The House will be aware of the protest on the roof of Westminster Hall. For very good reasons we do not discuss matters of security in this Chamber, but I wanted to say to the House at the first opportunity that I have had a preliminary report and the full circumstances are now being investigated urgently and thoroughly. The results of that investigation will be considered by a meeting of the Joint Committee on Security in the very near future. Whatever action is necessary will be taken.

Secondly, as I emphasised before the recess, I repeat that I am keen to make good progress both at Question Time and in the conduct of ministerial statements. I am therefore looking to each Member to ask a single, short supplementary question and to the Minister at the Dispatch Box to provide a brief reply.

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the proposed sale of Government assets announced today.

Thank you, Mr. Speaker, for the opportunity to come here this afternoon and answer questions about the sale of Government assets.

Our overriding ambition is to lock in the recovery and then to lay the foundations for growth in the years to come. Because of the action that we have taken this year, we are confident that growth will return to our economy towards the end of this year and into 2010. Over the months to come, therefore, the Chancellor will set out more detail around our plan to halve the public sector deficit over four years once recovery is secured. This entails a return to growth with support for firms and families; fair tax rises for those most able to bear the burden; and slowing the growth of public spending. As the Chancellor set out in April, an ambitious programme of asset sales is part of our plan—a plan that sets out up to £16 billion of property and other asset sales, with proceeds raised being used to support our priorities, including new capital investment and paying down debt.

Today the Prime Minister set out a few details of that programme, and in the months to come we will publish a portfolio of assets to be sold. It will cover assets for sales, and assets where we wish to explore different ways of managing things in the future. The portfolio will include the Tote, the Dartford crossing, the student loan book and the channel tunnel rail link. We know that councils will make a major contribution to the overall level of asset disposals through sales of housing and other assets, as will central Government property. As I said, these three elements are expected to deliver £16 billion in receipts over the period 2011 to 2014. However, we aim to secure receipts from central Government sales within the next two financial years where and when market conditions are right.

We have already sold £30 billion of public assets since 2004. This success, building on the £22 billion sale of 3G licences in 2000, played a major role in the reduction of debt over the past decade. We have made tough choices to cut debt in the past; those decisions allowed us to support the economy now. We will not flinch now from tough choices to allow us to live within our means in the years to come.

Thank you, Mr. Speaker, for calling this urgent question. It is Parliament’s first day back, and we have seen old habits—this national car boot sale was announced in the media yesterday evening, with a major speech by the Prime Minister and no statement to Parliament.

I have no objection to the principle of asset sales, which are an important part of managing the public finances. However, there are big questions about timing and content. Can the Chief Secretary first confirm the Treasury’s own figures that the net worth of Government has declined from 70 per cent. of GDP in the late 1980s, before the big privatisation, to nil today and will decline to a minus figure in 2013? That means that if the Government were to sell off the whole of what remains of the public sector, they would have to pay somebody to carry it away.

On the substance of the Chief Secretary’s answer, he said that there would be £16 billion of sales. Is it not true that £13 billion of that will be from local authorities and that, as he confirmed to me in a discussion on the radio at lunch time, there is no pressure on local authorities to make those disposals and they will be free to invest the money raised? In that case, how will the sales narrow the Government budget deficit, if at all?

Can the Chief Secretary explain why the Government were in favour of privatising the Tote in 2008, then announced in the Budget this year that it would be kept in the public sector in the medium term, but now say again that it is to be privatised? The Tote has had more false starts than any race in history.

On the timing of this announcement, the Government have a terrible record in selling public assets, with the history of gold sales and the sale of QinetiQ, which was condemned by the National Audit Office. There is now a proposal to sell land, in a market in which development land is at about 15 to 20 per cent. of its peak value. Is that not an absolute guarantee that the Government will not get value for money, and that this announcement has been driven entirely by political concerns?

I am grateful to the hon. Gentleman for the question and for his renewed interest. I know that that is completely unrelated to his own difficulties to do with tuition fees and mansion taxes at his party conference recently.

Let me be absolutely clear about the substantive question that the hon. Gentleman poses, because it is important and there will be wide interest in all parts of the House about our strategy. As I said in my statement, in the Budget, the Chancellor set out the ambition to sell about £16 billion of assets over the period 2011 to 2014. About £11 billion of those assets will, of course, be local authority assets. That is based on a long-term picture of what local government tends to sell each year. Over the past 20 years, local authorities have raised something like £3.7 billion a year, and of course they are free to keep those receipts and reinvest them in priorities such as affordable housing and schools.

In addition, we anticipate that something like £2 billion of central Government property can be sold and reinvested by Departments. We believe that additional business and financial assets can also be sold, such as those that the Prime Minister listed, and that something like £3 billion can be raised from them over the next couple of years. Of course, that money will be available to pay down debt.

How telling that at the end of the Prime Minister’s summer of denial, instead of following the Conservative lead and taking the tough decisions required to get the deficit under control, this morning he has ducked the issue and chosen to peddle the illusion that asset sales can somehow avoid the pain of fiscal adjustment—taking people for fools again. Can the Chief Secretary confirm that he, at least, understands that asset sales, however necessary they may be to reduce debt, do not reduce the deficit, and that they can only ever be a supplement to, not a substitute for, proper fiscal discipline?

Can the Chief Secretary confirm also that the package of central Government assets mentioned this morning amounts in value to little less than a week’s worth of borrowing at the current levels, and that it is not the Government’s intention to seize the proceeds of sales of local authority assets? Can he tell the House why anyone should believe a word the Government say on asset sales when they have announced every single one before? The Tate in 1999—[Interruption.] No doubt it is coming. The Tote announcement was made in 1999 and was in the Labour party’s 2001 election manifesto. The announcement on the student loan book was made in 1997 and again in 2007, on URENCO in 2005 and on the channel tunnel rail link in 2007. Not a penny piece has been achieved from any of them. Will the Chief Secretary confirm that the value of all those assets is now significantly lower than when their sale was first announced? Indeed, did not the comprehensive spending review 2007 pencil in a £6 billion receipt for the student loan book alone—twice what the Government now expect to get from flogging off the entire package?

