UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 404 - i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

NORTHERN IRELAND AFFAIRS COMMITTEE

 

 

POLITICAL DEVELOPMENTS IN NORTHERN IRELAND

 

 

Wednesday 1 April 2009

RT HON SHAUN WOODWARD MP, MS HILARY JACKSON

and MR NICK PERRY

Evidence heard in Public Questions 1 - 44

 

 

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Oral Evidence

Taken before the Northern Ireland Affairs Committee

on Wednesday 1 April 2009

Members present

Sir Patrick Cormack, in the Chair

Christopher Fraser

Mr Stephen Hepburn

Lady Hermon

Dr Alasdair McDonnell

Mr Denis Murphy

Stephen Pound

David Simpson

________________

Witnesses: Mr Shaun Woodward MP, Secretary of State for Northern Ireland, Ms Hilary Jackson, Director, Political Directorate, Northern Ireland Office and Mr Nick Perry, Director General Criminal Justice and Policing, gave evidence.

Q1 Chairman: Secretary of State, could I welcome you on behalf of the Committee. Thank you for coming before us again, one of our regular sessions to ask you how you see recent developments in Northern Ireland; and we welcome both of your officials, both of whom we have the pleasure of knowing. Secretary of State before I begin the questioning on the main subjects this afternoon could I just confirm that we are not going to be asking you questions today about Eames-Bradley because you very kindly agreed to have a separate session on that in about six weeks' time.

Mr Woodward: First of all, can I thank you for asking me to the Committee this afternoon and to your colleagues, Sir Patrick. May I also in answering that question just say that I was not proposing this afternoon to deal with this issue at length, but I thought it might be helpful, perhaps, since this is something that you have looked at recently, if I might be permitted for one or two minutes to give the Committee an indication, which I have not given to anybody else yet of where we are on the Eames-Bradley response.

Q2 Chairman: That is extremely helpful. We were not going to quiz you on that for the reasons I had said, but I was obviously going to ask you if you wanted to say anything by way of general introduction, and if you want to preface your remarks by some references to Eames-Bradley we would be very grateful.

Mr Woodward: Thank you again. I think you are absolutely right to want to devote a special session and I am very happy to come to that session at the end of April. But I thought it would perhaps be helpful for the Committee to just indicate the general direction of travel in which we are beginning to go in response to the work of Eames and Bradley, and may I begin by thanking them again for the work that they have done. It was an extraordinary, onerous task which I know they carried out with not only distinction but enjoyed doing, despite the difficulties. Whether they enjoyed some of the opprobrium which came their way afterwards I think was unfortunate because the distraction over the discussion of one particular recommendation meant that the other 30 recommendations at moments were not even getting any kind of hearing at all, and that was why I departed from the direction which I think I had originally described to you, Sir Patrick, which was that I would not respond to any of the report until we could respond to most of it. The reason for deciding to move against that one recommendation for a recognition payment was because it was preventing any sensible discussion happening of the rest of the report, about which I think there is quite a lot of consensus. The particular recommendation on recognition payments clearly had some consensus in some quarters and, as they have described it, it was not only to be found in one quarter but very, very clearly many, many people found it unpalatable, disagreeable and it was clearly getting in the way of sensible discussion.

Q3 Chairman: If I could just interrupt for a second and say that that was very much the reaction of this Committee who had varying degrees of opposition to that proposal but all were opposed to it and I think we were grateful to you for making your position plain because that enabled us to concentrate on other things when we had them before us. So I think we are of one mind on that.

Mr Woodward: It seemed to me that one of the major themes of their report was the importance of reconciliation and the concern over talking about recognition payments was drowning out the importance of this concept of reconciliation and the work behind it. I certainly think that the theme of reconciliation is one that has certainly grabbed me in how I think one wants to look at this report. Reconciliation is clearly crucial for the long term success of people in Northern Ireland and indeed it will only be through addressing the legacy of hurts, anger, what remains unknown, the questions not answered that we will be able to help people build that healing environment, which for some is still so incredibly important. In that context I think the work already of the HET, the work of the Ombudsman in looking at the past, indeed the capacity of people to tell their stories seems to me to be extremely important as a set of building blocks. They are already established in some form - the HET of course, the Ombudsman - in other places, but again one of the proposals inside some of the recommendations of Eames and Bradley is to consider bringing them together in some way. I think that bears particular fruit and it is something we will be looking at and developing. I also think that we have to recognise the importance of doing this with consensus. This is not therefore about some vehicle that would be created by a British Secretary of State and just handed down and left to people to see how they could possibly make it work. It is absolutely essential that the spirit of dialogue and talking is fundamental in putting anything together, and in that sense speed is not of the essence - getting it right is of the essence. In saying that, therefore, I do not propose to redo the work of Eames and Bradley - they did a great deal of this work, but that signalled I think that we will want to talk to First and Deputy First Ministers, Members of the Executive, the Assembly, yourselves and other interested parties on a number of the proposals in it. But I think there are some very significant proposals amongst the 31 recommendations that we will want to take forward. Northern Ireland I think will only reconcile itself over a period of time - and I think we also have to remember here in Northern Ireland that time is our friend and not our enemy - not because of legislation, not because of a Commission but because the principles that underpin legislation or Commissions, or whatever they might be are ones that people believe in across Northern Ireland and do not divide them. That means whatever vehicle in relation to this that might be created may have to move at different speeds and in different ways from perhaps the way that it has been envisaged. Again I draw on and this draws me into a reflection on the last few weeks, if you want me to go into this. What the last few weeks I think have shown, Sir Patrick, is that there is a very deep and wide basis for building the shared future. We saw the principles, the institutions attempted to be shaken violently in the last few weeks and we saw them emerge stronger and we saw the roots of them deeper and wider than we had seen. Therefore I think any institution we create that tries to help people in Northern Ireland deal with the legacy of the past in a way which does not hold them in a grip but equally does not in any shape or form pretend it did not happen must firmly recognise that the only way forward here is in the same principles as the institutions that have been created; they must be ones that people feel they can share; they must not belong to one community or another. So in guiding you to where I think we are going to be on 29 April I think the theme of reconciliation will be very important in this; we will want to look at whether we can bring together a number of the recommendations around this area. It will be critical for us to get at issues around how we continue to develop the theme of sharing information, ensuring that families and victims can get answers to their questions; that we can do something that is equitable and fair for all of those who lost their relatives in terms of finding information because very clearly for some people what they simply want to know is how their relative died. Therefore, I think the principle of the HET work is a very important one and we would not want to lose that. So I think story telling is another major component part because there are many people out there who do not want inquiries, they do not want major inquests - they just want their story somewhere held, and if we can put that together and build on the other proposals inside Eames and Bradley we may have something to report to you at the end of April.

Q4 Chairman: That is extremely helpful and I am not going to pursue the question on that today because you have given us an idea of your thinking on this subject and we shall certainly want to follow this up in detail and the Committee will be making a report on the Eames-Bradley Report because if you remember, when we did our own report on the Cost of Policing the Past we left several questions unanswered quite deliberately because we did not wish to pre-empt or anticipate Eames-Bradley. So that is very, very helpful, Secretary of State, and we will follow up on that on 29 April. Could we begin the main session, therefore, by looking at the events of the last few weeks? We were in Northern Ireland, as you know, a fortnight ago. We had an opportunity to visit some of the border areas in the company of the PSNI and the Garda. We are doing an inquiry into cross-border cooperation and I think it would be fair to say that we were struck by the absolute unanimity of all responsible politicians in Northern Ireland in condemning the brutal murders that took place just over three weeks ago. But how severe do you see the ongoing threat from Republican dissidents in particular; and also, if I add a rider, from those loyalist paramilitaries who have not yet given up their weapons?

