Not that democracy is perfect anyhow but we, in the west and in the UK do not have it!
So if anyone talks to you about our “great democracy” and “Who are you voting for?” or “What are you voting for?” please, do me a favour, laugh in their face! They’re just ignorant bastards.
HC Deb 21 April 1993 vol 223 cc485-92 485
§Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
§Mr. John Garrett (Norwich, South) I wish briefly to explore the scope and limits of the royal prerogative and its present-day usage by the Government, and to put a number of questions to the hapless Minister who has the duty of answering the debate. I want to ask him about the profoundly undemocratic practice that allows a Government to act with royal absolutism.
As I understand it, the royal prerogative denotes what remains of the monarch’s power to legislate without the authority of Parliament. As the monarch acts on the advice of Government, the procedure enables a Government to produce primary legislation without parliamentary consent—legislation which, as was made clear by the GCHQ case, may not be challenged in the courts.
Blackstone’s 18th century “Commentaries on the Laws of England” referred to the prerogative as that special pre-eminence which the King hath, over and above all other persons, and out of the course of the common law, in right of his royal dignity”— an arrangement that Blackstone described as in its nature singular and eccentrical”. In the past 10 years, some 1,400 orders have been made under the prerogative. Ministers usually imply that such orders relate to such quaint and innocuous matters as the grant and amendment of charters, and the appointment of visitors and governors of universities. Many do; but the prerogative is also applied to important international obligations and, in particular, to citizens’ rights.
The prerogative is used for the making of international treaties—which may be why from time to time, when it suits them, Ministers tell us that any Commons vote on the Maastricht treaty can be disregarded by the Government. It is also used for the declaration of war and blockade. The Government used it to commit British military forces in the Gulf war—prompting my right hon. Friend the Member for Chesterfield (Mr. Benn) to observe: this is the first time in the history of this country that British troops have been sent into battle under foreign command, using the royal prerogative of war-making to do so, without the House having had an opportunity to express its view on any motion other than that we adjourn”.—[Official Report, 14 January 1991; Vol. 183, c. 616.] My right hon. Friend contrasted the handling of the matter in the House of Commons with the way in which both Houses of the United States Congress had debated and voted on a resolution on military action.
The Government used prerogative powers to enable the United States military to bomb Libya from bases in England. That was a matter of awesome political importance, in which—once again—the House of Commons had no status. The prerogative is used for the control and organisation of the armed forces. In the matter of civil liberties, under the royal prerogative the Government can refuse or withdraw a passport, and can forbid a citizen to leave the country. There is no legal obligation on the Government to provide a passport, which I should have thought was a fundamental right of any citizen of this country.
Jury vetting guidelines and telephone tapping are authorised by royal prerogative, apparently under an ancient royal right to intercept communications between 486 subjects. The criminal injuries compensation scheme was established by royal prerogative without statutory authority.
Most notoriously in recent times, the royal prerogative was used in 1984 to ban from membership of trades unions the staff of the Government intelligence establishment GCHQ. In a subsequent court case on that subject, the Government argued successfully that not only were their powers not open to judicial review, but that instructions given in exercising them enjoyed the same immunity. This situation derived from the fact that the legal relationship between the Crown and civil or Crown servants is governed by the prerogative, and is unlike any normal contractual relationship between employer and employee. That explains why we in this country have yet to resolve the crucial issue whether the duty of a civil servant is to the national interest or to the Government, and why there is no protection for whistleblowers in the civil service.
In any other country, the civil service would be regulated by a civil service Act that set out in law the rights, duties and constitutional position of civil servants. Here, the civil service is subject to the monarchical whims of some Minister. My first question to the Minister is, why cannot the civil service be governed by a civil service Act, and are the Clerks of this House also governed by the royal prerogative, rather than by legislation passed by the House?
The royal prerogative is used for literally thousands of appointments in the public sector, and it is the fount of Government patronage. In 1965, Lord Reid observed: it is not easy to discover and decide the law relating to the royal prerogative and the consequences of its exercise. He noted that there had been “practically no authority” on the matter since 1688.
The most extensive discussion recently of the royal prerogative was by Professor Colin Munro in a publication in 1987. He wrote: In practice … the supervision of prerogative powers does seem to be attended by greater than average difficulty. The very nature of these powers makes them less readily subject to challenge. He tells us that the Parliamentary Commissioner for Administration, or ombudsman, has no power to examine decisions under the royal prerogative and says: the exercise of prerogatives by the Attorney General may not be reviewed. He also says: The correlation between the matters excluded from the Commissioner’s jurisdiction and the spheres of activity in which governments exercise prerogative powers is striking. We also learn from Munro that the manner of the exercise of prerogative powers lies outside the scope of judicial review, so we are inevitably brought to the conclusion that a British subject may be deported, or refused a passport, or have his or her telephone tapped or mail opened by the state without legislative authority, and that neither Parliament nor the judiciary is entitled to examine the matter.
The Minister will also know that subsidiary powers flow from the royal prerogative. The Crown’s right to have admissible evidence withheld from a court when it claims that the public interest so demands has been known as Crown privilege although nowadays its existence is disputed. Does it exist, I ask the Minister, and what does it cover? Is there still such a concept in British law as Crown privilege which exempts the Crown from justiciable matters?
487 Crown immunity is certainly alive and kicking. The sovereign—and, therefore, the Government—still enjoy a number of immunities derived from the ancient “prerogative of perfection”—that is, “The King can do no wrong.” What it means today is that Government Departments and many public bodies are not bound by a huge range of protective legislation, such as health and safety, food hygiene laws and planning and environmental regulations. I understand that that legislation does not, for example, protect those who work in the parliamentary precincts, let alone the hundreds of thousands of people in other public organisations. Therefore, to be employed in a public building means that one cannot be protected by a wide range of legislation.
Munro concludes: Behind the phrase “royal prerogative” lie hidden some issues of great constitutional importance, which are insufficiently recognised. It seems that the prerogative could be dispensed with almost entirely. The civil service and the military could be governed by Acts of Parliament, as in other countries. Telephone tapping, mail interception, deportation and entitlement to travel should be justiciable. Senior public appointments could be supervised by Select Committee. The Speaker could take over some prerogative powers, such as the dissolution of Parliament and the invitation to the leader of the party with the largest majority to form a Government.
In a recent written answer to my hon. Friend the Member for Nottingham, North (Mr. Allen), the Prime Minister said: It is for individual Ministers to decide on a particular occasion whether and how to report to Parliament on the exercise of prerogative powers.”—[Official Report, 1 March 1993; Vol. 220, c. 19.] It is nothing less than a constitutional outrage that Ministers should decide whether to withhold matters from Parliament. It should be the Speaker’s job to decide how the exercise of prerogative powers should be reported to the House. It should also be up to the Speaker to judge whether a Minister should answer to the House for the use of extra-statutory power.
The royal prerogative is an anachronism—an example of the overweening and authoritarian power of Government over Parliament. In truth, the purpose of our Parliament is to provide a Government and to scrutinise their actions and decisions, but only to the extent that Government will allow. That is not good enough. The royal prerogative is a chilling manifestation of the way in which our democracy is deficient, and it should be mapped by the Select Committee on Procedure as soon as possible, and then largely ended.
I am keen to hear what the Minister has to say about the boundaries of the royal prerogative and the extent to which as, I hope, a democrat he thinks that government by proclamation and diktat could be replaced by a proper legislative process.
THE SECURITY SERVICE
HC Deb 17 January 1989 vol 145 cc180-238
Mr. Benn The amendments touch on the nub of the Bill—what is subversion and what is national security and who should decide what is national security and who 193 should decide what is subversion? Having the Bill means that we have probably had more meaningful discussion on the Security Service than we have had in recent years.
For a long time the general public have been persuaded that it is in their interests that foreign spies and domestic terrorists should be under careful scrutiny. Communists were automatically identified with foreign spies. I imagine that if the Soviet Union had wanted spies in Britain it would not have picked members of the Communist party. However, that was one of the foolish ideas that was current. The whole thing had to be covered by the tightest security and secrecy and judges capitulated whenever they heard the magic word “security”.
The amendment is important because the definition of subversion is a political decision. Who is the enemy is a political question. We do not say that the chief of staff will announce which enemy country he intends to attack. That too is a political question. After all, security is a part of defence. We have an annual defence White Paper in which we are told what resources we have at out disposal and where they are deployed. We have an annual Army order. When I was first in Parliament an Act went through every year. Now it is an annual order. If the House does not endorse that order, the discipline of the armed forces disappears on the day that the old order expires. Why does that procedure not apply to the Security Service?
What is it about the Security Service’s political objectives that makes them different from the defence forces’ political objectives? The answer is that the decision about what is subversive has been taken by MI5, sometimes upon the intervention of Ministers. I say without any disrespect to the Home Secretary that I would be surprised if, like his predecessors, he really knew what was going on. Certainly some of my colleagues who were his predecessors did not know what was going on, because what was going on was an attempt to get the Labour Government out of office. I cannot believe that Lord Jenkins of Hillhead or my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) was in charge of such an operation.
If one pursues the matter more fully, one finds that if pressed the Security Service would say that it is responsible not to the Home Secretary but to the Crown, a concept that I tried to explore on Second Reading. The Crown is a mysterious idea which implies a continuity of activity. The security services have really been protecting the status quo, which is not the same as parliamentary democracy. Parliamentary democracy is supposed to allow one to change the status quo by political action. If one cannot change the status quo by voting, why vote? Immediately we come to the relationship between what is called national security, which is defined as the political and economic status quo, and subversion, which, in the case of parliamentary democracy, is a legal form of trying to change the status quo. The Home Secretary knows that, or his draftsmen have worked on that basis. If one then says that parliamentary democracy is trying to change the status quo by political means, one is caught by the Bill. If one is trying to undermine parliamentary democracy by political actions, one is a subversive. The Home Secretary has put his finger on that. If one interprets parliamentary democracy as meaning that one wants to change anything, one is covered by the Bill because one is trying to undermine parliamentary democracy by political action.
194 The Home Secretary may smile and may give as many assurances as he likes, but I am defining how the Bill will work and that is how the system has worked until now.
Another aspect of the matter, which I have raised before, is that the condition under which the Americans allow us to borrow nuclear weapons is that American intelligence supervises British intelligence. The Americans have to check procedures and, for many purposes, they have to check people who are engaged in activities in which they take an interest. In a strange way, the definition in amendment No. 47 covers the Americans. It refers to the activities of agents of foreign powers that are detrimental to the interests of the United Kingdom and are clandestine or deceptive or involve a threat to any person”. That would deal with James Angleton immediately, but no British Government who wished to retain nuclear weapons could implement such an amendment.
It is not only the theory of the matter that is interesting but the practice. In Field Marshal Lord Carver’s television broadcast after his resignation as chief of the general staff, he said that for most of history Britain’s armed forces were concerned with domestic security. He pointed out—and this point was interesting to me—that there have not been many foreign wars in which the British Army has been engaged. We fought the French and, a couple of times, the Germans, but for most of our history the armed forces have performed the function of security forces. That is why Parliament, in 1688, resolved that it did not want a standing army. That domestic function has been far greater, in the mind of the security services, over a long period. We have been told that the Russians were planning to invade. I do not know how many people now believe that Mr. Gorbachev is planning an attack on London. According to opinion polls, only 2 per cent. think that a Russian attack is very likely.
The concept of the “enemy within” is central to the issue. The present Prime Minister has made it explicit that the “enemy within” became the dominant consideration of the security services at the time when there was a Socialist challenge to the status quo. Trade unions are, by definition, considered to be potentially subversive by the security services. I know that because my private secretary in one of my Departments tried to take advantage of the scheme for interchange with industry. He said that he did not want an interchange with industry, but that he wanted to go to a trade union for a time. He was warned off because, in the eyes of the establishment that still runs the security services, trade unionism was subversive in itself. I am saying not that the security services believe that every trade unionist is subversive, but that the purpose of trade unionism is subversive.
I want to deal next with the peace movement. The right hon. Member for Henley (Mr. Heseltine), when he was Secretary of State for Defence, was able to instruct MI5 to bug the Campaign for Nuclear Disarmament—the Cathy Massiter case. That shows that anyone whose view of the world differs from the view that peace has been retained by nuclear weapons against the Red Army is a subversive—and that view is still held. No one should imagine that Peter Wright’s story ended with his retirement or with the acquisition of power by the present Government.
Mr. Benn The hon. Member may have more knowledge of these matters than I have, as he speaks with such confidence about what happened, and that illustrates my point. We should have known the information to which, apparently, the hon. Gentleman is privy and we should have had a chance to test the matter. I do not believe for a moment what he has said, but I cannot prove that, and he cannot prove the validity of his remarks, because the whole matter is covered by secrecy.
The next category of people who are considered to be subversive are the various types of Socialists. It is funny that the Communist party is held to be subversive now. As far as I can make out, it is advocating electoral pacts, so the security services do not seem to be up to date. But the people in the security services are not politically clever. I was once invited, as a Minister, to attend a conference of the Socialist International, a respectable body which was then presided over by Willy Brandt. My private secretary said to me that MI5 would not let me go. He said that the reason was that the International Socialists were on our list. He did not know the difference between the International Socialists and the Socialist International. That does not show a high level of political intelligence. There may be a need for more chemists in MI5. Perhaps it would not be a bad idea if MI5 were also to employ people who understand Socialism and realise that there are many varieties of Socialism.
I remember the case of a woman who was refused employment by the Civil Service because her father read The Daily Worker. We should not deceive ourselves that the amendment will be passed, but we can use Parliament to make available through Hansard—the only publicly owned newspaper that has not yet been acquired by Rupert Murdoch—to those who bother to read our speeches the truth about what is happening.
Mr. Winnick Will my right hon. Friend give way?
§Mr. Benn I shall just finish this point.
The security services go to universities and ask teachers about the political activities of particular students who may have applied for a job in the defence industry or the Civil Service. Lecturers have told me that MI5 was sniffing around to find out whether Mr. Jones or Mr. Smith was reliable. If one has a friend who is keen to join the Civil Service, the first advice to give such a young man is, “Don’t go to political meetings, my friend, because if you do, you may not get into the Civil Service.” One reason why the security services and the Civil Service are so ignorant about political argument is that, to join the security services, one must have an unblemished record. One must not even read Campaign Group News or Tribune because that might suggest that one wanted to change the status quo.
§Mr. Norman Buchan (Paisley, South) Will my right hon. Friend give way?
§Mr. Benn Let me finish going through the categories of subversives.
Another category is those who are known to be politically active on an issue that may appear to be harmless. People may be against vivisection, for example, but it is always possible, in the minds of those who sniff around, that such people might take part in other activities that could be threatening. What is misleading is to pretend that the activities of the security services in the past, or the way in which they will operate in future, has anything to do with protecting the people’s democratic rights. They are designed to protect the status quo.
Mr. Benn That is absolutely right. We have not yet discussed the question of vetting. The employees of the BBC are vetted. One cannot get a senior job at the BBC until one has been cleared by the security services. Do they imagine that a lot of terrorists are about to be made head of news and current affairs? The Clerks in this House are vetted. I know that from the evidence given to the Committee of Privileges. Members’ research assistants are vetted. What has that to do with terrorism or espionage?
§Mr. Tony Banks Will my right hon. Friend give way?
§Mr. Benn I do not want to detain the House. I am merely trying to put a few fruits on the harvest festival altar so that people may observe them later.
The next question is, “What is parliamentary democracy?” It has been defined in many different ways. Last summer, we celebrated the tercentenary of 1688—apparently the year of the birth of parliamentary democracy. I should have thought that William of Orange would have been regarded as one of these foreigners trying to disturb parliamentary democracy, but it turns out that he was in at its birth. I am reminded of the saying Why does treason never prosper?
Here’s the reason:
For if it prosper, none dare call it treason. The other day I went through the Second Reading of the Reform Bill. The Conservatives of the time were opposed to the Reform Bill because they thought that it would undermine parliamentary democracy. Mr. Asquith, the great Liberal leader, opposed votes for women on the ground that that proposal would upset parliamentary democracy.
Parliamentary democracy has been defined to mean the status quo at the time. What is it in practice? The Crown in Parliament is sovereign and the powers of the Crown—except for the power to dissolve Parliament or to ask someone to form a Government—are not personal to the 197 sovereign. Every Prime Minister—I do not differentiate between the present Prime Minister and her predecessors in this respect—uses the powers of the Crown to do all sorts of things that have nothing to do with Parliament and nothing to do with democracy. The Prime Minister appoints the Archbishop of Canterbury. What has that to do with Parliament or democracy? The Prime Minister appoints the judges and the chairman of the BBC. She appoints Lord Chalfont to the IBA. The Prime Minister can go to war without consulting Parliament or sign treaties without consulting Parliament. The right hon. Member for Old Bexley and Sidcup (Mr. Heath) signed the treaty of accession to the Common Market before it was even published. All such activities are undertaken under the Crown prerogative.
Suppose that we say that we do not like the use of that prerogative. Is that an attempt to undermine parliamentary democracy by political action? I have long been a republican and I believe that the Queen should be the head of the Commonwealth. Is that subversive? Is it subversive to want to abolish the House of Lords, which has no democratic base in society? Many Liberals have argued for a single Chamber or two elected Chambers. Is that subversive? Is it subversive if I say that the Church should not be established? The other day, I looked up the coronation oath and found that the only pledge that the Queen gives is that she will uphold the rights of the bishops. That is most interesting. It was clearly not applied in the Viraj Mendis case, but that is another matter. There is no democracy in the sense that in a democracy the electorate has the final say. The truth is that the status quo covers a semi-feudal system which is not subject to normal public means of accountability under the Bill.
In a democracy, the ultimate responsibility for deciding the interests of the state lies with the electorate. That is what democracy means. If the electorate is to decide what is in the interests of national security and what is subversive, the electorate must know enough to know what goes on. This Bill tries to entrench in statute a rotten little directive of Maxwell Fyfe, who told them to get on with it and not bother him and a rotten definition by Lord Harris of Greenwich, who used virtually the same phrase as appears in clause 1. On that basis, the Home Secretary hopes to entrench in statute powers that have been exercised under the Crown prerogative for years, and dress it up as the entrenchment of the protection of parliamentary democracy against subversion.
The Home Secretary will not be affected by my arguments, but I hope that people outside will realise when they read them that the Bill is not what it is made out to be. It is not an advance. It is the entrenchment in statute of powers that no democratic Government have the right to exercise.
on behalf of
THE FIRST MINISTER
§The Chairman of Ways and Means (Sir Alan Haselhurst)With this, it will be convenient to discuss the following amendments: No. 254, in page 18, leave out lines 19 to 27.
No. 313, in clause 43, page 18, line 36, leave out ‘or’.
No. 275, in page 18, line 38, at end insert‘or—
- (e) the First Minister being admitted to a hospital under the Mental Health (Scotland) Act 1984, becoming subject to a guardianship order or having a curator bonis appointed on his estate’.
No. 76, in clause 44, page 19, line 9, leave out`with the approval of Her Majesty’.No. 276, in page 19, line 10, after ‘appoint’, insert`up to a total of ten’.No. 277, in page 19, leave out lines 11 and 12.
No. 87, in page 19, line 11, leave out`seek Her Majesty’s approval for’and insert ‘make’.
No. 88, in page 19, leave out line 14.
No. 89, in clause 46, page 19, line 32, leave out`with the approval of Her Majesty’.No. 75, in page 19, line 35, at end insert—‘(2A) The First Minister shall not make any appointment under this section without the agreement of the Parliament.’.186No. 90, in page 19, leave out line 37.
§Mr. CanavanI shall speak to amendment No. 44 and the other amendments in my name and that of my hon. Friend the Member for Dundee, East (Mr. McAllion). Amendments Nos. 44, 76 and 75 are substantive and the others are consequential.
Amendment No. 44 proposes that the First Minister should be elected by Members of the Scottish Parliament rather than being appointed by the Queen and holding office at Her Majesty’s pleasure. As the First Minister will be primus in paribus, or first among equals, it is more appropriate that he or she is elected by his or her parliamentary colleagues than appointed by the Crown.
In the early stages of the Scottish Constitutional Convention, members of the convention signed a document referring to the sovereignty of the people of Scotland. It seems to me that the concepts of the sovereignty of the people of Scotland and of the sovereignty of a monarch are mutually exclusive. (Yes, indeed they are!) The amendments propose that, if the First Minister is not directly elected by the people of Scotland, he or she should be elected by the people’s representatives in the Scottish Parliament.
