So far as possible the witnesses who appeared to be prejudicially affected by statements in the Press or by statements obtained by the Treasury Solicitor were informed before they gave evidence of the substance of the allegations which might be made against them. In the Bank Rate Inquiry in 1957, in which I played a part, I took great pains to see that those who might be criicised were made fully aware of the case they had to meet. Were Sir Reginald Verdon-Smith, Mr. Brian Davidson and the others condemned by the Report of the Wilson Committee told of the allegations against them and of the substance of the evidence in support of those allegations? Were they told before they gave evidence the kind of case they had to meet? So far as I can learn, they were not.

In paragraph 8 of Chapter 2 of the Reply published by Bristol Siddeley, which perhaps some of your Lordships have received, this is said: No charges or accusations of criminal acts or other misconduct were ever framed or communicated to any witness. In paragraph 10 of the same chapter they say: In many cases the persons against whom accusations of commercial misconduct or even deceit were levelled in the Report were not even invited to give evidence before the Committee; and, in the case of those who did give evidence, they were frequently not informed of the allegation, let alone given an opportunity to deal with it. The facts on which those statements are based are given in Chapter 8 of their reply. It does not seem to me to be without significance that neither in paragraph 9 of their Report, in which the Wilson Committee state the procedure they followed, nor elsewhere in their Report is there any suggestion or indication that those they thought to criticise were informed before they gave their evidence of the allegations against them and the substance of the evidence in support of those allegations.

The other relevant principles enunciated by the Royal Commission, so far material, read as follows: (3) (a) He"— that is the individual concerned— should be given an adequate opportunity of preparing his case and of being assisted by legal advisers. (4) He should have the opportunity of being examined by his own solicitor or counsel. (5) Any material witnesses he wishes to call at the inquiry should, if reasonably practicable, be heard. The sixth and last, but not the least important, cardinal principle reads as follows: (6) He should have the opportunity of testing by cross-examination conducted by his own solicitor or counsel any evidence which may affect him. Those are the material parts of the cardinal principles which the Royal Commission said should be strictly observed. I am sure the noble and learned Lord the Lord Chancellor agrees with them, and that he will agree that natural justice requires that they should be strictly observed in all inquiries in which the conduct of individuals comes into question. If he does not, I am sure that he will say so.

May I now turn to the Committee's own account of the procedure they followed and see to what extent, if at all, it shows that these cardinal principles were complied with? In fairness to the Committee, I hope that your Lordships will not mind my reading the whole of paragraph 9. As soon as possible after our appointment, with a view to deciding what would be the best method of conducting our inquiries, we held a preliminary meeting at which senior representatives of B.S.E. and of the Department were present, as also was the Treasury Solicitor. In the result we came to the conclusion that in conducting our inquiry we could not do better than follow the procedure which the Lang Committee had adopted in the Ferranti case. The main features of this procedure were that our hearings would be conducted informally and in private; that the Department and B.S.E. would each give to us, although not to each other, access to all their relevant documents, whether or not such access might otherwise have been withheld on the ground of privilege; that the names of witnesses would not be mentioned in our Report"— If I may pause there, it does not seem to me to comply fully with the spirit of that statement if they are so identified in the Report as to be easily recognizable— that a verbatim record of the evidence would not be made, and that the notes taken of each witness's evidence would be sent to him for agreement; and that we would not publish the evidence of witnesses or disclose it to their superiors. We are satisfied, in retrospect, that this method has enabled us to investigate as thoroughly as possible the matters we have had to consider and that we could not have informed ourselves so well in any other way. From the outset we were given full access to any of the Department's staff whose evidence we wished to hear and to all their contemporary records and memoranda. B.S.E. have been equally cooperative and frank. They have made available to us, in private, any member of their staff whom we have wished to question on any aspect of the case, and have willingly supplied all the financial documents and information which we requested, together with their own internal memoranda: we are satisfied that nothing has been withheld from us. They also gave us, at one of the Coventry factories, a detailed and most useful exposition of the nature and operation of the relevant contracts and allowed us to see at first hand the work of overhaul. There is nothing there to suggest that those involved in the Inquiry were informed before they gave their evidence of the allegations they had to meet and the substance of the evidence in support of the allegations. There is nothing to suggest that those involved were given an adequate opportunity of preparing their case in answer. If, as would seem, they were not informed of the case they had to meet before they gave evidence they cannot have had adequate opportunity to meet it. They were not assisted by counsel. Were they given the opportunity of calling witnesses in their defence? There is no indication that they were. But I submit that what is clear beyond all doubt from the paragraph I have just read is that the condemned individuals had no opportunity of testing by cross-examination by a solicitor or counsel any evidence that might affect them—for each witness, that paragraph makes plain, gave his evidence in private. Notes of his evidence were sent to him for agreement, but there was no shorthand note and evidence was not disclosed to a witness's superiors.

From that paragraph it would not seem to me that the Wilson Committee ever directed their minds to the safeguards the individual in peril before them should have, and that they were either not aware of or ignored the views of the Royal Commission. Some of the findings of that Committee were of a very serious character. In paragraph 59 they say that, in their opinion, the Chief Estimator's conduct in putting forward those figures, that is to say, the estimated man-hour figures, amounted to a representation by him that they constituted a fair and genuine estimate by him of the hours the work would take, and that he knew that those man-hours were far greater than the man-hours actually being spent. In the next paragraph they say that the Price Controller realised approximately by what extent the man-hour estimates which were being agreed with the Department and used in the negotiations exceeded the actual hours being worked.

In the next paragraph, paragraph 71, the Committee say that the Commercial Manager (Ministry) knew that the main source of B.S.E.'s excessive profits was the excessive estimate of man-hours, and in paragraph 72 they say that the representations by conduct about the man-hour estimates— … were grossly untrue to the knowledge of B.S.E.'s representatives who made them. In each case the falsehood started with the man-hour estimates put forward by the Chief Estimator …. Then they say: In the result, the Department's representatives were utterly deceived. Surely, here is a finding of fraud in the clearest of terms. Indeed, it may be said that really it amounted to a finding of criminal conduct, of obtaining or attempting to obtain money by false pretences. Were these three men—the Chief Estimator, the Price Controller and the Commercial Manager (Ministry)—told before they gave their evidence of these serious allegations; that they appeared to be guilty of fraud? Were they told the substance of the evidence? Were they given an opportunity of preparing their case in answer, and of obtaining legal assistance? Did they have the opportunity of being examined by their own counsel and of calling witnesses in their defence? Did they have the opportunity of testing the evidence on which the allegations were based by cross-examination by counsel or solicitor?

In paragraph 8 of Chapter 2 of the Bristol Siddeley Reply, it is stated that no witness was professionally represented; there was never any opportunity of cross-examination or contradiction of any witness's contentions face to face. There is nothing in the Committee's account of their own procedure or elsewhere in their Report to indicate that those statements are untrue, and that was not, I think, suggested at all in the debate in another place. If the answers to the questions I have posed are what I think they must be in the light of these documents, then none of the cardinal principles laid down by the Royal Commission was observed.

In Chapter 4, paragraph 4, of the Bristol Siddeley Reply the following appears: The Coventry Chief Estimator has consistently and vigorously denied the D.T.C. (Directorate of Technical Costs) version of their exchanges. He has been found guilty of fraud without any opportunity of testing the D.T.C. evidence by cross-examination. The same questions arise with regard to the finding of double charging. In paragraph 155 of the Report it is said: … the Price Controller knew, some time before August, 1964, that double charging on a large scale had taken and was taking place. They say, too: … the Commercial Manager (Ministry) had information from which he should have realised, if he did not, that such double charging had taken and was taking place. Both of those men were seen by the Committee on July 4, 1967. That is stated in paragraph 11 of Chapter 8 of the Bristol Siddeley reply. To neither was it suggested that he knew or ought to have known of the double charging.

The Committee saw the Price Controller again on December 6, 1967, and then no suggestion was made to him that he knew or ought to have known of the double charging. That is what is stated in the Reply; and if it be true, then, my Lords, there was—was there not?—a grave breach of a cardinal principle laid down by the Royal Commission. They were not even told of the allegation against them; and if they were not told, how could they have had an opportunity of defending themselves properly?

I turn from those three individuals to the Executive Directors. In paragraph 82 of the Report it is said: … the Executive Directors … planned in their budgets, from the earliest years … to obtain huge profits from the Department's overhauls". That is a serious reflection on the Executive Directors and no doubt intended as such. Were the cardinal principles laid down by the Royal Commission observed in relation to them? Of the 12 Executive Directors nine were not invited to give evidence so they were condemned unheard, and in relation to them the cardinal principles cannot have been followed. Were the three who gave evidence informed, before they did so, of this allegation and of the substance of the evidence in support of it?

In paragraph 84 of the Report it is said: … the Board were made aware … that the profit rate on overhauls … was high and by 1960 was in fact nearly 55 per cent.". Five out of 12 on the Board gave evidence, and the Bristol Siddeley Reply says that with none of those five was the nature and significance of the Managing Director's Monthly Reports on which that finding is based ever discussed. If that be right, here was another breach, and a grave breach, of one of the cardinal principles.

I know not, and it matters not in relation to the argument which I am addressing to your Lordships, whether the Wilson Committee's findings of fraud on the part of certain individuals and their conclusions with regard to the Executive Directors and the Board of the company are right. Of one thing I am certain, and that is this: that the conviction of a man for a fraudulent offence, for obtaining money by false pretences, would never be allowed to stand if it were shown that he had not been informed of the charge against him, had not had time to prepare his defence, had not been given the opportunity of calling witnesses in his defence and—I stress this in particular—had been convicted without hearing the evidence of the witnesses who testified against him and without having a chance to test their evidence by cross-examination. And as each witness was heard in private, all those men have been condemned on evidence which they have not even heard.

As I said, a convicted man can appeal. These men convicted by this Committee have no appeal. If the cardinal principles have not been observed in relation to them, should not these convictions by this Committee be wiped out? The question may be asked: "What ought the Wilson Committee to have done when they realised the course the inquiry was taking?". I think they had two courses open to them. One was to refrain from blaming individuals in their Report, as they were going to retrain from blaming individual civil servants. They might have followed the example of the Lang Committee and blamed the company and not singled out individuals for blame. The alternative was to comply with the cardinal principles. They should have changed their procedure to do so. And if they had complied with the cardinal principles and then blamed individuals, I should not be initiating this debate.

The Committee took neither of those courses. Perhaps, as I said, they were unaware of the Royal Commission's Report. Perhaps it was not brought to their attention. The Government accepted the Report of the Committee and its conclusions. The Government, at least, cannot have been unaware of the Report of the Royal Commission—a Royal Commission set up at the instance of the present Chancellor of the Exchequer. Before they accepted the Report of the Committee, did the Government ask whether the cardinal principles had been complied with, because there is nothing in the Report to show that they were? If they did not, it seems to me that the Government should have done so. If the answer was that they had not been complied with, then perhaps the Government should have said to the Wilson Committee, "Before you record these findings you should seek to comply with them". Or if it was thought too late to do that, then the Government should have said, "We cannot publish a Report containing these condemnations of individuals when they had no proper opportunities of defending themselves."

