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APPENDIX 7
COMMISSION PAYMENTS
On two occasions I received an ex gratia payment
from Ian Greer Associates following the introduction of new business
to the firm. The two companies concerned were the National Nuclear
Corporation and the United States Tobacco Company.
Neither company had any connection with Fayed
or House of Fraser. There was no express or implied prior agreement
that IGA should make these payments. IGA had no legal obligation
to pay anything. Nor did I have any legal right to be paid anything.
Furthermore, there was no expectation that further services of
whatever nature would or ought to be rendered in exchange for
the payment, which was purely a goodwill gesture.
NATIONAL NUCLEAR CORPORATION
Since my first election to Parliament in 1983
I have actively supported the nuclear industry. I was for many
years a member of the British Nuclear Forum, which brought together
MPs and nuclear industry leaders. I am well acquainted with the
major companies, which employ substantial numbers in the North
West, and Cheshire in particular. One of these, National Nuclear
Corporation (NNC) is based at Knutsford in my constituency. The
company designs and project-manages the construction of nuclear
power stations.
Until 1988 the Government had a majority shareholding
in NNC. The company was anxious to be privatised so that it could
develop without having to secure Treasury authorisation for borrowing
and without having to agree all major policy decisions with the
DTI or Department of Energy.
I regularly visited NNC to discuss general matters
of concern to them. I knew the main directors personally.
In the mid 1980s NNC wanted to raise its profile
in the political world, to raise awareness of the importance
of the nuclear engineering industry and to encourage moves towards
privatisation.
I was asked if I could recommend a firm of lobbyists
to help raise awareness. At this distance in time I cannot remember
exactly who initiated the request, but it was either Derek Taylor,
(Managing Director of NNC), or Neil Forsyth (Director, Personnel
and Corporate Services). I recommended Ian Greer as a starting
point and informed them that his company, IGA, was widely regarded
as one of the most effective lobbying companies. I informed NNC
about IGA's recent success on behalf of British Airways, which
was widely reported.
The Guardian maintained in its Defence
that the payment of introductory commissions is not usual practice
in the industry and I understand that they were intending to
call Andrew Gifford of GJW lobbyists to give evidence to that
effect. It is relevant in this context that Andrew Gifford himself
paid an introductory commission to Ian Greer at or about the
time Gifford was assisting The Guardian. His evidence is
therefore unconvincing.
I had regular contact with NNC from 1983 when
I was elected MP for Tatton. With over 1000 employees based in
my constituency the reason for my association with the company
is self-evident. I visited NNC at least twice a year and also
visited power station sites, such as Torness and Heysham. I was
in regular contact with BNFL and had been to visit Sellafield
in Cumbria on several occasions.
It was in this context that Derek Taylor formally
asked me to become a consultant to NNC. I served for one year
from 1 November 1987. My involvement was principally intended
to assist NNC in raising awareness and understanding of the nuclear
engineering business amongst Members of Parliament. The company
asked me to become a consultant because they said that my work
would go beyond what they would expect of me as a Member of Parliament.
Details of the consultancy were registered with
the Registrar of Members' Interests on 21 November. My consultancy
came to an end following the purchase by GEC of the Government's
shareholding in NNC.
In helping NNC I was being entirely consistent
with my long-term public stance on the civil uses of nuclear
power. In support of this I set out below the dates upon which
I made interventions in the House on nuclear topics. It will
be seen that five of them took place prior to my being approached
to accept an appointment as consultant and four before IGA's
appointment:
| 21 December 1983 | (Sellafield discharges - Ministerial Statement) |
| 14 May 1984 | (Electricity generated by Magnox and AGRs - WPQ) |
| 13 May 1986 | (Debate on nuclear energy - intervention) |
| 12 March 1987 | (Sizewell B - Ministerial Statement) |
| 11 May 1987 | (Debate on nuclear energy - speech and intervention) |
| 7 March 1988 | (PWRs - oral PQ) |
| 28 March 1988 | (Announcement of NNC exhibition - WPQ) |
| 21 July 1988 | (Fast reactor programme - Ministerial Statement) |
In 1989 and 1990 my Parliamentary duties (chairing a private
Bill) made it impossible for me for over a year to participate
in Question Time or to intervene on Statements. In July 1990 I
became a Minister. It is largely for that reason that there are
no more references in the Hansard index to my continuing interest
in the nuclear industry - until I became a backbencher again
in October 1994.