Selling the family silver will not solve the crisis in the public finances. The country has had enough of denial, dither and delusion. The Government need to start taking the tough decisions, not ducking them, or call an election and let someone else get on with the job.

I enjoyed the remark about tough decisions. I have made a mental note of the Tate. The hon. Gentleman presumably refers to tough decisions such as proposals on state pension plans—I understand that the National Institute of Economic and Social Research, having looked at his plans, has discovered that he is £3 billion short and five years out in his sums. So I will not take lessons in tough decisions from him.

The hon. Gentleman knows that bringing public spending within the bounds of what is possible in the years to come will take a mixture of things: growth coming back, investing in new industries and jobs, the right decisions on tax—decisions that he has opposed consistently; I think that the Conservative party has voted against something like £20 billion of necessary tax increases for the years to come. It requires tougher decisions on spending in the years to come, but where there are things that the Government should not hold on to, we should sell them off. Yes, we should allow local authorities to keep receipts to invest in local priorities, but business or financial assets, such as those that the Prime Minister talked about today, can be sold off and the proceeds used to pay debt.

rose—

Order. We have under 10 minutes to go and we want as many people to contribute as possible.

In 2008, I spoke in the House about defending the jobs in the Tote in Wigan, in my constituency and that of my hon. Friend the Member for Wigan (Mr. Turner). After meetings with Downing street and the Minister at the time, a commitment was given that, in any future sale, the jobs and the investment in north-west Wigan would be protected. Will my right hon. Friend give a commitment that that is exactly what will happen? The first I heard as a local Member of Parliament about the 600 jobs and the sale was over my porridge at six o’clock this morning.

I do not think that the Government’s position on the sale of the Tote has changed in essence. The medium-term decision was to keep it in the public sector, but now is the right time to look at the possibility of its sale. The dimensions and constraints around the sale of the Tote that my right hon. Friend outlined have not been disturbed.

Columns 586 to 588 in Hansard on 9 July 1987 contain the acceptance by the Labour spokesman that the Dartford bridge—effectively the first privately funded, operated, designed and built public works—would, as I said as Minister in the previous column, have tolls for 15 to 20 years. How can we have trust in Parliament if both sides accept something and then one side says, “We’ll keep the tolls going so we can sell it off”?

Again, the precise way in which the different assets are sold will have to be the subject of further debate and conversation, not least in the House. That is why it is the Chancellor’s ambition to bring before the House a portfolio of assets, which we believe could be sold. There will be several different questions that relate to different assets, but once the portfolio is published, we might be able to have a bit more of a debate about the precise detail of each one.

What does the brief say about the Thurrock-Dartford toll in relation to the fact that it is lawful to toll a riparian crossing only to control and manage congestion? How does a sold bridge and tunnel allow either the operators to get a return, or the Government to continue to pay, if they are constrained by the European Union directive?

There will be many different questions on each of the assets. In some cases, the sale of the assets will require us to return to the House to change legislation but, as I said, once the portfolio of assets is published, we can have a proper debate about the whys and wherefores of each one.

In 2001 and 2005, the Government made a manifesto pledge that they would nationalise the Tote in order to gift it to racing. Will the Minister tell us what proportion of the proceeds from the sale will be given to racing and what steps he will take to safeguard the jobs in Wigan, because he studiously avoided the question on that from the right hon. Member for Makerfield (Mr. McCartney)?

The announcement today has done nothing to disturb the policy commitments that have already been made about the different sales of assets. However, the Government must balance the need to get best value for the taxpayer in the years to come with the constraints and policies regarding each of the different businesses and assets. That is quite properly a subject for further discussion in the House.

May I just clarify things? We have consistently made a commitment to the racing industry that if we sell the Tote, we will contribute half the receipts back to the racing industry. Is that still our position?

Yes it is.

How much have the Government pencilled in from sales of leisure centres owned by local authorities, and how many of those leisure centres are currently facing financial ruin because of Her Majesty’s Revenue and Customs’s claims to recover retrospective VAT?

The figures on local authority asset sales that have been put before the House this afternoon are projections based on the pattern of local authority asset sales for the past 20 years. Over the last 20 years, local authorities have sold something like £3.7 billion of assets a year. As the recovery sets in and as market values return, we have no reason to think that those values will be any different in future.

Does my right hon. Friend agree that a lot of people listening to this debate will think that it is a bit rich that the market got us into this situation, but the market will now be able to buy our assets on the cheap?

As I said in my statement, the Government must not only lock in the recovery, but lay the foundations for growth in the years to come. As growth sets in, our ambition is to halve the deficit over four years. That is going to require a number of difficult decisions. If we want to invest in creating new industries and new jobs in the years to come, as well as to put public finance on a sustainable footing for the medium term, there will be difficult decisions on tax and difficult decisions on spending. However, if we can create new investment in the infrastructure that we need in the years to come and if that can be financed through selling off assets that we no longer need, it is the right decision to take.

Will the Minister confirm that his brief fails to alert him to the common sense of hon. Members on both sides of the Chamber relating to the funding and history of the building of the two tunnels under the Thames and the Thames bridge? It was intended that they would be paid for and then made free. In a spirit of joined-up government, will he confirm that the Department for Transport is at this very moment looking at proposals that could lead to the removal of the tolls altogether?

The Department for Transport has to look at a whole range of scenarios for the years to come, not least whether another crossing is put over the Thames. That is why I said that the ambition over the next couple of years—the next two financial years—is to raise something of the order of £3 billion from the disposal of central Government businesses. We think that the assets listed could make a big contribution, but there will not be a fire sale. We will seek to extract the most value for taxpayers from the sale of the assets. That is why the Chancellor will return to the House with a portfolio of assets that we think it is right to sell over the next couple of years—the assets to which the hon. Gentleman referred will, I think, be among them.

Does the programme of disposals include all or part of the business of Northern Rock?

The programme that we are putting before the House now, and which we will put before the House in more detail in the months to come, does not include disposal of the Government’s interests in financial institutions.

What is the Minister’s definition of a fire sale?