My Lords, in another place the Minister sought to defend the procedure followed by saying that they were eminent men conducting the inquiry who would not proceed contrary to natural justice. No matter how eminent the men on a tribunal appointed under the Act of 1921—and they are often Judges—the Royal Commission requires that the cardinal rules shall be strictly observed as safeguards for individuals. The main ground on which the Minister defended the procedure was that Bristol Siddeley representatives had agreed to it. My Lords, so they did. Like the Committee itself, they could not expect the Committee's findings to be as they were. They would have been mad, in my view, to agree to a procedure which deprived an individual of the safeguards laid down by the Royal Commission, if they had realised that individuals might be condemned. Their agreement to the procedure cannot amount to waiver on behalf of these individuals of the safeguards they should have had.

My mind goes back to the 'thirties and to the Budget leak which took place at that time. The Royal Commission had this to say about that inquiry in relation to Mr. J. H. Thomas: It was not until a late stage of the inquiry, however, that his name was first mentioned". My Lords, it was certainly not at the commencement of this Committee's inquiry that impropriety of individuals was envisaged. The Commission's Report went on: It then appeared from the evidence which had come to light during the course of the hearing that it was he who had made the disclosure. Accordingly he was called as a witness at short notice and those representing him had very little time in which to prepare his case. The Tribunal found that there had been unauthorised disclosure by him to Sir Alfred Butt, M.P., who had made use of the information. Sir Alfred had to resign his seat, and I should like to read to the House a passage from his resignation speech in another place. He said this: I would ask right honourable and honourable Members to visualise the position in which I find myself. I have been condemned, and apparently I must suffer for the rest of my life from a finding against which there is no appeal, upon evidence which does not justify a trial, and there is now no method open to me by which I can bring the true and full facts before a jury of my countrymen. A little later he said: If any good may conic from this, the most miserable moment of my life, I can only hope that my position may do something to prevent any other person in this country being subject to the humiliation and wretchedness which I have suffered without trial, without appeal and without redress. My Lords, those were moving words, bound to evoke sympathy from all who believe in justice and who believe that no man, however guilty, should be condemned without a fair trial. If what I have said is correct, may not Sir Reginald Verdon-Smith, Mr. Davidson and all the others condemned also say that they have suffered "without trial, without appeal and without redress"?

My Lords, I have nearly finished. I hope I have not taken too long. There are a number of other points which I could have raised; for instance, inregard to the interpretation placed on the terms of the contract by the Wilson Committee. Let it suffice for me to say that I think the correctness of their interpretation is open to considerable doubt. I have sought to keep my speech to what I consider to be the main issue. My argument is primarily based on the Report of the Wilson Committee and the Bristol Siddeley Reply. I have not sought to approach this matter in any Party spirit. I have raised it because consideration of these documents has led me to fear that considerable injustice may have been done—and I am sure that, no matter where we sit, we are all equally concerned to see that individuals do not suffer injustice.

If the noble Lord, Lord Shackleton, or the noble and learned Lord, the Lord Chancellor, can satisfy the House that the cardinal principles to which I have referred were in fact observed, then I think this debate will have served the useful purpose of making that clear. But if they cannot do that—and, if the parts of the Bristol Siddeley Reply to which I have referred are true, it cannot be done —what then? The conclusion must follow that injustice has been suffered and that these individuals have beer convicted of conduct and publicly condemned without their having had proper opportunities to defend themselves. And if the convictions were in the courts that could lead to the convictions being quashed, whether or not they were in fact guilty of such conduct.

My Lords, if that is the conclusion which has to be drawn at the end of this debate, will it suffice? is it too much to hope that even though the Government have committed themselves so deeply something can be done to remedy the position? If nothing can be done I hope that at least this debate will ensure that in future in such cases the six cardinal principles essential for the protection of individuals laid down by the Royal Commission will be strictly observed. My Lords, I beg to move for Papers.

3.37 p.m.

THE LORD CHANCELLOR (LORD GARDINER)

My Lords, the Motion before the House is: To draw attention to certain aspects relating to the Wilson Report on Bristol Siddeley and action taken thereafter …. The most interesting and carefully prepared speech which your Lordships have heard from the noble and learned Viscount has meant, of course, that as I had no idea from the extreme vagueness and width of the Motion what he was going to say, I have naturally been unable to prepare any reply.

VISCOUNT DILHORNE

My Lords, would the noble and learned Lord the Lord Chancellor give way to me for one moment? I know the Motion is extremely wide. It was extremely difficult to try to find a form of words fit for a Motion to raise these matters. But I had conversations (which I am sorry to hear cannot have reached the Lord Chancellor) indicating the line I was proposing to take.

THE LORD CHANCELLOR

My Lords, I assure the noble and learned Viscount that what I was saying was in no way intended as any sort of criticism of him, but merely as an explanation of the fact that I had not been able to prepare any reply. What the noble and learned Viscount has said might, I think, be divided into two parts. First, he has made certain criticisms of the Wilson Committee, and particularly of its procedure; and, secondly, he has invited the House to consider how in future similar cases should be decided. I do not think that anybody has ever been absolutely happy as to what is the optimum way of dealing with a case of this kind; and although I am not for a moment saying that the noble and learned Viscount should not have raised the first point, this debate would have been well worth while, I think, if he had raised only the second.

As to the first point, I would propose to deal with the specific complaints against the Wilson Committee rather generally, leaving the details to my noble friend Lord Shackleton, who will have had at least a little time to hear what has been said. The substance of the matter, I think, is this. The terms of reference of the Wilson Committee were not terms of reference which contained any charge against anybody; any case against anybody; or any allegations against anybody. They were these: To investigate the circumstances of the pricing of certain contracts for the overhaul of aero-engines in the period 1959 to 1963, leading to the repayment in March 1967 by Bristol Siddeley Engines Limited to the Ministry of Technology; and matters related thereto …. As your Lordships know, not long before there had been a similar Inquiry in relation to the Ferranti company. It was of almost precisely the same nature. The Chairman of that Committee was Sir John Lang. Not unnaturally, I think, there was a rather general impression that probably the procedure in the Bristol Siddeley case would follow the Lang procedure. No one, so far as I know, had ever made the slightest complaint about the Lang procedure; no one, so far as I know, had ever suggested that it was unfair or unsatisfactory, or had led to a wrong Report.

My noble friend Lord Beswick in this House, in dealing with this matter on April 24, 1967, told your Lordships that in relation to the Bristol Siddeley inquiry no procedure had been laid down but he anticipated that it might well be on the lines of the Lang procedure. Not one of your Lordships said anything to that. Nobody said, "We cannot have the Lang procedure; that is very unfair; that is the procedure under which nobody is told what he is charged with." That idea seemed to command general support.

I do not know whether Sir John Lang invented this procedure; but I would agree that it is a procedure wholly unknown to lawyers and one which I think would strike any lawyer as a very surprising one. Because what it comes to is this: a body which has no powers (because this Committee had no powers of any kind) invites the two groups who seem primarily concerned, the Ministries and the company, to provide witnesses and documents, on the footing that it will all be informal and private; that each witness will be seen separately; nobody will be told what he said. He will be given a summary of what his evidence was, I suppose so that if he thinks anything is wrong he can correct it or add to it. Nobody else is shown it. The documents which the Committee gets from each party are not shown to the other party; the evidence is never to be published. But they are warned, of course, that in the Report the positions held by people, both in the Ministries and in the company, may make those who know the personnel of the company clearly recognise who they in fact are.

This, as I say, is a procedure which is quite unknown to lawyers. It is really the essence of a lawyer's life that there is a lis; that one person is saying one thing, another person is saying the contrary; and everything is usually done in public. People are represented; they know where they are. It is not for me to say that the Lang procedure may not be satisfactory in doing what a Committee of Inquiry of this kind is seeking to do; namely, to find out what happened. When a Committee like that starts, when Sir John Lang started, he did not know whether it would turn out that the Ferranti Company was in any way to blame or whether it would turn out that the fault was entirely that of the civil servants of the Ministry concerned in being either grossly negligent or, perhaps, having been corrupted; or whether it would turn out that the overcharge was entirely due to a course of occurrences which were accidental and could not have been foreseen. You do not know where you are.

I have no experience—and I do not suppose any lawyer has such experience—which would enable him to say whether the Lang procedure is a sound one or not. All I do know—and this appears from paragraph 9 of the Report —is that at the first meeting, Sir Roy Wilson (and I must say this because, as a whole, I think the criticisms made of the Committee are both unjustified and, for a reason that I will explain, unfair)—who had seen Sir John Lang, naturally, to get his experience of the procedure which the Lang Committee had followed, asked representatives of the company and the Department whether or not they would like to follow the Lang procedure. There were present, apart from representatives of the company and of the Department, the Treasury solicitors, Sir Reginald Verdon-Smith, Mr. Davidson and the company solicitors.

Sir Roy Wilson carefully explained to them what the Lang procedure was. He particularly explained that, while no names would be mentioned in the Report, the positions occupied might result in people knowing who was who, as had in fact occurred in the Ferranti case. He suggested only one alteration from the Lang procedure. This was, I think, after they had both agreed on the Lang procedure and had said, "Yes that is what we would like." He suggested to them that it might help the Committee if both the Department and the company, to start the thing off, would give the Committee a document summarising what they said had happened with any submissions that they wanted to make. They said, "No. We do not want that at all. We just want the Lang procedure." So that was agreed. In those circumstances it seemed to me unfair to criticise the Wilson Committee for doing exactly what the previous Committee had done, particularly when they had no idea of how the thing might turn out.

The reason why I said I thought it was unfair is this. If was of count part of the agreement throughout that, whatever happened, the evidence would not be published. What they found would be published; but not the evidence. Therefore, when you now get the Bristol Company saying that on a particular occasion when evidence was given Mr. So-and-So was or was not asked so-and-so, the Wilson Committee have their hands tied behind their backs. They cannot answer. They are under a pledge not to publish any of the evidence. That is what seems to me to put them a difficult position; and I think it right to say that because, no doubt like the noble and learned Viscount, I have known Sir Roy Wilson for many years. He is a man who, as President of the Industrial Court, has undoubtedly won the confidence of both sides of industry. I am certain—and I am sure the noble and learned Viscount will agree—that he is the last man ever to want to do anything unfair.

This, however, does not affect the question: Is this really the sort of method that we ought to adopt in future? The Royal Commission on Tribunals were dealing with tribunals under the 1921 Act. I do not think that in the paragraph to which the noble and learned Viscount refers the Royal Commission intended to deal with any other kind of tribunal except those. If they did, they were making recommendations which were wholly outside their terms of reference. I do not think this is right on a true construction of the Report. Lord Justice Salmon, a distinguished Lord Justice, was the Chairman of the Commission. Their terms of reference were: To review the working of the Tribunals of Inquiry (Evidence) Act 1921 and to consider whether it should be retained or replaced by some other procedure and if retained whether any changes are necessary or desirable and to make recommendations". So the Commission's terms of reference were entirely limited to tribunals under the Act.

