Arms Exports (Iraq)

HC Deb 23 November 1992 vol 214 cc631-712

Madam Speaker

We now come to our debate on the conduct of Ministers on arms exports to Iraq. First, I must tell the House that I have selected the amendment standing in the name of the Prime Minister. Secondly, I must tell the House that, because of the demand to speak in the debate, I have had to limit speeches between the hours of 7 and 9 to 10 minutes. Would hon. Members speaking outside that period exercise considerable voluntary restraint?

4.45 pm

Mr. Robin Cook (Livingston)

I beg to move, That this House notes the evidence that up to July 1990 Her Majesty's Government was granting export licences for the supply to Iraq of defence equipment and munitions machines in clear breach of the Howe Guidelines of 1985 preventing the export of equipment that would significantly enhance military capability; is concerned that as a result of Her Majesty's Government's private change of policy British servicemen may have been exposed to fire from shells and rockets made in munitions factories equipped by Britain; regrets that no statement was made in Parliament or in public about the covert change in policy and that honourable Members were persistently misled by assurances that the Guidelines were being observed and that Britain had not helped arm Saddam; deplores the willingness of Her Majesty's Government to see citizens put on trial for exports at which Ministers had connived and to put their liberty at risk by attempting to prevent the disclosure of documents crucial to their defence; and believes that the conduct of Ministers in this matter has been inconsistent with the security of British troops, with open government, and with the just administration of legal process. Two years ago, British troops were assembling in the Gulf in order that in the new year they might drive Saddam out of Kuwait. Because the Royal Scots recruit in my region, I, like many hon. Members, had many constituents on that expedition. On the eve of the offensive, I met on a number of occasions the support group of the wives and mothers of those men. I remember those meetings clearly, because they were so heavily charged with the emotions of those families, who knew that their men were going to face one of the largest standing armies in the world, lavishly equipped with some of the most sophisticated weaponry in the world.

The first charge against the Government is that, in the two years before the Gulf war, they had helped to equip that war machine, and in two years provided hundreds of millions of pounds' worth of machine tools straight to the factories that made the weapons.

Mr. Jerry Hayes (Harlow)

Will the hon. Gentleman give way? [Interruption.]

Mr. Cook

I will give way to the hon. Gentleman on this occasion, but I warn the House that many facts need to be put on the record, and I am sure that it would wish me to make progress with my speech.

Mr. Hayes

Does the hon. Gentleman think that it is wise that he should heed the old legal maxim that he who comes to equity should come with clean hands? Does he agree that he is presently serving time on the Opposition Benches for his economies with the actualité some time ago? [Interruption.] Why should the public believe him today, when they are of the view that the debate is nothing more than party political muck-raking? Leave the inquiry to Lord Justice Scott.

Mr. Cook

As my hon. Friends have already concluded, I was in error in giving way, but, for the avoidance of doubt, because I had some difficulty in following the hon. Gentleman's reasoning, at no stage have I exported either arms or machine tools to any other foreign power.

Conservative Members armed Saddam when they had ample evidence that he was a brutal tyrant who had already used his war machine to invade one neighbour, and, as that war with Iran would down, intensified his use of his war machine to terrify his own population.

In 1988, when the guidelines on exports to Iraq were relaxed, Lord Howe, the then Foreign Secretary, was telling the world and the House that he had compelling evidence that gas had been used to kill 5,000 Kurds, mostly women and children, in the Halabja massacre. At the time, his Minister of State, now the Minister for open government, was particularly indignant at Question Time on Saddam's gas attacks on his population, but, a year later, he was agreeing to arm Saddam, provided that the Department of Trade and Industry answered any questions about it.

Mr. Jeremy Corbyn (Islington, North)

Will my hon. Friend give way?

Mr. Cook

I will give way on this occasion to my hon. Friend, but again I make the same observation.

Mr. Corbyn

Is my hon. Friend aware that, shortly after the Halabja massacre in 1988, I was part of a delegation, which included Kurdish people, to the Foreign and Commonwealth Office? We met the said Minister, who expressed great disquiet about the gas attacks. However, when asked whether he would forthwith suspend all export credits, arms sales and trade with Iraq, he said that he would not, because trading interests came above considerations of our relationship with that tyrant.

Mr. Cook

As my hon. Friend reminds us, not only did the Foreign Office know that the regime was brutal: it knew that the ideology of Saddam's party revolved around his ambition to be the leader of a pan-Arab world. A stepping stone to that ambition, and at the heart of his war machine, was the drive to develop strategic weapons of mass destruction, to destabilise the middle east and to enable him to dominate it. In short, we helped to arm a man we knew to be brutal in his past conduct and megalomaniac in his aspirations.

Mr. Gyles Brandreth (City of Chester)

Will the hon. Gentleman give way?

Mr. Cook

No.

I have read that people who have seen the documents have accused their authors of cynical conduct. Having read them, it was not Ministers' cynical decisions that impressed me, but their stark naivety in thinking that they could arm a brutal, unstable dictator and that he would not use those arms. Why did Ministers not ask in those documents, "Why does that man want such sophisticated weapons in such vast quantities?" They knew what the machine tools were for—[HON. MEMBERS: "No."] Oh, they knew.

Several Hon. Members

rose—

Mr. Cook

I shall not give way.

The machine tools were pre-programmed for use in munitions factories. The Iraqis sent specifications of what they wanted from the tools, which were programmed to make fuses and shell casings. There was no question of their having a dual purpose.

Mr. Brandreth

rose—

Mr. Cook

I shall not give way—there is quite enough information to embarrass the Government in my speech.

Nor can it be said that the machine tools were put in packing cases and sent to Iraq, where Saddam Hussein diverted them without anyone here knowing about it. Matrix Churchill sent workers to Iraq to set up the machine tools, to train their operators and to repair machines which did not work.

During the past week, I have been approached by Matrix Churchill employees who knew that the company was making machines to make weapons. They cannot believe that anyone could be in any doubt about that. I have here a statement from an employee who was sent to repair a machine which had already been installed. He writes that, when he got there, it was obviously a munitions factory. The main gates were guarded by at least 25 to 30 soldiers, all armed with automatic weapons. The surrounding areas were guarded by surface-to-air missile launchers, manned by a five-strong squad. Everywhere I looked there were large and small rockets, again with missile launchers. The ground was littered with spent shells. It was not a general engineering factory—not even Saddam put a missile launcher to guard a car factory—but a munitions factory, at the heart of his war machine, and Ministers knew that that was where the machine tools were going.

I notice that the amendment refers to the "overriding consideration" of whether the equipment was lethal. The machine tools went into lethal weapon programmes. We know that at least two went into the Scud missile programme and that at least 30 have been found in Saddam Hussein's nuclear warhead factories. We know that many went to a factory that was intended to produce half a million shells per year. Those Scud missiles, nuclear warheads and Howitzer shells were lethal weapons.

To be sure, Saddam Hussein did not intend to stuff the machine tools down the barrel of a supergun and use them to shell his enemies. He had a more lethal purpose: to produce the weapons he needed to wage war on his enemies and critics.

The 1985 guidelines do not confine themselves to barring lethal equipment. They also bar any defence equipment which would significantly enhance military capability.

Mr. Richard Page (Hertfordshire, South-West)

The hon. Gentleman makes much of the fact that the machine tools were sent to make weaponry. Will he take it from someone who has operated most types of machine tool, that I know of no tool that' cannot be converted to a military purpose? Can he tell me whether, in 1986 or 1987, he or the Labour party asked for all sales of machine tools to Iraq and Iran to be banned?

Mr. Cook

Surely the hon. Gentleman's logic should make him question whether the machine tools should have been exported if they were all capable of being converted. The hon. Gentleman does not seem to have been listening. I have been arguing that there was no need for Saddam Hussein to convert the tools, as they were preprogrammed and specified to produce fuses and shell cases. Before they were sent, the Matrix Churchill factory produced fuses and shells with them to find out whether they worked.

Several Hon. Members

rose—

Mr. Cook

I shall not give way.

Several Hon. Members

rose—

Madam Speaker

Order. I understand that the hon. Gentleman does not wish to give way. Is that correct?

Mr. Cook

Yes.

The 1985 guidelines did not merely ban lethal equipment but also any defence equipment which would significantly enhance military capability. Between 1988 and 1990, we did just that, and Ministers knew it, because in 1989 they received a report from the Ministry of Defence entitled: "British Assistance to the Emerging Iraqi Arms Industry", which listed in its appendix five pages of companies providing defence equipment to Iraq, and which came to the conclusion that assistance from British companies had helped to build a very significant enhancement to the ability of Iraq to manufacture its own arms, thus to resume the war with Iran. The Ministry of Defence concluded that Ministers had broken the guideline not to enhance military capability.

I notice that, in the amendment, the Government accuse us of "sensationalised" disclosures. If we have been sensational, it is only because we have published documents that show what Ministers did in meetings. I would not disagree with their choice of words. The picture that emerges from those documents is of Ministers arming one of the world's most brutal regimes and breaking their guidelines to do it. I agree with those on the Government Front Bench that that is sensational, and the Government knew it. We know that because, when the document was first produced in 1989, it was unclassified. In December 1990, it was marked "Restricted" in handwriting.

Why? Would someone on the Government Front Bench like to tell us? It was not as if the document would have been of any value to our enemy in the Gulf war. Saddam knew what we had provided—he knew rather more than the British Parliament. The document was reclassified because the Government became embarrassed at the major role which Britain had played in rebuilding a war machine that British troops had to fight.

There is another reason why Ministers might well be embarrassed. They not only helped to arm Saddam, but it looks as if Britain will have to pick up most of the bill. The Government agreed a new credit facility to Iraq in 1987, and the then Chief Secretary to the Treasury approved it —he is now the Prime Minister. Before he denies it, I accept that no one told him what he was approving. I am sure that no one showed him the letter of November 1987 from the Export Credits Guarantee Department, which said: A notional 20 per cent. has been set aside for military business"— no nonsense there about dual use or general purpose machinery, only a clear credit facility for military business.

Today, a written answer from the DTI confirms that £830 million is outstanding, on which the ECGD might be invited to honour guarantees, in respect of exports to Iraq. If we assume that a notional 20 per cent. of that sum was for military business, the British taxpayer stands to foot £170 million to pay for the equipment that we provided for Saddam's war machine. We did not just arm his forces —we paid for them into the bargain.

I hope that no one today will claim that it was right to approve those exports on commercial grounds, because, judged as a commercial decision, it was a disaster for which the British taxpayer is still paying.

Mr. Phillip Openheim (Amber Valley)

Will the hon. Gentleman give way?

Mr. Cook

I cannot resist the hon. Gentleman, and I shall do so in a moment.

That £830 million is not that much less than the annual budget of the President of the Board of Trade when it is stripped of the swollen redundancy payments for miners. How much better would British industry benefit if that money had gone into supporting investment and training in British industry rather than in arms exports to a foreign power.

Mr. Oppenheim

I thank the hon. Gentleman for his courtesy in giving way. Will he answer the question posed by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page)? At any point in the middle or late 1980s, did Her Majesty's Opposition formally urge the Government to cease the export of machine tools to Iraq? Yes or no?

Mr. Cook

The answer is that, for once, we were naive enough to trust what we had been told by the hon. Gentleman's colleagues on the Front Bench [Interruption.] There is no point in the hon. Gentleman intervening if he does not listen to the answer. We were told by Ministers that they would not allow the export of lethal equipment or any defence equipment that enhanced the military capability of the Iraqis or the Iranians. We now know from the documents, however, that Ministers knew perfectly well that it was not general purpose machine tools that were being exported, but defence equipment that would produce some of the most sophisticated weapons. That was a clear breach of what the House had been assured.

Mr. Winston Churchill (Davyhulme)

Will the hon. Gentleman give way?

Mr. Cook

No, I shall not.

Let us consider the defence that the Government have put forward. The commercial defence—the fact that we needed the money—is at least better than the most contemptible defence of all, which is to dump all the blame on Alan Clark. The idea is that the rest of them did not know what he was up to: he sneaked in by the back door at night and took all the decisions after the rest of them had gone home. That will not wash, because Alan Clark left the DTI in July 1989, and the most controversial decisions were taken after that date.

That defence will not wash because the Government are trying to blame the one man who told the truth. That is the real crime of Alan Clark, according to the Government. It is not that he participated in secret meetings to export arms to Saddam, or that he misled Parliament, but that he let the cat out of the bag.

If the President of the Board of Trade wants to point the finger at any colleague, let him point it at those who have yet to own up. Let him point it at Lord Trefgarne, who, in October 1989, said that the case for the guidelines had weakened to the point of extinction Let the finger point at Nicholas Ridley, who, in July 1990, wrote to the Prime Minister pressing for another "thorough review of policy". Let the finger point at the current Foreign Secretary who, on 19 July 1990, chaired a meeting of Ministers to review that policy, which resulted in a decision to release material for Saddam's Asa rocket project in the two weeks in which we now know he was massing his troops for the invasion of Kuwait.

I noticed that, just before the weekend, journalists were briefed that Ministers had really wanted to tell Parliament about the outcome of the meeting on 19 July—it was just that the summer recess came too soon to tell us. I have my doubts about how sorry they are that they did not tell us. First, as Ministers are well aware, anyone who had made such a statement in the last week of July 1990 would have looked a proper ass the next week when Saddam walked into Kuwait.

My second reason for doubt is even more compelling. If Ministers are really sorry that they did not tell us before the summer recess about what they had agreed at that meeting, they could always have told us after the summer recess. After the invasion of Kuwait, they were given many chances to do so by my hon. Friends, who wanted to know the truth about those exports. Not once in the answers that we were given was there even a glimpse that the guidelines had been bent.

On 3 December 1990, the then Minister for Trade, the right hon. Member for Hove (Mr. Sainsbury)—he is still a member of the President of the Board of Trade's team at the DTI—said in the House: The guidelines … were set out … on 29 October 1985, and since then they have been scrupulously and carefully followed"—[Official Report, 3 December 1990; Vol. 182, c. 29.] In August 1991 the right hon. Member for St. Albans (Mr. Lilley), who is still a Cabinet colleague of the President of the Board of Trade, told the Select Committee on Trade and Industry: Our examination of the records shows that the policy announced in Parliament in 1985 was adhered to both in the spirit and in the letter. Not a word there about the fact that, in December 1988, the letter of the guidelines was changed without any announcement in Parliament and that, by November 1989, the spirit of the guidelines had been extinguished.

It is not surprising that we were not told. It is a repeated theme of the minutes and memoranda disclosed to the court that Parliament should not be told and that the public must not be allowed to know. As one official expressed it: There seems to be considerable merit in keeping as quiet as possible about this politically sensitive issue. When Alan Clark proposed that the guidelines be relaxed, he added in his letter: I would not propose an announcement of any decision. When one reads the documents, one becomes persuaded that the problem that Ministers perceived was not that Saddam might use the machines to make weapons; what they were really worried about was that the public might find out what they had decided.

