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Mr Davey: My hon. Friend is absolutely right, and that is one of the problems that many have with the official Opposition’s policy. Governments do not control wholesale prices. We have seen large increases in wholesale gas prices over a long period, primarily driven by the increase in energy demand from countries that are growing such as China and India. My hon. Friend is absolutely right to say that we cannot control that, but we can do everything in our power to help people, whether by promoting competition or helping people to save energy through energy efficiency.

Dr Alan Whitehead (Southampton, Test) (Lab): Bearing in mind that the “State of the Market” competition report contains a number of different headings of concern about the market, has the Secretary of State done any work, or will he do any, on the relative urgency of those headings? If he is considering referring the headings in Ofgem’s report to the CMA inquiry, does he think the two-year time scale will give his Department sufficient urgency to deal with them all?

Mr Davey: First, for the avoidance of doubt, it will be Ofgem that makes the referral to the Competition and Markets Authority, not me. However, I want to make it clear to the House that we have been acting on competition issues in energy markets from day one in 2010 and will continue to do so. Where evidence is brought to our attention or Ofgem’s that more can be done, we will do it. As I said in my statement, consumers can look forward to our work with the industry to drive forward faster switching times, for example. We want to halve switching times, so that competition works for people and they can get the best deals in the market. We are not going to do nothing during the review; we are going to be very active. However, the review is critical to doing a deep dive and getting a deep analysis of what is going on.

Christopher Pincher (Tamworth) (Con): My right hon. Friend is quite right to suggest that the vast array of tariffs, which the last Government allowed to proliferate, is one reason why many people are deterred from switching supplier, but so, as he says, is the speed at which one can switch. Will he say a little more about how we will drive down and halve switching times, so that people can enjoy lower energy prices, rather than the frozen prices that the Opposition want, but which, rather oddly, in the same breath they say are too high?

Mr Davey: My hon. Friend is absolutely right. We are rather more ambitious than the official Opposition: we want to see low energy prices through competition, not just to freeze them. He is right that reducing the number of tariffs is important—the Labour party refused to do that in government—and the retail market review by Ofgem, which the Labour party wants to abolish, has led to a reduced number of tariffs. As for switching times, which he has focused the House’s attention on, we have already been working with the industry through Energy UK, which has a body working with all other parts of a chain of companies involved in switching customers. We will report later this year on the progress we believe can be made and how it can be made. It is complicated, but we are determined to deliver it.

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Thomas Docherty (Dunfermline and West Fife) (Lab): On 12 February, the Secretary of State criticised Labour’s critique of the wholesale energy market as deeply flawed, so does he think he is as stupid as he looks right now?

Mr Davey: It is always nice to have charm in the House. I have to tell the hon. Gentleman that Labour’s proposals include introducing a pool. The problem is that the day-ahead market, which is like the pool, has grown dramatically under this Government. That is one of the reasons why I said that Labour’s policies are absolutely flawed: because the Opposition have not looked at what is actually happening. Indeed, I asked the right hon. Member for Don Valley (Caroline Flint) in that debate whether she had read the report and it was clear that she had not. That is one of the reasons why we think Labour’s policy proposals are flawed.

Sir Andrew Stunell (Hazel Grove) (LD): As a Liberal Democrat, I very much welcome today’s statement and the vigorous way in which the Secretary of State set about it. Does he share my view that it is amazing that Labour, having set up both the big six energy companies and Ofgem to regulate them, should now be so grudging about his taking the action necessary to ensure that consumers get a fair deal?

Mr Davey: My right hon. Friend is absolutely right. The Labour party created the big six, and now it seems to be worried about the fact that we are trying to take action. Its policy would entrench the big six, and would undermine the competition that we have delivered. The Labour party set up Ofgem, and now it wants to abolish it. People listening to the Labour party and looking at its record must be astonished that it has the gall even to pretend that it has a sensible energy policy.

Nia Griffith (Llanelli) (Lab): In its report on energy prices and fuel poverty, the Select Committee said that Ofgem was failing consumers because it had not been properly using the powers at its disposal. Can the Secretary of State tell us what action he took as a result of that report, why prices have not fallen, and why consumers have repeatedly found themselves in financial difficulties because the Government did not act earlier?

Mr Davey: I think that recommendations made by the Select Committee to Ofgem are matters for Ofgem. In the Energy Act 2013, we set out a new approach for my Department, working with Ofgem, and provided for the introduction of a strategy and policy statement. We have made the reforms that we believe are needed to ensure that Ofgem works well with the Government in promoting competition. I am delighted to note that, although the Labour party still seems to want to abolish Ofgem, it supports its proposal for a market investigation reference.

Mr Philip Hollobone (Kettering) (Con): I am sure that residents of Kettering will welcome the inquiry into the electricity and gas markets.

I was interested to hear what the Secretary of State said about vertical integration. Surely the problem is the small number of energy suppliers that are vertically integrated. If 20 energy suppliers were vertically integrated, there might be the requisite level of competition. If a small number of energy suppliers were not vertically

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integrated, that might work. Surely the lethal combination for consumers is a small number of suppliers that are vertically integrated. I shall be extremely surprised if the inquiry does not conclude that that vertical integration needs to end.

Mr Davey: I am pleased that the competition assessment is focusing on vertical integration, because I think that it needs to be looked at. Ofgem proposed the introduction of a market making obligation because it wanted to tackle some of its concerns about vertical integration. However, the consultation document states:

“We recognise that there are benefits to vertical integration in terms of cost efficiency…and in terms of supporting investment to maintain security of supply. However there are also costs in terms of barriers to entry.”

The report is balanced, and, unlike the Labour party, has not rushed into making a judgment. Everything cannot be the fault of vertical integration. The gas market is not vertically integrated, but I believe that there are serious problems related to competition in the domestic gas supply market.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Any review of the energy market is welcome, but yesterday, referring to nuclear power, Scottish and Southern Energy said

“the deal which the UK government has reached with EDF”

—the French energy giant—

“over the construction of two reactors at Hinkley Point…will add considerable costs to consumer energy bills for 35 years.”

Will the “full market investigation” cover the cost of nuclear power and its effect on comprehensive spending review bills, and if not, why not?

Mr Davey: The investigation will not deal with that, because it involves policy on the generation mix. A mixed, diverse source of low-carbon energy is the best way in which to protect the consumer. There are Members of Parliament and, no doubt, many people outside who know the future—who have a crystal ball and know what the various technology costs will be in the 2020s. Perhaps SSE has a crystal ball; perhaps the hon. Gentleman has a crystal ball, but I do not. I have created a framework in which there is competition between technologies, and I believe that that is the right way in which to proceed.

Mr Peter Bone (Wellingborough) (Con): I am amazed that the Labour party wants to freeze energy prices when they are high, when wholesale prices are falling, and when the Government are reducing—as the Prime Minister delicately put it—Labour’s green crap. Would the Minister care to congratulate the Prime Minister on reducing subsidies for green energy, thereby driving prices down for the consumer?

Mr Davey: It is always nice to be able to agree with my hon. Friend on the odd occasion—[Interruption.] Not necessarily on everything he said—the right hon. Member for Don Valley (Caroline Flint) is very worried about that—but on his point about the Labour party and competition, I do agree.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): One of the headline findings of the market assessment in the Ofgem press release is that switching has fallen in recent years:

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“There was a brief spike in late 2013 but no indication of a permanent increase.”

Indeed, there has been a substantial reduction since January this year. Given that switching has so far not really had the effect in driving down prices that the Secretary of State suggested it might, why should we expect consumers to wait for two years for the outcome of this assessment to see some action being taken to drive down prices?

Mr Davey: I am glad the hon. Gentleman has raised that point. Switching rates have fallen in this country primarily because of the end of doorstep selling. That method of trying to persuade people to switch was one of the reasons why switching numbers increased in the early days after privatisation. However, all Members in their constituencies will have experienced cases of doorstep mis-selling, and it was the many problems that that caused that led many people in this House and the regulator to say that it was not an acceptable way of driving competition. Doorstep selling has gone out of the picture and that has been the main cause of the reduction in switching. We have therefore had to address that and look at new, innovative ways to try to get the rate of switching going back in the right direction. That is why we are looking at simpler bills, fewer tariffs, collective switching and faster switching times. We are relentless in trying to get those switching rates back up again, and the recent evidence suggests we are on the right track.

Andrew Jones (Harrogate and Knaresborough) (Con): I welcome my right hon. Friend’s statement. Does he agree that the whole House today should be backing Ofgem and the investigation, which I believe is in the long-term interest of consumers—and the key is “long term”?

Mr Davey: I strongly agree with my hon. Friend and I am genuinely pleased at the way in which the discussion has gone among the parties in the House. It is important that we allow the independent competition authorities the time to get to the bottom of the matter. Let the professional experts deal with it, and let the political parties listen to them and follow their advice.

Sammy Wilson (East Antrim) (DUP): The report highlights that, because of local monopolies, barriers to entry and colluding between the big six, they have been able to hold on to 95% of the market share and increase their profits. Is that not an indication that now is the time for quick action rather than further reviews, and would one quick action be to reduce the subsidies to the renewables industry, which the Secretary of State’s own Department admits currently add 10% to energy bills?

Mr Davey: I certainly do not recognise that figure, and the hon. Gentleman needs to look at what has been driving up bills: it has been the price of wholesale gas. Whether it is that trend in the past decade or the events in Ukraine and Crimea, people should worry about relying on just importing gas from abroad. We need to diversify, so we need to invest in renewables, nuclear, carbon capture and storage, and energy efficiency. We need a diverse approach. That is the best way to ensure that we get prices down and keep the market competitive.

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Mrs Emma Lewell-Buck (South Shields) (Lab): In December, the Secretary of State said that Ofgem was not fit for purpose. He has also said that we cannot rely on guesswork to fix the energy markets. Why will he not admit that today’s decision to refer the energy market for a full market investigation is a clear admission that the market is broken and Ofgem is not fit for purpose? May I also offer him some polite advice? He does not need to rely on guesswork; he needs to listen to the Labour party.

Mr Davey: I am grateful for the hon. Lady’s question, but I have been accused by the Opposition of saying—in the same debate, I believe—that Ofgem is fit for purpose and that Ofgem is not fit for purpose. I believe she was quoting her Front-Bench colleague, the right hon. Member for Don Valley (Caroline Flint). I will let the hon. Lady try again next time.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): In November 2011 the Government ruled out a full energy market investigation. Is the Secretary of State willing now to admit that the Government got it wrong and made a mistake, and can he explain to the House the difference between tacit co-ordination and collusion?

Mr Davey: On that last point, one is illegal and one is not, but I think we can all agree that they both need to be investigated by the independent competition authorities. It is interesting that Labour is complaining—at least, some Labour Members are complaining—that we did not make this referral before, given that Labour’s leader, when Secretary of State, refused to make the market investigation reference. Let us remember that in the previous Parliament electricity bills and gas bills increased faster on average each year than they have done under this Government. He had all the reason to make that reference to try to improve competition, but he flunked it when he had the chance.

Barry Gardiner (Brent North) (Lab): May I extend my sympathy to the Secretary of State, as it must be galling for him to have to make this statement to the House, particularly with his minder, the right hon. Member for Sevenoaks (Michael Fallon), present? The Secretary of State has known for many years that what the Labour party has been saying, and what the Select Committee has been saying, has been correct, but he has been prevented from doing anything by the Treasury. Now he has had to come to the House to accept that all the things we were asking for—the Competition Commission referral, a proper examination of this situation and addressing vertical integration—are going to come to pass on his watch. Having said that, can he explain why, when the profits made by the companies in Europe are between 2% and 3%, whereas in this country they are between 5% and 7%, he will not do anything now?

Mr Davey: If the hon. Gentleman reads the assessment, he will see that the competition authorities have focused on that last point. On the market investigation reference, I have to remind him, again, that it was the leader of his party who flunked that opportunity. I also have to tell the hon. Gentleman that he should read the record, because Labour’s spokesperson in this area, the right hon. Member for Don Valley, was saying just a few

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weeks ago that a market investigation reference was not a good idea, that to make such a reference would be to kick things into the long grass and that it should not happen. I am glad that Labour has changed its position.