Of course, they had first to distinguish the tribunals. The first difficulty, I think, if we are thinking of the future, is to try to see where particular types of inquiry fail. The Royal Commission said: For these reasons we are strongly of the opinion that the inquisitorial machinery set up under the Act of 1921 should never be used for matters of local or minor public importance but always he confined to matters of vital public importance concerning which there is something in the nature of a nation-wide crisis of confidence. They slightly altered the wording in a later passage, saying: The purpose of an inquiry under the 1921 Act, as we have already pointed out, is publicly to establish the truth when there is a nation-wide crisis of confidence about matters of urgent public importance. The first difficulty is that it is quite obvious, is it not? that there are many matters of which it cannot be said they are merely matters of local or minor public importance, but at the same time do not qualify as being something in the nature of a nation-wide crisis of confidence; so that we could, I think, recognise the 1921 Tribunal type of case when we consider for what they have been employed. There was the Budget Leak Tribunal; the Lynskey Tribunal; the Bank Rate Tribunal and the Vassal Tribunal; and, of course, the Aberfan Inquiry—an obvious case for the 1921 Act procedure.

The Royal Commission considered what other types of tribunal there were. I do not think anyone would consider the Bristol Siddeley type of Inquiry suitable for a Royal Commission. Regarding a Select Parliamentary Committee of Inquiry the Royal Commission say: The record of such committees appointed to investigate allegations of public misconduct is to say the least unfortunate as we have shown in Chapter 2. They took a poor view of that. There is an inquiry of the type carried out by Lord Denning in the Profumo case, and the Royal Commission gave their reasons why they did not like that.

Then there is an inquiry of the type carried out by the Security Commission. This is obviously a specialised kind of case, something which has to be heard in camera and to which, no doubt, special procedure would apply. Then they divide into two what I should have been inclined to put together: first, a Departmental inquiry; and, secondly, an inquiry of the type carried out in the case of accidents to ships or aircraft. The latter are usually Departmental inquiries in the sense that they are appointed by a Minister. But there are these differences, as is pointed out in the Report of the Royal Commission. The ordinary Departmental inquiry has no power of any kind at all. It cannot subpoena a witness or a document. Nor can a Department confer any such power; it has no power itself to confer any such power on a committee of inquiry. The distinction between that and the other type of Departmental inquiry is that they are under Acts. For example, the recent level crossing inquiry was a Committee which had power under the Railways Regulation Act 1871. The Stockport air disaster inquiry was held under the Civil Aviation Investigation of Accidents Regulations 1951. But an ordinary Committee like this has no power of any kind at all, and is entirely dependent on the people concerned.

The noble and learned Viscount, Lord Dilhorne, does not suggest (I do not know whether he is suggesting; I suppose he must inferentially be suggesting) that the Lang Committee was contrary to natural justice because the procedure there was exactly the same.

VISCOUNT DILHORNE

My Lords, if the noble and learned Lord the Lord Chancellor will permit me, I may be able to save time. Perhaps he did not hear me. I said that I did not criticise them for adopting the Lang procedure in the first place. My criticism was that when they found the inquiry leading them (inquiries very often take curious courses) to criticise individuals, they ought then to have adapted their procedure.

THE LORD CHANCELLOR

My Lords, this is an interesting suggestion, but I think that the noble and learned Viscount would agree that in no form of inquiry has any such course ever been followed. I see the very greatest practical difficulty about it. I think it is one form of procedure which we could, and perhaps should, consider, because I do not know that we have yet found any absolutely satisfactory form and it may well be worth consideration. What we should be clear about at once is that this has in fact never been done. Once an inquiry has started, it is no use saying: "Why were not these people warned of the case against them?" Here there was not any case against them. This was an inquiry to find out what had happened. If in such an inquiry you arrive at once at the position where (what shall I say?) one person out of a great number may have a finding against him of a criminal offence, or of any blame, it would be extremely difficult, it seems to me, and of course a very lengthy process, having started the inquiry on the Lang basis, then to say that you must stop and start again and do something else—I do not know what. Turn it into a public inquiry? Send the papers to the Director of Public Prosecutions? Whatever form you use, in practice it is always found that you cannot prosecute.

The Salmon Royal Commission said: Of course there is a risk that the guilty man may escape prosecution. This would be unfortunate, but it is much more important that everything reasonably possible is done to enable a tribunal to establish and claim the truth about a matter which is causing a nation-wide crisis of confidence. Moreover the risk would be minimised by the fact that tribunals have in the past and no doubt will in the future wherever practicable forbear to investigate any side issues when it is known that a prosecution is in contemplation or maybe brought in respect of them. In any event, it has long been recognised that from the practical point of view it would be almost impossible to prosecute a witness in respect of anything which emerged against him in the course of a hearing before a tribunal of inquiry. The publicity which such hearings usually attract is so wide and so overwhelming that it would be virtually impossible for any person against whom an adverse finding was made to obtain a fair trial afterwards. As your Lordships may know, my right honourable and learned friend the Attorney General has decided that the evidence in this case is not such as ought to result in a prosecution. I do not know what animated my right honourable friend, but it is clearly obvious, I suppose, to most of us, that, first, the Director would have no evidence and that a promise that the evidence would not be published could not possibly justify the evidence being handed to the Director. Obviotsly that would be quite wrong. The Director would have the Report, but he would have to start again at the beginning. He would not have documents; he would riot have any evidence; he would not know the names of the many witnesses who had been seen. It would be quite impossible. The Report could not be published. You could not report a case like that and then prosecute, because how could a man get a fair trial? That is what the Royal Commission were saying of the Tribunals. Of course, you would do it in public and you cannot prosecute afterwards. I do not know how long the police would have taken to prepare a case. After all, this is all pretty old—it runs from 1959 to 1963.

So, my Lords, all I am saying, in short, leaving any detailed complaints against the Committee to be dealt with by my noble friend Lord Shackleton, is this. It does not seem to me that this Committee can be criticised for following a form of procedure which was exactly the same as that adopted by the Lang Committee without any complaint by anybody and without any suggestion that anybody had been unfairly treated. I know of no distinction between the two cases at all, except that it may be said that in the Bristol Siddeley case it seemed to be rather more of a search for who actually knew what. But I think this may be explained by the fact that, as I understand it, Mr. Sebastian Ferranti said from the start: "If there is anything wrong, if you want to know who to blame, you do not have to bother about who knew what or who is to blame—I am to blame; I take complete responsibility for eveything that happened." Sir Reginald Verdon-Smith's attitude, judging by what he said to the Public Accounts Committee, was of a somewhat different character; but in substance the two cases were the same kind of case. Nobody has suggeste3 there was anything wrong in the first ease and nobody, I am told, at any time suggested during the Wilson Committee's prccedure that he had any complaint to make against the Committee, or that in any way at all the men were not receiving a fair trial. But I agree that the Lang procedure is a very odd one for a lawyer. The subject which the noble and learned Viscount has raised was well worth raising, if I may say so, because I am not sure that we have got it right yet.

The recommendations of the Royal Commission apply only to tribunals under the Act. I think I am right in saying that their Report was published a day or two before the Aberfan Tribunal first sat and that only some 7 out of 50 recommendations would require any legislation, and very minor legislation at that. Most of them are administrative, dealing with the procedure of tribunals under the 1921 Act, there being no procedure of any kind laid down in the Act. I was not surprised when on the first day of the Aberfan Inquiry Mr. Justice Edmund Davies referred to the recommendations of the Royal Commission and said, in substance, that he proposed to conduct that Inquiry in accordance with the recommendations.

One of the difficulties is that cases will vary. I hope that we shall always be able to recognise—I think we have so far—which are suitable for a tribunal under the 1921 Act. There are many departmental inquiries of the simplest possible kind where there is no question of any blame arising or of any complaint against anybody. Then we have mixed cases of the present kind. I shall listen with care to any suggestions which any noble Lord has to make on what he considers would be a better form of inquiry in a case of this kind, remembering always that the company concerned might say that they were not going to supply a list of names of witnesses or any documents if they were going to be "bully-ragged" in public. If it were going to be an inquiry on the Lang lines, held in private and the evidence not to be published, then they might agree. Otherwise, we have no power to make them appear before an inquiry. These are grave difficulties and I am sure that the House is grateful to the noble and learned Viscount for having raised the question. It is a subject which, so far as the future is concerned, deserves more careful consideration than perhaps it has had before.

4.4 p.m.

LORD BRIDGES

My Lords, it is right that I should start by declaring an interest, not a material or pecuniary interest, because I have never had any concern in the companies involved in this affair. It is a personal interest it is because I have known Sir Reginald Verdon-Smith for about 14 years, and during half that time we were both on the board of a company, not one of the companies in this business. I know him well and hold him in high regard, and I cannot reconcile his character and integrity as I know it with the aspersions cast upon him in this Bristol Siddeley affair. It is only right and candid that I should make that point clear.

My purpose to-day is to make some remarks, not from a legal point of view but from the point of view of someone who has spent many years in Whitehall, on some points that arise on the many and varying kinds of inquiry that take place. I will start with the obvious. There is the procedure in the Fighting Services when the conduct of an officer calls for inquiry and a court-martial is set up. That involves specific charges being laid, after a preliminary investigation. On the civil side of Government many such inquiries are carried out when necessary on the same broad principles as a court-martial but with much less formal procedure.

The trouble is that in the civil affairs of Government when something goes badly wrong, there is tremendous political and public interest and it is felt essential to set up at once an inquiry, primarily to find out what happened. It is necessary to start an inquiry before enough is known about a case to say whether there is any charge to be made against individual officers. It seems to me that if we set up an inquiry into what happened in a particular case, there is a corollary: that is that if in the course of the inquiry the conduct of certain individuals is called in question, there should be a halt and it should be made clear to them what the charges against them are and on what evidence they rest, and they should be given every opportunity of answering those charges. I had thought that this would be accepted as obvious and easy, but it seems that there may be legal difficulties which I had not thought of. All I can say is that this practice has been observed in a great many departmental inquiries. If the possibility of prosecution for a criminal offence is ruled out, I must admit that I should not have thought that it was wholly impossible to arrange some such procedure of this kind, even in an inquiry of great importance.

I do not wish to touch on some of the difficulties and important questions which have been dealt with by the noble and learned Lord the Lord Chancellor and by the noble and learned Viscount, Lord Dilhorne, but I wish to put a broad point of distinction between the Lang Inquiry and the Wilson Inquiry which I do not think has yet come out. I may not be wholly accurate, but I have the impression that in the Ferranti case the Lang Inquiry was set up to examine the level of profits and settle how much the company ought to repay. I imagine—or rather guess—that the reason why this procedure was accepted in the Bristol Siddeley case was because it was thought that this inquiry had the same objective, and it was only when the Inquiry broadened out that these difficulties showed themselves.

What I have been saying is based mainly on my experience in the public service, but it seems to me that when the actions of a public company are concerned and the conduct of responsible heads of the company is called in question, the position of the responsible heads of that company becomes very involved and difficult. Let us look for a moment at the various interests and considerations that have to be borne in mind when they are giving evidence. First of all, the inquiry is set up to deal with some points of public interest. Secondly, there are the interests of the company concerned, which they cannot ignore and which they have to try to see have fair consideration. Then there are the interests of their subordinate officers in the company whose actions may also be called in question. Finally, there is their own position as heads of the company. To keep all those different interests in mind and protect them through an inquiry, in this case by two Committees can obviously prove very difficult. It is all the more difficult to do—perhaps impossible to do—if there is not some clear point at which the Inquiry has begun to shift from the ascertainment of fact to the apportionment of blame. That seems to me to be the thing which has given so much trouble in this case.