Mr. Phil Gallie (Ayr)

Does the hon. Gentleman at least acknowledge that Ministers were under pressure at that time from Opposition Members who were keen to maintain their constituents' jobs and constituency businesses? Is not he aware of the pressure brought to bear on Ministers by Opposition Members?

Mr. Cook

No, I am not aware of any such pressure. If the hon. Gentleman has knowledge of any hon. Member who exerted such pressure, he owes it to the House to disclose who he is talking about. In case he gets hold of my reply and misrepresents it, as the hon. Member for Harlow (Mr. Hayes) has sought to do with other information—I note that the hon. Gentleman has already left the Chamber; he is probably out researching this point even as I speak—I should say that I met representatives from the Machine Tool Technologies Association a month ago. I have written to that association to learn what minutes it had written up of our meeting, just so that we are both clear about it.

Those representatives presented me with their demands for the machine tools industry. Those demands did not include any demand that we should sanction exports to dicey regimes that might use them against British troops. However, those demands contained a full list of the added help that is needed to provide investment in small industry and the stimulus for business to buy machine tools, as well as the help it needs for training. It is that pressure that my hon. Friends have constantly applied to the Government, and to which they never received any response.

Mr. Churchill

Will the hon. Gentleman give way?

Mr. Cook

No, I must get on.

I have recited the replies that we received in the House. Earlier this year, the Prime Minister released the document entitled "Questions of Procedure for Ministers", in which he said that Ministers had a duty to give Parliament and the public as full information as possible about the policies, decisions and actions of the Government. If hon. Members play back the answers that we have received on exports to Iraq and asked themselves whether those questions provided as full information as possible about the policies … of the Government on arms exports to Iraq, the answer must clearly be a resounding no. I doubt if even Conservative Members are convinced about that. No one else in the country is—at any rate, according to the latest opinion poll, 3 per cent. believe that Ministers have told the whole truth, while 83 per cent. do not.

There is, rather remarkably, one person among that 3 per cent.—I presume that he must be counted among that group— who was possibly the most curious victim of all the statements to Parliament. It turns out that the Prime Minister himself was misled by those ministerial statements. Until two weeks ago, he really believed that his Ministers had always observed the guidelines. He was shocked when one of his former Ministers said otherwise in court two weeks ago.

The Prime Minister's defence is well known. It is simple, if inelegant: nobody told him. When he was Foreign Secretary, nobody told him that his No. 2 was in dispute with the Department of Trade and Industry over Matrix Churchill exports. Nobody told him that the Foreign Office was in dispute with the Northern Ireland Office over the Iraqi purchase of the Learfan factory. Nobody told him even when he was briefed to meet the Iraqi Foreign Secretary, and nobody told him when he was Chancellor and his private office was warned of Customs' concern over Matrix Churchill. Nobody told him what happened at the meeting of 19 July, to which he was invited but could not make it—no doubt because nobody told him where it was being held.

It would take another John Bunyan to do justice to that Pilgrim's Progress around the key offices of state, preserving such invincible innocence. I am driven to wonder whether he ever asked why nobody told him. Since Alan Clark's appearance in court, has he had in any of his officials and asked them why they did not tell him what was going on? They knew—they told Lord Howe when he was Foreign Secretary about the controversy, and they briefed the present Foreign Secretary about the controversy.

The Prime Minister had the same private secretary as those other two Foreign Secretaries—Mr. Stephen Wall. Mr. Wall knew what was going on, because he briefed those two Foreign Secretaries. Did it never occur to the Prime Minister to ask Mr. Wall why he was allowed to continue to state that the guidelines had been observed, when half of Whitehall knew that they were being broken?

It will not be difficult for the Prime Minister to question Mr. Wall, because, after he moved to 10 Downing street, he appointed Mr. Wall to advise him on foreign policy affairs. I presume that it was Mr. Wall who advised him before he said in the House, two weeks ago, that, from 1985 until the Iraqi invasion of Kuwait, the Government operated under guidelines set out by the Foreign Secretary in 1985.

There is one way to convince me that nobody told the Prime Minister—for him to haul Mr. Wall over the coals for having done such a rotten job of briefing him. If he will not do so, the implication will clearly be that, either at the Foreign Office or at Downing street, Mr. Wall shared all he knew with his boss.

The President of the Board of Trade has a better defence that the Prime Minister. He has an alibi, because, during the key period of 1988–90, he was nowhere near the scene of the crime. He was busy writing books calling for a strategy for industry, a partnership with business and a programme for the steel, aerospace and car industries. Those books provide such embarrassing proof that his private views diverge from his public policy that I daily expect him to slap a public interest immunity certificate on the Library to prevent if from disclosing the fact that it has a copy.

That brings me to the third charge against the Government. First, they armed Saddam; secondly, when he used those arms against a British ally, they covered up the fact that they had provided the arms; and thirdly, as the cover-up unravelled, rather than own up, they were willing to see three executives of Matrix Churchill go to prison.

The President of the Board of Trade is one of four members of the Government who signed certificates seeking to prevent disclosure of documents vital to the defence of the three executives. I have read all three certificates, and admit that the President's certificate was worded carefully and with great attention. I suspect that his was the only one drafted personally rather than by an official. It has the mark of being signed by a man who was troubled by what he had been asked to do.

I cannot say the same about the certificate signed by the Home Secretary. It does not have the same stamp of an agonised conscience. There is one notable difference between the Home Secretary's certificate and those signed by the other three. The other three Ministers all signed that they had read the documents in front of them, whereas the Home Secretary's certificate said that the documents have been shown to me". Such a formula will come in handy the next time he is asked whether he has read the Maastricht treaty.

Let us be clear about the purpose of those certificates. The parent certificate, as acknowledged by the President in his certificate, is the one signed by the Minister of State, Foreign Office. In its opening paragraph, that certificate says: The purpose of this certificate is to explain to the court why, for reasons of public interest, such documents should not be so disclosed. Over the page, the certificate says: The production of such documents would be injurious to the public interest and it is necessary for the proper functioning of the public service that the documents should be withheld from production". The intention behind that certificate is plain: it was to persuade the judge not to disclose the documents. Let there be no pretence about the purpose of the certificates: they were submitted with the purpose and in the hope that those documents would not become public property.

Back in 1956, under another Conservative Government, the then Lord Chancellor, Lord Kilmuir, said that the Government would never claim immunity in a criminal case. The reason for that is easily understood. It is wrong in principle that, when liberty is at risk, evidence that could be vital to the defence of a defandant should be withheld. It was exactly that principle that Ministers endangered when they sought to prevent the defence from getting those documents.

Let us suppose that Judge Smedley had accepted the arguments in the certificates and had decided that disclosure was contrary to public interest. Let us suppose that he had not released those documents to the defence and that the three business men had been convicted. Would the Government be confident that they had done the right thing? Could they persuade themselves that they had behaved honourably when those three executives went to prison?

If they do not answer those questions to the House, they must do so to their own consciences, because the public interest also requires that there should be a fair administration of justice. It is in the public interest that justice be done, and justice would not have been done had those documents not been released.

I fully understand why the Attorney-General was so keen to advise Ministers to keep the documents locked away, and why the Government would not wish to release them for another 30 years. They tell a tale of deceit, of how Ministers agreed in private to arm Saddam, even though they knew how brutal he was. They tell of how they conspired to conceal from Parliament what they were doing; how they desperately tried to cover up what they had done when they found Britain at war with Iraq; arid how they let three business men face prison rather than release the documents that would show what Ministers had done.

Those documents have convinced the nation that it was not the executives of Matrix Churchill who should have been in the dock but the Ministers who approved what they were doing and who deserted them when they were caught. We have given Parliament an opportunity to return a verdict on the conduct of those Ministers. Tonight we shall vote to record our contempt for the Ministers who misled the House, deceived the public and tried to muzzle the courts.

5.18 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I beg to move, to leave out from 'House' to the end of the Question, and to add instead thereof: 'notes that up to August 1990 Her Majesty's Government granted export licences for the supply of goods to Iraq in accordance with guidelines which had as their overriding consideration not to supply any lethal equipment and which also restricted the supply of any defence equipment; recognises that it will be for Lord Justice Scott, under the terms of his inquiry, to consider whether these guidelines were followed; welcomes the Government's decision to give the inquiry wide terms of reference which will enable Lord Justice Scott to examine all of the facts, including the decisions taken by those signing public interest immunity certificates in the Matrix Churchill case; and deplores the sensationalised attempts of Her Majesty's Opposition to anticipate the inquiry's findings.'. It may be for the convenience of the House if I set out at once the order in which I intend to cover the principal issues raised by the debate. First, I intend to explain the procedures within which British export policy was conducted in the context of the changing pattern of events from 1984 onwards. Secondly, I shall refer to how the rules were applied. Thirdly, I shall discuss the trial of the three directors of Matrix Churchill and the role of Ministers in issuing public immunity certificates. Fourthly, I shall cover the establishment of the Scott inquiry, its terms of reference and related matters.

In December 1984, the Government drew up a set of guidelines to govern the export of defence equipment to Iran and Iraq. Those guidelines were formalised in 1985 when Lord Howe, the then Foreign Secretary, announced them to the House of Commons on 29 October 1985.

The then Foreign Secretary said that there were four constraints. He said:

1. "(i) We should maintain our consistent refusal to supply any lethal equipment to either side;
2. (ii) Subject to that overriding consideration, we should attempt to fulfil existing contracts and obligations;
3. (iii) We should not, in future, approve orders for any defence equipment which, in our view, would significantly enhance the capability of either side to prolong or exacerbate the conflict;
4. (iv) In line with this policy, we should continue to scrutinise rigorously all applications for export licences for the supply of defence equipment to Iran and Iraq."—[Official Report, 29 October 1985; Vol. 84, c. 450.]

Scrutiny was to be carried out by the interdepartmental committee on exports to Iran and Iraq, which comprises officials from the Foreign and Commonwealth Office, the Ministry of Defence, the Department of Trade and Industry and other Departments as necessary. Not only would individual licence applications need to be scrutinised, but it was obvious that, in many cases, a judgment would have to be exercised as to whether or not certain potential exports came within the rules. I draw attention only to the words "significantly enhance" or "prolong or exacerbate", so that the House may appreciate the detail of the judgment that was bound to be necessary.

I make two observations. First, by no means all our major competitors were so constrained—[Interruption.] I should have thought that Labour Members would welcome the fact that we gave a lead in the matter. Secondly, it is obvious that any interpretation of those rules required careful consideration of individual export licence applications. The embargo did not prohibit the export of all defence-related equipment.

The substance of that policy remained in place until it was overtaken by the United Nations embargo on all trade with Iraq that came into effect after the invasion of Kuwait in August 1990. A change in the wording of the guidelines was obviously necessary to reflect the fact that there had been a ceasefire in the Iran-Iraq war. Questions have been raised about the nature of the change in the guidelines and why it was not announced to the House. Those matters will need to be explored by Lord Justice Scott on the basis not only of looking at the numerous documents, but of talking to the Ministers and officials involved in making those decisions at the time.

I should like to stress one point. It has been suggested that a change in the wording of the guidelines meant that dual-use goods and industrial equipment, such as machine tools, would no longer be caught because they did not provide direct assistance in the conduct of operations. In fact, during that time, scrutiny continued of dual-use goods, including machine tools.

In June 1990, my predecessor, Lord Ridley, wrote to the then Prime Minister suggesting a consideration at Cabinet Minister level of changes in the guidelines. In July 1990, Ministers discussed the desirability of a continuation of the rules under the chairmanship of the Foreign Secretary against a background where circumstances appeared to have changed beyond those that gave rise to the rules in the first place—

Mr. D. N. Campbell-Savours (Workington)

rose—

Mr. Heseltine

I shall not give way as I must explain the context of what I am saying. I shall certainly give way later, but it is important that the sequence of this part of my speech should be heard in one piece.

The circumstances had changed beyond those that gave rise to the rules in the first place. Equipment from all over the world was being sold to Iraq. British companies were at risk of losing orders.

I shall remind the House of the background circumstances. In 1990, Iraq was purchasing industrial and dual-use equipment in the world market from a wide range of countries, including the United States, west Germany, Japan, France and Switzerland. The group of Ministers decided to recommend to their colleagues in government that a collective decision be taken to revise policy, but not to permit the export of lethal equipment. That same group of Ministers also concluded that any change should be announced to Parliament.

The hon. Member for Livingston (Mr. Cook) made a number of grave allegations today, one of which was that when the facts were fully revealed it would become clear that Ministers had no intention of announcing the change to Parliament. I merely wish to tell the hon. Gentleman that he is absolutely wrong. [HON. MEMBERS: "Prove it."] I am only making the point that I have read the papers that Lord Justice Scott will read, and I am telling the hon. Member for Livingston that what he has said today is utterly without foundation.

Mr. Bruce Grocott (The Wrekin)

Is the strategy of the Secretary of State today to be as follows: when documents of which he is aware appear to support his argument, he will quote them to the House, but when documents of which he is aware do not support his argument, he will say that we must wait for the inquiry?

Mr. Heseltine

That is not my strategy. The hon. Member for Livingston gave an impression of what is contained in certain documents—which he cannot have read—that is diametrically wrong. I happen to have read the documents, and can tell him that I am diametrically right.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

On that point, will the Secretary of State explain why the then Minister of State, Foreign and Commonwealth Office, the right hon. Member for Bristol, West (Mr. Waldegrave), said at a meeting with Lord Trefgarne and Alan Clark that he was prepared to anounce publicly then —as he was in January—the form of words adopted and agreed in January?

Mr. Heseltine

As the right hon. Gentleman will know, that was not the meeting to which the hon. Member for Livingston was referring. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) is referring to an earlier meeting, but the meeting that is of consequence—and on which the House is rightly focusing —is the meeting at Cabinet level chaired by the then Foreign Secretary. It was at that meeting that it was decided that it was appropriate to change the guidelines and announce them to the House of Commons. That did not happen, because by the time that it would have been possible to do so, the Iraqi invasion of Kuwait had taken place.

Mr. Robin Cook

The President is absolutely correct. A fortnight after the meeting that apparently relaxed the guidelines, Saddam Hussein invaded Kuwait. However, the President has not explained why, if the meeting at Cabinet level decided that the House of Commons should be told, when Ministers were repeatedly asked questions during the next two years, not a single reference was made either to the meeting in 1990—which the President now regards as critical—or to the changes in the guidelines in 1988 or the many decisions in between that represented a weakening of those guidelines to the point of extinction. If it was decided in July 1990 to tell Parliament, why was there a failure to do so in the subsequent two years?

Mr. Heseltine

Because they never changed the guidelines. That is the point that the hon. Gentleman cannot understand. The meeting decided that it would recommend a change in the guidelines and that if a decision to do so was taken, that would be announced to Parliament. However, the guidelines were not changed, so it was not appropriate to make an announcement to Parliament.

Mr. Robin Cook

rose—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. Hon. Members cannot just stand up when the Secretary of State is addressing the House. They must wait to see whether he gives way.