I would define a fire sale as selling things for substantially less than we think we could secure for taxpayers. However, this Government have a good record of selling assets in order to pay down debt, not least regarding the money that was raised from 3G licences in years gone by. Those decisions allowed us to go into this recession with debt at something like 36 per cent. of gross domestic product, which is much lower than other countries in the G7. Those decisions have helped us to ensure that help is available for businesses and families to get through this recession—help that the Conservatives opposed.

With all these public assets due to be sold off, may we be reasonably satisfied that at least the Palace of Westminster will not be flogged off to some land speculator or property company in the near future?

There are some limits that even I must observe.

On 29 June, the Prime Minister said that the £16 billion would be redirected to public investment. Will the money go to investment or to pay off debts? Even the Prime Minister cannot spend the same money twice.

As I tried to say in my reply to the hon. Member for Twickenham (Dr. Cable), we think that local authorities will be able to secure some £11 billion of asset sales and central Government will achieve some £2 billion of asset sales. That money will be available for re-investment in infrastructure and other capital investment priorities. There are some businesses that can raise some £3 billion over the next two financial years, and those proceeds can be used to pay down debt.

Can the Minister confirm that the onward sale of the Tote will be on the basis of the seven-year exclusive licence that was in the original sale? Will the Treasury be willing to consider a revised bid put forward by a racing consortium?

The answer to the second question is yes. The answer to the first question is, as I said to my right hon. Friend the Member for Makerfield (Mr. McCartney), that the current policy position on the sale of the Tote is undisturbed by the announcements made today.

Mr. Speaker, with your permission, I will make a statement on the circumstances surrounding the decision of the Scottish Justice Minister on 20 August to release on compassionate grounds the man convicted of the Lockerbie bombing, Abdelbaset al-Megrahi.

As the Prime Minister has said, Lockerbie was a terrorist act of the gravest brutality. It was the largest peacetime loss of life on British territory. It was a major tragedy, with the killing of 43 Britons in the sky and in Lockerbie, 190 Americans and people of 19 other nations. It was an act, by people and a state, that breached all norms of humanity. That is why the reception for Megrahi on his return in August at Tripoli airport was so unacceptable.

My statement today sets out the events leading up to the Scottish Justice Minister’s decision to release Megrahi. I will set out the changes in Libya’s relations with the international community since 1988 and address the three central issues raised in respect of the UK Government at the time of his release: first, the decision by the Government to sign a prisoner transfer agreement with Libya that did not exclude Megrahi; secondly, the relationship between the British Government and Scottish Executive in the decision-making process; and thirdly, the separate questions of the investigation into the murder of WPC Yvonne Fletcher and the compensation for victims of Libyan-supported IRA terrorism.

The House will know that today is the 25th anniversary of the Brighton bombing, when the IRA attempted to murder a British Prime Minister and her Cabinet, and did kill five people, including one Member of this House, and injured many others. Throughout the 1980s and 1990s, the Libyan Government were linked to a number of terrorist organisations, including the Provisional IRA. Libya’s support for international terrorism defined its relations with the western world.

As right hon. and hon. Members will recall, WPC Yvonne Fletcher’s murder in April 1984 led us to cut off diplomatic relations. The bombing of a nightclub in West Berlin in 1986 was followed by US air-strikes on Tripoli and Benghazi. When evidence emerged supporting allegations that Libyan intelligence officers had been involved in the bombing of Pan Am flight 103 over Lockerbie in December 1988, the United Nations Security Council demanded that Libya hand over the accused and imposed sanctions when it failed to comply.

During the 1990s there was evidence from a range of sources that the Libyans were also actively pursuing a range of nuclear, chemical and biological weapons programmes, as well as the development of ballistic missiles. Libya was a pariah state whose activities posed a clear and unambiguous threat to international peace and stability, and to our security in this country. The story of the past decade has been very different. Libya has abandoned its support for international terrorism and stopped its pursuit of weapons of mass destruction, in a series of events that merit the term “unforeseeable”.

In 1998, the US and UK Governments put forward a detailed joint proposal for the trial of the two accused of the Lockerbie atrocity. Our joint commitment to close and transparent working in all matters has continued throughout this case. We reported our proposal to the UN Security Council and the UN Secretary-General and, with the support of the Security Council, in 1999 persuaded the Libyans to surrender the two accused to a specially constituted court in the Netherlands where a Scottish panel of judges, without a jury, would try the accused under Scots law. Libya also agreed to pay $10 million compensation to each of the families of the victims, whatever their nationality, if the defendants were convicted. Megrahi was found guilty under Scottish law by the court in 2001 and his conviction was upheld on appeal in 2002.

Against that background and, as I will explain later, in particular after the Libyan admission of responsibility for WPC Fletcher’s murder, the UK restored diplomatic relations in July 1999. The long-term aim was clear: the normalisation of relations with Libya.

On 19 December 2003, following months of secret discussions with the UK and US, the Libyans announced that they would eliminate their weapons of mass destruction and nuclear weapons programmes, and restrict the range of their missiles. They also agreed to immediate international inspections and to be bound by all the relevant international agreements, which they now are. Today, we share information and co-operate in our efforts to disrupt and dismantle terrorist groups in Europe and north Africa, in particular al-Qaeda in the Maghreb, which was responsible for the kidnap and murder of Edwin Dyer in May. We also try to find common ground in the UN and elsewhere on matters of common concern.

There is also an entirely legitimate commercial dimension to our ties. With the largest proven oil reserves in Africa and extensive gas reserves, Libya is potentially a major energy source for the future. We work hard to support British business in Libya, as we do worldwide.

We continue to have serious concerns about human rights in Libya, including about freedom of expression, arbitrary detention, political prisoners and the mistreatment of migrants. There are a number of important outstanding issues, in particular concerning the investigation into the murder of WPC Fletcher and the campaign for compensation by the victims of IRA terrorism.

In May 2007, Prime Minister Tony Blair made his second visit to Libya. His summit with Colonel Gaddafi at Sirte covered the full range of our interests with Libya. Mr. Blair signed a defence accord and witnessed the public signature of a major BP exploration contract. Also agreed was a memorandum of understanding on negotiations for a judicial co-operation package, including a prisoner transfer agreement and agreements on mutual legal assistance, extradition, and civil and commercial law.