I would quote one instance of this which I think is important. The last thing the head of any organisation will want to do is to do anything which will prevent a subordinate who is or may be in trouble from having the best opportunity of defending himself. To the extent he does that—and the better the head of a company he is, the more fully he will do it—he may well adopt attitudes which will make his own position difficult later on. I am bound to say that I cannot feel that these points were adequately taken into account in these two Inquiries.

I hope that 1 may be allowed to touch very lightly on one aspect of this affair —the Public Accounts Committee, who of course have the right to summon whoever they wish to give evidence before them. I have a great deal of experience of the Public Accounts Committee. I think I first appeared before them as a witness some thirty years ago, and have appeared on many subsequent occasions. I have great respect for this body as a financial watchdog. I have often been put through a tough and gruelling examination by them, but I am sure it was very salutary. I have always gone on public record as to the good influence of the Public Accounts Committee in deterring wasteful expenditure.

But, my Lords, it seems to me unfortunate that Sir Reginald Verdon-Smith and his colleagues were subjected to giving evidence before two separate tribunals, whose inquiries overlapped in time, on the same matter: first before the Wilson Committee; and then, before the Wilson Committee had reported, before the Public Accounts Committee; and after the Wilson Committee had reported, again before the Public Accounts Committee. That seems to me to be putting the officers concerned in an extraordinarily difficult position. It is something to which I do not think people ought to be subjected.

I would add one rather personal impression. I have read Sir Reginald Verdon-Smith's evidence before the Public Accounts Committee on both occasions. It reads to me like the evidence of a man who is unfamiliar with the form of the Public Accounts Commitee. Those of us who have appeared before it very often perhaps get to know, not merely what the question is, but what lies behind it. I do not think he had that background. I also have the impression that he was doing his utmost throughout to give frank and informative answers to questions put to him, and I am greatly surprised that people should not have been convinced of this. My Lords, I hope that at least one result of this debate will be to lay down guide lines for the future which will ensure a more satisfactory procedure from the point of view of individuals than was adopted in this case.

4.13 p.m.

VISCOUNT CALDECOTE

My Lords, the noble and learned Viscount, Lord Dilhorne, has raised a most important matter. Like him, I have no brief for anyone concerned, though I know Sir Reginald Verdon-Smith and Mr. Davidson fairly well. I do not want to repeat in any way what the noble and learned Viscount has already said, particularly as regards the points he made on the proceedings of the Wilson Committee. He has done this very ably and fully, and I thought that he made some extremely powerful points.

With the greatest respect to the noble and learned Lord the Lord Chancellor, I did not feel that he in any way answered the points made by the noble and learned Viscount, Lord Dilhorne, who initiated the debate. The noble and learned Lord on the Woolsack seemed to me to be saying that, because this was not a Committee set un under the Tribunals of Inquiry Act 1921, the points made by the Royal Commission—the six cardinal points mentioned by the noble and learned Viscount, Lord Dilhorne—were not applicable. But surely those points were put forward to ensure that justice was done in all cases to individuals in Inquiries. I should have thought that it was not realistic to pretend that they should not be applied, even in Inquiries of this kind.

The point to which I should like to draw the attention of your Lordships' House is not so much the procedure of the Wilson Committee, but rather the second part of the Motion moved by the noble and learned Viscount, the action taken by the Government after the Committee had reported. The action to which I particularly wish to draw attention is the dismissal of Sir Reginald Verdon-Smith and Mr. Davidson from Government appointments. This seems to me to be a perfectly clear implication of condemnation of two honourable gentlemen who have served this country well over many years.

In an unlegal way (I have no legal experience), it seems to me that there are two types of inquiry. There is, broadly, what I would call the judicial inquiry, where there is full representation by counsel of those involved; where blame can be attributed; where there is opportunity for cross-examination and the like. And presumably it is possible, in cases like that, for prosecutions to result, because people have been properly warned in the normal way that is our practice in this country. Secondly, there is the less formal and less judicial type of inquiry, of the type conducted by Sir John Lang and Sir Roy Wilson. Here there is no representation information is given in evidence, is not to be repeated and is not published in any way. Clearly, whatever happens in an inquiry of that kind, no prosecution is possible, for the reasons indicated by the noble and learned Lord the Lord Chancellor.

Surely it follows that, in circumstances such as those, there cannot possibly be any penalty imposed on any of the individuals concerned. Why then was this action taken by the Government in dismissing Sir Reginald Verdon-Smith and Mr. Davidson from their public appointments?

LORD SHACKLETON

My Lords, may I interrupt the noble Lord? He will appreciate that if I am to answer these points I shall again have to deploy the case on behalf of the Government. I had hoped, and indeed the noble and learned Lord had clearly hoped, to avoid this. I think the noble Lord has gone wrong so far that we shall have to go over all the ground again, which will amount to a re-trial.

VISCOUNT DILHORNE

My Lords, perhaps I may intervene at this moment to say that I hope we shall not have to do that because it is not the point of this debate. If I might suggest it to my noble friend, obviously the Government acted on the conclusions of the Wilson Committee Whether they were right to do so is perhaps another matter; but that is not really the point that I want to investigate in this debate.

VISCOUNT CALDECOTE

My Lords, I certainly should not wish anything to be brought up that is unnecessary. But the point of principle I was making was that it seems to me that an injustice has been done, in the sense that these gentlemen have been dismissed from their public appointments for reasons given by the Minister in another place, using words such as, "in all the circumstances of the case". And he also added that, "those who hold Government appointments must enjoy public confidence." Surely, my Lords, this begs the question. The point is that these gentlemen have been dismissed for that kind of reason, although the fact that they have lost public confidence has never been proved. This is the point at issue, and not the detailed reasons which led the Government to do it. In the normal course of events, people are removed from positions which they hold for one of two reasons: because they are bad at their job, or because they have been acting improperly in other areas. In this case, neither of these applies. It seems to me, therefore, that the Government did act somewhat unreasonably and unjustly in this case.

I hope the noble Lord will not feel it necessary to go through all the details of this again, because I am raising a point of principle: that these gentlemen were dismissed on the ground given by the Minister in the other place, which relied on a view taken, and not on the result of a prosecution and conviction in a court of law. This is the point of principle to which I wish to draw the attention of your Lordships. I hope that the Government will be able to think again on this matter and, on reflection and in view of the points that I have made, make it clear that the action taken against these gentlemen was unwise; that in future they are again available for Government appointments, and that the country can, therefore, have the great benefit of their experience and their devotion to duty—qualities which characterise both of them.

4.20 p.m.

LORD GRANVILLE OF EYE

My Lords, the Motion which we are discussing, and which was moved by the noble and learned Viscount, Lord Dilhorne, refers to certain aspects of the Wilson Report, and is drawn in fairly wide terms. I will not attempt to cover the ground that has already been covered by noble Lords who have so far spoken.

What I suppose we are really discussing arises from the Report of the Public Accounts Committee, as well as the Wilson Report, and what is known as the Ferranti or Lang Report, which has been referred to by my noble and learned friend the Lord Chancellor. Of course, what has a bearing on this is the Statement of the Chief Secretary to the Treasury on February 26 in another place, and the setting up of the new Review Board with its right of appeal.

As the Lord Chancellor suggested in his speech, this matter goes back almost to the Plowden Report of two years ago, which then criticised certain methods of procurement. I am not sure what powers the new Review Board is likely to have for the future to deal with cases between companies and the Department, or whether in fact those powers have already been settled. Apart from powers, concerning finance and prices appeal, I doubt very much whether this Board is likely to have any other powers. Therefore, presumably it would not have been able to deal with what is now known as the Bristol Siddeley case or any of the other cases which have been referred to.

It was suggested by the noble and learned Viscount, Lord Dilhorne, and also advanced in another place by the spokesman for the Opposition, that this Inquiry and other inquiries provided the wrong method. Three points were suggested: that a man should be told clearly the charges against him; that he should be able to see and study the evidence, and that he should be able to cross-examine and call his own evidence in defence. But, having read all of these Reports, including the Public Accounts Committee's Report, it is my understanding that in fact the Chairman of Bristol Siddeley agreed with the Chairman of the Wilson Committee on the procedure to be followed, and that he appeared at that time to be completely satisfied with it. If this is a debate on the procedure of this Committee, I think, as the Lord Chancellor has said, that the main question we have to consider is: Was it fair? I think that, in the light of the Lord Chancellor's speech this afternoon, there can be little doubt that, with all the circumstances taken into consideration, it certainly was fair.

If I may make a reference to another aspect of this matter which has found its way into some of the Reports, we have to bear in mind that this relationship between large companies and the Ministries concerned is, and must be, a partnership in which trust in each other is absolutely essential. This has been so over a large number of years. It certainly applies so far as the supply of military aircraft is concerned. And the company officials who over the years, almost as a matter of routine, have to meet their opposite numbers on questions which in many cases are secret and involve security must enjoy the confidence of the Ministers concerned and their officials upon a very confidential basis. These two essentials are the main part of our procurement of aircraft and vital components.

This is a very difficult and very complicated matter and, as has been referred to, it has been extensively debated in another place. It concerns those individuals who are engaged in an industry whose main custom comes from Governments, from whom it receives substantial orders every year. It is an industry which is not nationalised; it is not under the control of a Ministry or the Government. But it has, by very reason of its relationship with Governments, to work in close technical and financial association with them; and in fact so close is this relationship between ministerial Departments and these large companies that it is quite common practice for Air Marshals and other distinguished civil servants to join the boards of these large companies.

Having said this, I should like to say that everyone who knows the Chairman of Bristol Siddeley knows that he has had a distinguished career, both in industry and in the public service. He is well known and greatly respected in the West of England and elsewhere. I am not attempting to "whitewash" him or his overall responsibility. As has been said, he is the chairman of this great company and, as the chairman, he must accept the responsibility for all these serious aspects. He and his business director or deputy chairman must, because of the very nature of this Inquiry and its findings, bear the brunt for the officials concerned in their own company.

But there is another aspect to this. Sir Reginald Verdon-Smith is the director of a large number of companies, the chairman of some and vice-chairman of others. He is Pro-Chancellor of Bristol University, and has a whole list of public appointments which I will not read out this afternoon. The point I wish to make to your Lordships' House is this. With all these varied and considerable responsibilities, how can he know what is going on in detail in a company such as this, and still carry out all those onerous public duties and responsibilities? In my view, he is very much a victim of the over-employment. I think, my Lords, that we must bear some responsibility for this. These large companies have to compete all over the world for their business, and probably no other country in the world with which we have to compete employs this practice of taking these senior industrial directors and putting them on these various public boards and asking them to do all this work efficiently and to know exactly what is happening in every case. I am not sure who makes the decisions regarding these appointments, but all Governments have been repeatedly warned about this situation, yet they do nothing and take the line of least resistance.

It is my experience that these company officials who are referred to in the various Reports are good and reliable people. It is also my experience that the Government Department administrators, public servants, dealing in millions of pounds, are the same. If anything, they may be underpaid, but their integrity is beyond doubt. These senior civil servants every year, as a matter of routine, have to deal with an annual review with these companies involving millions of pounds—indeed, scores of millions of pounds. 1 would suggest that perhaps what is needed to prevent this kind of situation from happening in the future, with its unfortunate consequences, is the introduction of more resident cost accountants representing the Ministry in these various departments handling large contracts on behalf of the Government. They are needed in addition to the technical officers, whose number I understand the Ministry are increasing at the present time. This was a practice enjoyed during the war, and we never then had a quarter of the trouble we have now.