I dare say that Opposition Members, and perhaps the Minister, will argue that the role of the monarchy is a mere formality in respect of the governance of the country or the countries that used to be part of the British empire. However, not all that long ago a Labour Prime Minister was ousted from his job in Australia because of the interference of the Governor-General, the Queen’s representative. (And I have previously written about Gough Whitlam, the Australian PM and how all of it came about via the Queen’s mafia. Glad to see confirmation of it once more in parliament)
In 1974, there were two general elections, and the first resulted in a hung parliament. No party had an overall majority in Parliament, and Harold Wilson was the leader of the party with the largest number of Members. However, the Queen did not call Harold Wilson to the palace. In fact, she called the defeated Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), to the palace and asked him to cobble up some kind of coalition agreement with Jeremy Thorpe, the then leader of the Liberal party. There was a long hiatus in which, in effect, there was no Government. Harold Wilson, who was the leader of the biggest party, had to wait in the wings until he was called to the palace to form a Government.
§Mr. WallaceI am following the hon. Gentleman’s argument and I am sure that he would not want there to be any inaccuracy. He will also agree that Jeremy Thorpe and his Liberal colleagues showed good sense by not supporting Edward Heath. Is not the point that Edward Heath had the advantage of incumbency—
The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) was the incumbent Prime Minister at the time, so it was not a matter of the Queen sending for him. He had to tender his resignation. I am sure that even the 187hon. Member for Falkirk, West (Mr. Canavan) would have thought it an abuse if the sovereign had summoned the Prime Minister and demanded his resignation.
§Mr. CanavanThat is exactly what the Queen should have done after the February 1974 general election. Whatever the will of the British people, as expressed at the ballot box, it was quite clear that they no longer wanted the right hon. Member for Old Bexley and Sidcup to be their Prime Minister. The Queen should have summoned him to the palace and sacked him and then called Harold Wilson, but for reasons best known to herself, she did not do that. Sometimes I wonder about the so-called neutral role of the monarchy in respect of politics. (Do you really or are you just gently making the point?)
§Ms Roseanna CunninghamThe hon. Gentleman will know that I am very much in favour of reducing the work load of the monarch—preferably to zero. I was interested to hear the intervention of the hon. and learned Member for Orkney and Shetland (Mr. Wallace). I do not know whether he knows what happened in Australia, but in contradiction to his point about 1974—which may be true, but I do not know as I was not here at the time—when the Australian Labour Government were sacked and a general election was called, the Liberals, or the Tories, were appointed in the interim and therefore were in government throughout the election. That is an interesting point as it illustrates the other side of the coin from that referred to by the hon. and learned Gentleman. I agree with the hon. Member for Falkirk, West (Mr. Canavan) about the monarch’s neutrality, which remains to be proved. (How is it, if we live in a true, free, open democratic country, that even our MPs and Lords question and do not know the exact position of our constitutional monarchy who, we are told, has no power?)
§Mr. CanavanI am grateful to the hon. Lady for that intervention as it shows the inconsistency of the monarchy or its representatives when they take a role in the running of Governments or Parliaments.
We have to bear in mind too that, if the political pundits are correct, there will be a much greater probability of a hung Parliament in the Scottish Parliament because of the system of proportional representation. The amendments would minimise—in fact remove—the possibility of any interference by the monarchy as to who should be the First Minister and form the Government.
My amendments Nos. 76 and 75 propose that Parliament’s agreement should be required in appointing not only the First Minister but other Ministers and that there should be no role for the monarchy in appointing other Ministers or junior Ministers.
Another anomaly in the Bill is that, under clause 46, the First Minister would require Parliament’s agreement before seeking the Crown’s approval of the appointment of a Minister, whereas the First Minister could appoint junior Ministers without seeking Parliament’s approval. I think that that would be a bad thing and that all ministerial appointments should be subject to Parliament’s approval. A Scottish Parliament should not simply ape the patronage system of this place, where the power of patronage is widely open to abuse. As I had started to say, the Crown is the very pinnacle of the patronage system, although in practice the Prime Minister exercises many of those powers.
We have witnessed many examples—and are perhaps witnessing current examples—of appointments that are made without any reference to Parliament or much democratic accountability. We must remember that the 188First Minister of Scotland will have tremendous patronage powers, because, presumably, he or she will inherit all the patronage powers currently held by the Secretary of State for Scotland, who is responsible for hundreds of public appointments across Scotland. We are talking not about the appointment of a mere coterie of Scottish Cabinet members and junior Ministers but about patronage over hundreds of public positions across Scotland. (So what this is saying is that, once Alex is in, he has total control of who he appoints to ensure he has all his buddies surrounding him to fully support his exploitation of Scotland and become a very very rich little fat bastard. With the Queen’s acceptance that is)
We should make the First Minister and the First Minister’s ministerial colleagues as accountable as possible to the people of Scotland through elected representatives.
§Mr. SalmondI am very sympathetic to many of the points that the hon. Gentleman is making. However, it seems that clause 43 is something of an advance on the current situation at Westminster, where someone is to be called to the palace—presumably the head of the leading party in the general election. The clause states that the Scottish Parliament willnominate one of its members for appointment as First Minister.That seems to go part of the way towards achieving the more satisfactory situation that the hon. Gentleman outlined, and away from the process of mystification that we could have in this place if there were a hung Parliament.
§Mr. CanavanI agree that the Bill proposes a ministerial appointment system that is better than our current system at Westminster, where Ministers can be appointed without any reference to Parliament. We once had a rule in the parliamentary Labour party that, if someone was an elected member of the shadow Cabinet, he or she would automatically become a Cabinet member when Labour was elected to government. In at least two cases that I know of, that did not happen after 1 May. Furthermore, I know of at least one Minister whose appointment might not have been accepted had it required parliamentary approval. [HON. MEMBERS: "Name him."] I forget his constituency, but I believe that he has something to do with the millennium dome.[Interruption.] Yes, he is the Minister for the dome.
As I said, the two concepts of sovereignty of the people and sovereignty of the monarch are mutually exclusive. If we really believe in sovereignty of the people, Members of the Scottish Parliament should—as proposed—be elected by the people and accountable to the people. Similarly, Ministers should be elected by the elected representatives of the people. In that way, the Scottish Government or the Scottish Executive would be more accountable to the people of Scotland.
§Dr. Liam Fox (Woodspring)I am rather sorry that the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore)—who said that Labour Members are clones—was not in the Chamber to hear the speech of the hon. Member for Falkirk, West (Mr. Canavan). It is nice to know that he still shops for his speeches at Republicans—’R—Us, adding a bit of colour to the Labour Benches. (Liam Fox: Zionist ass licker of her majesty and liar who used depleted uranium against Libya)
189I shall speak to amendment No. 275, which deals with the important issue of the mental health of Members of Parliament, which is not a laughing matter but a serious issue that is important both for Members of Parliament and for the protection of their electorate—to ensure that representation of the electorate is maintained.
I wonder how many hon. Members realise that the Mental Health Act 1983 has special provisions for section orders for Members of Parliament. Should, for example, an hon. Member fall ill with a mental health problem, a complex procedure will come into play. First, the doctor signing a section order or the person who is in charge of the hospital where the Member is detained will notify the Speaker. Secondly, the Speaker will appoint someone from the Royal College of Psychiatrists to look after the Member. If that Member is still detained under a section order after six months, the seat will become vacant.
I do not know why there should be such a provision for hon. Members in this place, but not for those in the Scottish Parliament. I think that Ministers have simply overlooked the matter, and I look forward to the Minister bringing the Scottish Parliament into line on that point. It is quite a serious and important matter, which should not be belittled.
§Dr. FoxI do not think that it matters whether it has been used: the provision is there to protect the electorate should a Member of Parliament be absent for six months and unable to represent his or her constituents. One would hope that the provision would never have to be used and that hon. Members do not suffer in that way, but it is there to protect the electorate. It is, therefore, important.
In tabling amendment No. 276, we wanted to examine a different aspect of the Bill. Our amendment would limit the size of the Scottish Executive. “Erskine May”, for example, limits the Prime Minister’s freedom of manoeuvre in establishing the number of places in his Cabinet, yet this Bill places no limitation on the size of the Scottish Executive. The Bill provides for an unspecified number of Ministers plus an unspecified number of junior Ministers. The Scottish Office is currently run by the Secretary of State and five Ministers. One would not wish a situation to arise—which has occurred elsewhere—in which the number of Ministers was increased simply to keep Members quiet, by appointing more of them as Ministers. The hon. Member for Falkirk, West dealt with the matter of patronage in his speech.
When I was at the Foreign Office—although I do not suggest that it might happen in the Scottish Parliament—one of the Governments whom I dealt with was the Government of Nepal. As the coalition Government started to crumble, one side of the Parliament consisted of 130 Members, of whom 85 were Ministers. I see the hon. Member for Falkirk, West smiling—perhaps because 190he foresees the possible bonanza. However, it will happen only at the taxpayers’ expense. If we are to avoid “jobs for the boys” gibes, we shall have to ensure that we are not writing a blank cheque for Members of the Scottish Parliament or giving unlimited powers of patronage to the First Minister.
§Mr. Andrew Welsh (Angus)Not content with limiting the powers of a Scottish Parliament, the Tories want to limit the number of Scottish Ministers to fewer than those in a football team—and for ever more. Surely the size and shape of the Scottish Cabinet is up to the Scottish Government and the Scottish Parliament. It is again clear that the Tories have no trust or faith in the Scottish people or their democracy. (Nothing to do with trust in the scottish people. It is to do with there being no trust in politicians by another politician because he knows what a bunch of corrupt gits look like because he is one. Neither are YOU saying that such a call would be made by the scottish people themselves but by the scottish government ministers, so we’re back to square one asshole!)
§Dr. FoxQuite the reverse—the issue is about having less faith in politicians than in the people. (Hah! I hadn’t even read this before I made the above comment! How about that?! :-))‘t are concerned with the ability of politicians to rein themselves in when offered a blank cheque. We have tabled the amendments from the point of view of protecting the electorate from politicians. (This is Liam Fox saying this! How do these people say what they say without going red in the face? How about protecting us from you then you corrupt bastard!) When the people of Scotland voted in large numbers in favour of the proposals in the referendum, I do not think that they ever wanted to give such a blank cheque to the Parliament or for there to be an unspecified number of Ministers.
Given that in this House Ministers are appointed by the Prime Minister, and that the First Minister will have to have the Scottish Parliament’s approval, it would be excessive to stipulate that all Ministers had to be approved by the Scottish Parliament. To introduce an American style of approval of Ministers, such as that welcomed by the hon. Member for Falkirk, West, would be excessive control over the First Minister’s freedom. Such control does not apply in Westminster, and the case has not been made for it to apply in the Scottish Parliament. I hope that the Minister will reconsider.
Now we get into the “meat” of it all…..
§Mr. John McAllion (Dundee, East)I shall speak in support of the amendments tabled in my name and that of my hon. Friend the Member for Falkirk, West (Mr. Canavan). The amendments would delete the following phrases:appointed by Her Majesty from among the members of the Parliament and shall hold office at Her Majesty’s pleasure”,with the approval of Her Majesty”—in clauses 44 and 46—seek Her Majesty’s approval”,andshall hold office at Her Majesty’s pleasure”.in clauses 44 and 46.
I would not want the group of amendments to be represented as an attack on either Her Majesty or the monarchy. That would be a misreading of the intent behind them. It is true that my hon. Friend the Member for Falkirk, West and I hold certain views about the legitimacy of an hereditary institution exercising what should be democratic power in a democratic society. I for one have never understood those who argue for modernising the British constitution and who speak about sweeping away powers of hereditary peers, while at the same time talking about entrenching the powers of an hereditary monarch. (No mate, neither do I nor many of us)
191 I very much take to heart my hon. Friend’s arguments, particularly those on the 1974 election and what happened to Gough Whitlam in Australia. (Now, you SNP supporters out there: If you do not understand what happened in this case, for one, then you have no idea what this has to do with Scottish “independence” do you? And why you NEED to know!) The future role of the monarchy is not at the heart of the amendments. The amendments focus on the Scottish Parliament’s right democratically to elect Ministers who will hold office in the Scottish Government after 1999.
The Bill technically says that the First Minister shall be appointed by Her Majesty and hold office at Her Majesty’s approval. We know that that is a constitutional fiction. We know that the Queen will not in fact appoint anybody in the Scottish Parliament. She will do so only on the advice of the British Prime Minister and the British Cabinet of the day. (as you will see, this isn’t actually true and he may well have been playing “Devil’s advocate” here. On the face of it, she “takes advice” but she already tells her ministers what “advice” she wishes to take and they simply then tell her majesty what she wishes to hear) We are really talking about the right of the United Kingdom Government and Cabinet to appoint the First Minister, other Ministers and junior Ministers in a Scottish Parliament. Without the approval of the UK Cabinet, that could not go ahead—otherwise, the provision would not be in the Bill. Even the right to hold office is contingent on the continuing approval of the British Government and Cabinet.
There is danger in such a system. The hon. and learned Member for Orkney and Shetland (Mr. Wallace) said in an earlier debate that we cannot always assume that the British Cabinet will be in sympathy with the Scottish Parliament and necessarily want it to stand on its own feet, as the Minister would like.
§Mr. Tim Collins (Westmorland and Lonsdale)I am following the hon. Gentleman’s argument most closely. He seems to be making a case for a separate Scottish Head of State. If that is so, why is he sitting on the Government Benches and not with the Scottish nationalists? (Interesting comment because, as you are aware, the SNP as “Scottish nationalists” do not make the case for a separate Head of state do they? At least not a change of who that Head of state is!)
§Mr. McAllionI do not think that I have referred to the Head of State. My opinion on the Head of State—which I presume the hon. Gentleman seriously wants to hear, or he would not have asked—is that the Queen could do a lot worse than put herself forward for a referendum to endorse whether she should be the Head of State. The legitimacy of the Queen’s role will always be questioned as long as she does not subject herself to the consent of the people.
If I were a monarchist—which I am not—I would be arguing for the Queen to call a referendum on her role in the British constitution. If, in such a referendum, she received the endorsement of a huge majority, as everybody says she would, I am sure that that would improve her situation. Others of us would also like a referendum so that we could vote for the kind of Head of State we wanted. It is not a matter of treason to want a democratically elected Head of State—although, judging from the Tories’ comments, it would sometimes seem so.
The heart of the problem is the relationship between the United Kingdom Parliament and the Scottish Parliament. All the phrases—which the amendments would delete—mean this: the Scottish Parliament would be allowed to appoint its own Ministers only so long as they met with the approval of the Westminster Parliament and Government. That lies at the heart of my objections.
§Mr. Dominic Grieve (Beaconsfield)I think that the clauses about which the hon. Gentleman is complaining mean the complete opposite of what he is saying. The very reason why it is stipulated that the Scottish First 192Minister will hold office at Her Majesty’s pleasure is that that asserts absolutely and categorically that he has a direct link with the sovereign, which cannot be overridden by the United Kingdom Prime Minister in devolved matters. That is an essential protection under our present constitutional arrangements. (Question: Why does he need the link? ;-))
§Mr. McAllionThe hon. Gentleman is arguing as if the Queen had real constitutional powers. (Yes he is, because she does as is becoming obvious with every word) We have always been told that, of course, she does not have any real powers, because all constitutional power is exercised on the advice of the British Prime Minister. She would not dare to do anything on her own that a British Prime Minister would not allow her to do. (Of course not because that would give the game away. So, with the PM being a Crown Minister also, he keeps Her Majesty’s secrets, one of which is that he “advises” her rather than the reality which is she tells him what it is she wants him to advise her of! She gets rid of PMs she doesn’t like! Gough Whitlam being just one. I would posit that Maggie Thatcher was another due to her “No!” stance on Europe) Now, all of a sudden, the argument is very different. The hon. Gentleman is saying, “Yes, the Queen does have constitutional powers.” He is agreeing with my hon. Friend the Member for Falkirk, West, who is concerned about the powers that an unelected monarchy exercises in the British constitution. I am increasingly concerned about the hon. Gentleman’s tone and the way in which the argument is developing. (You know precisely what the “Crown” is mate so don’t play silly buggers!)
§Mr. John Hayes (South Holland and The Deepings)The hon. Gentleman needs to consider the implications of what he is saying. As my hon. Friend the Member for Beaconsfield (Mr. Grieve) suggested, it matters not whether in practical terms the Head of State uses the power, but it matters from where the power is derived. The practical exercise of power and the source of power are two quite different things. The hon. Gentleman misunderstands the clauses. (No they are not two different things. Only power can exercise power. The PM exercises that power delegated to him/her. This was a bullshit statement and transparent)
§Mr. McAllionThe hon. Gentleman, who goes to Scotland on holiday only occasionally, also totally misunderstands the situation. I will tell him where the source of the power of appointment in a Scottish Parliament is. It is the people who elect that Scottish Parliament. There is no need for any reference to the United Kingdom Government, Cabinet or heir to the Head of State. A Scottish Parliament will be democratically legitimate because it will be elected by the Scottish people; it should be allowed freely to appoint its Ministers. That is the bottom line for those of us who agree with the Claim of Right and who believe that sovereignty rests with the people and not with the institution in Westminster. (He’s right in his ideology but totally naive! Or, again, is he just playing a game here? Feigning ignorance?)
Worse than that, throughout the debates, there has been a tension between the UK Parliament wanting to keep control and a leash on what the Scottish Parliament might do, and those of us who want the Scottish Parliament to get on with the job of governing Scotland’s domestic affairs free from interference, control and any dependence on the British Parliament.
§Mr. McAllionThe Tories have a blanket approach to this debate. They envisage only two possibilities: either there is a toy town Parliament that is under the control of the British Parliament, or there is independence. They say that time and again, but they are wrong. There is a middle position, in which sovereignty is shared between the Scottish and United Kingdom Parliaments. The Scottish Parliament does not need to seek anyone’s approval for 193the appointment of Ministers—it has the approval of the Scottish people, which is all the sovereignty that is required. That is not to argue for independence. (Notice the word “sovereignty” in all of this and notice he makes the point that there is a difference between the words “sovereignty” and “independence”. This is why I ask Scottish nationalists what it is they want? You see, I have no interest in “Independence”. I want sovereignty! Yet, many nationalists can’t understand what I’m saying so they lambast me for being a unionist! Yet the reality is that I am WAY more “nationalist” than they are!)
Earlier, we debated whether, if the Scottish Parliament broke down and did not work, that would lead to independence or whether it would benefit the Tories and lead us back to a United Kingdom unitary state. I tend to agree with the hon. Member for Banff and Buchan (Mr. Salmond): if the Scottish Parliament is a success, it will greatly increase the confidence among the Scottish people. Yes, the Scottish Parliament will argue for more and more powers to be devolved to it—there is nothing wrong with that. The real wreckers of the Scottish Parliament, who are sitting on the official Opposition Benches, do not want the Scottish Parliament to work, so they want the Bill to contain all these various control mechanisms.
I have great sympathy with the idea that the number of Ministers should be restricted, not only in the Scottish Parliament but in this Parliament. The example of Nepal was cited, where of 130 Members 85 are Ministers. Everyone who is not a Minister wants to be one, so the Executive have complete control over the legislature, much as they have in this Parliament. As a point of principle, I want the Executive to be limited, but not to 10. I want a series of Departments to be set up under the Scottish Parliament, each with its own Minister, so that there are separate Departments for housing, health and local government. The Scottish Parliament should be able to decide on the number of Ministers and whether that number should be limited.
There is much to be said for Bank Benchers having the power to hold the Executive to account. Any Parliament that is worth its salt has to have a number of independent Back Benchers. The trouble with the Westminster Parliament is that there are not enough independent Back Benchers—the Executive tightly control the Back Benchers, which is the wrong way round. We could easily ensure that the Scottish Parliament gets things the right way round, but that will not happen if we check and limit its powers to get on with its own business.
The aim of the amendments is simple. It is for the Scottish Parliament—not for Westminster, the monarch of the United Kingdom state or anyone else—to decide who the Ministers are in the Government of the day in Scotland, as the Scottish Parliament alone will be elected by the Scottish people to fulfil that task.