I bring this information to the Inquiry's attention
in order to counter The Guardian's allegation that the
tabling of Parliamentary Questions was connected to the payment
of introductory or consultancy fees. My interest in the nuclear
industry has been consistent during my time in Parliament and
bears no relation to my year's consultancy with NNC.
UNITED STATES TOBACCO COMPANY
My initial contact with UST executives arose
through their involvement in a libel action against the BBC concerning
one of Esther Rantzen's "That's Life!" programmes. They
wrote to me in April 1986; we met and this led to a discussion
of public policy issues affecting the tobacco industry generally.
Ever since my election in 1983 I have been a
member of a loose all-party group of MPs who opposed further
restrictions on tobacco advertising and other attempts by Government
to browbeat people on smoking-related issues. I have frequently
made representations to Ministers on tobacco taxation and related
issues. I have also, from time to time, signed relevant EDMs.
I have been associated with FOREST (Freedom
Organisation for the Right to Enjoy Smoking Tobacco) since its
inception in 1984. I was also for many years a member of the Tobacco
Advisory Council. I belong to the Lords and Commons Pipe and
Cigar Smokers Club.
Lord Harris of High Cross, Chairman of FOREST
for about ten years, will confirm the strength and consistency
of my support.
To the best of my recollection, sometime in
1988 UST invited Michael Brown and me to lunch. (Brown has a
long history of activity in Parliament supporting a libertarian
approach to smoking and tobacco).
The Department of Health had announced in February
1988 that it proposed to introduce Regulations to ban the sale
of one of their products - Skoal Bandits, known officially as
oral snuff. Their existing PR company was not experienced in
Parliamentary lobbying and we were asked if we could recommend
a specialist company to help.
Brown produced a list of three companies, which
included IGA. We both spoke highly of IGA. I understand that
UST considered these three (and possibly other companies) and,
in May 1988, chose IGA in open competition. Some time afterwards
Greer offered us an introductory commission payment, which we
shared. This was calculated, according to what I now understand
to be Greer's invariable practice, on the basis of 10 per cent
of the client's first year's fee, so Brown and I received 5 per
cent each.
This was "ex-gratia" payment wholly
related to the introduction of UST to IGA. No Parliamentary services
were demanded or expected in return.
SKOAL BANDITS
Oral snuff has been a major product lawfully
sold in Sweden for over 200 years. A sachet, akin to a teabag
is filled with tobacco, which is placed between the gum and the
cheek. Nicotine is absorbed in the mouth. The Government's Committee
on Carcinogenicity of Chemicals in Food, Consumer Products and
the Environment (COC) advised that, whilst there was a causal
connection (as with cigarettes) between oral snuff and cancer,
the overall health risk was less than that incurred in smoking
cigarettes.
Furthermore, the company had been encouraged
by the Government to set up a manufacturing plant in East Kilbride
and a grant was provided for this purpose.
I was not attracted to Skoal Bandits personally
but I objected on libertarian grounds to the Government's proposals
to ban oral snuff. I also thought it unfair on grounds that:
(a) UST had been encouraged by the Government
to invest in a manufacturing plant in Scotland and yet, only
a short time afterwards, it was legislating to close it down;
(b) there was no new scientific evidence
which justified a change in Government policy;
(c) the company had been negotiating in
good faith with the DHSS with a view to concluding a revised
voluntary agreement to include a health warning on the packaging
of Skoal Bandits and to restrict advertising.
Michael Brown and I (together with other MPs)
had several meetings with Ministers and in December 1989 I tabled
a motion to annul the draft Regulations which proposed to ban
oral snuff. No debate took place and the Regulations came into
force in March 1990.