This industry in the last twenty years, dealt with by Government Departments and senior executive industrial directors, has now reached the stage of being one of the largest industries in Europe. Since the Plowden Report was published, considerable changes have been made and there have been modifications in its structure, as a result of suggestions from the Government. It is a great exporting industry, and technically, in Europe and elsewhere, it leads the world; and while these Reports and this debate, and the debate held in another place, highlight mistakes which have been made, they should not cloud the achievements of this great industry and its very considerable future.

4.31 p.m.

LORD MITCHISON

My Lords, no doubt we are entitled to hold this debate and we should be grateful to the noble and learned Viscount, Lord Dilhorne, for giving us the opportunity, but I wish to begin, if I may, by pointing out that this subject has been very well ventilated already. There were two Reports of the Lang Committee and one of them found that Ferranti's (who were concerned in that Report) were making exorbitant profits, to the knowledge of those concerned. That Report was made to a Tory Government, and nothing happened. As regards the present matter, there has, of course, been the Report which we are now discussing, which was the Report of a Committee appointed by the Treasury in the exercise of their functions of safeguarding the public purse, and there have also been two Reports of the Public Accounts Committee. No one can say that the other place has not investigated this matter thoroughly, apart from two debates.

With great respect to the noble and learned Viscount, Lord Dilhorne, I thought his observations at the beginning of this debate were completely off the mark. He seemed to me to be misconceiving the character of the Inquiry. This was an Inquiry into contracts, to find out what had happened in relation to very large sums of public money. It was not an Inquiry into the conduct of any particular person; it was an attempt to recover the cash, and it did recover the cash—quite a bit of it—and there may be other cases. That was indicated in the Report of the Lang Committee.

The noble and learned Viscount talked of people having been "convicted". He talked of their having had charges made against them, and this, that and the other. I prefer the view of the Chief Secretary of the Treasury, who was, after all, the responsible person, who said that he made no charges against anyone and the Committee had made no charges against anyone. I listened to hear what the charges were. I did not hear them. If I may, I will quote from the winding up speech of the Front Bench spokesman for the Opposition in another place. This is usually out of order but I think I am justified in doing it in this case, and anyhow, like the well-known baby, it is very small. What he said was simply this—he referred to the company's "indefensible and dishonest behaviour". That has been said by almost every newspaper that has commented on the proceedings. I think it was Lord James of Hereford who said that the point about limited companies was that they had no body to be kicked or soul to be damned. That is surely true—and what has happened? Here is a legal entity which somehow or other has behaved in a culpable and dishonest manner, which would have been to the great detriment of the public purse unless they had been chased about it, and we are told that nobody can be held responsible and that nothing must be done about it, except as regards these individuals.

I want in the first place to deal with the two people concerned. They have suffered no penalty. Is it really suggested that after the conclusions reached in these Reports they should be retained as Government representatives in sundry positions which they occupied? I should have thought common sense indicated that one could not possibly expect good working between the Government—whichever Department it was—and these two gentlemen after that. That is all that has happened. For the rest of it, they have to thank some rather injudicious defences of their own arid some rather injudicious defences of their friends, who seem to have spent their time in defending them against things of which they were never accused.

Whatever may be said about the form of the Inquiry, it was not a criminal trial. The two gentlemen concerned are no doubt identifiable by their offices—and I may add that I know nothing whatever about either of them—but I should have thought that anyone of ordinary sense, having regard to the findings of the Committee, would have left it at that, and that their friends, in chasing so assiduously on what they thought was their behalf, were doing them no good at all. At the end I should have thought that it was not clear who knew what; I would have accepted their resignations from their Government posts, or their dismissal, and I am bound to say I should not have thought very much worse of them.

I want to take up for a moment the position of limited companies. They are always called "companies with limited liability"; they are becoming companies with limited morality nowadays. They can be as naughty as they like and nothing can happen to them. They have no body to be kicked and no soul to be damned; they cannot be imprisoned, or anything of that kind. So a public company is at liberty to do anything it likes, according to some of the arguments we have heard. Who will be responsible for them—anybody or nobody? When one gets as far as that one is bound to consider the motives of these company directors and company officers.

I thought the noble Lord, Lord Bridges—and I am glad to see him here again—was quite right to point out that this was a relevant matter. We have had a little light on this subject lately. First of all, we had people talking about the "profit motive". Of course that motive exists, but it is nonsense to say that the profit motive justifies any means of getting profit. When it is put like that, nobody would really say it; yet I have heard remarks that got very close to it. We had a remarkable instance a day or two after Notice of this debate was put on the Order Paper. It concerned a company of merchant bankers called Hambros, and I will quote what the Chairman of Hambros said, because I think it bears on the motives of these companies. He said: I believe we have the worst Prime Minister in this country since Lord North. That was intended to get into the newspapers, and of course it did. It is rotten bad history and it forgets a good many of the pre-Reform Bill Governments.

But leaving that on one side, let us go to the next remark. This amused me. He said: I believe it is in the best interests of our shareholders and the country"— and the country, my Lords— that we have a change of Government". This is a merchant banker; this is one of the "Latter Day Saints" who manage to conduct a sort of curious double marriage between the interests of their shareholders and the interests of the country. But what happens supposing they disagree? Suppose he finds one thing is in the interests of his shareholders and the other in the interests of the country. I have heard people say that his first duty, his overriding duty, in that case is to the interests of his shareholders. There is a good deal to be said for it, because he is a better judge of that than of the interests of the country. It seems a little odd that a merchant banker, by way of contributing £10,000 to the Tory Party, should be taking upon himself to choose the right moment for the dissolution of Parliament.

These are the people one has to deal with. It is not only industrial companies—the bankers have caught it, too; and yesterday The Times unkindly pointed out that this is exactly what they had said when the Macmillan Government was in power and Selwyn Lloyd was administering a bit of a squeeze. At the end of this extract it says, "Squeeze will hit Hambro's".

Here are companies which are prepared to behave dishonestly and make exhorbitant profits of which, if those profits were known, Parliament would not approve, which are guilty of what the noble and learned Lord called fraud, and no one is to be held responsible—they are considered to be suitable parties to Government contracts. I earnestly hope that what my noble friend was saying just now may come to fruition. We had a very full statement, which at this hour I will not trouble your Lordships with, about the steps being taken to get contracts between the aircraft industry and the Government on to a basis of mutual trust; because you want nothing less than that if you are to deal with a matter of this complexity, and a matter where so much of the knowledge is in the hands of the company and not the Government Department concerned.

I hope it will happen, but I should like to point out most respectfully to your Lordships that there is an alternative—and, so far as I can see, only one alternative. You cannot abolish limited companies; they have dug themselves in too tight. You certainly cannot abolish merchant bankers; heaven knows! they have dug themselves in tight enough. What do you have to do?

LORD BOWLES

Dig them out!

LORD MITCHISON

My noble friend has anticipated what I was going to say; perhaps somebody else has. If this goes on, there is no alternative but to take over and make public the business of making these aircraft. After all, there is nothing strange in it; we have had ordnance factories before now; and during the war, we are told, there was very little trouble about these contracts. I understand that. At that time they had another motive. They were not obsessed by their duty to their shareholders, the profit motive; they had some regard to the public interest. If we find them falling short in that respect, there is no real alternative but to nationalise this part of the aircraft industry. That seems a shocking thing to say in a place like this. Looking around, I do not for a minute think I will persuade any one of your Lordships to agree with me. But I should like to be told what is the alternative. You are dealing, and you have to deal, with large companies. My heart bleeds for some of these directors. They have to consider their shareholders and the country and it must be extraordinarily painful and difficult for them. If they do not succeed in reconciling their two marriages, to profit on the one hand and patriotism on the other, and if they continue to regard patriotism, as Dr. Johnson called it, as the last refuge of scoundrels, clearly we must have somebody else to deal with. And who else but a public corporation or the public in some form or another? People must reconsider the morality of what they are doing and we must not have a whole collection of people refusing to admit any liability and saying that, though the company has been dishonest and discreditable, has been guilty of fraud, no individual is really responsible. What it comes to is this: if you spread the skulduggery widely enough, no one is going to have any moral indigestion.

4.47 p.m.

THE LORD BISHOP OF SOUTHWARK

My Lords, my intervention, which will be brief, deals not with the political but with the personal and human aspect of this sad matter. I use the word "sad" because it is particularly apposite, so far as I am concerned, in that I find myself taking part in a debate which concerns inter alia the Minister of Technology and Sir Reginald Verdon-Smith. Both are friends of mine and for both I have the greatest regard.

For 19 years I was a parish priest in East Bristol, in a typical working-class parish which had known difficult days. Our Member of Parliament until his death was Sir Stafford Cripps, and he was succeeded by Mr. Wedgwood Benn; and of both I speak with the utmost affection and regard. Nothing was too much trouble, and whenever I referred a case to either of them they devoted themselves to it. In the interests of justice they were tremendous fighters, and I am sure there are dozens of people it East Bristol, or who used to live there, of all Parties and none, who, like me, have a great admiration for what the present Minister of Technology and his predecessor did, in their concern for justice and fair play.

During those 19 years there was another man who was as faithful a friend to many of my parishioners, Sir Reginald Verdon-Smith. As I think back to those difficult days, so many years ago, when people were harassed, unemployed and on the scrap-heap, I recall the letters that I wrote to Sir Reginald asking him to help to find employment for my parishioners. In those days, I was not a Bishop, but a back-street parish priest, and what I remember above all else is that every letter I sent to Sir Reginald was answered by himself. It did not stop at that. I recall his interest in a boy from a particularly poor home who had shown signs of ability. This was in the days before the generous L.E.A. grants to which we are accustomed. It was Sir Reginald who made it possible for this boy to go to Cambridge, where he had a distinguished career. Again, a young man fell sick and his doctor said that it was essential that he went abroad; and once more it was Sir Reginald who footed the bill. That is the man I know.

I mention these matters because I think it is only right that one should declare one's interest. Two of the men involved in the dispute have proved themselves, in my limited experience, as men of compassion and concern, and for both of them I have the utmost regard and respect for their integrity. Yet it is the integrity of Sir Reginald Verdon-Smith and of Mr. Davidson (who is not known to me; I have never met him) that has been questioned, and I rise on their behalf, just as I should rise if it were the integrity of Mr. Wedgwood Benn that was in question. It has been suggested that Sir Reginald's integrity is not in question, that no charges have been levelled against him. If that is so, one wonders why Sir Reginald Verdon-Smith was approached to resign from his public appointments (surely this has the implication of a plea of guilty) and approached, I believe, before the matter had been finally determined by the Public Accounts Committee.

I raise these points, not because I think, as the noble and learned Viscount has suggested, that much can be done to bring about a redress, and certainly not because I want to repeat the debate, but rather that we may learn from what has happened and, as the noble and learned Lord, the Lord Chancellor, suggested, perhaps find ways in the future of devising a better procedure.

