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Lord Lloyd of Berwick: My Lords, the decision of the Scottish Executive to release Megrahi on 20 August seems to have become confused with a number of wider issues. No doubt many of those issues are of great importance and are still unanswered, as the noble Lord, Lord Howell, and the noble Lord, Lord Thomas, have pointed out. Does the Minister agree,

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though, that in the end the sole question regarding Megrahi's release was whether it was justified on compassionate grounds-in other words, whether the evidence was that he was not likely to live for more than another three months? If that was the evidence, and if those were the grounds for his release, surely those grounds override all the other grounds that have been mentioned. Does it not follow inevitably, if those grounds are the correct ones, that it would have been clearly wrong for the United Kingdom Government to seek to influence the decision in any way?

Baroness Kinnock of Holyhead: I thank the noble and learned Lord for that helpful and expert opinion. As he said, it is a matter for the Scottish judicial system, and within that system it is clearly stated that for compassionate release to be agreed, the judgment has to be that that person will live for only a further three months. As I understand it, there was a parole board, a consultation with the prison governor and a thorough medical examination which determined that that was actually the case, and on that basis the Justice Minister in Scotland decided that that would be the course that they would take on this occasion.

Lord Trefgarne: My Lords, I declare an interest in this matter. I am chairman of the Libyan British Business Council. Virtually all the major firms trading with Libya, certainly all the larger ones, are members of the council. I believe that I would have known had there been any major business deal that was part of the agreement to release Mr Megrahi. I know of no such deal, and I believe that the Government are entitled to make that claim.

Baroness Kinnock of Holyhead: I say to the noble Lord that it is important for the British Government and for British business, which he has declared an interest in, to re-engage with Libya, as a result of which we have secured many advances on weapons of mass destruction and so on. We have to admit, too, as the Prime Minister said on 2 September, that it is in all our interests that Libya rejoins the international community, and it is in all our interests that British interests in other spheres are supported.

Lord Anderson of Swansea: My Lords, one can surely act only on the basis, after the appeals, that this was a proper conviction. Are there any general lessons to be learnt from this matter? The dilemma is clear, as was pointed out by my noble and learned friend Lord Morris of Aberavon. There are separate jurisdictions in law and the Scottish jurisdiction is sovereign in this matter. However, there are key UK interests. The wider dimension includes counterterrorism co-operation with Libya; illegal migration from Libya over the Mediterranean into Europe; the commercial interest-including many jobs-in the UK; and foreign policy relations, not least those with our major ally, the United States. Is my noble friend satisfied that the channels of communication are sufficient? Were there any actual relations between Libya and the Scottish Executive? Is there a need for more formal protocols on consultation in matters of this sort? What, if any, are the general lessons to be learnt from this matter?

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Baroness Kinnock of Holyhead: I thank the noble Lord. I point out that UK involvement in the measures under the prisoner transfer agreement is very clear. The decisions that the Scottish authorities were able to take reflected their particular judicial system. Since Mr Megrahi was imprisoned under Scottish law, in Scotland, it was clear that that it was the prerogative of the devolved Administration to pursue the matter themselves. I agree that in all matters, whether between Libya and the UK or between Libya and any other part of the world, it is extremely important that Libya is in contact with and influenced by other countries. The Secretary of State raised Amnesty International's concerns on human rights. If we do not engage with a country such as Libya, we are unlikely to see developments of the kind that we have seen already on non-proliferation and other matters of grave concern, not just to us in the UK but of course globally. I welcome any opportunities for useful exchanges that can be had between devolved authorities, the British Government and the Libyans so that we can make progress on improving relations and improving the capacity for influence on Libyan thinking and action and so that everything possible can be done.

Lord Steel of Aikwood: My Lords, I preface my question with a word of congratulation to the Minister on her appointment as our new Minister for Africa, a subject in which she and I have a long-standing interest.

It is some years since I went to Libya with Dr Jim Swire, whose daughter was killed in the Lockerbie tragedy, to try to help to persuade the Libyans to agree to a trial in a third country. Since that happened, I have had no involvement in the case at all. However, four things concern me, which have all been referred to already, but which I shall repeat.