UST then made a successful application for Judicial
Review to the High Court, which quashed the Regulations as "unfair
and unlawful." In view of the criticism of me in connection
with a telephone conversation I had with Michael Heseltine prior
to my resignation from the Government, it is interesting that
the Court held that Ministers had shown lack of candour with
the company. In The Guardian's words:
"(UST) wanted to see what reasons had led
the COC, on unchanged evidence to change its views . . . (UST)
had been led up the garden path . . . fairness demanded that
it should be treated with candour. To conceal from it the scientific
advice which directly led to the ban was unfair and unlawful."
(The Guardian, Law Report 22 January
1991, page 35). Furthermore, it is clear from the official
advice accompanying draft letters of reply that the Government
was acting duplicitously, in encouraging UST to put forward further
proposals in respect of a voluntary agreement on marketing whilst
knowing that the decision to impose a ban on the product had already
been taken and awaited only the official announcement. (See,
e.g., Confidential Note of 11 July 1989 from Mr McCulloch to
Mrs Goldhill, Private Secretary to the Secretary of State for
Scotland.)
LETTERS FROM EDWINA CURRIE AND DAVID MELLOR
I note that both Mrs Currie and Mr Mellor have
in recent months reviewed the Department of Health files on the
Skoal Bandits issue, although Mr Mellor says that he has not re-refreshed
his memory as a result of your request to him to give evidence
at the Inquiry.
I did not know that he had intended to appear
as a witness for The Guardian in my libel case. No witness
statement was served upon me on his behalf, nor was any indication
given that The Guardian might call him.
Both their letters contain errors.
1. Mrs Currie
Mrs Currie says that Skoal
Bandits were not legal in the UK in 1988. This is incorrect -
the argument was about whether a proposed ban was justifiable.
Mrs Currie bases her support for a ban on
grounds that:
" . . . they caused in particular a
form of mouth and throat cancer which was virulent, which tended
to attack young people (unlike the main tobacco cancers), which
was site specific in that cancerous ulcers would develop at the
site where the tobacco pouch was normally lodged in the cheek."
There are a number of inaccuracies in this:
(a) the health risks from oral tobacco
products in a pouch are very small, particularly when compared
to other forms of tobacco use.
A study carried out in 1978 in Sweden
(where oral snuff is widely used) by the Lund Dental School concluded
that the risk of contracting oral cancer from this product was
one case per annum in every 50,000 snuff users. This compares
with 120-140 cases of lung cancer in every 50,000 smokers and
14 cases of lung cancer in every 50,000 non-smokers.
(b) there was no evidence of increased
susceptibility amongst young people. Nor was there any evidence
to show an increasing use of oral snuff amongst young people
- even in a study in Alabama, which had no legal minimum age
for usage.
There was no evidence that any form
of smokeless tobacco was becoming more popular in the UK - whether
nasal or oral snuff or chewing tobacco. The evidence from around
the world showed that culture factors and parental example were
the most important influences in the different patterns of usage
in different countries.
(c) the Government itself accepted that
smokeless tobacco products were safer than cigarettes. No new
research findings had been made to justify a change in Government
policy since the earlier decisions, in 1984 to encourage UST
to manufacture in the UK, and in 1985 not to ban the product on
health grounds.
Mrs Currie refers to photographs of oral
cancers which she passed around at our meeting. I did indeed regard
these as irrelevant to the discussion. The essential question
was whether the degree of risk attaching to this form of tobacco
use as compared with other lawful uses could rationally justify
a ban.
Mrs Currie is an enthusiastic supporter of
"gay rights," and supported the campaign to reduce to
16 the legal age of consent to homosexual acts. She appears not
to have been convinced by photographs of AIDS victims that homosexual
buggery should be criminalised in spite of the known significant
health risks of this form of sexual activity. Her libertarian
concerns appear to be rather selective, not to say illogical.
