HL Deb 08 December 1977 vol 387 cc1752-9

3.37 p.m.

The LORD CHANCELLOR (Lord Elwyn-Jones)

My Lords, if it is the wish of your Lordships, I will now read the Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:

"The Government have taken due note of the general feeling expressed by the House on Monday last that there should be a public inquiry in the light of the facts disclosed by the Fay Report on the Crown Agents. The Government have decided to respond to this view and will place proposals for a public inquiry before honourable Members as soon as possible.

"The Government have carefully considered the form of the inquiry and have taken into account the various proposals contained in the Report of the Royal Commission on Tribunals under Lord Justice Salmon in 1966. The Government's conclusion is that the most appropriate form of inquiry in this case would be a tribunal set up under the 1921 Act. The tribunal must identify those responsible for these deplorable events. It should, however, also seek to find a way to safeguard the legitimate rights of innocent people to have their reputations protected from public allegations which may well prove to be unfounded.

"The House will be aware that the appointment of a tribunal will effectively prevent criminal proceedings being taken in the future against any witness and civil proceedings might be affected. The tribunal will have the necessary statutory powers to compel witnesses to attend and give evidence and it would ensure a judicial hearing for those who are subject to criticism. Its terms of reference will need careful consideration not only to achieve its main purpose but, if possible, to avoid it having to start afresh and duplicate all the work of the Fay Committee. The Government will make a further Statement about this and the necessary Resolutions embodying the proposed terms of reference will be tabled, for the approval of both Houses, as soon as possible."

My Lords, that concludes the Statement.

Lord HAILSHAM of SAINT MARYLEBONE

My Lords, I know that the House will be grateful to the noble and learned Lord for having repeated this Statement and would also wish me to say that there is no intention whatever, in any criticisms I make, to make any Party political points about it. But I am a little disturbed about the course which this matter has taken. When I read the Fay Report, which I did immediately after the Statement proposing the private inquiry by Sir Carl Aarvold, I could not help wondering: what do we need a further inquiry for?

Surely the next step must be a series of criminal prosecutions, if they are justified, followed by appropriate sentences and a series of writs in the civil courts to try to claw back any of the money which may prove to be recoverable. I gather from the Statement which has just been made that the inquiry, when and if it is set up, will have to choose between not calling any of those against whom criminal proceedings are probable, or thought likely, and giving them effective immunity—in other words, not prosecuting them at all—and that the same may be true in relation to civil proceedings. If that really is the choice, I am bound to say, without any attempt to speak on behalf of my noble friends in my Party, that I do not approve of it.

I remember that at the same time as the Poulson public inquiry in bankruptcy there was exactly this pressure to have a public inquiry—the public's right to know. I fought it with all my might and main, because the real deterrence for corruption is a course of law, followed by appropriate penalties and appropriate judgments; and you stultify and impede the course of justice if you hold inquiries which prevent the courts from being brought into effect. That is the first point that I want to make.

The second point that I want to put to the noble and learned Lord is this. What good did the Government think could come of the proposed Aarvold inquiry? He has referred in his Statement to the findings of the Salmon Commission, to which I want to add a word in a moment. But one of the most important findings of that Commission was No. 6, which said: No Government should in future set up a tribunal of the type adopted in the Profumo case to investigate any matter causing nation-wide public concern". As far as I can see, looking back on the paragraphs of the report to which that conclusion refers, the Aarvold inquiry would have been precisely of the type of the unfortunate Denning inquiry in the Profumo case, and I wish to reiterate my opinion, which is also, I believe, that of the noble and learned Lord, Lord Denning, and certainly of the noble and learned Lord, Lord Salmon, that no such inquiry should ever in any circumstances be held again.