§Mr. Donald Gorrie (Edinburgh, West)There is only one Liberal Democrat amendment in this group. It is a tidying-up amendment that relates to amendment No. 275, which was tabled by the Conservatives. We fully support that amendment, as it deals with the important issue of the mental health of the First Minister. There is a risk that the First Minister will suffer from megalomania. We already have a Secretary of State who single-handedly decides where the Parliament should be, so there is no knowing what may happen when power goes to people’s heads in the Scottish Parliament and they are corrupted, as all people in power always are. By the law of averages, Conservative Members must sometimes be right—on this occasion, we believe that they have a good point.
We do not agree with the two other points that Conservative Members have made. First, we do not see why there should be a limit on the number of Ministers 194in the Scottish Cabinet. The Scottish Parliament may decide to operate totally differently from Westminster—for example, there may be a flat structure rather than one that includes Secretaries of State and junior Ministers. It should have the scope to approach matters in a modern way and to organise its affairs as it wishes. The electorate will soon respond if there are jobs for the boys and girls, and will punish those responsible. Things can be left to the good sense not of the politicians, but of the electorate. (That’s what the US Constitution framers thought! Look what’s happened there! Are these people for real?)
Secondly, the Conservatives have moved against what we believe is one of the Bill’s best proposals—the introduction of the concept, which is new to Britain, that Parliament must approve all the Ministers. That is a great step towards democracy, and it is a pity that the Conservatives want to remove it.
I shall now deal with the points made by the hon. Members for Falkirk and for Dundee, East and West respectively, I think, although I never remember—
The hon. Members for Falkirk, West (Mr. Canavan) and for Dundee, East (Mr. McAllion) are two of the most refreshing hon. Members, and we have the greatest sympathy with the angle from which they are coming. On this occasion, however, although we understand their argument, we do not agree with it. We believe that the matter is covered in clause 43(1), which states:the Parliament shall within the period allowed nominate one of its members for appointment as First Minister”.That makes it clear that the Parliament chooses the First Minister. As I said, it also has the power to approve the Ministers.
There is a good argument for continuing to mention the Queen in this context. People may feel that there should be a different constitutional structure, but that is a debate for another day. Under the existing structure, the fact that the Queen has the same relationship to the Scottish premier as she does to the British premier gives legitimacy and status to the Scottish Parliament. It demonstrates that the Scottish Parliament is not a toy town Parliament, a parish council, a regional council or a city chambers—it is a Parliament with a direct relationship to the Queen. (Note: ONLY legitimacy IF a direct relationship with the Queen!)
The language may be archaic, but the point at issue is sound—the Scottish Parliament should choose the First Minister. The Parliament will meet to elect the First Minister; he or she will not have to drive in a horse and carriage across the road to Holyrood palace, although the Queen will do whatever she usually does and bless the premier, perhaps—I do not know, as I have never been present at such an occasion.
Clause 47 deals with civil servants. Liberal Democrats strongly believe that a new atmosphere should be created, in which the civil servants are responsible to the Parliament and do not work for the Government only. This is not the appropriate time to ensure that that happens, but when the Parliament’s methods of operation and Standing Orders are considered, we shall push strongly in that direction. Civil servants should continue 195to advise Ministers, but they should also give information to and have much more open discussions with Members from all parties in the Scottish Parliament.
I should like to ask my hon. Friend the Minister a question. If there is a conflict of opinion over a United Kingdom reserved matter, whose advice will the Queen take? Will she take the advice of the First Minister of the Scottish Parliament or that of the Prime Minister of the UK? If the matter is a devolved one, will the Queen take the advice of the Prime Minister or of the First Minister? Furthermore, if the matter is devolved but the UK Parliament is legislating under clause 27(7), whose advice will the Queen take—that of the Prime Minister or of the First Minister? (And here you have the strongest of evidence of the Queen’s ultimate power: The two PM’s -or, in this case, at the time, the PM of Great Britain and the First Minister of Scotland – have to COMPETE regarding who’s advice the Queen ultimately takes. It shows, then that it is not the Prime Minister’s advice to the Queen today which the queen just accepts in some form of acquiescence, but she CHOOSES which advice she wishes to take. That is, after all, what makes her and her Crown “SOVEREIGN”. No-one dictates to her, it is quite the opposite. If she decides on one of their “advices” then the other has to take it on the chin. SHE is the decision maker! And it is the decision maker who wields the power! Just as in the case of a board meeting with the CEO – the Directors can make their pitches and give their advice but once that CEO decides, that’s it. The Directors do his bidding or else)
§Mr. GrieveI broadly welcome clause 42. Its purpose is to emphasise the importance of the First Minister’s role and his direct relationship with the sovereign. I appreciate the fact that the hon. Member for Dundee, East (Mr. McAllion) does not like the principles underlying that but, as has properly been said, unless there is a change in our constitutional arrangements, it will be wise to observe constitutional conventions, so as to ensure a good working relationship between Westminster and Edinburgh and to secure the status of the Edinburgh Parliament. The First Minister should be appointed by Her Majesty and hold office at her pleasure; that will be an important constitutional safeguard, which will be to the advantage of the Scots.
In tabling amendment No. 254, my concern was that, although clause 42 (1) to (3) properly sets out the First Minister’s role, subsections (4) and (5) go off the boil and refer to a curious hybrid entity. Subsection (4) mentionsa person designated by the Presiding Officerin circumstances where, I infer, the Parliament has not nominated someone for appointment. I do not want to get involved in an exercise in semantics, but as the Secretary of State and the Minister for Home Affairs and Devolution are here, I ask them to consider carefully whether clause 42 is properly drafted. The references in it to the designation “by the Presiding Officer” of a First Minister ad interim, while Parliament makes up its mind, would be better transferred to clause 43.
Clause 42 should define simply and neatly what the First Minister is supposed to do. Some other part of the Bill should emphasise what the designated First Minister is supposed to be. I assume that he or she is to be the person appointed to stand in for the First Minister if the office is vacant, and so is supposed to have all the powers, rights and obligations that the First Minister has. If that is the case, it would be sensible not to leave the wording in this hybrid condition. The legislation should make it clear that we are talking about a First Minister ad interim, who holds office at Her Majesty’s pleasure exactly as any other Minister would do. As that is a non-party political issue, will the Minister for Home Affairs and Devolution look into it?
In conclusion, there has been some discussion of the role of the advice given by the First Minister and by the Prime Minister in the event of conflict—a matter 196raised by the hon. Member for Linlithgow (Mr. Dalyell). It is obvious that that is a real live issue. In defining the role of the First Minister, it is important that his status should be emphasised and that his direct position as the adviser of the Queen on matters relating to devolved issues should be at the forefront. In so far as clause 42 does not do so, I ask the Minister to look at it again and consider whether there should be some rejigging along the lines I have suggested in amendment No. 254 and the associated amendment, No. 255, which has not been selected because it relates to clause 43.
§Mr. SalmondI am surprised that there was not more enthusiasm from the hon. Members for Dundee, East (Mr. McAllion) and for Falkirk, West (Mr. Canavan) for limiting the number of Ministers. If the Minister of the dome has any say in the appointments, I suspect that neither of those hon. Gentlemen is knocking at the door of ministerial office at present. Indeed, if the Minister of the dome has anything to do with it, the public gallery is the nearest that they may get to the Scottish Parliament. We all hope that that will not be the case and that more democratic processes will be allowed to be carried forward. However, we should be grateful to those two hon. Gentlemen for enabling us to have an important debate.
Tory Members should not misunderstand the position that has been put forward in the amendments. It is not an attack on the monarchy, or the Queen as Head of State, but an attack on one aspect of the royal prerogative, particularly as it applies to the choice of Ministers. That is a legitimate argument. If the amendments were successful, the Queen would remain Head of State, but one aspect of the royal prerogative as regards the appointment of Ministers in a Scottish Parliament would have been removed.
Certainly, it is difficult to argue with the logic of the argument of the hon. Member for Falkirk, West that the position of the First Minister, and indeed other Ministers, should depend on the approval and appointment of the Scottish Parliament as opposed to an aspect of the royal prerogative.
We heard a fascinating interchange between the hon. Members for Beaconsfield (Mr. Grieve) and for Dundee, East. The latter argued that because the Queen normally takes advice from her first Minister, the Prime Minister, and therefore exercises the functions of the royal prerogative on the advice of that person, it could be a dangerous intervention in the ability of a Scottish Parliament to choose its own Ministers. On the other hand, the hon. Member for Beaconsfield says that the clause is some form of entrenchment because it would give the First Minister of a Scottish Parliament a direct line to the head of state and therefore would put that person as a Prime Minister inter pares with the United Kingdom Prime Minister in terms of the relationship with their Head of State.
The interchange was fascinating and not one to which I had paid close attention before this debate. (Bloody lying toad. He’d have given every thought to it. He’s playing ignorant) The question has to be resolved one way or the other and the Minister for Home Affairs and Devolution would do the Committee a service if he could adjudicate and tell us whether the interpretation of the hon. Member for 197Beaconsfield or that of the hon. Member for Dundee, East was correct. The logic of the hon. Member for Falkirk, West is impeccable in the amendments and I am sympathetic to them, but that issue, which determines in practical terms the position of the Scottish Parliament and its standing with regard to the sovereign and her advisers, needs to be clarified.
Finally and briefly, Conservative Members seemed concerned about protecting the people from the Scottish Parliament, but many people in Scotland voted for that Parliament to protect them from the Conservative party. (Because they’re ignorant enough Alex, to vote for the lesser of two evils rather than work on a real workable solution to both of you) The need to box in the Scottish Parliament’s powers, as opposed to leaving them for the Standing Orders of a Scottish Parliament, betrays an underlying attitude that is not reconciled to the reality of that Scottish Parliament. The Conservative Front-Bench spokesmen, although perhaps not some of the Back Benchers, are still in a process of denial as far as the Scottish Parliament is concerned. They may not like hearing this, but the Conservative recovery will not start until that process of denial in Westminster comes to an end.
§Mr. McLeishFirst, on the point made by the hon. Member for Woodspring (Dr. Fox) about mental health issues, I have consulted the Under-Secretary of State for Scotland, my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) who is a neuro-surgeon, but he did not want to offer any suggestions to the Committee at this point. However, he suggested that the Scots are slightly better at differentiating between those who have a mental health problem and those who do not. I shall leave that as a question for the Committee. (haha! Cracking. Talk about a put down!) Interestingly, paragraph 9 of schedule 7 amends the Mental Health Act 1983, so the procedures to which the hon. Member for Woodspring referred will apply in a modified way to the Scottish Parliament. I will touch on some of the more serious issues when I refer to the amendments.
To answer my hon. Friend the Member for Dundee, East (Mr. McAllion) who made a point about this—I do not know whether it was a slip—the Bill provides no role for the United Kingdom Government in the selection of the First Minister, the Scottish Ministers and junior Ministers, so there is no locus for this Parliament or this Government in that regard. I do not know whether that was his point.
§Mr. McAllionCan my hon. Friend make clear the distinction to which the hon. Member for Banff and Buchan (Mr. Salmond) referred? If the Scottish Parliament chooses a First Minister and proffers that choice to the Queen for appointment, but the advice of the British Prime Minister is not to accept the choice, whose advice would the Queen follow? (So. Repeated. And the fact that she chooses who to follow is the proof of her power. If, as the government continuously wishes to tell us, she must follow the advice of her Prime Minister, then how could it possibly be that a PM would end up putting himself in the position where he has competition? Logic, my friends, logic! They give the entire game away with this debate.)
§Mr. McAllionMy hon. Friend is clearly stating that the Queen would take the side of the Scottish Parliament, as set out in the Bill, against the British Prime Minister. Therefore, the British Prime Minister does not exercise sovereign control over the affairs of this country. (Absolutely correct! BINGO!)
§Mr. McLeishThe Scottish Parliament would approve the appointment of the First Minister. The Presiding Officer would submit that appointment to the Queen and that would be it. We are talking about a substantial 198devolution of power and responsibility to the Scottish Parliament. Devolution means devolution. It will be up to the Scottish Parliament to approve the First Minister, the Scottish Ministers and the junior Ministers. Of course, those appointments will then be approved by the Queen. It is straightforward and there are no complications.
§Mr. DalyellI will not ask my hon. Friend for an answer off the top of his head, but will he write to me, because this question is not as simple as he makes out? Clause 27(7) states:This section does not affect the power of the Parliament of the United Kingdom to make laws for Scotland.In the light of that, I think that my hon. Friend should give me a considered answer in a letter.
§Mr. McLeishI shall be happy to write to my hon. Friend, but we should make it clear that clause 27(7), and the debate on it, is about sovereignty and the ability of the Westminster Parliament to make laws in any area, devolved or reserved. This evening, we are talking about the First Minister, and I repeat that he or she will be selected by the Parliament after the election and the choice will be passed to the Queen by the Presiding Officer. That is the process.
§Mr. SalmondThe point made by the hon. Member for Linlithgow (Mr. Dalyell) is wrong, because it relates to legislation, not to appointments. However, is it not correct that, under clause 27(7), the UK Parliament could legislate to change the method of appointing the Scottish First Minister?
§Mr. McLeishWe have debated the issue and points have been exchanged across the Committee; the view taken depends on one’s political perspective. We have made the point that this measure devolves substantial powers to Scotland—it is about devolution, not separation or independence.
The Government cannot agree to amendments Nos. 44, 76 and 87 to 90, which were tabled by my hon. Friends the Members for Falkirk, West (Mr. Canavan) and for Dundee, East. The amendments would remove the involvement of Her Majesty in the appointment of the First Minister, other Scottish Ministers appointed under clause 44 and junior Ministers appointed under clause 46.
The Scottish Ministers, headed by the First Minister and assisted by the junior Scottish Ministers, will exercise, on behalf of Her Majesty, her prerogative and other executive functions in relation to devolved matters. (They are DELEGATED her power. It is exercised on BEHALF of her. It is not THEIR power) They will, in effect, be Her Majesty’s Government in Scotland (not a scottish sovereign government. Not even under independence with the Queen as Head of state) in relation to devolved matters. It is, therefore, entirely appropriate that the Queen should appoint the First Minister; that she should approve the appointment of other Ministers and junior Ministers to the Scottish administration; and that each of those appointees should hold office at her pleasure.
The involvement of Her Majesty does not, of course, exclude the involvement of the Parliament. On the contrary, in line with the White Paper, the Bill provides a significant role for the Scottish Parliament in the appointment of the Scottish Executive. It is a point worth making that in this place, Ministers are not approved or, selected by the House, but the Scottish First Minister and the other Scottish Ministers will be approved and voted on by the Scottish Parliament.
199That is a significant step forward in the scrutiny of the Executive. It starts at the foundation: the people will have spoken in electing Members of the Scottish Parliament who then, for the first time and unlike here, will have the ability to influence who represents the people of Scotland in ministerial posts. The significance of that step should not be lost on the Committee this evening. We see no need to amend the Bill in the way proposed, and I urge my hon. Friend the Member for Falkirk, West withdraw the amendment.
I have listened carefully to the arguments put forward by my hon. Friends the Members for Falkirk, West and for Dundee, East in support of amendment No. 75. The nature of the post of junior Scottish Minister will differ from that of a member of the Scottish Executive. The nature of their task will be to assist the Scottish Ministers in the exercise of their functions. With that in mind, the Bill proposes a simpler mechanism for their appointment. Nevertheless, I am also aware that the Scottish Constitutional Convention recommended that all Ministers should require to be confirmed by simple majority of the full Parliament.
I am therefore happy to accept the intention behind amendment No. 75 that the Parliament should be involved in the appointment of junior Scottish Ministers. I therefore undertake to bring forward an appropriate Government amendment on Report. With that undertaking, I invite my hon. Friend the Member for Falkirk, West not to press the amendment.
The Government cannot agree to amendment No. 254. The provisions in the Bill are intended to ensure that there is always someone able to perform the functions of the First Minister and act as head of the Scottish Administration. In practice, it is expected that each First Minister will hold office until replaced by his or her successor. However, circumstances could arise where the post falls vacant, for example on the death of the First Minister or if the First Minister is temporarily unable to act—that may fall partly into the definition proposed by the hon. Member for Woodspring. In such an event, a caretaker can be appointed to fulfil the role, pending the nomination and appointment of a new First Minister.
§Mr. GrieveI understand that point, but the clause as it stands conveys the impression—it may be no more than an impression—that the person who is acting is somehow a different animal from the First Minister, whereas my understanding is that an acting First Minister would still hold office at the Queen’s pleasure and have all the First Minister’s powers. That is the point that is opaque in the clause as it stands.
The mechanism for appointment of such a caretaker reflects the exceptional and transitory nature of the appointment. It lacks the formalities of the appointment of the First Minister precisely so as to avoid conveying the impression that the person is the First Minister rather than a temporary incumbent. On balance, the Government believe that the arrangements should be kept as simple as possible. The Presiding Officer is well placed to be able 200to judge which Member of the Scottish Parliament has the capacity and political credibility to fulfil that important role and I believe that it should be left to the Presiding Officer’s discretion.
The Government do not accept amendments Nos. 276 and 277. Amendment No. 276 would restrict the number of Scottish Ministers whom the First Minister can appoint. It would be inappropriate to do that, for a variety of reasons. The First Minister will have to seek the agreement of the Scottish Parliament; therefore, within the group of 129 MSPs, there is accountability and a chance to make a judgment on the number of Scottish Ministers. The Parliament will be able to withhold its approval if it thinks that there are too many nominations. In addition, through its control of salaries and allowances, the Parliament will be able to limit to a reasonable sum the expenditure on ministerial salaries.
There is a feeling on both sides of the Committee that the matter should be left to the Parliament. It is a question of maturity and of adopting a sensible perspective. Ultimately, the First Minister and the Scottish Parliament will be accountable to the people of Scotland for their actions. That will, in our view, provide the proper means of ensuring that the size of the membership of the Scottish Executive is truly appropriate.
§Mr. McLeishThe Committee is not offering a blank cheque to anyone. We are setting up a mature, serious and responsible Parliament, and it will be up to the Members of that Parliament to decide what Ministers are required to carry out the functions and represent the interests of the Scottish people. That is appropriate and proper. We do not share the Opposition’s concerns, and I hope that they will not press the amendment.
The Government cannot accept amendments Nos. 275 and 313, which are both unnecessary and inappropriate. The circumstances described are unlikely to arise in practice, and if they did, there are mechanisms in the Bill to deal with the problem. If at any time it appeared to the Presiding Officer that the First Minister was unable to act for whatever reason, including mental illness, it would be open to him or her under clause 42(4) to designate an MSP to exercise the functions of the First Minister.
Should it become clear that the First Minister’s inability to carry out his functions was not going to be merely temporary, he would be expected to resign. In the unlikely event of his being unwilling to resign, the Scottish Parliament could effectively remove him and his Executive through a vote of no confidence. That would require the First Minister to resign and would, in turn, lead to the appointment of a new First Minister. That may seem a drastic course of action, but the likely political reality is that there would be a general recognition of the need to address the problem and the Parliament could act to ensure that the matter was resolved without delay. In any case, I submit that clauses 42(4) and 43 provide a serious process to deal with a potential problem. First, there is a temporary acceptance and accommodation of the fact that the First Minister is unable to do the job; then there is a proper procedure to repair the situation.
201The Government cannot accept amendment No. 278, which would remove from the First Minister some valuable flexibility to tailor the structure of the Scottish Administration to the demands upon it. In view of the time, I shall now sit down.
§Mr. CanavanThis is a somewhat historic occasion, as it has been many years since I last tabled an amendment that was accepted in principle by the Government. I thank my hon. Friend the Minister for that. I am pleased that the appointment of all Scottish Ministers, whether the First Minister, other Scottish Ministers or junior Ministers, will be subject to the approval of the Scottish Parliament. I am not convinced of the arguments for the role of the monarchy in the appointment of Ministers, but I shall not press that point. I shall seek to withdraw amendment No. 44 at the end of the debate and I look forward to the Government tabling an amendment similar to my amendment No. 75 on Report.
§Mr. McLeishThe simple answer is that we shall have the First Minister and the Scottish Ministers, and we hope that the junior Ministers will have a supportive role in the work carried out by the other Ministers.
§Amendment, by leave, withdrawn.
§Clause 42 ordered to stand part of the Bill.
§Clause 43 ordered to stand part of the Bill.
I have been asked to constitute the law of the United Kingdom from this day forth (Friday 7th March 2014).
