§ Second Reading Debate resumed.
§ 4.14 p.m.
§ Lord RAWLINSON of EWELL
My Lords, we now return to the Second Reading of the Crown Agents Bill. At the end of his speech, the noble and learned Lord the Solicitor-General for Scotland apologised for the length of his speech in which he explained the Bill. I can only say that I should have preferred it to continue so that my noble friend, or my noble colleague, who was in charge of replying to the Second Reading speech would have been able to get here. But unfortunately the speed with which the business has been transacted has prevented that happening and, despite the intervention of the Statement, noble Lords will have to deal with me not having really read much of the Bill, but having greatly benefited from the speech of the noble and learned Lord the Solicitor-General for Scotland.
This is an important Bill. It contains 31 clauses and five Schedules. It is a Bill which would normally require detailed concern and consideration by both Houses of Parliament. Although I appreciate the reason for the Bill and very much agree with the principle of the Bill, I cannot help feeling a certain degree of trepidation when we follow the procedures which we are now following in this House, making laws at speed and without the investigation which normally takes place when we consider Bills of this kind. However, I am indebted to the noble and learned Lord. On this, the penultimate day of this Parliament, this Bill is, I think, his final task and, unless he has some business to transact tomorrow, we can at least expect that after 3rd May he will return to the distinguished and far more lucrative position of a leader of the Bar in Scotland. 1829 I, for one, shall miss the clear way in which he invariably explains Bills to the House.
As every noble Lord well appreciates, the position of the Crown Agents over the past few years has been extremely unhappy. At this very moment the inquiry into the Crown Agents and their recent history has reached its eighty-second day. It is very right and proper that there should be a rethinking of the whole of their position and the creation of this statutory corporation, so that the Crown Agents can, indeed, carry out the task which they have traditionally performed for many years—that of providing assistance to overseas governments and administrations. However, it is difficult to disassociate the Crown Agents from what has passed and it will place a considerable burden upon the new Crown Agents in the future in carrying out the task which is provided for under the Bill so that the credit of the organisation returns.
The Crown Agents went with land developers to the constituency which I recently represented, tore down great parts of the historic centre of the town of Epsom and moved in with various forms of financial assistance in order to invest in development. All those matters are under investigation and, of course, it would not be right to comment upon them. How-ever, over the past few years their role has been such as to make me wonder whether the name should still continue. I appreciate that they have a very traditional role and a very traditional name, but, if this is to be the statutory corporation which we hope it will be in the future, a great burden will rest upon the new Crown Agents who will be appointed when the body corporate comes into existence.
Be that as it may, it is quite right that we should have this Bill so that the status of the Crown Agents is properly amended and properly created into the statutory corporation. Although I support the noble and learned Lord, I repeat that I still feel anxiety—an anxiety which any legislator should have—that we are dealing with an important, massive Bill very swiftly. However, in the circumstances it is inevitable. It is right that the Bill should be on the Statute Book as soon as possible.
§ 4.19 p.m.
§ Lord DRUMALBYN
My Lords, I should like to ask the noble and learned 1830 Lord, Lord McCluskey, one question which is in two parts. I take it that it would have been perfectly possible to have separated entirely the Crown Agents from the Crown Agents Holding and Realisation Board. At first sight one might think that that would have been desirable, because am I not right in thinking that the kind of transactions that are described as "own account" transactions must have related mainly to transactions in this country?
I quite see that the Crown Agents themselves will be familiar with these transactions and, from that point of view, that would be one argument for keeping both sides under the control of the same body, the Crown Agents as before. On the other hand, the Crown Agents Holding and Realisation Board will be responsible as is, and will be, the Crown Agents to the Minister for Overseas Development. That, in a way, seems rather anomalous if all the transactions with which they are to deal relate to matters in this country; investments, disposals, reinvestments, borrowing, and the like.
These are set out in Schedule 5 paragraph 8(3). These are the matters on which the Holding and Realisation Board will have to get the consent of the Minister to any transaction such as,
and so on. That is the point of general interest. One would like to know the reasons why the Government decided not to separate these two functions—the functions of the Crown Agents proper and the "own account" functions that are now to be passed to the Crown Agents Holding and Realisation Board.
- "(a) to acquire any interest in a body corporate;
- (b) to form or take part in forming a body corporate;
- (c) to enter into a partnership or any other form of joint venture with any person other than a subsidiary of the Board;
- (d) to acquire land;
- (e) to guarantee any obligation (however arising) incurred by any person other than a subsidiary of the Board:
- (f) to lend money to any person other than a subsidiary of the Board;"
The other is a much more simple question. What period do the Government envisage will be necessary to complete the winding-up of the Holding and Realisation Board? I am not asking for a definite answer in that, but is it likely to be 1831 a very long period, or will it be a comparatively short one? Of course, Schedule 5 provides for the ultimate winding-up by order of the Minister when the task has been more or less accomplished. Could the noble Lord give me some indication on those two points?
§ Lord BARNBY
My Lords, I welcome this Bill and thank the Minister for the clear and full explanation that he has given of it. There have been persistent Questions in this House for the past few years with regard to this Bill being brought forward. My noble friend Lady Ward in particular has repeatedly raised the matter. This regularises what was previously an ill-defined position. I echo the words of my noble and learned friend Lord Rawlinson, who drew attention to the fact that the number of clauses and the variety of angles which were required to be covered in this Bill is sufficient indication that it is certainly regrettable that it could not have been brought to this House at a stage when it would have been possible to have the very full discussion which it would have received.