The UK had a model agreement, based on Council of Europe arrangements, that was the starting point for negotiation on our prisoner transfer agreements with any country and that provided the starting point for negotiations with the Libyans. Four points are relevant. First, a PTA provides for prisoner transfer, not prisoner release. Secondly, it provides a framework for transfer, not a right to transfer. Thirdly, a PTA cannot be used when appeals, including by the prosecuting authority, are outstanding, as in this case. Fourthly, Ministers in the sentencing jurisdiction—in this case Scotland—have an absolute right to veto any transfer.

This standard draft had no provision for any carve-out for any named prisoner. However, the Scottish Executive made strong representations for us to seek to alter the standard PTA so as specifically to exclude Mr. Megrahi. The UK negotiation team, led by the Ministry of Justice, sought in good faith to achieve this goal.

The Libyans insisted that the only PTA that they would sign was a PTA without any exclusions. So the Government had a clear choice. We could agree to a standard PTA with no exclusions, retaining for Scottish Ministers an absolute veto over any request for prisoner transfer in the case of Megrahi—a veto which they used in August this year—or we could have ended the negotiations to prevent an application for prisoner transfer. This would have set back our wider national and commercial interests that flowed from normalised relations, as the Justice Secretary has made clear. Since the PTA involved no prejudice to the rights of the Scottish Executive, nor pressure on the Scottish Executive, the Government decided it was right to go ahead. The PTA finally took effect in April 2009.

In September 2008, a new factor came into play. Megrahi was diagnosed with terminal cancer. The Libyans became increasingly concerned at the prospect of Mr. Megrahi dying in a Scottish prison. They communicated this to the Government and to the Scottish Executive. It was repeatedly made clear in reply, including in the Prime Minister’s meeting with Colonel Gaddafi on 10 July this year, that the decision on Mr. Megrahi’s fate was exclusively for Scottish Ministers and the Scottish judicial system.

Notwithstanding that any decision on release was for Scottish Ministers and the Scottish judicial system, the UK Government had a responsibility to consider the consequences of any Scottish decision. We assessed that although the decision was not one for the UK Government, British interests, including those of UK nationals, British businesses and possibly security co-operation, would be damaged—perhaps badly—if Megrahi were to die in a Scottish prison rather than in Libya. Given the risk of Libyan adverse reaction, we made it clear to them that as a matter of law and practice it was not a decision for the UK Government and that as a matter of policy we were not seeking Megrahi’s death in Scottish custody.

In Scotland, compassionate release generally comes into play in the last three months of a prisoner’s life. Scottish Justice Secretary MacAskill has set out the process by which he arrived at his decision in August this year to refuse the PTA transfer but to grant Megrahi compassionate release. He also set out the grounds on which he did so. As the Scottish Justice Secretary repeatedly stated in his announcement, this was a decision for him and him alone to take. The Government were clear that any attempt by us to pressure the Scottish Executive would have been wrong. At the press conference announcing his decision, the Scottish Justice Secretary confirmed that there was “no pressure from Westminster”.

It is also important to address the unfounded allegation that we ended our search for progress in dealing with the legacy of Libya’s past support for terrorism. Admission of responsibility for WPC Fletcher’s murder and the payment of compensation were necessary for the restoration of diplomatic relations in 1999. Four years later, we secured Libyan agreement to a joint investigation into the murder. It was clear, including to the family, that anyone prosecuted for the murder would have to be tried in Libya. Since 2007, the Libyans have refused to allow the Metropolitan police to return to complete their work. We share the determination of the Fletcher family to find answers, and continue to work on this case.

In 1995, Libya provided critical information on its past links to the IRA. At that time, the then UK Government wrote to the United Nations declaring that they were

“satisfied that they have largely met our expectations”

in accounting for the extent of their support for the Provisional IRA. Libya has since then considered the issue a closed matter. Nevertheless, in respect of the campaign involving hon. and right hon. Members to secure compensation from Libya in respect of its past support for the Provisional IRA, we have created a dedicated unit in the Foreign Office to facilitate the families’ renewed campaign. The unit is currently working with hon. and right hon. Members to secure a visit to Libya soon.

Twenty-one years on, the ongoing pain of the Lockerbie atrocity remains a testament to Libya’s past association with international terrorism. Her re-entry into the community of nations does not and cannot absolve her of this responsibility. It does, however, represent a major step forward. The Government make no apology for their part in securing this progress and we reject the charges repeatedly made but not justified. The PTA was not an agreement for Megrahi’s release. The Scottish Justice Minister said he was not pressurised to release him. We did not forget the victims of IRA terrorism, or WPC Fletcher. On that basis, I commend this statement to the House.

We are grateful to the Foreign Secretary for making a statement and we of course concur with his remarks about the horrors of the Lockerbie bombing and about the 25th anniversary of the Brighton bombing, the memory of which means a great deal to all of us in the House, but particularly to those of us in the Conservative party.

In other respects, we will differ with the Foreign Secretary’s statement, because it is our view that the release of Mr. Megrahi by Scottish Ministers was a mistake, that the episode was characterised by obfuscation and confusion on the part of Ministers at Westminster and that it damaged the standing of this country in the United States. The Secretary of State said that the decision was absolutely wrong, and the director of the FBI said that it made

“a mockery of the rule of law.”

As the Foreign Secretary has pointed out, relations with Libya have improved over the last 10 years, which we all welcome. Since then, as he also pointed out, Libya has voluntarily dismantled its programmes on weapons of mass destruction, surrendered al-Megrahi for trial and co-operated on migration and counter-terrorism. We all want that co-operation to continue for the future. In the opinion of most people of this country and in our opinion, however, the case to release Mr. Megrahi against that background was outweighed by the requirements of justice and the fact that he had been sentenced to life imprisonment for the murder of 270 people—an opinion shared across the parties, including by the leader of the Labour party in Scotland, who said that this would not have happened if the Labour party had been in power there.