Mrs Currie says:
"it was well-known that these MPs were
being paid by tobacco lobbyists." I believe that Sir
William Clark MP was a consultant to UST for one year and that
fact was registered. I am not aware that Eric Forth, John Lee
and Allan Stewart were paid by tobacco lobbyists and, if Mrs Currie
has evidence that they were, she should produce it or withdraw
her allegation.
Neither Michael Brown nor I were paid to
lobby on tobacco interests. For the reasons set out elsewhere
in this Submission we did not, at the time, regard the commission
payments as registrable or declarable as they did not influence
our conduct in any way.
2. David Mellor
Mr Mellor's letter also contains inaccuracies:
(a) "When I became Minister of
State for Health, a position I held between July 1988 and November
1989, I was disturbed to discover that US Tobacco wished to manufacture
. . . Skoal Bandits and were in line to receive an investment
grant from the Scottish Office . . . "
UST were already manufacturing and
had already as far back as 1984 been offered regional aid to
induce the company to locate in Scotland. The company was offered
Regional Selective Assistance and Regional Development Grants
amounting to £1,045,000 and had actually claimed RDGs on
its investment at East Kilbride of £193,357.
(b) "I saw papers that plainly
evidenced the greatly enhanced risk of appalling oral cancers
as a result of using this product . . . "
As shown above, the risks were small
compared with other products which Mellor did not propose to
ban.
(c) " . . . I determined to render
its use unlawful . . . "
Insofar as Mellor seeks by this to
convey an impression that this was his initiative he is mistaken.
The draft Regulations were announced on 26 February 1988, five
months before he became a Health Minister. By the time the Regulations
were actually laid in December 1989, he had ceased to be a Health
Minister.
It is true that he was responsible
in the meantime for the Ministerial decisions which ultimately
led to the Regulations being quashed by the High Court on grounds
that Ministers had shown a lack of the candour to which UST was
reasonably entitled, and had behaved unfairly.
Mr Mellor says that he agreed to see us only
with "an ill concealed bad grace". I have to say that
I did not, at the time, notice that his attitude towards us was
uncharacteristic of him in any way.
THE TAX TREATMENT OF COMMISSION PAYMENTS
When discussing my 1988-89 tax return with
my accountant in the summer of 1989 I gave him the details of
all moneys due and received in respect of the introductions of
NNC and UST, including benefits in kind. He advised that they
were gratuitous payments which were not taxable as income.
This opinion is supported by case law, principally
Bloom v Kinder (1958) 38 TC 77 and Scott
v Ricketts (1967) 44 TC 303.
Bloom v Kinder demonstrates that a Schedule
D Case VI assessment can be resisted even in a case where the
payee has performed services or quasi-services for the payer.
Bloom was a partner in a firm of solicitors
and entered into correspondence with Cecil Moores of Littlewoods,
which led to Moores purchasing the issued share capital of a
firm of drapers.
Littlewoods wrote to Bloom to say that their
usual practice was to pay commission of 1.5 per cent. of the
consideration in cases of that nature, despite the fact that there
was no legal obligation upon them to pay anything. Bloom wrote
back to say that this sum was acceptable to him as "the usual
agency commission in the district," by which he meant the
usual commission charged locally by estate agents and solicitors
for negotiating sales of property.
Bloom argued that the payment was a freewill
payment or gift by Littlewoods.
Vaisey J HELD: where there was no contract a
commission payment was not assessable to tax under Case VI or
any other provision.
Further and higher authority for the general
proposition is provided in the case of Scott v Ricketts,
a Court of Appeal decision in which Lord Denning MR said:
"The crux of the present case is that Mr
Ricketts (the taxpayer) had no legal ground to be paid anything.
All he had was a moral claim . . . " (at paragraph 321H)
But, even if he had had a legal claim under a contract, it
is not every contract which would give rise to a tax liability:
"The Judge (at first instance) seems to
have thought that, as the payment was made under a contract,
that was enough to bring it within Case VI. I cannot agree with
him. It must be a contract for services or facilities provided
or something of that kind."
