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Mr. Page: My hon. Friend raised a valuable point when he asked that the guidelines be examined. The Minister mentions bringing the perpetrators to justice, but the Department has not covered itself in glory in past years. I earnestly ask the Minister not merely to read his brief but to re-examine the guidelines to see whether they are as effective and correct as they could be.

Mr. Griffiths: I am trying to keep party politics out of this. What we have really had is an assertion that, for

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18 years, there has been some form of corruption at the heart of government in the investigations. The hon. Member for Bexhill and Battle shakes his head, but he used words which he may regret. He said that DTI inspectors led Ministers by the nose and he made more serious allegations. He referred to sinister motives and suggested that the Department was flawed and corrupted. He said that civil servants had taken sadly flawed judgments.

Mr. Page: No.

Mr. Griffiths: The hon. Gentleman implied that. Let us be frank with each other. Those are the serious allegations on which I as a Minister now have to satisfy myself and answer.

I have looked into the matter in some detail. I know that the hon. Member for Bexhill and Battle has been in discussions with my office and I am grateful for the information that he gave us. As for sinister motives, let us consider what the Parliamentary Commissioner for Standards said when he published part of the fourth report in March this year:


Hon. Members have asked whether the inspectors' reports were unfair. I do not see any evidence of that. For instance, Lord Denning concluded:


    "Inspectors should be masters of their own procedure. They should be subject to no rules except this: they must be fair. This being done, they should make their report with courage and frankness, keeping nothing back. Public interest demands it."

I believe that the inspectors have met that obligation. As the European Court said of the Al Fayed case:


    "Whilst inspectors are accorded broad freedom in reporting on the affairs of public companies, the performance of their investigation function is attended by not inconsiderable safeguards intended to ensure a fair procedure and the reliability of findings of fact."

At the heart of the debate is the question whether the DTI will review the House of Fraser report. I must tell the hon. Member for Bexhill and Battle that the answer is no. The European Court of Human Rights was extremely complimentary about the procedures followed by the inspectors when it gave judgment on the Al Fayeds' claim that the publication of the report was damaging to their right to a fair hearing. The court stated:


    "Considerations of public interest dictate both the appointment of Inspectors and the publication or not"--

I stress the word "not"--


    "of their report."

The court also quoted from an earlier European Commission of Human Rights hearing:


    "It is necessary in a democratic society that governments exercise statutory controls over large commercial activities in order to ensure good management practice and the transparency of honest dealings."

Mr. Quentin Davies: No one would disagree with that quotation, but as for publication, does the Minister appreciate that at the moment and for the foreseeable future he will bear the responsibility if the Guinness report is not published? He cannot lay that responsibility on to

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anyone else. After such a long delay, will he or will he not now publish the DTI inspectors' report into the Guinness bid for Distillers?

Mr. Griffiths: The hon. Gentleman has repeated a point raised by my hon. Friend the Member for Cathcart, which I was about to answer.

The inspectors have not yet completed the Guinness report, but it is expected shortly. That is not my fault. It should be noted that the inspectors have been constrained--I will not use the word hampered--by the judicial procedures. They were guided by the need to ensure that while court proceedings were in train they were not open to accusations of harassing witnesses and pursuing matters that were before the court. I am sure that that is a cause of frustration to DTI inspectors and former Ministers, as well as to me and my hon. Friend the Member for Cathcart, who has taken such a direct interest in the case for so many years. Everyone in Scotland and elsewhere who has taken an interest in the Guinness affair wants to see that report concluded as soon as possible. I am advised that it is expected shortly.

When the report is received, it will be given due consideration. It is the usual practice to publish reports into public companies, but a decision on whether to publish this one or any other such inspection can be made only after careful scrutiny of the signed report.

My hon. Friend the Member for Cathcart rightly asked why the Guinness inspection has taken so long. I gave him one reason. I am sure that he knows more about the chronology of events than most, but I shall go through them for the benefit of the House.