Nick Smith (Blaenau Gwent) (Lab): In his statement, the Secretary of State says, and has just acknowledged, that there is “evidence that the big six have seen increasing profits that do not appear to reflect increasing efficiency”—too right! So why does he not acknowledge that he has been too slow to act today?

Mr Davey: I completely disagree with the hon. Gentleman; this coalition Government have been acting from day one. We inherited Labour’s big six. We have deregulated, and we now have 18 independent new suppliers taking on the big six. The best buy tables show that people can save hundreds of pounds by switching from Labour’s big six to the new competition that has come about under this Government. We have been making lots of efforts, but because we are impatient and frustrated and we want to do more, we set up this annual competition assessment and we welcome its proposals today.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): I welcome the Secretary of State’s statement. I always remember him as a fair-minded, independent Liberal Democrat, and I get on very well with him, but it does stick in my craw when I hear him repeating this Conservative mantra about the big six and Labour. I have been in this House long enough to remember the botched privatisation of the energy sector, which is at the heart of the rotten energy sector we have inherited today. That is the truth, and he is better than what he said today.

Mr Davey: I like the hon. Gentleman, despite his question. It is not a Conservative mantra—it is a Liberal Democrat mantra, a coalition mantra and a consumer mantra. Let us remember that the people who have been

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calling for this reference include Which?, Citizens Advice, Consumer Futures and the Federation of Small Businesses, and we are delivering on that today.

Dr William McCrea (South Antrim) (DUP): No matter what politicians say in this Chamber today, many of our constituents believe that they are being ripped off on energy costs. How can we assure them that the cost of electricity and gas is a genuine cost and has not been set by a cartel of the big six?

Mr Davey: The hon. Gentleman can do that by backing this reference by the competition authorities, which will ask all those questions. I say to him and his constituents that if they are worried now, they should look at the best buy tables and use the competition that is there now. I hope that, as a result of this reference, we will supercharge that competition. There is choice now, because this Government have brought it in.

Mr Deputy Speaker (Mr Lindsay Hoyle): Last but certainly not least, the voice of Hyndburn, Graham Jones.

Graham Jones (Hyndburn) (Lab): I was most interested in the answer that the Secretary of State gave to my hon. Friend the Member for Blaenau Gwent (Nick Smith)—that he had had four years of impatience or that he had been impatient over the period. Looking back, does he not regret that the Energy Act 2013, which took more than a year to go through Parliament, does not contain a single concrete measure to improve competition in either the wholesale or the retail energy market?

Mr Davey: Even though the Act may have taken a year to get through this House, I am afraid that the hon. Gentleman did not manage to read it. We had measures supporting Ofgem from both its retail market review and its wholesale market review. There was also the overall reform of the electricity market to ensure that we had competitive markets for the future. I am afraid that the hon. Gentleman is wrong.

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Quality Workplace Pensions

11.56 am

The Minister of State, Department for Work and Pensions (Steve Webb): With permission, Mr Deputy Speaker, I will make a statement setting out the actions that this Government are taking to ensure that the pension schemes into which workers are enrolled are of high quality and provide value for money. The steps I shall outline today are the latest in a sequence of groundbreaking changes that are revolutionising the pensions landscape.

As we move towards our goal of enrolling 10 million workers into pension saving, we need to ensure that those savings are invested in value-for-money schemes that are well-governed. So today, I can announce that this Government will introduce a package of measures to protect people against high and unfair charges; ensure schemes are well-run; and turn our pensions market into a world leader for disclosure and transparency. Through the new measures, this Government will be the first to get an iron grip on the issue of pension charges. We are going to put charges in a vice; and we will tighten the pressure year after year.

In our pre-Christmas consultation, we consulted on three options for capping pension scheme charges: an across-the-board cap of 0.75%; a comply-or-explain cap, allowing schemes to go up to 1%; or a simple 1% cap. You may be aware, Mr Deputy Speaker, that there were those who, to use a technical term, suggested that we might wimp out on these choices—that we might give in to the vested interests of the pensions industry. I hope that the announcements of my right hon. Friend the Chancellor last week show that the Government are without fear or favour when it comes to the financial services industry. I can tell the House today that of the three options, we have decided to go with the toughest of the three.

At the heart of our plan is a charge cap of 0.75% for the default funds of all qualifying schemes, with equivalent caps for schemes with combination charge structures. The cap will apply from April 2015, and it will apply to all schemes used for automatic enrolment. That means that we will deliver on the timetable in our consultation document to have a full cap in place by April 2015.

I can also confirm that we are today publishing a full impact assessment of these changes, which has received a green fit-for-purpose rating from the Regulatory Policy Committee. Over the next 10 years, the new charge cap will transfer around £200 million from the profits of the pensions industry to the pockets of savers. After the charge cap is implemented, we will make further changes, year after year, to tighten further our grip on unfair charges.

As well as meeting the 0.75% cap, from April 2016 schemes will be prohibited from taking money from people's pension schemes to pay for sales commission. Schemes will have to end the practice of increasing the charges of people who are no longer employed by the sponsoring employer of the scheme—so-called active member discounts or more accurately deferred member charges. That is in line with the recommendations both of the Work and Pensions Committee and the Office of Fair Trading. It is not right that people should pay more in charges simply because they have moved employer

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and consequently stop contributing to a scheme. These charges are particularly unfair in the context of an increasingly flexible labour market, where people change jobs more regularly and are therefore more likely to become deferred members.

On transparency, the Office of Fair Trading uncovered 18 different names for and configurations of charges. The charges are often hidden and complex. Today, I can confirm that in a further measure to shine some light into the dark recesses of the pensions industry, we will introduce full standardised disclosure of all costs and charges that will make scheme comparisons a reality for the first time. The transaction costs hidden in complex and opaque investment chains will be exposed, giving new clarity about where members’ money is really going.

From April 2015, trustees and those who represent members’ interests in pension schemes will have a duty to obtain information on all scheme charges. We will start work straight away with the Financial Conduct Authority to develop standardised measures of transaction costs. We will use that information to consider whether another turn of the vice is needed in 2017 to take our reforms even further, potentially by including transaction costs within the default fund charge. In addition, in 2017 we will consider whether the base charge cap of 0.75% is to be reduced further.

As well as focusing on charges, we are strengthening the way in which schemes are governed. Our governance reforms will ensure that there are people running schemes in members’ interests and that they scrutinise the costs and charges that affect their members’ pots.

We want members of so-called legacy schemes as well as those people enrolled into schemes being sold today to receive good value for money. The OFT identified that charges are currently a quarter to a third higher in schemes that were sold before 2001. Those schemes have gone unscrutinised for too long. We therefore welcome the independent audit of legacy and other high-cost schemes put in place following the OFT’s recommendation, in which my Department is involved. The audit is scheduled to be completed by the end of this year and we will take any further action necessary in the light of those findings to address the poor value that has been allowed to persist in some of the older pension schemes.

The pension system we inherited was broken. The coverage of workplace pensions was declining. The value of the state pension was declining. The only growth area in pensions was the mass means-testing introduced by the previous Government as a last-ditch attempt to prop up a failing system. Through our bold and innovative changes, we will reverse that spiral of decline. We are following up our radical reforms to the state pension, the successful implementation of automatic enrolment and last week’s bold Budget announcements with another measure that will help to put pension provision back on its feet.

This is a full-frontal assault on poor value for money from a Government on the side of people who save. These changes are a major step in our wider programme of pensions reform, safeguarding the hard-earned savings of those who work hard and do the right thing. This truly is another landmark day for pensions policy and I commend our plans to the House.

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12.2 pm

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): I thank the Minister for notice of the statement.

Rare is the day when the Government appear to adopt an Opposition policy lock, stock and barrel. Rarer still is the day when the Government appear to adopt two of the Opposition’s policies lock, stock and barrel. Today, the two broken markets identified by my right hon. Friend the Member for Doncaster North (Edward Miliband)—energy and pensions—have been accepted by the Government, who have made concessions in that regard. They are two big wins for the Opposition.

We welcome those concessions. We welcome the Prime Minister’s announcement on Wednesday that an energy freeze from SSE is a good thing. Perhaps we will finally see the Government reversing their tax cut for millionaires, although that might damage the Minister’s new-found interest in the market in Lamborghinis. The Government have belatedly accepted that the market in pensions, as in energy, is not working for consumers. We welcome this historic change of Conservative and Liberal heart. It is a retreat from free-market dogma.

This is the second time—the Minister alluded to this—that I have welcomed a Government proposal to cap pension charges. The Minister refers in his statement to delivering on his timetable, but what he does not say is that it is a new timetable. In October, the Minister rushed into a four-week consultation with a view to capping pension charges from April 2014, five days from now, but his impact assessment was condemned as not fit for purpose by the Regulatory Policy Committee. Today, the Minister has confirmed that no charge cap will be in place until 2015, a year from now. That matters because in the Government’s own figures, someone who has worked hard to save £100,000 in their pension pot for retirement and is charged 1.5% for the next 12 months will pay a hefty £1,500 in charges, so why the delay, given the difference that will be made by a cap set at the level the Labour party suggested and given what the Minister has recommended today? Why the delay in not introducing it today? That £1,500 might not be enough to purchase a Lamborghini, but it could well amount to a deposit on the two-door Corsa that the whole world now knows the Minister drives.

This is so important because pensions market failure has significant consequences for millions of savers. The Minister knows that, by 2017, 11 million people will be auto-enrolled—3 million now and 4.5 million by the election. That is why it is so urgent. The Minister promised a full-frontal assault on pension charges in October. Whoever has heard of a full-frontal assault that comes with a 12-month notice period?

The Minister and I both know that governance is the key to better pensions, so when will the independent governance committees that the Labour party has called for be implemented? Will he give us clarity on that? In his review for the Business Secretary, another Liberal Democrat, Professor Kay concluded that excessive churning by fund managers was reducing the value of pension assets. Will the Minister pledge to the House today that all fund management costs, as set down in Labour’s amendment to the Pensions Bill, will be disclosed as part of the policy? Furthermore, to whom will the fund manager costs be disclosed? The statement mentions trustees and others, but who are these others?

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Let me finish on a note of consensus: an Opposition are always delighted when a Government adopt their policy. To have two significant Opposition policies adopted in one day is truly a success for my right hon. Friend the Leader of the Opposition, and for the Labour party. We welcome the Government’s endorsement of our policy. It matters so much because of the difference it makes to pension savings, but we will continue to scrutinise the detail of the proposals as it emerges, because in pensions the devil is always in the detail, and this Government certainly have form on that point. We welcome this endorsement of Labour policy and we will look further at the detail.

Steve Webb: I understand why the hon. Gentleman wants to talk about energy and income tax rather than pensions: he has nothing to say on the pensions announcement.

The hon. Gentleman said that we have adopted Labour’s policy. I thought he might say that, so I thought I would have a little look at what Labour’s policy was. The first evidence we have is their record in office, when they had 13 years to cap charges and did precisely nothing. But we do have more recent evidence—he mentioned the leader of the Labour party and his views on the subject, so I have a done a bit of research. Clearly, The Guardian was briefed by Labour, and the leader of the Labour party called it an “all-out attack” on rip-off pension charges, so that is good. Patrick Wintour said in September 2012:

“Ed Miliband will promise to end rip-offs in the pensions industry”—

that is good, is it not?

—by putting a 1% cap on pension charges”.

I wonder whether he has moved a bit because he saw what we were doing. I get a slight sense that might be the case.

The hon. Gentleman asked about the timetable. Our consultation document made it clear that every scheme would have a cap in place by April 2015. We are today delivering on that timetable. [Interruption.] The hon. Member for Leeds West (Rachel Reeves) says, “What about April 2014?” If they are seriously suggesting that we should apply a charge cap with a few days’ notice, it shows how little they understand about how employers work and how the pensions industry works. Unless they are calling for us to announce a cap at a few days’ notice, which would be pretty irresponsible, we are delivering on the timetable that we set out.

The hon. Gentleman asked me some specific questions. The independent governance committees will have to be in place by April 2015, but the Association of British Insurers and the Office of Fair Trading have agreed that they will put them in place before that date. The legal requirement is April 2015, but we expect to see them in place before that.

