HL Deb 30 July 1975 vol 363 cc1034-40

3.47 p.m.


My Lords, with the leave of the House, I should like to repeat the Statement that is being made in another place by my right honourable friend the Secretary of State for Trade. The Statement is as follows:

"As the House will recall, following the collapse of Court Line I appointed Inspectors on 22nd August 1974 under Section 165 of the Companies Act to inquire into all the circumstances relating to the collapse of this firm. Subsequently, following the approach by individual MPs on behalf of their constituents, the Parliamentary Commissioner decided to undertake investigations of allegations of maladministration arising from the Statements made by Ministers prior to the firm's collapse. Both these Reports were published at 3 o'clock this afternoon and are now available in the Library.

"I would like to take this opportunity of expressing the Government's gratitude to Sir Alan Marre and the Inspectors and to pay tribute to the thoroughness of both Reports.

"Neither Report makes any criticism of the decisions taken by the Government in the handling of the issues. Indeed they pay tribute to both officials and Ministers for the speed and sense of responsibility with which they reacted to the situation as it developed.

"Both PCA and the Inspectors do, however, criticise in certain respects the Statements made to Parliament on 26th June and 1st July by the then Secretary of State for Industry on behalf of the Government. They accept that the Statements were made in good faith and reflected the confidence which the Government genuinely felt at the time about the prospects of the business based on a careful assessment of the best information available to it, but they consider that the Statements went further than was justified in reassuring the public about the continuation of the company's operations for the rest of the summer season last year. The Government note and respect the criticisms made in both Reports but the Government considered then and still believe that the Statements made were right in the difficult circumstances at the time.

"The Government have carefully considered in the light of the Reports whether any further measures to assist those affected are called for. This is not a case in which any legal liability arises. The Government's Statements were not phrased or intended to give a formal guarantee and did not do so. Furthermore, the House will recall that the Government decided last September to legislate to compensate those Court Line and other holidaymakers who had a reasonable expectation that they were protected by adequate bonding arrangements but who nevertheless suffered loss as a result of the failure of their tour operator. The Air Travel Reserve Fund Act 1975 has accordingly established a fund to which the Government have offered a £15 million interest free loan and from which the Court Line and other holidaymakers to which I have referred are being reimbursed and future holidaymakers will benefit. The Government have, therefore, concluded that no further payment out of public funds would be justified.

"However, wider issues of public policy are involved. Very difficult questions of judgment are always involved in deciding how much or how little should be said publicly in situations of this nature, particularly when there is a risk that a wrong emphasis in a Statement may bring a company down. This is a matter of continuing concern to all Governments."

My Lords, because of the importance of this matter I understand that in another place an opportunity for a debate will arise. That is the conclusion of the Statement.

3.51 p.m.


My Lords, the Statement which the noble Lord the Leader of the House has made arises from two Statements which the Secretary of State for Energy made when the right honourable gentleman was Secretary of State for Industry last year concerning Government help for Court Line, in which the right honourable gentleman added an assurance that members of the public who were booking holidays through Court Line would, in effect, be all right. Although the Statement which the noble Lord has read out records that the Parliamentary Commissioner for Administration's Report pays tribute to the Government for the sense of speed and responsibility with which they reacted to the Court Line situation as it developed, paragraph 87 of this Report, which has been published for only an hour, justifies the view which was expressed in both Houses of Parliament—very strongly in another place, far less strongly in your Lordships' House—that the Secretary of State for Energy's Statement had misled members of the public because of the assurance he gave to holidaymakers. Everyone makes mistakes and life would be extremely difficult if we did not recognise that, and that is really a matter for another place.

However, having got a Parliamentary Commissioner for Administration's Report, which concludes in paragraph 87 that the Minister has misled the public, it seems incredible that in the next breath the Government are rejecting the Ombudsman's findings. Can the noble Lord the Leader of the House give me the information about whether a Government have ever before rejected a report from the Parliamentary Commissioner for Administration? Then, the end of the Statement deals with rather more complicated matters connected with the Air Travel Reserve Fund Bill. May I ask whether the Government will rethink what they are saying in the Statement and consider introducing an Amendment to that Bill to ensure that in these circumstances those holidaymakers who suffered through Court Line's collapse will now be compensated by Government grants and not, as the Bill provides, by levies on future holidaymakers?


My Lords, I also should like to thank the Minister for making this interesting Statement, the detail of which has only just become available. We should like to reserve our criticism of this Statement as I note that we are to have a debate on the subject, fairly soon I hope, and when that time comes we shall have had time to digest what this Report says. I should like also to support the noble Lord who has just sat down in saying that the Government should consider an Amendment to the legislation whereby payment to these people is made from Government grant and not from the Reserve Fund. In the meantime, may I ask the noble Lord one question. How many of these unfortunate people who have suffered from this disaster have since been reimbursed, and if they have not been, how long will it take before they are?