Mr. Tony Benn (Chesterfield)

On a point of order, Mr. Deputy Speaker. The House will recall that, earlier today, the Speaker said that, when Government documents were quoted, they must be placed on the Table of the House. The Secretary of State has referred to Government documents, Cabinet and other meetings, and told the House that it should wait until Lord Scott replies before commenting on the matter. Those documents should be made available to the House; otherwise the Scott inquiry is just a way of silencing the House in its task of establishing the accountability of Ministers.

Mr. Deputy Speaker

Madam Speaker's ruling was clear on state papers and direct quotations therefrom.

Mr. Heseltine

In the event, as I said, Iraq—

Mr. Benn

Further to my point of order, Mr. Deputy Speaker. With great respect, Cabinet papers are state papers. There is no distinction between one type of state paper and another. The Secretary of State has quoted from a state paper, and that paper should now be made available to the House.

Mr. Deputy Speaker

It appears that Cabinet papers are not state papers. I shall take further advice and report to the House later.

Mr. Heseltine

In the event, Iraq invaded Kuwait. These proposals were not considered further and were never implemented. The House will be aware—

Mr. Gerald Kaufman (Manchester, Gorton)

The President of the Board of Trade has stated that, when the Overseas and Defence Committee of the Cabinet, on 19 July 1990, considered the possibility of changing the guidelines on the embargo—I quote the words which he has offered this afternoon—"circumstances had changed." Did the Committee take into account the fact that among the circumstances that had changed was the fact that it was known that Iraq was seeking to acquire nuclear triggers to manufacture nuclear weapons? Did the changed circumstances include the knowledge that it had become public that Iraq was trying to manufacture a supergun with British parts? Did the Committee consider the fact that, three days before it met, The Sunday Times had published a story about British-manufactured titanium parts for the manufacture of Iraqi missiles? In the circumstances, was it appropriate for the Committee to recommend relaxation of the guidelines?

Mr. Heseltine

The right hon. Gentleman is as aware as I am that that is precisely why we are having an inquiry. We are having one precisely to establish who knew and who should have known and whether these matters should properly have been taken into account. That is the purpose of the inquiry.

The House will be aware that publicly available memoranda were submitted to the Select Committee on Trade and Industry for its inquiry into supergun and exports to Iraq in general. The memoranda listed details of the exports from January 1987 to August 1990.

Mr. Corbyn

Will the President of the Board of Trade give way?

Mr. Heseltine

No.

The House will be interested to know that during that period—January 1987 to August 1990—Iraq concluded contracts for the import of defence equipment worth an estimated $11.3 billion. Contracts placed with United Kingdom companies during that period were worth only $200 million, less than 2 per cent. of Iraqi procurement.

Even today, there have been references to export credit guarantees supporting sales of defence goods to Iraq, and suggestions that the taxpayer will be paying £200 million for the sales. The facts are as follows. The Export Credits Guarantee Department provided support for United Kingdom exports from 1984 onwards under a series of intergovernmental protocols. These covered both short-term and medium-term credits. From 1985 onwards, however, a limit was applied to medium-term credit for defence-related goods. As the hon. Member for Livingston said, at the end of 1985 the limit was 20 per cent.

The total of medium-term export credits taken up between 1983 and 1989 for defence-related goods came to just £54.3 million, or 6 per cent. of medium-term credit taken up for all goods by Iraq. That is entirely different from the figure produced by the hon. Gentleman a few minutes ago. When he quoted the amounts that are outstanding—that have not been repaid by Iraq—he was talking in the main, with the exception of the £54.3 million to which I have referred, about goods for peaceful purposes—industrial contracts in British factories for British jobs.

All exports, whether benefiting from short-term or medium-term credits, were subject to export licensing regulations and any claim against export credit would normally be invalid if such a licence had not been obtained. The defence-related equipment supplied under medium-term credit did not include armaments of any sort. It ranged from radio communications equipment to power supplies, video recording systems and diesel test equipment.

That brings me to the allegation that, while rules were in place, they were flouted with ministerial connivance, if not positive encouragement. The seriousness of such allegations cannot be overstated, but nor can they be examined with the care that is appropriate without a full and independent inquiry. Certainly, they cannot be examined with only partial discovery of the evidence or selective quotations. That is why the Government immediately set up an inquiry under Lord Justice Scott.

Of course there was a continuing debate in Whitehall about the desirability of individual export contracts. Some were turned down—for example, Hawk aircraft, civilian helicopters and small boats. That is clearly established. Clearly, Ministers and officials had to weigh what were often conflicting interests in changing circumstances. In interpreting policy guidelines, judgments had to be made about British contracts for British factories offering British jobs in circumstances where others in other nations were queuing up to fill the orders if we did not. No Government can escape, or should try to do so, from their legitimate consideration of our national interest in these circumstances.

I shall return to the Scott inquiry.

Mr. Tam Dalyell (Linlithgow)

Will the President of the Board of Trade allow me to intervene?

Mr. Heseltine

No.

I make the point at this stage—

Mr. Dalyell

Will the right hon. Gentleman give way?

Mr. Heseltine

No.

I make the point at this stage. The Opposition demanded an inquiry under the Tribunal of Inquiries (Evidence) Act 1921. That was the request of the Leader of the Opposition. If we had agreed to it, the debate would not be taking place today. Little of the press coverage would have been permitted. The first consequence of a 1921 Act inquiry is that the matter becomes sub judice. Secondly, the time scale is likely to be of a different order. It is fair to say, however, that one advantage of such an inquiry is that the country might have been spared the activities of the hon. Member for Livingston.

Mr. Dalyell

Will the right hon. Gentleman give way?

Mr. Heseltine

No.

The hon. Member for Livingston applied all his energies to blaming my right hon. Friend the Prime Minister. The hon. Gentleman was the impresario who so debased the general election campaign with the cynical exploitation of a five-year-old girl. He has been up to his old tricks again. The headline screamed, "Cook Reveals All". You and I, Mr. Deputy Speaker, might have faced so daunting a prospect with less than our usual equanimity. The hon. Gentleman is not exactly what one might call a Chippendale.

Behind the gory headline, it was obvious—

Mr. Dalyell

Will the right hon. Gentleman give way?

Mr. Heseltine

No.

It was obvious that this matter was being played for every piece of applause that the hon. Member for Livingston could find. He had no intention that—

Mr. Dalyell

Will the right hon. Gentleman allow me—

Mr. Deputy Speaker

Order. I shall be most grateful if the hon. Member for Linlithgow (Mr. Dalyell) will resume his seat. It is clear that the Secretary of State will not give way at this stage.

Mr. Heseltine

The hon. Member for Livingston had no intention that all the evidence should be produced at once for a full appreciation of the matter. Not a bit of it. It was to be a selected quotation here and an inaccuracy there for day after day. It was to be another revelation and another gathering of pencil-sucking journalists, with row after row of discarded raincoats. It was not to be done with the flourish of a sort of Soho stripper. This was not a striptease, it was a Cooktease.

I shall give the House two examples of the hon. Gentleman's techniques. In his letter to the Prime Minister on 13 November, he quoted Lord Trefgarne, then a Minister at the Department of Trade and Industry, as saying that the operation of the ministerial guidelines had weakened to the point of extinction. I shall give the House the full quotation.

Mr. Stuart Bell (Middlesbrough)

Another state document?

Mr. Heseltine

It is a document from which the hon. Gentleman's hon. Friend quoted. However, I shall not quote it selectively; I shall quote the whole passage, which states: The continuing ceasefire has necessitated reconsideration of the operation of the ministerial guidelines and weakened to the point of extinction any case for prohibiting exports of general purpose industrial equipment for fear that it might be put to military use. That is a very different letter. If the hon. Gentleman cannot even quote accurately from Government documents, what credence can we place on his preposterous allegations about the extent of my right hon. Friend the Prime Minister's knowledge of the affair?

Mr. Benn

On a point of order, Mr. Deputy Speaker. The Secretary of State has now said that he is quoting from a state document—[Interruption.] Yes, he said that. I am asking you to protect the House, Mr. Deputy Speaker; I am not engaging in argument. The House has responsibilities in this matter and the Secretary of State is quoting from a state document. Every Cabinet paper states, "This paper is the property of Her Britannic Majesty's Government." A state paper has been quoted, but the House is being allowed the opportunity to hear only certain passages that the Secretary of State wishes to reveal.

Mr. Deputy Speaker

I am quite sure that the Secretary of State is an honourable man, as is every hon. Gentleman and hon. Lady in the House. If he is quoting from a state document, it will have been tabled. If he is not, he has every right to quote from it.

Mr. Dalyell

Further to that point of order, Mr. Deputy Speaker. Do you intend to protect the House against what has become an unworthy rant? Can we be told why, if all that the Secretary of State said is true, three men were prosecuted? If all the documents were debated by Ministers, why were those three Matrix Churchill directors prosecuted?

Mr. Deputy Speaker

The House knows that the Chair is not responsible for the quality of speeches.

Mr. Bob Dunn (Dartford)

Further to that point of order, Mr. Deputy Speaker. In view of what my right hon. Friend has said, would it be in order for the hon. Member for Livingston (Mr. Cook) to withdraw his earlier statement?

Mr. Deputy Speaker

That is not a matter for the Chair.

Mr. Heseltine

The hon. Member for Livingston was not content simply with selective quotations. Grubbing around in the undergrowth, he though that he had hit on another winner. He discovered that a telegram had been sent from the Foreign Office, signed "Howe", to our embassy in Tokyo seeking information about an aspect of the Matrix Churchill affair. Even that argument exploded in his hands. The telegram never went to Lord Howe's office. All telegrams from the Foreign Office go out in the Foreign Secretary's name, no matter who originates them. If it is love and kisses from the cleaning lady in London to the third secretary in Moscow on his birthday, the happy message will go out in the name of the Foreign Secretary.

Mr. Benn

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Is it another point of order?

Mr. Benn

It is the same point of order, Mr. Deputy Speaker. Nothing in my previous point of order reflected on the honour of the Secretary of State or any other Minister. I am asking you to apply the rules of "Erskine May". Ambassadorial telegrams are all state documents. We cannot discuss this matter if some people have access to documents. We have to protect the House, not one user.

Mr. Deputy Speaker

I have given a clear ruling—[Interruption.] Order. How can I give a ruling if hon. Members interrupt me? It is clear that, if a state document is quoted directly, it must be tabled. That is the ruling, and I expect all hon. Members to abide by it.

Mr. Heseltine

It is extraordinary that the whole debate is based upon quotations that the hon. Member for Livingston has taken from documents released to the court by the Government, yet not a word of protest is heard from Opposition Front-Bench spokesmen about their ability to quote selectively from those documents. All that I am doing, without quoting from those documents, is to set the record in a full context. That is the inevitable consequence of a debate that has been originated by the Opposition, not the Government.

Many hundreds of telegrams a day, from every Tom, Dick and Harry in the Foreign Office building, are sent out in the name of the Foreign Secretary. All that the debate reveals is that Labour has been out of office for a very long time. It no longer knows how government works, so Labour Members make it up and trust to luck. The hon. Gentleman got it wrong. The headlines faded—the six-inch banner on the front page subsided to an inside column headed, "Cook fails to convince"—[Interruption] Oh yes, it was there.

The hon. Gentleman held about three press conferences, with more disclosures, and even the journalists began to lose faith in him. Indeed, even better than that, the hon. Gentleman is now beginning to realise that he has made a mess of it. I heard him on the radio on Saturday morning. I understand that he is about to carpet some hapless research assistant. He said: I could not have done it all myself. My assistant worked all night. That was the basis of three weeks of allegations by the hon. Gentleman. It is a terrible warning to the research assistant about where the blame will lie.

I want to deal with the suggestion that my right hon. Friends and I sought to cover up the evidence available to us in our Departments. The suggestion, which has been widely reported in the national press, is that we were prepared to allow innocent men to be convicted rather than expose the Government to the risk of criticism. If for no other reason, the Scott inquiry is essential to establish the facts.

My three colleagues and I were each approached with a request to sign a public interest immunity certificate. It was not a collective decision; we were each signing in respect of papers within our own Departments. It was for each of us to read the papers in our Departments and to satisfy ourselves that they came within the categories either of security or of advice to Ministers—and if we were so satisfied, we had to sign.

Lord Justice Scott will satisfy himself on whether we acted properly. He will consider what we said and did and he will have before him the advice that we have received from the Attorney-General, which my right hon. and learned Friend explained to the House on 10 November. I shall add only one thing—that I want to express my gratitude to Mr. James Hunt QC, who appeared for the defence in the Matrix Churchill trial. In a letter to The Times on 13 November—

Ms. Clare Short (Birmingham, Ladywood)

He is not a QC.

Mr. Heseltine

Mr. Hunt is a QC. It is intolerable that the Opposition should seek to denigrate those who are responsible for the conduct of justice.

I shall quote from the letter written by the QC who appeared for the defence in the Matrix Churchill case. The letter says: We feel bound to state that much of the reporting elsewhere in the media of the government documents issued has caused us to think we must have been present in an altogether different court. The plain fact of the matter is that counsel for the Crown said at the outset, when placing the public interest immunity certificates before the court, that the question of disclosure was a matter for the trial judge and not for the Ministers concerned. Public interest immunity cannot be waived by either the prosecution or the Ministers. It was for the judge to decide whether the interests of justice in ensuring a fair trial for the defendants outweighed those considerations of public interests referred to in the certificates. There was no question of anyone attempting to suppress evidence. In the event, the judge decided in favour of disclosure and the documents were immediately produced. Although views may differ as to the importance of the documents, the approach of counsel for the Crown to the question of public interest immunity was entirely in accordance with our understanding of the decided cases. I could not have put the matter more clearly. That is the position as I understood it. I would not have acted in the way that I did unless I had been absolutely satisfied that the judge would make available those documents or those parts of a document which he considered necessary for the proper course of justice. Therefore, I totally and absolutely reject the accusations of the hon. Member for Livingston. Mr. Robin Cook: I repeat the question that I asked in my speech. If Judge Smedley had accepted the advice in the certificates that disclosure would be contrary to the public interest and the documents had not been revealed, and if the three executives had been convicted, does the President of the Board of Trade believe that in those circumstances justice would have been done?

Mr. Heseltine

That is simply another grave accusation about the judge in charge of the trial. The judge was in a position to exercise a judgment. I knew that he would exercise that judgment, because I had established beyond question that he would consider the documents. If the judge had considered the documents necessary for the conduct of justice, he would have released them. If I must rely on the Attorney-General or the hon. Member for Livingston, it is the simplest decision that I have ever had to make in my life.

Mr. Richard Shepherd (Aldridge-Brownhills)

I have read my right hon. Friend's certificate. I think that it is an artful and true document. If it was a duty, why was the duty not invoked in the Ponting case when the prosecution made available, without Crown immunity or the claim for Crown immunity, the Crown jewels?

