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Cadco

Volume 718: debated on Wednesday 3 November 1965

The text on this page has been created from Hansard archive content, it may contain typographical errors.

This is in the nature of a further instalment in the serial story which began in an Adjournment debate on 1st December last year. At that time, I had in my possession a letter from the Glenrothes Development Corporation from which it might be apposite to quote. That letter used these words:

"A spate of further adverse publicity will do the town no good whatsoever."
That was almost a year ago. There is very little evidence, in view of the subsequent development of the town, to suggest that that has happened, despite the continuous adverse publicity that the Cadco affair has had meanwhile.

In any event, I would be failing in my duty as a public servant if I did not seek by every means at my disposal to ascertain the truth in this unfortunate affair, to prevent any recurrence elsewhere and to call to account those responsible for it. All these responsibilities I intend to try to discharge, however long it may take and however distasteful it may be to certain individuals.

The debate on 1st December last year was answered by my hon. Friend the Under-Secretary of State for Scotland. For one reason or another, and not forgetting that I left him only seven minutes in which to reply, he did not answer any of the questions which I put. Neither did he confirm or deny any of the allegations which I then made as to departmental responsibility, guilt or negligence.

In that debate, I accused the Treasury, the Board of Trade, the Scottish Office and the Glenrothes Development Corporation of a grave dereliction of their duties. I accused the former Secretary of State for Scotland, the right hon. Member for Argyll (Mr. Noble), whom I am glad to see in his place, of playing up the project as a glittering and exciting example—these were the words I used—of what Her Majesty's Government at the time were doing for Scotland. I believe that he knew little or nothing of what was going on. If he did know, his offence and culpability become that much greater.

Eleven months have passed since that debate, and I am still waiting—and the public and the Press are still waiting—for the answers to those questions and those allegations, which I will not repeat now. Following that debate, however, as everyone knows, several inquiries were begun, although denials were made at the time. The Treasury has been inquiring into certain exchange control matters, the Scottish Office has been inquiring into the purely Scottish administrative aspects of the matter and the Board of Trade has been inquiring into the industrial facets of the case. In addition, certain organs of the Press, local and national, have been engaged on their own detective work.

Here I may interpose a few remarks about the Press. At times it can be a great nuisance and embarrassment, but in this case, with a few exceptions—and there have been some—the journalists and their newspapers have served the public interest well.

No one, therefore, can complain about any lack of research and investigation, public and private, into this affair. We now seem to be getting to the end of the road. All the facts have been collected, all the departmental reports have been completed, and all have gone to the Lord Advocate and the Director of Public Prosecutions. I suppose one can reasonably assume from that that criminal proceedings may ensue against a person or persons as yet unnamed. I could probably give one or two names that would not be wide of the mark. To that extent, the case may justifiably be said to be sub judice, and I would wish to say nothing which might prejudice future criminal proceedings, and I therefore ensured that this debate would be answered by the Board of Trade, to whom I should now like to put—and I shall have to put them as briefly as I can—a cannonade of questions which must be answered, if not tonight, then by subsequent correspondence. The public interest demands no less than that. Some of the questions were put or implied last December. None was answered. So I hope my hon. Friend will excuse the repetition.

The first question is, what was the Board of Trade's part in this squalid tale? I had a very surprising Answer from my right hon. Friend the President of the Board of Trade on 28th October, a few days ago, in which he said:
"If it is my hon. Friend's suggestion that the failure of Cadco was in any way due to my Department, then I must emphatically repudiate it."—[OFFICIAL REPORT, 28th October, 1965; Vol. 718, c. 84.]
All right. Let us hear what it was.

The second question is, is it normal procedure for the Board of Trade to show industrialists possible sites in development districts before making thorough inquiries into the financial soundness of those prospective developers? Question 3: did the Board of Trade at any time offer financial assistance to Cadco? Question 4—I had better number them strictly and my hon. Friend in answering can refer to them by their numbers, and that will save him a little time—why was there such a long interval between the receipt and the rejection of Cadco's application for a building grant? I gave the dates, I think, last December. I will not repeat them now. Question 5: why did the Board of Trade or B.O.T.A.C. fail to warn the Glenrothes Development Corporation much earlier about the financial soundness of Cadco? I have an idea the Minister will reply that this is B.O.T.A.C. procedure, that the inquiries it makes into companies are confidential, but I should have thought there might be exceptions where another public corporation and public money are involved. Question 6: why does the Board of Trade not examine firms going to new towns at least as closely as those going to development districts? Question 7: arising from the inspector's investigation, what steps have been taken by the Board of Trade to tighten up procedures for sanctioning development?

Question 8: if the Board of Trade has nothing to hide—and the Minister has implied that in the Answer to the Question to which I have referred—and it can give satisfactory answers about its part in the affair, and if the decision to publish the report of the inspectors lies with the Board of Trade, why is it being held back? What has the Board of Trade to hide?