Mr Woodward: Let me just provide, first of all, a context for the current environment. Both the Chief Constable and myself have been saying for some considerable numbers of months, particularly since the cowardly attack on police officers started last year, that we thought there were serious grounds for recognising that whilst the overall number of dissidents might not have grown there was a very real need to recognise who they were and who they were not, by which I reflect on the number of debates, for example, we were having around the issue of the Army Council this time last year. I think you will recall, Sir Patrick, I was saying that I thought it was very important to move on from that debate because I thought there really was a threat out there and the threat would come from those people self-style themselves CIRA or RIRA, and regrettably and indeed they did pose a threat and last year despite the number of threats they did not succeed but then in the last few weeks we saw the tragic events at the Massareene Army Base and the slaughtering of Stevie Carroll. I think it is very important that anybody listening to this recognises that I do not think we have seen some dramatic change in the numbers of people; I do not think we have seen some dramatic shift in coordination between, frankly, badly organised groups of criminals. I do not think we are seeing some return to the past in terms of popular appeal because I believe these people have virtually none - almost no support in the community. This is very different from the past. What has happened is that as the politics have become more successful, as they have recognised that the political leaders are coming together and that it is an Executive which has found its feet and has matured, an Assembly that has found confidence in working with each other - something that everybody quite rightly said would be difficult, would not simply come overnight - the bad guys, the criminals - and I say criminals advisedly because I do not think we should simply allow them some recognition of some quasi-political paramilitary organisation; they are not, they are criminals. Anyone who, as they did on Monday, pulls a man out of his car, takes the wallet out of his pocket and then douses him in petrol is a criminal - this is an assault. The fact of the matter is there may be no more of them - some may have died and they have been replaced by some younger ones but overall more - but they are no less dangerous for being a small number. But what has changed has been that in the face of seeing the politics working, having recognised that there is a moment coming probably sooner rather than later in which the Assembly may be asked to consider taking on the powers of policing and justice, having seen that confidence rooted the bad guys have said, "We cannot let this happen because if this happens, if the politicians here actually get control of policing and justice then we have no cause at all." So my view is that they are trying to stall it and their calculation was that if they did something outrageous - murdering Army soldiers, murdering people delivering pizzas, murdering a policeman - they would be able to stall the politics, and what I think they were hugely confounded by was that they found the politics stronger than they could ever possibly have anticipated.

Q5 Chairman: I am sure we were all greatly impressed by the historic comments of Dr Paisley in the House here and by the very, very brave comments of Mr McGuinness when he stood shoulder to shoulder to Hugh Orde and Peter Robinson - that was all very impressive. A number of people though, both in Northern Ireland and in the rest of the United Kingdom have been raising two points that have disturbed people in recent days with me. One is - and I am not expecting you to make any comment on a case that is sub judice because clearly you cannot and I cannot - that one of the people arrested is only 17 years old; and the other is the fact that there have been some disturbances recently in Northern Ireland and other incidents and how far, if at all, do you think that they are linked to these criminals of whom you have been speaking - or these criminal elements, should I say?

Mr Woodward: I think most Honourable Members here would in some way recognise that whether it is Northern Ireland or any other part of the United Kingdom alienated 17 year olds have the capacity to be swept into crime. I am not complacent about this, Sir Patrick, but I am not surprised that a 17 year old was involved, can be involved in these things; just as I think if you were sitting here with a group of New York Congressmen and they were talking about 17 year olds in the Bronx. The problem is if within a community you have alienated people - and we cannot condone this for a second - the point is that they are vulnerable to this and one of the lessons I take from this is the need for us - and indeed I was working on this only yesterday with the Chief Constable - to develop in Northern Ireland a strategy to deal with not only containing the 300 I mentioned but actually preventing the 17 year olds from being stupid enough to think that they can somehow achieve some kind of status in their life by becoming part of a criminal gang. The disturbances to which you occurred, again on Monday of this week there were over 30 hoax attacks. This was unprecedented in recent years. The attempt undoubtedly was to disrupt and to frighten and I think it would be foolish if we did not recognise that a group of masked men getting on a bus is not anything other than very frightening - it is more than a hoax and I will not distinguish it by saying it was a stupid hoax; it was an attempt to frighten people and it clearly did. Taking a man out of his car and taking his wallet and covering him in petrol is a terrifying experience and if it happened to any one of us we would be terrified. So these are real incidents and they are designed to intimidate, they are designed to frighten and what they actually did, of course, apart from the particular individuals involved, was to cause massive traffic disruption on Monday. Again, may I just commend the way that the media responded to this on Monday; they did not inflame it on Monday, they reported it as it was and by Tuesday the traffic disruption had moved on. They reported that exactly as it was. But this was something with which people have regrettably too familiar with in Northern Ireland in the past. It was a return to something that people did not want to see; but, again, what I think Monday had more in common with than three weeks ago was not so much a return to the past but it was actually what the real point in common here, the real news here was the response. Fifteen years ago had this happened there would have been, dare I say it, in Republican communities groups of people saying "Terrific". In the evening we would have seen rioting happening in some parts. They would all be very predictable where it would take place. But this did not happen on Monday night. We did not see the face of the Northern Ireland of 15 years ago produced on the back of this as a catalyst. Just as we saw that extraordinary lead out by a Catholic priest from a church in Antrim the day after the shootings at Massareene, this is different and there is one critical point here - the people of Northern Ireland are not going to allow Northern Ireland to go back to its past, and that is our biggest weapon to use against these people.

Chairman: Yes, I am sure that is so. I want to bring in now colleagues from Northern Ireland to start with; first of all David Simpson, then Alasdair McDonnell and then Lady Hermon.

Q6 David Simpson: Mr Chairman, can I start off by thanking the Secretary of State and his colleagues who visited the home of Stephen Carroll in my own constituency. I spoke to his widow last Friday when I called again at the house and she was very grateful. She passed on her apologies because she did not realise who you were at the start - over a cup of tea, I think. It was very good and she appreciated you taking the time and to come and visit her. In regards to the dissident threat, Secretary of State, whilst I would agree with your comments that the individuals that are involved in this are not a large number - and I do not believe for a moment that they have the capacity to wage a campaign like we have seen for 35 years with the Provisional IRA, as the provisionals did; but - and I do not know if you agree with this comment - they really do not have to because all they have to do is to be a thorn in the side of the security forces - dear forbid, take out an officer or someone in the security forces or whatever every so often. They do not have to have a systematic campaign, and that is one of the worrying factors. I understand last night in the Clifton Orange Hall there was a petrol bomb thrown at the hall and I understand that there was an Orange meeting taking place at the time. That is the information I received today. I believe, Secretary of State, that these individuals, whether they be criminal elements, dissident Republicans, whatever, are trying very hard to provoke a reaction from the Unionist, Loyalist community, and that is the worrying factor. And the age bracket concerns me because in my own constituency of Craigavon, Chairman, I understand that recruiting is continuing - maybe not at a large rate but certainly at a percentage of age bracket 18 to 25 year olds. To me that is very concerning. Whilst I agree with your sentiments again that the vast, vast majority of people in Northern Ireland do not want to go back to what we have gone through in 35 years that is a worrying factor for this younger generation. We have heard the press conference, Mr Chairman - I do not know if you have seen it from Republican Sinn Fein, which was daunting - it was a remarkable press conference and some of the comments that were made. That again is a younger element that is coming forward. So I would ask the Secretary of State if he would agree that the extra resources that the Chief Constable has asked for for the next few years to fight against these so-called dissident Republicans would be looked upon favourably so that it does not get out of control.