Mr. Heseltine

It is about eight years since I stood here to deal with the Ponting case. If I remember correctly, I agreed at that time to make available the documents known as the Crown jewels to a Select Committee of the House. I did that so that the House could have an opportunity through its Select Committee to consider deeply sensitive, secure information. Having done that, I was grateful that the Select Committee supported the Government's judgment at the time. The House was as fully briefed as possible, compatible with the immensely secure information that those documents contained.

Mr. Menzies Campbell (Fife, North-East)

As the Secretary of State is telling the House about the state of his knowledge, will he tell us whether he knew when he signed the certificate that the three accused had been acting in accordance with Government policy, and that one of them had been giving valuable information to the security services?

Mr. Heseltine

The certificate that I was asked to sign did not ask me to become involved in investigating or even understanding the nature of the prosecution. However, it asked me to look at documents in my Department and determine the technical issue of whether they were within one of two categories. That is the issue which I was asked to determine. That is the nature of the certificate, and I signed it on that understanding.

Mr. Campbell

It is a simple question, yes or no. Did the right hon. Gentleman know the information that I put to him earlier?

Mr. Heseltine

It is clear from what I said that I was not involved, and I was not expected to be involved, in the conduct of the trial. I had not sought to involve myself in the issues that the trial raised. In no way was that my responsibility.

We are dealing simply with whether Ministers should have signed the public interest immunity certificates. I was advised that it was my duty to sign them, and I did so on that basis.

Mr. Neil Kinnock (Islwyn)

I shall ask the Secretary of State two questions, one of which he has already been asked but to which he has not comprehensively responded. Did he know—yes or no—that the people who were to go on trial and who were the subjects of information contained in the certificates had been of assistance to the Government? When he signed the certificates, was he aware that they were relevant to criminal proceedings that would affect the liberty of the subjects?

Mr. Heseltine

Of course I was aware of the significance of the trial and the charges upon which the outcome of the trial depended. That is why, as Lord Justice Scott will want to establish, I asked the questions and discussed the matter in the way that I did. It is essential that Lord Justice Scott looks at the matters. It is the only way in which the allegations made—I believe irresponsibly—by the Opposition can be adequately dealt with. What I knew, what I should have known, the questions that I asked and the questions that I should have asked are matters which will be properly examined.

I repeat what I said earlier: I had to decide whether the legal position gave me any discretion in signing the documents. If counsel acting for the defence believed that Ministers had no discretion, why should I be persuaded that Opposition Members had a greater insight into ministerial duties than counsel who were responsible for defending the very people that Opposition Members were concerned about?

Mr. Kinnock

I recognise that, in responding to a question with another question, the Secretary of State is engaging in a fair parliamentary debating technique. However, he still has not answered two basic questions. I shall concentrate on the first one.

When the right hon. Gentleman signed the certificate, did he know that the people to which the material related had been of assistance to the Government in collecting intelligence information which was of use to the Government?

Mr. Heseltine

The right hon. Gentlleman must be aware that I, as Secretary of State, am not in a position to involve myself in prosecuting proceedures. That is not a ministerial responsibility. The right hon. Gentleman knows as well as I do that the moment one is drawn into discussions on that subject, a vast range of sub-questions arise which can be dealt with only by a proper and full inquiry.

The charge against Ministers is that they tried to conceal the facts from the court. I did not try to conceal the facts from the court. That is the responsibility that I bear. I have no doubt whatever that the matter will be fully—

Mr. Geoffrey Robinson (Coventry, North-West)

Will the Secretary of State give way?

Mr. Heseltine

No, I will not give way. I have given way several times.

I have no doubt whatever that the matter will be explored exhaustively by Lord Justice Scott's inquiry, and properly so. The issue that the House is invited to examine is whether Ministers properly signed the certificates. On the legal advice to us, there was no discretion.

Mr. Kinnock

On a point of order, Mr. Deputy Speaker. It is clearly important that the House should never be misled. It would be dreadful, would it not, if a right hon. or hon. Member were accused of seeking to mislead? It is important that we understand that no charge has been levelled against the President of the Board of Trade. A simple question was asked. The right hon. Gentleman cannot be dragged into anything if the honest answer is the simple one—no.

Mr. Deputy Speaker

Order. The right hon. Gentleman was formerly the Leader of the Opposition, and knows that that matter is not for the Chair.

Mr. Heseltine

In the event, as the House knows, the papers themselves were to play no part in the prosecuting counsel's decision to recommend to his clients, the Commissioners of Customs and Excise, that the trial should be ended. The evidence of Alan Clark under cross-examination proved the critical point and is now the subject of investigation.

The House will want to be satisfied about the nature of the inquiry to be undertaken by Lord Justice Scott. It has been kept fully informed. Lord Justice Scott has wide terms of reference. His inquiry is not restricted to the Matrix Churchill affair but can cover exports over the whole period from 1984 to 1990. He will consider the PII issue and the decisions taken in relation to prosecution.

Ministers will be required to give evidence and officials have been instructed to co-operate. All Government papers sought by Lord Justice Scott will be provided to him. He alone will determine which matters he considers relevant and he will be able to cover them all in his inquiry. Lord Justice Scott will have unfettered discretion as to what to publish and whether, or what parts of, his inquiry will be in public.

Lord Justice Scott knows that if he feels unable to obtain satisfactory attendance or answers, he is free to ask the Government to convert the inquiry into a 1921 Act inquiry. If he asks, the Government will agree to his request. I do not believe that the Government could give more comprehensive reassurance than I have just repeated.

I was dismayed to read in The Independent this morning an article on page one that carried the headline, Labour raises doubt over Iraq arms export inquiry. I will quote the second and third paragraphs of that report: Robin Cook, Labour's spokesman on trade and industry, also raised doubts about the independence of the Scott inquiry, saying: 'What we see at the end of the day will depend on negotiations with Lord Justice Scott and the Government … The inquiry is staffed by the same Treasury solicitors that advised those government ministers not to disclose documents in the Matrix Churchill case."' Once again, the hon. Member for Livingston makes two extremely serious allegations. The first is that Lord Justice Scott could have his independence constrained by negotiations with the Government. I utterly refute that charge. I urge the hon. Gentleman to confirm my understanding of Lord Justice Scott's independence. Does the hon. Gentleman really believe that Lord Justice Scott would allow his independence to be constrained by Government?

Hon. Members

Yes.

Mr. Robin Cook

A moment ago, the President of the Board of Trade said that it was open to Lord Justice Scott to come back and to reconstitute the inquiry as a tribunal of inquiry. The right hon. Gentleman is well aware that, if Lord Justice Scott did so, the proceedings would take place in public, the evidence would be on the record, and everyone would know what went on in private. If the right hon. Gentleman believes that there may be a case for coming back in that way and for leaving Lord Justice Scott to request that, why do the Government not agree now to allow the inquiry to take place in public—and prove to the whole world that it is taking place in public and is independent, and that the evidence is fully reported? If the inquiry were so set up, would the right hon. Gentleman give an assurance that it would not be staffed by the same Treasury solicitors that advised his Government?

Mr. Heseltine

It took the hon. Gentleman a long time to think of that answer and a long time to give it—the problem is that it answered a question that I did not ask. Does the hon. Gentleman believe that Lord Justice Scott would allow his independence to be compromised by negotiations with the Government? That is the issue.

Mr. Cook

indicated dissent.

Mr. Heseltine

The hon. Gentleman, from a sedentary position, shakes his head. Why does he do so when in The Independent this morning he was quoted as saying that Lord Justice Scott would allow his independence to be compromised by negotations with the Government?

That is a scandalous performance by a leading member of the Opposition. The hon. Gentleman has smeared—he has more than smeared—a judge of the High Court, and he does not have the guts to admit it. He does not have the guts to withdraw it. I hope that that point will not be lost on Lord Justice Scott.

Mr. Cook

The right hon. Gentleman just used the word "guts". If the right hon. Gentleman has the courage, and if the Government believe that they have nothing to hide and that they they can face the future, why does not the right hon. Gentleman accept the challenge that I posed a moment ago, and make the inquiry a tribunal of inquiry so that it will take place in public and we can see what the Government have to hide?

Mr. Heseltine

Just by asking a second question, the hon. Gentleman does not hide the fact that he could not answer the first.

Let us make a little progress. The allegation has been made that the inquiry is staffed by the same Treasury solicitors that advised … ministers not to disclose documents in the Matrix Churchill case. The solicitor who will assist Lord Justice Scott was selected precisely because he had no previous involvement in the affair. Lord Justice Scott is entirely satisfied with that arrangement. The hon. Member for Livingston smears Lord Justice Scott and smears the Treasury solicitor, and only attempts to hide his embarrassment by asking quite different questions. The hon. Gentleman lowers the already low esteem of his conduct in the affair.

I want to make one final point, which has been doubly reinforced by the conduct of the hon. Member for Livingston this afternoon. No one disputes the seriousness of charges being investigated. No one should doubt the Government's immediate response in setting up an inquiry under Lord Justice Scott, yet a political dimension has clouded the atmosphere in which the affair has been conducted over the past few weeks.

A nauseating hypocrisy has flavoured the remarks and the behaviour of Labour Members. They cry, "Misleading the House." That from a party which secretly updated Britain's nuclear deterrent at a cost, in today's money terms, of £22.5 billion by adding the Chevaline programme to our Polaris submarines. Why did Labour do that? It was because an inner group of senior Labour Cabinet Ministers could not even trust their Cabinet colleagues, let alone the parliamentary Labour party.

Labour Members allege that we endangered British service men. I cannot remember—

Mr. Ron Leighton (Newham, North-East)

On a point of order, Mr. Deputy Speaker. Will you ask the right hon. Gentleman to speak a little louder? I cannot hear him. —[Laughter.]

Mr. Heseltine

No matter how loudly I speak, a large number of Opposition Members will never hear or understand a word that I say.

Labour's second nauseating act of hypocrisy is its suggestion that the Government in some way set about endangering British service men. I do not remember mass pickets protesting at the sale of British weapons to the Argentines when Labour was in power. Then, Argentina was governed by a military Government whose civil rights reputation did not actually shine across the enlightened world. Of course that Labour Government did not know about the risks of a Falklands war. No one knew—just as no one knew that Iraq would invade Kuwait.

No one is going to take lectures from the hon. Member for Livingston—who, throughout his political career, has been enrolled under the battle honours of the Campaign for Nuclear Disarmament, and whose political career has been devoted to undermining the defence interests of our country. Conservative Members want an independent inquiry.

Mr. Allan Rogers (Rhondda)

Will the Secretary of State give way?

Mr. Deputy Speaker

Order. It is clear that the Secretary of State will not give way. The hon. Gentleman must resume his seat.

Mr. Rogers

rose—

Mr. Deputy Speaker

I hope that the hon. Gentleman is about to bowl me a genuine point of order.

Mr. Rogers

I apologise, Mr. Deputy Speaker. The truth is that I could not hear the right hon. Gentleman—

Mr. Deputy Speaker

Order. I am grateful. That is enough.

Mr. Heseltine

It is apparent that there is a need for Lord Justice Scott to get on with the inquiry. That is the only way in which the matter will be seriously investigated to the satisfaction of the House and a wider public.

Mr. Peter Hain (Neath)

On a point of order, Mr. Deputy Speaker. Documents contained in appendix 8 of the Bingham report, relating to the BCCI inquiry, also bear on Lord Justice Scott's inquiry. Are they state papers, and are MI5 or MI6 intelligence papers relating to the case also state documents?

Mr. Deputy Speaker

I certainly cannot advise on that.

Mr. Heseltine

The case for an independent inquiry under Lord Justice Scott has been proved beyond peradventure by the behaviour of Opposition Members. Conservative Members want an independent inquiry to be carried out by a distinguished judge, with all the evidence, and that is what our amendment seeks. We will vote against the Labour motion, which prejudges the issues, apportions blame and affronts the independence with which Lord Justice Scott has been entrusted.

6.11 pm

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

I congratulate the President of the Board of Trade on a very good speech to the Conservative party conference. The problem is that this House is not the Conservative party conference, and I suspect that Opposition Members are not the only people to resent being treated as though it were. There are serious issues to be addressed, relating to the conduct of Government; the motion attempts to address them, but a number of them were not addressed by the right hon. Gentleman.

I shall begin by asking some questions about the nature of the inquiry, and I intend to quote from documents, but I shall not name any civil servant in relation to those documents, because I am old-fashioned enough to believe in ministerial responsibility. Ministers will know the documents from which I intend to quote.

My first point concerns the nature of the inquiry. At the time of the internal Government inquiry into the Westland affair—in which the President of the Board of Trade had more than a passing interest—I complained to the then Prime Minister that, had she been living in the real world, she would have been charged with wasting police time. I am now concerned that we should not waste Lord Justice Scott's time.

I believe that the terms of reference that he has been given are drawn too narrowly. In my view, it is not a question of inviting Lord Justice Scott to report on whether the relevant Departments, Agencies, and responsible Ministers operated in accordance with the policies of Her Majesty's Government. I am prepared to accept for the sake of argument that they may well have done that, in relation to the terms of reference. The question is: why was an overt policy relating to supplies to Iraq declared to the House and the public while a covert policy was pursued by Ministers over quite a long period?

A letter written today by the Prime Minister to my right hon. Friend the Leader of the Liberal Democrats referred to the reasons for holding an inquiry of this kind, rather than a tribunal. According to the Prime Minister, a tribunal would have suppressed all questions in the meantime". That brings me to my first question. I know that the Secretary of State for Defence is to reply to the debate, and that the matters that I intend to raise are not strictly within his departmental responsibility, but I hope that we shall receive answers none the less.

My first question relates to the current police inquiries about the conduct of Mr. Alan Clark. Like the Secretary of State for Defence, I am just a humble graduate in Scots law, and I do not entirely follow English legal proceedings, but the Attorney-General will correct me if I am wrong.

Am I right in believing that the current police inquiries into the conflict between the written and oral evidence of Mr. Alan Clark are pretty routine and have nothing to do with Ministers? Am I also right in believing that, if a decision were made to prosecute Mr. Clark because of that conflict, the prosecution could be stopped by the Attorney-Gerneral? If I am right, I believe that the Attorney-General should stop the prosecution. Not only would prosecuting Mr. Clark make him a scapegoat, as the hon. Member for Livingston (Mr. Cook) suggested earlier, but it would also do exactly what the Prime Minister said that a tribunal hearing would do—that is, render the whole matter sub judice—and thus hamper Lord Justice Scott's inquiry.

The House wants the truth, not the prosecution of a former Minister. The Government appeared to be fairly easy in their mind about whether business men would go to gaol, and they will not lose any sleep over whether Mr. Alan Clark resides in one of the more salubrious open prisons. That, however, is not the issue. The question is whether Mr. Alan Clark will be available to give evidence to the inquiry, and whether the inquiry will get at the truth.