I attach great importance to inspections being conducted as quickly as possible. As for the Guinness inspection, inspectors were appointed in November 1986. They submitted their interim report in November 1988. By that time, Ernest Saunders had been arrested. The first Guinness trial started in January 1990 and convictions were obtained in August 1990. In March 1991, the inspectors were directed to limit their work while the criminal proceedings against other defendants were in train. They resumed their work in March 1993. In March 1994, the inspectors went to court to certify Thomas Ward's failure to attend for interview. Ward was sentenced to six months' imprisonment for contempt. He is currently in the United States and contempt is not an extraditable offence.

Following the evidence gathering part of the inspection, the inspectors have spent most of the remaining time writing their report and, significantly, applying the fairness procedures. That process is commonly referred to as Maxwellisation and involves inspectors' putting the substance of their criticisms to those whom they are minded to criticise in their final report. That important procedure was highlighted by the hon. Member for Bexhill and Battle.

The process takes time and it is sometimes open to abuse. It involves trying to balance the need to produce a quick report as efficiently as possible against the need to apply fairness by offering those likely to be criticised an opportunity to seek to dissuade the inspectors from their critical opinions.

I do not believe that any of the parties in the relevant cases have been denied that fairness. The delays in the publication of the report are, however, one reason why we want such powers to be used sparingly in the future.

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Hon. Members have expressed their concerns this morning. I pay tribute to the hon. Member for Bexhill and Battle for being honest enough to admit that he has suffered a change of mind. In March 1990 he criticised the then Secretary of State for Trade and Industry, Nicholas Ridley. He spoke of hon. Members' frustration


In common with other hon. Members, I have looked at the evidence. I must tell the hon. Gentleman that I do not believe that there was any conspiracy or any incompetence on the part of DTI inspectors. It is a problem for all of us to ensure that public servants act in the best interests of the public. We in the House must safeguard that. I will of course consider any of the points raised that I have not so far answered and which the hon. Gentleman considers require further explanation.

It is vital that the Companies Acts are operated effectively. None of us takes any satisfaction from the lengthy delays in the Guinness trial or the rather unsavoury activities of Al Fayed and Lonrho. As a young, new Member, I, too, was subjected to their glossy publications. I learnt to use the circular filing cabinet and I put "From Hero to Zero" in the bin. I gather that they are not collectors items.

We cannot base what we do in government solely on the authority of investigative journalism. Any allegations must be considered. I assure hon. Members that officials at the DTI have given the case the closest consideration. That has been done not merely by one or two officials, but by a number who have cross-checked each other's work. They have advised Ministers accordingly.

We want the Guinness report to be concluded quickly. I have given an undertaking to the House that I want that done. We are also a Labour Government who want a flourishing corporate sector. We want it to deal honestly and fairly with its customers, suppliers, shareholders and, most important, employees. Those objectives go hand in hand and we cannot have one without the other. The Government will use all the powers at their disposal to deter, detect and punish wrongdoing.

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Cyprus

10.59 am

Mr. Andy Love (Edmonton): I should like to add my congratulations to you, Mr. Deputy Speaker, on your appointment and welcome you to your new position. I also offer belated congratulations to my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), both on his appointment as Minister of State, Foreign and Commonwealth Office and on the prominent part that he has played in forging a new relationship with our neighbours in the European Union.

I hope that hon. Members will bear with me as I make my traditional introductory remarks. It is a great honour to represent the people of Edmonton and I thank them for electing me as their Member of Parliament. I should also like to thank all those across London, both hon. Members and supporters, who worked so hard to achieve victory. For the first time, I am joined in the House by two other new Labour Members for the London borough of Enfield: my hon. Friends the Members for Enfield, North (Ms Ryan) and for Enfield, Southgate (Mr. Twigg). Not only is the borough now represented by three Labour Members of Parliament, but it has a Labour council which was newly elected in 1994 after 26 years of Tory rule.

This phenomenal run of electoral success began with the election of the first Labour Member of the European Parliament, Pauline Green, who was elected eight years ago. Like Pauline, I stood for election as a Labour and Co-operative candidate and now have the privilege of representing the Co-operative movement in the House. With my colleagues, I hope to bring its principles, values and experience to bear on hon. Members' deliberations.