Mr Woodward: First of all, Mr Chairman, can I thank David for his remarks about Stevie's widow. I am not surprised she did not know who we were because we visited her the day after Stephen's funeral. Apart from the obvious overwhelming nature of the tragedy there is the extraordinary thing where you just have an army of all these people coming through your front room who you have never met before and we, as it were, were the latest line of people to come through. That said, you are quite right, it was 20 minutes when she said, "And, by the way, who are you?" That is the great thing about Kate; she is very direct, and I cannot think of a finer spokesperson both for the futility of the actions committed against her absolutely adorable husband who she loved to pieces, but also as somebody who can teach all of us how to handle grief. I know there are people here who have experienced grief of a kind that none of us would ever, ever wish because of its unnatural nature. But as she says, "I have no bitterness; I just do not want anybody else to go through this." She said, "I would like to talk to the people who did this because I would just like to ask them why? What are you actually going to win from this? Because we are all going to end up in that little patch of land six by six and all you have done is taken away the love of my life." She wrote those words on the card on her husband's coffin and they were as much in love when he was murdered as they were on the day they got married, and there was something so terrible and futile about what happened. But what I took away from meeting her was actually a renewed sense of what we all have to do; we all have to make this work. To pick up, therefore, on what David has said, yes, I am working very hard to try to secure the resources that the Chief Constable needs, but I think it is important to identify what those resources are. Nearly half of the cost that he is asking for is actually the cost of police overtime because the Chief Constable is actually clear about how you respond to this. These are attempts - and again David is right - where they are trying to provoke, and what the Chief Constable is determined to do is not to rise to the provocation, just to give people even more neighbourhood policing. We have some fantastically brave PSNI officers. Those who were part of Stevie's unit, the next day they were out there again - they were not going to be put off giving the public normal neighbourhood community policing by the actions of a group of thugs. Again - and this does not diminish what happened to Stevie one jot - let us not lose context here as the same night that Stevie was shot by a stupid group of killers in Germany 15 kids were shot by a 15 year old. I say that because we must not lose sight of what has happened in Northern Ireland. It is not like the old days; it has not gone back there. These people have no community support; they are criminals and they earn their money from crime and we must treat them as such and we must bring them to justice and we must allow the police not to be provoked. We must give this security challenge, in so far as it is organised, the response it deserves, which is the politicians of Northern Ireland condemning it and, crucially - and I think perhaps the Committee will want to note this - the police have had an overwhelming response from areas across Northern Ireland that only a few years ago they would not have heard from. It may not have been people who were directly witness to the events of that night or the other night, but they are people who will say, "There was a bloke down my street the other day and it was a bit odd." It is exactly the kind of police intelligence that allows you to put together a picture. It is simply about people being good citizens. The difference here is that they are coming from communities that only two or three years ago the police would not have expected to receive a phone call from.

Q7 Dr McDonnell: Previous to the murders there was quite a bit of contention about Sir Hugh Orde requesting Army Special Forces. Was that justified? Would we not have been better with police forces or reinforcing the police? Is there not a certain amount of almost giving the lunatics what they want in terms of upping the ante again in terms of military forces?

Mr Woodward: I think one of the unfortunate moments - and I have taken great care to praise the media for the way they dealt with Monday, which very much includes the BBC - I am afraid I am going to say that I do not think that some of the coverage that went with some of the questions which some of the politicians raised around the use of additional technical back-up help to the police when it was raised, just before the attacks at Massareene was so distinguished because the pictures that appeared on the BBC website suggested all kinds of people doing all kinds of things in Northern Ireland that simply were not happening. I say that because Sir Hugh has made his position very clear and indeed the MoD made their position very clear at the end of Operation Banner, as did my predecessor and as have I. It is this: Operation Banner has come to an end. We said at the end of Operation Banner that there would be a need to retain some specialist technical support. That was absolutely plain in July 2007. We have never retreated from that. There is the need, for example, to have that specialist support to deal with explosive devices. There is a need for us to have in Northern Ireland, as any other part of the United Kingdom, the capacity for the Chief Constable, who has control of operations, to call on that technical support. It may help if the Committee allows itself for a moment to think ahead ten years, and let us think ahead ten years to a time when we have hopefully a Department of Justice, with a Minister very much elected in Northern Ireland, and actually the threat from the dissidents is a distant memory. I fear even by then it may not be entirely distant but we are moving in that direction. I tell you what I do fear is that the threat that people will speak of when it comes to national security in Northern Ireland in ten years' time will be that of al-Qaeda, as it is in any other part of the United Kingdom or could be in the Republic. Then I would fear that if we had constructed a straightjacket which actually said that the Chief Constable in Northern Ireland to deal with a threat from al-Qaeda was not able to have assistance from those parts of the Ministry of Defence - which actually might be absolutely essential to protect people's lives - and the reason for that was a problem that was constructed to deal with a problem from 20 years ago in 2009. There need to be proper protocols; there need to be proper memorandums of understanding; there needs to be accountability; and there need to be proper arrangements between the Justice Minister, the Chief Constable, and the Secretary of State for Northern Ireland retaining responsibility for national security and so on. Of course that needs to be in place. But I just do not think in an age of international terrorism, let alone the legacy of the problems we have had in Northern Ireland, that you would so want to tie the hands of the Chief Constable that said you cannot have the kind of specialist support that is available to every other part of the United Kingdom except for here.

Q8 Dr McDonnell: I think nobody would disagree about specialist backroom support; I think the fear was that this involved SAS or other similar types of operations. Whether it was media fed or whatever, that is the apprehension that moved out of the community and I think what you have said is clearly dismissing that option and I welcome that. You mentioned the protocols - and that is the other half of my question - would it not have been better if there had been some sort of protocol in place for the Chief Constable to inform the policing board that this was in place rather than have it leak out, as it did, almost by accident, and in its own way feeding a certain amount of anxiety? I am trying to be constructive in this but the worry for me is that you could have - and I would like to think it might be less than ten years before we have a devolution of policing and justice - a situation technically a few years down the road, let us say, basically where you have a devolved policing and justice with a Minister for Justice in Northern Ireland almost detached from someone else in control of national security and defence if those protocols that you rightly refer to are not put in place relatively quickly.

Mr Woodward: The answer to that of course is that at the moment I am still Secretary of State with responsibility for policing and justice. However, what I have promised - and indeed I said so to the Executive Review Committee in Northern Ireland yesterday - is that within a matter now of weeks I will share with the Committee the two protocols that we have prepared on this and the two concordats that we have also prepared on this, so that when the Assembly - and I share your wishes that this is a matter that is done sooner rather than later in terms of transfer, but that is not a matter in the first call for me, it is a first call for the First and Deputy Minister putting forward a motion - when you are ready to do so you will have in the next few weeks the protocols that you seek, and I think you will find that those will allay concerns that people have on the grounds of responsibility and accountability. I am obviously content for the moment because I have to carry the responsibility that actually the proper arrangements are in place and that I am informed. As I say, I am grateful for your response to what I said because I do think that the BBC website, which conjured up images of all kinds of shadowy figures doing strange things, actually alarmed people; and we know why it alarmed people because it had an echo of a time which was deeply concerning to some. Whether that was justified is something quite different, but in terms of the sensitivities and the extraordinary care that people have taken to rebuild trust I think it was slightly precipitous of the BBC just to go to the library, find a few images that matched the particular subject heading, stick them up and then worry about the consequences later.