The hon. Gentleman asked who the costs have to be revealed to. The trustees or the independent governance committees, who will act on behalf of the members and will have the technical expertise to understand all the detail, get the information, but they will form a judgment about the format in which they pass it on to scheme members. Scheme members need to understand about charges, but probably not in the full gory detail that trustees and governance committees would. The point

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is that for the first time there will be people in every pension scheme acting on behalf of the scheme member, and that is a radical step forward.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I welcome the statement, which is good news for the savers of Suffolk Coastal. Will my hon. Friend say a little more about how he is tackling the unfair active member discounts in workplace pension schemes?

Steve Webb: I certain will, and it was very much the savers of Suffolk Coastal we had in mind. Active member discounts have been going on far too long. They are one of the hidden charges, and people are ignorant enough already of the charges in their pension schemes, through no fault of their own, even when they are active members, but when they move on to a new firm and a new scheme they probably have no clue what the charges are in the scheme they have left. Therefore, from April 2015 even schemes that retain active member discounts will be unable to go above 0.75%, which will stop many of them, and by April 2016 they will have to have been worked out of the system altogether.

Dame Anne Begg (Aberdeen South) (Lab): The shadow Minister failed to persuade the Minister that the Opposition might have been responsible for some of these changes, but I wonder whether he will acknowledge that many of the measures he has announced today were recommended by the Work and Pensions Committee. In particular, we hope that we have played some part in ensuring that costs and charges are capped and transparent. He said that transaction costs will not be part of the cap but that there is some action on them. How likely is it that transaction charges will be part of the cap at some time in the future?

Steve Webb: I am grateful to the hon. Lady and hope that I acknowledged in my statement the contribution her Committee has made to some of the measures. On transaction costs, from this time next year trustees and governance committees will have a legal duty to obtain information about all costs and charges; we will be working with the Financial Conduct Authority, staring immediately, to try to define them all. The shadow Minister came up with a list the other day, but there will be things missing from it. As soon as a phrase appears in an Act of Parliament, the industry will change the name of it. We must therefore ensure that we are as comprehensive as possible. We are certainly open to the possibility that that should go in a charge cap. We would not want to do that in a way that discourages transactions that are in the interests of members, but clearly we want to avoid gratuitous transactions intended only to generate charge income, rather than to further the interests of members. It is certainly something we will return to, particularly in the light of the transparent information that will become available for the first time because of these measures.

Nigel Mills (Amber Valley) (Con): I welcome the charge cap, which shows how far we have come from the days of stakeholder pensions and the level of charging that was allowed. Will the Minister update the House on some of the other ideas for reform that are out there, such as defined ambition schemes and large aggregator schemes, which might also give savers a better deal?

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Steve Webb: I am grateful to my hon. Friend. Stakeholder pensions were the previous Government’s one attempt to limit charges. He will recall that they initially introduced a 1% cap—again, we have seen the colour of their money—before going back on that and allowing 1.5% for 10 years. I have always wanted to say that we will take no lectures from the Labour party, and he has now given me the chance. On defined ambition schemes, we will be taking that agenda forward, and I hope to have more to say about that when we publish our response to the consultation document. With regard to large-scale pension schemes, the command paper we are publishing today included a section on scale that I think he will find interesting. We think that the pot-follow-member model is the best way of ensuring that people build significant pension pots with the person they are currently saving with.

Julie Elliott (Sunderland Central) (Lab): Why is the Minister waiting a year to introduce the full cap and a further year to ban people taking money from pension schemes to pay for sales commission? Why is he not acting much sooner?

Steve Webb: There is a perfectly straightforward answer to the hon. Lady’s question. When we asked firms to enrol their staff automatically, we asked them to plan 12 months ahead, because it takes a long time to set up a pension scheme, to choose a pension scheme and to communicate with scheme members. A firm sitting down today to plan for April 2015 knows the rules of the game today so that it can choose its scheme in an informed way. She asked why we have allowed a further year for commission and active member discounts. Clearly, if either of those takes a scheme above 0.75%, which many do, they will have to comply immediately in April 2015, but many of those are based on complicated contractual arrangements in pension schemes. We have to strike a balance between unpicking all those and focusing the pensions industry on delivering automatic enrolment, which is a key priority for the next 12 months.

Richard Fuller (Bedford) (Con): Whether the Select Committee or the shadow Pensions Minister wish to claim credit is of secondary importance to my constituents, who today can feel a little more confident that they are not being ripped off. I thank the Minister for actually doing something about this, rather than just claiming credit. One of the most important things is that people can easily see what charges will be imposed in future. How will his proposals help to make that clearer for people?

Steve Webb: I am grateful to my hon. Friend for his kind comments. The challenge with this market is that the people buying the pensions are essentially the employers of the firm, not the staff. We need to ensure that when firms are shopping around for pensions for their workers they get clear and straightforward information about what the charges will be and that they will be capped. Scheme members clearly need to be able to access information about charges in a straightforward and transparent way. It is a slightly odd market, because people are buying on their behalf and, because of automatic enrolment, scheme members cannot negotiate a different price; they just have to take the price they are given. Our focus is therefore very much on ensuring that

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the people who make the choices on pensions—in this context, the employers—have clear advice and the cap to ensure that they and their members cannot be ripped off.

Mark Durkan (Foyle) (SDLP): The Minister has indicated that further work will be done to try to tackle the whole ecosystem of charges and combinations of charges. What does he believe will actually trigger a decision in 2017 to capture some of those charges in the cap?

Steve Webb: I am grateful to the hon. Gentleman. Our central interest in all this is the well-being and welfare of scheme members. We would not put transaction costs, for example, into a cap if we thought that might result in certain transactions that would benefit scheme members not taking place. On the other hand, if we thought that there was overtrading or that people’s money was being invested in a way that generated income that did not benefit them, we would need to take account of those issues. One of the challenges we face in making policy in this area is that so little is known about what is going on. Step one is therefore to get transparency so that we know the scale of what is going on and what sorts of charges there are out there, and then we can make an informed decision.

Andrew Jones (Harrogate and Knaresborough) (Con): I warmly welcome the statement. Strong, quality workplace pensions are critical to dignity and security in old age. Who does the Minister think will be the big beneficiary of these changes?

Steve Webb: I am grateful to my hon. Friend. As I have said, we estimate that around £200 million over the next 10 years will go from the pensions industry to savers, which we think will cover around 2 million pension savers, many of whom will work for smaller firms, because we know that the biggest firms have been able to negotiate good deals with providers. That is good news for people who work for Britain’s small firms, in particular, who might not otherwise have got good value for money in their pensions.

Sheila Gilmore (Edinburgh East) (Lab): I am grateful to the Minister for coming to the House to make a statement, unlike some of his colleagues who have slipped out an important announcement in a written ministerial statement today rather than coming to the House. Will he give us a little more detail on the changes he proposes to make to governance and say when we can expect to see them introduced, because they will be very important in allowing people to be confident that some other form of charging is not emerging to replace it?

Steve Webb: I am grateful to the hon. Lady. The principal change, although not the only one, is the introduction of the requirement for independent governance committees. With trust-based governance there are member-nominated trustees and a fiduciary duty on trustees, but with contract-based pension schemes provided by insurance companies there is a question, as has often been argued, of who is acting on the members’ behalf.

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The IGCs will have to be in place by April 2015 and they will have various duties. The way in which they are set up is described more fully in the document—I know she will not yet have had a chance to read it. I think that she will welcome the changes, which mean that whatever sort of pension scheme someone is in, there is somebody there looking out for them.

Mr Philip Hollobone (Kettering) (Con): Residents of Kettering will welcome these measures to improve the quality of workplace pensions. The reason for automatic enrolment in the first place is that a lot of people are either frightened by pensions or do not understand them, or they might be young people who think that pensions are irrelevant. Under the quality scheme that the Minister has announced, may we have a stamp of quality on the documentation to reassure workplace employees? May we also have a common-sense, plain-English helpline that people can phone without any difficulty so that they can have the complexities of their pension arrangements explained? Can we also ensure maximum transparency of portability of pensions between workplaces?

Steve Webb: My hon. Friend raises a number of important points. On kitemarks and the like, we are placing a legal duty on firms to use for auto-enrolment only schemes of a requisite quality, so it will not be a matter of individual employees wondering whether their scheme is good enough—they will know it is good enough because their employer will not be allowed to enrol them into a scheme that is not so. All schemes will be of the requisite standard. He is right that people need places to go for advice in amongst the complexity. Our Department sponsors a body called the Pensions Advisory Service. I encourage all Members of the House to refer their constituents to TPAS, which is a free, expert and very good service. I must confess that I occasionally ring it myself.

Mr Gregory Campbell (East Londonderry) (DUP): I welcome this move. The Minister said, in effect, “We are going to put charges in a vice and we will tighten the pressure.” That sounds as though it might bring tears to the eyes of some of the pension providers, which may be no bad thing. He also talked about shining “sunlight into the dark recesses”. Those are good clichés and this is a good, progressive move forward. However, what is he going to do to ensure that instead of the eyes of people who are enrolling, and will enrol in future, glazing over whenever they think about pensions, they know there is transparency and know what is the likely outcome whenever they come to retire?

Steve Webb: I assure the hon. Gentleman that so far the response to automatic enrolment has been excellent. Despite predictions to the contrary, nine out of 10 of those who have been enrolled have stayed enrolled, which is a tremendous vote of confidence. In general, people have more trust in their employer than in financial services providers or even—dare I say it?—politicians, so we are using the employer route such that employers will ensure that the schemes they are using for their workers are of requisite quality. I also assure him that the language I used in the statement, though designed to be colourful, is also backed up by some hard reality.

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Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Many will welcome the overdue cap and the possibility of lowering it further. On the pre-2001 schemes, may I press the Minister to act as soon as possible, because far too many people have lost too much money already to countenance much further delay?

Steve Webb: The hon. Gentleman is right. One of the problems, as with transparency, is that we do not know enough about the nature of these schemes and what the charges are. In some cases, they are high-charging but come with guarantees, so people are getting something for their money. An audit is going on at the moment. The pensions industry is having to produce a lot of information about all these schemes. That is often very difficult because pension companies have been bought, sold and merged; just getting the data is the first challenge. As soon as we know exactly what is going on and what further measures we can take to improve the welfare of consumers, I assure him we will do so.

Nick Smith (Blaenau Gwent) (Lab): We have heard today that the independent audit on legacy and older pension schemes is still in hand. When will the further reforms that the Minister is talking about be brought forward, because there are some very high costs in these schemes?

Steve Webb: I agree. I have already met the chair of the new audit committee, and one of my senior officials serves on it. This work is now under way. Providers are being asked for data. That represents a significant cost to them, but we need those data. The deadline for that work is the end of this year. I have talked about some measures being taken years down the track, but this work will be completed this year. We will not just sit and wait until a letter arrives on my desk on Christmas day, or whatever. We are keeping close to the review, and as we learn from it and decide what action we can take, we will do so as soon as possible.

Barry Gardiner (Brent North) (Lab): The Minister spoke of the “bold” pension proposals in last week’s Budget. Now that the Chancellor has allowed people to

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cash in their pension pot instead of purchasing an annuity, can the Minister confirm that, under his Department’s rules on care costs, local authorities will now be able to insist that they do cash them in, thereby pushing them over the threshold where they have to contribute to their own care costs?

Steve Webb: The hon. Gentleman raises an important point, which is that these changes have a number of knock-on effects within our Department and the Department of Health. Of course, we will make sure that the spirit of the Chancellor’s announcement is carefully reflected in the way Departments carry on. These flexibilities do not come in for another year, so we still have time to work through detail of the sort that he properly raises.

Mr Deputy Speaker (Mr Lindsay Hoyle): Last, but certainly not least, the voice of Middlesbrough South and East Cleveland—Tom Blenkinsop.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Thank you, Mr Deputy Speaker.

I find the Minister’s statement fascinating given that he said only recently that putting a cap on pensions was like trying to put

“a price cap on a tin of baked beans”.

I wonder whether he read this in yesterday’s Financial Times:

“Labour led the way with criticism of the annuities market and high opaque fees on pensions, long before the coalition took action.”

Would he care to comment on that very good article?

Steve Webb: I would. It is no coincidence that that newspaper is printed on pink paper. It has run stories about our plans for a price cap which, now that we have made our announcement, will be shown to have been wholly inaccurate. Those who have subscriptions to that newspaper might wonder whether they can always believe what they read in it.