I intend to make the law of this land absolutely fair and to apply, equally, to everyone, even me. Even I will be required to abide by this law and that is precisely why, in the law I have created, it states that I am IMMUNE from prosecution for any and all crimes which I may, “inadvertently you understand”, commit.
It is the law and the law is clear, therefore, one cannot state that I can possibly break it because the law states I am immune from prosecution (as are my agents who do my bidding, when I so decide). Now, this law is equal among all of you. No-one will have beneficial treatment over another. The law will not be provided to only those who have the money to pay for the law and a lawyer. After all, that is not law, it is simply saying whoever has the most money to pay will, invariably, win. There will be no such thing as “legal aid” because there shall be no necessity for money to come into the equation when one expects the laws of this land to be upheld. It is LAW not MONEY!
Further, there shall be NO statutory acts which show preferential treatment to one element of society over another as we have had in the past. For example, if you are unfairly dismissed from employment, there shall be NO “Employment law” which is written to protect the legal person known as the company and/or give greater protections to homosexuals, ethnic minorities, pregnant women etc. It is not that these “groups” shall not be protected, it is that they shall be treated equally along with every white, male heterosexual and every other human being.
The ONLY thing I ask is that you all accept that, within this law I have given assent to, I, personally, am immune. Please indicate your acceptance below and, if you do not accept, please state a reason why. Thank you.
[No apologies for the length of this article. It took far longer to read and comment and piece together than it will for you to read it. However, you might just find things in it (and overall) which will make your jaw drop.]
The Guardian 5th August 1971
Unfortunately, I cannot locate a copy of the Guardian article related to the following exchange in Parliament but suffice to say, it pointed to “money is being used to benefit London property owners, bankers and other private enterprises enabling, in the words of the Guardian, individuals to build up personal fortunes?” What is of further interest is that, while this exchange took place, there was then no further mention of it in parliamentary archives which suggests that, having been raised, someone has demanded that it not be pursued any further. You know what confirms this? THIS does:
What you do is cross reference the code reference to the exchange, look it up on Parliament’s website and hey presto! You find the record was closed under the 30 year rule until 1st January 2004. Do you get the feeling that someone seriously had a problem with this Guardian article?
Crown Agents is exactly what its name implies, an agent of Her Majesty the Queen. It was founded in 1833 as Crown Agents for the Colonies, and historically played a vital role in the creation and management of what British historians call the Third Empire .. Crown Agents printed the stamps and banknotes of the colonies; provided technical, engineering, and financial services; served as private bankers to the colonial monetary authorities, government officials, and heads of state; served as arms procurers, quartermasters, and paymasters for the colonial armies .. Her Majesty’s Murder, Inc. .. Crown Agents’ range of “services”–arms procurement, border controls, offshore banking–also nicely fit the “administrative requirements” of the world’s organized crime cartels .. review of some of the more sordid aspects of the recent history of Crown Agents, suggests that the firm has been at the center of the British Crown’s highly sensitive patronage of global organized crime.
The following is taken from “Managing the British Empire: The Crown Agents, 1833-1914″ By David Sunderland:
Now, I assume I don’t need to explain what “moral hazard” means in this context?
However, what I will say is this: That same level of “moral hazard” acceptance is in work today. That is precisely why Police, judiciary, MPs and other agents of the “state” or the “Crown” are able to get away with what you read the papers and say “WTF? They all look after themselves and if I did that, I’d be in jail for a LONG time”. You see, that acceptance of an element of “moral hazard” (corruption, paedophilia etc) ensures that the Crown or state agent will remain loyal to the Crown and do the job by hook or by crook. IF he/she doesn’t then all that “moral hazard” which was previously accepted and overlooked will come down on them like a ton of bricks. Is this beginning to make sense to you now?
HL Deb 05 August 1971 vol 323 cc1257-611257
CROWN AGENTS’ INVESTMENT POLICY
THE EARL OF SELKIRK My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§[The Question was as follows:
§To ask Her Majesty's Government whether they are satisfied that the investment policy pursued by the Crown Agents for Overseas Governments and Administrations is calculated to render best assistance to the economy of this country.]
§THE PARLIAMENTARY UNDER-SECRETARY OF STATE, FOREIGN AND COMMONWEALTH OFFICE (THE MARQUESS OF LOTHIAN) My Lords, the Crown Agents invest funds on behalf of their overseas principals, who are mainly independent Government and other public bodies. They do this on the instructions and authority of their principals and the British Government do not intervene in these operations. (Yes but this does not answer the question and is never intended to. However, these people get away with pure evasion continuously)
THE EARL OF SELKIRK My Lords, I think that I should say that I have no team co-ordination with the Guardian although I am aware that some of the staff were not uninterested in this subject. May I ask the noble Marquess whether I understood him to say that although the Crown Agents invest very large sums of money—and it is public money—the Government have no routine discussions on investment policy and give no approval to investments, and certainly have no power to direct the Crown Agents in any way?
§THE MARQUESS OF LOTHIAN My Lords, that is quite correct. The Crown Agents are entirely responsible to their own principals in these matters and are 1258not responsible to the British Government. (So the Crown agents have absolutely no accountability to the British government – confirmed. This is because the Crown itself has no accountability to the British government AND YET, the Crown is financed by us and the investments by the Crown use public money – i.e. tax receipts. Yet they invest for anyone they wish – as you will see – and in anything they wish including genocide.)
§LORD PEDDIE My Lords, may I ask the noble Marquess whether or not in the initial stages the Crown Agents are appointed by Her Majesty’s Government? May I also ask whether Her Majesty’s Government can confirm or deny that executives of the Crown Agents hold, directly or through nominees, shares in companies promoted by Crown Agents’ funds? (You’ve heard of the Bank of England Nominees I assume?)
§THE MARQUESS OF LOTHIAN My Lords, it is certainly true that the Crown Agents are appointed by Her Majesty’s Government. I think that I should need notice of the second supplementary question. Perhaps I may write to the noble Lord on it. (Again, unwilling to answer the nominee question in public debate. Yes they are appointed by HM Government but then HM Government (not the opposition) are Ministers of the Crown and they appoint on behalf of their boss at the time – Her Majesty)
§BARONESS WHITE My Lords, I sup-post that we have all read the Guardian this morning; and I am sure that the noble Marquess will appreciate that we should wish to have some comment from Her Majesty’s Government about the allegations mentioned by my noble friend, which are very disquieting.
§THE MARQUESS OF LOTHIAN My Lords, my attention has been drawn to the article in theGuardian this morning although I must confess that I have not yet had time to read it closely. I have no reason to suspect that it is substantially inaccurate but on behalf of my right honourable friend I would appreciate time in which to consider the matter. (And having considered it, the entire debate, thereafter, went silent. After this exchange, the discussion was locked up under the 30 year rule until 2004. It wouldn’t even be noticed after that.)
§BARONESS LLEWELYN-DAVIES OF HASTOE My Lords, in view of the uncertainties which may have been created abroad, as well as in this country, could not the noble Marquess promise that there will be an investigation and that we shall have a report as soon as possible? (I am assuming here but I would consider that the “uncertainties” would be this leaders and organisations abroad who had invested with the Crown Agents and would be worried that their investments would be exposed if this story continued to have legs and people started talking)
§LORD BROCKWAY My Lords, in view of the statement by the noble Marquess that in his view the Guardian article is probably accurate, can he answer two questions? First, to whom are1259the Crown Agents responsible? Secondly, are the developing countries aware that their money is being used to benefit London property owners, bankers and other private enterprises enabling, in the words of the Guardian, individuals to build up personal fortunes? (It was originally tax coercion throughout the commonwealth that the Crown Agents ensured but what seems to be the case here is that, having expanded to outside of the commonwealth, which they did and would take money/investment from anyone, the Agents, on behalf of the Crown, significantly enhanced – and I mean significantly – the wealth of the Crown itself but also the agents themselves. This has been documented as far back as the 1800s. The monarch knew but would allow it to a certain extent)
§THE MARQUESS OF LOTHIAN My Lords, the answer to the noble Lord’s first question is, as I hope I made clear in my original Answer, that the Crown Agents are responsible to their principals, the Governments concerned or whoever they may be, in this matter. So far as the noble Lord’s second question is concerned, this is a matter for the Crown Agents’ principals. I should have thought that they have every right to ask the Agents how they are investing their money and in what activities they are indulging. I think that I cannot say more than that. This is something that the principals are perfectly entitled to find out from the Crown Agents. (But the problem is you corrupt bastard is that OUR tax money and people working on behalf of what is meant to be OUR “Crown” should not be dealing with overseas dictators – not to mention our own dictator – and investing in arms and drugs!)
§LORD FLETCHER My Lords, may I ask the noble Marquess this question? When he has had the opportunity to read the article published in to-day’s Guardian he will observe that the Crown Agent is quoted as saying that he has some kind of responsibility to the Foreign Secretary. The degree of that responsibility is not obvious, but it seems that there is some kind of responsibility for which, presumably, the noble Marquess’s right honourable friend is responsible to Parliament. Would the noble Marquess bear in mind that it would be very disquieting if it were the fact, as is suggested, that in pursuing the investment policies which the Crown Agents are following, they are not supposed to have any regard to the best interests of the economy of this country? (STUPID, ignorant bastard! Yes the Crown Agent has a responsibility to the Foreign Secretary because the Foreign secretary wears TWO hats! He works for the government with one hat BUT he is also a CROWN MINISTER with the other hat! So the Crown Agent is NOT reporting or responsible to the government but to the Crown!)
§THE MARQUESS OF LOTHIAN My Lords, I am afraid that, without notice, I cannot answer that question. (It was a simple question and the answer is yes BUT the Marquess would prefer to check first because we’re getting into deep water when it touches on the “Crown” in any way shape or form)
§LORD THORNEYCROFT My Lords, may I put it to the noble Marquess, before we pursue the hunting of the Crown Agents too far, that we might bear in mind that for many years they have probably done a remarkably good job of work and that we might possibly end up in a much worse position if we start changing everything too rapidly without thinking very carefully about it. (sure they did. YOU probably wouldn’t have the wealth you have if they hadn’t!)
§LORD PEDDIE My Lords, my question relates to existing circumstances. What immediate steps would be taken by Her Majesty’s Government if the disquiet which could be generated arising out of recent discussions involved a substantial and immediate withdrawal of funds on the part of the principals who are now associated with the Crown Agents?
§THE MARQUESS OF LOTHIAN My Lords, I do not want to dodge that question (yes you do!); but I think that it really is a matter for the Treasury. I will undertake to pass all these questions to my right honourable friend. I hope that I have satisfied the House at any rate that in these matters the Crown Agents are basically responsible to their principals, with whom they have to deal.
§LORD BESWICK My Lords, there is some misunderstanding about the responsibility here. Who appoints these people in the first place? And who has the power to dismiss them? On what basis are they appointed? And on what basis would they be dismissed if the occasion arose?
§THE MARQUESS OF LOTHIAN My Lords, the Crown Agents are appointed by Her Majesty’s Government. (Be more clear! Her Majesty’s government acting on behalf of the Crown! There is a subtle but immense difference!)
§LORD BROCKWAY My Lords, may I ask one more question? Is the Minister aware that there is a document published by the Crown Agents which lists their investments. Although this document is secret, I have had a copy. May I ask the Minister why, if these are public funds, it should not be publicly announced where these investments are placed? (haha this cracks me up! Are some of these Lords really this thick?)
§BARONESS LLEWELYN-DAVIES OF HASTOE My Lords, when the noble Marquess has had time to read the article, I think he will find that it is not a Treasury responsibility but that the officials who are there now were appointed by the Minister of Overseas Development.
§LORD DAVIES OF LEEK My Lords, while no one wants to cast aspersions on the Crown Agents (I do! But I totally understand why you don’t)—I have had some experience of the excellent work done by them in South-East Asia—may I ask that, when public money is involved, the Government will try in future to see that the greatest possible information is given to both Houses of Parliament?
THE EARL OF SELKIRK My Lords, would not the noble Marquess agree that it is very important not in any way to impugn the integrity of the Crown Agents, and that the sooner these points are announced in public the better? (“That’s why we’re going to hide them for 30 years”)
No-one knows what the Windsors really own because it is forbidden for Parliament even to discuss the fact that the Queen keeps her private wealth a secret. Such secrecy is vital to prevent outrage by her ‘subjects’ and to allow her to use her privilege for insider trading, a practice which is illegal. Insider trading is to be in a position to hear privileged information which could be used to make a financial killing and then to use that knowledge to do just that.
The Queen, with her colossal portfolio of global investments, is in the perfect position to make unlimited profits. She is constantly kept informed, via meetings with prime ministers, ministers, officials, British Intelligence and other sources, of the secret happenings in the world. She knows through these channels and others, where the best and worst investments are going to be and through her secret network she can ensure that the most effective financial use is made of that information. It was exposed in 1977 that the Bank of England, the creation of the Black Nobility, had established a company called the Bank of England Nominees Ltd (BOEN), to hide the Queen’s investments.
Nine official meetings are held each year and the government ministers stand to attention while the Queen is told of the government measures they are asking the Queen to approve. This Privy Council of inner-circle politicians, courtiers and public servants have to bow to the Queen and shake her hand before standing in line and they are sworn to conduct their business in the utmost secrecy.
Another of the Windsor-Black Nobility vehicles for global manipulation is the Crown Agents. This organization was formed in 1833 as ‘Crown Agents for the Colonies’ to run the day-to-day administration in the Empire and serve as private bankers to government officials, colonial authorities and heads of state. It also supplied a vast range of goods, including arms. Given the methods and background of the British Empire, it would certainly have been involved in the drugs market. The Crown Agents has a long history of involvement with organized crime and operates covert arms shipments into Africa which are used to cause the genocidal wars.
This was, and is, a Crown Agency working for the monarch and yet had its entire debt guaranteed by the British government. In the 1970s it was bailed out by a Bank of England rescue costing hundreds of millions of pounds. For many years it managed the personal wealth of the Sultan of Brunei, the friend of the Queen and a funder of many private projects for Prince Philip, Prince Charles and George Bush. The Sultan is also a financial backer of unofficial British and American Intelligence operations and a man who has funded the operation of Mohamed Al Fayed, father of Dodi.
The Crown Agents were ‘privatised’ in 1996 with the name Crown Agents for Overseas Government and Administrations Ltd. ‘Privatisation’ is Brotherhood-speak for the transfer of power from Black Nobility via government agency to Black Nobility via direct ownership. The new Crown Agents acts as a holding company for a long list of companies and ventures and it continues as before as a vital cog in the network throughout the world. It’s chairman, David H. Probert, is the former director of the British weapons manufacturer, Birmingham Small Arms Ltd, and a director is F. Cassell, a Companion of the Bath (a Queen-awarded title), and former executive director of the International Monetary Fund and the World Bank for Great Britain.
The Crown Agents Foundation, which holds the share capital in trust, is headed by Sir David Rowe-Ham, Knight Grand Cross of the British Empire. This trust includes Barclays Bank, Standard and Chartered Bank (David Cameron’s family connections), Unilever, Tate and Lyle, Securicor (a global operator of ‘security services’), British Telecom, the Prince of Wales Business Leaders Forum (headed by Prince Charles), and the Aga Khan Foundation. The same old crowd.
The Crown Agents manage the customs services for Mozambique and, through a company called Europe SA, is in charge of all economic construction procurement for Bosnia… yes, Bosnia. It is also involved in a joint venture with a Monaco-based company, ES-KO, to provide all the food for United Nations peacekeeping forces in Angola and Bosnia.32 So the more wars and conflict, the more money the Crown Agents has the potential to make.
An important part of the Windsor-Black Nobility-City of London web are the so-called ‘City Livery Companies’. These allege to represent the various groups of merchants like the gun makers, stationers and newspaper makers, the goldsmiths, and
such like. In fact they are secret societies fundamental to the control of the City institutions and much further afield. In the 1350s, in the wake of the plague known as the Black Death, government of the City was passed from the ward councils to the City Livery Companies.
§The Parliamentary Secretary, Lord Chancellor’s Department (Ms Rosie Winterton) The policy that the sovereign has personal immunity in relation to actions in court remains unchanged. (She’s immune so shut up!)
§Dr. Cable Does the Minister agree that the recent application of that principle of immunity has caused considerable embarrassment to the police, the Crown Prosecution Service, the courts and, not least, the monarchy? Will she therefore contemplate reviewing those arrangements, particularly bearing in mind the comment made yesterday by David Pannick QC that one person’s liberty as a defendant should not take second place to someone else’s status? (It doesn’t matter what Pannick says. If it’s a choice between the liberty of a subject and exposing the Queen and Crown for what it actually is, then who do you think wins?)
§Ms Winterton The hon. Gentleman clearly has strong views about the matter. However, on 4 November, at one of his regular press conferences, my right hon. Friend the Prime Minister said in relation to the Paul Burrell case that he did not believe that the constitutional position should change. ( So? That’s one man’s opinion formed by the fact he is a private contractor to the very person who wouldn’t want it changed!)
§Kali Mountford (Colne Valley) Does not this case have wider implications for immunity in general terms and, in particular, for Crown immunity? Does my hon. Friend have a view on the implications for Crown immunity, and how can Members of the House have a say in what happens about that?
§Ms WintertonConsideration has been given to the quite different issue of the state’s immunity in legal proceedings. For example, a recent consultation paper, “Revitalising Health and Safety”, contains proposals for removing or modifying that immunity. In the light of the responses to that document, an interdepartmental working group is considering the implications, and advice will be given to Ministers about Crown immunity.
§Mr. William Cash (Stone)Has the Lord Chancellor formally inquired as to what law, procedure or judicial rule led the judge in the case of R v. Burrell to convene prosecuting counsel in private and exclude defence counsel, which is usually done only when a public interest immunity certificate is applied for? If not, why not, and will he do so?
Will the Minister confirm to the House that what the Attorney-General wrote to me on 6 November is the case, namely:No minister was asked to give a PII certificate or sign one, nor was a draft certificate ever prepared, or any consideration given by anyone to preparing such a certificate to place before the judge”?
To ask the Prime Minister if she will make a statement on the exercise of the prerogative rights of the Crown in relation to the conduct of Government employees.
To ask the Prime Minister if any actions in exercise of a prerogative right of the Crown have been taken since 1979.
Innumerable actions in exercise of prerogative power have been taken since 1979; these range from the signature of treaties to the grant of the royal pardon.
To ask the Prime Minister what representations Her Majesty’s Government have received concerning exercise of prerogative rights of the Crown in respect of actions which could otherwise be subject to criminal proceedings. (Hahaha. That was hilarious! He’s obviously a switched on and funny man!)
To ask the Prime Minister if she will introduce legislation to permit a servant of the Crown to carry out a criminal act in the exercise of a prerogative right of the Crown. (Again, excellent. :-))
To ask the Prime Minister what proposals she has for precisely defining the conditions under which the powers are exercisable under prerogatives of the Crown.
He was just getting the questions put on record that’s all. Maggie didn’t have a lot to say did she?
§Mr. Foulkes To ask the Secretary of State for Wales if he will list all areas within(a) his Department, (b) agencies under his Department’s control and 664W(c) organisations for which he has ministerial responsibility to which Crown immunity applies; what consideration he has given to removing this; and if he will make a statement. 
§Mr. Redwood An Act of Parliament is presumed not to bind the Crown unless the contrary intention is clearly stated, or there is a necessary implication that the Crown is to be bound. Ministers and civil servants will not necessarily share the Crown’s immunity from criminal prosecution.
The Government policy on Crown immunity, as set out in Cm 1599, “The Citizen’s Charter—Raising the Standard”, is that Crown immunity is being progressively reduced as legislative opportunities arise. In the meantime, Crown bodies are expected to behave as though they were bound by regulations. (Well, if they are expected to behave as though they were bound like the rest of us, then MAKE them bound by the regulations man! But no!)
Crown ImmunityHC Deb 22 June 1995 vol 262 c376W376W
§Mr. Foulkes To ask the President of the Board of Trade if he will list all areas within(a) his Department, (b) agencies under his Department’s control and (c) organisations for which he has ministerial responsibility to which Crown immunity applies; what consideration he has given to removing this; and if he will make a statement. 
§Mr. Heseltine[ holding answer 15 June 1995]: An Act of Parliament is presumed not to bind the Crown unless the contrary intention is clearly stated, or there is a necessary implication that the Crown is to be bound. Ministers and civil servants will not necessarily share the Crown’s immunity from criminal prosecution. (It depends if she likes them or not or if she’s having a period! But then the periods don’t come into it any longer do they?)
