HL Deb 13 June 1995 vol 564 cc1631-2

Lord Peyton of Yeovil asked Her Majesty's Government:

When they expect the action they initiated 10 years ago in the American courts against Arthur Andersen, arising out of the De Lorean affair, to come to trial; and whether they are now prepared to consider Mr. Ian Hay Davison (a partner in Arthur Andersen at the time of the affair) as eligible for any such government appointment as may be appropriate.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)

My Lords, Arthur Andersen and Company has filed a Motion for summary judgment in this action. No date for trial will be set until the United States Federal Court has decided that Motion. While the proceedings continue, it would not be appropriate to offer any public appointment to anyone who participated in Arthur Andersen's work for De Lorean Motor Cars Ltd.

Lord Peyton of Yeovil

My Lords, I wish to ask my noble friend a straightforward question. Does he really believe that it is fair or respectable to keep a British citizen, Mr. Ian Hay Davison, effectively in quarantine for as long as 10 years while the action which they have launched in the American courts winds its labyrinthine way towards a trial, and to do so at the behest of an American lawyer who simply fears that Mr. Ian Hay Davison's evidence, as a witness for the defence, might be more valuable as a result?

Lord Henley

My Lords, obviously I have no control over the speed at which the American courts process this matter, but, as I said in my opening remarks, while it is before the courts it would be prejudicial to the proceedings against Arthur Andersen to offer any public appointment to anyone who took part in Arthur Andersen's work for De Lorean. That obviously includes Mr. Ian Hay Davison.

Lord Dean of Beswick

My Lords, is the Minister aware that I have a Question on the Order Paper, not dealing with the person involved in this Question, but with the company? Is the Minister further aware that the Arthur Andersen company was pretty heavily involved in the nonsense and lack of probity that took place in the Wessex Regional Health Authority? Is the Minister also aware that, as I understand it, that company has just been awarded another government contract for over £300 million by, I believe, the DSS? What criteria are the Government using in awarding contracts, particularly to a company with a reputation of this kind?

Lord Henley

My Lords, I am not aware of the noble Lord's Question. But I can tell him that in 1985 an understanding was reached between Arthur Andersen and the Government in relation to the firm's appointment to undertake public sector assignments while the US action continued. The Government agreed to treat those arrangements as confidential and I cannot go further than that.

Lord Peyton of Yeovil

My Lords, does it not seem rather unjust that Mr. Ian Hay Davison, who was not a party to that agreement, should be penalised as a result of it?

Lord Henley

My Lords, I am very sorry, but I do not believe that it is unjust. The simple fact is that Mr. Ian Hay Davison will be a witness and I do not believe that I can go further than what I said in answer to my noble friend's first supplementary question.

Lord Eatwell

My Lords, can the Minister tell us how much was lost by the taxpayer because of the De Lorean affair; who was the Minister responsible at the time and what proportion of that loss does he believe is attributable to the activities of Arthur Andersen and Company?

Lord Henley

My Lords, that is another Question, but I can tell the noble Lord that the earliest decisions in terms of lending money to De Lorean were made by, I believe, the party represented by the noble Lord opposite. I believe that they were made while the noble Lord's noble friend, the noble Lord, Lord Mason of Barnsley, was Secretary of State for Northern Ireland.

Lord Pearson of Rannoch

My Lords, does my noble friend agree that there must be many members of Lloyd's who look back on Mr. Ian Hay Davison's period there with affection and gratitude?

Lord Henley

My Lords, I am sure there are, but I believe my noble friend will appreciate that that is another Question.

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