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Baroness Chalker of Wallasey: My Lords, I am aware of that appreciation. However, it is always nice to receive from the noble Lord the thanks of the specialist committee in Kuwait. While the ICRC is the key organisation for dealing with detainees, we are watching most carefully how the committee is getting on. I shall be talking with the committee tomorrow in Geneva. I am glad to say that there are some signs, for example, by their attendance at the Tripartite Commission and initial responses on 127 files, that Iraq is perhaps beginning to co-operate. Let us hope that that process continues.

Lord Avebury: My Lords, I welcome everything that has being done on behalf of the Kuwaiti detainees. Will the Minister consider referring to the ICRC the question of 1 million Iraqis, allegedly of Persian ancestry, who were expelled to Iran between 1980-90 and of the representatives of those families who, according to the UN rapporteur, Max van der Stoel, have been detained ever since as hostages in southern Iraq?

Baroness Chalker of Wallasey: My Lords, I shall certainly look into what the noble Lord has said.

Lord Wright of Richmond: My Lords, can the Minister give an assurance that the Government continue to support the ICRC, not only in the very important work that it is carrying out in Iraq and Kuwait, but also in such so-called "forgotten areas" of the world, such as Afghanistan and Liberia?

Baroness Chalker of Wallasey: My Lords, I can give the noble Lord, Lord Wright of Richmond, that assurance. I shall discuss those very matters tomorrow.

Lord Rea: My Lords, I have a question which is peripheral to the one on the Order Paper but, nevertheless, relevant to it. Can the Minister throw any further light on newspaper reports which appeared today which seem to show that there has been a coup attempt in Iraq, and that the son of Saddam Hussein has been seriously wounded and is now in hospital in Amman, Jordan?

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Baroness Chalker of Wallasey: My Lords, I can give no confirmation or denial about those reports at this time. But, needless to say, I am as interested as the noble Lord in the matter.

Lord Molloy: My Lords, is the Minister aware that there is a feeling in Kuwait that the pressure exerted by the International Red Cross and all supporting governments and Parliaments, including our own, is beginning to have an effect? Surely that pressure must be maintained. Ultimately, I feel sure that the free world will show that it cannot be treated in such a way by an evil dictator.

Baroness Chalker of Wallasey: My Lords, I thoroughly agree with the noble Lord.

Baroness Blackstone: My Lords, as Iraq has attended the last two meetings of the Tripartite Commission—something I believe that the UN special rapporteur on Iraq has very much welcomed as a new development—can the Minister tell the House whether Iraq was asked to give an explanation at those meetings about the continued imprisonment of 600 or more Kuwaitis? Further, are there any plans to put pressure on the Iraqis in the context of the commission meetings?

Baroness Chalker of Wallasey: My Lords, I cannot give the noble Baroness an exact answer; but I hardly think that such meetings would have taken place without those matters being raised. They are part of the work of the Tripartite Commission. Certainly, one of the things that has happened is that the Tripartite Commission has been successful in cutting away some of the procedural undergrowth. That is how the new technical sub-committee has been able to speed up its work. It means that the committee will be able to take account of things that previously it could not.

Banking and Charitable Institutions

3.18 p.m.

Viscount Chandos asked Her Majesty's Government:

    Whether, in the light of the collapse of Barings, they will introduce legislation to prohibit charities from owning banking institutions.

The Minister of State, Home Office (Baroness Blatch): My Lords, the Government share the wide regret at the financial difficulties of Barings and will study any views from the inquiry which has been commissioned by my right honourable friend the Chancellor of the Exchequer. Charity trustees are already under important duties of care in relation to the safe custody of their charities' property. The Government are not persuaded that new legislation to prohibit a charity from owning a bank would be appropriate.

Viscount Chandos: My Lords, I thank the Minister for her Answer. However, does she agree that day-to-day banking supervision can and should only be the protection of last resort, with proper accountability

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to shareholders being the primary discipline? Should not the Bank of England have recognised that the interrelationship between the trustees of the Barings Foundation and the past and present directors of the Barings group blunted that discipline and at the same time allowed a disproportionate share of profits to be paid to senior employees?

Baroness Blatch: My Lords, it would be quite inappropriate for me to speculate on any of the noble Viscount's points. As he knows, a review of all such matters is taking place at present. It is absolutely certain that the trustees do have a duty of care in such matters. As regards the underlying premise of the Question, Barings started off as a bank and set up a foundation over 200 years after its establishment as a bank. The idea of putting legislation in place which would prevent a bank from setting up a charitable foundation would simply not be sensible.

Viscount St. Davids: My Lords, does my noble friend agree that the matter that needs to be addressed is whether it is desirable for a bank to be owned by any single shareholder or group of shareholders who may not be able to increase the capital of the bank in a manner which is commensurate with the risks that the bank enters into? In the case of Barings, the risk was probably entered into involuntarily.

Baroness Blatch: My Lords, I am not able to say how Barings entered into that risk. All I know is that the trustees of the charitable foundation acted properly and were wholly unaware of the tragedy that was about to befall them. However, the relationship as regards the charitable foundation, the bank, the proper management of the bank—which I believe is what is at stake—and the proper relationships and line management that operate at any given time is really what is at issue. I hope that that will be looked at during the course of the investigations.

Lord Ashburton: My Lords, I declare an interest. I am the current chairman of the council of the Baring Foundation, which has indeed been grievously wounded by the collapse of Barings. I was also chairman of Barings plc up until 1989 and a non-executive director of Barings until last year. Do the Government agree that to lead a Question on shareholder responsibilities with an apparent assertion that the trustees of a charity are less capable than others of keeping pressure on management to do what they should do—to produce income by managing the asset well—and, furthermore, to use the Baring Foundation as an example, when several of us on the council have had, and have, intimate knowledge of Barings business and management, is less than convincing?

Baroness Blatch: My Lords, first of all, I note the noble Lord's involvement in these matters. I think the whole House will share the regret that this generous charitable foundation should have fallen so tragically. There is a criticism of the Baring trustees implicit in this Question. I would like to think that we could distance ourselves from that and say that the trustees of any charity have a duty to maximise income, to invest

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responsibly and to carry out their duties responsibly. It is those duties of care which would apply to any trustees of any charity.

Lord McIntosh of Haringey: My Lords, without in any way wishing to comment further on the efficacy or otherwise of the actions of the trustees of the Baring Foundation, does not the Minister agree that, as regards the public, the real scandal in recent weeks has been that the senior management of Barings have paid themselves £105 million in bonuses for profits in 1994 which are not there, whereas the Baring Foundation has had to notify its recipient charities that the money is not available for them?

Baroness Blatch: My Lords, I shall make no comment on the point that was made by the noble Lord. I do not wish to speculate on any outcome of any inquiry about the behaviour of Barings in this matter.

Lord Jenkins of Putney: My Lords, is the noble Baroness aware that nothing that has been said so far has removed the need for the Question that was originally raised by the noble Viscount, Lord Chandos?

Baroness Blatch: My Lords, I remind the House of the Question, which invites the Government to consider the possibility of introducing legislation,

    "to prohibit charities from owning banking institutions".

As it relates to Barings, I am simply saying that Barings was a bank for 200 years before it set up a charitable foundation. It has been extremely generous to the charitable sector. We all regret the downfall of Barings Bank, but that is not an argument for putting in place legislation to prevent any bank from setting up a charitable foundation.

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