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Point of Order

12.24 pm

Sheila Gilmore (Edinburgh East) (Lab): On a point of order, Mr Deputy Speaker. Have you received any notification from the Secretary of State for Work and Pensions or any of his Ministers that they propose to make an oral statement to this House on the early exit of Atos from the contract for work capability assessments? That is a matter of concern to many Members of this House, and I thought that perhaps we could hear whether there has been such an application.

Mr Deputy Speaker (Mr Lindsay Hoyle): We can rest assured that I have not been give any such notice. I am sure that people will already be listening, and the matter is certainly on the record.

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Backbench Business

High Court Judgment (John Downey)

12.25 pm

Mr Nigel Dodds (Belfast North) (DUP): I beg to move,

That this House has considered the background to and implications of the High Court judgment on John Downey.

Let me put on record our thanks and gratitude to the Backbench Business Committee for tabling this important subject for debate in the House this afternoon. I also want to put on record the fact that the debate has been requested by all the parties from Northern Ireland represented in this House, including the Social Democratic and Labour party and the Alliance party, as well as the hon. Member for North Down (Lady Hermon). Representations were made to the Backbench Business Committee by those parties and the hon. Lady, and also by the hon. Member for Tewkesbury (Mr Robertson), the Chairman of the Northern Ireland Affairs Committee, so the debate has cross-party support. Following the Attorney-General’s statement in this House on 26 February, it is important that we have this opportunity to debate at more length and in more detail the background to and implications of the High Court judgment in the John Downey case.

It would be right and proper for me to begin by putting right at the forefront of this debate the names of the four soldiers who died in the Hyde park bombing on 20 July 1982. I pay tribute to the memories of Lieutenant Anthony Daly, Trooper Simon Tipper, Lance Corporal Jeffrey Young and Squadron Quartermaster Corporal Roy Bright, who died in the horrific IRA bombing on that day. It was one of the most notorious incidents of the entire IRA campaign. It touched very, very many people and is to this day remembered by so many for the deaths of those soldiers, but also for the deaths of the horses that occurred, and the terrible images that were shown on our TV screens and in our newspapers.

We will obviously come on to debate in detail all the issues surrounding the administrative scheme for on-the-runs, the implications of the Downey judgment, the political fallout, and all that, but it is important to remember that at the heart of this case are families who have had visited upon them not only this terrible tragedy but the terrible iniquity of justice having been denied to them. That has been very eloquently, movingly and emotionally put by the families’ representatives. We all feel for those families today. Indeed, their hurt and anguish is also felt by very many other victims of terrorism in Northern Ireland and elsewhere across the United Kingdom. When they look at this judgment and see the revelations regarding the administrative scheme, the hurt they feel from the loss of their loved one is brought home to them all the more as they realise that there are not only people out there who negotiated what turned out to be a “get out of jail free” card scheme, but people in Government who were prepared to implement such a scheme behind the backs of the public and Parliament—a scheme that those victims knew nothing about.

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The judgment in the John Downey case was revealed on 25 February. The court had actually ruled the previous Friday, but the judgment was not made public until, as I understand it, consideration had been given to a possibility of an appeal by the Attorney-General. He decided not to appeal the case, so it would be useful if the Secretary of State could give an indication, when she responds, of the reasons why no appeal was made against the judgment.

The news that Downey would not be prosecuted and that the prosecution would be stayed was bad enough in terms of the individual case, but what came as a real bombshell to the public and everybody concerned was the revelation of the administrative scheme for on-the-runs. As I have said, the fact of the matter is that the scheme was not the subject of any kind of parliamentary debate, discussion or scrutiny at any time over many years. It had no statutory or legal basis and there was no public awareness of it. I will come on in more detail to some of the allegations that have been flying about that people should have known about the scheme and that there was enough information in the public domain—as if it was good enough, in relation to a matter of such importance, to say that we should have all been able to put together the pieces of the jigsaw, instead of having a normal process, with a statement and a debate, through which we could properly consider all the matters.

Naomi Long (Belfast East) (Alliance): I thank the right hon. Gentleman for placing the people who are most important in this debate—the victims of this crime—at the centre of what he is saying. Specific allegations were made against the right hon. Gentleman and his current party leader in Jonathan Powell’s book, which claimed that they were fully aware of the OTR scheme and happy for it to go ahead, provided that the blame was laid at the door of David Trimble. Would the right hon. Gentleman like to comment on the record about that specific allegation, which has been repeated throughout?

Mr Dodds: I am very happy to take that on board and I will deal with it in detail when I come to that part of my speech. I have listened to a lot of the commentary and the only allegation out there about the Democratic Unionist party is one reference in one tiny section of one book. Interestingly enough, it was never mentioned in the memoirs of the right hon. Member for Neath (Mr Hain). I will come on to it later, but what it refers to is not the on-the-runs administrative scheme, but the issue of whether the Government were going to introduce legislation. It came after the talks at Leeds castle. The Government intended to introduce legislation and we made it very clear that that was a matter for them, but that we would not sign up or subscribe to it and that we would oppose it in the House of Commons, as we did, and table amendments to it. It did not relate to the administrative on-the-runs scheme, which was done as a dirty deal behind the backs of everybody concerned. I will come on to the issue in more detail in due course.

Lady Hermon (North Down) (Ind): I am grateful to the right hon. Gentleman for taking another intervention so quickly. Will he take this opportunity to confirm that the Downey judgment makes it perfectly clear that Mr Gerry Adams, the president of Sinn Fein, requested an invisible process to deal with on-the-runs, and that is precisely what he got—a deal in secret?

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Mr Dodds: I can confirm that. The hon. Lady is absolutely right to say that it is revealed in the court papers that Gerry Adams said that

“it would be better if there was an invisible process for dealing with OTRs”.

Indeed, the day after that revelation was made, Gerry Kelly, who became, as it turns out, the postman—

Mark Durkan (Foyle) (SDLP): A man of letters!

Mr Dodds: He is described as many things in Northern Ireland—most famously, of course, as the Old Bailey bomber. This is the man who was given the letters by Government officials and others—we are yet to hear the precise details—and who then communicated their contents to the people concerned. The night after that was revealed, he said on “The Nolan Show” on television that Unionists were kept in the dark because if they had known there would have been a crisis, so Sinn Fein itself admits that Unionists were kept in the dark and that there was an invisible process. The attempts by some people to now say, “Well, everybody knew about it,” simply do not wash. Indeed, a colleague of the hon. Member for Belfast East (Naomi Long)—he is her party leader—who just happens to be the Minister of Justice in Northern Ireland, with responsibility for the administration of justice and policing, has made it very clear that he knew nothing about it either. I will come on to that later. The claims that people knew about the scheme do not wash.

There was considerable shock at the revelations, at the fact that justice had been denied, at what people saw as the rule of law being undermined and at the behind-the-scenes nature of the scheme. There is still considerable anger in the Province about the way in which things have come out. Sinn Fein has alleged that it is some kind of synthetic anger, that this is an issue about which people should not be too concerned and that it is not really an issue at all because everybody knew about it. That simply does not wash either. The anger in the community—not just on the Unionist side, but across the board—is real and palpable. People feel that justice has been denied and that the scheme has been characterised by years of deceit and is, in effect, devoid of any kind of morality.

We have made it clear throughout that we opposed and continue to oppose any kind of amnesty. Indeed, I think there is consensus across the House that there should be no amnesty for past crimes and terrorism in Northern Ireland. When we raise the issue of amnesty, we do not do so in a narrow legal sense; we are clear that there should be a proper pursuit and interrogation of suspects, and questioning leading to prosecution where evidence is available. In other words, not only should there not be any kind of amnesty in law passed by this House; there should not be any kind of effective or de facto amnesty by the back door either. Although it is said that this is not an amnesty—I understand what has been said—the reality is that in the case of Downey, for him in his circumstances, it amounted to an amnesty. That is the reality.

We know from the police and others that some 228 people were considered under the scheme. When the Secretary of State speaks, I would be grateful if she could update the House on the precise number of people involved. Our understanding is that the scheme

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began in 2000-01 and that 174 letters had been issued by 2002. The scheme came to a stop for a while and a Bill to grant amnesty to OTRs was introduced in 2005, but ended up collapsing—it did not go anywhere because of strong opposition from so many people. Members of Sinn Fein were in favour of the Bill, but when they came under attack because it also applied to members of the security forces and others they decided that they wanted an approach based on an amnesty for terrorists and their people, but not for soldiers, police officers and others. It was a one-sided approach and on that basis the legislative approach collapsed.

Lady Hermon: Will the right hon. Gentleman confirm to the House exactly when the Bill was withdrawn—I believe it was in January 2006—and perhaps look at the sequence of events? Three days after his Christmas lunch, the then Prime Minister, Tony Blair, wrote a confidential letter to the president of Sinn Fein to say that he would ensure that the administrative scheme was expedited so that any remaining OTR cases were dealt with before he left office—presumably, within six months.

Mr Dodds: I am very grateful to the hon. Lady, because I do not now need to go through the next part of my speech. She has outlined the sequence of events immediately after the legislation was withdrawn, and she is absolutely correct. The administrative scheme was ramped up, and the police set up a special unit to deal with it and look at all the cases. When the coalition Government came into office in 2010, the scheme was continued. As we now know, 38 cases have been considered in the period since 2010.

As I have said, there were 228 cases in total, and I understand that 192 letters were issued. There are other statistics for the numbers that were returned, for the people who were arrested and for the people who were investigated. I would be grateful if the Secretary of State updated us on the precise details.

Naomi Long: Was the right hon. Gentleman as surprised as I was to find out from the Secretary of State’s written ministerial statement earlier this week that in order to know how many letters had been issued and cases processed, Sinn Fein’s own records are now one of the sources of information? The Government now have to consult Sinn Fein to find out how many letters were issued by Government.

Mr Dodds: I was interested to read that statement, but nothing surprises me any more about this scheme, quite frankly. One advantage of the current array of investigations and inquiries is that, between them all, we will get to the bottom of all the facts, uncover exactly what has gone on and, I hope, get to a better place as we move forward.

Bob Stewart (Beckenham) (Con): In practical terms, if someone on the run is given an amnesty, the police would presumably take their name and photograph off wanted lists. I am slightly surprised that people did not realise that amnesties had been granted for nearly

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200 people, because their names and photographs had presumably been taken off wanted lists. Does he have a view on that?

Mr Dodds: The hon. Gentleman raises the issue of amnesty. As was borne out in the Downey judgment, in reality, someone in possession of a letter of comfort issued by whoever it was—again, the inquiries will no doubt probe who gave authority for or signed off the letters, as well as to whom they were transmitted, and so on and so forth—could use it in court as a shield against prosecution even if evidence existed, provided that the information that they were being pursued or that evidence existed had not been communicated to them. That is my understanding of the situation in relation to Downey. Effectively, because a mistake was made on the facts in the Downey case, he could use the letter as a shield against any further prosecution, and the prosecution was stayed. For him, it was an amnesty, and given the double jeopardy rule, he cannot now be prosecuted for the particular crimes relating to the Hyde park bombings. Of course, prosecution remains open for other crimes, and I hope that the prosecution authorities and the police are looking into that matter.

My party and others opposed any relief or amnesty, or any scheme that would allow on-the-runs to evade justice. That has been our consistent position for many years. We opposed the legislation when it came before this House in 2005. The recent suggestion by the Attorney-General for Northern Ireland, John Larkin, that there should be an amnesty as part of the Haass process has been rejected by us and others. As a party, we opposed the provisions of the Belfast agreement in relation to the early release of prisoners, whereby people who had been convicted by due process—some of them, on both sides of the community, had been convicted of the most heinous and horrible crimes of terrorism—were allowed to walk free from prison if they had served more than two years. We opposed that part of the Belfast agreement, while other parties, which opposed this scheme, supported it.

The point has of course been made—it is a fair one—that at least the early release scheme was known about and was in the public domain. It has even been described as a terrible betrayal of victims by the right hon. Member for Neath, who has said that he understands the hurt that it caused. It was at least open and out there, and people knew about it when they voted in the referendum in 1998.