Question 9: are the premises which were built for Cadco by the Development Corporation to lie idle until the report is published? Question 10: if not, what are the Board of Trade and the Corporation doing to find new occupants who will use the capital, create jobs, and help to pay off the loss to public funds that might arise in the event of the premises not being occupied at all? Some time ago I put a Question to my right hon. Friend about the feasibility of using the premises as a public enterprise. Question 11: has this possibility been fully explored? The Labour Party—and now the Labour Government—is committed to creating new public enterprises, particularly in areas like this. This is a wonderful opportunity to put that promise into practice now that we have some assets in the hands of a public enterprise and a public corporation. What consultations has my learned Friend had with the Ministry of Agriculture, Fisheries and Food in England and the Agricultural Department of the Scottish Office about the possibility of using these premises in the public interest and as a public enterprise?

Question 12: How much longer have we to wait before the Lord Advocate and the Director of Public Prosecutions decide whether there are grounds for prosecution? Have we any idea of the time scale involved here? But even assuming a satisfactory answer to that, and even assuming that the prosecutions eventuate—and I hope that they will—of what use will they be compared with the need to allay the great and growing suspicion and the need to learn and apply the lessons which will surely emerge from the publication of the report in full?

That leads me to Question 13: can we have a categorical assurance from my hon. Friend that the report will be published, and in full? The answer should be "Yes, a thousand times yes", because the present Administration have nothing whatever to fear. Indeed, they have everything to gain from the fullest exposure of the shortcomings and laxity of the previous Administration.

My last question is, as the laws of evidence in Scotland are different from those in England, and as it is likely that such criminal offences as might have been committed were probably committed primarily in Scotland, it is probable that the Lord Advocate will take a longer time to reach decisions than will the Director of Public Prosecutions, and presumably everything will await the decision of the Lord Advocate. What steps is my hon. Friend taking to impress on the Lord Advocate the necessity for speed in this matter, and will he, if it is at all possible, try to correlate the decisions made by the Director of Public Prosecutions with those of the Lord Advocate? Of course, the longer the delay, the uglier become the rumours about this dreadful affair. Before this matter is finalised we may have an ombudsman, and I can think of no better case on which he could begin his career than that of Cadco, in Glenrothes.

Meanwhile, in view of the unsatisfactory answers which I expect, I beg to give notice that I will raise this matter on the Adjournment in the next Session.

11.45 p.m.

I have taken note of the last remark of my hon. Friend the Member for Fife, West (Mr. William Hamilton). It is clear from his vigorous speech and the number of questions he has asked that the Ministers who, one might say, are involved in this matter will have no peace from my hon. Friend's persistent campaigning until the report of the Cadco affair is published.

I have no complaint about my hon. Friend's persistence. This is a matter which seriously concerns his constituency, it is a matter of concern to him personally and to everybody engaged in public and commercial affairs. Therefore, I agree with my hon. Friend that if there were any attempt to suppress this report, it would be a most reprehensible action. My hon. Friend is fully justified in demanding its publication.

I wish to assure him that there is no question of this report being suppressed, and there never has been. My right hon. Friend the President of the Board of Trade has asked me to state categorically that the report will be published. My hon. Friend said that he hopes that the report will be published in full. I would point out that the Board of Trade has no authority to publish some parts, to delete other parts, of an investigation report of this kind. If it is to be published, it has to be published in full. But publication must be delayed for a time, as my hon. Friend himself has suggested, until the inquiries by the Lord Advocate and the Director of Public Prosecutions are concluded. I am sure he would agree—he said so—that it would be wrong to publish the report as long as there is any risk that there might be prejudice to the fair trial of any person who might be charged in connection with matters dealt with in the report.

This is a difficult matter for Ministers to decide on. The balance must be fairly held between early publication of matters of public interest and concern, on the one hand, and the liberty of the subject on the other. However, I repeat that there is no question of suppression of any information. The report will be published in full when my right hon. Friend is satisfied that it properly can be.

My hon. Friend asked whether these legal inquiries can be speeded up. As he knows, the matter is in the hands of the Lord Advocate at the moment and my hon. Friend the Under-Secretary of State for Scotland, who is here, will have taken note of my hon. Friend's remarks.

I will try to answer my hon. Friend's questions as best I can. I hope that I can get them in the right order. First, he asked why the Board of Trade show representatives of a company which is seeking industrial sites in development districts possible sites for the erection of factories without first making inquiries about its financial circumstances. It would be difficult if my hon. Friend insisted that the financial standing of all the companies to whom we show development district sites should be examined beforehand.