First, the Scottish Criminal Cases Review Commission has expressed grave reservations about the authenticity of the original verdict, and we have not yet seen its full report. That is a matter over which great uncertainty still hangs. Secondly, the United Nations legal observer at the trial has been scathing about the quality of the evidence on which Mr Megrahi was convicted. That must be a matter of concern. Thirdly, the Government have placed public interest immunity certificates on some of the papers, which prevents the defence seeing what evidence they had that has not been made public. Fourthly, Mr Megrahi withdrew his appeal, so we have not been able to get at the truth. Surely, there is an unanswerable case for a full, independent judicial inquiry, and the victims of the Lockerbie disaster deserve nothing less.

Baroness Kinnock of Holyhead: I thank the noble Lord. I very much value his experience in connection with these matters. As the Secretary of State mentioned in his Statement, the terrible tragedy of Lockerbie is something that many of us in this House remember very well. The reality is that the Libyans continue to maintain that they consider the matter to be closed. Although the British Government do everything that they can, still, as I am sure do the Scottish authorities, it is proving very difficult to persuade the Libyans that the matter can be opened.

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This must be an issue for the Scottish justice system to deal with. The issues that the noble Lord raises are extremely worrying and throw the spotlight on some aspects of the trial that we should be concerned about, but I very much hope that the Scottish Parliament and others will take up these matters and ensure that the issues that noble Lords have raised will be understood to have been taken very seriously by your Lordships. Perhaps we will see some responses soon on the matters raised with me.

Lord Boyd of Duncansby: My Lords-

Lord Marlesford: My Lords, I think that it is our turn.

Lord Boyd of Duncansby: I have an interest, but go on.

Lord Marlesford: My Lords, I agree very much with my noble friend Lord Howell of Guildford and his implied conclusion that at ministerial or at least prime ministerial level, the release of Megrahi was handled pretty crassly. However, Libya's leadership seems to have changed in recent years. Prime Minister Blair, ably supported by all the departments of the FCO, in 2004 played a leading part as a bridge between Gaddafi and the West. As a result, to some extent at least, Gaddafi has come in from the cold.

Has the Minister yet had a chance to read Gaddafi's Green Book, as I have? If so, she will recognise his muddled and fumbling attempts to give power to his people. Does she agree that what he really seems to be trying to do-although he does not appear to have read the original source-is to follow Abraham Lincoln's adage at Gettysburg that the object is to have government of the people, by the people and for the people? Does she further agree that, in practical terms today, Gaddafi's enemies are our enemies? They are those Islamist jihadists who would be as keen to kill him as they would be to kill leaders of the West. Does she also agree that Libya, with 2 million barrels of oil a day and only6 million people, has much scope to improve the lot of its own people? Does she agree that we have an important role to play, for example through education? We have something like 6,000 Libyan students in our universities, who produce some £120 million a year in fees for our university system.

Baroness Kinnock of Holyhead: I thank the noble Lord and promise that I shall put Gaddafi's Green Book on my Christmas wish list. My background has been in international development, so I well understand the need for state-building and nation-building. A prerequisite for that is a subscription to democracy-building, to good governance and the rule of law. Those are matters for anyone who engages with a country such as Libya. Of course, trade and energy security are important issues, but part of the relationship has to be the importance of building those structures, including an educational system, and giving real freedom to the people. That is something that we would all believe to be a priority in Libya, as with other countries in which the UK has an interest and involvement.

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Lord Boyd of Duncansby: My Lords, noble Lords will know that I was Solicitor-General for Scotland when the two accused were handed over in Libya for trial and I was Lord Advocate at the time of the prosecution. I appeared myself for parts of the prosecution and was responsible for it. I have been asked on many occasions for my view on the compassionate release of Mr Megrahi and have taken the view that it would not be proper for me as the prosecutor to comment on that. However, I shall say one thing. I have known Mr MacAskill for more than 30 years and know that he is someone who would take a decision on proper grounds and not on extraneous matters. In particular, when he said in his statement that the withdrawal of the appeal by Megrahi was solely for him and his legal advisers and that no pressure had been put on Megrahi to do so, that should be accepted.

Does my noble friend agree that in respect of the conviction, no fewer than six Lords Advocate have taken the view that there was sufficient evidence for Megrahi to stand trial and that he was appropriately convicted on that evidence, and that no fewer than eight judges of the High Court of Justiciary have similarly concluded on the evidence that he was guilty of the crimes? He remains convicted of the worst terrorist offence on British soil-the deaths of 270 people, 11 of whom were in the town of Lockerbie.