Mr Gregory Campbell (East Londonderry) (DUP): Does my right hon. Friend agree that the galling thing about the Downey case is that had the scheme not come to light—he has outlined it, and our and many people’s rejection of it—it would still be continuing to this very day?

Mr Dodds: My hon. Friend makes a very good point. He is absolutely right that had it not been for the revelations in the Downey case, we would still be in the dark about all this. The two-year release scheme was obnoxious, and it remains obnoxious because anyone convicted of a terrorism-related crime that took place before 1998 can still avail themselves of its provisions. If someone is now found who has evidence against them of an offence that occurred before 1998 and was related

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to terrorism in Northern Ireland, they can go to prison for at most two years. That continues to cause great offence in Northern Ireland, but at least that scheme was out in the public domain. It was debated in this House and debated publicly, and decisions were taken as a result. However, there was never such transparency in this scheme. As my hon. Friend has pointed out, we would still be in the dark if we had not had the Downey case.

We need to find out how this all happened—who knew and when they knew—and to examine the scheme’s legality. We also need to ensure that another Downey case never happens, and that such letters have no effect when it comes to being able to stay prosecutions.

When the details emerged, the Attorney-General made a statement in this House on 26 February, but it appeared to many people that that would be it. There was no indication in any statements made at the time that there would be any further consideration of the matter. Indeed, Ministers were on the radio at lunch time that day saying that, as far as they were concerned, that was the end of the matter and nothing more could be done.

As the House knows, the First Minister of Northern Ireland—my party leader, Peter Robinson—made it very clear that had he known about or been made aware of the scheme when the restoration of devolution was negotiated, we would not have been able to proceed with devolution on that basis. He said that the matter was of considerable concern, given that policing and justice has become a devolved matter, that it is now the responsibility of the Northern Ireland Assembly and the Northern Ireland Executive, and that the Justice Minister is responsible for those matters. He said that given that the First Minister, the Justice Minister and the parties in Northern Ireland, apart from Sinn Fein, were not aware of the scheme, it needed to be addressed urgently. He made it very clear that there had to be a judge-led inquiry.

I welcome the fact that that inquiry was announced by the Prime Minister on 27 February. I welcome the fact that on that day, the Secretary of State also issued a statement, which said:

“We will take whatever steps are necessary to make clear…in a manner that will satisfy the courts…that any letters issued cannot be relied upon to avoid questioning or prosecution for offences where information or evidence becomes available now or later.”—[Official Report, 28 February 2014; Vol. 576, c. 39WS.]

I welcome the fact that Lady Justice Hallett has been appointed. Her terms of reference are in the public domain. The intention is that she should report by the end of May.

Some people in Northern Ireland were critical of the appointment of the judge-led inquiry. Some of those people had nothing to offer other than base political point scoring and have not contributed anything towards getting to the bottom of these matters. We were very keen that the inquiry should not be dragged out over a long period, as we have seen with so many inquiries that relate to Northern Ireland matters, and that it should not lead to a panoply of lawyers trooping in and out, extending the process so that we did not get an outcome for months, if not years. I therefore welcome the fact that it will be a short, sharp, judge-led inquiry that will be able to examine the papers and deal with many of the issues.

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I welcome the fact that the Northern Ireland Affairs Committee, under the chairmanship of the hon. Member for Tewkesbury, has taken steps to set up an inquiry. The Justice Committee in Northern Ireland, under the chairmanship of my friend Paul Givan, the Assembly Member for Lagan Valley, has also initiated an inquiry. It had its first session on 25 March, at which the permanent secretary at the Department of Justice appeared. Interestingly, the permanent secretary, who is a former official in the Northern Ireland Office, admitted to having knowledge of the secret OTR scheme while in that role, but apparently he did not feel that it was necessary to inform the Justice Minister of it when he became permanent secretary at the Department. That raises questions as well, but it is for the Justice Committee in Northern Ireland to pursue them.

Naomi Long: As a former Minister, the right hon. Gentleman will know that a civil servant is not at liberty to give information about the role that they played as a civil servant for one Minister to a new Government taking office. Although it may seem bizarre and frustrating that that knowledge was available in the Department of Justice, it would have been thoroughly inappropriate and, in fact, illegal under the civil service code for the permanent secretary to have shared it with anyone.

Mr Dodds: I understand that completely. We are all aware of the rules about disclosure in relation to previous Ministers and all the rest of it. That is one reason why the judge-led inquiry is so significant and important. The judge will be able to inquire into the papers and have before her the various documents, even if they relate to previous Administrations. That matter is also important for the other inquiries, because we must get to the bottom of all the facts and of who knew what and when.

Mark Durkan: The point made by the hon. Member for Belfast East (Naomi Long) reinforces the fact that this arrangement was, in effect, a secret. Civil servants are quite free to comment on issues that past Governments have dealt with and that they were engaged in when they are matters of public policy and when it is sensible for the understanding of the current Minister to have the benefit of that background information. The very fact that the civil servant felt so precious about this matter underscores the fact that it was a secret arrangement.

Mr Dodds: The hon. Gentleman has put it very well. Documentation and papers relating to the civil servant’s time in the Northern Ireland Office would not be made available to the current Minister of Justice, but it beggars belief that no reference to the scheme could be made anywhere at all by any official. As the hon. Gentleman put it so well, it was because there was a preciousness about ensuring that the secrecy of the deal was maintained.

I am glad that the Police Service of Northern Ireland is also reviewing the process that led to the issuing of the letters. A team of 16 detectives has been assigned to the review. It will investigate the circumstances of each of those who received a letter. It will also re-examine the original checks that were carried out by the specialist PSNI team to which I referred earlier, which led to the Public Prosecution Service being told that none of the

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individuals was wanted. The police have made it clear that investigations into killings and other incidents may be reopened if mistakes or new evidence are uncovered.

It is important to note that all the inquiries and investigations that are under way are complementary. They will work together. Some of them will concentrate on the more political aspects and ramifications of this dirty deal; some of them will consider the legal side of it and look at the documentation and papers; and some of them, no doubt including the Justice Committee, will want to probe what the status of the scheme was post-devolution, when policing and justice were devolved. The police will look at the matter in the terms that I have just indicated. All the inquiries and investigations are complementary, all of them are important and all of them must get to the truth. They must find a way forward that implements what the Secretary of State indicated in her statement in February after this was announced, which is that there can be no bar on the questioning, prosecution and investigation of cases, and that they must be brought to court.

I want to talk briefly about how this whole issue has been handled in respect of informing Members of Parliament and the public. I raised a point of order on 5 March, in which I said that

“examination of the parliamentary record going back over a number of years indicates that there were occasions on which the House may have been misled by ministerial statements, whether oral or written.”—[Official Report, 5 March 2014; Vol. 576, c. 905.]

I know that it is not the responsibility of current Ministers to speak for previous Ministers, but it is important that we hear in this House, on the record, from those previous Ministers whether they stand over the statements that they made in this House. When one reads those statements now, it is very clear that there was certainly an economy in the truthfulness of what was said.

I refer, for instance, to the question that was asked on 11 October 2006 by Peter Robinson to the then Secretary of State, the right hon. Member for Neath:

“Although we welcome the earlier answer from the Minister of State that no legislation is to be brought before the House, will the Secretary of State reassure the House…that no other procedure will be used to allow on-the-run terrorists to return?”

The then Secretary of State answered:

“There is no other procedure.”—[Official Report, 11 October 2006; Vol. 450, c. 290.]

The hon. Member for North Down subsequently asked, on 1 March 2007,

“what measures the Government are considering to deal with ‘on the runs’ other than further legislation or an amnesty.”—[Official Report, 1 March 2007; Vol. 457, c. 1462W.]

The right hon. Member for Neath replied, “None.”

Lady Hermon: I am most grateful to the right hon. Gentleman for allowing me to intervene on that point. He has quoted a reply that was given to me by the then Secretary of State for Northern Ireland, the right hon. Member for Neath (Mr Hain). It is important to note the date of that reply, which was at the beginning of March 2007. We know from the Downey judgment that the first meeting of Operation Rapid within the PSNI was chaired by Norman Baxter on 7 February 2007. It is of considerable regret that the right hon. Member for

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Neath is not here today. However, may I say in his defence that, quite properly, he attended the funeral of his colleague and dear friend Tony Benn, and that he has a family commitment today?

Mr Dodds rose—

Madam Deputy Speaker (Dawn Primarolo): Order. Before the right hon. Gentleman resumes, may I gently point out to him that he has been speaking for 35 minutes and there are 14 Members who wish to speak in this debate? I do not think they would appreciate a time limit, which may be necessary if he goes on for much longer.

Mr Dodds: I shall be brief. Given the gravity of the situation and the need to ensure that these matters are properly aired, I do want to give time to other hon. Members to contribute.

The hon. Member for North Down has rightly pointed to the reasons for the absence of the right hon. Member for Neath. We understand also that the Minister of State has another commitment. [Interruption.] I am glad to see that he is now present, although he was not here for the start of the debate.

All sorts of allegations are floating about and it is said that everybody should have known about the scheme. We have dealt with the Sinn Fein comments. We know about their claims that there needed to be invisibility and that the scheme needed to be hidden in case there was a crisis. We have had references to the Eames-Bradley report, but examination of it does not bear out the allegation that the scheme was known. We have seen allegations about the Policing Board. When one examines the record—I will not go into the detail—again, that is disproven.

On the Powell book, I have dealt with that matter clearly. This was not about the administrative scheme. It was about the legislation that was being brought forward, and it is completely wrong to allege that the DUP was somehow part of any kind of information sharing in relation to the scheme. I make no allegation that other politicians in Northern Ireland knew about the scheme either.

Naomi Long: Would it be right to say that this scheme was already in train at the point when those allegations were made? The scheme was already operating behind everyone’s back, and that was almost being redressed by saying that people had knowledge that they did not have.

Mr Dodds: The hon. Lady is right. The consensus that exists in relation to the approach by all the parties in Northern Ireland generally and many other commentators bears out the fact that this matter was withheld not just from the public, but from the political classes in Northern Ireland and those who were dealing with negotiations at that time.

I close by saying that there are issues about the authority for the continuation of the scheme after 2010 when these matters were devolved, and that will have to be looked at by the judicial inquiry. There are also grave implications for the continuation of the Haass process, although I do not think it should be called the Haass process any more as Mr Haass has gone, not to return.

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On the talks about the past and about parades and flags, there is no doubt that talks and discussions were continuing, negotiations were taking place, and one party at the table was aware of the scheme that provided an effective amnesty for certain individuals. Not to have it revealed, for others not to know anything about it, was a grave betrayal of trust.

There are those who would say that the answer to all this is to throw everything up in the air at Stormont, get rid of devolution and get back to direct rule. Well, this scheme illustrates what happens when politicians in Northern Ireland do not have their hand on the tiller.

I speak to some of our Unionist friends back home, who urge people to tear down what has been built up, who say that as a result of this we should all get out of Stormont and bring the whole thing down. But when we look at the issue of the iniquitous, immoral and deceitful on-the-runs scheme, when we look at the issues of the Parades Commission and the flying of the Union flag, what do we find they all have in common? They are the product of direct rule. They are the product of a situation where Unionists—I say this as a party political point—did not have influence or power in relation to that decision making. It would be a travesty to suggest that the way to correct the ills of this scheme is to tear down devolution at Stormont.

It is important that the inquiries all take their course. We eagerly await their outcome. Let us put it on record that as far as this party is concerned, if these matters are not adequately and properly dealt with in the way the Secretary of State outlined in her statement on 27 February, we will have to return to the issue again. This is not going to go away.

1.4 pm

Mr Laurence Robertson (Tewkesbury) (Con): I apologise to the right hon. Member for Belfast North (Mr Dodds) for missing the first few minutes of his speech. Thankfully, he spoke for half an hour so I was able to hear most of it.

I was part of the team that approached the Backbench Business Committee to ask for this debate. Up to that point we had had only an hour of discussion in the House of Commons when I tabled the urgent question on 26 February. This debate is useful because an urgent question does not allow the House full discussion.