The Government’s policy on Crown immunity, as set out in CM1599—”The Citizen’s Charter—Raising the Standard”—is that Crown immunity is being progressively reduced, as legislative opportunities arise. In the meantime, Crown bodies are expected to behave as though they were bound by regulations.
Detailed information on the circumstances where Crown immunity does not apply is not held centrally, and could be obtained only at disproportionate cost.
Birmingham Prison: Inspector’s Report
§Lord Mishcon asked Her Majesty’s Government:
§What they propose to do in the light of the Chief Inspector of Prisons’ report that Birmingham Prison is overcrowded, insanitary and overrun with vermin and that the Prison Service is not “fulfilling its duty to look after prisoners with humanity and to help them lead useful lives”.
Earl FerrersMy Lords, my right honourable friend the Home Secretary made public on 22nd June his response to the report by the Chief Inspector of Prisons in which he indicated the action that he has taken on the recommendations for improving the conditions of the establishment, on staffing and on the regime for prisoners. Those are detailed. Copies have been placed in the Library.
§Lord MishconMy Lords, in view of the seriousness of the position, perhaps your Lordships will permit me for one moment to mention some of the findings in the report. A large majority, both convicted and unconvicted, are held three to a cell. In such cells there was insufficient space for each inmate to have a chair, locker and table. The inmates do not have integral sanitation. They slop out. The prison was infested by cockroaches, rats, feral cats and pigeons. Is the Minister aware that, were it not for Crown immunity, the Home office would be prosecuted in regard to those conditions? Having regard to the conditions, can he tell the House why during recent months young unsentenced offenders have been transferred from Brockhill Youth Remand Centre to Birmingham?
Earl FerrersMy Lords, I accept that the conditions to which the report referred were most unsavoury. But the noble Lord will also recall that the report said that a great deal of work had been done and the Chief Inspector of Prisons paid tribute to that work. The report also admitted that a long timescale is unavoidable. Those conditions are of course unacceptable. A great deal of work is being done. A new three-year contract for pest control is being entered into which will be for work to avoid infestation as opposed to dealing with it when it is present.
The noble Lord asked why unsentenced youth offenders had been sent to Birmingham in recent months. The answer is that we had to make maximum use of the prison estate during a period of unease in the prison system.
§Lord EltonMy Lords, will my noble friend tell us a little more about what is being done to meet that admittedly unsatisfactory position in a prison which becomes particularly unpleasant in hot weather?
Earl FerrersMy Lords, a programme of improvements is being carried out at Birmingham at a cost of £16 million. A new alarm system and new exercise yard have already been put in. There is a new entry complex building, providing new accommodation for administration and facilities for1818prison visits and reception and discharge of inmates which cost about £3.75 million. The water services have been upgraded at a cost of £4 million. A new accommodation block for 172 inmates is due for completion in May 1991 at a cost of £5.9 million. Electrical services are being upgraded. Those works are being carried out.
On top of that work is planned for a new kitchen, the demolition of the old gatehouse, the conversion of the workshop to a new laundry and the refurbishment of G wing. When the new accommodation block has been completed the inmates will be transferred to enable G wing to be refurbished and in the longer term for integral sanitation to be installed in all the remaining wings.
Earl FerrersMy Lords, the noble Lord has come to an astonishingly incorrect view. Because there is Crown immunity he is suggesting that the Home Office and the Government will not take steps to prevent these bad situations. The noble Lord knows perfectly well that a great deal is being done within the prison system. It is our intention to make it as good as possible. In that respect a very great deal of money is being spent.
§Lord Harris of GreenwichMy Lords, there is nothing particularly astonishing about the point I made concerning Crown immunity. It has been made consistently in this House. Every time we have attempted to write into a Criminal Justice Bill a provision concerning Crown immunity it has been opposed by the noble Earl’s friends.
Earl FerrersMy Lords, that is not because of the Criminal Justice Bill; it is because the principle is that the Crown is immune. The noble Lord knows perfectly well that Crown immunity does not mean that the Crown does not try to keep up correct standards.
§Lord MishconMy Lords, in the light of these uncivilised conditions, is it not surprising that the report also says that in the year 1988–89, £0.8 million of the budget was underspent for this prison?
Earl FerrersMy Lords, the £0.8 million underspent related entirely to administrative support and had nothing to do with buildings.
§Lord MonkswellMy Lords, Crown immunity appears to be part of the cause of the problem within Birmingham Prison. Will the noble Earl make clear to the House that the responsibility rests with the Government and not with the Crown?
Earl FerrersMy Lords, that is entirely correct.
Crown ImmunityHC Deb 13 November 1985 vol 86 cc558-9558
§37. Mr. Canavan asked the Solicitor-General for Scotland on how many occasions in each of the last six years he has been obliged to discontinue prosecution proceedings on the grounds that Crown immunity is involved.
§The Solicitor-General for Scotland (Mr. Peter Fraser) I know of no such case. Criminal proceedings should not be instituted in the first place if Crown immunity is a bar to prosecution. (Precisely. So when it comes to any individual daring to bring up the Birth certificate issue and the fact that the Crown, itself, is a “legal person”, you get nowhere. A mafia protects itself by immunising itself from any and all forms of attack simply by that same mafia making the law of the land. “It’s me who MAKES the law so my law states that I am unaccountable to it!”)
§Mr. Canavan In view of the statement yesterday by the Minister for Health that the Government were giving further consideration to Crown immunity in hospitals—whereby hospital authorities cannot be prosecuted if, for example, their kitchens fall below statutory standards of hygiene—will the Solicitor-General give a commitment that abolition of Crown immunity will be extended to Scotland? Why should the Secretary of State not be prosecuted if he fails to give hospitals enough resources and puts patients at risk by failing to keep the hospitals up to statutory standards?
§The Solicitor-General for Scotland The matter of Crown immunity is of United Kingdom application. As the hon. Gentleman rightly says, yesterday my right hon. Friend the Minister for Health said that he was considering the matter in respect of food hygiene regulations. If any change were to come out of that, prosecution would have to be considered, but first, we have to wait for what comes out of the review.
§Mr. Forsyth Does my hon. and learned Friend accept that this is a serious problem, because not only are hospital catering departments protected from competition, but they are now protected from action against them when they fall down because of incompetence?
§The Solicitor-General for Scotland I can only repeat that the matter of Crown immunity is there, and it covers hospitals. There can be no doubt about that. It is essentially a matter for my right hon. Friend the Secretary of State for Social Services. There has already been a clear sign that the matter is under review.
§Mr. Kennedy Will the Solicitor-General be directly involved in the review that he mentioned? Given that today all-party delegations have been to see his right hon. Friend the Minister for Health south of the border, have the Scottish Office or his Department had any input into the considerations thus far?
§The Solicitor-General for Scotland On the latter point, the hon. Gentleman will have to ask that question of the Secretary of State for Scotland. He will appreciate that the review is a matter for the Department of Health and Social Security to consider. As I have said, the issue of Crown immunity is of fundamental constitutional importance, and I anticipate that, if it were breached, there would be a wide-ranging review.
§The Solicitor-General for Scotland The situation is this. Even a number of employees within the NHS could be subject to prosecution if they were in breach of regulations. The position of private contractors is different. From what the hon. Member for Falkirk, West (Mr. Canavan) said, I understand that the point of greatest concern is what happens now, when there are no private contractors and the catering work is undertaken by the health board itself.
So let me put all this another way for you: Whatever happens to you in an NHS hospital bed, whether due to the negligence and inadequate funding BY THE CROWN or not, you can never sue that Crown for negligence. So the next time one of you monarchists out there are SUBJECT (good word isn’t it?) to such negligence, just smile and say “God save the Queen but not me!”
While, you may wish to think about the privatisation now of the NHS – What it does, in this time of “awakening” is get the Crown off the hook because, being run by private investors, they will now be liable to prosecution if THEIR standards are not up to standard so to speak. Now why do you think it will then all become so costly? Profit yes but also, these private interests will have to insure themselves against such potential lawsuits in future.
CROWN AGENTS BILL
§Order for Second Reading read.
§The Minister of State for Overseas Development (Mrs. Judith Hart) I beg to move, That the Bill be now read a Second time.
I have it in command from the Queen to acquaint the House that Her Majesty, having been informed of the purpose of the Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Perhaps the first thing that I should say is that this is historically a considerable event. It is the first time since their inception in 1833 that this House has legislated about the Crown Agents’ status. Therein has lain one source of the recent problems which have troubled us so much. I hope that the Bill will provide a sensible and satisfactory basis for the constitutional relationship between the Crown Agents, the Government and Parliament. It may even be that it can do so for the next 150 years, though I would not be so brave as to predict it.
I shall, of course, explain the Bill to the House. But at this point I can best summarise it by saying that it gives the Crown Agents a recognised legal status as a statutory corporation, responsible to the Minister of Overseas Development. It gives important powers of direction to the Minister, as in the case of other public sector corporations. It puts the Crown Agents on a financial basis comparable with that of other public corporations, including provisions about reserves, borrowing powers and audit arrangements.
But there is one important difference between arrangements in the Bill and other Acts of Parliament concerning natonalised industries and public sector bodies. It reflects the very special function of the Crown Agents in relation to their principals—their clients, whom they serve. The Bill carefully protects this, which is their traditional role, in their relationship with overseas Governments and bodies. It would not be right 586for the Minister and the Government here in Britain to be involved in the arrangements for procurement or money management carried out by the Crown Agents on the instructions of, and on behalf of, an overseas principal, subject of course to the proper financial safeguards in the Bill. So it is a public sector corporation with a difference.
To explain the real and urgent need for the Bill, which seeks to establish beyond doubt a new constitutional relationship, I must remind the House of the background. As hon. Members know, it has been my responsibility, shared with my Treasury colleagues, to cope—there is really no other word—with events, crises, urgencies and inquiries stretching back over the last three Parliaments. But one should begin at the beginning, and that was in 1833. The House will forgive me if I spend just a few moments on the history.
The Crown Agents were first established in 1833 by the Secretary of State for the Colonies, then Mr. Stanley, later the Earl of Derby, to act as agents for the procurement of goods and services for colonial Administrations. It was the heyday of colonialism and empire, and throughout the last centutry and the first half of this century a Crown colony Government would put its orders in to the Crown Agents.
The relationship with the Secretary of State for the Colonies emerges very clearly in a report of a Select Committee of this House in 1909. As a Minister, one does not have time for such entertaining historical reading, but I read it in the Library in my Oppoistion years as Shadow Minister, and I recommend it strongly as a fascinating read to give the full rich flavour of empire and colonialism.
The report, which was Cmnd. 4473, said:the Crown Agents form part of the general machinery of Crown Colony government and are necessarily subject to the instructions of the Secretary of State.The fact that the Crown Agents are allowed, especially in financial matters, considerable discretion in transacting a Colony’s business, and that it is their duty to point out to a Colony if and when its interests could best be served by some modification in its orders, certainly does not enable them to overrule the maintained opinion of a Colonial Government. They may appeal to the Secretary of State from the decision of the Colony, and ask for his instructions on uncontroversial matters when 587the question is urgent and cannot wait for reference to the Colony; but the Secretary of State decides all such questions on his own authority in virtue of his powers of control over the Crown Colony Governments, and the Crown Agents can only act on his instructions, and have no independent authority. On this question the Committee feel that the evidence which they have taken leaves no doubt.The evidence of an assistant undersecretary, Mr. Bertram Cox, to that 1909 inquiry further clarified the position. The Crown Agents were—servants of the Colonial Governments paid out of Colonial funds … and appointed by the Secretary of State as representing the Crown’s final controlling power in Crown Colonies.So in 1909 the Government had complete powers of direction on questions of detail as well as of principle, exercised through the Secretary of State for the Colonies. So continued the position.
The next time Parliament interested itself in the Crown Agents was in the Session of 1947–48. The Estimates Committee reported on colonial development. Perhaps it was inspired by the grant of independence to India in August 1947. In the course of its investigation, which was concerned mainly with delays in procurement of orders, it took evidence from the Senior Crown Agent of the time, Sir John Calder. In its report, which was the fifth report in Session 1947–48, it said inter alia:The Crown Agents act on behalf of Colonial Governments in a great many matters requiring to be dealt with in the United Kingdom. Though they are under the general supervision of the Secretary of State for the Colonies, the Crown Agents receive their instructions direct from the Colonial Governments.The Government’s reply to various of the recommendations made in that 1947–48 period included this:It must be remembered, however, that the Crown Agents are in fact, as well as in title, the agents for Colonial Governments; and that it is only in very exceptional circumstances that interference can be justified with the normal flow of orders placed and deliveries secured by an agent.So, looking at it historically, between 1909 and 1947 it would seem there had already been a subtle change of emphasis, probably as a result of the emergence of self-government in a number of colonies. The Secretary of State for the Colonies had slightly distanced himself from the Crown Agents.
588In 1954 it was announced in the London Gazette that the Queen had approved the change of name from “Crown Agents for the Colonies” to the “Crown Agents for Oversea Governments and Administrations”, which is the title that we give to them in the Bill. It was from that point onwards, in my view, that the area of constitutional confusion developed, as what is summarised as “the wind of change” swept through our world of empire. In 1965 the management structure of the office was reorganised and a board was formed consisting of the Senior Crown Agent, Assistant Crown Agent, Assistant Crown Agent and Engineer-in-Chief, the Directors of Finance and Contracts, head of the computer installation group, Establishment Officer, Head of External Relations Department and an Additional Member—capital A, capital. M. When Sir Stephen Luke retired as Senior Crown Agent in 1968, the title of the office was changed and Mr. Claude Hayes—now Sir Claude Hayes—was appointed as first chairman of the Crown Agents. In the same year management consultants recommended the continuance of the board system of management established in 1965 and advised an extension of membership. Four additional directors were appointed.
In August 1966 the Secretary of State for the Colonies disappeared—not literally; my noble Friend Lord Lee of Newton has certainly not disappeared. His post was absorbed into the Commonwealth Office, and in fact I replaced him as Minister of State. In October 1968 the Commonwealth Office merged with the Foreign Office.
The next clear statement of the relationship between the Government and the Crown Agents occurred in 1968. The noble Lord, Lord Brockway, speaking of arms supplies to Nigeria, asked:Who are the staff at the Crown Agents? … Are they British civil servants? Have they any responsibility to the Houses of Parliament?In reply, the Government spokesman, then Lord Shepherd, said the Crown Agents werea completely independent body responsible to no Minister and not responsible to Parliament.”—[Official Report, 29 April 1968; Vol. 921, c. 951–69.]My own inquiries in early 1970—as the Fay report records—established only 589that the Minister of Overseas Development had the power to appoint the Crown Agents but appeared to have no power to give them directions, and that the constitutional position was, to say the least, unclear.
This Bill makes it clear, and, I hope, clear beyond doubt. The Crown Agents will retain the title given to them in 1954—the Crown Agents for Oversea Governments and Administrations. But, in spite of the name, they will no longer retain their present Crown status, which is why I made my introductory remarks about the consent of the Queen. Also, they will lose their present immunity from taxation.
On the appointed day, when the new corporate body comes into existence, it will be my intention to appoint the chairman and board at present serving in our ad hoc situation. They are doing a splendid job, and have done so in very difficult circumstances, as indeed did the recently retired chairman, Sir John Cuckney, who met the acute crises of the past years with courage, resilience and determination. We owe a great debt of gratitude to him. We are fortunate that Mr. Eburne has now succeeded to the post of chairman. He was managing director, and is thoroughly familiar with the Crown Agents’ affairs. I am confident that he will carry on the work of his predecessor with the same success.
I would also like to thank a number of hon. Members on both sides of the House for their co-operation in all our joint efforts to retain overseas confidence in the Crown Agents at those points when I have had to announce Government support for them as the degree of financial crisis in the past unfolded. We have succeeded. Their traditional operations, so valuable overseas, have not suffered. They stand high in respect and regard all over the world.
The Bill regularises the constitutional relationship. I have given an interesting historical background to that. It provides for the capital structure of the Crown Agents. It defines their functions and powers. It does not impair the traditional confidential nature of their relations with their principals.
I turn now to the financial aspects. I would like to stress that the Crown 590Agents have no liquidity problem, and under the arrangements proposed the new Crown Agents will start on a sound footing. As the House will recall, in July 1974 I directed the Crown Agents—on this ad hoc basis without proper constitutional backing—that they were no longer to engage in own-account activities in property and secondary banking.
On 31 July 1974, I announced the creation of a new board structure for the Crown Agents; the appointment of a new chairman from 1 October; and my intention to issue new investment guidelines for the own-account business. On 18 December 1974, I told the House of Commons of the Crown Agents’ financial difficulties and announced the Government’s intention to provide a recoverable grant of £85 million. On 23 April 1975, I announced the Government’s decision to appoint a committee of inquiry under Judge Fay, QC.
On 16 October 1975, the Government announced their intention to publish a White Paper setting out their proposals for legislation to incorporate the Crown Agents. The White Paper was published in April 1976. On 3 May 1977, I told the House of the arrangements which had been made for dealing with the Crown Agents’ Australian property investments, and in July 1977, on my instructions, my Department issued further detailed guidelines to the Crown Agents about consultation over realisation of their own-account investments.
On 1 December 1977, the report of the Fay committee of inquiry was published, together with the earlier Stevenson report, which I felt should be published, and a statement by the Government. On 15 February 1978, I announced the Government’s intention to give a further grant of £90 million to the Crown Agents in respect of losses on their own-account business, and on 28 February 1978, following a considerable debate in the House in December, the Home Secretary announced the Government’s intention to set up a tribunal of inquiry into the conduct of events described in the Fay committee’s report.
As I told the House in reply to a question yesterday, there is no longer any need to have the standby facility with the Bank of England. This was arranged in December 1974 as part of the rescue 591package. It is not needed because the liquidity position of the Crown Agents is now entirely satisfactory, so it has been discontinued. We have had to provide two large grants, as the House is very well aware. It is also aware that the full background to the own-account activities of the Crown Agents which led to this disastrous situation are now being fully investigated by the tribunal of inquiry under Mr. Justice Croom-Johnson.
§Mr. Dennis Skinner (Bolsover) Can my right hon. Friend assure the House that in the period after 1974, when properties were sold off which hitherto had had connections with the Crown Agents in this rather sleazy episode, the disposals were made correctly and in the appropriate manner? This part of the operation will not be dealt with by the Croom-Johnson tribunal, which is concerned only with events up to 1974.
§Mrs. Hart My hon. Friend is right. The tribunal of inquiry will be dealing with the events that led to the disastrous losses on own-account activities. I gave instructions to the Crown Agents to disengage from those own-account activities in property. The process of disengagement has been a matter of steady and, I hope, careful and intelligent consultation between myself and the Chief Secretary, together with the Crown Agents themselves. If my hon. Friend has any doubts about the way in which the process of disengagement has occurred—
§Mrs. Hart My hon. Friend wrote to me. I wrote to him about one or two aspects of this matter. If he wishes to discuss this further or write to me about it, I shall be happy to engage in that. The realisation account is a matter for the Chief Secretary, myself and the Crown Agents. I should not wish to feel that anything that was done in the process of that, which we could affect, was not being corrected. I hope that that meets my hon. Friend’s legitimate point.
This is relevant to my hon. Friend’s point. The Bill provides for the maximum possible separation between the financial consequences of those own-account activities between 1967 and 1974 and, on the other hand, the Crown Agents’ financial responsibilities in their 592continuing traditional services. This is to be done by incorporating also a separate holding and realisation board. It will have the same management as the Crown Agents but will be under direct and close ministerial control, which in effect means very close consultation between myself and the Chief Secretary, concerning the management of the withdrawal from past own-account activities from which disengagement is to be made—which means of all of them. On all these matters I consult closely with my right hon. Friend the Chief Secretary.
The major remaining unrealised asset lies in the Abbey Capital Property Group investments in Australia. A fairly lengthy period of disengagement offers the best prospect there of reducing demands on public funds. We should not do it too quickly. It is best to make it a fairly lengthy period. When the realisation account is no longer needed, the separate holding and realisation board will be wound up. If, in the event, there should prove to be a surplus, there is provision in the Bill for the Minister to pay this to the Consolidated Fund in recognition of the grants made as a result of the Crown Agents’ losses on their own-account business.