One of the most bizarre aspects of the decision to release al-Megrahi was the fact that the Scottish Executive, having concluded that they could not transfer him under the prisoner transfer agreement because it would breach assurances given to the United States, then concluded that it was appropriate to release him altogether. Would it not have been more sensible to conclude that if it was inappropriate to return him to Libya as a prisoner, it was even more inappropriate to release him as a free man?

In the time available, let me put a few short questions to the Foreign Secretary about the Government’s own conduct. Will he clarify what advice the Foreign Office gave to Scottish Ministers? We know that the Foreign and Commonwealth Office’s middle east and north Africa directorate wrote to the Scottish Justice Secretary saying:

“We do not consider that the UK entered into a definite commitment, legal or otherwise, with the United States.”

However, both the United States Attorney-General and Secretary of State were adamant that assurances had been given to the US Government that any person convicted would serve his sentence in Scotland—and, by implication, would serve the sentence. Why was there this fundamental difference of opinion between Westminster, Holyrood and the United States?

Secondly, the Foreign Secretary appears to have argued in his statement, in line with what the Justice Secretary said in his interview at the beginning of last month, that trade played a big part—a view that I see the Justice Secretary now assents to—in the decisions made about the prisoner transfer agreement. In that case, why did the noble Lord Mandelson say of that suggestion that

“it is not only wrong; it’s completely implausible and actually quite offensive”

to say that the release of al-Megrahi was in any way linked to trade. [Interruption.] If the Foreign Secretary thinks that Lord Mandelson was wrong—however risky it may be make that assertion—he can say so and we can get that clear! Even more importantly, will he say what the event was that changed the Government’s policy on the prisoner transfer agreement and caused the Justice Secretary to change his mind? What was the event, threat or negotiation that led to that change? Is it the case, as Colonel Gaddafi’s son has asserted, that Megrahi was

“always… on the negotiating table in all commercial, oil and gas contracts and when British interests were discussed in Libya”?

The Foreign Secretary said nothing in his statement about relations with the United States. Given the evident differences of opinion with the US on the nature of the assurances given about Mr. Megrahi, should not the United Kingdom have informed the US about the change of policy on the prisoner transfer agreement? My hon. Friend the Member for Aylesbury (Mr. Lidington) tabled a question on 7 September, asking whether that was done, but no reply has yet been given. Will the Foreign Secretary clear up the confusion now by saying whether the US was informed of the British Government’s policy and, if so, what was said in response? Will he now accept that the Government’s handling of this matter in the aftermath of the Scottish decision left a great deal to be desired?

The Foreign Secretary effectively argued in his statement that the Government were happy to see Mr. Megrahi released—he can put that a different way if he does not agree to those words, but that is effectively what he argued. Does he agree with me that it was therefore deeply regrettable that the Prime Minister stayed silent on this issue for five days after the release, and that it took him another four days to say that he respected the decision? Would it not have been better for the Prime Minister to say immediately either that he disagreed with the decision, or that he agreed with it if he thought it was, on balance, the right thing to do?

Twelve days after the release, it emerged that the Minister of State, Ministry of Defence, the hon. Member for Harlow (Bill Rammell) had told the Libyans at a meeting in Tripoli that the Prime Minister did not want al-Megrahi to die in prison. That statement received tortuous confirmation from the Foreign Secretary when he said what he subsequently said in this statement—that

“we were not seeking his death in prison”.

Why, then, did the Secretary of State for Children, Schools and Families say that

“none of us wanted to see the release of al-Megrahi”?

How can that be reconciled with the statements of Foreign Office Ministers? Why was the Cabinet unable to express a coherent view on the subject? Did it not damage this country in the eyes of the world that it was unable to do so?

The Foreign Secretary commented on the prospects of taking forward the case of WPC Yvonne Fletcher. Will he say whether he sees any realistic prospect of success, and what the next steps will be?

While we welcome the fact that the Government have changed their policy on support for the families who were victims of Libyan-backed IRA terrorism, can the Foreign Secretary assure us that as well as assisting those families, and consistent with that, Ministers will now raise the issue with Libyan officials and Government members whenever the opportunity arises? It seems extraordinary for Her Majesty’s Government to give assistance to the families but never mention the subject in their dealings with Libya.

Will the Foreign Secretary concede that, when all the facts are taken together, it is clear that damage was done all round because of the Government’s mishandling of the matter? Not only do the British public disapprove of this decision; our American allies were mystified and felt let down, from the President downwards. At present it is harder to pursue improved relations with Libya after all this, because of the cloud of suspicion that currently hangs over Britain’s dealings with that country.

Given the number of questions, the huge public interest in the matter and the need for clearer answers to those questions, should we not have the independent inquiry into the matter for which we have called throughout?

Let me deal with the points made by the shadow Foreign Secretary.

I think that much of the right hon. Gentleman’s quarrel—he was quite open about this—is actually with the Scottish Justice Secretary. He described the way in which his view of the case differs from that of the Scottish Justice Secretary. He was right to say that there was a difference between the prisoner transfer agreement and compassionate release. As I said in my statement, the prisoner transfer agreement is not an agreement for release, but an agreement for the transfer of a prisoner from a prison in one country to a prison in another country. As I also said in my statement, the prisoner transfer agreement was not available for use because of appeals that were under way, including one from Scottish Ministers in respect of the length of the sentence. However, the Scottish Justice Secretary dismissed that.

The advice to the Scottish Executive was the subject of letters published last month. There was no legal bar to the decision made by the Scottish Justice Secretary. It is also important to point out that at every stage in the late 1990s it was clear—as it would have been clear to any Government talking to another Government—that the Government could not bind the hands of their successors, and could not foresee all the circumstances of the future. Certainly, I think that the transformation of our relations with Libya qualifies for the term “unforeseeable”.

The right hon. Gentleman cautioned me about the risky business of decoding the remarks of my right hon. Friend Lord Mandelson, but actually they did not need to be decoded in this case. What Lord Mandelson said—as the right hon. Gentleman pointed out—was that there was no deal for the release of Megrahi in respect of trade, and that is absolutely right. I am afraid that the right hon. Gentleman was condemned in quoting the words of Lord Mandelson. As for the son of the Libyan leader, he has made it quite clear that there was no deal in respect of Megrahi’s release.