I well remember when I was at university, reading constitutional history (most of which I have forgotten), being most impressed by a Member of another place who came to give us a course of lectures on the then development of the concept of justice and the rights of the individual. I remember him telling us how, although Magna Carta is far from being what it is often claimed to be, yet it was at least a step in the right direction in the development of that concept. This was a case of the King not being allowed to dispose of his lieutenants by summary jurisdiction; they had some rights of redress. Then, three or four centuries later, we see again how this concept has developed, when we come to the Star Chamber Government. There the Executive was being allowed to condemn without a fair hearing; and so people rose up against that particular form of Executive jurisdiction.

This problem still remains with us, and it is still not altogether solved. Your Lordships will remember that only a few months ago I rose to protest in the case of Court Lees. I did so not because I approve of corporal punishment, not because I questioned the ascertained facts in the Report of the Gibbens Committee, but because I thought that some of the persons involved were condemned without having had a full opportunity to defend themselves in accordance with the laws of natural justice. As I see it, we are in the same predicament in this particular case. I do not want to question the findings of the Wilson Report or to debate it again, but I do question a procedure which permits individuals to be condemned and to have their characters damaged by inquisitorial methods which preclude the right of legal representation, the right to call evidence on oath and the opportunity to face specific charges.

I speak from the Bishops' Bench, but your Lordships will know that in my private capacity I have much sympathy with the aims and intentions of this Government, and I have no wish whatsoever to embarrass them to-day. I think that the issue which we have had raised to-day cuts right across Party divisions. We are concerned with the rights of individuals. As I said, I have no desire whatsoever to further the sort of things which were a matter of criticism in regard to Court Lees. I am certainly, as I hope noble Lords will realise, no advocate of capitalist industry. But, like the noble and learned Viscount and others who have spoken, I am passionately concerned in the rights of the individual. This House has the privilege of protecting these rights. By all means let our Executive be efficient. I am sure that nobody on the Benches opposite wants to see any letting up in the efficiency of the present Executive. But, at the same time, coupled with efficiency, let us remember the things for which Magna Carta stands. Let us remember the battles put up by our predecessors in regard to the Star Chamber. May I just quote the final words of a great peroration which was made, I remember, on this sort of issue by Mr. Wedgwood Benn's distinguished predecessor, Sir Stafford Cripps: Let us in all things remember the dignity and the rights of the common man.

4.56 p.m.

LORD BROOKE OF CUMNOR

My Lords, justice is one and indivisible; and what my noble and learned friend Lord Dilhorne has done to-day is to invite your Lordships to consider the processes for investigating complaints and to examine whether they are adequate at the same time for securing justice. At this moment, more strikingly than at other times, Parliament is under examination at the Bar of public opinion. To-day our procedures for securing justice are under examination at the Bar of Parliament. Your Lordships will have been deeply moved, I think, by the speech of the right reverend Prelate who, like me, was claiming no special or technical knowledge of the issues that have been under investigation by the Wilson Committee. I thought he did us an admirable service by comparing his concern over this matter with the deep and sincere concern he showed some time ago over Court Lees, a complaint in a quite different field but raising the same question as to whether an inquisitorial procedure can be relied on, as things are, to secure justice.

He spoke with personal knowledge of some of the principal people who have been mentioned to-day. I have perhaps an advantage over him in that I have no knowledge of them. To the best of my belief, I have never met Sir Reginald Verdon-Smith or anybody connected with the Bristol Siddeley Company. My only connection is that rather more than forty years ago, in our university days, he who is now Sir Roy Wilson was for a short time a pupil of mine. Despite that early handicap, he has since become a public servant of the highest repute. Nothing whatsoever that I have to say in my brief speech to-day is intended as any sort of criticism of Sir Roy Wilson.

But I have a personal and historical interest in this issue because, as my noble and learned friend will recollect, a Home Secretary has certain duties, in connection with the Tribunals Act 1921. During my term of office I felt concern about the working of that Act and I welcomed the decision of the present Government to set up a Royal Commission. I must say I was deeply impressed by the speed with which Lord Justice Salmon and his colleagues performed their onerous task. Nobody can read the Report of the Royal Commission without concluding that there are here questions of justice which are difficult to answer. Whatever our age or background, whatever our Party approach, we are concerned with safeguarding the liberty of the subject and ensuring that no one is put in peril without a fair trial, whether it is a trial before a court of law or elsewhere. I give the Government credit both for having set up that Inquiry and, so far as I am aware, for having accepted its recommendations, at any rate in principle.

But what gave me some anxiety was when the noble and learned Lord the Lord Chancellor sought to make as an important point in this debate the fact that the Royal Commission did not intend to make recommendations regarding any other form of inquiry; they had referred to them only the problem of tribunals under the 1921 Act. Yet, my Lords, as I said at the beginning of my speech, justice is one and indivisible, and if the six principles stated by the Royal Commission to be cardinal principles are acceptable for application to an inquiry under the Tribunals Act 1921, they cannot be dismissed when some other, although subordinate, form of inquisitorial inquiry is under consideration.

LORD MITCHISON

My Lords, would the noble Lord allow me one minute? What happened to these gentlemen was that they were invited to resign or called upon to resign certain Government appointments. Do I gather that that ought never to be done without something in the nature of a legal inquiry, something conforming with the principles in the Royal Commission Report?

LORD BROOKE OF CUMNOR

My Lords, if the noble Lord wishes to get into controversy with me he is welcome, but I am not inviting it. I will remind him, however, that in his speech he began by saying that the Wilson Committee was not an inquiry into the conduct of any person, and concluded by implying that certain people had been found guilty under that inquiry.

LORD MITCHISON

No. With great respect, I did not say that.

LORD BROOKE OF CUMNOR

My Lords, I am not going to be diverted from the main course of my speech into the detailed rights and wrongs of this particular case, because I say frankly that I am not in a position to pass judgment on the details any more than the right reverend Prelate would claim to be. I am concerned to-day solely with the procedures. As my noble and learned friend said, the Royal Commission laid down six cardinal principles. They said, in paragraph 32: The difficulty and injustice with which persons involved in an inquiry may be faced can, however, be largely removed if the following cardinal principles … are strictly observed. And then they set out the six principles.

I grant to the noble and learned Lord on the Woolsack that when they said in that paragraph "an inquiry" they were thinking first and foremost of the type of inquiry which they were asked to examine. Nothing else was within their terms of reference. But I find it hard to detect any grounds on which these six cardinal principles can be deemed irrelevant to other inquiries of an inquisitorial character. It is that which gives me concern. It is that, I think, which gave my noble and learned friend the greatest concern. I am thinking now of the future rather than of the past. I am thinking of the tasks which may fall to other Governments, whether this one or Governments of a different colour, faced with allegations which require investigation; and I think that all our experience up to now must show that we have not yet found the full answer.

I believe that the Royal Commission have made a very considerable advance in their Report, and that if these six cardinal principles are adhered to in future tribunal inquiries there will be less risk of injustice being done to individuals. What I am rising to suggest is that all concerned should consider carefully whether these principles, mutatis mutandis, cannot be applied to other investigations of an inquisitorial type. The noble and learned Lord, the Lord Chancellor, said that he would be glad to hear any suggestions which might be made in the course of this debate. I would simply suggest that what the Royal Commission said in paragraphs 49 onwards should be carefully considered for application to any further inquisitorial investigations that may be set up, whatever form they may take.

For example, paragraph 50 states: Any potential witness from whom a statement is taken by the Treasury Solicitor should be told that, if he so wishes, his own solicitor may be present when the statement is taken … As soon as possible after he has given his statement, and certainly well in advance, usually not less than seven days before he gives evidence, he should be supplied with a document setting out the allegations against him and the substance of the evidence in support of those allegations. And then paragraph 51: However thoroughly a case is prepared, fresh evidence may emerge during the course of an inquiry which may give rise to further material allegations. In such circumstances the witness concerned should be given a reasonable opportunity of meeting those allegations even if this means adjourning the inquiry for a few days. I could go on through further paragraphs, but I do not wish to weary your Lordships; I simply want to establish the point that the safeguards which have been strongly and unanimously recommended by a Royal Commission in relation to inquiries under the Tribunals Act were not applied in the Bristol Siddeley Inquiry, and therefore I would urge your Lordships to be very cautious before you impute guilt, criminal guilt, to anybody who has been criticised under that Inquiry. I would most strongly urge future Governments, of whatever political colour, when they are setting up an inquisitorial investigation of this kind, to seek to ensure that the investigating tribunal pays proper heed to those six cardinal principles recommended by the Salmon Commission.

5.7 p.m.

LORD SHACKLETON

My Lords, I am grateful to the noble Lord, Lord Brooke of Cumnor, for his speech, because he has brought us back to the theme which I believed it was the intention of the noble Viscount to bring before your Lordships' House; namely, the nature and type of these inquiries and their suitability for their purposes. I only regret that the noble Lord, Lord Brooke of Cumnor, fell into the same sort of error as the noble and learned Viscount when he talked about criminal charges, and I should like to say a few words about the type of inquiry to which the noble Lord, Lord Brooke of Cumnor, has referred, and perhaps consider briefly how we should now proceed on this. But it will also be necessary for me at a later stage to do what I know was certainly not the wish of either myself or the noble Viscount; namely, to make a defence both of the Wilson Committee and of the action of the Minister. I regret that this should be so, but I am left with no choice in this matter in the light of the speeches that were made by the noble Lord, Lord Caldecote, and the right reverend Prelate the Bishop of Southwark.

Turning to the particular type of inquiry, I should like to remind the noble Lord, Lord Brooke of Cumnor, that there is a very great difference, as he will know very well, between a Departmental inquiry, which is what the Wilson Committee was, and an inquiry under the Tribunals of Inquiry Act 1921. There have been so many departmental inquiries of various kinds. It is quite a usual thing for Ministers, in certain circumstances, either to set up an inquiry like the Wilson inquiry, which was a rather heavyweight and formidable inquiry, or even light inquiries. I know that in the case of the Malta Dockyard distinguished accountants were appointed who produced a report on the conduct of the particular company involved (I will not mention the name now), which had a number of damning remarks in it, and no real concern was expressed on that occasion.

The important difference, as paragraph 43 of the Royal Commission makes clear, is that these inquiries have no power to compel the attendance of witnesses or the production of documents and are not in our view suitable for dealing with the special type of case for which the Act of 1921 was framed. Speaking as a layman, I naturally share the views of the noble Lord, Lord Brooke, as to the propriety of the six cardinal principles to which he referred, but I am not sure whether they are applicable in simple terms in that type of case. We are still left with a dilemma; we have not solved the problem. But what the noble Viscount has achieved by his Motion is to focus our attention on a problem to which I, personally, can see no easy solution.

Nobody in this debate, possibly with the exception of my noble friend Lord Mitchison, has taken the opportunity to say a word of thanks or of approval to Sir Roy Wilson and his two distinguished colleagues who are active in the City. They have been accused in another place, but not in this House to-day, of actual prejudice in this case. We have been warned that it is unfair to treat businessmen the way Sir Reginald Verdon-Smith and Mr. Davidson have been treated; indeed, the C.B.I. suggested that one could not expect public service from people if they are given this sort of treatment. But what about the treatment of these completely impartial and distinguished men, Sir Roy Wilson, accompanied by a very distinguished accountant and another leading figure in the City? This debate has been less than fair in respect of the remarks about the procedure which Sir Roy Wilson and his colleagues followed.