That brings me to my second question about the inquiry and the terms of reference. There is an extraordinary provision allowing Lord Justice Scott, if need be, to come back and ask for more powerful terms. I do not understand why it should he anticipated that Lord Justice Scott will be obstructed in any way; however, I wish to raise a specific point, which I have raised before but to which I have so far received no answer.

Do the instructions given by the Prime Minister to Ministers and civil servants to co-operate with the inquiry apply to former Ministers? Do they apply to Mr. Alan Clark himself, to Lord Ridley, to Lord Trefgarne, to the right hon. and learned Member for Putney (Mr. Mellor) —who had a walk-on part in the proceedings—and, indeed, to Lady Thatcher?

That last question is particularly important. Information in the documents made available to the court makes it clear that in two ministerial meetings—in November 1988 and in July 1990—what Ministers were discussing required the Prime Minister's personal approval. I do not see how the inquiry can proceed effectively without the active participation of Lady Thatcher. I assume that, before drawing up the guidelines the Prime Minister received an assurance that she would co-operate; in any event, I think that the House should know about it.

My third question relates to something mentioned by the President of the Board of Trade: the work of the United Nations Verification Commission for Iraq. Two days ago, in New York, I met Ambassador Ekeus, the chairman of the commission. The commission has done some remarkably effective work, and has been able to compile a list of all the supplies that went to the Saddam Hessein regime—not just from this country, but from others—before the invasion of Kuwait.

The list contains some equipment from this country for which Ministers could not possibly be held responsible, because it did not go directly to munitions factories or other places that have been mentioned in newspapers. It went under the guise of hospital contracts, schools contracts and so forth. Nevertheless, the list is now in the Government's hands. I well understand why it must remain secret: it is essential to the commission's work that it can compare what it knows from its own findings with what the present Iraqi regime is willing to own up to. I want to know whether the Government will make the list available to Lord Justice Scott. That is a specific question requiring a specific answer. Unless Lord Justice Scott can see the details of all the supplies sent by this country and others, I do not see how he can carry out his task properly.

My fourth and last question on the terms of reference is this. I interrupted the President of the Board of Trade on this subject, and I hope that we were not talking at cross purposes. So far as I can make out, the guidelines were changed twice—or, at any rate, preparations were being made to change them on the second occasion. I was referring to the earlier occasion when the memorandum on guidelines was changed in December 1988–January 1989. The documents reveal that the then Minister of State, Foreign Office—the right hon. Member for Bristol, West (Mr. Waldegrave)—made it quite clear to his fellow Ministers in October 1989 that he was willing to make the change public and that he had been willing to make the change public at the time the change was made. The House is entitled to know why it was not told of the slackening of the guidelines and why the House was misled in the opposite direction.

As we all know, the guidelines were announced in 1985. They were changed in December 1988. Yet the House was told in December 1990 by the then Minister for Trade—the right hon. Member for Hove (Mr. Sainsbury), who is in his place now—the following. The hon. Member for Livingston (Mr. Cook) quoted only part of what he said; I shall give the quotation in full. This was in 1990, after the guidelines had been relaxed. In answer to Mr. Beaumont-Dark, then Member of Parliament for Birmingham, Selly Oak, the right hon. Gentleman said: The guidelines to which the hon. Member referred are clear. They were set out by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) on 29 October 1985, and since then they have been scrupulously and carefully followed in the issuing of licences. No other country has such a careful method for scrutinising applications for export licences and for controlling exports. Later in the same exchanges in the House, the right hon. Member for Hove said: I assure him that we continually review our procedures for controlling defence exports. The procedures are applied most scrupulously and carefully. As he will see from recent events, we have further reviewed and improved those procedures, and we are open to further suggestions about anything that can be done to make them even better than they are."—[Official Report, 3 December 1990; Vol. 182, c. 29–35.] The answers, I quote are important, because they relate to specific allegations concerning Matrix Churchill at a time when Customs and Excise had already started proceedings against the company and its directors. They amount to the Government's official response to Matrix Churchill and make it clear that the 1985 guidelines were upheld—and even, it was hinted to the House, strengthened—when in fact the reverse was the case.

Dr. Keith Hampson (Leeds, North-West)

It is only fair to refer to the whole record. I have before me what officials said to the Select Committee—that in December that year they did indeed substantially tighten the operational procedures whereby they scrutinised applications, at which point certain companies, including Sheffield Forgemasters objected to the new, tighter procedures. The officials also told the Committee that the guidelines were changed in December 1988. That was said to the hon. and learned Member for Fife, North-East (Mr. Campbell) who is sitting on the right hon. Gentleman's left.

Sir David Steel

Yes, that may have been correct in the Committee's proceedings. I accept that the procedures were being tightened up. What I am complaining about is that, even as late as 1990, Ministers were referring on the Floor of the House to the original 1985 guidelines. We were never told openly here what the changes were until recent events. That is the burden of my complaint.

The Prime Minister's answer to me has been widely quoted in the press, but not in its entirety. The House should listen again to this exchange. In January 1991 I asked the present Prime Minister this question: After the Gulf war, bearing in mind what was done after the Falklands war, will the Prime Minister consider setting up a high-level inquiry into the acquisition by Iraq of British arms and technology, including some from private companies, quangos and Government Departments, so that lessons may be learnt, and so that never again will our forces be faced with an enemy armed partly by ourselves? This was the Prime Minister's reply: There is a considerable degree of sensitivity about the supply of arms and equipment. As the right hon. Gentleman will know, for some considerable time we have not supplied arms to Iraq for precisely that reason."—[Official Report, 31 January 1991; Vol. 202, c. 1.102.] There is an elision, is there not, between "arms" and "arms and equipment" or "arms and technology"? Again the impression was being given at the highest level to the House that nothing of the kind had been going on for some time in relation to Iraq. The House was, I believe, consistently misled at every level by the Government.

There was an interdepartmental memorandum by a civil servant in October 1989 in preparation for one of the ministerial meetings. It was a memorandum to the Minister of State, Foreign Office, and it referred to the efforts being made by Alan Clark and Lord Trefgarne. It says: Their letters are full of special pleading (Lord Trefgarne's astonishing claim that Matrix Churchill is somehow separate from Iraqi arms procurement activities/Learfan can be exploded by showing him the nice diagram in the FT of 21 September which demonstrates the organic connection!) and the letter from Matrix has all the hallmarks of having been prompted by and drafted in co-operation with the DTI. That is a very serious allegation for one Department to make of another.

Another memorandum, this time from the Ministry of Defence in January 1988, argued: We have obtained intelligence … that the lathes are to go to set up munitions factories to produce missiles and shells in large quantities. Had this information been available at the time that the licence applications were considered, the MODWG would have advised the IDC that the military assessment was that the use of the lathes for this purpose would constitute a significant enhancement in Iraq's capability to prolong the confict with Iran. That, surely is an admission that equipment was being supplied which enhanced the capability and was therefore presumably in breach of the guidelines, wittingly or unwittingly.

Another memorandum from the Foreign Office—again I shall not name names—says: It is likely that had we known from the outset that the machine tools would be used to manufacture munitions we would have recommended that licences be refused. At present, the Iraqis import most of their shells from the Soviet Union. The Iraqi aim is to replace this supply with local manufacture. It is therefore arguable that Iraqi capability will not be significantly enhanced. That gives the game away. If one argues that, because Iraq intends to manufacture its own shells with equipment that we supply, it is therefore merely replacing Russian imports and its capability is not being enhanced, the guidelines are, of course, beautifully observed. That is why I believe that the terms of reference for the inquiry are nowhere near wide enough.

I intend no slur on Lord Justice Scott, who I understand to be a man of the highest integrity, but I do not understand how an inquiry into the Government's activities can be called genuinely independent when the terms of reference are laid down by the Government themselves. Why were the terms of reference not agreed with the Opposition parties? Had that been done, one would have had more confidence in the exercise in which we are engaged.

I turn from the inquiry itself to one of the other issues which ought to concern the House: the way in which information has been concealed from Parliament and from the public. My party and I, and other hon. Members, have long supported freedom of information legislation. I have not the slightest doubt that none of these activities would have gone on had we introduced the system which operates in the United States, under which the public can ask for papers after a certain amount of time has elapsed. I do not believe that these memoranda would have been flying around Whitehall if it had been known that, within five or 10 years, or whatever period the House decided was appropriate, they would be open to public scrutiny. They do not bear examination as they stand at the moment.

I do not want to weary the House with quotations, but I intend to quote briefly from four memoranda. One, dated January 1988, says: If it becomes public knowledge that the tools are to be used to make munitions, deliveries would have to stop at once … The companies should be urged to produce and ship as fast as they can. That was the advice that was given. Another memorandum states: Meanwhile MTTA companies should maintain a low profile. Press or public attention would make it more difficult to permit fulfilment of contracts. The then Secretary of State for Trade and Industry, Lord Ridley, has been quoted many times as talking of the dirty washing that would come out if the Customs and Excise case against Matrix Churchill were allowed to proceed. The final internal memorandum in 1988 stated: There seems to be considerable merit in keeping as quiet as possible about this politically sensitive issue. Merit for whom?

The case for the defence put by the President of the Board of Trade rested on the basis that, if we had not made these sales, others would have done so, and that the sales were in the interests of employment. That ignores a number of issues, such as what was happening to the Kurds at the time. The then Foreign Secretary, now Lord Howe, told the House: We have certainly been appalled by the suffering inflicted as a result of the large-scale displacement of Kurds from their homes in Iraq. We have proclaimed the evidence of chemical warfare use as compelling but not conclusive. It is clear that Iraq has a case to answer, and we have been in the forefront of pressing the case in respect of these barbaric issues."—[Official Report, 30 November 1988; Vol. 142, c.687.] We are now told by the President of the Board of Trade that pressing the case seemed to involve millions of pounds, worth of export credits and relaxing the guidelines. We must not forget why Ministers were reluctant to announce these changes or to let all this information come out. They knew what the public and parliamentary reaction would be to continuing supplies to Saddam Hussein's regime.

The Kurds suffered then, and they are suffering now. It is clear that Iraq has succeeded in one of its principal aims —to establish a home-based munitions industry. As a result, it has been able to rebuild many of the tanks that were lost in the Gulf war, which are now surrounding the Kurdish safe havens for which the Prime Minister fought so hard months ago.

It is a very sorry tale, but unhappily it is not a new one. In a speech that I made towards the end of the Falklands war, I spoke of Ministers referring to the islanders as being under the heel of the fascist junta. I said: it should be remembered that we were happily selling arms to that same Fascist junta not long ago. Morever, the Exocet missile, which has been frequently been referred to as a 'fire and forget' weapon might also be referred to as an 'export and forget' weapon." [Official Report, 13 May 1982; Vol. 23 c. 971.] In Argentina, and now in Iraq, we sold equipment for arms that were used against our own forces. We should consider that in the context of the world-wide sale of arms, because, after the end of the cold war, the world is spending £450 billion a year on arms, and 75 per cent. of conventional arms sales go to the developing world. On the streets of Maputo, it is possible to buy an AK-47 for $2. Our troops in Bosnia cannot have helicopter cover because of the existence of shoulder-launched missiles which have seeped through into former Yugoslavia from American supplies to Afghan rebels. The world is awash with arms.

Unless it becomes a central part of our foreign and defence police to get international co-operation to stop the arms trade, and ourselves to stop export credit guarantees for the supply of arms and equipment, to close down the arms sales agencies, and to use the defence-related work force for more sensible purposes, there will continue to be tragedies such as the invasion of Kuwait.

Mr. Andrew Mackinlay (Thurrock)

On a point of order, Madam Deputy Speaker. We are being invited to support the Government amendment, which welcomes the wide terms of reference which will enable Lord Justice Scott to examine all of the facts". That implies that all the documents will be available to Lord Justice Scott. Many hon. Members are deeply worried that documents held by Departments or firms which may have been involved in this matter will be lost or removed.

I understand the rules on written parliamentary questions being referred to other Ministers, but I tabled question 329 to the Attorney-General asking whether he would take measures to prevent the unauthorised removal, destruction of and tampering with all documents relating to the sale of arms and components to Iraq, held within Government Departments and elsewhere. It was passed—abandoned I think—by the Attorney-General to the Prime Minister.

That raises an important issue of whether the Attorney-General has been advising the House as an impartial Law Officer or as a Conservative politician defending the Prime Minister's hide. We require reassurance, first, on whether documents held by Departments and elsewhere are secure, safe and being held independently for Lord Justice Scott and, secondly. on whether the Attorney-General has been advising the House as an independent Law Officer or as a Conservative politician.

Madam Deputy Speaker (Dame Janet Fookes)

The accuracy or otherwise of the contents of an amendment is not a matter for the Chair. The switching of questions is not a matter for the Chair, and it cannot be responsible for the quality of answers.

6.36 pm

Dr. Keith Hampson (Leeds, North-West)

So much of today's debate, as with the press, has been taken out of context. The hype with which so-called disclosures have been released in the press and used by Opposition spokesmen is pretty close to disgraceful. I shall give a couple of examples. Four journalists wrote an exclusive in this Sunday's The Observer on the way in which the Iraqis tried to buy the Learfan factory. What surprising disclosure was that, when in September 1989 the same newspaper disclosed exactly the same story, written by Alan George? It has taken four reporters four years to rewrite the story, to which the only addition was a quotation by the ubiquitous hon. Member for Livingston (Mr. Cook).

In The Engineer of 26 October 1989, Mr. George again pieces together the Iraqi jigsaw puzzle. The entire Iraqi network across Europe for arms procurement is itemised, such as the fact that Matrix Churchill had been bought by Iraqi intelligence. On the Nick Ross radio programme last week, that journalist said that he had to put this information in a magazine as widely read as The Engineer because he could not interest any of the major national newspapers—The Observer, The Independent and The Guardian, which are now so fulsome in their condemnation —in the story.

Dates are scattered indiscriminately in newspaper stories—as they have been today. Most of the quotations that seem so damning are about official and ministerial meetings in 1989, 1990 and 1991, yet the war finished in October 1988. Of course, therefore, changes were made. Officials told the Select Committee on Trade and Industry that the third guideline was amended to take account of the ceasefire. Year in, year out, Opposition Members protest their concern about the decline in the manufacturing base in this country, so how can they say that Industry Ministers should take no interest in that?

Ms. Short

Two issues are at stake here: the first is whether the House has been misled; the other is whether Britain helped to build the monstrous regime of Saddam Hussein, which oppressed the Iraqi people, invaded Kuwait and then triggered a war. The hon. Gentleman has not dealt with whether Britain helped to cause the war.

Dr. Hampson

No one could claim that we helped cause the war, although of course we helped indirectly to arm Hussein.

Trade and Industry Ministers have a responsibility to assist British industry. The Committee had the evidence; companies were asking to be relieved of regulations and bureaucratic controls in what is, after all, an extraordinary market. In 1988, we sold £4 billion-worth of goods to markets in the middle east, importing only £1.3 billion from there. The middle east is a big market for everything, not just arms. In 1988, we sold Iraq goods worth £412 million and imported only £43 million-worth from Iraq. It is, as I say, big business. There was nothing to stop British companies selling goods to Iraq or Iran throughout the Iran-Iraq war. Throughout that time, there were trade fairs, to which British business men went. Ministers assisted them.