Chairman: Not untypical.

Q9 Dr McDonnell: The fact that we are paranoid does not mean that they are not out there.

Mr Woodward: I cannot comment on service activity and that is a principle that we stand by. What I can tell you is that I am entirely confident that first of all they are under the control of the Chief Constable and secondly the particular support that we seek is about technical support.

Q10 Lady Hermon: It is very nice to see you here, Secretary of State. Can we just go back for a little moment to a point that was raised by Mr Simpson, in relation to loyalist paramilitaries? How close do you really believe on this occasion loyalist paramilitaries are to decommissioning? And could I ask you to confirm or deny reports that the UDA is indeed recruiting?

Mr Woodward: I cannot comment on reports that the UDA is indeed or is not recruiting because I do not know. There are always reports out there which say many things and I cannot tell you whether or not because one person talks to another person and somebody might describe that as recruiting and that constitutes recruiting. I take what you have said at face value and I will take it away and see what we can do with that rumour - and I think it is no more than a rumour. But if I may, I would like to deal with the substantive point that you made, which then may help us inform that.

Q11 Lady Hermon: Thank you.

Mr Woodward: The reason I asked for the further and final year - and let me underline the word final - of the extension of the powers for decommissioning was I had very good reason to believe that the International Commission on Decommissioning was making meaningful progress. That meaningful progress I believe not only continues but is developing. But as I said at the time, this is not instead of the criminal law - it is as well as the criminal law. I believe that we will get there, otherwise I would not have asked for the extension. I believe that we will get there in a matter of months and not years and that is why I am confident in saying that this is the last time I would want to seek an extension. I am equally clear about the message that must go to these people, which is that if there has been no meaningful progress by the middle of August of this year, in other words six months after we sought this extension from Parliament, I will bring an order in immediately to bring it to an end. I believe that these people have heard that message and have understood it, but just in case they have not let us be unequivocal: if there has not been meaningful progress by the middle of August - and meaningful means meaningful; we have had many statements and we now need more than statements - it will come to an end and there will then only be the criminal law. But it is precisely because in discussion with the Chief Constable and others that we believe that if this is an additional route to bring these illegal weapons off the streets, out of the places they are hidden we should seek it, because if we knew where they were we would go and get them tonight, but the problem is we do not. But we believe through the International Commission that we may actually manage to bring in a number of weapons by this route and that is why it is worth persisting with. In relation to the rumour on recruitment, as in any organisation, Sir Patrick, there are some people who do not want to move out of the grip of the past; there are some people - and we see it in those organisations responsible for the deaths of the soldiers and the police constable. They may be trying to recruit; they may be under the banner of loyalism trying to recruit, but we need to make a distinction here between the many people inside loyalism who have decided that they do not want to be in that field any more; they want out of it, they want to be part of society, they want to actually have a place in society. One of the things that I think we have to remember here, Sir Patrick, that again part of the past was that an attack by a dissident Republican group would be met by an attack by a dissident loyalist group. What happened? Actually - and we should give them the recognition here that they deserve - they acted with proper leadership qualities; they went out into their communities and said, "Do not respond; do not take a life for a life." They were the ones who went out and actually pointed out to people in their communities, "Do not go and get drunk tonight; do not get into a position now whereby you are then going to take a weapon in search of a Catholic life" - because, by the way, a Catholic was killed - he was Stevie Carroll. "Remember that it does not have to be like the kind I grew up in," say some of the parents. What these people are doing is showing that they want to take a civic place and our job, I believe, is to help them, if they will decommission, assume that place, but they have to decommission - that is non-negotiable; guns have no part in any normal society in Northern Ireland, whoever you are.

Chairman: Let us hope that they are listening to this if they have not listened before and thank you for that.

Q12 Christopher Fraser: Can I ask you questions about the issue of devolution of policing and justice in terms of its timetable and then its costings? We in Parliament gave the Assembly eight options. What do you see as being the timetable for Stormont in terms of actioning this now?

Mr Woodward: First of all, of course, that is a matter for Stormont - there is the irony of devolution.

Q13 Christopher Fraser: You have an option.

Mr Woodward: We create an additional model which of course they asked us to create for them and, again, can I just express my thanks, Sir Patrick, to everybody on this Committee and in the House who enabled that legislation to go through speedily. I know that raised a number of issues for people but I am grateful for the support we got from all the political parties to enable that to happen. But in giving them an eighth model now and giving them the scope to create the ministerial office it is now for the Assembly - and indeed the work of the Assembly Executive Review Committee goes on - to create a Department of Justice, to choose a model and that could take a period of about 12 weeks or so from when Stormont returns. That does not necessarily follow that that is a timetable to devolution but it does mark out the minimum that would be needed before you could move to a next stage. It then of course would require after that 12 weeks - and that is an approximation - the First and Deputy First Ministers to put a motion before the Assembly. This is about confidence - it has always been about confidence. One of the ironies of the attacks of the last few weeks is it had shown, I think, actually why everyone is right to have confidence in locally elected politicians - the very positions that you commented on, Sir Patrick, to which people had risen. But it is a matter for them, Christopher; it is not a matter for me. I can encourage and nurture; I can say that I believe that the best answer you will give - even more than extra resources for the Chief Constable, even more than discussions around Barnett Formulas or anything else - a dissident, criminal activity is you taking control of your lives. So I would urge the politicians there to seek that confidence which the criminals seek to undermine and I would hope that in a matter of months rather than anything else the First and Deputy First Ministers will see fit to put that motion and the Assembly, which of course must do it on a cross-party basis, will feel the confidence to do it. But equally, let me also say this: we should not take anything for granted. Confidence building is a very important piece of work and actually the biggest confidence building that probably is going on now is the confidence building, for example, I imagine within unionism - and there are some here who could speak for themselves on this - of actually seeing the Deputy First Minister making such an unequivocal condemnation of the attacks that took place, and by return for those in Sinn Fein to see actually - and I am thinking, for example, of William McCrea coming to visit with the Prime Minister those soldiers at the base at Massareene two days after the attack and before William went in for his operation saying to the Prime Minister, "It is really important that we do not allow people to hold us back; this is really important that we do not allow these people to succeed." So when I imagine the Deputy First Minister sees Peter Robinson say, "We need to complete our trip in America and we must do every single one of the engagements," that is a signal - that is confidence building. So to answer your question, it is a matter for them but I see that confidence being built very, very strongly.

Q14 Christopher Fraser: But it comes to the second point, which is the cost of it. Recently because of the dissident activities there has been a £200,000 to £300,000 extra cost in terms of police overtime. There is currently a £70 million plus funding shortfall that has been identified by the Assembly. Ultimately this is going to be a very expensive exercise. Do you think the Assembly wants to take that on, given the funding problems that it presents?