Prior to the coming of the railways and the rapid expansion of London, Edmonton, like the surrounding villages of Enfield, Friern Barnet and Potters Bar, was represented in Parliament by a Middlesex county Member. Under the Reform Act of 1885 Edmonton became part of the Enfield parliamentary division. Local electors had to wait for the subsequent reform Act of 1918, which introduced the major innovation of a limited franchise for women, for the formation of the Edmonton constituency.

My immediate predecessor, Dr. Ian Twinn, was the seventh Member of Parliament for the constituency. Although, since its formation, there have been four Labour and three Conservative Members of Parliament, more than 50 years separate Dr. Twinn's election from that of the previous Tory Member. It is a measure of the regard in which he was held that Dr. Twinn served for 14 years in the House. I pay tribute to the tenacity with which he held the seat during that time. Indeed, I learnt that to my cost at the general election in 1992. The House will not be surprised to hear that we disagreed on many things, but he was, by unanimous consent, a tireless representative of local people and local causes. He will be particularly remembered in the House for his advocacy on behalf of Cyprus--a cause about which I know he feels passionately and to which I shall return later.

Among the distinguished list of my Labour predecessors, I wish to pay tribute to Ted Graham, now Lord Graham of Edmonton. Like me, he is not a native of Edmonton--he originally came from Tyneside. He came to work locally, stayed and formed a strong attachment to Edmonton and its people. In the nine years

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that he served in the House, he built up an unrivalled reputation as a campaigner on issues affecting the constituency. He was, and to some extent still is, known as the voice of Edmonton. I wish him well, in the knowledge that he will be playing an active part in this Parliament in another place.

I have it on good authority from the Fees Office that Edmonton lies nine miles north of the House--[Interruption.] That struck a chord. Since local government reorganisation in the early 1960s, it has formed part of the London borough of Enfield, but it still maintains a distinct identity and character, of which its citizens are very proud. Depending on one's view, it is either blessed or cursed by being dissected by two of the busiest routes into and around the capital: the great Cambridge road and the north circular road, which are both currently being extended or strengthened.

The work is causing significant disruption, noise and pollution. Business is being badly affected, as are local shopping patterns. Local people wonder whether the disruption will ever end. But when the work is complete, the improved road network should hold out hope of much-needed investment in that part of north London--to some extent, that hope will be fulfilled. However, little thought has been given to the overall impact of the road developments on either the wider transport infrastructure or on public and private investment patterns locally. That is because decisions are fragmented and taken by unelected and unaccountable bodies. London needs a directly elected strategic authority to provide an independent voice and to act as a powerful champion for promoting economic, transport and planning strategies to boost prosperity and job growth.

I can also confirm that the local economy is in much need of a boost; it was undermined in the 1980s by two of the deepest recessions since the war and has not fully recovered. Much of the industry for which Edmonton was famous--furniture, electrical goods and electronics--has disappeared or moved to green-field sites. The replacement jobs have often been low skilled with low wages. Many people are insecure and it is not hard to find locals, particularly young people, who have been forced to change jobs two or three times in as many years. One in four of all our under-25s in Edmonton are unemployed. With few or no skills or qualifications, many of them have little prospect of gaining employment. For that reason, the people of Edmonton welcome the Chancellor's welfare-to-work initiative and the Government's commitment to provide meaningful employment and training that will lead to a qualification. For many people, the scheme will for the first time provide both the independence and self-respect that come with earning a wage.

Edmonton is a community of many contrasts. Alongside increasing prosperity, many people suffer considerable hardship and deprivation. One way in which those problems are being challenged is through the Edmonton partnership initiative, an innovative scheme to regenerate the local town centre. It is an attempt to reverse the long-term decline of the shopping centre while, at the same time, radically improving local housing conditions and providing community facilities and much-needed jobs and training for local people. Based on a public-private consortium, the initiative will attract more than £100 million of investment into the constituency, with more than £80 million of that coming from the

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private sector. Over the next seven years that exciting partnership project will transform the centre of Edmonton, delivering tangible benefits and increasing prosperity to one of the most deprived parts of the constituency.