Since 2010 the Select Committee has tended to concentrate on economic issues. We have looked at corporation tax, air passenger duty, fuel laundering and smuggling and the amounts of money being lost. We have touched on the armed forces covenant, and we are coming to the end of an inquiry into the structure of banking in Northern Ireland. In other words, we have tried to help to regenerate the economy in Northern Ireland, believing that to be very important for the prosperity of the people who live there, and with a view to attempting to cement the peace that has been achieved over the past 16 years or so. I am sure Committee members would have been happy to take that policy forward towards the next general election. However, that changed on 25 February.

Speaking for myself, I was not aware of any such scheme. I was obviously aware that the John Downey case was being considered as I got a telephone call that day explaining the judgment and letting me know the background to it. It came as a complete surprise to me

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that there was any such thing as an administrative scheme. It was a big surprise because in 2005 through to January 2006 I led for the Conservative party on the Northern Ireland (Offences) Bill, which attempted to grant an amnesty across the board. It was the realisation that that amnesty went across the board that caused Sinn Fein to stop supporting the Bill, and the Bill was subsequently withdrawn. I received a telephone from the then Minister of State, who asked to see me. He informed me that the Government were, in his words, pulling the Bill. There was no support for it and it was not going to happen.

I was not aware at that point or earlier or up to 25 February that there was any other way of dealing with the so-called on-the-runs. The Select Committee found itself in a changed position after 25 February. I have never known the members of that Committee to be so exercised over any issue as they have been over this, which has persuaded us to launch an inquiry into the background to this scheme and everything connected with it, despite the fact that there is a judge-led inquiry appointed by the Government, which we welcome, and an inquiry is being held by the Justice Committee in the Assembly, the leader of which I met just the other day. Both inquiries are welcome, and we will probably concentrate on different areas.

We start with the case itself and a stay being put on the case. We have taken legal advice on the matter. I am advised that the Government cannot appeal a stay. That was the advice that I received just yesterday. I would be glad to hear the Secretary of State’s response to that because it seems an extraordinary judgment that possession of a letter can take on greater importance than a murder charge. I make no suggestion as to whether Mr Downey is guilty or innocent. That is not the role of a politician and I do not have the facts to hand. But a murder charge was made—in fact, a charge of multiple murder and injury—yet possession of a letter appeared to assume greater importance than that charge. I find that very surprising indeed.

David Simpson (Upper Bann) (DUP): Does the hon. Gentleman agree that there is a possibility that the letters in the Downey case may not have been sufficient in themselves without political influence?

Mr Robertson: I thank the hon. Gentleman for his intervention. He is a valuable member of the Select Committee and I am grateful to him for his support on this and many other issues. The point he makes is correct. Not being a lawyer myself, I cannot make a judgment on whether that is normal. My suggestion is that perhaps it is not normal. I understood courts always to look at the facts before them, but in this case the court seems to have relied on this letter, which concentrated on the fact that the PSNI did not want to question Mr Downey. It said only that in the PSNI’s belief no other police force in the United Kingdom wanted to question him—it was not a categorical assurance. That letter, weak and flimsy though it may sound, seems to have taken on a greater importance because of the political process. I would be the first to say that it is very important that we do not unravel the peace process or undo the enormous achievements in Northern Ireland, but the rule of law applies here, as well as the separation of powers between the Executive, Parliament and the

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courts, which has to be observed. I suggest that all the inquiries have that as the central motivation behind their opening.

The Attorney-General (Mr Dominic Grieve): I may be able to help my hon. Friend. The judgment in the Downey case speaks for itself, and one needs to read it. It is very straightforward in its language about the terms of what had happened and the impact that the judge felt it had on the fairness of any prosecutorial process. Beyond that, to pick up a point that was raised earlier, that judgment was considered with great care by the Crown Prosecution Service, using independent lawyers’ advice, and the CPS was clear that it was not possible to appeal against it. CPS staff came and explained that to me and, having listened carefully to what they had to say, I shared their view.

Mr Robertson: I am grateful to the Attorney-General for that clarification of the possibility of appealing in that case. That certainly was the advice that I received yesterday from an eminent QC—

Nigel Mills (Amber Valley) (Con): I am a little confused. I thought that the reason for the lack of an appeal was that there was no realistic prospect of success, not that there was no process by which an appeal could be made. Is the position that there was no possibility of an appeal for technical reasons, or is it that the appeal had no chance of being successful?

Mr Robertson: My understanding from our discussions yesterday was that a stay cannot be appealed.

The Attorney-General: The decision of the judge was capable of being appealed. I hope I made that clear when I made my statement in February. It was possible to appeal against the decision but, for the reasons I have just given, the view was taken that it had no reasonable prospect of success.

Mr Robertson: I am again grateful to the Attorney-General for that clarification, although it is in some contradiction to the advice I received from Queen’s counsel yesterday. Perhaps this matter could be taken up further, but at this stage it is probably better to move on from the case.

Sammy Wilson (East Antrim) (DUP): Given that this is not just about the judicial process but about the political confidence that people can have in assurances that were given in this House, and whether there was an attempt not only by the last Administration but by the current one to help terrorists guilty of crimes escape the consequences, does the hon. Gentleman agree that—regardless of how slim the chances were of a successful appeal in judicial terms—politically the right thing to do would have been to appeal?

Mr Robertson: I agree with the hon. Gentleman, and that is why the conflicting advice we have received has to be explored further. If a stay cannot be appealed, it cannot be appealed, but if—as the Attorney-General suggests—the issue is that there is no prospect of overturning the judgment, my view as a non-lawyer is

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that we should consider an appeal. It is extraordinary that a letter, which appears to be ambiguously worded, can take on greater importance than a charge of multiple murder. I do not know whether it is unique, but it is extremely unusual.

The Attorney-General: I rise again only to say that the decisions of the Crown Prosecution Service cannot be taken on a political basis. Indeed, insofar as I exercise functions in relation to the administration of justice, I have to ensure that those are not taken on a party-political or other political basis. It might often be convenient politically to do something, but if it is not justified on an objective consideration, it would be quite improper to do it.

Mr Robertson: I do not think that anyone would disagree with what the Attorney-General has just said. The problem is that the judgment in the Downey case appears to have taken the political situation into account, and that is what concerns everyone. Royal pardons appear to have been given, but I do not know what they were given for or which crimes were being overlooked. If that was not done on a political basis, I do not know what constitutes a political basis. The point that we are trying to make is that such decisions should be made on a legal basis, not a political basis.

The one good aspect is that the judgment has blown open the whole issue and drawn attention to what has been going on. The Northern Ireland (Offences) Bill was introduced in 2005, presumably because it was felt necessary to put the scheme on to a statutory basis, to give it a public airing or some respectability. It now seems that the scheme had been running since 1999, but it was six years before the Bill was introduced. The Bill was dropped, but the scheme continued. Was the scheme legitimate for all that time? If it was, why the need for the Bill?

As the right hon. Member for Belfast North said, the 1998 legislation—some of which I also voted against, for all sorts of reasons—addressed very unpalatable issues, but at least we could debate and vote on them publicly.

Nigel Mills: There was a referendum on it.

Mr Robertson: My hon. Friend, who is a valuable member of the Select Committee, points out that a referendum was held on that legislation. That was completely in the open, so why was this scheme not made public? We will need to look at that issue.

It is claimed that the letters were just assurances that no one was being looked at by the PSNI; it was just an administrative scheme and simply a matter of informing people that they were not wanted. But we are also told that the scheme was crucial to the peace process and if it had not been done, the whole peace process would have somehow unravelled. Both those statements cannot be correct. If it was just a matter of clearing the police computer and moving things on, it cannot have been crucial to the peace process.

Bob Stewart: Something that puzzles me relates to whether the crime was committed in Northern Ireland or in London. We know the answer: it was committed in Hyde park, which is the responsibility of the Metropolitan

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police. I do not understand how the PSNI can issue an immunity letter in that case, because it suggests that the Metropolitan police do not have any responsibility.

Mr Robertson: My hon. Friend makes an important point. I do not want to go back to the Downey case in too much detail, because I am trying to make progress, but it was an extraordinary judgment.

I also question who received these letters: who are the on-the-runs? If a completely innocent person received a letter saying that they were not wanted by the police, that would be extraordinary. It does not happen; there has to be a reason why people were on the run. What exactly does “on the run” mean? What were they suspected of doing? What did they fear the police thought they might have done to put their names forward? Why did they need confirmation that they were not wanted? That is central to the whole debate.

I am also concerned about the number of letters that appear to have been sent out. I am not quite sure of the exact figures, but those I have suggest that 221 letters were sent out, with 10 being provided by the Prison Service, which I find a little confusing, and four by the Government of the Republic of Ireland, which I find a bit worrying. That is according to the statement made by the Secretary of State a couple of days ago. We are told that that does not amount to an amnesty, but what about the royal pardons? Again, the advice I have received is that those are normally issued following a miscarriage of justice, not to prevent a case from being brought against a person in the first place, and that prompts the question of what the pardons were issued for.

The timing of this issue is unfortunate, as I said during the urgent question. As we speak, the PSNI is advertising for people to come forward as witnesses to the Bloody Sunday killings of 1972.

Mr John Baron (Basildon and Billericay) (Con): Will the Committee’s inquiry also examine what seems to be a contradiction in that the final sentence of a written statement of 25 March states:

“If the Government had been presented with such a scheme on coming to office, we would have stopped it.”—[Official Report, 25 March 2014; Vol. 578, c. 16WS.]

That prompts the question of why the letters continued to be issued.

Mr Robertson: We will certainly ask about that, and I do not know why it was not devolved to the Northern Ireland Assembly when a Justice Minister was in place—a Justice Minister who confirmed to me and other members of the Committee that he did not know anything about the scheme. I do not know why the matter was not devolved, but it is something we will consider.

As I was saying, the PSNI is looking for people to come forward as witnesses to the Bloody Sunday killings. Let me say straightaway that I do not believe in any amnesties. If republicans have committed crimes they should be charged, if loyalists have committed crimes they should be charged, and if members of the security forces have committed crimes they should be charged. This seems to be a one-sided scheme. In 2005 the Government tried to open it up to everybody, but it was rejected by all parties and withdrawn because we do

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not believe in amnesties. It seems, however, that there is a scheme for certain members of the community but not for others, which cannot be right.

My hon. Friend the Member for Basildon and Billericay (Mr Baron) is quite right and the Committee will certainly consider why this issue was not devolved following the devolution of policing and justice in April 2010. We also published the terms of reference on 11 March. They are quite comprehensive and we want to carry out a full and deep inquiry. We do not want it to run on for ever, but we will certainly do it properly and interview a range of people including past and present Secretaries of State, Ministers, police officers, relevant civil servants, and others. The first session will be held next week with former senior police officers. Yesterday we appointed two eminent barristers—I cannot name them at the moment—including a Queen’s counsel, to become special advisers to the Committee during this inquiry.

It is important to recognise the progress made in Northern Ireland over the past 16 years, but there are no amnesties and no excuse for violence. The rule of law must be upheld by all concerned, so although I regret the need to delve into the past once again, it is sometimes necessary to do so in order to secure the future.

1.24 pm

Naomi Long (Belfast East) (Alliance): I thank you, Madam Deputy Speaker, for calling me so early in the debate, and I apologise to the House and to other hon. Members, particularly the Secretary of State, for the fact that I will not be able to remain in the Chamber for the whole debate owing to circumstances beyond my control. I am also grateful to the Backbench Business Committee for granting time to consider this issue today. It is a sensitive and serious matter, not just from a Northern Ireland perspective, but for the UK as a whole, given the way in which this scheme appears to have circumvented the will of Parliament and allowed others to circumvent due process under the law.

Let me put my remarks into context by setting out a number of points. Like the right hon. Member for Belfast North (Mr Dodds), I agree that the centrality of victims in issues of justice and dealing with the past must be reflected, recognised and given respect. It is one thing to be honest with victims in Northern Ireland and tell them that they may never receive justice because of the passage of time or a lack of evidence, but it is another thing if, where people have the opportunity to pursue justice, it is denied to them, either by a process that is concocted as this one was, or by any other mechanism that seeks to prevent people from pursuing justice. Like others who have already spoken, I would oppose—as would my party—any form of amnesty.