Mr Woodward: Again, to some extent that is a question you should be asking the Assembly and not me. Let me give you therefore my answer, which is my advice to them. First of all, the £70 million so-called that you just spoke of is not actually a £70 million shortfall, it is a number that has been put against what the Chief Constable makes as a preliminary estimation of what he might need to maintain normal policing, half of which, as I said earlier, would be about overtime. So it is not a shortfall because it has not yet been spent, it has not yet been needed. But in the course of the coming months it will be needed and therefore I am now working with the Prime Minister and the Treasury to look at those issues, look at those numbers, see what we need to do, see what we can do and we are in discussion about that. On the issue about funding of the PSNI itself in relation to transfer of powers, there are two issues. One is the Comprehensive Spending Review Settlement and, again, let me remind you of what I said before. Northern Ireland - and I believe deserved every penny - got a very good settlement. Northern Ireland has had terrible problems in the past, which is why it got a good settlement, but the fact of the matter is today that it actually has a lower crime rate than probably anybody else who serves in a constituency that is not in Northern Ireland in this room. It has as a number of police officers one police officer for every roughly 210 members of the population, whereas I in Merseyside with much higher crime rates have one for every 310. I do not say that begrudgingly but I think one has to recognise that in a tight fiscal environment it is necessary to prove when you say, "I would like more money" everyone would like more money, so why do you need more money, have you been as efficient as you can be and can you get more? Which leads me to are there issues which need to be addressed which would be highly problematic and destabilising if devolution were to take place. The answer is yes, there are. That is why I have asked Jeremy Haywood in Number Ten to chair a committee - it has already had two meetings, it has two more meetings to conclude on 6 May - which are addressing these funding issues and funding mechanisms, especially around issues like hearing loss, especially around those issues like inquiries, which must be addressed. It also needs to address the issue of legal aid. It happens that of course that involves the Lord Chancellor as well, so this is a mechanism that I put together to try and address these issues in a way which allows us, even within the current difficulties of any economy, in producing any additional money to find a resolution.

Q15 Chairman: This will come to a conclusion on 6 May, you say?

Mr Woodward: The Haywood Committee will come to its last meeting on 6 May.

Q16 Mr Fraser: How soon after will it report?

Mr Woodward: The Haywood Committee is a work in progress; it is not impossible that on 6 May all the people around that table, which are the senior civil servants from Northern Ireland as well as my department and the Ministry of Justice and so on, and the Treasury, may actually walk out all holding hands and saying, "We have reached an agreement." That would be wonderful and we would in so doing take our leave from the First and Deputy First Ministers. It is impossible to say at the moment whether we will be in that position but what will happen at that point is that both myself and the Prime Minister will then engage in where those figures are, and I suspect the truth is that there will not be enough, for this reason. Take the issue of pensions; I doubt we will have resolved whether or not by then it is right to move the pension structure of the PSNI from a composition of AMI and DEL expenditure all to, for example, AMI expenditure - I doubt if that will have been resolved. And I actually doubt whether it will be in the interests of everybody. In the same way, Sir Patrick, on hearing loss: this time last year the Police Service of Northern Ireland estimated that the cost of hearing loss claims could be around £60 million. They currently have a figure of around £90 million odd and they currently - in the last few days - have put it up to 120 or 130. The thing is how long is a piece of string because we may have received nearly 3000 claims so far but we do not know how many more we will receive. We can guess. So the numbers here are not precise, for a perfectly good reason - we do not know how many people will come forward with claims and even if they come forward with claims how many people will then actually be legitimately people who have hearing losses as a result of their profession. That is not to doubt them; it is simply to say that we have public money here at stake and we rightly have to have a process.

Q17 Mr Fraser: If there is this question mark about funding in the ways that you have described - and it is complicated clearly and it is very detailed - it could well have an effect that the decision after 6 May is that we cannot resolve these issues, therefore we have to consider the timetable for putting this forward. Does that have an impact or not on whether we get this done sooner rather or later; and can you comment on what you said earlier - and I think I quoted you correctly. The Assembly may, you said quite specifically, be asked to take on policing and justice. I may be wrong but that is what you said - maybe. Is your caution because there may well be in this difficult economic climate a problem with funding later on this year? No, absolutely not. Absolutely not is the answer to that. My point about May is that I would not presume to tell the Assembly what to do; it is up to the Assembly to decide whether to ask for it; it is up to the First and Deputy First Ministers to agree to put a motion down, and it would be impertinent of me in the extreme and somewhat perverse if in seeking devolution I then presumed to tell them to ask for devolution. In relation to the money what I am really pointing out is the good faith of the government here. If you think about it, it is almost the other way around - if the government was not committed to honouring what it set out at St Andrew's it could create indefinite delay for this. The fact of the matter of what the government is trying to do, through the process that I have created with the Prime Minister, is to devise something whereby we can give the reassurances that an Executive would rightly seek about funding, in a way that responsibly recognises the role that we have to play to the taxpayer who must fund this; and which recognises that some things probably will be resolved by a figure, some things will be resolved by a principle and some things will be resolved by an understanding - but I believe that it will be a combination of all of these factors that will provide the confidence for a First and Deputy First Minister to feel that the funding issues - of course it is going to difficult and tough but what area is not finding things difficult and tough at the moment - I believe we can find a way through on that.

Q18 Stephen Pound: Secretary of State, thank you very much indeed for your information about the Haywood Committee and I hope that this Committee will have the opportunity to see the final report when it becomes part of a wider corpus. But for the present time is the remit of the Haywood Committee to consider issues such as whether devolved policing and justice should be funded from the block grant to the Assembly within the Barnett Formula, or are we seriously talking about other issues apart from the Barnett Formula arrived at block grant?

Mr Woodward: There is nothing disingenuous really about what the Haywood Committee is trying to do.

Q19 Stephen Pound: I was not suggesting there was.

Mr Woodward: No, and I accept that; I just want clarity on it. It is not therefore an attempt to seek to deal with the Treasury's statement of funding policy through the back door, as it were. Of course that is on the table because it has always been on the table because it has always been the Treasury's policy to look at that issue. But what it is fundamentally there for is to face up to the fact that there is at the moment the CSR Settlement, which has at the moment a series of pressures and, frankly, I would have the Haywood Committee even if we were not looking at the prospect of devolution in the next few months because the hearing pressures, the issue about the cost of inquiries, the issue about legal aid are all issues. If we take hearing damage compensation payments as an example, as you know the annual PSNI budget is about £1.1, £1.2 billion. This claim, if it is £130 million is not fundable - it is not possible just to reorganise the priorities of policing in Northern Ireland without actually taking vast numbers of police off the streets - and very clearly we have a firm commitment to 7,500 police officers. So that remains. We have a firm commitment to the pensions, which of course accounts for 34% of the police budget, so it is not possible to deal with the hearing loss pressures within the CSR Settlement. So that is why it is principally there, to find a way through for us to resolve these issues to ensure that we can continue with strong community policing in Northern Ireland.

Q20 Stephen Pound: I take your point about Haywood and I take your point about the Comprehensive Spending Review, but if none of those were taking place would your intention be that a devolved structure for policing and justice be funded from the block grant payable under Barnett?

Mr Woodward: I can see advantages to it. To be frank, the most important thing that I see is to make sure that Northern Ireland has a policing service which can deliver policing and confidence for people in Northern Ireland, and matters for exactly how the amount is transferred and so on I rightly recognise the authority of my Treasury colleagues and civil servants to deal with, and it may be that if we could find a more efficient way of the money going through the post-box we should do that, particularly if it means we could put more money into frontline policing.

Stephen Pound: Almost a Jesuitical answer!

Q21 Chairman: I think we are going to find, Secretary of State, unless there is confidence in Northern Ireland that the funding will be adequate the progress towards devolution is clearly not going to be as fast as either you or I would wish; but thank you for going as far as you can for the moment and perhaps we can return to this on another occasion. As you will know, we have been seeing the Omagh families at their request. We met them in Omagh last autumn and they gave evidence a couple of weeks ago in Stormont, and in spite of the report by Sir Peter Gibson there is still very, very real anguish and concern among the victims' group in Omagh. I want to ask you two questions before I bring in Mr Murphy, who will want to ask you about the Panorama programme. Do you believe - because the families clearly do not - that the published version of the Gibson Report dismisses all concerns about the way intelligence was handled; and what is your position - and the Committee, may I say, does not have a position because we are still taking evidence and we are listening - on the demand of the victims' families for a cross-border public inquiry?