My Lords, I would say to the noble Lord, Lord Belstead, that I think he was wrong. The Government have not rejected this Report. They pay tribute to it and have given an explanation of their position. The words in the Report, which the noble Lord has only just seen, do not say that Mr. Bennmisled. The problem of the Statement and supplementary answers is that, if one were overcautious and took full care, one could well create so much doubt in the public mind and in the City—the feeling that the Government knew sufficient but were not willing to express anything but caution—that there would immediately be a run on that company, with very severe loss to those who were already on holiday and had themselves already contracted. I suggest the Report requires careful consideration. It raises considerable difficulties for Governments, the present or any future Government, in dealing with matters of this kind in a public place. There is also the fact that at the time in question Hansard was not being published and all the public were able to know of what was going on was from reports in the newspapers.

In regard to the suggestion of the noble Lord, Lord Belstead, that the Government should provide further funds to the existing £15 million, so that the burden is not in future borne by a levy, our understanding is that for 1974, taking Court Line and others, the total loss is likely to be some £8 million, of which Court Line's is between £5½ million and £6 million. The feeling is that there are adequate resources for this fund and no need for a further injection of monies. In regard to the noble Earl's question, I understand there have been some legal difficulties in the authentication of claims, but that payments to those who have suffered will shortly be made by the authorities of the Fund.


My Lords, will my noble friend inform the House whether the Parliamentary Commissioner had an opportunity of investigating the circumstances in which a highly confidential report, prepared by a very eminent firm of chartered accountants and with a restricted circulation, came to be published in a magazine called Accountancy Age, published by the Haymarket group of companies in which Mr. Michael Heseltine has had an interest?


My Lords, I fear that I have no knowledge of that article or of the circumstances, but if it is a matter for the Parliamentary Commissioner it is for him as an independent official to take it up.


My Lords, will not the noble Lord confirm that the Companion to Standing Orders expressly states that it is highly improper for a Member of this House to mention by way of criticism a Member of the other place; and will the noble Lord, as Leader of the House, kindly explain that point to his noble friend, who is perhaps not so familiar with the Companion as are those of us who have been here longer?


My Lords, I must say in fairness that I do not know whether there was any imputation in what my noble—




I am expressing my own view, my Lords; the noble and learned Lord is entitled to his. There have been occasions when we disagreed on some of his own imputations on some of my right honourable or honourable friends in another place. I hope that the noble and learned Lord will leave to me these decisions on advice to Members of the House.


But surely, my Lords, the observance of Standing Orders is something for the whole House. Are we not entitled to expect from the noble Lord the Leader of the House strict firmness and impartiality as between the two sides when a clear breach has been committed?


My Lords, the noble and learned Lord is now suggesting that I act unfairly as between one side of the House and another, but I should not have thought that was a fact.


My Lords, is my noble friend aware that no imputation was intended in so far as Mr. Michael Heseltine was concerned; but is he also aware that I have drawn public attention to this fact and invited comment on it publicly quite a long time ago?


My Lords, if my noble friend has referred to it in public I do not know under what circumstances, and I think we had better leave the matter there.


My Lords, is the noble Lord aware that the understandably kindly way in which he tried to deal with the excess of the Minister of Energy, his colleague in the Government, could give the impression that the Government compound that excess? Here we have had what I imagine is an unprecedented rebuke to a Cabinet Minister by an impartial inquiry, and it is a pity if the Government, who one would understand would not want to be a party to it, give the impression by the way they accept this Report that perhaps they are not so disturbed about it as other people would be. Has the Lord Privy Seal any hope at all that the Minister who has received this rebuke is likely to have learned any lessons from it in the way he has acted since?


My Lords, if before making such supplementary statements the noble Lord would read the Report he might find it of use. The fact is that this was a Government responsibility: there were more Ministers involved in the matter than the then Secretary of State for Industry. It was a Government responsibility, and that is why I have repeated the Statement myself this afternoon.


My Lords, can the noble Lord say on what grounds the Government think it right or prudent that when a firm goes bankrupt they should use public money to reimburse those who happen to have purchased the wares of the company before it went into liquidation?


My Lords, again I suggest that the noble Earl should refresh his memory on the circumstances of Court Line. The reason why the Government acted with great swiftness in this matter was to save 9,000 working men's jobs in the North-East. It was nothing to do with the holiday section, although that was a matter of interest; it sprang from the whole ramifications of Court Line. That is why the Government acted with the speed they did, in order to save 9,000 jobs in the North-East.