HL Deb 21 November 1973 vol 346 cc1073-82

3.40 p.m.


My Lords, it might be to the convenience of your Lordships if I were now to repeat a Statement which is at present being made in another place by my right honourable friend the Minister for Overseas Development. The Statement is as follows:

"With your permission, Mr. Speaker, and that of the House, I would like to make a further Statement about the Crown Agents.

"In my Statement last year I said that I welcomed the findings of Sir Matthew Stevenson's Committee that the interests of the Crown Agents' Principals and others would best be served by the continuation of the whole range of services which the Crown Agents provide. I also accepted recommendations that the status, structure and responsibility for the Crown Agents should be clearly defined, and that they should bear an appropriate liability to taxation.

"The Crown Agents originally came into being primarily to provide certain financial and purchasing services in Britain for countries which were then dependent. The range of their services, conducted on a non-profit-making basis and contributing to the development of the countries concerned, has been progressively made available to a large number of countries, most of them now independent. The scope of their activities has also been extended to cover a wide range of technical and financial services.

"The Crown Agents have adapted their organisation and structure over the years in order to meet these widening requirements, and in particular have established certain of their services on the basis of fully-owned subsidiary companies staffed by Crown Agents personnel. In the light of the Stevenson Report, I have agreed that this process should be extended by the establishment of further wholly-owned subsidiary companies to deal with the specialised financial services of the Crown Agents. The boards of management of those companies will include non-executive directors appointed after consultation with me, as well as executive directors drawn from the Crown Agents staff. The Crown Agents intend that the investment policy pursued by these companies should be generally in accord with the trustee analogy and should be fully consistent with their name and standing. These subsidiary companies will be subject to taxation in the normal way, and arrangements are also being made to bring any profits which may be made by the Headquarters' organisation itself within the scope of normal taxation.

"The Crown Agents will, as in the past, be appointed by the Secretary of State, or by myself acting on his behalf, for the purpose of carrying out the various services on behalf of the overseas Principals. They will thus remain answerable finally to Ministers, but it is not my desire or intention to disturb the traditional practice under which the operations of the Crown Agents on behalf of their overseas Principals have been discharged on a basis of nonintervention by Ministers.

"In the future, as in the past, the scale and scope of the Crown Agents' operations will depend on the confidence which overseas Governments and authorities repose in the organisation. That confidence is fully reflected in the present scale of operations, and I am particularly anxious that the arrangements I have mentioned, which are designed to produce a more readily comprehensible structure and to define the various functions more clearly, should in no way disturb that confidence. I have made this clear to the main overseas Principals when informing them of the outline of the new arrangements.

"Finally, I should once again like to take this opportunity of thanking Sir Matthew Stevenson and his Committee for their Report, and of sincerely endorsing the tributes which they paid to the work of the Crown Agents."


My Lords, the House is indeed indebted to the noble Earl for repeating this important Statement. I am sure he will be the first to agree that it raises matters of considerable importance, not only so far as Her Majesty's Government are concerned, but also with regard to the many independent countries and territories which use the services of the Crown Agents. Therefore perhaps we may at some suitable time have an opportunity to debate this Statement and the proposals of Her Majesty's Government.

I would like to confirm on behalf of my noble friends the full confidence that we have in the Crown Agents. Perhaps this is best illustrated by the very size of the business that independent territories place with the Crown Agents, running into some billions of pounds a year. There have been difficulties, and those occasions are still fresh in our minds. Whether the proposals in the Statement will satisfactorily deal with them and prevent their recurrence I am not sure. I must say that I am still unhappy at the idea of the Secretary of State appointing the Crown Agents, and now the non-executive and executive directors to the subsidiary companies. Of course, at the end of the day they are finally answerable to the Minister but, as I understand it, the Crown Agents are not required at any stage to report to the Secretary of State. I appreciate the difficulty, but this is one of the areas where I think it would be well worth while to consider whether we can have greater accountability of the Crown Agents to the Minister without in any way infringing the obvious freedom that they require in doing business on behalf of their overseas clients.

May I ask the noble Earl to say a little more with regard to the trustee standards that the Government would expect of these subsidiaries in their investment programme? If he could give further information perhaps some of our doubts might disappear. However, I think this is not the occasion when we should pursue this matter too earnestly with the Minister, but we should seek an opportunity of debating the proposals at a later stage.