It might be argued that this was immoral, given the nature of the Iraqi regime. Some Opposition Members take that view of high principle—but Labour Governments never took it. No sensible person, I believe, would take that view. This country was seeking orders from around the world, against our major competitors, and many British manufacturing companies involved in those sales were facing great difficulty. In that context, the restrictions were severe, and after the ceasefire they were relaxed to help this country.,

Page XII of our report mentions, in the context of restrictions, the consistent refusal to supply any lethal equipment to either side, subject to the consideration that we should attempt to fulfil existing contracts and obligations. There is nothing there to say that we cannot sell arms to Iraq. So of course British suppliers could sell associated equipment, knobs for radar, and so on. Retrospectively, it is possible to point the finger and say that certain radar parts and tank spares were later turned against British soldiers, but that is hind with a vengeance. One cannot prophesy about this world. Existing contracts were maintained for perfectly understandable reasons, because companies needed the income and the jobs.

As the situation changed, so did the requirements. The key thing is that we never shipped or allowed to be shipped any "lethal" weaponary.

Mr. Richard Shepherd

I noticed my hon. Friend's caveat, but is he suggesting that the Customs and Excise prosecuted Matrix Churchill casually or frivolously?

Dr. Hampson

I will come to that point later—[HON. MEMBERS: "Answer it now."] I shall make my own speech in my own way. I readily concede that my hon. Friend has put his finger on a real point.

Which lethal weapons really mattered in all this? The Learfan project, involving missile technology, was stopped. The supergun tubes were stopped right across Europe. In country after country, the customs managed to stop all those parts. The Hawks did not go, either. It was a different story elsewhere, though. I hope that the German ambassador and others will forgive me for saying that Germany, which initiated the use of gas in modern warfare, was the country that supplied Saddam Hussein with his lethal gas capacity—

Mr. Benn

The hon. Gentleman is no doubt aware that the Royal Air Force used gas against Iraqi tribesmen in the 1920s. If he tells the story in its proper context, he must therefore admit that Britain has a heavy responsibility in this respect.

Dr. Hampson

The right hon. Gentleman's history is a little faulty: the first world war predated the 1920s.

The Condor II missile was a joint Austrian-German project, with heavy Swiss involvement. It had nothing to do with this country.

So other countries, notably the Germans, helped to produce the nastiest possible weaponry for Iraq. Opposition Members may disagree, but it is clear that we said that we would not deal in non-conventional weaponry but would scrutinise other contracts, case by case, as long as they involved conventional weaponry. That was certainly not in breach of the guidelines after the ceasefire of August 1988.

Mr. Peter Kilfoyle (Liverpool, Walton)

How would the hon. Gentleman define a power-control system used in missiles fired by an explosive charge? That sounds remarkably like a supergun to me. Is it conventional or non-conventional? The power control system came from a company in this country—in my constituency.

Dr. Hampson

I cannot answer that now, so I will not attempt to. The hon. Gentleman gave neither dates nor context. Opposition Members tend not to separate out the dates, and say whether incidents took place during the Iraqi war or after the ceasefire—

Mr. Kilfoyle

rose—

Dr. Hampson

No, the hon. Gentleman has had a good go—

Hon. Members

Answer.

Madam Deputy Speaker

Order.

Dr. Hampson

It is not my responsibility to answer, and I shall make my own speech. It seems to me that Opposition Members are slightly embarrassed when the facts are put in context. They do not put them in context, nor do they differentiate between the risks, case by case.

I should like to deal now with the point raised by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd). The House knows that I do not fall over backwards to support the Government's case. Indeed, the Select Committee was deeply concerned about a number of events. I should say first, however, that it is outrageous that Opposition spokesmen knew nothing about Lord Justice Scott. He is a fiercely independent-minded man and if they knew of his role in the "Spycatcher" case, they would not say what they have said.

I trust that this inquiry will look into the reasons why the Customs and Excise proceeded with the case. It seems extraordinary that, just because a business man is occasionally involved with British intelligence, it has become conventional to imagine that he can proceed to act illegally. To the Customs and Excise, this man was fraudulently filling in forms regarding the end use of the equipment that he was selling. I hope that the Scott inquiry will look into that, because it is important not to portray Mr. Henderson as a new form of James Bond. We need to know whether he was acting honourably and in the national interest all the time, or whether he was using his connections with the intelligence service to legitimise or excuse his otherwise illegal efforts to make money.

Mr. Alan Williams (Swansea, West)

Will the hon. Gentleman concede that, if, as we know, Ministers realised that these licences would be in breach of the rules but decided that they would be granted in order to secure the intelligence information, those Ministers were conspirators and partners to the crime?

Dr. Hampson

The right hon. Gentleman has clearly not scrutinised in even the most rudimentary way the flow of information that Opposition Members have released to the press. It is perfectly clear that Matrix Churchill had the contracts in 1987. before any such involvement. The company certainly had the contracts before my former colleague Alan Clark made his speech to the trade association representing the company. There appears to be another distortion in this area, that he was telling Mr. Henderson—nudge, nudge, wink, wink—"You fill it in improperly 'for peaceful purposes'." He did no such thing. He simply spoke to the trade association, and we must wait to see how that was interpreted.

We are entering the realms of myth and fantasy. Once the company was brought by the Iraqis, it immediately won contracts in October 1987. From what we have seen leaked in the papers, it seems that the Foreign Office Minister and other officials at the Ministry of Defence have said retrospectively that, if they had known in 1987 what was happening, they would not have allowed the contracts. However, as they had been allowed, and MI6 was involved with Mr. Henderson, as the letter from the Minister of State, Foreign and Commonwealth Office of September 1989 which appears in The Independent states, they regret that, but they must now protect their sources.

If we wait for the Scott inquiry to put those issues in context, we will begin to see that there may have been reasons why, in relation to that company, matters were allowed to drift, and why it may now seem to have been unfortunate. However, we cannot extrapolate from that particular case to the policy in general in the way that the Opposition have extrapolated.

Mr. Geoffrey Robinson

There is a great danger that the hon. Gentleman might leave the impression of impugning the integrity of Paul Henderson and the others who were acting for British intelligence. The hon. Gentleman does not know the facts; I probably do not know all the facts. I will be referring to some documents later, from which it is clear that, before the issue of export licences, MI6 knew what the machines were going to be used for and what category of shells was involved. Government Departments were also aware of that.

Dr. Hampson

I await the Scott inquiry, and I hope that it will examine that matter. It is all too easy for business men in a very murky world in that neck of the woods to claim that everything is excused because of connections with the intelligence services.

I want the Scott inquiry to consult the intelligence services and state clearly whether the intelligence services found Mr. Henderson reliable; whether he really was collaborating and on what sort of scale—[Interruption.] With respect, we have not seen that information. One member of the intelligence services made a statement in court, but I want the Scott inquiry to consider the full relationship with Mr. Henderson and discover what emerges.

I do not want to be bogged down on that. I have given way on many occasions, and many other hon. Members wish to speak. The role of the Customs and Excise is very important. When we examined that matter in the Select Committee, we were deeply disturbed. They are the only totally independent prosecuting authority in the country. Unlike the Crown prosecution service and the Serious Fraud Office, Customs and Excise are not accountable to Ministers, the Treasury or the Attorney-General.

Did Customs and Excise proceed in the Matrix Churchill case because of what happened in the supergun case? In that case, the Law Officers were consulted about whether it would be proper, as a matter of prosecution policy, to continue the prosecution in the light of advice from the senior Treasury counsel. They did not proceed.

In the Matrix Churchill case, did Customs and Excise go to the Attorney-General? They did not have to, because they are not accountable to him, and it looks as if they did not. If they did not, why did the Attorney-General still not stop the case? We have heard that it is possible under Customs and Excise legislation that the Director of Public Prosecutions may take over proceedings instituted by the Commissioners and withdraw them and may be directed by the Attorney-General to do so. It is important to know why Customs and Excise proceeded with the case. It is pretty obvious that they must have known that intelligence was involved. However, they still proceeded with the case. At what stage were Ministers aware of that? If they were aware, why did they not step in and stop the case?

Mr. Clark was quizzed on those matters by the Select Committee, in the context of the role of the intelligence services, and specifically about Matrix Churchill. He said that the case was sub judice, and that he could not comment on the latter.

However, when he was asked about the role of the intelligence services in relation to the supergun affair, he said that there was no question that, so far as he was aware, the intelligence services had used the companies to sell items to discover what was happening in the Iraqi military. When asked specifically whether he had asked his Department and whether he was convinced that that was the position, he said, "Correct." However, at another point, he said that he could not give an answer that would illuminate the activities of the intelligence services.

Therefore, we found ourselves in a trap. Mr. Clark may have been speaking for the intelligence services in the Ministry of Defence, but not for the intelligence services as a whole. In that area, we probably received rather disingenuous answers, or words that were very carefully and cautiously devised.

Arms dealing in the middle east is a particularly murky world. We heard about kickbacks of up to 25 per cent. of contracts. We know about the kind of people who arrange such things out there. Information about those very dubious and deceitful operations arrived in a Department manned by a handful of civil servants of pretty low rank.

The scale of the problem was staggering. In 1988, there were 57 staff in the Export Control Organisation, who handled 92,280 applications. They also handled the inquiries about the supergun case as people telephoned to ask for advice and guidance. The organisation had only just been set up. Many other operations had been brought together only the previous year under the one organisation, and there was huge responsibility on the shoulders of men of executive officer rank in the organisation. They had to make judgments and, at grade 7, they had to decide whether to pass the matter on to Ministers.

It is clear from the table in the Select Committee report that, because of the ceasefire, fewer cases were passed on to Ministers. At that time, the Export Control Organisation was primarily concerned with the cold war, the Warsaw pact and high-tee COCOM material. Iraq was not their primary consideration. It is very important to bear in mind the context and the personalities before one begins to imagine great conspiracy theories.

The Select Committee decided that, whatever the role of the intelligence services, there had been a cock-up in the way in which the supergun affair had been handled. We also concluded that, because of the way in which it had been handled, Ministers accepted that it had been handled wrongly and badly, and changes had to be made.

Mr. Doug Hoyle (Warrington, North)

I was not going to intervene on the hon. Gentleman, because I always listen to him with interest in the Select Committee. However, the cock-up theory belonged to the Conservative side of that Committee and not to the Labour side. He was not the only hon. Member to share those opinions.

Dr. Hampson

That simply proves that the Labour party will seek a conspiracy wherever it believes one might rest. From the very beginning, at least two Labour members of the Select Committee wanted to blame everything on the British Government and so camouflage and whitewash the British intelligence services. The rest of us looked at the matter more objectively and accepted that the intelligence services could be blamed in part. However, we also recognised what was happening in the Department.

However, as a result of the way in which the case was handled, changes were made. Alan Clark said that he was most unhappy with the situation that had transpired over the handling of the Astra side of the affair. There are questions about why he did not have his permanent secretary consider other activities in that area and at the contract stage, and therefore possibly stop the case. Nevertheless, such issues will emerge in the Scott inquiry.

At long last, computer systems were installed in the Department of Trade and Industry. The sensitive technologies division and the sensitive areas division were brought together. That had not been possible before. Applications involving Iraq and SRC were brought together so that those rather junior officials could make their judgments. We do not want to hide behind the Scott inquiry, but it is not acceptable for Opposition Members to build a great edifice of conspiracy and distortion.

6.58 pm

Mr. Gerald Kaufman (Manchester, Gorton)

The hon. Member for Leeds, North-West (Dr. Hampson) says that he wants some dates and that the context in relation to dates is important, so let me give him some dates. Let me give him the date of 25 February 1989. That is the date on which steel tubes bound for the supergun were flown from Manchester airport to Mosul, Iraq on an Iraqi plane, flight IA 14707—tubes sent with an export licence from the Government which went to form part of the supergun that was found after Saddam Hussein was defeated.

When I put it to the Prime Minister that that was a breach of the embargo, and I said in my letter to the Prime Minister of 31 January this year that the giant steel tubes intended for the Baby Babylon supergun were on an Iraqi air force Ilyushin 76 cargo plane, the only correction that the Prime Minister made was that it was not an Iraqi air force plance, but an Iraqi Airways plane. The Prime Minister acknowledged that, with the knowledge of the Government, because export licences had had to be granted by the very—

Dr. Hampson

Will the right hon. Gentleman give way?

Mr. Kaufman

I am not giving way immediately to the hon. Gentleman. He spoke for a very long time, and I am now going to make my speech.

Dr. Hampson

rose—

Madam Deputy Speaker

Order. The House knows the rule that, if the person who has the floor does not give way, other hon. Members must resume their seats.

Mr. Kaufman

It is not a reflection on the hon. Gentleman, it is a clear statement of the fact that the Prime Minister acknowledged to me in a letter dated 17 February this year that the Government knew that parts of the supergun were exported from Ringway airport in Manchester on 25 February 1989, and yet the Foreign Secretary has written me a letter only today in which he said that they did not learn of the involvement of British companies in supplying tubes for the Iraqi long-range or supergun project until 30 March 1990; yet a year previously the Government had licensed the export from Manchester of parts of that supergun.

I will give the hon. Gentleman another date. I will give the hon. Gentleman the date of April 1988, on which information was provided by an informant to MI5 of the nature of the supergun. That information was passed from MI5 to MI6, and MI6 circulated that information to the Foreign Secretary, so that the Foreign Secretary had it two years before he says in two letters to me that he first learned about the British participation in the supergun.

The hon. Gentleman has disgracefully traduced Mr. Paul Henderson: Customs and Excise withdrew the prosecution against Mr. Henderson, yet the hon. Gentleman is smearing Mr. Henderson's name on the Floor of the House when he has no defence whatever. Mr. Paul Henderson gave information in October 1989 about the supergun directly to MI6, and MI6 then directly passed that information to the Foreign Secretary, as it was obliged to do, because the Foreign Secretary is the Minister in charge of MI6.

I will give the hon. Gentleman another date, since he wants dates. I will give him August 1988, when the present Prime Minister was Foreign Secretary. Information was given by Mr. Henderson about project 1728, a plant stocked with British machine tools to modify the Scud missiles which, in the Gulf war, were fired at Israel, at Saudi Arabia and at Bahrain as well. That is another date.

Those facts were available to the Government, and they show that the Government were lying to Parliament when they told Parliament that they were not aware of the way in which those matters were being conducted.

Dr. Hampson

Will the right hon. Gentleman give way?

Mr. Kaufman

I will proceed a little further before I do so.

What we heard this afternoon from the Secretary of State for Trade and Industry was greatly inflated rhetoric, which did not even work with his own side, and a minimum of fact. What was interesting, though, was that, when he was questioned by my right hon. Friend the Member for Islwyn (Mr. Kinnock) and others about why he signed the certificates of immunity, he said that he signed them only after he had assured himself that they could nevertheless be available to the court at the discretion of the judge.