I am certain that I have taken scrupulous care, which the House would want me to do, to protect the confidential relationship between the Crown Agents and their principals. In the Bill before us, the Minister does not intervene in the day-to-day operations involved in this important relationship, which lies at the heart of the Crown Agents’ success in their traditional activities of procurement and services for overseas countries and public bodies. It is most important that this should be so.
The Crown Agents’ functions have grown steadily and successfully over the years to cover not only procurement but recruitment, management and investment on behalf of and as agents for their principals. Those hon. Members who read the Quarterly Review of the Crown Agents will be well aware of the importance of all they do and of its value to so many Third world countries.
At the same time, I have been determined that there should be complete safeguards against any possibility that at any time in the future the Crown Agents 593might follow the dangerous road which they pursued in their own-account affairs a few years ago.
We all know of course—as I have said in the House before on a number of occasions—that what essentially happened was that the Crown Agents walked straight into the trap of property speculation. They did it not only unwisely but with amateurism. I must not trespass upon the affairs of the tribunal of inquiry, but I have said these things sufficiently often before not to do so again. I can refer to a number of highly informed newspaper comments by reputable and distinguished financial journalists. The Crown Agents involved themselves with the shady side of the City.
I should like to pay a particular tribute to Mr. Charles Raw, then of The Guardian and now of the Financial Times, for the investigative work he did, which my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham)—who I know is not able to be here today—and I so much appreciated at a time when we were all trying to look into these matters.
This must never be allowed to happen again. So I have taken specific and considerable powers in this Bill, for any Minister to exercise in the years ahead, to define and direct what the Crown Agents may and may not do in their own right, as distinct from acting on behalf of their clients and their principals. Very largely these powers, spelled out in necessary detail, I fear, in the Bill, embody the practices which have been willingly and happily agreed upon and accepted by the Crown Agents without legislative backing since the new era began in 1974.
The Minister’s powers of direction in these matters are comprehensive and precise. But I think this is necessary. I think it is right. I hope that the House will agree.
The Bill is not a simple one, but I should tell the House that every possible effort has been made to make it as clear-cut as it possibly can be. I use a cliché, but no stone has been left unturned to make it as short and understandable as strict legal requirements allow.
I should draw attention to one aspect of the Bill in clauses 4 and 5. It seemed 594right to me that we should not at this moment in time encapsulate the Crown Agents in their present field of activities on behalf of their principals, so we do not define them once and for all in this Bill. It allows an extension of their services and activities in the future, but it provides that any such extension shall have the approval of Parliament. For example, at present the Crown Agents carry out feasibility studies for development projects. They provide inspection services for the supply of goods. They give professional advice on technical matters. All these activities they carry out as paid services to their overseas principals.
The Crown Agents also act for us under various technical co-operation schemes such as the Colombo plan, and they administer the supply of goods which we supply as tied aid both for development projects and programme aid. They are often deeply and quickly involved in our urgent disaster relief programmes.
A number of these activities have developed very substantially during the last decade or so. I think it is right that a door should be left wide open for the future. I should not like to find—or for my successor to find in years to come—that some valuable new area of activity in which the Crown Agents could even more usefully help their overseas principals, or enter into even closer co-operation with our programme of development assistance to the Third world, was closed to them because this Bill was too tightly drawn.
§Mr.Christopher Price (Lewisham, West) The Minister spoke of some of the services which the Crown Agents perform for the Government. She referred to additional services that might take place in the future. She will be aware that at one stage many of our defence arrangements, run under Millbank Technical Services which somehow turned into International Military Services, were hived off from the Crown Agents and put under the Ministry of Defence, where I suspect they should properly be. Will the Minister give an assurance that she does not envisage the Crown Agents taking on further defence responsibilities of that kind as an agent for the Government? Can she see any other areas similar to Millbank Technical Services 595which should properly be taken away from them and put directly under Government Departments?
§Mrs. Hart I can give my hon. Friend that assurance. The hiving off of Millbank Technical Services to the Ministry of Defence is now absolutely complete. The Bill does not, and the Crown Agents do not, deal in that way with arms supplies. That is entirely a matter for the new body which is responsible to my right hon. Friend the Secretary of State for Defence. I do not envisage in any way that by opening a door here for future developments we are at all likely to include anything to do with defence and arms sales. This is one of the reasons why the hiving off took place. It is most important that any activities that we might envisage in the future for the Crown Agents—that is why I want to leave a little door open, subject to parliamentary approval—should be concerned essentially with development. I give my hon. Friend that complete assurance. He will find that the Bill is drafted tightly enough to provide that assurance within its clauses.
Essentially, then, I want to leave freedom for the right kinds of initiatives concerned with development—freedom to meet the changing needs which could arise in the years ahead and to respond to new challenges in development. We cannot at this moment say what they will be. But it is right that Parliament should approve any developments of this kind, and clauses 4(3) and 5(5) do this.
There are, naturally, several clauses in the Bill which follow standard Treasury procedures in relation to public bodies, and which can be further explained, if need be, in Committee. They provide for an appropriate capital structure, with the usual powers of borrowing to meet the functions very precisely specified in the Bill and its schedules.
The Bill, in clauses 13 to 24, brings the Crown Agents for the first time within the general financial framework for public sector bodies, as outlined in the Government’s White Paper on the nationalised industries, published in March last year. In particular, it has been decided that the Crown Agents, like other bodies in the public sector, should be required to make a reasonable return on the public resources invested in them. This is a 596necessary test of whether those resources are being efficiently used—until we discover some other test that serves the purpose. Thus, the Crown Agents will be required under clause 17 to assume a commencing capital debt in respect of the assets transferred to them on the appointed day.
This debt will be deemed to be a loan from the national loans fund, which means that the Crown Agents will be required to service the capital employed in their assets at the rate of interest which would have applied had they borrowed from the national loans fund in order to acquire their assets. Rates of interest on loans from the NLF are geared to what the Government have to pay to borrow money. This represents a change in the financial basis on which the Crown Agents have operated to date, and the Bill therefore provides for a transitional period of five years, which may be extended to seven years by order, during which interest on the debt may be waived. This should give the Crown Agents time to adjust to the new financial framework.
There is no question of levying interest charges on the Crown Agents during this period in a way that would put their commercial viability in doubt, nor is it the intention in any way to penalise the Crown Agents for the own-account losses of the past. The financial powers and duties laid down in the Bill with respect to the Crown Agents have been drawn up solely and entirely in relation to the ongoing business.
§Mr. Nicholas Ridley (Cirencester and Tewkesbury) I should like to put a question to the Minister, to clear up a doubt in my mind. If the Crown Agents prosper, will they be allowed to pay back their £25 million commencing capital debt, or whatever it will be, or is that something that the hon. Lady envisages will remain for ever?
§Mrs. Hart Perhaps we can explore this in greater detail in Committee, but the position is that there are the two accounts, the realisation account and the normal account. If on the realisation account it is possible to pay back into the Consolidated Fund money which has been granted by the Government, that will be done. That is the purpose of having the two accounts. Concerning the seven-year period during which the 597Government will decide what is the proper rate of return, we shall be having regard to the circumstances of the Crown Agents during those years. But perhaps we can explore this a little further in Committee.
We have, of course, very recently had another illustration of the unsatisfactory nature of the existing constitution of what the Bill describes as the “unincorporated Agents”. This was the legal advice, of which I informed the House three months ago, to the effect that in strict law the Crown Agents’ revenues should have been paid into the Consolidated Fund as hereditary revenues of the Crown, and their expenditure met from Votes. I remember reminding the House that this all went back to William IV. It was described by a Conservative Member as a bizarre situation, with which I completely agree. In addition, as a matter of constitutional practice, their borrowing should have had the authority of Parliament. I told the House then that I could see no alternative to allowing the Crown Agents to carry on as they had for many years, until we could legislate to regularise the position. The House will, I am sure, be glad that this can now be done in the Bill, and I shall be glad if the House will be so kind as to do so. I hope that the House will agree to make an honest woman of me, because that legal discovery made me feel that I was offending a little against all constitutional proprieties.
There could have been alternative approaches to that which is presented here. As the House will know, the Stevenson report, presented in 1972—which I decided in 1977 should be published—put forward some possible options, and there have been others. They ranged from incorporation by Royal charter to a mere definition of powers and functions with no statutory backing, and from a public trust to incorporation as a limited liability company.
I do not believe that any of these would meet our needs. We must have the firm legislative authority of Parliament to define the functions and powers of the Crown Agents, against the background of the past. We must create a sound and responsible capital structure with sensible financial arrangements. I believe that the Bill provides a workable 598and flexible basis for the future and which can, I hope, carry on into the future.
I mentioned earlier the great anxieties that we have all had at the various points of past crisis. It was always utterly possible that there could be a crisis of confidence overseas in the Crown Agents. A great deal of consultation and care went into every one of my past statements. I stressed throughout that the Government stood behind the Crown Agents, and I know that Opposition Members supported that view as much as did my right hon. and hon. Friends. It is now in the past. The Crown Agents, concentrating now entirely on those traditional services upon which their history has been built, are going from strength to strength. They deserve to do so. I hope that we can all agree, as I know that overseas Governments agree to do, to regard the inquisitions upon the past as just that—inquests upon a brief inglorious and costly episode in a history of over 150 years.
I am sure that the whole House will agree that we all place our complete confidence—and the backing of Parliament as well as of the Government—in the ability, the capacity and the potentiality of the Crown Agents to serve their overseas principals in a way which will assist the process of development which will engage them in one of the most fundamental economic developments in the world today.
§Mr. Richard Luce (Shoreham) The Minister will know that on a number of issues concerning overseas development she and I do not always see eye to eye. On this occasion, she will not be surprised to learn that we on this side of the House give full support to the principle behind the Bill. It can only be right that the status and the function of the Crown Agents should be clearly defined for all to see, that the Crown Agents should have proper statutory authority, and that they should be fully accountable for their activities.
The catalyst for the introduction of this Bill has been the appalling story of the so-called own-account activities, the financial disasters that took place in the 1960s and, particularly, in the early part of the 1970s. I agree with what I believe the Minister was implying in her599introduction to the Bill, that a sharp distinction should be drawn between the traditional services of the Crown Agents, that have grown up substantially and steadily since the establishment of the Crown Agents in the last century, and the short-lived but nevertheless sad episode of the own-account activities. The Government seem to acknowledge that there should be a sharp distinction. As the Minister explained, the Bill establishes two separate organisations to deal with the two separate sets of activities or problems.
The Crown Agents are a unique organisation providing a unique range of services. I can think of no parallel organisation, certainly in the United Kingdom, or, indeed, in any other part of the world. Perhaps some hon. Members can. I do not believe that there is an organisation in any part of the Western world which is parallel to the kind of organisation that has grown up in the form of the Crown Agents. It is right that we should consider this as a unique body and deal with it on a pragmatic basis. We should accept the Bill in some respects as a unique measure to deal with the situation.
The right hon. Lady has set out clearly the historical background to the introduction of the Bill. I do not intend to weary the House by repeating what she has said. She has highlighted the fact that since the early part of the last century, for nearly 150 years, the Crown Agents, who started by providing a service for the procurement of goods and services to our colonial territories, have expanded and extended their range of services to the financial, professional, technical and commercial fields, provided in various colonial dependencies and to a vast range of independent Governments, most of them, if not all, members of the Commonwealth, granted independence in the 1940s, 1950s and 1960s.
Two notable developments have occurred since the independence of these countries. The first, stemming from the process to independence, was the financial disaster and the accompanying reports and inquiries with which we have been dealing throughout this decade. Secondly, the Minister revealed another notable facet to the whole problem on 10 November last year when she told the House in so many words that some genius— 600because he must be a genius—in her Department—
§Mr. Luce—well, some genius in the Government or somewhere—I would love to know who he was, because, if we are to have an honours system, he deserves a high honour—had actually discovered that after nearly 150 years of the existence of the Crown Agents they had been operating, however successfully in their traditional services, illegally and unconstitutionally.
An extraordinary situation was revealed to us. I described it at the time as an Alice-in-Wonderland situation. We had two options. One was to deal with the matter promptly, to face the past and eliminate it and to produce this Bill. Alternatively, I suppose, we could have had another inquiry, summoning from the dead all the ex-Secretaries of State for the Colonies since 1833, and taking further evidence. But this Bill is also intended to deal with that situation.
I should like to say a few words about the own-account side of the Crown Agents and then briefly turn to the traditional services. As the Minister has said, the problem of the financial crisis of the 1960s and the 1970s stemmed from the process towards independence of these Governments. The right hon. Lady has stated that while they were colonial territories they were the responsibility of the British Government and there was therefore a much tighter control, using the Crown Agents as the agents over the whole operation. As these territories proceeded towards independence, I can understand that the Crown Agents were anxious to know how their organisation would develop, how they would make themselves viable in the long term, and how they would get extra business.
The White Paper of 1976 highlighted this problem as perhaps one of the reasons why the Crown Agents had a major financial setback. They developed a wide range of services and built up investments and reserves. They invested catastrophically in secondary banking and property development. We know the story of the insolvency, of Government grants, of the inquiries and the losses which, I believe, amounted to over £200 million. The whole story is familiar to the House.
601The Fay report contained a massive condemnation of unwise decisions taken by those within the Crown Agents at the time, the lack of expertise, the neglect of accounting systems and also the failure of Governments to inform themselves of developments. We now have yet another 1921-type tribunal to look at the past. It has been a sorry chapter in an otherwise distinguished history for the Crown Agents.
The Minister has provided in the Bill for a Crown Agents holding and realisation board. She is right to treat that as a separate problem. The right hon. Lady described as recoverable grants the two sets of grants of about £175 million provided by the Government. It is obviously hoped to recover as much as possible. It would be helpful if the Minister who is to reply to the debate could say more about this matter. I appreciate the right hon. Lady’s point that it may take time to recover some of the losses.
I should like an impression of the Government’s hopes for recovering at least part of this sum, although it would be better if the whole of the grant could be recovered. I should also like to know how long the Minister expects it to take to make a reasonable recovery on the losses. It is sensible to allow time. There is property in Australia. It would be sensible to allow the realisation of possible potential assets there.
§Mrs. Hart I do not think that my hon. Friend the Under-Secretary will be able to add much to what I have said. As hon. Members will be aware, it is a most difficult procedure to anticipate what one may recover in terms of selling assets. The Australian property investment is one which we think, if we take a little time, may yield something. But it would be most unwise to make any predictions as to whether we think we will get some money back. It is not predictable at the moment.
I turn to the traditional services. It is remarkable to note the wide range of principals served by the Crown Agents. 602They include more than 100 Governments, all within the Commonwealth, local government organisations, many ports and harbours throughout the Commonwealth, banks and currency boards all over the world, development and research bodies, universities and schools in the Commonwealth and Government-sponsored organisations in this country and elsewhere. It is not fully understood what a remarkable range of principals the Crown Agents serve.
It is a measure of the maintained confidence that the principals have in the Crown Agents that, despite the financial setbacks of the past few years, the traditional services have continued to increase. The House and the country should note that.
The Crown Agents provide a wide range of services which were listed in the 1976 White Paper. They bring in visible and invisible earnings and make a healthy economic contribution to this country. They serve many of our traditional Commonwealth friends in many ways. For example, they have recently provided railway wagons for Bangladesh, cyclone relief equipment for India and a colour television station for Brunei. Those are just some examples of the remarkable range of services that they provide for the Commonwealth, the Third world and many of our traditional friends throughout the world.
My hon. Friends and I believe that in the previous chairman, Sir John Cuckney, and the present chairman, Mr. Eburne, the Crown Agents have had two outstanding men who have contributed in a unique way to enabling the Crown Agents to get through a very difficult period and to enter a new and healthier future. That is good news for the House and for the country.
The Bill provides for an incorporated body for the traditional services. I agree that it is right to have tight ministerial control over the own-account activities, which will have a separate board, because they involve a great deal of taxpayers’ money.
The Minister started to explain the structure for the traditional services. The Stevenson report suggested four models for consideration. One was a nationalised industry-type model and the second suggestion, which was most strongly recommended, was a model on the lines of a603private sector body with minority Government interests. I accept that a lot of water has gone under the bridge since that report was prepared, and the financial aspects have been the main part of the story.
The Minister told us that none of those models has been accepted. She has taken parts of models one and two and has established a body along the lines of the relationship between the Government and the Commonwealth Development Corporation. Perhaps the Minister who is to reply will indicate whether the Government see that proposal as distinctive from the four recommendations of the Stevenson report. It would be helpful to have the Government’s understanding on the record.
When I approached the matter in 1974, I did not do so on the basis of asking which of the possible Stevenson recommendations could be accepted or modified. I took a new view of what should be the responsibility between the Government and the Crown Agents in order to protect the taxpayer against future losses. It was a matter not of taking the Stevenson options and asking whether we could modify them but of taking a distinctly new approach.
The question of accountability is critical. It is crucial that Parliament should be able to scrutinise sensibly the activities of the Crown Agents. I hope that the Minister who is to reply will tell us to what extent he and his right hon. Friend will be able to answer questions in the House and how far they will be able to go in answering questions on both aspects of the Bill—the own-account activities and the traditional services.
Subject to closer scrutiny in Committee, I hope that the Bill will provide the basis for the eradication of the one major financial blot in the history of the Crown Agents and, more important, will provide 604a foundation for a new era to enable the traditional services to expand their business confidently to the benefit of both this country and many Commonwealth countries.
§Mr. Donald Anderson (Swansea, East) The Crown Agents are a peculiarly British institution. They were not planned and their role developed, as we have learned lately, in an unconstitutional way over a longish period at a time of rapid change in the decolonialisation period.
The role of the Crown Agents was adjusted to meet new demands, but their services were greatly valued and, had they not existed in their original form, something like them would probably have had to be invented. They have played a significant and beneficial role and have made a major contribution to British prestige overseas and to our own industrial and export efforts.
I agree with the hon. Member for Shoreham (Mr. Luce) that it is sad that, after such a long and distinguished history, the Crown Agents’ record was impaired in the early 1970s as a result of their intoxication in the heady days of property speculation. Amateurishness was displayed by the Crown Agents in the own-account activities in that area—though many who thought that they were experts also had their fingers badly burnt at that time.
Worse than that, there was a lack of control by the Government at that time. It is significant that it was largely as a result of investigative journalism by Mr. Charles Raw and others that the full extent of what was going on was revealed to the public. The result of those activities must have been a considerable blow to the morale of those working for the Crown Agents, and there must have been some diminution of the esteem in which the Crown Agents are held overseas. However, it is good that the principals are still going—and now in greater numbers—to the Crown Agents, recognising that that was but a brief and unhappy period in what has been an excellent record of service to their principals over a long period of time.
What are the lessons of the past that have been revealed by Fay and are now being revealed by the tribunal? The 605Government have sought to learn those lessons and to make control as watertight as possible over the Crown Agents by the Treasury and by Parliament. A good example of such increased control is the one given by my right hon. Friend, namely, that Parliament should be consulted for approval before there is any extension of the competencies of the Crown Agents. That is set out in clause 4(3).
However, in spite of the commendable attempt by the Government to make more watertight the Executive and legislative control, I feel that there are still gaps in the Bill that might properly be filled to ensure that what occurred in the early 1970s will be a thing of the past, because that was an unhappy blot on an otherwise excellent record.
I believe that Treasury control of the Crown Agents should be spelt out more clearly in the Bill. Clause 18(4) provides:The Minister shall not give any consent or authority under subsection (2) or (3) except with the approval of the Treasury”,but that provision has not been made in clause 6, relating to ancillary powers. Subsection (3) (b) states that the Crown Agentsexcept with the consent of the Minister, shall not have power in their own right to guarantee any obligation (however arising) incurred by such a subsidiary.The Treasury is not mentioned specifically there, but it is in clause 18.
Surely the lesson of the past, revealed particularly by Fay, is that the Treasury must be given muscle to intervene directly. Officials of the sponsoring Department were previously misled or bamboozled—or perhaps there was inadequate financial expertise in the Department. The Treasury must be shown at every stage to have ultimate authority, and that should be written into the Bill in much clearer terms. It is mentioned in clause 18 as a specific reference to overseas transactions, but I believe that there should be a specific reference in clause 6, as it may also encompass overseas transactions.
I turn to the control to be exercised under the new dispensation by the House over the Crown Agents. The Bill recognises, properly, that the shareholders in the new company are the taxpayers, who 606are represented in the House. Therefore, there should be proper control by the House over the activities—and the possibly extended activities under clause 4—of the Crown Agents. If that control is to be meaningful, Parliament should see the report and the accounts as soon as possible.
