Skip to main content

Crown Agents

Volume 24: debated on Wednesday 26 May 1982

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

asked the Prime Minister whether she will make a statement on the report of the tribunal of inquiry on the Crown Agents.

The report of the tribunal of inquiry on the Crown Agents has been published today. The Crown Agents were deeply involved in the property and secondary bank failures which took place in 1974–75, with the result that large sums of public money had to be made available to enable them to meet their liabilities.Following the report of the committee of inquiry under the chairmanship of His Honour Judge Fay, the tribunal was set up in 1978 by the previous Government under the Tribunals of Inquiry (Evidence) Act 1921 to inquire into the extent to which there were lapses from accepted standards of commercial or professional conduct or of public administration in relation to the operations of the Crown Agents as financiers on own account in the years 1967–74.The tribunal has examined the issues very thoroughly and the Government would like to express their gratitude to the chairman, Mr. Justice Croom-Johnson and to his colleagues Lord Allen of Abbeydale and Sir William Slimmings for all the time and work they have put into examining these events.The tribunal's report is long and detailed. Five main issues are examined:

  • i. The way in which the Crown Agents came to operate as financiers on own account;
  • ii. the main transactions which led to the ultimate losses;
  • iii. internal control over the own account activities;
  • iv. the impact of the financial crisis of 1974 on the Crown Agents;
  • v. the part played by Government Departments and the Bank of England in supervising the Crown Agents' activities, and in considering their future status and accountability.
  • In looking at these issues, the tribunal has identified a number of serious shortcomings that existed at that time, not only in relation to the conduct of individuals, in respect of some of whom lapses or criticisms falling short of lapses were formally specified, but also in relation to the operation of institutions and procedures. The tribunal has drawn some general conclusions about the causes of these shortcomings. Those conclusions are based on the findings on specific issues given in the main body of the report, and need to be considered in that context.

    The Government will now study the tribunal's findings in greater detail. They will look closely at the criticisms made, and in particular at those of the institutions and procedures examined by the tribunal, to see whether the changes that have taken place since the events of 1967–74—including the enactment of the Crown Agents Act 1979, which now governs the current operations of the Crown Agents—are sufficient to prevent the risk of repetition, and if not what action now needs to be taken.

    The Government will also consider the tribunal's comments on the recommendations of the Royal Commission on tribunals of inquiry on the procedure lo be followed in inquiries carried out under the 1921 Act.