By that, the right hon. Gentleman was saying that he had the right to decide whether or not to sign them. He said very honourably—his role in this matter has been far more honourable than that of any other member of the Government—that he would not have signed them if he had believed that the men on trial would not receive a fair trial. Therefore, he was saying that he need not have signed them. Therefore, all the stories that have been put about by the Government that it was Ministers' duty to sign them is nonsense, because Ministers have a right to decide whether to or not, and the Secretary of State, very understandably and creditably, agonised before signing them.

But I go further than that. The Secretary of State for Trade and Industry knew, if anybody did, how the advice of the Law Officer could be misused, because the advice of the Law Officer was used against him on the Westland affair. Therefore, he should have been the last person to trust the advice of the Attorney-General. I shall return to that matter.

Although the Secretary of State was the victim of Westland, it has to be said that the Westland scandal, although serious, went no further than the fate of one helicopter company. This scandal is worse than Westland. This scandal also is worse than Watergate. After all, Watergate was about a cover-up to prevent Nixon, Haldeman and Erlichman from going to gaol. Crooks though they were, they did not try to send innocent men to gaol in their places: they simply tried to avoid incarceration themselves.

The Secretary of State says that he was worried—I accept that he was—about the immunity certificates, and that he took a lot of trouble before he signed them. The Home Secretary said that he did not know what was in the documents, because he did not read them. The Home Secretary did not read those documents, he did not read the Maastricht treaty, and he does not read, so he tells us, the crime reports in the newspapers, which one would have thought would be of great interest to him as Home Secretary. It is difficult to know how the Home Secretary spends his time, since Ronnie Scott's is not open 24 hours a day.

This episode is comparable with the Iran Contra affair in the United States, in terms of arming a dangerous person. Yet, even in the Iran Contra affair, Ronald Reagan could at least offer the excuse that he was trying to secure the release of United States hostages, which is an honourable objective, even if the means employed were far from honourable. But this Government have no excuse at all for a cynical operation aimed at arming a dictator, who, moreover, had British citizens illegally imprisoned in his gaols in Baghdad while the British Government were helping to arm him, and the British taxpayer was making the arms a free gift to him through unrequited export credits.

Dr. Hampson

I am very grateful to the right hon. Gentleman for giving way, because he cited the material which we looked at in the Select Committee, and he got it wrong. There is no evidence that the Government knew about the participation, to use the right hon. Gentleman's word, in project Babylon, even though the Government knew about the existence of the supergun project from intelligence sources in September 1989—not from Mr. Henderson but from other sources, as we said in our report.

Regarding the flight, the reason the tubes flew out from Manchester and from other ports was not because they were given a licence, as the right hon. Gentleman should know; it was determined by the officials concerned that they did not need a licence because they were claiming that they were for the petrochemical industry—they were camouflaging the intent.

Mr. Kaufman

It is curious that the hon. Member should lend his authority to that explanation, as the Prime Minister does not. I wrote to the Prime Minister on 30 January saying: The giant steel tubes intended for the Baby Babylon supergun were flown from Manchester airport to Mosul Iraq on an Iraqi air force Ilyushin 76 cargo plane flight IA14707 on 25th February 1989. Instead of offering all the complications that the hon. Gentleman offered me, the Prime Minister merely denied that it was an Iraqi air force plane, and said that it was an Iraqi Airways plane. Otherwise, he accepted everything that I had written to him.

The Government are trying to turn Alan Clark into the fall guy for this affair, and he is not the fall guy. They are—

Madam Deputy Speaker

Order. I am afraid that the 10-minute rule hits even Privy Councillors.

7.10 pm

Mr. Rupert Allason (Torbay)

I shall leave issues involved in the Howe guidelines and the sale of dual purpose equipment to the judgment of Justice Scott. I have full confidence in him. Having read his judgments during the Peter Wright affair, no one could accept the view of the hon. Member for Livingston (Mr. Cook), who impugned his reputation. I was surprised and disappointed by the hon. Gentleman, because he did not seem to have much grasp of the Official Secrets Act 1911 or the Public Records Acts. If he believes that those documents will ever be released—even after 30 years, as he said—I am afraid that he is in for a disappointment.

Two central issues can be discussed without preempting Lord Justice Scott's verdict. The first is the protection of sources. On analysis, the Matrix Churchill fiasco boils down to that issue. The protection of sources is enormously important to the security and intelligence services. It does not exist for the convenience of Ministers and officials—it is to protect people who often risk their lives, and certainly break confidences, by supplying to the appropriate authorities information that they regard as being in the national interest. It is up to the security and intelligence services to make that judgment.

Some agents have been working to their own agenda when supplying information. We know that that was the case with the Littlejohn brothers, for example, because they had been supplying information on the provisional IRA to the secret intelligence services, but those services expressed astonishment when the brothers said that MI6 had allowed them to rob banks. That turned out to be completely bogus.

There is always a danger that security and intelligence sources may not be supervised and that they may be manipulating their case officers. A recent example was Brian Nelson in Northern Ireland, who supplied information which saved many dozens of lives in that troubled Province. However, we also know that he masterminded sectarian murders and took advantage of military intelligence.

With Matrix Churchill, it was not a case of protection of sources, because Paul Henderson was keen to disclose that he had been an informant for the security service and we know from the prosecution case—from witness B, who was an officer of the security service—that he had supplied that information. So the crucial issue of protection of sources is not strictly relevant in that case. The public interest immunity certificates and how they came to be signed—who gave the advice that four certificates should be signed in one criminal prosecution, and the advice given to Ministers at the time—are relevant.

The House is entitled to ask how public interest immunity certificates work. We have heard one version from the Secretary of State, who simply said that he has a duty to decide whether the interests of security or of advice to Ministers are involved. He said that it is a black and white issue: if the documents before him cover those topics, he has a duty to sign. The Secretary of State said that he received that advice from the Attorney-General. We know that the latter has a particular view of public interest immunity certificates, because he wrote a letter to The Times to explain that it was a type of application to the judge, and that it was up to the judge to decide whether to accept the advice given in the certificate.

I am bound to tell the House that that is not my experience of how public interest certificates work. My right hon. Friend the present Foreign Secretary signed such a certificate against me on 10 September 1989, to prevent two important witnesses from giving evidence at an imminent trial. It will help the House if I describe what took place, as it undermines the proposition that a certificate is some sort of application to the judge. In my experience, that simply is not so. Lord Justice Smedley was certainly courageous, but he may well have been unique in challenging such a certificate.

I shall explain briefly what happened in that case. In June 1989 I served a subpoena on two former secret intelligence service officers, whose names are well known and have been published many times. I sought them to give evidence in a case against a proven perjurer. The Foreign Secretary did not sign a public interest immunity certificate to prevent them from giving evidence until September 1989. I have a particular interest in that episode, but the House will be interested to know the judgment in that case because I had the temerity to challenge what the then Home Secretary stated in his certificate.

The judge was not a complete novice in matters of national security. By a strange coincidence—it was no more than that—he is the son of a former Home Secretary and the brother of a Secretary of State then and of one today. The judge said: On the hearing of the summons there were put before me an affidavit by Mrs. Susan Elizabeth Marsh of the Attorney-General's Department, an affidavit by Mr. David Brummell, an Assistant Treasury Solicitor on behalf of the Attorney-General and two affidavits sworn by … the Second Defendant's solicitor. Mrs. Marsh's affidavit exhibited a copy of a certificate made by the Rt. Hon. Douglas Hurd MP, Secretary of State for the Home Department, on the 10th September, 1989. I was not given a sight of any documents at all relating to this matter before the hearing started on the 13th September and, for very obvious reasons, I am obliged to prepare and deliver this judgment at haste less than 24 hours later after rearranging my vacation list … The reasons why the matter had to be brought before the Court in such a rush nearly two-and-a-half months after the subpoenas were served were not explained to me. This is not a very satisfactory way of conducting a judicial hearing and of doing justice in such an important matter". It seems to me that, on that occasion, the judge was not shown any documents relating to the certificate. He went on to make a few more apposite remarks concerning ministerial certificates, when he said: For the purposes of argument it was accepted by Counsel without overdue citation of authority"— because there is no overdue authority in these matters— that in a case of this kind the Court has to balance the public interest in the fair administration of justice and the public interest in the effective operation of the security services; and that although the Court should pay very serious regard to the contents of a certificate signed by the responsible Secretary of State, in the last resort, the Court has a residual power to override his objection if satisfied that the grounds relied on by him are insufficient or misconceived or that there are no reasonable grounds for apprehending danger to the public interest"—

Madam Deputy Speaker

Order.

7.20 pm

Dr. John Gilbert (Dudley, East)

I shall start by citing a couple of general principles from which the Government might take some comfort, but I do not believe that they will take much comfort from the rest of my speech.

It is clear to me that, where intelligence matters are concerned, it is perfectly natural that Ministers carry out policies and commit actions that they disguise from their own electorate. That has always been the case in this country and in any other democracy, and it always will be. In my judgment, the public fully understand and appreciate the need for that. It follows from that—again in terms of general principle—that when those policies, which are, from time to time, covert, have to be changed, the implementation of those changes will be carried out clandestinely.

It is deplorable, of course, if our troops are killed or wounded by armaments manufactured here. We all know that that is an unpleasant and inevitable consequence of the international arms trade, which has continued over the centuries. It was not so long ago that the Russians were our great allies, but then they became the unspeakable tools of a dictatorship. Precisely the reverse metamorphosis was undergone by the Germans. It is a question of judgment rather than any great matter of principle as to whom countries sell armaments.

The President of the Board of Trade was right to say —it was about the only thing with which I agreed—that the Labour Government tried to sell frigates to Argentina. At that time, I was the Minister responsible and I want that to be put on the public record. We were not very successful in doing so, but it is true that the Foreign Office and other Departments were perfectly agreeable to attempts to sell arms to Argentina. Those attempts were more successful under a successor Government.

I do not happen to believe that the issues to which I have drawn attention are the germ of the accusation against the Government today. On ministerial knowledge, I am perfectly prepared to accept an assurance from the Prime Minister that he did not know of the correspondence between his junior Ministers when he was at the Foreign Office. After all, it is the responsibility of a Minister's private office to decide what gets into a ministerial box. Heads of Department need not, and should not, know about all the correspondence of his or her junior Ministers.

I cannot get very excited about those matters when viewed in terms of general principle, but when it comes to the inquiry, there may well be some matters to which I am not privy that will be damning of the Government.

The nub of the matter is contained in the penultimate sentence of the Opposition motion, which calls on the House to deplore the willingness of Her Majesty's Government to see citizens put on trial for exports at which Ministers had connived and to put their liberty at risk Junior Ministers did not initiate the Customs and Excise prosecution, because, as the hon. Member for Leeds, North-West (Dr. Hampson) said, it has independent rights in such matters. Junior Ministers would not have known that Customs and Excise was about to initiate a prosecution. They certainly did not authorise any trial and they did not have any power to stop one. But they need not have held their tongues. They knew what was going on when the prosecution process started and the men finally appeared in the dock.

The junior Ministers knew of the initiation of the prosecution, and I want to know which of them, if any, told, their departmental head. Which of them wrote to the Prime Minister? Which of them got in touch with Customs and Excise and said, "You must not do this because we are involved in what these men have been doing"? Did any of them report to their senior political colleagues to tell them what was going on and the extent to which they knew that those men had carried out Government policies?

Mr. John Morris (Aberavon)

Did they tell the Attorney-General?

Dr. Gilbert

My right hon. and learned Friend makes a helpful addition to my list of questions.

The plain fact is that three men were put at risk, first as to their liberty; secondly, as to their reputation—I wish that the Minister of State for Defence Procurement would wipe the smile off his face; this is not a funny matter—and thirdly, because of the probable great financial cost to themselves, to say nothing of the stress and worry to their families. The trial proceeded unimpeded until the judge learned what some Ministers had known all along. The prosecution then collapsed in ignominy.

In one of the less worthy passages of his speech, the President of the Board of Trade made the jibe that the Labour party had been out of government for a long time. One does not need to have been a Minister to know how a Minister should behave. One does not need to be a Member of this House to know the difference between honourable and dishonourable conduct. The British public are perfectly capable of distinguishing what is honourable conduct. I believe that they are now waiting impatiently for the resignations of the Ministers who connived at and, even worse, were complicitous in the activities of the men put on trial, and remained silent as they went to trial.

7.27 pm

Sir Giles Shaw (Pudsey)

I recognise the importance of what the right hon. Member for Dudley, East (Dr. Gilbert) has said. Few other speeches would make such a contribution, which underlined the need for the full-ranging kind of inquiry to which the Government are now committed.

The fact that the inquiry is under way makes it extraordinarily odd that the Opposition, in the person of the hon. Member for Livingston (Mr. Cook), decided to launch an extraordinary tirade of allegations, theories, fantasies, hypotheses and hyperbole. I do not mind what one calls it; it all adds up to hysteria.

I accept, however, that, as the right hon. Member for Dudley, East has said, there is a need for facts, proof, evidence, analysis and assessment. With any luck, that might lead to a few answers, which might lead to history. There is no great gap between hysteria and history, but it makes all the difference in the world as to how the House should comport itself in the light of current events.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) asked a number of questions about the scope of the inquiry. In relation to one part of the speech of the right hon. Member for Dudley, East, I willingly quote from the terms of reference of the Scott inquiry: to examine and report on decisions taken by the prosecuting authority and by those signing public interest immunity certificates in Regina v Henderson and any other similar matters he considers relevant to the issues of the inquiry'. The points that the right hon. Gentleman has made are well within that definition of the terms of reference.

On the width of the terms of reference, I hope that my right hon. Friend the Secretary of State will disabuse me if I am wrong in saying that, if Lord Justice Scott finds his powers to be insufficient, he can ask for more and will be granted more or, if he wishes to alter the basis of the inquiry, the Government will agree to that change. That was the inference which the right hon. Member for Tweeddale, Ettrick and Lauderdale sought to draw, and I should be grateful if my right hon. Friend would deal with that when he winds up the debate.

I make those points purely to emphasise the wide-ranging nature of the motion, the inadequacy of seeking to speculate before the inquiry takes place, and the prospect that the inquiry will be the major determinant of the facts—the analysis, assessment and answers to the issues before us.

We are discussing trade, exports and armaments. As the right hon. Member for Dudley, East said, the armaments trade is known to have a difficult character, to put it mildly, but it also has two important features. First, from that trade—from the preparation, research and development of military hardware—comes a huge civilian spin-off that is crucial to many other aspects of modern economic life. It is probably one of the most profound spin-offs, whether it is in radio, communications or other areas.