Edmonton is also a multi-ethnic, multi-cultural community. At the latest count, 65 languages were spoken in local schools. In the words of my right hon. Friend the Prime Minister, it will be a great privilege and pleasure to


in my constituency. By far the largest local ethnic minority is the Cypriot community--Greek and Turkish--many of whom have come here since the invasion and division of the island in 1974. The future of Cyprus is of more than academic interest to all of them. It is with that in mind that I have sought to initiate this first debate on Cyprus in the new Parliament.

First, I offer the apologies of my hon. Friends the Members for Tooting (Mr. Cox) and for Knowsley, South (Mr. O'Hara), who are great friends of Cyprus and regularly contribute to debates on this subject. Unfortunately, they are away on urgent business of the House and are unable to be with us today.

I congratulate Her Majesty's Government on their commitment, stated in the Queen's Speech, to seek a settlement in Cyprus. I warmly welcome the mission statement by my right hon. Friend the Foreign Secretary. I am particularly pleased to see that, among its objectives, he includes:


We must also demand them for Cyprus and the Cypriot people. It is appropriate that this debate is taking place today, because I understand that the Cypriot Foreign Minister, Mr. Cassoulides, is at this very moment flying into Britain for talks with my right hon. Friend the Foreign Secretary. I am sure that the House will join me in wishing them well.

This year has been dubbed the year of the "big push" in Cyprus. There has certainly been a flurry of diplomatic activity in recent months, which is not surprising, given the number of international representatives who are currently on the island. Apart from the ubiquitous United Nations representative, who has recently been sponsoring proximity talks between the two communities, there are also representatives from the United States and from the European Union and, of course, Britain's own representative, the recently reappointed former ambassador to the UN, Sir David Hannay. This has occasioned the President of Cyprus to comment that there are "too many cooks", and one can see his point.

The critical issue facing the Government is to evaluate what role Britain can play in finding a just and lasting settlement for Cyprus. Before looking at that, I want to give a word of caution. Nearly 23 years have elapsed since the military invasion that divided the island and hopes of a settlement have risen in the past, only to be dashed. A flurry of diplomatic activity is no substitute for confidence-building measures and meaningful negotiations. The high-level agreements that form the starting point for direct negotiations and that set out the framework for a settlement were drawn up 18 years ago and it has to be admitted that there has been little real progress since.

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It is widely recognised that there is a great deal of work to be done before there is a realistic prospect of reaching an agreement, but a consensus is emerging that that work must be undertaken urgently and that the measures necessary for the effective promotion of a settlement must be put in place. Britain is uniquely placed to facilitate that process, because of its historic role on the island; because it is a guarantor power of the security of Cyprus; and because it is a member of both the UN Security Council and the EU. Most important, Britain can help to ensure that any final agreement is based on international law, UN resolutions and the objectives of the Government's own mission statement.

Britain must make it clear that the continued division of Cyprus is unacceptable and can never form the basis of a settlement. Any solution must be based on the unity and integrity of the island. That is already set out in the high-level agreements and in the Gali set of ideas to create a bizonal, bicommunal federation comprising two politically equal communities. Over the years, many on both sides have cast doubt on that formulation, yet it describes the only framework that can provide both the unity and equality that are critical to a settlement.

Division on the island creates instability, as the furore over the now delayed purchase of Russian S300 missiles shows. A shift in the balance on one side leads to a response from the other and the result is military build-up. It is little wonder that, over the past 23 years, Cyprus has become one of the most over-militarised areas of the world and consequently a potential flash point. Any solution must be based on the demilitarisation of the island and in that respect the House should welcome the statement by Mr. Clerides, proposing to demilitarise the whole island and reallocate spending to the economic development of a reunited Cyprus.

It is, of course, security--or the lack of it--that has bedevilled all attempts to find a lasting solution. Both communities well remember the failures of the past--in 1963 and 1967--and the tragic events of 1974. No one underestimates the difficulty in achieving firm security guarantees. The people of Cyprus must have confidence that there will be no return to the communal violence or military interventions of the past.

Working next door to my constituency offices is a Cypriot shopkeeper, who has not seen his parents for 25 years. They are elderly and he despairs that he will never see them again. They are Greek Cypriots, but live in the Karpas peninsula in the north of the island. They should be able to travel, but cannot leave as they would find it impossible to return. Their relatives cannot visit. Ending their isolation must be the first step in building confidence and moving towards a settlement.