There was no contract, whether
express or implied, between me and Greer. That must be beyond
argument in respect of the NNC payment as it was not until after
the recommendation had been made and the contract between Greer
and NNC had been agreed that I was told about it.
Had there been many such commissions it might
be possible, in the absence of express agreement, to argue that
an implied contract had arisen by the conduct of the parties.
But a mere spes (or hope/expectation) does not in itself give
rise to a contract capable of being enforced at law.
Way v Latilla [1937] 3 All E.R. 759 is
authority for the proposition that, while the Courts will accept
the conduct of the parties and surrounding circumstances as establishing
a contract for services, there must be positive evidence that
the services were NOT to be gratuitous before an agreement to
pay remuneration could be inferred.
In any event Greer had no intention to create
legal relations between us and it would be very difficult to argue
that, just because I had received one gratuitous payment previously,
enforceable obligations had been created, compelling him to make
another payment if the circumstances were repeated.
My accountant's view was and is that, as there
was no contract between me and Greer, the payment was not taxable.
Furthermore, his advice was and is that
"At the material time there was no requirement
to disclose on the tax return the receipt of gifts other than
those received in the course of employment or which could be construed
in exchange for services rendered."
In Bloom v Kinder
it was clear that Bloom had been paid in exchange for services
rendered to Littlewoods - but the key point was that there was
no legally enforceable obligation to pay.
I submit a letter from my accountant confirming
his advice. This was the basis on which my accountant prepared
my tax return and which, relying on his professional advice, I
duly signed.
A copy of the note which he took of our telephone
conversation of 24 July 1989 is also exhibited to this submission.
From this document is evident that I was not seeking to conceal
the receipt of these payments. Had he advised that the payment
should be then included on my tax return and acted accordingly
I would have signed the accompanying declaration in the usual
way.
Furthermore, the payments were fully receipted
for IGAs accounting purposes and appropriately entered in their
accounts. Hence the payments were properly accounted for, in accordance
with the law on both sides.
Additionally, on two occasions I received hospitality
from UST: 1. St James's Court Hotel:
Sometime in the Summer Recess in 1989 I stayed
for one night at the St James's Court Hotel in Buckingham Gate,
Westminster.
Some UST executives came to London on business
and I was asked if I would attend a discussion dinner with them
at IGA's offices. I was happy to do this but I had a problem as
I had nowhere to spend the night. Hence, a room was booked for
me at a nearby hotel.
My wife and I frequently lend our flat to friends
at weekends and in the Recess sometimes for periods of a week
or more. On this occasion the flat was being used by some American
friends for a holiday.
As I did not arrive at the hotel until after
dinner (probably 11.00 pm) and got up to catch the 7.45 am shuttle
to Manchester from Heathrow it is rather fanciful to present
this "hospitality" as "lavish"; it was merely
a place to sleep.
I do not believe that this would be registrable
in any event as it was hardly a "benefit." It was merely
an incident of attending the dinner. I would rather have slept
in my own bed but that was not possible. Additionally, the room
charge is unlikely to have exceeded the de minimis registration
threshold which has since been introduced.
2. Essex House, New York:
In October 1989 I visited the US with the Treasury
Select Committee. Our itinerary included two days in New York.
UST's Senior Vice President (Marketing) invited
me to attend a dinner party the day after the Treasury Select
Committee concluded its business and suggested, to avoid the
nuisance of changing accommodation for one night, that I should
stay in UST's accommodation at the Essex House for the Select
Committee days also.
The Essex House is part hotel/part condominium
and UST retained accommodation there permanently. The value of
the accommodation cannot readily be quantified; I have been told
that it was not priced by the day. However, the Essex House is
of a comparable standard to the Intercontinental Hotel, where
the rest of the Committee were staying at the time. It should
be noted that I have entertained the Chief Executive of UST and
his wife, and other UST executives, to lunch/dinner at the House
of Commons at my own expense.
The allegation by David Leigh that I was "on
a free holiday" with my wife has no foundation. It was not
a holiday and my wife was last in New York in 1980, three years
prior to my first election to Parliament.
