Crown Agents

Part of the debate – in the House of Commons at 12:00 am on 5th December 1977.

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Photo of Mrs Judith Hart Mrs Judith Hart , Lanark 12:00 am, 5th December 1977

Much of this is covered in the Fay Report, and I think that any further action would be covered by the further inquiry.

May I summarise what I have said so far. What can be done in the area of criminal or civil proceedings against individuals or their estates—the issue, in effect, of "take the guilty men into court"—is either being done or will be done. There are no inhibitions. I can give that undertaking to the House.

The Fay Report, in dealing with all the causes of catastrophe, says that they were due to the actions (and inaction) of individuals, coupled with a defective system". The report has made criticisms of individuals, some very serious, some less serious, which do not and clearly cannot lead to court proceedings. It is a story, to quote Fay again, of incompetence rather than misconduct apart from the instances that I have given where proceedings are either under consideration or are being taken. On the other hand, surely, we all agree—I think that the House does agree—that culpability in this sense cannot be assumed without an express inquiry to determine this. That was not, and could not be, the function of the Fay Committee.

Fay goes in considerable detail into the actions of individual members of the Crown Agents' staff and enables one to form a clear idea of who was to blame. But even there, more specific investigation of particular actions may be needed before culpability can be fully and fairly assessed; and in relation to the Ministry of Overseas Development, the Treasury, the Bank of England and the Exchequer and Audit Department, the report is much more generalised and does not deal with the specific responsibility of individuals.

Nor, indeed, was the Fay Committee asked to do so. It was asked to inquire into events. It is shown very clearly that there were most serious shortcomings and it has also made criticisms of some individuals. It is the Government's view that this is not enough. It is necessary to pinpoint every relevant neglect or breach of duty and, having done so, to take appropriate disciplinary or other steps. I should mention, as has been pointed out, that some of the key figures have retired and that the Social Security Act 1973 will not permit either reducing or stopping pensions except as a result of criminal conviction connected with previous employment. To establish precise responsibility and neglect of duty a further inquiry is necessary. I think the House will agree on that.

Then we come to the form of inquiry should take. There were before us three possibilities. The first would have been an inquiry under internal Whitehall procedures. We rejected that option. I am sure that the House will appreciate that it is important to understand the reasons which have led the Government to come to their decision on the form of the inquiry.

Having rejected internal Whitehall procedures, the second possibility would have been the kind of public inquiry which has been suggested and which my hon. Friend is, I think, favouring at the moment. This would be an inquiry under the Tribunals of Inquiry (Evidence) Act 1921. The House knows that such tribunals are rare, but that is not a reason against it. They may be set up where both Houses of Parliament resolve that it is expedient that a tribunal be established for inquiring into a definitive matter described in the resolution as of urgent public importance.

Of course, the Government have considered extremely carefuly whether this would be the appropriate form for the inquiry to take. [HON. MEMBERS: "The House must consider it."] Of course the House must consider it also, but I am saying that the Government have considered it. A tribunal set up under the 1921 Act has certain advantages over other forms of inquiry. It has power to compel the attendance of witnesses. It must admit the public to its proceedings, except in the very rare case, which my hon. Friend mentioned, where the tribunal is of the opinion that the public interest demands that it should sit wholly or partly in private.

I must tell my hon. Friend that the actual question of the interests of overseas principals was not one of the factors that loomed large in our consideration of this particular question of the inquiry because, of course, there is this provision. It has power to authorise or refuse the right to any person interested to be represented by a lawyer.

The Salmon Commission on Tribunals of Inquiry which reported in 1966 said that the exceptional inquisitorial powers conferred upon a tribunal under the 1921 Act should always be confined to matters of vital public importance"— certainly this is one— concerning which there is something in the nature of a nation-wide crisis of confidence"— where no other method of investigation would be adequate. [HON. MEMBERS: "Hear, hear."] I ask my hon. Friends to listen because there is a real argument here and I am stating all the cases.

A case might have been made for such a tribunal in lieu of the Fay Committee. On balance the arguments then were against it, but we are now at the stage—and this is one of the key points—where the Fay Committee has already made a very searching inquiry into what went wrong with the Crown Agents. It has covered the ground in enormous depth. It met on 85 occasions. It heard 46 witnesses. That inquiry was set up by me on 23rd April 1975. The Committee reported to me on 10th August this year. Its inquiry took well over two years. All its findings have been made public except those which could prejudice criminal proceedings.

In the Government's view, and it is a firm view reached after tremendous consideration, we would not be justified in setting up a further inquiry under the 1921 Act to go over again those matters so carefully and comprehensively investigated by Fay. That is why the terms of reference of the independent inquiry start with the words: In the light of the Report of the Fay Committee". The third option, which is the one we have decided upon, the Aarvold inquiry, follows the precedents of both Crichel Down and the Bossard case. Crichel Down was followed by the Woods Committee Report. The Security Commission's Report on Bossard was followed by the Wilson Smith inquiry. We have had both precedents very much in mind and I think that the House should take care to recall that. There can be no question whatever of a cover-up. Indeed, I believe it likely that in the light of the history of events the House would not believe that either I or my colleagues could countenance any such thing.

Perhaps I might explain first how the Aarvold Committee may be expected to operate. Its starting point will be Fay and all the evidence given to Fay, from the files to the transcripts of the evidence of witnesses. Fay has quoted from them but Fay has the transcripts of all the evidence given by every witness. Those will all be available to the Aarvold Committee. This will mean much greater speed, whereas were a 1921 Act tribunal to be set up it would have to start from scratch since every item of evidence must be produced and can be the subject of cross-examination.

I do not know whether the House wants the whole matter to go on for two or three years, which could happen in the circumstances of a 1921 Act inquiry, as against giving an inquiry the possibility of starting off with all the transcripts of evidence and all the papers in front of it, therefore leading to greater speed. Speed is one argument in this situation and I find it rather an important one. After the saga of 1967 to 1977, the sooner we get this matter disposed of the better.