The right hon. Gentleman asked about the next steps to be taken on the Fletcher case. Obviously I will not give a running commentary on all the aspects, but I look forward to meeting the Metropolitan Police Service and the Fletcher family again this month with a view to discussing how we might take that forward. I think it would be wrong to give false hope at this stage, because the Libyans have made it absolutely clear that they consider the matter closed.

Of course we will continue to discuss the support for the families of the victims of IRA terrorism with the Libyan authorities, but we have reached the very clear view that there is more chance of its being addressed on a humanitarian basis by representatives of the families than in a Government-to-Government negotiation. It is important to be open and clear about that.

I said in my statement that candour and transparency were the essence of our special relationship with the United States. That relationship, and that basis, have been fulfilled at every stage of this affair. The right hon. Gentleman will I hope have seen the article in the Financial Times last month by the new United States ambassador to the United Kingdom, which made it absolutely clear that our relationship with the United States was as strong as ever, and I hope he will also have studied carefully the words of Secretary Clinton yesterday, who could not have been more fulsome or clear about the strength, and continued strength, of the relationship between the UK and the United States.

May I thank the Foreign Secretary for his statement and note in passing that long recesses are not a good advertisement for Parliament, as too often we cannot ask questions when they are most pertinent?

The Foreign Secretary has once again tried to suggest that at all times the British Government acted appropriately and that they got the best possible result for everyone involved. I have to tell him that that is not the view of many victims of the Lockerbie massacre, or the victims of Libyan-supplied IRA Semtex bombs, or the family of WPC Fletcher—not to mention President Obama. How were the United States Government able to secure compensation from Libya for the Lockerbie bomb victims, yet the British Government failed to secure compensation for IRA bomb victims? Why did it take this summer’s row to force a change in policy on compensation for IRA victims?

Today, the Foreign Secretary has once again protested that there was no link between al-Megrahi’s release and any trade deals; yet his explanation of why his right hon. Friend the Secretary of State for Justice totally changed his position on the prisoner transfer agreement with Libya suggests, in his own words, commercial considerations were a key factor, so is it not the case that trade came before justice? Even if trade issues did not affect the final decision to release al–Megrahi, is the Foreign Secretary saying that in all UK Government negotiations with the Libyans there was never any discussion involving any type of linkage between al-Megrahi’s possible future release and trade deals for UK companies?

While we all welcome the changed Libyan policies in recent years in respect of terrorism, will the Foreign Secretary not accept that the Libyan regime still has an extremely poor record on human rights? According to Amnesty, peaceful opponents of the regime can face execution merely for speaking out, so will the Foreign Secretary make it clear today that Britain wishes to see Libya clean up its act on human rights, and will he therefore explain why Britain has been training Libyan police and Libyan special forces, and granting a growing number of export licences for everything from water cannon to armoured personnel carriers?

Given all this, surely the Foreign Secretary must think again about our call for an inquiry, and the Conservative call, and announce an inquiry that covers all aspects of the UK-Libyan relationship in the run-up to the release of al-Megrahi. Nothing else will be able to reassure the public that trade in arms did not come before justice. Anything else should be unacceptable to this House.

I want to start by saying very clearly that the fundamental issue in this case was the right of Scottish Ministers to take this decision without pressure. It is the word of the Scottish Justice Minister—not a member of the governing party in the United Kingdom, but a member of the Scottish National party—that it was his decision, his decision alone and a decision taken without pressure from Westminster; he himself has said that. The most fundamental responsibility of the Government was to respect the constitution of this country, which has devolved powers in respect of this issue, and that was acted upon very diligently by the Government.

In respect of US compensation and the victims of IRA terrorism, the hon. Gentleman will know that the United States were at a different stage in the restoration of diplomatic relations than us. We restored diplomatic relations after the resolution of the WPC Fletcher issue, and, as I explained in my statement, the United States were at a much later stage in their discussions. None the less, I think it important to support the campaign being waged by hon. and right hon. Members on this issue.

I will check Hansard, but the hon. Gentleman did say in his question—I wrote it down—“Even if trade negotiations did not affect the final decision.” That was an important thing to say because I could also quote what he said on the radio when debating with my right hon. Friend the Secretary of State for Justice, which was far from such an admission. I hope that the hon. Gentleman has now recognised that the final decision was not affected, as it could not be because we were not putting pressure on.

In respect of Libyan human rights issues, the hon. Gentleman will know that the Foreign Office publishes an annual human rights report. He is right to draw attention to this, and I mentioned it in my statement. I certainly agree with him that we want to make human rights abuse a thing of the past, wherever it exists. Finally, the Libyan police training is a programme to help Libya meet its human rights obligations; far from undermining the case, which he and I share, that Libya needs to clean up its act, this was a way of helping it to do so.

On the inquiry, which is the hon. Gentleman’s single transferable answer to every conceivable policy problem, his call seems to be ill-founded. On the sentencing authority, the Scottish Executive and the Scottish authorities are the right people to consider whether there are any issues in that respect, and I come to this House to explain the facts of the case. Given that a lot of the papers have already been published—last month—I think there is more than enough material for him to make his own judgments about the situation.

rose—

Order. Leaving aside the evident interest in this statement, there is heavy pressure on business today, as the House will appreciate, so once again I appeal to each hon. or right hon. Member to ask a single short supplementary question and to the Foreign Secretary to provide us with a brief reply. I call Mr. David Hamilton.

One thing that angers most Scots, as it does people throughout the UK, is that this Government did not condemn outright the action taken by the Justice Minister in Scotland. His decision angered the vast majority of Scots and people throughout the UK. What message does it send to our armed forces fighting in Afghanistan that we release a prisoner who should never have been released?