I found myself in the position of knowing a good deal about the work of the Crown Agents many years ago, before their original deviation from the habitual and classical manner in which, for over a century and a half or two centuries, they had serviced the various parts of the Empire and Commonwealth. It was at that moment, when I remember a severe devaluation of the pound occurred—I think it was when the present Socialist Government were in office—that one knew the size of the deposits with which the Crown Agents had been entrusted. I was staggered at the magnitude of the loss which was imposed on all those depositors who had counted not only on the integrity but on the financial solidity of the Crown Agents. As it happened, at that moment this was not imperilled. Since then the deviation of the Crown Agents from their original intention has certainly alarmed a good many people who happened to follow their doings. I lead up to ask the Minister one question. Is it to be understood that in any part of the Bill, which has been so insufficiently examined, any guarantee of index protection has been given to any form of past or future depositor with the Agents?
§ 4.26 p.m.
§ Lord McCLUSKEY
My Lords, I had not realised when, in connection with an earlier Bill I moved 73 Amendments en bloc, that I would cause such terrible confusion in the business of the House. Not only did my noble friend Lord Boston of Faversham arrive breathless at this Dispatch Box in connection with his Bill, but apparently I have deprived the Opposition of their principal spokesman on the Crown Agents Bill. None the less, let me deal with the points that have been raised.
First of all, the point with which I sought to deal—although of course I cannot fully answer it—that we are dealing with this Bill rather more speedily than we should like to do. I acknowledge that and simply have to say that of course this Bill derives from, and gives effect to, the proposals contained in the White Paper published in April 1976, and the matters in that have been well understood. They have been mentioned in Parliament many times. I think that the issues involved have been fully discussed. Indeed, as the noble and learned Lord, Lord Rawlinson of Ewell, acknowledged, there is a considerable welcome for the whole thrust of this Bill. Therefore, it is not the principles that are at issue.
So far as the details are concerned, of course one knows that in this House, whatever one may think when presenting a Bill, whatever view one may take of its excellence, your Lordships will discover that it has defects of which a mover is unaware. I must say that as the Bill passed through another place very few Amendments were proposed. Furthermore, once the principles are clear—and we are setting up a public sector body—the precedents are considerable, as noble Lords will be aware, and many of the provisions in this Bill, however complicated they may look, are standard form provisions. A few of course derive from the rather unusual nature of the unincorporated Crown Agents in the past, and there are some special ones. But, by and large, apart from the clauses enshrining the agreed main principles, the other clauses are, in a sense, consequential and well precedented in relation to public sector bodies.
The noble and learned Lord, Lord Rawlinson, said that it was difficult to 1833 disassociate the Crown Agents from what had gone before; from the disastrous effects of certain of their activities. I would have to say that so far as their principals overseas are concerned, those for whom they act as agents, there does not seem to have been any such adverse effect. What has been understood by them is that this was an aberration in part of a part of their activities, and their principals overseas have not lost faith in them and continue to use their services. I may be wrong, but my impression from something I read when preparing for this debate was that in fact there has been an increase in the number of clients, of principals, since the bad days of the early 1970s. I tried to explain in my opening speech why the name was to be retained. The name is still well respected in relation to the agency activities and the name is contained in much of the legislation of other countries, and accordingly those reasons outweighed the one to which consideration was also given.
The noble Lord, Lord Drumalbyn, asked certain questions which I will read again in Hansard and then return to the matter when the Bill comes before your Lordships tomorrow because I cannot at the moment say what is the split, as it were, between overseas and United Kingdom activities. However, in relation to the question he asked about separating the Board from the Crown Agents, of course as a matter of law they are legally separate personae. There is some considerable advantage in having the persons who are to be the Crown Agents of the future concerned in the activities of the Board—there is the advantage of continuity in that they understand how the whole situation came about and they are expert at dealing with these difficulties—and of course both bodies, the Board in particular, will be subject to the directions of the Minister in relation to the winding-up of the own-account activities.
§ Lord DRUMALBYN
My Lords, I was more concerned that there should be a different Minister—admitting that one has the same Board dealing with these two quite different functions—because it seemed inappropriate that the Minister for Overseas Development should be the Minister in charge of that part which represented the old own-account activities of the Holding Realisation Board. I 1834 should have thought it would be better to have two separate Ministers rather than one. I accepted the argument for not splitting the responsibility for the two arms, so to speak, of what was once the unincorporated Board.
§ Lord McCLUSKEY
I shall give further consideration to that overnight, my Lords, but one should recognise that it is the intention of the Board that it should wind up its activities. As to the period about which the noble Lord asked me, it is difficult to say because everything depends ultimately on the realisation of the Australian investments and one cannot say at what point it may be sensible to realise those investments; it may be difficult to make that judgment and one might hang on too long. I am reluctant to give a figure, but I am advised it is contemplated that the Board should be wound up within a few years, five or seven years or something of that order. As for the question asked by the noble Lord, Lord Barnby, I shall take advice on that and seek to give a full and balanced reply when I deal with the remaining stages of the Bill tomorrow.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.