REGISTRATION OF COMMISSION PAYMENTS
The Select Committee on Members' Interests considered
the question of registrability in 1990. In their Third Report
the Committee said:
"In our view there is no doubt that (such
payments) should be registered." However, the Committee
also accepted that the Rules were not clear on this point:
" . . . it may not be readily apparent
from the description of each category contained in the introduction
to the Annual Register that commission payments of a minor or
casual kind should be registered or where they should be registered."
The Committee also accepted that:
" . . . different Members may well, in
good faith, interpret (the rules) somewhat differently."
With the benefit of hindsight and in a more censorious climate
my judgment as to the registrability of the two commission payments
is open to question. I ask, however, that the lack of registration
be judged in accordance with the interpretation of the rules
prevailing at the time and that the following matters be taken
into account: 1. The payments were not made pursuant to
any agreement.
2. The payer had no expectation of any return.
3. It was normal practice in the industry.
4. The nexus of the payments was the introduction
of new business, not my position as an MP.
5. There was no attempt at concealment:
(a) I signed receipts for IGA's accounting
purposes;
(b) I declared the receipts to my accountants
who prepare my tax returns and advise me on Revenue practice.
6. There is no evidence that my relationship
with either company swayed me in the exercise of duties as a
Member of Parliament, nor did they in fact do so.
7. Neither payment falls within the definition
of the nine categories referred to at the material time in the
Introduction to the Register.
8. The view I adopted, namely that the payments
did not fall within the rules relating to registrability, is
one that could be legitimately taken at the time. In this context
I draw the Inquiry's attention, in particular, to the Select
Committee on Members' Interests, First Report 1994-95, paragraph
13:
"The primary purpose of the Register (is)
. . . to provide information of any pecuniary interest or other
material benefit which a Member may receive which might be thought
to affect his actions, speeches or vote in Parliament."
"The most recent Register (1995), adopting
the Committee's recommendation in the First Report of Session
1991-92, has altered the final phrase to read ªwhich might
REASONABLY be thought BY OTHERS to influence his or her actions,"
thus introducing an objective test whose purpose was "to
remove any possibility of the existing words being interpreted
in a wholly subjective sense and this misinterpretation being
advanced as a justification for a failure to disclose relevant
interests." [HC 326 (1991-92, paragraph 27]."
The
Committee went on to explain that:
" . . . certain aspects of the original
rules were not free from ambiguity, and it was precisely for this
reason that they felt it necessary to conduct a comprehensive
review before the end of the last Parliament."(paragraph
17)
9. I commenced libel proceedings against The Guardian
in the full knowledge that my receipt of these two commission
payments would become public knowledge, and accordingly volunteered
the information in my witness statement signed as long ago as
June 1995.
I have learned by bitter experience that
the media and one's political opponents are always ready to put
the worst possible construction on an innocent transaction. As
Tony Blair has recently discovered, the creation of a blind trust
with impeccable trustees to fund his operations has not dispelled
the suspicion that financial favours may be repaid in due course.
Like him, I had no ulterior motive and nothing
whatever to gain from concealment. That must be obvious from
my separate registration of NNC. It seemed to me at the time that
it could not reasonably be inferred from the facts that the payment
might influence my conduct in Parliament and I assumed therefore
that it need not be registered.
I cannot pretend accurately to recall my thought
process at the time, but I believe my reasoning would have been
as follows:
the Introduction to the Register stated that
its scope sought to:
"balance . . . what should be publicly
known about MPs with . . . the proper degree of privacy to which
they and their families are entitled."
Looking at the nine specific categories for
registration of particular interests none of them appears to
be appropriate to such one-off commission payments. The most appropriate
categories appear to be the following:
category (4) - clients. But IGA were
not clients of mine. Nor did I perform, in return for the payments,
"personal services" . . . "arising out of or related
to" my membership of the House. The "service"
was complete in itself in the introduction of the client; there
was no further obligation on my part.
category (5) - financial sponsorships.