I wish to raise one matter. Assurances were given that, if convicted, Mr Megrahi or his co-accused would serve their sentences in the United Kingdom. Those assurances were important in securing the support of the American relatives for the trial process, which was particularly important in ensuring the legitimacy of the trial. They now feel alienated from the trial process. It is a source of regret to me that I gave those assurances based on the assurances that were given by the United Kingdom Government to the relatives when I met them, and they now feel aggrieved about that. Will the Minister work with the Scottish authorities to make overtures to the families, particularly the American relatives, to ensure that they know the full facts behind the decisions that were taken and assure them that we have always had their interests and the interests of justice in mind?

Baroness Kinnock of Holyhead: I thank my noble friend. I will certainly pursue the issue that he raised, particularly in relation to the importance that we attach to having contact and engagement with the American relatives.

Government Assets

5.52 pm

The Financial Services Secretary to the Treasury (Lord Myners): I would like to repeat a Statement made earlier today in the other place by the Chief Secretary to the Treasury.

"Mr Speaker, our overriding ambition is to lock in recovery, and lay the foundations for growth in the years to come. Because of the action we have taken this year, we are confident that growth will return at the turn of the year. Going forward, the Chancellor

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set out in the Budget our plan to halve the public sector deficit over four years, once recovery is secured. This entails a return to growth with support for firms and families, fair tax rises for those most able to bear the burden, and slowing the growth of public spending.

As the Chancellor set out in April, an ambitious programme of asset sales is part of our plan; a plan that sets out up to £16 billion of property and other assets sales, with proceeds raised being used to support our priorities, including new capital investment and paying down debt.

Today we set out a few details and in the months to come we will publish a portfolio of assets to be sold. It will cover assets for sale-and assets where we wish to explore opportunities for managing these assets in a different way. The portfolio will include the Tote, Dartford Crossing, the student loan book and the Channel Tunnel rail link.

We know that councils will make a major contribution to the overall level of asset disposals, through sales of housing and other assets, as will central government property. These three elements are expected to deliver £16 billion in receipts over the period 2011-14. In particular, we aim to secure receipts from central government sales within the next two financial years, where market conditions are right.

We have already sold £30 billion of public assets since 2004. This success, building on the £22 billion sale of 3G licences in 2000, played a major role in the reduction of debt over the last decade.

We have made tough choices to cut debt in the past, which allowed us to support the economy now. We will not flinch from tough choices today, to allow us to live within our means for years to come".

5.54 pm

Baroness Noakes: My Lords, I thank the Minister for repeating the Answer to the Urgent Question tabled in another place. One of the Government's horrid habits is making policy announcements outside Parliament, and it is right that Ministers have had to come to both Houses of Parliament today to deal with the issues that the Prime Minister included in his speech in the City this morning.

We are not opposed to asset sales. Indeed, my party, led by the Government of my noble friend Lady Thatcher, charted the way forward in the 1980s. But we are against selling assets at the wrong time and the wrong value simply to realise cash flow. Our economy may well have been weakened by 12 years of mismanagement by the Prime Minister, but it is not, I hope, so weak that we need to resort to fire sales. We must remember that the Government's track record on selling at the right value is not good. It was the Prime Minister who sold 400 tonnes of gold in 1999 for £3.5 billion. If he had held onto it, our country would today be £5 billion better off. Value for money for taxpayers must be a key consideration. What is the Government's approach to timing and how will value for money be assured?

We need to put this in the context of the dreadful borrowing figures. Government borrowing this year is forecast to be £175 billion, or £3.3 billion per day.

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Today's Statement is rather light on figures merely repeating the Budget figures of £16 billion, but that is but a tiny drop in the ocean-less than five days' worth of this year's borrowing.

We should also be clear about the impact of asset sales. The Government's spinmaster-in-chief, the noble Lord, Lord Mandelson, was on the airwaves this morning saying that the Government need to cut the deficit-we all say amen to that-and that selling assets is one way of doing it. It is not. Asset sales can cut the stock of debt, but they will do precious little for the deficit and in particular the structural deficit going forward. Most of what we heard today is not new. It was spun as another example of the Prime Minister's wizardry in saving the world or at least this country, but in practice, it was a rehash of old ideas. If there had been a little less spin this morning, we might not even be taking this Statement here this evening.