During the last 12 months, officials of the Board of Trade discussed the possibility of movement to development districts with about 3,000 firms and supplied information about sites and financial assistance available in those districts to a similar number of other firms—that is, a total of 6,000. If the Board of Trade investigated the financial standing of all the firms with which it deals in these steering activities, the speed with which it could deal with inquiries would be very seriously reduced, and indeed the whole steering machinery might well be brought to a halt.

Moreover, the vast majority of firms with which the Board of Trade deals in this field are financially sound. This is obvious. One knows the firms, one knows what kind of business they are doing and how long they have been doing business. They would be very much less willing to seek the help of the Board of Trade if they knew that before they could get that help they would be subjected to a financial examination. After all, one does not expect to prove one's credit rating before being told what a sales organisation has to offer.

Therefore, Cadco was treated in exactly the same way as all other companies are treated in this steering operation. The fact that a firm is introduced, for example, to a New Town Development Corporation by a Board of Trade official who may be escorting the firm's representative on a tour of possible sites does not constitute, and is never represented as, a guarantee of the financial standing of the company.

My hon. Friend went on to ask about the long interval—I think that he put it like this—between the receipt and the rejection of the company's application for a building grant. Again, this is Board of Trade procedure, and the more that one considers it the more the procedure needs to be commended rather than criticised. I know that when I first became involved with these applications for financial assistance to firms going to development districts, I queried the length of time which the Board of Trade Advisory Committee took to examine the firms concerned.

When one goes into the time factor quite a number of issues arise which one had not thought of. This happened in the case of Cadco. The first step in dealing with a building grant application—which is the first application made for financial help—is to establish prima facie the eligibility for further consideration under the terms of the Act. In the case of Cadco the application was received in September, 1963, and it satisfied these first tests. Then it was referred to the Board of Trade Advisory Committee in November, 1963.

The next step, as I think my hon. Friend knows, is to consult the Board of Trade Advisory Committee, as we are required to do by the Act before making a building grant, and the Committee's job is to advise the Board of Trade whether the grant should be made because there are good prospects of the undertaking ultimately being able to be carried on successfully without further assistance. All these examinations take time. Among the things which the Board of Trade Advisory Committee requires is the latest balance sheet and the most up-to-date accounts and these became available, I think, in January, 1964. Then the Board of Trade Advisory Committee quickly got to work. Supplementary information was required. This did not come along until June, 1964. The application was considered during July and rejected at the end of the month. The point which I am making is that time is needed for these very careful examinations before any public money is allowed to go to the firms which are making application for it.

I wanted to make that clear, because it is one of the key points in the series of questions which my hon. Friend has given me.

My hon. Friend asked why the Board of Trade does not look at firms going the new towns nearly as closely as it examines firms going to development districts. In fact, the Board of Trade does not make inquiries about the financial standing and prospects of companies going to development districts unless such firms seek financial assistance from the Board under the Local Employment Acts. All applications for such assistance are examined in exactly the same way.

I do not think that I need go over the whole story of why the Board of Trade did not warn the Glenrothes Corporation much earlier. I am sure that this point will be brought out in the report. The real issue here is the question posed by my hon. Friend; whether we will take note of any recommendations which come out of the inquiry, as a result of any criticism or whatever it might be?

As my hon. Friend knows, the Scottish Office has told me that steps have been taken to prevent a recurrence of the Cadco situation and that instructions have been given to the Scottish New Town Development Corporations laying down the procedure for assessing future industrial and other projects and providing them with a check list for use in assessing especially difficult cases. They have also been instructed to seek expert advice, including the advice of consultants when necessary.

If time permits, there are three further questions I will answer. First, what action is the Board of Trade taking to find other occupants for the premises? I understand that, in consultation with the Board of Trade, the Development Corporation office in Scotland is making the availability of these premises known to possible occupants. I understand that firms have already agreed to take over nearly all the premises which are likely to be of interest to industrial users.

Secondly, the question of the piggeries. I have taken note of what my hon. Friend said about consultations with the Ministry of Agriculture, Fisheries and Food. Indeed, consultations have taken place about their use as piggeries. I do not know what one could do with a piggery except keep pigs in it. This matter is still being considered, but I am afraid that we have had no success so far. We may have success in the future. We will continue our consideration and see if something can be done.

Thirdly, my hon. Friend referred to the laws of evidence being different in Scotland from those in England. I imagine that that is so, but I have once before tonight had to point out that I am not a lawyer and that I sometimes get tangled up when considering legal matters. Whether or not this is a matter which should go to an ombudsman, I do not know. I have noted my hon. Friend's remarks about speeding up the work of the Lord Advocate, but he will agree that this legal investigation must be done thoroughly. However, his point has also been noted by my hon. Friend the Under-Secretary of State for Scotland.

I hope that I have answered most of my hon. Friend's questions. I assure him that if I have not I will answer the remainder by writing to him.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve o'clock.