When discussing this issue it is important that we do not seek to diminish in any way the progress that has been possible as a result of the wider peace process in Northern Ireland. All Members of the House, I think, value the progress that has been made over the past 15 years, and all want to see it furthered rather than regressed. However, it ought not to be peace at any price, and there must be some sense of moral foundation on which we move forward as a society. I believe that this process has failed to engender a sense of confidence among the Northern Ireland public that a moral compass was operating in the Northern Ireland Office at the time these issues were dealt with.

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I recognise that all peace processes contain issues of transitional justice, where normal justice arrangements are in some way changed or altered to address specific circumstances. We accepted that in Northern Ireland—to varying degrees, I must say—and that it was done on a particular basis. However painful the early release schemes, they were endorsed by the public directly in the Good Friday agreement referendum. There were other cases of transitional justice where elected representatives endorsed a process. For example, there was limited immunity in the case of decommissioning, and because of the wider benefit of recovering those weapons it was accepted that they would not then be used for forensic testing in order to incriminate those who handed them over willingly. There was an acceptance by public representatives, on behalf of their constituents, that that was a fair, right and just thing to do. Equally, for the recovery of the remains of the disappeared, limited immunity was provided for those who gave information so that they would not incriminate themselves in doing so. The greater good being served was that those families who had suffered the horrendous torture of not knowing the final location of the remains of their families would perhaps be able to get some truth.

Those cases are distinct from this one, however, because they were either considered here openly in Parliament, with the acquiescence or at least the full knowledge of the political representatives who sat here, or endorsed in the Good Friday agreement by a public referendum. The issue we are discussing did not flow from the Good Friday agreement, and no amount of repetition will change that.

I remember voting for the Good Friday agreement, and how difficult it was to do so in the light of the early release scheme. It was one of the hardest things for me to swallow, as somebody who believes in the rule of law. I voted for that agreement, however, because I believed that it was in the greater good, as did the majority of people in Northern Ireland. No reference to the on-the-runs or any other issue of this nature was put to the people of Northern Ireland, and neither were they given the option to vote on that issue. For others to suggest that this scheme was a natural flow from the Good Friday agreement is absolutely false. It was not endorsed by the public or the representatives. More than that, when the tidy up was brought in to try to put this issue on some kind of statutory footing, Parliament rejected the attempt to extend the amnesty, which we now know has been given to those who received these letters, to other categories of person who may have been seeking similar comfort. Parliament rejected that, yet it went ahead.

The allegation is that, without the letters, the peace process would not have survived. No one denies that the issue of on-the-runs did not exist. The question was how it could be addressed in a manner that would keep the principles and foundations of justice intact. At that time, the Alliance party proposed a tribunal process, in which people would have their cases reinvestigated and tried in open court, but they would have to present themselves in person to face justice and their alleged victims to do so. My party has been consistent that no widespread amnesty, such as that floated by the Attorney-General for Northern Ireland, is an acceptable way forward. It was wrong then and it is wrong now. I go further and say that two wrongs will not make a right.

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The answer in this case is not to say, “Let us universally wipe the slate clean”, but to resolve it so that justice can be done fairly and squarely for everyone in Northern Ireland.

Lady Hermon: Will the hon. Lady take this opportunity to put on record her candid assessment of the damage done to public confidence in the prosecution service and—I say this with great sadness—in the Police Service of Northern Ireland by the ramifications and revelations of the Downey case?

Naomi Long: I am more than happy to do so.

The timing is significant. Over recent years, there has been a perception in the loyalist community in particular that justice acts in a differential way, and not to their benefit. I have not shared that perception, but I am hugely aggrieved that, as a result of the case, it has been compounded, because no loyalists and no members of the security service had access to the scheme. Only members of Sinn Fein or people who came through Sinn Fein had access to the scheme. In fact, there are complaints from other republicans who fell out of favour with the Sinn Fein leadership that even they were not able to access the scheme.

Therefore, justice in Northern Ireland was acting in a partial way during that process, which has undermined public confidence and further damaged people’s respect for the PSNI by implication—the PSNI was asked to do that job by the Government of the day, and did as it was asked to do, as is its duty, but its role in the process has tainted the public view of it. It has been incredibly damaging, and a huge amount of work will need to be done as a result to recover people’s confidence in their politicians, in the justice system and in the wider peace process.

That is why, from the beginning of the negotiations, the Alliance party was clear that side dealing and secret dealing would end up being the undoing of the peace process, not its underpinning, because the truth will out, and when it does, the ramifications, having been kept secret in the first place, are as significant as the deal originally done. It is better to face the truth and deal with the consequences of failure there and then than it is to continue a charade and a false perception of progress, which is shaken to its core when such things later emerge. I feel very strongly that the case has undermined people’s confidence in the process, and that a lot of work needs to be done to restore it.

On the inquiries, other hon. Members have outlined the variety of inquiries taking place in the Assembly, the Policing Board and the House of Commons Northern Ireland Affairs Committee, but I want briefly to consider the inquiry being undertaken by Lady Justice Hallett. That inquiry was always to be narrowly focused and swift, which is to be welcomed. However, I am slightly concerned by the increasingly narrow focus of the inquiry. We would be well advised to keep that under a watching brief. In letters issued to Lord Thomas by Julian King, director general of the Northern Ireland Office, Mr King appears to very narrowly circumscribe the role of Lady Justice Hallett and how far her investigations can go. For example, Mr King has advised that she will not need to look at every individual case as part of her inquiry. For me, that raises questions about who will do the sampling of cases she will look at and on what basis

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the sampling will take place. How will we ensure that she has the opportunity to look at the different wording in the letters that were issued over the period? The wording did change. Some people received letters saying that unless new evidence was discovered, they would not be requested for trial, but others were told that they would not be requested unless new cases were discovered, which is entirely different in terms of importance. How will we know that every variety of letter and text will be thoroughly investigated unless each case is looked at in detail? Indeed, without reviewing each case, how can we know whether there are errors in other individual letters? Only by looking at each case and the evidence on which those assertions were made can we know whether any of the others were erroneous.

The Downey ruling and the stay based on it make clear that they are not based on the fact that the letter was issued in error. In fact, the reading of the judgment suggests that the ruling was not even based on the content of the letter. The content of the letter coupled with the testimonies of the right hon. Member for Neath (Mr Hain), Jonathan Powell and Gerry Kelly, who set out their view of the intent behind the letter, were important in the ruling. That is hugely important, because—clearly—the intent was that those people would not face prosecution. That was taken into account in the judgment.

It is understandable that people want to know who knew what and when, and what the process was, not least my colleague the Northern Ireland Justice Minister, particularly given that the scheme continued to operate under devolution, interfering—that is the only word I can suggest—with the devolved responsibilities of the Justice Department and other devolved structures of government. It is important to know that, but it is more important to know the import of the remaining letters. The Secretary of State’s view remains—she has made it clear—that those letters ought not to be treated as an amnesty, but it remains to be seen how a court would view them in the light of the judgment, which was not appealed, and in the light of the evidence given in the judgment of the intent of the letters at the time. Will saying that they no longer count retrospectively count for anything in a court of law? We wait to find out whether they count for anything or not.

Having said that, it is crucial that we decide where we want to go from here. Victims who for reasons beyond our control may never receive any justice are still out there. Some might receive justice, but many will not. We have said for a long time to successive Secretaries of State that we require a comprehensive process to deal with those issues in a manner that ensures that openness, integrity, truth and justice are placed at the core of our peace. The cases should not be treated as commodities to be traded in our political process, corroding respect for the rule of law both within the process and within the communities we represent.

We have in the past cautioned against side deals and their toxic effect. We now need to focus on getting to the truth and on learning the lessons of flawed process and side dealing. We need to refocus our community and find that comprehensive way forward on dealing with the past, for which we have called for some time. I agree with the right hon. Member for Belfast North, who said that the Haass process—for want of a better terminology —needs to move forward with new vigour, because we

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need to provide answers on the footing of openness, transparency, honesty and justice, for those families who still await the outcome. We need to bear in mind the hurt and aggravation of the families of four soldiers who will never know the outcome because of the application of double jeopardy in the Downey ruling.

1.38 pm

Nigel Mills (Amber Valley) (Con): It is a pleasure to speak in the debate, which I do with a level of concern. I am not a victim of the so-called troubles or a resident of Northern Ireland. I am especially cautious about interfering in the legacy of a past that is not entirely mine.

I join the various sympathies that have been expressed to the victims of the Hyde park bomb and their families and friends. This is a terrible way to end any attempt at a justice process for them. It does great damage to the reputation of justice in the UK, both on the mainland and in Northern Ireland, that we have evidence to prosecute someone, but for a rather unfortunate reason cannot have a fair trial in a public court to see whether they are guilty. The families deserved that in the Downey case.

As many Members have said, there is an issue with the whole process. Somehow, our system of justice, of which we should be proud, has gone horribly wrong. We need to ensure that we know the extent to which it has gone wrong and that no further injustices are done. The point was made earlier that the idea of the royal prerogative of mercy was to correct miscarriages of justice, not create them. I fear that this process has created some miscarriages of justice. That is the last thing we should have done.

We are all entitled to expect a fair and transparent legal and judicial process, with a trial in an open court by one’s peers where everyone knows what happened, everyone can hear the evidence and everyone can understand the verdict to which the jury comes. In a closed, invisible process, not only do we not get a trial in a public court, we do not even know who has had these letters or why, and we do not even know who has had the royal pardons. That cannot be right. We need to get to a stage where the process is transparent, and where the people of Northern Ireland and the mainland know who has had these letters and what they say. Transparent justice is the only fair situation.

On the background to the case, what strikes me as important, both in the case and in the verdict, is the intent behind the administrative process. What was the idea of issuing the letters? As was mentioned earlier, we appear to have two extreme views on that. One says that the letters were essential to making the peace process work; that Sinn Fein desperately needed them to play a full part in the process. The other extreme is that the letters were merely a factual statement of the state of inquiries that did not confer new rights on anybody, and that if there was a change of heart or new evidence was found—perhaps if a more competent file review was done and evidence was pieced together—there could still be a prosecution. With my layman’s non-lawyer logic, I would assume that the letters were largely worthless—yesterday we were not looking for a certain individual, but perhaps tomorrow we will be—and that nothing in them could be relied on. That does not appear to be the status of the letters in the very comprehensive Downey judgment.

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David Simpson: The hon. Gentleman mentions the royal pardons and royal prerogatives. Does he agree that, apart from all the letters that were issued, the greatest insult to the victims and to the people of Northern Ireland is that royal pardons were given to people who were potentially murderers or bombers?

Nigel Mills: It clearly is an insult. I will leave it to the hon. Gentleman to decide whether it is the greatest insult. I am not a victim, I was not involved and I do not live in Northern Ireland.

I can fully understand that to achieve peace people on all sides had to hold their noses and swallow some things they really did not want to swallow. Perhaps this is something that people ought to have had to swallow. Perhaps we should have been transparent and said, “Look, there can’t be any peace without some solution on on-the-runs.” Perhaps that should have been in the Belfast agreement, and perhaps it should have been in the referendum. It was not, however, and that means that it should not have happened. It should either be there, with everyone knowing about it and accepting it, or it should not be done. The secrecy is perhaps one of the greatest insults: justice has been circumvented in secret.

What I cannot get over is why this process was entered into. Why did the process exist? Why would Sinn Fein want the process and apply for letters unless everybody involved believed that it conferred some right or new situation whereby one would no longer be prosecuted for something one would otherwise be prosecuted for? I have no reason to go on the run and I am not aware that I have done anything that would require me to go on the run—

Sir Gerald Howarth (Aldershot) (Con): The Whips may have something to say about that.

Nigel Mills: The Whips may have those ideas.

If I was genuinely fearful that I might be prosecuted, I might not wish to remind the authorities that I existed unless I thought that a valuable assurance would result from the process. Reminding them to have a look at my file, which may have been buried in some long forgotten cabinet, gathering dust, would be a strange thing to do if I was below the radar in Northern Ireland or elsewhere. I can only assume that the process was meant to confer a valuable right or assurance that the individual was free to come back to the United Kingdom, or to be more visible in the United Kingdom, and would not be subject to prosecution.