Mr Woodward: First of all I would like to thank Sir Peter Gibson for the work that he did on this. I would not choose to describe his report as simply "dismissing concerns". I think he addressed concerns and in the execution of addressing those concerns I think he allayed my fears based on suspicions that were undoubtedly promulgated by the Panorama programme. I have total confidence, as does the Prime Minister, in the integrity of Sir Peter's report, as well obviously as Sir Peter. I think there were issues that were raised in the programme which had the capacity to allow people to reach conclusions which were technically not possible and when, for example, a Member of this Committee last week, Kate Hoey, actually said to John Ware - who, I should declare, is a journalist I have worked with and made programmes with and for whom I have the highest respect; I think he is an outstanding journalist and has done a great deal to further causes of natural justice and uncover wrongdoings - I do not think that Kate was right to put to him that I had thought and the Chief Constable had thought that somehow John Ware had deliberately misled the families into thinking things. I do not think that was as sensible form of words. I think, however, it was possible that the programme would allow people to think that it was possible, for example, to follow on a television screen two cars. The fact of the matter is, as Sir Peter Gibson made absolutely clear, it just technically was not possible. I do not believe it is a good idea for me to rehearse in front of this Committee this afternoon for the benefit of the people watching, not all of whom may be those seeking to uphold the law, what the service can and cannot do. But what I can rule out is that at that time it was possible to do one of the things that the programme indicated it was possible to do. I do not believe it therefore follows that because the programme did it John Ware set out to deliberately mislead the families and I think that would be cruel to think that John would do anything other than want to help the families. So I think there were a number of issues in that programme; I think Sir Peter Gibson addresses them and I think he addresses them within the context of the law, which creates difficulties for all of us. Sir Patrick, I want to thank you too because I know through the Committee that in asking to see certain parts of the report it has been dealt with in the Cabinet Office by a way which might have been different from the way that you would have wished; however, those procedures, as you have generously recognised, are all there in the end to protect ourselves. I think the shame when it came to the Panorama programme was that perhaps some of the advice that was given to the programme makers was a little bit short of being accurate - aspirational perhaps, but in the case, for example, of the two blobs on the screen it simply was not accurate.

Q22 Chairman: Mr Murphy I know wants to pursue these points but I want to ask you the other question about the demand of the families for a cross-border public inquiry. What is your line on that? And I stress that the Committee does not have a line on this. We may well have one at the end of the day when we make our report but at the moment we do not.

Mr Woodward: As we know, in Northern Ireland there has been a history of holding inquiries as a solution to one of those situations where you say, "I do not know what happened, so let us have an inquiry." If I was any one of those families of the 29 murdered and the two unborn children, would I want an inquiry? I am sure I would be banging on the door asking for an inquiry. So what is the response from me as Secretary of State? First of all, I just caution whether or not any inquiry is anyway always a solution, although I understand why it is asked for. We have seen the Saville Inquiry - many, many years on a number of the families for whom the inquiry was set up having now passed on. Nearly £200 million of public money spent. You cannot question the value of the Saville Inquiry but you can certainly make questions about the cost. So the question really is what would an inquiry do and what is the answer that people are seeking and is it in the public interest of all of the public - and that does not take away from what the families feel? I then put that in the context of the work of Eames and Bradley and the value of continuing to have public inquiries, and I wonder whether or not we will get what the families actually want from an inquiry when they say, "We want an inquiry". So I have an open mind on it and the Prime Minister indicated to them that he was very mindful when he met with them to consider this. But in considering it we are considering this in the round and we have a responsibility of course to the families - and to everybody else as well.

Q23 Chairman: And you will obviously consider what the Committee says on this when we make our report.

Mr Woodward: Of course we will and the Committee's reports on many issues have been crucial for us.

Q24 Mr Murphy: Secretary of State, you have touched on one of the issues I intended to raise that came from the Panorama programme. Whether indeed it was possible or not at that particular time to monitor in real time mobile telephone calls or not has been disputed in the programme. However, what was not in dispute was that intelligence information was available to GCHQ at that particular time. Sir Peter Gibson says that in his report and he also says that that information was passed on. But he goes on to say - and, if I may, I will quote him - "It was not part of the terms of my review that I should investigate, nor have I investigated the reasons why Special Branch South acted in the cautious way it did, nor have I investigated the soundness of those reasons, although I do not doubt that Special Branch South took the actions it did for what it considered to be good operational reasons." Do you think it was a mistake that Sir Peter Gibson was not charged with that responsibility to investigate what seems to me to be at the very heart of the Panorama programme?

Mr Woodward: I can understand why people might have liked him to have had a wider brief, but I do not think it was a mistake. I think to some extent partly the whole issue and approach to everything in Northern Ireland is, "Now let us have an even wider inquiry; that inquiry was not big enough so let us have another one on the back of that." And I daresay, by the way, that when Lord Saville eventually publishes his inquiry - and I am afraid I still have no idea when that will be - there will be a dozen people asking for inquiries. The problem about inquiries is that they often just demand another set of inquiries; they never manage to give closure. So I am not surprised on this small inquiry that the response by some is, "Now we need an inquiry the outcome." Therefore, to take your specific point here the crucial words you are raising is about the "cautious way". This of course was the subject of an inquiry - it was the Ombudsman's Inquiry; and the Ombudsman's Inquiry that took place into this made a number of extremely important criticisms and extremely important set of observations, and had you the Chief Constable here now the Chief Constable would tell you that actually some root and branch fundamental changes were made to the organisation and the ways of working as a response to that Ombudsman's Report. But that is what worries me slightly here because the danger is that you are always handling the feelings of a family alongside this; this is not just an academic discussion between you and I because there are the families of 29 people out there who lost loved ones and the two unborn children. So I am very sensitive to how I am talking about this. But this issue has already had its inquiry; the Ombudsman did it, the lessons have been learned and it has moved on. The issue that the programme raised was whether or not - and, again, I cannot acknowledge there was any particular intercept material for reasons with which this Committee will be more familiar under the various pieces of legislation, except to say that I have been able to look at a very wide variety of intelligence and I am satisfied, as is the Prime Minister, that actually the issues raised in that programme have the capacity to allow people to think that had things been done differently either the bomb might not have happened - and that is not the case and Sir Peter Gibson is very clear on that - or that somehow there was a failure in the system which might have meant there would have been a different outcome afterwards. I am afraid that beyond the criticisms made by the Ombudsman at the time and therefore the changes that were made, I think that we are rehearsing areas that have already been explored. So I do not feel it was a mistake not to have a wider brief for the inquiry.

Q25 Mr Murphy: Therefore, do you think that the fact that Special Branch South acted, according to Sir Peter's words, in a cautious way impeded the inquiry after the bombing?

Mr Woodward: As I say, the Ombudsman has done a far better investigation into this than I am going to be able to do justice to this afternoon. To be frank, when Sir Peter refers to the cautious way there is no news there because that was well established and well covered and well reported on many fronts when the Ombudsman produced the report. So in a sense I slightly feel that I am giving you old news here because I think that this one has been rehearsed and people have already given a view on this which was the way in which the information was circulated afterwards, perhaps, left something to be desired; but equally let us be clear, we cannot sit here and say that even if it had have been handled in a different way that today we would have had successful prosecutions with people who are serving long periods of time. Again, I think it is very important that we have a sense of proportion here. It could have been done differently and the Ombudsman did not spare any criticism in that. Changes were dramatically made as a result, so the changes have been made. But let us be very careful here, I do not think we could have stopped the bomb from happening - indeed, we could not; we did not know. Secondly, when it comes to the way that the investigation was handled could the forensics have been handled better? Yes, they could, that was perfectly obvious from Justice Weir's statement last year. But the Ombudsman got to the heart of the issue inside the then RUC and I think we have to now understand that one of the most important things to do is to make people understand that the changes have happened.