The Bill lays reasonably strict obligations on the Crown Agents vis-à-vis the Executive. The obligations vis-à-vis Parliament are not nearly so strict. It was pointed out by Fay that the lack of time limits caused a number of the problems associated with the sad events of the past. There should be a strengthening of the time limits in clause 11, particularly under subsection (1). There should be a strict timetable within which the Crown Agents must report to the Minister and consequently the Minister to Parliament.
For example, what objection can there be to an obligation on the Crown Agents to report within a period not less than a stated maximum? Similarly, under clause 11(3) why should there not be an obligation to lay the report in Parliament within, say, 28 days of receipt? There can be no question of waiting for the audited accounts, because those will be dealt with separately. Parliament is entitled to know when it can receive the reports.
There is a distinction between the lack of time limits under the reporting clause, clause 6, and the obligations under clause 22(7), where it is said:As soon as the accounts kept, and the statement or statements prepared, by the Crown Agents in pursuance of the preceding provisions of this section have been audited, the Crown Agents shall send to the Minister a copy of the statement”.Therefore, there is an immediate obligation at that time. There is no similar obligation in clause 11 in respect either of a report to the Minister or the laying of that report by the Minister to Parliament in clause 11. If, in reply, my hon. Friend says that no Minister would unduly delay the laying of such a report. I feel that is hardly an onerous obligation on the Minister. It would be, in strict terms, what the Minister would do in any event.
A relatively minor point is the possible unfairness vis-à-vis the principals under clause 8(3). Unlike the normal agent 607at common law, the Crown Agents do not have to account when acting as a surety—they only pay interest. Therefore, that goes further than in a case of an ordinary agent and may enable the Crown Agents to make a profit out of smaller associated States which pay in advance.
I am told that in some cases, and for certain services, the smaller associated States are bound to use the Crown Agents. That would not be significant in the case of, for example, Hong Kong and countries of that financial standing which are able to look after themselves, but it would be more significant for the smaller States. The Government should consider carefully whether the interest obligation in clause 8 should be at normal commercial rates of interest—bank rate plus 2 per cent. or whatever is the relevant definition.
I welcome the Bill. It represents a major advance in control over the Crown Agents. I believe that control can be strengthened in the respects which I have mentioned, namely, control by the Treasury and by the House. That might be done, and certainly is done by the House, by stricter time limits being set and by not having a discretionary reporting obligation.
I welcome the Bill. It is a pity that we have had to wait nearly three years for it, following publication of the White Paper in 1976. One does not normally go into great detail on Second Reading, but there is one aspect of the Bill which is worthy of being brought out here and now. I refer to clause 32(3), which deals with the repeals in schedule 7. This Bill will have the effect of repealing the whole of the Moneylenders (Crown Agents) Act 1975. That was retrospective legislation introduced by the right hon. Member for Newham, North-East (Mr. Prentice) when he was a member of the Government. Much as he despised bringing forward retrospective legislation, it was necessary for the public purse, in effect, to fund the bucket-shop operations which had been carried out to the tune of £85 mil- 608lion because of the unacceptable aspects of capitalism that the Crown Agents had unwisely got themselves into. It is nice to know that that Act will no longer remain on the statute book following the passage of this Bill.
I think that people should constantly be reminded of the actions of the Crown Agents and the fact that the Government—the taxpayer—had to come to the rescue of many fringe operators in the City. I refer to some of the fringe banks and the property speculation which went on with the misuse of the Crown Agents’ funds. It was outrageous. It is a tragedy that it has taken so long to find out what went on and to do something about it.
I want to ask only a few questions of my hon. Friend the Parliamentary Secretary. I hope that he will forgive me if I speak briefly, but I have to attend a meeting. If my hon. Friend wishes to write to me about these matters, I shall certainly take on board any comments that he makes.
The questions relate to certain aspects of the Crown Agents’ operations. The Crown Agents go under many names. There were many subsidiaries of the Crown Agents. One could not tell from looking at the name of a company whether it was the Crown Agents. Occasionally, if one was in the know and knew the address of the Crown Agents at 4 Millbank, when one saw a company, such as Four Millbank Nominees or Four Millbank Holdings, the bells might ring and one might realise that was the address of the Crown Agents.
The Crown Agents went under many other names as well. One was Millbank Technical Services Ltd.—MTS—which operated in a wide range of spheres. Of course, it provided business for this country. I applaud the operations of the Crown Agents 100 per cent. I do not knock them in any shape or form. But, because of their unincorporated status, they had to create these self-imposed internal quangos, as it were. All the agents put themselves on the boards and sought business overseas for this country.
On 24 November last year I spotted a question by my hon. Friend the Member for Walsall, South (Mr. George) about Millbank Technical Services Ltd. The question was posed to the Secretary of609State for Defence. I could not see the significance of it at the time. It turned out that the name Millbank Technical Services Ltd. had been changed to International Military Services Ltd.
On 11 December last I put down a question asking the reasons for that change. I was referred back to an answer on 29 March 1977 in reply to a question asked by my hon. Friend the Member for Dearne Valley (Mr. Wainwright), who, as far as I know, had no wide-ranging interest in the operations of Millbank Technical Services Ltd. or the Crown Agents. I am not knocking my hon. Friend. However, he had clearly been co-operating with the Minister by putting down a question so that the Minister could make a statement. It was a planted parliamentary question. It happens all the time.
MTS was a wholly-owned subsidiary of the Crown Agents. It was supposed to have been getting orders from overseas principals for all kinds of civil and defence equipment to be supplied mainly by British companies. In 1977 the Crown Agents were still a matter of public and almost daily concern in this House. MTS was wrapped up. Its name was changed and ministerial accountability was transferred from the Ministry of Overseas Development to the Ministry of Defence. It would seem that the most massive laundering operation of the decade has been perpetrated. It is not shown in the Bill, as far as I can tell. This operation has been carried out by virtue of planted parliamentary questions and announcements. There was a further question only a few days ago. On 29 January my hon. Friend the Member for Horn-church (Mr. Williams) put down a question, to which the answer was that the shares had been transferred on 24 January 1979—the day before the Bill was published. The Bill was actually published on 25 January.
For two years there had been questions and answers telling us in obscure ways that this laundering operation had started. Then, on the day before the Bill was published, the shares in International Military Services Ltd. were transferred from the Ministry of Overseas Development or the Crown Agents—they are one and the same as far as I am concerned—to the 610Ministry of Defence. Apparently legislation will be brought forward as soon as parliamentary time permits to cover that.
Why is there not a schedule to the Bill to deal with that matter? This is the appropriate vehicle. There is no pressure on Second Reading. This debate will be over in a few minutes. Why has this Bill not been used as the vehicle for transferring those shares? If it were, hon. Members could discuss this laundering operation in the context of the change of status of the Crown Agents now and not in some future debate on the Army or on some aspect of the Ministry of Defence.
Some commissions have been paid or earned—I have to use the word “earned”—by people working for Millbank Technical Services Ltd., such as the famous Sir Shapoor Reporter, who was reputed to have got £3 million commission for arranging to flog or sell 800 Chieftain tanks to the Shah of Iran. That is some commission—£3million. It is a good thing that the Shah did not buy Concorde. I understand that Sir Shapoor Reporter would have got £10 million commission through MTS, because he was the agent—”consultant” was the posh name used—of the Crown Agents and Millbank Technical Services Ltd. as well as the Ministry of Defence, the British Aircraft Corporation missile division and GEC.
MTS is now dead and buried. The name has been changed and responsibility for the shares has been moved to another Department. There have been no press statements about this matter. It has been done by planted parliamentary questions. Why is the Bill not being used as the necessary parliamentary vehicle to effect that transfer? Last week it was admitted that on the day before the Bill was published the shares were transferred in deed and name.
Is any action being taken about the commission paid by MTS and the Crown Agents to people, such as Sir Shapoor Reporter, who got massive commissions out of these contracts? That is the way business is done in the Middle East. Is anything being done to recoup any of that commission?
I do not expect my hon. Friend to give off-the-cuff answers, because I did not warn him that I proposed to raise these matters tonight. If my hon. Friend would 611care to write to me, or arrange for one of his ministerial colleagues to write to me, about this matter, I would be extremely grateful. The nub of the argument is that this laundering operation could have been included in the Bill. What I really want to know is why it has not been done in that way.
§Mr. Nicholas Ridley (Cirencester and Tewkesbury) The speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) was most interesting. I hope that the Minister will not answer the hon. Gentleman by letter but will tell the House the answer, because he raised points of general interest.
I do not want to go over the history of the Crown Agents. It has already been amply documented by the Minister of State and by my hon. Friend the Member for Shoreham (Mr. Luce). However, there is one point which neither of them touched upon, and that is that in 1832 Mr. Patrick Maxwell Stewart, MP, was appointed agent for Tobago. What surprises me is that, as a Member of this honourable House, he was allowed to be an agent.
It is a curious thought that colonial secretarial control over the Crown Agents has weakened in the years since 1832. In those days hon. Members were allowed to be agents, but according to the Bill they are not allowed to be agents, and I am sure they have not been allowed to be agents in the recent past. Indeed, schedule 1(9) makes it clear that they cannot be agents in the future either.
§Mr. Ridley I was coming to quangos. I must plead that I am a newcomer to these debates on the Crown Agents. I think that I have only one record in Hansard as contributing to recent statements and debates, and that was when I called the Crown Agents a quango. Indeed, I think that they were a quango, though they will be slightly less quango-shaped when this Bill becomes law.
The tale about Mr. Patrick Maxwell Stewart illustrates the problem, which is that the Crown Agents had no owners. They were not responsible to the Crown, they were not responsible to shareholders, and over a period they ceased to be res- 612ponsible to Ministers. I believe that in any commercial enterprise there has to be an owner or proprietor of some kind to exercise that ultimate supervision of the use of the funds.
No hon. Member of this House criticised the Crown Agents on their activities on behalf of principals. Indeed, there has been universal praise for what they did. We are told that last year they traded £216 million with the principals but that 65 per cent. of the orders came to this country. That is held out by all to be of great economic importance to us. I press Ministers and hon. Gentlemen not to overdo the praise, because it gives the impression that there is, as it were, some special advantage to the United Kingdom which brings this business here, which might not happen if we did not have the Crown Agents. It is even as if they were slightly bent in favour of this country to praise them thus. That, I believe, is not so. The Crown Agents have always been required to get their supplies in the market at the cheapest price. Indeed, in the instructions to the agents—I think this was at the end of the nineteenth century—they were required to act as follows:You are to procure all such stores by public tender and open competition, or by applying to three or more different tradesmen for a list of the net cash prices at which they would supply the articles required; in which latter case the lowest tender is to be accepted.That should still be the rule for their trading on behalf of their principals, and there should be no particular advantage derived to us unless it be that we put in the lowest tender. We all congratulate the Crown Agents on that part of their activities and wish them well for the future in their actions on behalf of the principals, although we cannot escape the fact that we should discuss recent troubles in the own-account side. Indeed, the hon. Members for Perry Barr and Swansea, East (Mr. Anderson) did just that.
I think that the House should pay a tribute to Judge Fay for the clarity of his report. It reads like a really good novel. It is almost impossible to put it down once one has started to read it. It is one of the most literary excellent and convincing documents emanating from Her Majesty’s Stationery Office that I have ever read. Yet it comes out again and again that it was lack of control which caused the disaster.
613In passing, it is worth commenting that there are several other bodies to which that lack of control is perilously close to applying. I remember the old saga of the Mersey Docks and Harbour Board in 1970. I believe that the National Enterprise Board is in a very similar position in relation to lack of parliamentary control and lack of access by the Comptroller and Auditor General to the affairs of the Board.
I hope that the affairs of the Crown Agents’ own-account trading will be a lesson to the Labour Party. However much it might like to think that the State can engage in trading, banking, insurance, investments and risk-taking, what is likely to happen is the same as has happened with the Crown Agents. The concept of the nationalisation of banking, which has been advocated by many Labour Members, is that the State would not make a much better fist of it than the Crown Agents. Therefore, I hope that that lesson has sunk in.
All the civil servants who were concerned with monitoring this affair do not come out of it very well, nor does the Comptroller and Auditor General. I believe that no one really thought that it was his responsibility to control what was going on. The lessons which come out of it are as follows. First, there are lessons about accounting. I believe that this House should make sure that the Comptroller and Auditor General has access to all bodies which receive or borrow public money so that he can report to the Public Accounts Committee.
The Government have now agreed to set up an inquiry into the future role of the Comptroller and Auditor General, and that is welcome. We understand that legislation may be in preparation. But the diffidence of the Comptroller—which comes clearly out of the Fay report—to take action which would have been sufficiently drastic to make sure the Treasury and civil servants in the Ministry of Overseas Development took action and his inability to alert the Public Accounts Committee are weaknesses which would be remedied if the reports of the Public Accounts Committee and the Select Committee on expenditure were put into practice.
614In addition to what has already been said, I believe that we need a code of practice laid down by the Comptroller, so that where there is a public body which may be employing private auditors—quite properly—those private auditors follow that code. In addition, I believe that the Comptroller and Auditor General should have the right, and the power if necessary, to go in and check that proper accounting procedures are being followed, and to report accordingly to the Select Committee if he feels that something is wrong. That is one of the lessons which we learn.
The second lesson that I believe we learn is that the Civil Service can never be equipped with the necessary skills to monitor complicated banking and property transactions of this sort and that it is quite wrong to expect that sort of skills of it. The third lesson—this is one which I think the right hon. Lady has eminently accepted and put into the Bill—is that there should be limits on the activities in which nationalised industries can engage, and that it is when they get out of their immediate responsibility that troubles such as this are liable to arise. It is possible that this scandal could have occurred in an organisation such as the National Coal Board. I do not say for one moment that it has, but there is very little to have stopped it happening.
I commend the right hon. Lady for drawing tight limits upon what the Crown Agents may or may not do. I believe that this will be salutary for the future. If we have learnt that lesson, it will be some contribution towards avoiding this happening in the future.
The last lesson—again I pay tribute to the Government for learning it very thoroughly—is that the constitutional position should be clear. It is to the Bill that I turn to discuss that. I should like to know why the illegality of the last 130 years which the right hon. Lady brought to the House in November did not go undiscovered earlier. It is extraordinary. There was inquiry after inquiry in the Ministry of Overseas Development. There were inquiries in the Treasury. There were so many inquiries that I cannot remember how many. There were the Fay report and the Stevenson report, and Sir Arthur Grattan-Bellew, the legal 615adviser, spent a considerable time on investigating the constitutional position of the Crown Agents. Yet, after all that activity, it was in November of last year that the right hon. Lady was first alerted to the illegality and unconstitutionality of the Crown Agents. I wonder how the fact unearthed then went unknown for so long.
§Mrs. Hart As the hon. Gentleman will appreciate from the brief historical account that I tried to give of what developed in the constitutional, non-constitutional and unconstitutional relationships between the Crown Agents and the Government from 1833 through to 1909 through to 1947, and the reply that was given in the House of Lords in 1968, there were clearly a number of matters in which the intelligence and capacity of Government had not been fully involved. As a result of the preparation of the Bill, greater intelligences and greater involvement ensued, as a result of which the legal advice available to the Government indicated that this was another factor in the situation which up to then none of us had fully appreciated. I can only explain it in that way.
§Mr. Ridley I must accept that. To my way of thinking, there are other directions in which the intelligences and capacities of Government are not fully developed, although we must not go into them now.
I come to the question whether the right hon. Lady and the Government have chosen the right model for this new statutory corporation. I can find very little difference between what is in the Bill and the first model put forward by Stevenson, which, in effect, is a nationalised corporation. I accept and agree with the distinction that there is no ministerial power of intervention over the activities of the Crown Agents in respect of work for their principals. But that exception might almost be paralleled by saying that the Secretary of State for Energy does not have power to decide the best type of pick for the pickman to use underground. To that extent, there is very little difference between the form of the legislation and the forms of the numerous committees on nationalisation Bills on which I have had the privilege to serve in the past.
616I wonder whether the right hon. Lady is entirely right about this matter. As was said, a lot of water has flowed under the bridge since Stevenson. It is this excess of speculation on the side which makes it perhaps more undesirable than was perhaps said earlier strictly to limit what happens. Nevertheless, the role of the Crown Agents in the future is remarkably without incentive and without possibility of reward for doing well. The whole financial set-up for the repayment to the Government of part of the reserves of the existing Crown Agents seems to be putting the Crown Agents into a suitably tied-up situation in the future, but the room for scope, initiative and connecting reward with success is rather too limited.
I do not quite know why the right hon. Lady rejected the possible solution suggested by Stevenson that there should be share capital for the Crown Agents with at least the majority of it owned by the Government. In fact, there is little difference between a nationalised corporation and a “company law” company in which 100 per cent. of the shares is owned by the Government. In many respects there are extraordinarily few differences, except that it enables shares to be given perhaps to the managers or the agents, and even at some stage allows other corporations or investors to partipate with or without losing control. It makes it a less rigid framework for the future.
To that extent, we shall want to ask the Government in Committee to justify their choice of model. I personally believe that there was a strong case for at least having the Crown Agents represented by shares which could be used to try different forms of organisation for the future.
I believe that there should be two separate funds. I personally entirely support the concept of the realisation board. But we have some concern about how long the assets in Australia will go unrealised. I accept that we should await the peak of the market before they are sold, but I see a slight temptation never quite to believe that we have reached the peak. I should not like it if in five years the British Government were still the owner of large office blocks and buildings in Melbourne and Sydney which we could well have disposed of. That is 617something on which we shall want to press the right hon. Lady in Committee.
I should also like to refer to the commencing capital debt. As I understand the transaction, about half of the present reserves of the Crown Agents is to be paid over to the Consolidated Fund, leaving half of them in the hands of the Crown Agents as working capital. But, at the same time, they are debited with a commencing capital debt—I do not think that I am disclosing anything that I should not—which I believe will be about £25 million. That represents the value of their land and buildings. This is a rather restricting atmosphere. The commencing capital debt could have been public dividend capital, which is known as PDC. I am not enamoured of PDC. At one time I thought it meant “payment deferred constantly”.
Is the commencing capital debt repayable by the Crown Agents? If with the five-year moratorium on their capital, their £7 million reserves and their enterprising and successful chairman, which in every respect he certainly is, the Crown Agents prosper and do well, will they be able to pay back their commencing capital debt in five years or 10 years, whatever it may be, and once again build up balances that a different and less scrupulous chairman may be tempted to use in a different way? I am not criticising. I am merely asking whether they are stuck with the commencing capital debt for ever or whether they may repay.
That question has never arisen before when dealing with a nationalised industry. I do not know of any other nationalised industry that has ever been in the position to repay its capital debt.
§Mr. Ridley That is probably true. I should like to ask the Secretary of State for Energy whether that nationalised industry will pay its commencing capital debt. I accept that I should not be in order if I were to put that question to the right hon. Lady.
Various aspects to which I have referred require a little more explanation. However, the form in which the right hon. Lady has established the new structure of the Crown Agents is acceptable.
618The success of the Crown Agents will be the success of those who are engaged in their business. I wish them well. I am glad to know that they will not be civil servants or Crown servants. I am glad to know that they are to be employees of the Crown Agents. That will help enormously to give the board and the chairman the power to recruit widely and to obtain those with the skills that they require rather than relying on Buggins’s turn. One of the facts to emerge from the Fay report was that that is a most unsatisfactory way of filling high commercial posts, as has been shown in the past.
It seems that the employees of the Crown Agents will have inflation-proofed pensions. What accounting procedures have been used? They are not to be civil servants and presumably they will not be bound by Civil Service pay scales. On the other hand, they are to have inflation-proofed pensions. With all respect to them and with all good luck to them, we do not want them to have the best of every bargain.
There are many who are free to earn as much as they can in the market. There are many who are not so free, such as those in the Civil Service, but they have the privilege of inflation-proofed pensions. There are not many who are free to earn as much as their efforts justify in a commercial atmosphere who at the same time are blessed with inflation-proofed pensions for which they probably do not pay the full contribution. That is another matter that we should consider in Committee.
Once or twice during the past five years I have felt it right mildly to criticise the Government for some of their actions. It is only fair on this occasion to say that they have the Bill fairly nearly right.