I have a great deal of respect for my hon. Friend, whom I know to be a strong supporter of our work in Afghanistan and of the extraordinary bravery of our troops there. I hope he will accept that there is not a scintilla of doubt about the Government’s commitment in that respect, nor a scintilla of support or succour given to those who would be attacking our troops. He said that this was a decision that we made. It was not a decision that the Government made; it was a decision made by the appropriate authorities—in this case, a single member of the Scottish Executive: the Scottish Justice Minister. It is right to say very clearly that it was not for the British Government to take this decision. It was for the British Government to assess the consequences of the decision and to make it clear that we were not seeking the death of Mr. Megrahi in jail, although it was a decision for the Scottish Justice Minister to make. That is something we said repeatedly throughout this affair.

Is the Foreign Secretary aware that, as Secretary of State for Scotland in 1988, I had to travel to Lockerbie on the night of the disaster? Never for a moment did I expect that the person convicted of murdering more than 200 people would be released and sent home having served only eight years of a 27-year minimum sentence. Is the Foreign Secretary aware that he has made a remarkable admission today? In his statement he said—correctly, of course—that it was the Scottish Executive’s Minister who took the decision, but he went on to say that the UK Government had a responsibility to consider the consequences of that decision. He says, in his own statement, that the only consequences that they considered were the implications of al-Megrahi dying in a prison in Scotland, rather than at home. So has the Foreign Secretary, by his own admission, not acknowledged that he paid more attention to the views of the Libyan Government, who were responsible for this terrorist outrage, than to the views of the United States, almost 200 of whose citizens were killed on that evening?

I remember where I was in 1988—I was a student in New York. I can well imagine the emotion and passion that exist—[Interruption.] My right hon. Friend the Justice Secretary says that he remembers the right hon. and learned Gentleman travelling to Lockerbie at that time. I am sure that the right hon. and learned Gentleman never expected the transformation in Libyan relations that has taken place, nor anticipated the terminal cancer that struck. I want to address, head on, the nonsense that he talked at the end. We considered every eventuality—[Interruption.] I am sorry, but the statement is absolutely clear that we had a responsibility to consider the consequences of the decision that was taken, and the decision—be it one way or the other—had to be accounted for. Three possible decisions could have been taken, and they were all considered as part of our contingency planning for what the Scots might do, of their own accord, in the decision that was theirs to take.

Unlike my hon. Friend the Member for Midlothian (Mr. Hamilton), I fully support the Scottish Justice Secretary’s decision to send al-Megrahi home. During the middle of this furore it was reported that my right hon. Friend the Foreign Secretary had sealed the papers for ever regarding the Lockerbie bombing. Is that the case, and if so why?

That is the first I have heard of it. Obviously, some of the papers were released by the Scottish Executive last month and the normal freedom of information rules will apply. Perhaps my hon. Friend is referring to the papers of previous Governments—I do not know if that is the case, but I am happy to have a word with him afterwards to get to the bottom of his concern.

Is not the real problem that we have now in this country two competing jurisdictions—the Scottish Executive and the UK Government—both pursuing aspects of foreign policy and with overlapping and sometimes conflicting responsibilities? What is the Foreign Secretary doing to sort out this muddle and confusion and to prevent it from happening again, so that we can bring some coherence to our relations with other Governments?

There are no competing jurisdictions when it comes either to foreign or criminal justice policy. The right hon. Gentleman will know that there has long been a different system of criminal law in Scotland, which was previously administered by Ministers of the Crown here in London. However, now that his right hon. Friend the Member for Witney (Mr. Cameron) has arrived, I should say that his party now supports the devolution settlement in Scotland and I suggest that he stop attacking its continued presence in the United Kingdom.

I thank the Foreign Secretary for his statement, which has allowed Members on both sides to express their concern over the decision that has been taken. He mentioned the establishment of a new unit in the Foreign Office to help the families of the victims of IRA terrorism. Will he give an undertaking to this House that it is not just the creation of the unit that matters, but full and unequivocal support from Ministers for the campaign? Will he give thought to the idea of a Minister’s leading the delegation when it goes to Libya to ask for that compensation?

I certainly give my right hon. Friend the commitment of full ministerial engagement and support. However, I think it would be unwise to turn this into a Government-to-Government issue. It is far better that we support the families, who are campaigning for the victims, and their representatives in Parliament, because I think that a humanitarian appeal is more likely to succeed. I do not want to raise expectations of imminent success in this area, but I think that a humanitarian appeal has more likelihood of success than a Government-to-Government negotiation.

I hope that the Foreign Secretary deprecates the comments we heard from those on the Labour and Conservative Benches who seek to undermine the Scots legal system, where it is custom and legal practice to release prisoners who are terminally ill on compassionate grounds. The decision by Justice Secretary Kenny MacAskill on al-Megrahi was based on the recommendation of the Parole Board and the prison governor, and on the medical advice of the Scottish Prison Service. Does the Secretary of State agree that it was correct to make a decision based on quasi-judicial grounds and not on political considerations?

The particular role of the Justice Secretary in Scotland, like that of the Justice Secretary in the UK, is circumscribed by quasi-judicial aspects. They have been followed through in this case and that is why the Prime Minister said that we respected the process by which he came to his decision.

Given that this was a decision by a Scottish Minister on compassionate grounds, I wonder whether my right hon. Friend has seen any assessment of the evidence that the hon. Member for Moray (Angus Robertson) mentioned a moment ago—particularly that on the medical grounds—or whether, in a few months’ time, we might discover that compassionate release is as effective a cure for cancer as it once apparently proved for Alzheimer’s disease in another high-profile compassionate case?

I have no evidence to suggest that the medical opinions were other than straightforward, but we are all obviously watching the clock on this issue.

Does the Secretary of State acknowledge that there is disquiet among many people about the fact that Mr. Megrahi withdrew his appeal the day before Kenny MacAskill made his announcement, presumably because of the return of prisoners legislation? Does the Secretary of State not agree that as a consequence, people are disappointed that the opportunity perhaps to find other perpetrators of Lockerbie who have never been brought to justice has been lost? Does not that, in itself, justify an inquiry?

Although the Megrahi appeal was dropped, the appeal by the sentencing authority—by the Crown—was not. That is why the prisoner transfer agreement would not have been applicable in that case. Of course, it is completely within the rights of those in the Scottish system to establish any sort of inquiry that they want into the decision that was taken.