My Lords, I, too, would thank the noble Earl for repeating the Statement. I am sure that it represents a step forward, but I am not sure whether it is a sufficient step forward. The one question I should like to ask concerns a point which was not made in the Statement but which I feel should have been considered. Have not the Government considered again the question of the name of the Crown Agents? Is it not very wrong that a body which, among other things, trades in arms, and which is accountable in its trading only to its clients, should appear to the world at large to be an agent of Her Majesty's Government? Is it not true that this title now no longer bears any relation seriously to their function? If the object of some of the changes is to make the whole set-up more comprehensible, as the noble Earl said, would not a change of name help? Finally, do the Government not remember the extreme embarrassment caused during the Nigerian civil war by the misunderstanding as to the name and nature of the Crown Agents? If they have not already considered this point, will they not do so fairly soon?


My Lords, may I reply first to those two noble Lords? I would thank both the noble Lords, Lord Shepherd and Lord Beaumont, for what they have said. I agree with the noble Lord, Lord Shepherd, that this is probably not the right time to go into too much detail with regard to the Crown Agents, both in reference to what their propositions are in the future and to any details with regard to the past. It is in order to try to put them on a new and better footing that my right honourable friend thought it prudent to make this Statement to make it clear what the situation is.

The noble Lord, Lord Shepherd, wondered whether the Crown Agents should be more answerable to Ministers. Of course, the present pattern is to be altered slightly by incorporating further operations of the Crown Agents to provide a more suitable structure while still retaining scope for flexibility and adaptation. This should enable the Crown Agents to discharge the responsibilities they have accepted on behalf of their overseas principals. Of course, constitutionally the Crown Agents derive their status from the Crown and are charged with the responsibility of acting as agents to their overseas principals. The overseas principals employ such of the Crown Agents services as they desire, and the Crown Agents are answerable to them for executing their commissions. In that respect, the noble Lord will realise that answerability to the Crown for things for which they are directly answerable to their principals could cause problems.

The noble Lord also said he would have liked more information with regard to the analogy of the trustees to which I referred. Quite honestly, the best I can do in answering that point is to draw attention to the actual words used in the Statement, because this is important: The Crown Agents intend that the investment policy pursued by these companies should be generally in accord with the trustee analogy and should be fully consistent with their name and standing. While I accept the noble Lord's concern over this point, I think that now would not be the right moment to go into great detail as to how this should generally be done.

The noble Lord, Lord Beaumont, said that "Crown Agents" was the wrong name, for the reasons he gave. One accepts that the Crown Agents are in a unique position in this respect. I would tell the noble Lord that it is not the intention to change the name, and I would suggest to him that if we did change the name, which is well known in many countries throughout the world, and well respected, the result would be less advantageous rather than more advantageous.

3.50 p.m.


My Lords, as one who has put down a series of Questions over the past year or more relating to the activities of the Crown Agents and their lack of public accountability, I welcome this Statement. I was particularly interested, as was my noble friend, in the statement made that investment policy would be in accordance with a trustee analogy and fully consistent with their name and standing. That, I think, is the whole "guts" of the Statement that has been made. I appreciate the answer given to my noble friend, that is not possible to give a full description of precisely what that means. I take it at its face value, and I welcome it. At the same time I would appreciate, along with my colleagues, the opportunity of a full-scale discussion in this House on the whole range of activities of the Crown Agents. I need say no more at this stage. I think it is indicative of the influence of both Houses that they have directed attention to this organisation, which is capable of doing great good work but, due to the lack of adequate public accountability, has on more than one occasion, in my opinion, operated in a manner that runs counter to the Government's broad prices and incomes policy. Therefore I join with my noble friend in urging that at the earliest possible moment opportunity be given to this House to have a full discussion of all the implications of the Stevenson Report.


My Lords, I appreciate the interest which the noble Lord has shown in this subject, and indeed his knowledge of the whole situation. I am quite certain that if he and the noble Lord, Lord Shepherd wish to consider the possibility of a debate on this matter, it can be arranged through the usual channels.


My Lords, may I, as one who raised the question for the first time, I think in either House, two and a half years ago, on the whole congratulate the Government on the speed with which they have acted. It is a very complex question—I recognise that; and I have always recognised the value of the work of the Crown Agents. I am not clear, however, what is the nature of the responsibility they are to have in future. I do not know whether the Stevenson Report is to be published. Are we going to have a White, Paper? I would have thought it impossible to give freedom of action and at the same time have complete Ministerial responsibility. I think it is quite right that these should be separated; I accept that. But it was not at all clear from what the Minister said exactly how that was going to operate. I would make one other point. I do not altogether approve of the extension of Crown patronage which seems to come into this. I think it is probably rather a pity and, I would have thought, quite unnecessary. I would, frankly, have liked to see some body of trustees to whom they would be responsible, and I think, too, with some legal personalities. I do not know whether the noble Earl can add anything at this time, but I think it might be worth while to have a further discussion later.