Q26 Lady Hermon: Secretary of State, could I just ask you for clarification about one point that did come out of the Panorama programme. Would you accept that the GCHQ protocols governing the dissemination of information were in fact wrong at the time of the Omagh bombing? Surely it cannot be right that RUC detectives were left for nine months trawling through telephone bills, trying to seek the telephone numbers which GCHQ had at the time of the Omagh bombing which were conveyed, it would appear, to RUC South region but not to North region where Omagh was based. Surely the protocol was wrong?

Mr Woodward: No, I do not think the protocols were wrong. To be fair, what Sir Peter actually rightly says is that GCHQ did what GCHQ is meant to do. There were issues, as I understand it, around Special Branch decisions and again those are exactly the decisions that were partly looked at by the Ombudsman's Report. So I think it is far more complicated than protocols. But the good thing is that the lessons have been learnt. Again, what is terribly important here and it is terribly important for the families is that they do not somehow think that if the protocols had been different then it would not have happened, or if the protocols had been different then somehow we could be sure of the fact that there would be several people now in prison. I think that is where we all in our lines of inquiry just need to be slightly careful. I understand why the lines of inquiry are there but I am incredibly sensitive to these families who have been through enough without thinking that if somehow X had been different there would have been a dramatically different result.

Q27 Lady Hermon: Instead of a public inquiry, which is hideously expensive, has consideration been given by the present government to a judicial inquiry - a smaller inquiry?

Mr Woodward: The answer to that is that we are not sitting there making a distinction between a judicial inquiry and a full inquiry because quite quickly a judicial inquiry becomes a full inquiry and if you give a judicial inquiry what it needs, which is independence, in a sense you immediately have Saville on your hands, because actually at what point do you say if it wants to be independent, "You cannot have any more evidence" or "You cannot spend more time looking at this"? I think one of the things that Eames and Bradley raises is that we have to look at this area because I think the distinction one tries to hold up between an inquiry and a judicial inquiry, quite quickly it will be found that there is not really much space between the two. As I say, I think the really big question on the Omagh issue is what is it that we are trying to achieve from an inquiry? That does not do anything remotely to dismiss the question; it simply says that we need to be clear what we are trying to get at here. If what we are trying to get at here is to find those responsible for it, actually the police are still looking for those responsible for it, and the people that we need to convict those responsibility for it have to decide to come forward - they would need to come forward for an inquiry. All I am saying here is that I think we need carefully to work out together what we are trying to achieve from an inquiry and how that could be achieved.

Q28 Chairman: Secretary of State, you have been questioned about protocols and so on, would GCHQ intelligence today find its way immediately to investigating detectives in the PSNI or would there be a time gap?

Mr Woodward: Nick, do you want to comment on that?

Mr Perry: The revised arrangements that are in place, Sir Patrick, do allow for all appropriate intelligence to be passed across. The issues that arose from Omagh were partly about the speed of transmission and those have been resolved, which goes to the question you have just raised.

Q29 Chairman: I am sorry, I could not quite hear that.

Mr Perry: The issues raised in Omagh were partly about the speed which information was passed from one part of Special Branch to CID and the revised arrangements within PSNI means that that issue has been dealt with.

Q30 Chairman: So the answer to my question is yes?

Mr Perry: Yes.

Q31 Chairman: You are quite sure?

Mr Perry: Yes.

Q32 Chairman: Good, excellent because you said yes with less than your customary panache! But thank you very much indeed.

Mr Woodward: That was the more assertive yes!

Chairman: You are obviously a connoisseur of the yeses of Nick Berry. Could I move to the close of this session - Mr Fraser has a question first.

Christopher Fraser: What I would like to ask the Secretary of State very quickly, a couple of weeks ago I was at a presentation with the US Chargé de faire at the Ambassador's residence in lieu of the fact that the Ambassador was not there, and a discussion took place about Northern Ireland and the Chargé de faire pointed out that there was talk of having a special envoy to Northern Ireland. He asked our opinion and I made it quite clear that as far as I saw it the people of Northern Ireland want to be seen as equal partners in the United Kingdom, of Great Britain and Northern Ireland and do not necessarily want to be seen as a special case, and as pointed out by others special envoys normally go to states where they have an enormous amount of trouble and are perhaps a basket case. What is your opinion about having a special envoy?

Q33 Chairman: As you have been asked this question which is off the agenda can you give a quick reaction and then can we come back?

Mr Woodward: When I had meetings in Washington on this subject with Secretary of State Clinton she outlined to me the intention of the administration to appoint a special envoy, but also to consider an economic envoy because they recognised that there would be considerable value in having somebody who would continue the work of trying to bring investment and sustained investment from the United States to Northern Ireland, as well as having somebody who would continue to help with the ameliorating role that has been played by successive envoys in the politics of Northern Ireland. So they are looking at the prospect of two envoys.

Q34 Chairman: This would be a follow-up to last year's investment conference, presumably?

Mr Woodward: Partly and also because it is part of the continuing dialogue that I have had with the State Department and which the First and Deputy First Ministers were very much continuing with as well. I think we have recognised that actually the Republic of Ireland takes a huge amount of America's inward investment. As we have seen, there is a very strong interest from those who have invested in the Republic to actually look to Northern Ireland as well, to try to extent that investment or even to change their investment. I do not wish to do any damage to the economy in Dublin as a result of this, but I think what people are beginning to see is that there is real value for America in having an economic envoy because Northern Ireland has a fantastically high-skilled, low cost base with which to work. It does come back out of the investment problems but actually I think it also comes out of people looking at Northern Ireland and seeing that this is a place to investment.

Q35 Chairman: Can I just one plea in on that - and I accept when the Chairman said that we were coming to the end of the session I now know it was not the end of the session but the end of that section, so I had come in sooner. But can I ask you to make it absolutely clear to the American administration that what you have said about it being an economic envoy for the positive investment opportunities in Northern Ireland is what the people of Northern Ireland want, not to have the special envoy like a lot of other countries have because they are in trouble?

Mr Woodward: Again, it is very important to distinguish this because again, looking at this very selfishly from the Americans' point of view - and President Obama made the point rather well to me, he said "I have 41 million Irish-Americans, it is in our interests to have this relationship." So a special envoy has to be seen - although it has been extremely helpful during the times of the troubles, it is actually a very important dialogue between America and, after all, there is no other constituency in the United States where you can actually say 41 million people here, citizens of the US can trace their origins to Ireland and Northern Ireland. Remember, when it comes to Presidents claiming antecedents not only can President Obama trace his antecedents down to the Republic but the fact of the matter is that we have now, I think, Sir Patrick, had 13 Presidents with origins in Ireland and it is worth putting on record that nine of those - although not President Obama - are from Northern Ireland.

Q36 Chairman: I did not know that Mr Fraser was going to bring this, but it is a very important point. It is very, very crucial that whatever happens in Belfast the Embassy and the American Ambassador is here at the heart of the United Kingdom, in London. I think that is very important.