The third thing I want to say is this—and again it is not at all a Party point that I am making. I must have known of 15 or 20 occasions during my public life in which there has been this enormous pressure for a tribunal of inquiry to be held in public, and in more cases than not Governments have yielded to it. But when the report has come out, there has been an equally violent public outcry against the injustices which such a type of inquiry invariably brings about. In February 1966, the then Labour Government was sufficiently seized of this to appoint the Salmon Commission, and it reported in November 1966 with a number of very important recommendations to prevent that kind of injustice. In 1973 the Heath Government said that it was going to legislate. So both the Wilson and the Heath Governments had hardly rushed into premature legislation after November 1966; neither has this Government, because none of those things has ever been done. Now, 11 years after Salmon, we are solemnly told that we are to have a 1921-type tribunal, none of the necessary legislative steps having been taken, but we are informed that the Government will take into account what the tribunal decided 11 years ago ought to be the subject of legislation.

In my opinion, it is most unsatisfactory. Both Parties are to blame, and therefore I am not pointing a pistol of any kind at the noble and learned Lord. But I hope that the noble and learned Lord will undertake to bring to his colleagues, as I shall certainly bring to mine, the view which I hold, which is that it is high time that some of those Salmon proposals were put into effect legislatively.

Lord TANLAW

My Lords, while thanking the noble and learned Lord for his Statement, I, too, wish to follow the noble and learned Lord, Lord Hailsham, by saying that he has put, with all the power of his knowledge and wisdom of the law, a case for reconsideration of this public inquiry. But now that it has been decided in another place that we are to have a public inquiry, I certainly feel that it is quite incorrect to suggest otherwise. But I, too, agree with what has been said this afternoon, that we should ask ourselves whether such a court of inquiry will bring about the information that we need to prevent a future problem of this kind in another Government Department.

I should like to ask the noble and learned Lord if he can tell us whether the terms of reference of such an inquiry will include a thorough investigation into the Auditor-General's Department, its workings and its communication with Ministers and, indeed, with the Public Accounts Commitee. If the inquiry is to go ahead and be of benefit to this country, I feel that it is the internal workings of the accountancy section of the Executive that should be investigated more clearly, and made much more efficient than has been the case so far.

3.45 p.m.

The LORD CHANCELLOR

My Lords, if I may say so, it soon became apparent that the noble and learned Lord, Lord Hailsham, was not reflecting the views largely expressed in another place by his right honourable and honourable friends, who brought great pressure upon the Government to have a public inquiry and, in particular, to have an inquiry under the 1921 Act. So, if I may say so with great respect, I am not surprised that he was not seeking to make political capital out of his intervention.

But coming to the matters which he has raised, the view has been expressed both stridently, if I may say so, in the Press and eloquently in another place, that here there has been a gigantic cover-up. There was no satisfaction, surprisingly, with the Fay Report and its conclusions, and there was a demand that there should now be a public hearing traversing the grounds of the circumstances which led to the immense loss of over £200 million of taxpayer's money. That was the pressure which has been brought to bear and it is felt that, outstandingly able as the Fay Report was, there are still a number of matters which need to be investigated and need to be ventilated, so that there should be called to account all those who were responsible for the deplorable course of events which took place. Presumably, that will include all individuals concerned, including any who may have been thought responsible in the Auditor-General's Department and elsewhere.

I, of course, appreciate that a price must be paid for calling in aid the tribunal of inquiry procedure, and it will have the consequence, as the Statement of my right honourable friend the Prime Minister indicated, that it will effectively prevent criminal proceedings from being taken against witnesses, and indeed civil proceedings might also be adversely affected. That is the price that must be paid for this procedure.

But a matter of, perhaps, greater concern to which the noble and learned Lord, Lord Hailsham, has pointed, and with which, of course, I am in very full sympathy, is the extent to which these proceedings can be used without causing damage to the legitimate rights of persons who may be publicly defamed during the course of the proceedings when, at the end of it all, it is found that they are completely innocent. What I can say about that is that, although it is true that no statutory effect has been given to the six cardinal principles, as they were called, by the Salmon Commission, actual effect in the conduct of the proceedings will be given to them. If your Lordships will allow me to quote from the Salmon Report on this, because I know that it is a matter of concern to us all, it stated, The following cardinal principles … should be observed to minimise the risk of personal hurt and injustice to any person involved in the inquiries". Then they are listed:

  1. "(i) Before any person becomes involved … the Tribunal must be satisfied that there are circumstances which affect him and which the Tribunal proposes to investigate.
  2. (ii) Before any person who is involved in an inquiry is called as a witness, he should be 1757 informed in advance of allegations against him and the substance of the evidence in support of them.
  3. (iii)
    1. (a) He should have adequate opportunity of preparing his case and of being assisted by legal advisers.
    2. (b) His legal expenses should normally be met out of public funds.
  4. (iv) He should have the opportunity of being examined by his own solicitor or counsel and of stating his case in public at the inquiry.
  5. (v) Any material witnesses he wishes called at the inquiry should, if reasonably practicable, be heard.
  6. (vi) He should have the opportunity of testing by cross-examination conducted by his own solicitor or counsel any evidence which may affect him".
I have every confidence that the tribunal, which will be presided over by a judicial personality, will ensure that, so far as possible—I can put it no higher than that—those safeguards will be provided. There is no comparison between what the Government originally contemplated—what has been called the Aarvold inquiry—and the totally private procedure carried out by the noble and learned Lord, Lord Denning, in another matter. However, as the decision has now been made not to proceed with a private inquiry—the privacy of which was intended to prevent the very risks to which the noble and learned Lord has been pointing—because of the pressure of the House of Commons, the Press and public opinion, the Government have decided instead to embark upon this course. As I say, I shall endeavour to do all that I can, and I am sure that those conducting the tribunal of inquiry will do the same, to ensure that it is conducted with minimum damage to innocent persons.

3.52 p.m.

Lord SHINWELL

My Lords, in the course of a conversation the other day with a prominent member of Her Majesty's Government in another place, I suggested that on no account should the Government yield to the clamour for a public inquiry, on this ground: that at a public inquiry we shall not have a revelation of the truth, the whole truth and nothing but the truth because of fear of public prosecution. On the other hand, at a private inquiry it is possible to reveal the whole of the facts without any fear of being subject to prosecution. Why the Government should have yielded to this clamour I cannot understand. I do not suppose that they will change their mind, but I believe their decision to be a mistake.

The LORD CHANCELLOR

My Lords, the Government have met a tremendous onslaught, an avalanche of opinion, to the contrary of what my noble friend has mentioned. We live in a political world and a Government cannot ignore these kind of expressions of public opinion, both in the Press and in the House of Commons. I am afraid that this was something that the Government, owing a responsibility to Parliament, could not in the circumstances reasonably run away from.

Lord HAILSHAM of SAINT MARYLEBONE

My Lords, I do not want to persist too much, and again I must repeat that I am not seeking to make a purely Party point of it. I do not believe that the noble and learned Lord is quite right in detecting a divergence between me and, for instance, my right honourable and learned friend Sir Michael Havers. However, does not the evil stem from this, that instead of stating plainly that the results of the Fay Report really demanded that guilty people should be punished and that persons who had had public money should pay it back, they had this ridiculous private inquiry and the whole debate then got off on the wrong foot? It got off on the wrong foot because the public and the House of Commons were led to believe that what they were choosing between was a cover-up and a public demonstration of the facts, when they ought to have been told, and told plainly, that by having a public inquiry the guilty would get off scot-free, in both the criminal and the civil courts.

The LORD CHANCELLOR

My Lords, those facts were plainly stated in another place and I am afraid that we cannot cover that ground again. The private inquiry which was contemplated would not have had the consequences that the tribunal of inquiry proceeding will have in inhibiting prosecutions or civil proceedings. That is one of the reasons why a private inquiry was initially favoured. But this decision has now been made. As I have said, we shall do all that we can to explore those matters which have not been explored to find out the responsibility of individuals across the range of those involved in these deplorable events and we shall seek to minimise any damage to the innocent. I cannot repeat the matter more than twice with any benefit to your Lordships.