This applies to "gifts in relation to a Member's parliamentary
duties". But the payment was not made to me "in relation
to my parliamentary duties"; it was made because I had recommended
a client. My status as an MP was irrelevant; the nexus was the
fact of the recommendation and the subsequent signing of a contract.
None of the other categories is even remotely
relevant.
As I did not consider at the time that the payments
had any bearing on my parliamentary conduct I took the view that
I was entitled to the benefit of the "proper degree of privacy"
referred to in the introduction to the Register.
I said in my witness statement in May 1995:
"Having thought much about this, I now
think I applied too subjective a test - even though the test of
relevance was not then couched in the explicitly objective terms
introduced in 1992." (paragraph 22).
As stated above the test was changed from a
requirement to register benefits "which a Member may receive
which might be thought to affect his actions, speeches or vote
in Parliament" to register those "which might reasonably
be thought by others to influence his or her actions etc.,"
(See Members Interests' Committee, First Report, Session 1994-95
at paragraph 13).
However, when I was offered the commission
payments the original rules which "were not free from ambiguity"
then applied. I did not at that time think them ambiguous. It
appeared to me, and presumably to Michael Brown, that casual
payments of this kind did not come within the requirements of
registration.
If this was an error of interpretation on my
part, it was an innocent one. In the circumstances of this case
I and my family have paid a price which I think no reasonable
person could claim to be proportionate to the error.
Were it not wrapped up in the outrageous falsehoods
of Fayed and The Guardian, with the vast world-wide publicity
which they have calculatedly engendered, this infraction (whilst
it may have been criticised) would never have attracted the degree
of opprobrium which it has.
I accept that the purpose of applying an objective
test is to protect the House itself and its Members from being
diminished in public esteem by such opprobrium. I accept also
that the House has been greatly diminished in public esteem by
the whole "cash for questions" saga.
But without Fayed's deliberate lies and The
Guardian's reckless indifference to the truth, which caused
those lies to be disseminated with the force and speed of an
explosion, this error of judgment on my part would have been
relegated to an inside page of the newspapers on a single day
and would never have had more than a fraction of the impact on
the public mind which it has.
If it is now considered that my interpretation
of the rules was mistaken, I apologise unreservedly to the House
for this. However, my intentions were not dishonest. By contrast
Fayed has deliberately invented a pack of lies to mount a calculated
assault on me as an individual MP, which could not fail to damage
the integrity of the House itself.
Nor could Peter Preston, David Hencke and The
Guardian, on the basis of the so-called "evidence"
they relied on, reasonably have believed Fayed's allegations
about me. As I believe I have shown in my Submission, the documents
are at best neutral and The Guardian relied entirely upon
the uncorroborated word of Fayed, a man they knew to be not only
an habitual liar but also one they knew, or ought reasonably to
have known, to harbour malice towards me and a grudge against
the government. The first rule of journalism is to treat sources
known to have an axe to grind with circumspection.
Further evidence of their reckless indifference
to the truth is provided by the record given to me of a conversation
between Hencke and Peter Clarke, (another Journalist and mutual
friend), on 15 May 1995:
"Mr Al-Fayed has given them his cheque
book stubs and will be a strong witness. Even if no sums got
to you, IG or someone told him he was buying you in some sense.
Tim Smith has confessed all. No jury will think you are very
different. Even if there was no cash changing hands the lavish
hospitality will appear as a trade off. He made the point the
reality matters less than the impression to a juror."
I
accept that, with hindsight, I have made misjudgments. But, unlike
Fayed, Preston and Hencke I have done nothing dishonest.
It was always my intention to deal with these
payments openly in the libel action. Indeed, The Guardian
would have known nothing about them had I not volunteered the
information in my witness statement, which they received as long
ago as June 1995:
"I have on two occasions been paid a commission
by Ian for introducing new clients to IGA." (paragraph 20).
The details were later disclosed on Discovery
when Greer and I provided bank statements, accounts and receipts
fully evidencing the amounts and nature of the payments.
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