I will now deal with the items that we are told might be up for sale. First of all is the Tote. The idea is almost as old as the current Government. There was an explicit manifesto commitment to sell the Tote in 2001. The Government committed to selling the Tote to racing at a 50 per cent discount or that 50 per cent of the proceeds would flow to racing. That was repeated many times during the passage of the Horserace Betting and Olympic Lottery Act 2004. Brussels then ruled out a subsidised price for racing and the Treasury refused to sell the Tote to racing at any price that racing could afford. Will the Minister confirm that the Treasury wanted to raise £400 million in 2007? How much does the Treasury now expect to realise from the Tote? Also, do the Government remain committed to passing 50 per cent of the proceeds to the racing industry?

Secondly, there is the sale of the student loan book. That was first announced by Mr Brown in 1997. It was re-announced in 2007 and legislated for in 2008. Does the Minister think that now would be a good time to sell the loan book? If not now, what economic conditions would make the sale worth while?

The Minister will realise that the sale of the Dartford Crossing, first announced in 2008, raises very different issues given the history of tolls and the involvement of local councils. What is the Government's policy now towards tolls for the crossing in the long term, since that will be the key ingredient of the sale price that can be realised?

Lastly, we are told that the Channel Tunnel rail link is up for sale, as first announced in 2007, but with no evident progress since. What is happening here? The Statement also referred to council assets. The chairman of the Local Government Association has been quite clear that it is for councils to decide locally what to do about sales and their proceeds. The Minister might like to tell the House how the sale of council assets will help the national finances, because that is far from clear.

The Government might have thought that this set of tired announcements and reannouncements would play well in the media and look like part of a coherent response to the country's economic woes. It will certainly fool no one in your Lordships' House and I would be very surprised if it fooled anyone outside it.

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6.01 pm

Lord Newby: My Lords, when the House reconvened last October, the first day started with an emergency Statement by the Minister on the action that the Government had taken that day in recapitalising the banks. Within the first 10 days of coming back there had been three emergency Statements about the scale of the banking crisis. This year, we start by picking up the pieces. In the intervening period, the Government-and the Prime Minister in particular-have been dragged, kicking and screaming, to accept that there will have to be substantial reductions in public expenditure and increases in taxes and revenue. We have had, as it were, a very unseemly dance of the seven veils, conducted by the Prime Minister, of which this is the latest and smallest veil. As the noble Baroness, Lady Noakes, has pointed out, the Statement-all bar one sentence-was contained in the Budget. We knew, and it is in the figures, that £16 billion is expected from asset sales. The Prime Minister says that today they have set out a few details; the very few details are contained in a single sentence which just lists some of the items that the Government will sell from their own central portfolio.

I do not want to repeat everything that the noble Baroness has said about the individual items, although I cannot help at least making a feeble joke about there having been more false starts in selling the Tote than in the Grand National on a bad day. This is a relatively small, unconvincing list of national asset sales. The local government asset sales are, of course, much more substantial than those that are expected to come from national government. We have this wonderful statement:

"We know that councils will make a major contribution".

The only reason that the Government know this is because they have just told councils that they have to make a major contribution. Councils have not been asked whether they want to make a major contribution. At the moment, many councils are extremely worried about what the consequences of the announcement mean for them. Some £13 billion equates to £20 million per parliamentary constituency, so there are a number of £20 million dollops per local authority. If I am running a local authority, what does that mean in terms of what I have to flog off and when?

When we come to the two sentences about timing, we find across the piece a very considerable degree of muddle. These three elements are expected to deliver £16 billion over the period 2011-14. That is straightforward, except for this:

"In particular, we aim to secure receipts from central government sales within the next two financial years"-

that is, 2010-11-

I think it is the general view that market conditions are unlikely to be right in respect of virtually any of these categories of asset, and certainly property, within the next two years. If I had been a senior civil servant or Minister receiving this from a civil servant, in view of the timing I would have said, "Go back and make it clear". Could the Minister clarify the timing? This is a mouse of an announcement. It will do nothing to deal with the structural deficit and is yet another unedifying example of the Prime Minister attempting desperately to appear in control of the situation and public expenditure, which he manifestly is not.

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