May I tell the Secretary of State that the victims welcome the initiative of creating this special unit? Together with Northern Ireland colleagues, I have been privileged to attend weekly meetings at the Foreign Office in connection with this issue, but we want the opportunity to go to Tripoli to indicate that this can be a source of final reconciliation. We need more leverage from Ministers to get us access to Tripoli, where the victims can put their case before the Libyan regime. I urge the Secretary of State to tweak things a bit, just to put that extra energy into it.

I am grateful for what my hon. Friend has said—he has been a doughty campaigner on behalf of the victims. In fact, I think that he was in a meeting in the Foreign Office the week before this all blew up, and he will know that there is a real commitment to that proposal. I am happy to talk to him about the sort of tweaks that he thinks necessary, but I think that the case that he made for a visit to Tripoli is overwhelming, and I look forward to its being met.

Is the Foreign Secretary aware that I represent the family of Bill Cadman, who was a constituent murdered in the Lockerbie atrocity? The family feel incredibly strongly, as do the other families. The Scottish fatal accident inquiry was too limited in scope, because it did not cover security issues. Why has there never been a proper full inquiry into this atrocity, so that the families of the victims could secure proper closure?

I did not know about the individual family concerned, but I know that there are strong feelings among the families in the UK. It is right to keep saying that the criminal justice investigation and the final prosecution were undertaken under Scots law. It is for the Scottish Executive and the Scottish system to decide if there are any holes in that approach and, if there are, to follow that up.

If the decision to release al-Megrahi were made not by the Scottish Justice Secretary but by the Foreign Secretary’s colleague, the Lord Chancellor, would the Foreign Secretary still feel constrained to remain silent in the face of the world’s press?

I think that the hon. Gentleman will find that such a decision, whether in Scotland or in the UK, is for the Scottish Justice Secretary or for an English Justice Secretary to take, alone and on their own. Its quasi-judicial nature applies in both systems.

Does the Foreign Secretary accept that after all the sound and fury generated by Governments, the people who are left feeling more alienated and marginalised than ever are the families of the 259 passengers and crew from Pan Am flight 103 and of the 11 Lockerbie residents? They are the ones who are left feeling, more than ever, that they are further from the truth. I have asked the Select Committee on Scottish Affairs to hold an inquiry into how the machinery of government in London and in Edinburgh has operated to produce this lamentable situation. Would the Foreign Secretary assure me that if the Committee were minded to proceed with such an inquiry he and the rest of the Government would co-operate with it fully? Does he not think that the families deserve that at the very least?

I can certainly assure the hon. Gentleman that the Government will follow all the appropriate procedures and precedents when it comes to the establishment of inquiries by this or any other House.

May I, too, emphasise the strength of feeling among many friends and family of the Lockerbie victims about the fact that there should be a full inquiry, especially as they believe that the dropping by Megrahi of an appeal may deprive them of any opportunity of really finding the truth and achieving the closure that they want?

I am sure that the hon. Gentleman’s words have been heard in Scotland as well as here, because it is for them to decide whether or not there is the basis or evidence for a new inquiry of any kind.

Will the Foreign Secretary confirm that there is evidence that the Libyan Government supported terrorist groupings, including the Provisional IRA, even in the early 1970s, and that the papers that were recently released prove that the then Labour Government offered inducements to the Libyan Government, seeking the withdrawal of their support from the murderous Provisional IRA? Will the Government therefore actively engage with those innocent people who have suffered because of the IRA-Libyan connection, and lead the delegation to Libya?

The hon. Gentleman makes an important point. He dramatises the shift that has occurred in Libya’s position in the international community over the past 15 years. It is certainly our determination to work closely with him and with his right hon. and hon. Friends. I repeat to him what I have said in response to other questions in the House: it is the leadership of the group on humanitarian grounds, rather than on bilateral Government-to-Government grounds, that holds the best chance of success, and on that basis, we are absolutely committed to supporting him in any way that we can.

On 16 December 2003 a meeting took place between officials from the British Foreign Office and Downing street and Libyan intelligence officials. Just three days later the then Prime Minister, Tony Blair, announced the WMD deal. At the negotiations in the Travellers club, the subject of Mr. Megrahi was raised. Could the Foreign Secretary tell us in what context it was raised, and can he assure the House that there was absolutely no link between the status of Mr. Megrahi and the WMD deal?

In my statement and in my answers to questions I have given a full explanation of the situation. I have also explained the circumstances leading to the abandonment by the Libyans of their WMD programme. As the right hon. Member for Richmond, Yorks (Mr. Hague), who speaks for the Conservative party on these issues, has made clear, there is cross-party consensus about the process and the outcome in respect of Libya’s weapons of mass destruction programme and its nuclear programme. I should have thought that the hon. Gentleman would be better off resting on that basis.

With permission, Mr. Speaker, I wish to make a personal statement.

I am grateful to the Committee on Standards and Privileges for its consideration of the detailed report from the Parliamentary Commissioner for Standards following his seven-month investigation. I want to apologise unreservedly to the House, as I have to my constituents, for wrongly claiming for the cost of films alongside my broadband and cable connection. This claim should never have been made and, as the Committee notes, I paid back the claim in full as soon as it was brought to my attention.

On the issue of second home allowances, the commissioner and the Committee recognise that my London home is indeed a home. They dismiss the most usually repeated newspaper descriptions of my living arrangements, and I welcome this judgment. As the report makes clear, I sought and received written advice from the parliamentary authorities that supported my main home designation and, indeed, I spent more nights in London than in Redditch for three of the four years in question. I have never flipped my designation and I own only one home.

The Committee recognises that there is no evidence that the taxpayer would be any worse or any better off as a result of my having made a different decision. However, in retrospect the commissioner concludes that I should have used my discretion to change my main home designation. I accept the Committee’s conclusions and I therefore apologise to the House. I want to say sorry, too, to my constituents. They are my No. 1 priority, and for too long this investigation has overshadowed the work that I do for them.