My noble and learned friend the Lord Chancellor outlined right at the beginning of his speech the method which it was decided should be adopted for this inquiry, following the precedent of the Lang Report. I do not wish to delay the House, but I must emphasise that this procedure was adopted at the request both of the Government and of the Bristol Siddeley Engine Company. It would not have been possible, in my view, for Sir Roy Wilson and his colleagues, in view of the enthusiasm for, or at least the willing acceptance of, this type of inquiry, to have suggested some other kind of inquiry. There is no doubt that the Committee themselves were satisfied that this method enabled them to investigate as thoroughly as possible the matters which they had to consider, but it had the disadvantage, which ought also to be borne in mind, that the confidentiality of the evidence prevented replies to some of the baseless attacks the Committee's procedures and conclusions. I hope noble Lords who are inclined to be critical will bear in mind the position of the Committee. This may well help to strengthen the noble Viscount's argument that this is yet another disadvantage of this type of procedure.

It was suggested that this procedure was not fair and that as a result the basic requirements of natural justice have not been fulfilled. I would ask noble Lords to believe me when I say—and I have discussed this with Sir Roy Wilson—that the Committee took the greatest pains to avoid any unfairness to individuals or groups of individuals. They considered it imperative to give every witness or representative of the Department or company a full opportunity of dealing with any point as to which they thought they might arrive at conclusions adverse to them or their principals. They explained this method of approaching the matter repeatedly to witnesses or representatives of the company or the Department, and stuck to it throughout. Sometimes witnesses were asked to come before the Committee more than once to achieve this end. At a late stage in the evidence two top-level representatives of Bristol Siddeley Engines appeared before the Committee so that they might be given an opportunity of dealing with any point as to which they wished the Committee to reach a conclusion favourable to the company, or not to reach a conclusion unfavourable to it.

As paragraph 152 of the Report shows, when the Committee became worried about the matters referred to in paragraph 151, which deals with Viper engines, they drew the company's attention to them at a high level. They provided a written aide-memoire, and went so far as to urge them to consider this and be ready to give further evidence upon it. It is clear to me that justice was done, although it is also clear from the discussions that in the view of some people justice was not seen to be done. But I ask your Lordships to accept (and I speak as somebody who was very shocked when I read the Report; I know the two gentlemen concerned and it was something of a horror story to read the Report) that Sir Roy Wilson and his colleagues sought to achieve absolute fairness, and they made clear at every stage that they themselves had not come to definite views. They were not trying charges, which is a word that has been frequently used in this matter, and they said that before they came to conclusions they would give opportunities to those concerned as to the sort of case, as they saw it, which was being erected. I hope that your Lordships will accept this from me because some unfortunate language has been used, notably not in your Lordships' House, about this inquiry.

I will deal with one or two other points which have been raised. In regard to the differentiation which was made about procedure, the noble and learned Viscount, Lord Dilhorne, said that it was different in effect from the Lang Report, in that the Lang Report did not mention individuals. But in fact the Lang Report mentioned several individuals. The only difference was that the majority of individuals in this case were civil servants. Indeed, in the Lang Report there were far more names mentioned, or clear indication given of particular individuals, than was the case in the Wilson Report. In paragraph 34 of the first Lang Report the manager of the Estimating Department is specifically mentioned. I do not recall public protests, at least not on the same scale, being employed about the Lang Report and the unfairness of the identification.

There could be no suggestion at the beginning that the Inquiry would turn out as it did. There may have been those who were inclined to be somewhat suspicious because of the statements which were published in relation to the knowledge of senior members of the management. There was one statement in particular on which I commented in your Lordships' House at the time it was made. It was suggested that the senior management were not aware of some of the matters which were coming on. But the Wilson Inquiry set out without any certainty that quite as much—I do not know what word to find, but "dirt" is almost the word—would come out of it. Some of the accusations, if that is the word which the noble and learned Viscount wishes to use, were not of course directed in any way against the two gentlemen about whom the greatest concern has been expressed. Also it is noticeable that there was no hesitation on the part of the senior company representatives in recognising the responsibility of certain of their subordinates. Indeed, we know that one has been retired and others have been transferred. What the Committee said was that the conduct, amounted to intentional misrepresentation whereby the Department's representatives were deceived". There was no charge of fraud. There was no actual criminal charge of any kind. I accept from the noble and learned Viscount and other noble Lords—and my noble and learned friend the Lord Chancellor has indicated this—the limitations which confront any Law Officer faced with the possibility of circumstances being disclosed in which an offence might or might not have been committed, and the impossibility and indeed the unsuitability of instituting proceedings.

I want to make those points not because I wish to attack the noble and learned Viscount, but because it is important to acknowledge—as I do, and as I hope he will—that Sir Roy Wilson and his colleagues sought and achieved justice in their Report. The noble and learned Viscount very rightly said that it was not his object to attempt to re-try this particular subject, and I agree with him. But I have been forced to make those points because there has been criticism of the Wilson Report.

The more difficult subject for me to deal with briefly concerns whether the Government were right to terminate the public appointments of Sir Reginald Verdon-Smith and Mr. Davidson. The decision on that resulted from a review of all that has happened, and the earlier Report of the Public Accounts Committee (the later one was not published until after the two men had been invited to resign, though it was before the appointments were actually terminated) and the Wilson Report. The reason for the decision was this. This is not a question of punishment. This is not a question of conviction. The fact is that the Government, like any other person or body in a position of responsibility, felt that they could no longer have sufficient confidence in these men to continue their appointments to important public bodies. This is a situation which is familiar to all of us who have been in industry. There must have been times when the noble Viscount, Lord Caldecote, who I know has held executive positions, has had to terminate the employment of a particular individual. He has not gone through a judicial process. He has come to the conclusion, as I have had to do in business, that circumstances were such that it was not possible to continue to employ an individual.

VISCOUNT CALDECOTE

My Lords, it is clear that the noble Lord has not taken in the point I was trying to make, which is that dismissal from one job because of action in another sphere imputes improper conduct in that sphere. Secondly, the gentlemen concerned were not convicted of any improper conduct in another sphere. Therefore the Government's action is unwise and unjust. It is quite different from the example the noble Lord gave, of a man being dismissed from a job for not doing that job well.

LORD SHACKLETON

My Lords, I do not think the noble Lord understood what I was saying. I never said that they did not do a job well. I merely said that in certain circumstances one can lose confidence in somebody, which is what the Government did, and that is the dilemma which confronts us. There are times when you cannot continue to employ somebody. In view of what the noble Viscount has said—and he has insisted on this—I must now make the case here, because it has not been understood.

This is not a punishment. It is not the result of a conviction, and we have heard too much of this in the arguments. These men have not committed any crimes for which legal remedies are available It is certainly true that where a man's livelihood is at stake some organisations will find alternative employment in which such a man can adequately serve. But I wonder what the noble Viscount would have done in a case like this. Would he have transferred them to some other activity? I grant that the appointments were not directly related to what they were doing, but there are times when one finds, justly or unjustly, that a person's usefulness for a particular job has been diminished. I put it to noble Lords who have had experience, like the noble Viscount, Lord Mills, whether in the light of what I am about to say it would have been possible and in the public interest, and indeed in the interest of the individuals themselves, to have continued with the appointments.

There is very little in the Wilson Report about them individually, but the Public Accounts Committee have been a good deal more explicit. When they reviewed these events they came to the conclusion that: In view of the size of these contracts it seems difficult to reconcile the Board's ignorance of these matters for over four years with that degree of efficiency in financial administration which would be expected of a firm of their standing, or indeed with the proper discharge of its responsibilities by the Board. We know that in the course of the negotiations on these contracts there were arguments going on as to whether the rate of profit could be increased by one or, perhaps, one-half of one per cent. Indeed, the firm's negotiators, some of whom certainly were not the two gentlemen in question, but were of senior status, were arguing about whether they could continue to do the business unless they could "up" the profit rate by one or two per cent. Yet they knew the answer, because they had budgeted for 100 per cent. profit. I think it is necessary for those facts to be known.

The Public Accounts Committee also expressed a view on the cause of the double charging on Government contracts. They accepted that it was inadvertent, and concluded that it indicated considerable administrative weakness on the part of the company. It is worth emphasising that it was the company which had immediate responsibility, and that in the event it was the Ministry which eventually discovered that double charging was occurring. These are serious comments. The Public Accounts Committee, in their further review this year, came to the conclusion that these strictures were, if anything, under-stated; and in reaching that conclusion they took full account of the claim that the top management of the firm were wholly engaged with what they considered to be more important problems.

So far as Mr. Davidson and other members of the executive board are concerned, the Wilson Committee came to a different conclusion. They found that the firm had budgeted for and achieved exorbitant profits on their overhaul contracts, and that the exent of the profitability of those contracts was at the time known to the company at all management levels. There is a choice of explanations. Either there was inadequate financial awareness or the results were planned and achieved. Whatever the explanation, in the light of some of these criticisms it is at least understandable that there should be some loss of confidence. When we look at the events which took place between September and December, 1964, whatever the truth about the extent to which those facts were known at senior management level, there is no doubt that it was then made aware of what had happened. There have been conflicting accounts of the reactions at senior level, and the Public Accounts Committee have thrown rather interesting light on this.

After giving certain background information, the firm's own memorandum addressed itself to the question of the firm's obligation to alert the Ministry. It discussed various alternative courses, and concluded that a letter should be sent to the Director of Contracts making general points about profit policy in an attempt to disavow an obligation to alert the Ministry. In the firm's own words, in another letter, this was done in the full knowledge that they possibly faced a scandal of the greatest magnitude. This course was followed; and it is now clear that the approach which was made to the Ministry did not take place until after it had become clear that the correspondence with the Director of Contracts had not produced any conclusive result. It has been suggested that no blame should be attached to these men because the Public Accounts Committee, by the casting vote of the Chairman, decided that they did not seek to mislead that Committee when they gave evidence in 1967. But our main concern is the motives which lay behind the actions which were taken in 1964.

My Lords, this has been an unpleasant affair. I have a great deal more that I could say, but I think I should prefer not to. It is true—and I must say this—that the Public Accounts Committee said that the evidence given by the two gentlemen in question fell short of the accurate, complete and frank responses which the Committee were entitled to expect. Taking all this into account, would it really have been possible to allow these two gentlemen to continue to occupy public appointments? They were invited to resign. One understands that, if they feel they are innocent—and no doubt they do—they naturally refused, in that sense, to commit themselves to it. But I do not know what other action my right honourable friend, or any Minister concerned for the integrity of our public life, could do in circumstances where a loss of confidence was—I will not say justified, but was as strongly based as it was in these particular circumstances.

I regret very much having to go into this detail, and I hope your Lordships will accept—and the noble Viscount will know—that I did not myself wish to go into this. But the right reverend Prelate chose to stand up and defend his constituents, and it is not enough, in circumstances of this kind, just to leave it to the Government to brush a thing away. Admittedly there was no formal trial, but there was no question of there being a formal trial. Therefore, the Government have done the best they could. I must say that I resent that there have been elsewhere, but notably not in your Lordships' House, accusations against both the Wilson Committee and, indeed, the Government regarding matters which took place long before this Government came into office. I make little of this beyond saying that I think we are still confronted with a problem. It is difficult to know what the right answer is. I hope the noble Viscount will be satisfied that the problems have been aired, and I hope also that he will appreciate that on certain matters I think he was a little less than fair to the Wilson Committee.