Both communities have suffered many grave injustices. If they are to be reconciled, each community is entitled to know what has happened to the loved ones who disappeared during the violence of the past. Like the truth commission in South Africa, justice demands that the terrible events of the past should be made public, so that the fate of the innocent victims can be known. In addition, the events of 1974 made hundreds of thousands of Cypriots on both sides refugees on their own island. Many would like to visit their villages, return to their homes and travel freely to

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other parts of the island, but they cannot do so. Any meaningful settlement must underpin the human rights of all Cypriots.

Cyprus has had a relationship with the European Community since it first signed an association agreement in 1972. A customs union in 1987 was rapidly followed by an application for membership of the EC in 1990. A favourable opinion from the Commission on Cyprus's eligibility in 1993 led to agreement at the Cannes summit two years ago that negotiations for accession should begin six months after the conclusion of the intergovernmental conference in Amsterdam. That will coincide with Britain's presidency of the EU and provide a unique opportunity for Britain to give a lead in supporting Cyprus's application.

Membership will benefit both communities. It will end the isolation of the Turkish Cypriot community and provide an impetus to the economy and a huge boost to living standards. The EU can help to guarantee the security of both communities. However, one question remains: will Cyprus be reunited, as we all hope, before those negotiations are completed? In November last year, the then Foreign Secretary, Malcolm Rifkind, made it plain that it would be very difficult to admit a divided Cyprus to the EU. That view was subsequently echoed by the German Foreign Minister. The Government should continue to offer support to Cyprus's application for membership, on its merits and without conditions.

Much of the answer to the question of accession and of a general settlement lies, not in northern Cyprus, but in Turkey. Turkey's own application for membership has been described as "premature". It was told recently by the Christian Democrat group in the European Parliament that, as a non-Christian country, it was an unsuitable applicant for membership. I disagree fundamentally with that view.

However, there are continuing difficulties with the recently agreed customs union, and against that background it is unlikely that Turkey will be in a position in the near future to make a serious application for full membership. Many believe, as a result, that it is unlikely to encourage the Turkish Cypriot community to co-operate in the negotiations for Cyprus's entry to the EU. That would be regrettable, and I hope that the Government will make it clear that it can never be acceptable for a country that is not a member of the Community to exercise its veto on the application of another.

Relations between Greece and Turkey remain tense, and complicate the finding of a solution in Cyprus. Disputes about uninhabited islands, the military build-up in the region and friction regarding Cyprus continue to sour relations between the two nations--both, supposedly, NATO allies. As yet, diplomatic efforts to resolve the various disputes have met with very limited success. As both are guarantor powers, it is hard to see how any permanent settlement in Cyprus can be achieved without an overall resolution of the disputes in that part of the eastern Mediterranean.

The year 1997 will be crucial to Cyprus. The European Union and the United States appear to believe that there is a brief window of opportunity for a political settlement. Although proximity talks are not reported to have thrown up new initiatives or signs of greater flexibility, it is widely felt that, as Sir David Hannay was recently quoted as saying,


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    In addition, with European Union accession negotiations, presidential elections in Cyprus and the distinct possibility of fresh elections in Turkey--all likely to happen in 1998--it is hard to avoid the conclusion that 1997 presents a better prospect than will exist for some time.

I was therefore very pleased to read recent press reports of the possibility of direct UN-sponsored talks between President Clerides and Mr. Denktash, expected to begin in early July. As part of that announcement, the UN emphasised the importance of the talks developing on a positive note. I believe that we would all agree. I also welcome the note of realism in that statement, saying that the first round


    "may not yield any concrete results as such"

and that they will be followed by further talks later in the month. No one underestimates the task confronting the participants, but I am sure that the House will join me in wishing them every success in their endeavours.

However, Britain needs to do more. I hope that the debate will send a clear message that this House believes that the Government must do everything in their power to assist those negotiations, and that Ministers must use their influence with the international community to move the issue of Cyprus up the international agenda and to step up efforts to find a just and lasting settlement of the division of the island.


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