Mr Woodward: I do not think there are any proposals to relocate Winfield House to Belfast - regrettably!

Q37 Chairman: Nor to call it an embassy - that is important. Could I just touch on the other subject that the Committee is investigating at the moment, which is the proposed Human Rights Bill for Northern Ireland. We have taken advice from the Commission and we have taken evidence from others as well. When will your consultation be complete? Will you await this Committee's deliberations before you complete it? And do you think that it does make sense to have a separate Bill for Northern Ireland distinct from anything else in the UK?

Mr Woodward: I think it is extremely important that we have a clear set of human rights to which people can firmly attach themselves in Northern Ireland. I think that the original proposition at the time of the Good Friday Agreement, to recognise that there might be human rights in Northern Ireland, which could be different from the rest of the United Kingdom, precisely because of the Troubles, was very important to identify and to use as a mechanism to build confidence. I think that the subsequent revision of that that was made a few years later was extremely helpful and so we end up with the piece of work produced at the end of last year. The point about that piece of work last year is it contains 80 new statutory rights and requirements.

Q38 Chairman: Indeed.

Mr Woodward: Some of them are about wanting to get a statutory right to the highest standards of physical and mental and mental health. On the one hand, who in this Committee could possibly disagree with that? But I am not quite sure that it actually sets Northern Ireland apart from the rest of the United Kingdom, and in so far as it does it raises a whole set of issues about how actually you would implement it without implementing it across the whole of the United Kingdom because it would just be a matter of nanoseconds before we were dealing with the European Human Courts and so on. It is not a criticism of the HRC that they did this, but it is an observation that creates a problem for me because in bringing forward 80 new statutory rights, many of which go well beyond any proposals in either the Joint Declaration or the Good Friday Agreement, we have a problem on our hands because the reconciliation - even if we were minded to accept every single one of them - would produce a major piece of legislation that would preoccupy huge amounts of time in a timetable for which there currently is not that sort of slot. To get the legislation right, as we know, it is not acceptable and should not be acceptable practice - and the government is rightly held to book for this when it gets it wrong - it should not be a case of "We will draft something, stick it in the House of Commons and then we will spend the rest of the year trying to sort it out in the House of Lords and we will have another Bill next year to correct what we got wrong last year." So I think that we have been given something which is admirable on the one hand, but unwieldy on the other. But we are absolutely committed to do what we said we would do, which is to consult with the parties - we have to do that and we will do it. But what we are now trying to do is to actually reconcile what we were given with a document on which we could consult in relation to this being legislation, and I am afraid that having been given something that has gone so well beyond the brief they were given - although I am not criticising them, I am just observing that - it is going to take a lot longer than they want to start the process of consultation. So it will be some months before we can start it but we will consult with the parties because that is what we said we would do and at the end of that process we will see where we get.

Q39 Chairman: And you will take into account what we say?

Mr Woodward: Of course we will.

Chairman: Thank you very much indeed; we did not want to feel that you were making decisions at such a speed that we would be too late; but clearly we will not. That concludes the things that the Committee is currently involved with, plus the interesting point raised by Mr Fraser, but Lady Hermon has one other point that she wants to raise with you.

Q40 Lady Hermon: It is very kind of you, Sir Patrick, to allow me to raise this at the very end. Secretary of State, we have the Moderator of the Presbyterian Church visiting in Westminster today. As you will know, and I am sure that my Minister is also aware, the fiasco, if I may call it that, of the Presbyterian Mutual Society and what has happened to it has affected the savings of hundreds and hundreds of people throughout Northern Ireland, mostly elderly people who have invested their life savings. Given that the government was able over a weekend - or it appears to be over a weekend - to deal successfully with the Dunfermline Building Society, how is it that five months have now elapsed without anything positive coming out of Number Ten to give some sort of consolation to the many savers in the Presbyterian Mutual Society in Northern Ireland that their savings will actually be save with this government? Could the Secretary of State give some hope to those elderly people and other savers in Northern Ireland?

Mr Woodward: I certainly do not want to mislead people and I think that there is a danger in some of the observations and some of the questions that have been put about this issue which are at risk of misleading people.

Q41 Lady Hermon: My questions?

Mr Woodward: No, I said some questions - yours never mislead people.

Q42 Lady Hermon: Thank you, Secretary of State.

Mr Woodward: It is important to get on the record that there is a huge distinction between what has happened to Dunfermline and Presbyterian Mutual for one very important reason - Dunfermline is a building society; Dunfermline is a building society which is regulated by the FSA and as such it has paid into the industry insurance scheme. The problem with Presbyterian Mutual is that it is not a building society; it was not regulated by the FSA and as such, therefore, did not pay into the insurance scheme. Those distinctions actually mean that the comparisons that get made - it has been done for this but it has not been done for that, and that is what I meant about misleading - allow, as you say, all those old people to feel, "Why is it being done for them but not me?"

Q43 Lady Hermon: Exactly.

Mr Woodward: And the answer is that the government created a structure that it was incumbent on those who wished to, to take up - we cannot make the horse go to the water; we can provide the water but it is up to the horse to go. Here is the problem. What we have here is a situation in which because one is in an insurance scheme there is a way through this for people. On the other side, when it comes to Presbyterian Mutual, we have a completely different system here running altogether, so it is basically not apples and apples, it is apples and pears we are comparing. I do not therefore think that the comparison is helpful and I do think that it is potentially misleading because it will lead to people think, "They are getting compensation and we are not and yet we are in the same position" - they are not. That was because of a decision that was made and taken in Northern Ireland to do what they did. Having said that, the FSA is actually conducting an investigation at the moment into how the PMS operated. The Treasury review is going ahead of how all of those organisations, like PMS, have operated and that includes provident societies and credit unions in Northern Ireland. In addition to that, I have arranged with the Prime Minister for Nigel Dobbs to meet with the Chief Secretary, not with a view right now to being able to see what could be done right now because while the FSA investigation goes on there is not anything that anyone can do while the investigation is underway. But I did not want to waste the time of saying that while it is underway we do not need to get on with the exchange of information that needs to take place; and I am not here, Sir Patrick, raising people's hopes falsely. But we need to understand what happened, we need to understand how they ran themselves; we need to understand whether they governed themselves properly; we need to understand whether they took up opportunities to protect those who put money with them, that should have been done. It does mean that it is a different situation again from Equitable Life - so we have apples, pears and oranges and not three sets of apples here again. But please do not confuse the fact that because it is not in any kind of system that we are simply saying we do not care - we do. That is why the Treasury is engaged and I got it to engage six weeks ago.

Q44 Lady Hermon: Thank you.

Mr Woodward: That is why we are looking with the FSA at this area and where the FSA is conducting its review because the FSA cares about it. That is why the Prime Minister met at the end of last year with Ian Paisley, why the Prime Minister met with the First and Deputy First Ministers and discussed this issue with them; that is why the Prime Minister and I have continued to discuss this issue. But what I do not want to do is lead those who have lost money in this to conclude that this is comparable to Dunfermline or to Equitable Life because it is not. The question is, would there be something that might be able to be done for them? Let us wait now for the FSA review; let us wait and see where the overall review by the Treasury gets on this and let us see where we are. We are not walking away from them, but equally we have to make sure that we understand where the fault correctly lies here.

Chairman: Thank you very much for dealing with that and sorry to take you by surprise on that one; but thank you very much for your very full answer. Secretary of State we are grateful to you for your full answers on all the subjects we have raised and we shall look forward to seeing you again on 29 April, when we will be pursuing Eames and Bradley. Thank you to Hilary Jackson and Nick Perry.