5.34 p.m.

VISCOUNT DILHORNE

My Lords, I should like to begin my reply by thanking most sincerely those who have taken part in this debate and those who have stayed to listen to what has been said. I think it has been an interesting and valuable debate; and apart from, I think, three speeches, it kept within the framework within which I hoped it would be kept. I know that my noble friend Lord Caldecote went outside that framework; so did the noble Lord the Leader of the House, and the noble Lord, Lord Mitchison. I am sorry that that happened. I did not myself think that it was necessary again to repeat all that had been published and said in another place in seeking to justify the proposition that the Government can and ought to dismiss those in whom they no longer feel confidence.

LORD SHACKLETON

My Lords, may I just interrupt the noble Viscount? He will recall that I urged him to frame his Motion in specific terms.

VISCOUNT DILHORNE

I know; and I explained to the noble Lord the difficulties about that. I also did my best at the outset of this debate to make clear what was the framework.

My noble friend Lord Caldecote called in question the decision of the Government with regard to two of the individuals dealt with in this business. My Lords, I am rather sorry that that happened; but I do not myself think that it was necessary again to go into the grounds on which the Government felt no confidence. I would not challenge the proposition that if the Government feel no confidence in a person they are entitled to dismiss him. Whether that feeling be justified or not is another matter; but that proposition does not justify the Government's merely reciting again what has appeared in these Reports and what has been said in another place. That is not in issue in this debate. Unfortunately, the Government are in a better position in that respect than many other people in the country, who cannot get rid of those in whom they have lost all confidence.

I must say that I listened with interest to the speech of the noble Lord, Lord Mitchison. He seemed to think that there were only two individuals reflected upon by the Wilson Committee. Of course, that is not so. He said there were no charges. My Lords, I do not think he can either have read the Report or heard my speech (or, if he heard it, he cannot have understood it; I will leave it at that), because if he will look at the Report—I will not give way to the noble Lord for the moment—and will read it, he will find that three individuals, the Chief Estimator, the Price Controller and the Commercial Manager (Ministry), were all found to have made representations which they knew to be false and to have made them to the Ministry Department's representatives, and that there is a finding that the Department's, representatives were utterly deceived. If that is not a clear finding by the Committee, in print in that Report, of fraud, and of fraud almost amounting to obtaining money by false pretences, I do not know what it is.

LORD MITCHISON

I quoted the Chief Secretary to the Treasury—and this was a Treasury Committee—who said they made no charges. I agree with him.

VISCOUNT DILHORNE

I have no doubt the noble Lord, in his loyalty, will agree with anything said by the Chief Secretary or any other Minister, but I rely on what is said in print in the Report; and although the noble Lord, Lord Mitchison, may shut his eyes to that print and prefer Hansard of another place, the fact is there, and that was the finding. My Lords, I did not confine my speech to concern for just two individuals: I covered the case of all of them. We are told by the noble Lord, Lord Shackleton, that some of them have been dismissed. That may be. It may be right that they should be. But what I am concerned about is whether, before they were condemned—I will not use the word "convicted"—they had proper opportunities to defend themselves.

May I come now to the speech of the noble and learned Lord the Lord Chancellor? I feel I owe an apology to the noble Lord for not making sure that he was aware of the line that I proposed to take, because my failure to do so obviously placed him in a very considerable difficulty in replying to me immediately. In the past, I have on occasions been faced with a somewhat similar position, and I know how difficult it is. Therefore, I will not want to appear to be saying anything unduly critical of the noble Lord's speech; but I think I cannot have made myself clear in moving this Motion, because I did not criticise the Wilson Committee for adopting the Lang procedure, curious as that is, as the noble and learned Lord the Lord Chancellor pointed out. I made no criticism of that, because the Wilson Committee, like so many of these committees, did not envisage when they were appointed that there would be any case for condemning individuals or for finding them guilty of fraudulent conduct.

The noble and learned Lord the Lord Chancellor tried to draw a distinction between this Committee and a tribunal appointed under the Act of 1921, but the same applies to that kind of tribunal. Of course, there are some inquiries held to find out which particular individual is to blame; there are other inquiries to find out what has happened, what are the facts. The Bank Rate Tribunal was one of the latter kind, to find out whether there had been a leak about bank rate. When that inquiry started no one knew into what fields the inquiry would have to go. It went into some pretty odd fields in the course of that investigation. From time to time it appeared prima facie that some people might have been guilty of some degree of impropriety.

So here, in a Departmental Committee and in any other Committee investigating to find out what has gone wrong, it may look in the course of the inquiry as if some individuals are to blame. That can apply in an inquiry before a tribunal, in an inquiry before a Departmental Committee and before a Committee such as this. My criticism is—and I do not think it is unfair; the last thing I wish to be is unfair—that the Wilson Committee, when they realised that they were getting to that position, did not adapt their procedure. The noble and learned Lord the Lord Chancellor in the course of his speech asked. "What do you do?". I think he was answered by the noble Lord, Lord Bridges, for whose contribution I am sure the whole House is indebted. I suggest that when that position arises, no matter what the form of the Committee, natural justice requires that you should adopt broadly the six cardinal principles formulated by the Royal Commission. You must stop; you must adjust your procedure; you must let the persons know the case they have to meet.

The noble Lord, Lord Shackleton, in the course of his reply, said that the Committee took the greatest pains to avoid unfairness and gave the company and individuals the opportunity of dealing with any point on which the Committee wished to reach a conclusion, favourable or unfavourable. I am sorry if there should be any argument about the facts. I have here a copy sent to me of a letter to Sir Roy Wilson, dated September 20, 1967, signed by Sir Reginald Verdon-Smith. I think it desirable, in view of that statement by the noble Lord, Lord Shackleton, that I should quote two passages from that letter. It says: Various specific questions have been put to individual witnesses separately, many of these questions being, as you yourself have said inquisitorial in character. They appear to arise from statements made by Ministry officials either in written papers or in oral evidence. But we do not know whether these amount in total to any specific allegations about the conduct or integrity of individuals or about the behaviour of the company generally. it goes on: Apart from this, no discussion has taken place with us on a number of aspects of our original general submission which we feel to be important. You will, I feel sure, appreciate that since we have no knowledge or indication of the Committee's approach to the many matters arising and which of them seem to you to be either important or controversial it is difficult to put in a further written statement, some of which might be quite unnecessary while at the same time we might be omitting reference to points which the Committee regard as a great importance. That does not look to me as if Sir Reginald Verdon-Smith on September 20 knew what allegations might be established against him or against members of the company.

LORD SHACKLETON

My Lords, the noble and learned Viscount must be fair on this. He is quoting from a letter dated September 20 of which I also have a copy. I also have a copy, which I assume he has, of Sir Roy Wilson's reply, dated September 21. I would only suggest, if both sides agree, that both these letters should be tabled.

VISCOUNT DILHORNE

My Lords, I was just coming to that reply. I rather resent the suggestion that one is being unfair in making points about the procedure of this Committee. I am concerned with the unfairness that individuals may have suffered. That is my concern to-day. If the noble Lord likes to accuse me of being unfair, he can—it does not worry me in the least. If the noble Lord had retained his seat he would have known that I was going to refer next to the reply of September 21 from Sir Roy Wilson. I read the whole paragraph of Sir Roy Wilson's account of the procedure in fairness. I think it is somewhat unwarranted now to accuse me (and to do it more than once) of being unfair.

The letter of September 21—I think only one sentence is relevant to this point, but I will read whatever the noble Lord wishes of it—says: Your letter of yesterday however makes it quite plain that you would like to have a further hearing at which you and other representatives of the company could deal orally with such matters as you might think appropriate. That is all very well; but that does not tell the company what are the things that the Wilson Committee thought were appropriate for them to deal with in answer to the allegations made against them. That does not help at all. I find that that correspondence supports the Bristol Siddeley reply when they say—and I quoted the paragraphs—that they were not informed of the allegations made against them and not informed of the substance of the evidence in support of those charges.

It is for those reasons that I have thought it right—although I have the greatest respect and have never sought to criticise them personally—to criticize the procedure followed by the Wilson Committee; not initially, but when they realised that these men might be condemned by the verdict that they would feel bound to bring in. I was sorry the noble and learned Lord the Lord Chancellor did not answer the question which I put to him. I put to him the question put by the noble Lord, Lord Brooke, about the application of the six principles where any individual was involved before any form of inquiry. I assumed, perhaps wrongly, that he would agree that, broadly at least, those principles should apply in natural justice.

THE LORD CHANCELLOR

My Lords, with respect, I pointed out that you simply cannot apply them when there is no allegation being made against anybody. There is no case against him; there are no allegations. But I should be very interested if the noble and learned Viscount would tell the House this. If you have this inquiry and to one out of twenty people it looks as though some blame may be attached, as I understand it you stop. What do you do then? Do you say: "In public you must be represented, and the evidence on both sides must proceed in pubic"? Supposing the man then says, "If his is the case, I am not going on. I am not going to give you any more documents. I am not going to give any further evidence." You have no power to make him give evidence. You cannot get another document out of him. The inquiry comes to an end.

VISCOUNT DILHORNE

My Lords, I do not think those objections are very realistic. From my experience, things do not happen in that way. The noble Lord said that there were no charges, no accusations. There must have been a moment, to take the clearest case, when the Committee realised that the evidence they were receiving led them to the conclusion that there had been fraud. At that moment, I suggest, they ought to have realised that this procedure which they had agreed—and both sides agreed on the basis that no individual would be condemned—really was not suitable. Then they could have met the other side and said, "This is what it is pointing to." I am not talking about it being in public; I am not talking about compelling the attendance of witnesses or about the production of documents. I think that is irrelevant. What they ought to have done, in common fairness, is to have said to the persons concerned—and I put it in colloquial language—"Look here, what we have received points in this direction. We want you to know that this is the question. We want you to have every opportunity of meeting it, of calling witnesses if you desire, and of putting any material before us." That is giving them notice of the charge. I do not think that is difficult before any Committee, and I am confirmed in this view by what the noble Lord, Lord Bridges, said about departmental inquiries. If I may remind your Lordships, he said that when an inquiry shifts from ascertainment of fact to apportionment of blame there should be a halt, and every opportunity of answering should be given.

My Lords, that, I think, is a fairly simple proposition. I hope that the noble and learned Lord, the Lord Chancellor, will, when he reflects on it, perhaps agree with me that that is desirable. And it is because it does not appear to have been followed in this case that I have felt it my duty, sad and troublesome though it has been to go into it all, to raise this question before your Lordships. I can only hope that this debate will lead to very great care being taken in all forms of inquiry in the future to see that those whom an inquiry may think fit ultimately to condemn, or, it may be, ultimately to acquit, at least have knowledge as soon as possible of the case they have to meet and also of the substance of the evidence that is going to be produced against them. I do not think that I can usefully proceed further with this matter. It has been a valuable debate. Again I express my thanks, not least to the noble and learned Lord, the Lord Chancellor; to the noble Lord, Lord Shackleton; to the noble Lord, Lord Bridges, and others for taking part, and I ask leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.