My Lords, again the points my noble friend has raised are the kind of points that could much more easily be discussed in the type of debate which has been mentioned. I would tell the noble Earl, Lord Selkirk, that the Stevenson Report will not in fact be published because of the positions of the overseas principals with whom the Crown Agents are in a relationship of confidence. Clearly it would be difficult, when consultations have gone on between the Crown Agents and their principals, for a Report which took these matters into account to be published. Nor is it the intention to publish a White Paper, because again there are responsibilities between the Government and the Crown Agents which also have degrees of confidentiality. The purpose of this Statement is to indicate, as best possible, the lines that will be taken and the way in which the Crown Agents will operate in the future.


My Lords, would the Minister be good enough to tell us whether the status of the staff has altered, whether there will be any redundancies, and whether the staff associations concerned have been consulted? And would he give us an assurance that one of the reasons which have actuated the Government to take these steps is not that they are doing what Lord Gardiner suggested yesterday was being done with the Land Registry, that having given a promise at the General Election to reduce the number of civil servants this is the way they are bringing it about?


My Lords, I can assure the noble Lord, Lord Wigg, that nothing in the Statement changes the position of the staff employed by the Crown Agents.


My Lords, will the noble Earl tell us whether, in future, Estacode, however inadequate it is, will apply to the personnel of the Crown Agents?


My Lords, I repeat that nothing that has been said in the Statement will affect the position of those employed by the Crown Agents.


My Lords, is it not true that the lack of such regulations has affected the operations, unfavourably from my point of view, of the Agents.


My Lords, I will certainly look into the point which the noble Lord, Lord Balogh, has raised, and if I have not covered it satisfactorily I will write to him.


My Lords, in view of the very large sums of overseas money that are normally on deposit with the Crown Agents, and therefore the concern about the relationship of sterling to other currencies, can he say whether these large sums, which have suffered such loss by devaluation in the past, now attract the same partial guarantee which is attracted by certain classes of other foreign deposits in this country—that is to say, guarantees of indemnity by the Government in view of possible loss?


My Lords, I think that is a question of detail with which I should not like at this particular juncture to get involved. But I can assure my noble friend that the work which has been done by the Crown Agents in respect of overseas principals will continue.


My Lords, would the Minister be good enough to answer the second part of my question and assure us that no member of the staff is in danger of redundancy as a result of the change in Government policy?


My Lords, what I said to the noble Lord, Lord Wigg, was that their situation would not be changed as the result of this step, but I certainly would not be prepared either to confirm or deny that there would be any changes in actual management.


My Lords, is the Minister saying that, in taking a step of this kind, the Government have not consulted the professional organisations concerned, and are so regardless of the fears of the staff that there may be redundancy that to-day, on behalf of the Government, he cannot say whether there will or not be redundancy? Is that the way to run a railroad?


My Lords, it is certainly not the way to run a railroad. What I was suggesting to the noble Lord was that, in view of the concern which has been expressed over a number of months, the Statement indicates the way in which the Crown Agents will be run in the future, how certain areas are now becoming incorporated, as opposed to being just under the auspices of the Crown Agents. I would not be prepared to comment in any detail—and I do not think the noble Lord would expect me to—with regard to the individual day-to-day management or employment of labour other than to say that anything I have said in the Statement does not alter the position of those who are employed by the Crown Agents.


My Lords, I am sorry to detain the noble Earl, but I have stood up six times. I have a Question on the Order Paper asking for the Statement which he has now made, and I am grateful to him for having made this Statement. We have to debate this matter, but may I just say that the necessity for some accountability from the Crown Agents has often been illustrated. During the Nigerian civil war the Crown Agents were placing orders for arms which would not have been known to anyone if it were not for the fact that I had obtained its internal secret bulletin and was able to expose this. Obviously, when the Crown Agents are making orders of that kind it ought to be known to the public and Parliament of this country as well as to those who are making the orders and the Crown Agents themselves.


My Lords, the noble Lord, Lord Brockway, has put his finger on the very point, which is the confidentiality between the Crown Agents and their principals. It is on the basis of this confidentiality that the Crown Agents have in the past managed to succeed, and managed to build up the trade that they have in fact built up. Once one starts to display this confidentiality to other people, then confidence in the Crown Agents is likely to diminish. It is in order to try to get the correct balance between, on the one hand, the confidentiality between the principal and the Crown Agents and, on the other, the responsibility of the Crown Agents to the Minister, that my right honourable friend has made this Statement in an endeavour to satisfy this very point.