§The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Tomlinson) This short debate has been worth while and constructive. Although the speeches have been few in number, I am happy to pay tribute to the positive and helpful way in which the Bill has been approached.
The essential purposes of the Bill have been well set out. There is no real need for me to elaborate on them further. Both 619in the Bill and in the debate we have made it clear that our aim is to strike a balance between the legitimate interests of the public in the operations of the Crown Agents and the requirement that the Crown Agents should have day-to-day freedom to get on with their job of providing goods and services for their principals.
The Bill does not ignore the past or the lessons to be drawn from it. The decision to establish two corporations—the Crown Agents and the Crown Agents holding and realisation board—flows directly from the past losses of the unincorporated agents and the need, as a result, clearly to distinguish between the realisation of the old own-accounting business and the continuation of the on going traditional business of the Crown Agents on behalf of their principals. That is a traditional business to which everyone who has participated in the debate has paid tribute.
The hon. Member for Shoreham (Mr. Luce), speaking from the Opposition Front Bench, welcomed the Bill and rightly drew attention to the sharp distinction between the traditional activities of the Crown Agents and the period of own-accounting activity that led to the tribunal of inquiry. Illegal and unconstitutional activity has been taking place for over 150 years. As that was before the 1832 Act, I suggest that that probably exonerates the spiritual forebears of my right hon. Friend and myself, most of whom would not have been enfranchised at that time.
The hon. Gentleman asked a number of specific questions. He asked about the £175 million that has been described as recoverable grant. That is an important matter, and, as my right hon. Friend said in an intervention, it is difficult, if not impossible, to make a forecast. I merely add that the Bill makes provision for any money in excess of that needed to enable the board to discharge its liabilities to be paid into the Consolidated Fund. Thus any money that would have been available to repay the grants will come back to the Government. There is no need specifically to preserve the liability of the unincorporated agents to repay the grants.
Clause 26 clearly establishes a link between the liability of the old agents that 620has been extinguished and the power of the Minister to recover money from the board.
The hon. Gentleman referred to the Stevenson committee recommendations on alternatives to incorporation. That matter was also referred to by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). As my right hon. Friend said in an intervention, the Stevenson recommendations have largely been overtaken by subsequent events, notably the ending of the own-account business and the new legal advice on the treatment of Crown Agents’ revenues, which has made legislation necessary.
It is clear that none of the alternative solutions that has been suggested in the past will on examination offer all the benefits that accrue from the proposed incorporation. If we were to summarise the benefits, we could say, first, that there will be a readily comprehensible solution on recognised lines and corporate status ending the Crown Agents’ status as a Crown body, including, secondly, their immunity from taxation. Thirdly, there will be statutory backing for their powers and functions as well as for the Minister’s functions. Fourthly, there will be provided detailed parliamentary scrutiny of the proposals. None of the alternatives suggested by the Stevenson committee offers as wide a range of benefits as those that stem from incorporation.
The hon. Member for Shoreham asked a number of questions about accountability, some of which he may wish to pursue in Committee. He was concerned about the details of the report to Parliament on both sides of the new Crown Agents’ activities. The Minister will be answerable for the exercise of specific powers relating to Crown Agents’ activities in their own right. Obviously the Minister will have to give consent for borrowing to take place, to financial targets and to the controlling of reserves. The annual report and accounts will be laid before Parliament and the report will inevitably specify any directions given to the Crown Agents by the Minister during the year that the report covers. This question of accountability was dealt with in some detail by my hon. Friend the Member for Swansea, East (Mr. Anderson). The detailed question that he raised about Treasury control is one which we will have to look at in more 621detail. My right hon. Friend will, as she explained in her speech, maintain the closest consultation with Treasury Ministers in exercising her powers of financial control; and in regard to the regulations which will govern the Crown Agents’ investment of funds in their own right, these are all covered under the general statement in clause 31 where this is specifically required to be done in conjunction and with Treasury approval.
The other question raised by my hon. Friend concerned parliamentary control. In particular, he deplored the lack of a timetable and a time scale in relation to the reports. He pointed out that there was a specific requirement upon the Crown Agents for a time scale in which they would present their reports to Ministers, but not a similarly closely defined time scale on which Ministers needed to act in laying their reports before Parliament.
That is a reasonable point which my right hon. Friend and I will certainly consider. I welcome my hon. Friend’s approach in making these detailed criticisms and in indicating that this Bill was a major advance in both Treasury and parliamentary control.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) raised the question of Millbank Technical Services, which he rightly said had been renamed International Military Services Ltd. International Military Services Ltd is no longer a subsidiary of the Crown Agents. That is why it is not dealt with in this Bill. The shares were transferred to my right hon. Friend the Secretary of State for Defence on 22 January, and this arrangement, which my hon. Friend saw as being an attempt to avoid saying anything to Parliament—in view of the fact this this arrangement only happened a couple of days before this Bill was published—was merely the completion, in a legal sense, of a transfer of responsibility which was effected by an agreement as long ago as April 1977.
The transfer of the shares had to await the resolution of certain legal technicalities. It was a coincidence rather than a Machiavellian plot that it took place so close to publication of the Bill. However, if my hon. Friend, who has apologised for not being present, would like 622further details, I would be happy to hear from him and to reply.
The hon. Member for Cirencester and Tewkesbury, in replying to the debate, ranged rather widely in a number of his observations. I do not complain, but to me the dreadful saga of own-account activity, which he seemed to see as a condemnation of public sector activity, did, I think, rather turn on its head the argument about what happened during that period. The problem was not one of public sector activity but more one of the unacceptable face of capitalism as reflected in the areas of property speculation and secondary banking.
Though we may well differ about the cause of the problem, I welcome the fact that the hon. Gentleman welcomed the Bill. He suggested other forms of organisation for the board, and yet in his concluding remarks he seemed to think that my right hon. Friend had got the Bill just about right.
The hon. Gentleman pursued the idea that shares should be used to try different forms of organisation. Something the Crown Agents can well do without at the moment is any great innovation or experimentation. Experimentation in the form of own-account activities is one factor which has brought us to the present situation. I should not like to see any further experimentation. Incorporation makes the position quite clear and does not need any basis on which we can experiment in future.
But if the hon. Member was suggesting, when he talked about shares being used to try new forms of organisation, that we should perhaps establish the Crown Agents as being a company under the Companies Act, that is a different matter. We have no reason to suppose that the Crown Agents’ principals would regard this as a preferable scheme to incorporation by Act of Parliament, which has been the expressed intention since the White Paper of 1976. Legislation would, in any case, be necessary, by reason of the legal advice received last August, in relation to the revenues of the Crown Agents being hereditary revenues of the Crown.
Moreover, legislation would be required to provide the necessary statutory backing for the Ministers’ continuing functions 623in relation to the Crown Agents. My right hon. Friend said in her opening speech:We are sure that the powers conferred on the Minister in the Bill are the least which are called for in the circumstances of the case.If the Companies Acts were to be used, the same sort of provision would have to be brought in, presumably in a memorandum and in articles of association. It would be extremely complicated and unusual in relation to such memoranda and articles, and I believe that we have it absolutely right in seeking in this Bill not a Companies Act company but the process of incorporation.
The hon. Gentleman mentioned a number of points in relation to audit arrangements which we will want to look at in detail in Committee. The same applies to the detailed question raised concerning the borrowing powers. I have been particularly glad to note the recognition afforded throughout this debate to the valuable services provided to their principals by the Crown Agents. That is one of the threads which have united everybody who has spoken in the debate. I do not doubt for a moment that an understanding of the importance of the Crown Agents’ work, not only for their principals, but also because of the benefit which this country derives from their services, will animate our further deliberations on the Bill.
I look forward to a constructive discussion when detailed consideration is given to the clauses in Committee. I am encouraged in my conviction that hon. Members on both sides of the House share the objective of making this Bill a sound foundation on which the Crown Agents will be able to build a secure future.
§Question put and agreed to.
§Bill accordingly read a Second time.
§Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).
THE CROWN AGENTS
§[The Question was as follows:
§To ask Her Majesty's Government what contribution the Treasury makes to the costs of the Crown Agents' office, staff, and functions, what other Governments contribute, who is responsible for the appointment of its administrators, and to whom they report their activities.]
§LORD SHEPHERD My Lords, no contributions are made by the Treasury to the costs of the Crown Agents’ office. I am told also that no such contributions are made by any other Government. The Crown Agents have a published scale of charges for the services which they provide, and these charges are paid by individual principals to the extent to which they employ the Crown Agents’ services. These charges cover the cost of the office and staff. The three Crown Agents are appointed by the Minister of Overseas Development and they appoint their own staff. They report to their principals on the work which they carry out on their behalf and at their expense. In addition they publish an Annual Report.
§LORD BROCKWAY My Lords, may I ask my noble friend whether this institution has not now become an anomaly 1262and whether, in view of the fact that Her Majesty’s Government bear the major expenses for it through the Treasury and through Overseas Development appointed administrators—if I am wrong, I have misheard—it is not an anomaly that this institution should be able, for example, to buy arms from foreign Governments which are used for purposes which have not the endorsement of this Government, as in Nigeria to-day? May I ask my noble friend whether he will not consider looking at the whole basis of this institution, in view of the modern circumstances of the Commonwealth?
§LORD SHEPHERD My Lords, I apologise to my noble friend because I did not make myself clear to him. I said that no contributions were made by the Treasury to the Crown Agents office; and that is a fact. The noble Lord has deployed an argument by way of a question, which he did with great force the other day when I made it perfectly clear what Her Majesty’s Government’s view was. I have nothing further to add.
§LORD OGMORE My Lords, is it not a fact that if the Crown Agents’ services were not required by their customers the Crown Agents would not exist? Are not their services very much appreciated by territories, now independent, which were formerly Colonies?
§LORD SHEPHERD My Lords, the noble Lord is quite right. He may be interested to know that the Crown Agents service some 80 different Governments, some within the Commonwealth and some outside the Commonwealth, and also some 160 international organisations.
§LORD SHEPHERD My Lords, the relationship of the Crown Agents is with their principals, on the basis of a customer seeking a service. It is perfectly right, as the noble Lord, Lord Erroll, has said, that they buy according to the wishes of their principals. (whether that be guns, armaments, drugs….)
§LORD BROCKWAY My Lords, I apologise to my noble friend for mishearing him, as I quite genuinely did. But may I ask him this further question? 1263In the present position of the Commonwealth, is not the Crown Agents institution an anomaly? Is it not the case (unless I again misheard him) that the administrators are appointed by our Overseas Development Corporation, yet the Agency is responsible to the independent Commonwealth Government? Does not that situation merit some reconsideration?
§LORD SHEPHERD My Lords, there is much in our life which I suppose could be said to be an anomaly, but this is an organisation that has been in being for some 100 years. It has given great service to the Commonwealth and Colonial Governments, and I think it would be utterly wrong for us to take a special view in this organisation, which is clearly for the service of Commonwealth and other Governments who wish to use it. (You don’t fcuk with the Crown Agents ok?)
§[The Question was as follows:
§To ask Her Majesty's Government whether they will use their influence to alter the name of the "Crown Agents" in the near future.]
§LORD SHEPHERD My Lords, I do not feel that Her Majesty’s Government should use their influence to change this title, which has been in use for over 100 years and is held in high regard in both financial and commercial circles both here and overseas.
§LORD BEAUMONT OF WHITLEY My Lords, while thanking the noble Lord for that Answer, may I ask him whether the Government will reconsider this matter, in view of the fact that the Crown Agents do not appear to be under the control either of the Crown or of Her Majesty’s Government, and that therefore, there may be considerable misconceptions on the part of people who do not know the situation so long as they are called “Crown Agents”?
§LORD SHEPHERD My Lords, I do not think there is any misconception. As I replied to the noble Lord, Lord Erroll, this is an organisation that not only buys on behalf of its principals in the United 1264Kingdom but is perfectly free to buy anywhere in Europe, and I suppose, for that matter, in Russia and China. It is merely a service. It has given service to 80 countries and 160 international organisations. I should have thought that if there was a feeling that there should be a change, it would be best left to the Crown Agents and their principals to say whether a change should be made.
§LORD SHEPHERD My Lords, it is a part of history. Originally the organisation was called the Crown Agents for the Colonies, and then it was later changed to the Crown Agents for Overseas Government Administrations. It is just a question of history. (Sure it is. And that’s why issues pertaining to them are locked up under the 30 year rule – just a normal “corporation” then eh? Any other company would have been destroyed)
§LORD COLYTON My Lords, is it not a fact that under their existing name the amount of business transacted by the Crown Agents every year is increasing enormously, both in countries in Her Majesty’s dominions and in Commonwealth and other overseas countries? Secondly, is it not a fact that there is not the slightest evidence that the name “Crown Agents” has ever deterred any country from making use of its services, but, on the contrary, the office’s record and the very high standards it has set have been of the highest value, as the noble Lord said, in both commercial and financial circles throughout the world?
§LORD SHEPHERD My Lords, if there is any proof in the pudding it is clearly in the eating, and, as the noble Lord has said, the principals are obviously satisfied with the services of the Crown Agents.
§LORD MITCHISON My Lords, is it not like Lloyd’s Agents, for whom Lloyd’s have a major responsibility in connection with surveys, but who do a lot of other business all over the world for which Lloyd’s have no responsibility whatever?
Police, Security and Paramilitary Bodies
§Mrs. Clwyd To ask the Secretary of State for Foreign and Commonwealth Affairs which police, security and paramilitary bodies have enjoyed similar arrangements in the last 10 years with Crown Agents to that enjoyed by the Government of Bahrain; and which bodies continue to enjoy such arrangements. 
EGYPTIAN STAMPS: DISTRIBUTION BY CROWN AGENTS
§The Question was as follows:
§To ask Her Majesty’s Governmant whether they will take steps to stop the distribution by the Crown Agents of “Stürmer”-style Egyptian stamps attacking Israel.
§THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE) No, my Lords. The Crown Agents have no responsibility for the design or commissioning of this stamp for the Arab Republic of Egypt. They act only as agents for the distribution of the stamp.
LORD JANNER My Lords, does the noble Baroness really suggest that the distribution of no stamp, no matter how horrific or pornographic it may be, can be stopped if the Crown Agents are sent them by the Egyptian or any other Government? This is a shocking stamp, as the noble Baroness knows. Is there not any method by which its distribution can be stopped?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, the British Government do not interfere in the relationships between the Crown Agents and their principals; and, of course, the Crown Agents distribute millions of stamps, and it would not be right for them to make a political decision.
§BARONESS GAITSKELL My Lords, may I ask the noble Baroness this question? Since when do the Government 1696allow this kind of stamp, which is an example of the work of the late and unlamented Goebbels, to be distributed in this country?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, I understand that this stamp, whatever view may be taken of it, is an official issue by the Government of the Arab Republic of Egypt, and that it is available from several sources to the philatelic trade.
LORD JANNER My Lords, may I again appeal to the noble Baroness to appreciate just what she is saying? Does she really mean to say that there is no method by which the distribution by the Crown Agents of a stamp, no matter how horrific or how pornographic it may be, can be stopped by the Government? Will she consult with other Ministers to see whether there is any other method by which this scandalous thing can be stopped?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, this is a very difficult question; but the previous Government resisted criticism of the Crown Agents for buying arms in behalf of the Nigerian Federal Government during the Biafra war, on the grounds that the Crown Agents were acting on the instructions of their principals.
§LORD AVEBURY My Lords, would the noble Baroness say whether it is possible for there to be a distribution by official agents of stamps which constitute a prima facie infringement of the Race Relations Act? Had she considered this aspect of the matter before making her reply?
§BARONESS TWEEDSMUIR OF BELHELVIE Yes, my Lords. As I have said, the Crown Agents distribute hundreds of millions of stamps a year, and they would be breaking away from what is called their non-political standing if they made judgments about particular stamps. (So, immune from law and morality. What other corporation is allowed that?)
§BARONESS GAITSKELL My Lords, how far will the Government allow such stamps to be distributed? Can the noble Baroness envisage what this kind of stamp and this kind of trade in propaganda may lead to?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, as I said 1697before, whatever one may think of this particular stamp, it is in fact the case that the Crown Agents do publish millions of stamps and, if they were put up as the political judge of what was right or was not right, I think we should be in even greater difficulty.
§LORD SHEPHERD My Lords, since I think the noble Baroness quoted, in defence, what was said by the previous Administration—in fact, I think it is what I said in your Lordships’ House—and while recognising the problem of the Crown Agents as agents for overseas Governments, but also recognising the scurrilous nature of this particular stamp, would the noble Baroness not agree that if some foreign country required the Crown Agents to produce a stamp of such a scurrilous nature directed against the Crown of this country, a very different situation would arise, not only for Her Majesty’s Government but for Parliament? Would the noble Baroness look again at this matter to see whether something can be done with the Crown Agents, who are known by many to be of very great importance in the relationships between Her Majesty’s Government and the Governments of other countries, to see that this particular issue is in fact withdrawn from circulation at least in this country?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, I recognise the problem put to me by the noble Lord, Lord Shepherd, about a stamp commissioned by the Crown Agents. In fact, of course, this particular stamp was not made by the Crown Agents. They act as agents for the Arab Republic of Egypt; and at present there is not any way in which the Crown Agents can make a political decision on this or any other stamp. Indeed, I think a great deal of thought would be required as to whether it was desirable that they should be able to do so. (Essentially, they are given a free pass on anything and everything because it makes money for the Crown. There is NO morality or law involved)
§LORD BYERS My Lords, I do not believe the House is asking that the Crown Agents should make a political decision; but may I ask the noble Baroness to look at this matter again, and particularly to consider it from the point of view that, if a stamp was circulated which was an incitement to racial violence, surely this Government 1698would not be a party to seeing its distribution take place?
§LORD PARGITER My Lords, in view of the nature of the replies given to previous supplementary questions, could I have some indication of the nature of the activities undertaken by the Crown Agents which would warrant Government intervention?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, the Crown Agents act on behalf of over 300 principals of foreign or Commonwealth Governments; they are therefore in a separate category from a Government Department. The Stevenson Commission has made its Report, which is being considered by my right honourable friend the Minister for Overseas Development at this moment.
§LORD SHACKLETON My Lords, while defending the right of the Crown Agents to that proper independence on which they entirely depend for their successful business, would not the noble Baroness agree that they are able to exercise judgment in these matters? If the Icelandic Government employed the Crown Agents to produce, for example, a stamp showing the noble Baroness torturing a cod or something like that, would she not expect them in fact to exercise discretion? I wonder whether the noble Baroness, having seen the stamp, might not consider drawing very strongly the views of this House to the attention of the Crown Agents?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, in answer to the first part of the supplementary question asked by the noble Lord, Lord Shackleton, far from torturing cod I am only too keen to preserve and conserve it.
With regard to the second part, I have a copy of the stamp and I must say I regret its nature very much. I cannot remember many stamps of a similar character. I do not think that at the moment we have the power to do anything, I will certainly draw the feelings 1699of the House to the attention of my right honourable friend. (No power because while the Secretary of state nominates the Crown Agents, he does it as a Minister OF the Crown and not of government)
§LORD AVEBURY My Lords, if a complaint were made to the Race Relations Board about the activities of the Crown Agents in distributing this stamp, would the noble Baroness not consider it correct to suspend its distribution pending consideration of that complaint by the Race Relations Board?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, the point at issue, which I think has been supported by all Governments and all Parties, is that the Crown Agents should, so far as possible, be able to respect the confidences of their principals.
LORD JANNER My Lords, may I ask the noble Baroness to reply to one supplementary question that I put earlier? Will she consult the other Government Departments as to what steps within the legislation which exists at present, can be taken by them to stop this—and if the present legislation is not strong enough, to introduce some other legislation to do so? Does she realise that this is precisely the kind of thing that was published by the Stürmer organisation? I am certain that steps would have been taken at that time to prevent such a thing if it had been issued from the same office. Will she be good enough to consult with the other Departments over what can be done about this?
§BARONESS TWEEDSMUIR OF BELHELVIE My Lords, over many years the Crown Agents have been distributors on a commercial basis of stamps of all kinds and of many countries. They have not concerned themselves with the political content, if any, of the stamps. I will, as I have said, draw the attention of my right honourable friend to the feelings of the House.
VISCOUNT MONCK My Lords, in endeavouring to bring this question of design to a happy conclusion, is the noble Baroness aware that both in the Bishops’ Bar and in this Chamber her hat has met with considerable admiration? I hope that she will wear it often in the future.