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): Just to reassure my hon. Friend, the letters did not confer an amnesty. They are not “get out of jail free” cards. It was always the case that there were statements of facts about a person’s status in relation to the police and prosecuting authorities at a particular time. The reason for the judgment in the John Downey case is that he was sent a letter that was factually incorrect. The letter said that he was not wanted by the police when he was. It was the fact of that mistake—the fact that the letter was incorrect and that Mr Downey acted on that letter—that was the basis of the judgment in the Downey case. It was not the fact of the letter itself.

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Nigel Mills: I am grateful to the Secretary of State for that clarification. That still leaves me in a situation where it is hard to understand the purpose of the letter, if it was not meant to be something one could rely on. This gentleman was carrying this letter around with him every time he entered the UK. Why would he do that if it could be superseded at some point?

Mark Durkan: If we are to place any burden on what the Secretary of State has just said, does that not create a very serious danger that the case law arising from this case in future will be that anybody can claim an abuse of process based on any mistake in communication they received from a Government official at any level?

Nigel Mills: Yes, there is a real question about what the legal status of the letters is now. We can argue about whether they were intended to be amnesties. The question has now become: has this judgment somehow elevated their status to something that was not intended?

The end of paragraph 45 of the Downey judgment refers to a letter sent by the then Prime Minister, which said:

“The Government is committed to dealing with the difficulty as soon as possible, so that those who, if they were convicted would be eligible under the early release scheme are no longer pursued”.

That is basically saying that somebody who could have been prosecuted and would have got a two-year sentence would now no longer be pursued. I am not sure how I can construe that as just being a factual statement. It appears that the intention of the Prime Minister at the time was to give some assurance that people who had gone on the run would not be prosecuted in that situation. That strikes me as being an amnesty under any other name. As the old saying goes: if it looks like a duck, walks like a duck and quacks like a duck, it is a duck. This looks very much like it was intended to be an amnesty.

Naomi Long: It is constantly raised that the letter was issued in error. However, in the judgment the real influence came from the content of the letter combined with the testimony given as to what the effect of the letter ought to be. Personally, having read the judgment, I think that the issue of the erroneous nature of the letter was in many ways a red herring. If another letter, accurately written, had been presented with the same testimony from the right hon. Member for Neath (Mr Hain) and the others who gave testimony, the effect would have been exactly the same.

Nigel Mills: Yes, I think the hon. Lady must be right on that. The judge seemed to think that the process was meant to confer some kind of assurance on people and that the letter had to be read in line with that, but I am no expert.

We ought to look also at the concerns expressed at the start of this process by the then Attorney-General, who is quoted in paragraph 36 of the judgment. He said that he was

“seriously concerned that the exercise that is being undertaken has the capacity of severely undermining confidence in the criminal justice system in Northern Ireland at this most sensitive of times. Individual prosecution decisions have to be justifiable within the framework in which all prosecution decisions are reached and

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I am not persuaded that some unquantifiable benefit to the peace process can be a proper basis for a decision based on the public interest”.

Those concerns have not arisen retrospectively; there were concerns at the time about what the process would really mean and what it would be seen to mean to various people in Northern Ireland. That is why I welcome the inquiries into this situation.

Bob Stewart: My hon. Friend is niggling not in a bad way, but in a great way, on this process. If, as the Northern Ireland Secretary has just said, these letters are not “get out of jail” cards or amnesties, can we have all those who have received them put before a court of law?

Nigel Mills: I am grateful to my hon. Friend. One thing that needs to come out of the various inquiries is what the current legal status of the letters is in the light of the judgment and, if we are not happy with that legal status, how we can get to a legal position that we are happy with. It might be possible—I am not a lawyer; I do not know—for the Northern Ireland Office, the Secretary of State, the Attorney-General or the Minister of Justice in Northern Ireland to write to every recipient of such a letter and say, “Just to be clear, you can’t rely on these things to avoid prosecution if there’s evidence that justifies a prosecution.”

This all prompts the question: what was the point of the Historical Enquiries Team—now part of the Police Service of Northern Ireland—going back and re-investigating all those old cases if, I assume not to its knowledge, 200 or so people whom it might have been investigating as part of that process had a letter saying that past evidence would not be used to bring a prosecution? What was the point of that process?

Lady Hermon: Will the hon. Gentleman also comment on the odd timing of Mr Downey’s letter? We know from the judgment that it was signed off on 20 July 2007. I would briefly remind the House that in 2007 we had a successful First Minister, Ian Paisley senior, sitting with the Deputy First Minister, Martin McGuinness. Indeed, so good was their working relationship at the time—they took up office at the beginning of May 2007—that they were unfortunately nicknamed the “Chuckle Brothers”. However, the peace process in Northern Ireland was very secure in the early spring of 2007. Sinn Fein had come on to the policing board, and the IRA had decommissioned in 2005. What was there to save in the peace process by signing off Mr Downey’s letter in July 2007?

Nigel Mills: I suspect the hon. Lady knows the position far better than I, so there is not much need for me to add anything to what she has said.

To return to the status of the letters, if we do not like it, we need to discover the process for, if anything, restoring the position to what we think it should be—that they do not confer any kind of amnesty. If that requires a Bill to come before this House, perhaps we should do that. Given the devolution of justice, it might require something to go through the Assembly. I suspect that that might be a political challenge under the circumstances, but it is important that one of the outcomes of the inquiries is getting the legal position to where it should be, in the interests of fair and transparent justice for all the victims, on all sides.

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I do not see how we can have a process that applies to only one community and not the security services. I think that was a grave mistake in entering into this process. Clearly it would have been better to have a full debate on the amnesty. We could all have had a vote on an amnesty—if it had not gone through, everyone should have been prosecuted where there was evidence; if it had gone through, it would be put behind people. That is clearly a debate that can be had now—it was had nearly a decade ago—but we have to take the assurances of all the Northern Ireland Members who are here for this debate that that is not something that would be welcomed in Northern Ireland. There is no desire for that amnesty.

I have no great knowledge of Northern Ireland law. However, having sat through some inquiries on the Select Committee on Northern Ireland that looked at the equalities position in Northern Ireland and the power of the law to prevent one community from being favoured over another, I cannot see any way under Northern Irish law that there could be a process with any legal effect that so obviously favoured one community over the other. If I was a loyalist who feared prosecution or who perhaps was being prosecuted, I might be arguing and saying, “Wait a minute, there’s been this process for one side that ought to have applied equally. I should have had the right to apply for that letter. If I had been given that letter, I could have my prosecution stayed.” Indeed, I believe that might be the subject of a case. If I was a member of the security services who might face prosecution, I would be making that exact point as well: “Wait a minute. Why wasn’t I given the chance to write in 2000 and ask if I was being investigated and whether there was any evidence against me? If I had received my letter, I could have had my prosecution stayed.”

We have created a mess, and not just for the recipients of these letters. We might not like the position they are in now, and in every prosecution of someone from the security services or the loyalist side, I am sure the first thing their lawyer will do is try to get their prosecution stayed on the grounds that the process did not apply equally to all members of the community. We have created a mess, and the actions of the then Prime Minister and Secretary of State—which, as is clear from the judgment, deliberately created a process that was designed to achieve that—are thoroughly shameful to British justice.

This is perhaps one of the bleakest episodes that we will ever see, because it has tarnished a peace process that did not need tarnishing—a process that is working and needs to work. It was heartening that the leader of the Democratic Unionist party was clear earlier that he did not want the institutions torn down—he did not see that as a solution or something that would give a political advantage—and that the institutions need to be made to work. Whatever the outcome of the inquiries, I hope that all the parties stick by that. The best way forward is for the process to advance and the institutions to get stronger, not to try to unravel them, no matter how shameful this case was.

1.55 pm

Mr Gregory Campbell (East Londonderry) (DUP): The Downey case unfortunately brings into sharp focus some of the problems that we have as a society in dealing with the past. As I said in an intervention, we

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are in the unfortunate position of knowing that if the Downey case had not materialised, we would still be oblivious to the pernicious influence of the administrative scheme in Northern Ireland.

Since the Downey case, those of us who were not in possession of knowledge of the scheme have been criticised by those in Sinn Fein, who say that had we been informed in the run-up to any agreement on the scheme, we would have opposed it, and that was part of the reason for our being kept in the dark. After that was seen to be somewhat obtuse and ludicrous, the same people in Sinn Fein said that we knew about the scheme all the time. They tried to quote various judgments that might have made some passing reference to a scheme that required to be carried out. However, there never was any reference in the public domain, and as my right hon. Friend the Member for Belfast North (Mr Dodds) said, anything that was put in the public domain, either in the House or outside, precluded a scheme of this nature. In fact, the right hon. Member for Neath (Mr Hain), the former Secretary of State, made it absolutely clear that there was no scheme. Full stop. Period.

Lady Hermon: May I draw the hon. Gentleman’s attention to the characteristic features that were mentioned by the right hon. Member for Neath (Mr Hain)? I am sorry that he is not here this afternoon, and I have explained why I understand he cannot be here. The Downey judgment, which is now in the public domain, contains written testimony submitted by the right hon. Gentleman, who said:

“The procedure was in a number of ways wholly unprecedented.”

Another characteristic was that

“the scheme progressed in a non public manner. Confidentiality was maintained for the individuals who submitted their names to the scheme; neither the names of the applicants nor the outcome of the applications were subjected to publicity.”

That is in the public domain, so for Sinn Fein to claim that we all knew about this and that we all have amnesia about it now is absolutely untrue and very insulting.

Mr Campbell: I thank the hon. Lady for that very enlightening quotation, which simply proves the point that what unites people right across Northern Ireland—with the exception of those who used to advocate violence and excuse or defend it—is that we are all rightly appalled at the secret nature of the scheme.

It has also been said—others have alluded to this—that members of the Policing Board were in some way briefed, but when we examine the record, we see that no one was ever briefed on such an administrative scheme. Of course, everyone knew that there was an outstanding issue with on-the-runs. There were those who said, “This matter must be resolved,” and those of us who were determined to say, “If it comes before Parliament and there is any possibility of us having some input into a resolution that means giving people immunity for what they have done in the past, we will resolutely oppose it.” That much is absolutely clear.

Others have mentioned the Eames-Bradley report, and the fact that one of its authors, Mr Bradley, said that people knew about the scheme. However, when we look into the matter, it is absolutely clear to us that,

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whoever may have been informed privately, no one was informed publicly. There was no public reference whatsoever to a scheme of this nature.

Dr William McCrea (South Antrim) (DUP): It might be interesting to find out when Mr Bradley himself knew, and who told him.

Mr Campbell: Yes, indeed. I understand that Mr Bradley, who is the former vice-chairman of the Policing Board, said that the issue had been brought before the board. In fact, he had left the board at that stage.

Let me now turn to the question of intent, which is the very kernel of the issue. What was the intent of the administration that initiated the scheme, and what was the intent of the administration that continued it? What was the intent of those who were sending the letters, and what were the perception and understanding of the recipients? That is the key to the entire matter.

It is abundantly clear to everyone that the intent of the letters was to reassure people who might have believed—for a reason that we all understand—that there were circumstances in which, if they either came back to Northern Ireland or were approached by an officer of the law in another jurisdiction in which they happened to be, they could at some point in the future be made accountable for crimes in which they were suspected of having been involved. It is clear that they believed that the letters made them immune from that, and believed that they would be protected or sheltered in some way from the investigation of actions with which they had been associated in the past. For that very reason, Sinn Fein was quite happy to be the messenger of the tidings that would have been brought to the recipients of those letters.

It has been said—this was mentioned by the hon. Member for Belfast East (Naomi Long), who has had to leave the Chamber—that when news of the Downey case broke, disillusionment in some sections of the Unionist community became more apparent. I have a very different view. All that the Downey case did was crystallise some of the disillusionment that had been apparent for a number of years in sections of the Unionist community, and bring it into public focus. Unfortunately, we now have to try to repair the damage that the Downey judgment has done, along with a series of other issues.

The underlying principle is that those who supported terror in the past have used the potential of a return to violence as a bargaining chip, and not for the first time. Many of us believe that during the negotiations leading to and following the Belfast agreement, and, undoubtedly, during the negotiations relating to the administrative scheme, there was always the spectre—the prospect—that if this was not agreed to, violence could, unfortunately, return. Our view is very clear, and it is that we cannot be held to ransom by people who make threats or insinuations that bad times could return.