Secondly, although we have been discussing high-powered weaponry, low-powered defence is also at stake. Some of my constituents grind valves for German companies that may be among those supplying military equipment containing those valves. Others make moulds for various forms of equipment, not knowing where they might ultimately end up, or bend high-tensile wire into certain configurations, not all of which will be intended for the domestic market but may also be exported to other countries. Moreover, many of my constituents who work in the textile industry may have supplied military uniforms for all kinds of regimes.

Those matters are not of the significant character with which the House is concerned today but, nevertheless, they represent huge elements of the defence and armaments industry and much important employment to most of our constituents, wherever we represent. The House should therefore not write short the importance of the defence industry in relation to our constituents and our economy.

Foreign policy and trade policy have nearly always gone hand in hand. There has always been a close association—it has been even closer recently—between foreign policy initiatives and commercial and trade initiatives. It is essential that that happens, because we require an evolutionary economy, access to markets and the development of spin-offs. What may have been a trade mission must be allowed to turn into a mission of wider application for the purchase and sale of equipment and/or services.

As the right hon. Member for Dudley, East said, in all those endeavours one cannot decide that one is picking a friend for life. One has no right to assume that a country to whom one is selling goods this year will still be worth exporting to a year hence, whether it concerns geopolitical movement, collapsing eonomies or changes of regime. Let us face it: we supplied the Shah with virtually his entire army and felt that it was a rational proposition for stability of the middle east. We must never assume that times might change. It is therefore a matter of pertinence and care that trade arrangements must be made.

The role of junior Ministers has to some extent been impugned in the continuing discussions. As someone who has served in the engine room of government in five different Departments, I am glad that some initiative is occasionally allowed to those of lower ranks. It seems right and proper that lower-level Ministers should be able to take decisions. We are not picked to fail to use our own initiative and acumen.

The issue that the hon. Member for Livingston raised was to try to attack and impugn the Prime Minister, but he did not succeed in doing so. Happily, it will not happen when Lord Justice Scott's inquiry reports, which I trust he will do as speedily as possible.

7.34 pm

Mr. Tony Benn (Chesterfield)

We are discussing whether the House agrees with the policy pursued by the Government. The matter has become so complex that we have forgotten that we are discussing whether the Government were right to have such guidelines on arms to Iraq. Were those guidelines implemented? Did Ministers speak the truth? Was it right to agree to prosecute three people?

The case is straightforward and, as I listen to the debate, what comes out of it is the fact that it is nothing to do with a judge. Lord Justice Scott cannot assess whether it was right to put an embargo on Iraq, to make the embargo flexible or to prosecute three people concerned. The matter is political, not legal.

On whether Ministers spoke the truth, all that I can say is that, having had 11 years of ministerial experience, for many of which I was responsible for supervising the COCOM restrictions as Minister of Technology and as Industry Secretary, I know that Ministers are kept informed. Every incoming Minister is given a thick brief called "a brief for an incoming Minister", which reviews the Department's policy.

Every Minister who meets a Foreign Minister, as the Prime Minister met Tariq Aziz—Tariq Aziz referred to that meeting when I met him in Baghdad—would have a full brief describing every aspect of relations between Britain and that country. Every Minister goes home at night with red boxes full of letters written by every junior Minister to every other junior Minister about everything under the sun, Cabinet Committee minutes, security reports and ambassadors' telegrams. Furthermore, all decisions about the supply of arms are taken at the highest level by Cabinet Ministers.

Therefore, given the importance of Iraq, which was, after all, of major strategic importance, having always been in the British sphere of influence as one of the world's great oil suppliers, I find it hard to believe that a Minister who held any of those offices, let alone the Prime Minister, did not know, did not bother to ask, was not told and was not interested enough to ask. It is a matter not of honour but of policy.

To have a judge look at that matter is absolutely improper because it takes away Ministers' accountability to the House of Commons and hands it to a judge whom we cannot allow the House to see. That is why I made an issue of the fact that, when a Minister quotes from a Government document, that document should be laid in the House. The Deputy Speaker said that Cabinet papers were not state papers. They are state papers, and if the House gives up its right to hold Ministers accountable, we might as well go home.

Dr. John Reid (Motherwell, North)

Would it help my right hon. Friend if I tell him exactly what the Speaker said, because I took note of it at the time? She did not refer to state papers but said that when an Opposition Member or any Back-Bench Member refers to an official document, they do not have to lay it on the Table as a Minister must.

Mr. Benn

I am grateful to my hon. Friend, but I recall the words that were used and shall return to the matter.

I noticed that the President of the Board of Trade was shielding himself behind three lawyers. He said that he had to sign the certificate of public immunity because the Attorney-General told him to do so. He said that he knew that it would have no effect because the judge would have to decide and that, in any case, the whole matter would be decided by Lord Justice Scott.

This is an evasion of ministerial responsibility on a matter of public policy. We have discussed the conduct of Ministers so much that we have forgotten that the story is part of an unhappy record of British relations in the middle east, which my hon. Friend the Member for Linlithgow (Mr. Dalyell) will raise again on Friday. Iraq was part of the world which we took over when the Ottoman empire disappeared. Britain bombed Iraq with chemical weapons in the 1920s and a few months ago the Queen Mother unveiled a statue to the man who did it—Air Chief Marshal Sir Arthur Harris, known as Bomber Harris. He was the squadron leader who used chemical weapons against Iraq.

We planned to occupy Kuwait in 1958—it all came out in the official papers—when Selwyn Lloyd wrote to Foster Dulles stating that we might take over Kuwait as a Crown colony. The double standards of British policy in the middle east will be noticed by anyone in the Arab world who reads the report of today's debate. We did not take the same view as we took about Kuwait when Turkey invaded Cyprus or when the occupied territories were taken over by Israel.

Considered in the light of what we now know, the Gulf war is seen to be a war for profit, oil and control of the region. Now we are suddenly told that the Ministers, who so vigorously protested their defence of democracy and human rights, were selling weapons to Sadam Hussein who was represssing Kurds and Shi'ites before and after the war. Those Ministers then said that it was merely a matter of flexible guidelines.

Some 200,000 Iraqis were killed last year by forces including our own. Some 150,000 Iraqi children aged under five were expected to die by the Harvard medical team who studied the bombing of the water supply by British, American and French bombers. It is an act of odious hypocrisy then to say, as hon. Members have said, that our industry needs the orders and people want the jobs. The House may remember the joke about the man producing nuclear weapons in America. Somebody asked him, "How can you do it?" He replied, "A man has got to live." That is the argument being used to justify the supply of weapons.

I am glad that the former leader of the Liberal party the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) mentioned the arms trade, which is what matters for the future. I am grateful to the Committee Against the Arms Trade, of which I have long been a supporter, for providing me with information, some of which has been quoted.

The international arms trade is a greater threat to world peace than the AIDS epidemic or the drugs trade, because it is supported by Governments. It props up dictators such as the Shah, Batista, Marcos, Papa Doc and Pinochet, who received the weapons to crush their own people. They did so in the interests of keeping down their people so that multinationals could make a profit for the super-powers that sold them the weapons. The fact that such people have bought those weapons then leads them into trouble with the International Monetary Fund, which tells them to cut their social budget as they must pay the debt owed on the arms that were bought to keep down their own people.

There is a tremendous waste of skill. Some of the most brilliant scientists and engineers in the world are working on methods of death instead of means of life. Billions of pounds are wasted on weapons, when they could have been used to save life. A heavy responsibility rests on everyone who promotes the international arms trade—I know that all Governments have done so to some extent. There have been 134 wars since 1945, in which millions of people have died and in which the weapons used were often supplied by the super-powers. Millions more people died because they were denied the resources that were wasted in the arms programme. Every arms programme and every arms sale plants the seeds of a new war.

What should the House do about the problem? Ministers will not tell the House the truth about the matter. Everyone knows—it has been mentioned—that Ministers use secret intelligence. Ministers are prepared to sacrifice intelligence agents to conceal the truth. I wonder whether Farzad Bazoft was such a victim, as it is not all certain that he would not have been repudiated, like the man who was recently put on trial.

The House should deal with the issue by Select Committee. Oliver North was sent before a congressional committee and grilled for weeks about Watergate. When Peter Wright wrote a book saying that he had committed treason, millions of pounds were spent by the Government to prevent the book from getting into the hands of the British people.

We are discussing the capitulation of the legislature as it fails even to want to make the Executive accountable and is happy to pass the matter to a judge. We shall all have to wait two years, by which time the people will have forgotten what the inquiry was about and the Ministers responsible will have gone to the House of Lords, and that will be the end of the matter.

We should not pass the matter over to Lord Justice Scott. I have no knowledge of his work and he may be a distinguished man, but the House should take responsibility. The House would do well to get away from trying to find scapegoats. The central questions are: who should be allowed to buy weapons? Who controls them? Who knows what happens? Who tells the truth? Does the House take responsibility for holding the Government accountable or does it shuffle off the responsibility as it has on so many other issues, to a commission, an agency or a High Court judge? If we take the latter course, we shall be burying the House as an historic defender of the rights of those we represent, some of whom were sent to fight in Iraq against an army that we had armed.

7.45 pm

Mr. Richard Shepherd (Aldridge-Brownhills)

I am interested in the remarks of the right hon. Member for Chesterfield (Mr. Benn), if only because I am not sure that I share his conclusion on the nature of the inquiry. I agree with the Prime Minister and with every hon. Member who believes that we are discussing a fundamental issue which goes to the heart of our liberty. Three business men were put on trial, and there remains a suspicion in people's minds that those men were on trial while Ministers—who knew facts which were not readily available to the court and who tried to prevent the defence from knowing—were in some way conspiratorial.

Those events beg a question which I cannot get out of my mind. I asked my hon. Friend the Member for Leeds. North-West (Dr. Hampson) whether he thought that the trial had been capricious, and whether the Customs and Excise had brought it casually. I do not believe that the Customs and Excise did so. I think that it had reasons to suppose that the defendants had committed an offence.

The defence maintained that their clients acted in collusion with Ministers of the Crown, albeit junior ones. If the conviction had been successful, would Ministers and civil servants who were party to the attempt have been standing trial? I agree with my right hon. Friend the Prime Minister that it is essential that the matter is disposed of properly, effectively and with the widest possible remit. The judge will consider all the issues. I noticed that my right hon. Friend the Prime Minister said that he will agree to further and wider terms if necessary. I shall let the matter rest there, as I believe that the House and the nation will make a judgment and we shall learn the truth. The displays earlier today demonstrated some of the reasons for my belief.

I am deeply worried about one aspect of the affair, and I agree with the right hon. Member for Chesterfield that there is a suggestion that Ministers are not accountable for the certificates that they sign. It is interesting to look at the certificates. I raised the matter with my right hon. Friend the Secretary of State for Trade and Industry—the President of the Board of Trade—who had carefully crafted his certificate. His words make it clear that he was advised to take certain action. His certificate is undoubtedly the most carefully crafted of them all. It states: it is my duty to assert the public interest grounds why such documents ought to be immune from production". The Attorney-General saw in that the lacework of the judgments of judges, and captured a little of what is at the heart of the matter: Crown or royal prerogative and the assertion that Government business is secret from the House and from the courts of law. Until 23 years ago, that claim was absolute. I cheer the judges for having diminished the absoluteness of what was an almost imperial claim on behalf of royal prerogative.

I shall go further and state that I accept what the court has done and understand the reasoning of my right hon. and learned Friend the Attorney-General. However, Ministers are not the plaything of the court, but responsible and accountable to the House of Commons. It is not a question of whether it is my duty to assert the public interest". My right hon. Friend the Secretary of State for Defence has a little expertise in such matters—it was his Department which mounted the prosecution against Clive Ponting. In pursuit of the prosecution there was released into the public domain what were then referred to as the Crown jewels. That raises the suspicion that the documents were available to that court without exercising the terms of the certificate—the duty to assert the public interest grounds. There is a contradiction already. No wonder the certificate is crafted.

One claim that is made in the certificate of my right hon. Friend the Minister of State, Foreign and Commonwealth Office is based on national security. It is a solemn claim to make to any judge. We know that from experience with the "Spycatcher" case and experience in the United States. No judge in our sort of common law society will act casually in response to a claim for Crown immunity. It is something that is treated with the utmost seriousness. In some instances, it is treated so seriously that there is not even a preparedness to examine the facts behind the claim. It is the duty of the Minister to accept accountability. I am returning all the time to the fact that no Minister can escape responsibility for his or her assertion that information or material should not come before the courts.

We are talking about the most solemn duties of the House and of Ministers who are Members of it, which are to protect the freedom and reputation of our fellow citizens. If, following an assertion by Ministers—one so blanket and so grand—the courts decide in deference to them not to examine documents properly, our freedom is lost. We are talking of Ministers who are charged by the House and the nation to have a regard for the national interest. Against that background, we must insist that my right hon. and learned Friend the Attorney-General, while engaging in the necessary lacework and intricate judgments and the cautious edging forward of the courts to try to redress the claims of past years of absolute duty, must focus on the first line of the defence of our liberties, which is that Ministers should exercise these responsibilities correctly.

That is why we must challenge the advice of my right hon. and learned Friend the Attorney-General. We must challenge the way in which Ministers sign as a matter of duty. After all, duty does not permit of discretion. That is wrong. That is wrong for Ministers who are elected Members of the House. They are responsible, and when they sign they must assert that responsibility.

Secrecy has been claimed by my right hon. Friend the Minister of State, Foreign and Commonwealth Office. It seems to be said that every detail of government bears upon government and therefore must lead to a certificate of immunity. We are told that that amounts to duty, but it is a corruption of our process. Ours is a free and open system of government and the case that is before us provides the most powerful argument that we have had in years for freedom of information. The presumption must be that the business of government is available to the people of the United Kingdom and their representatives on the Floor of the House.

If we do not know what the Government are doing, we cannot defend our liberties and those of our constituents. That is absolute. Judge Brandeis of the United States once said that sunshine is the greatest antiseptic. I say that because there is a great scab somewhere that we know smells wrong. I argue that it is in the interests of my right hon. Friend the Prime Minister that we start opening up our processes.

It is in the interests of the Government that they examine what went wrong. There are Ministers who are still in office—some at high level—who were aware of the circumstances. They knew and know how men came to be led into the dock while they were party to the relevant judgments. Their conscience and duty to the House dictates a course of action. My right hon. Friend the Prime Minister should insist that it be followed. That applies also to their official advisers who were prepared to connive with them, if that is the charge and it is proven—that of trying to pervert this country's declared policy.

7.54 pm

Mr. David Marshall (Glasgow, Shettleston)

It is significant that we are debating these matters on an Opposition Supply day and not on the initiative of the Government, who must have felt that by setting up a judicial inquiry under Lord Justice Scott they would avoid the full scrutiny of the House. I endorse the comments of my right hon. Friend the Member for Chesterfield (Mr. Benn).

I believe that the debate would not have taken place had it not been for the persistence of some investigative journalists, of newspapers and of other sections of the media in constantly highlighting various aspects of the sordid detail which lies behind the matters that we are discussing. On this occasion they deserve the gratitude of the House and of the British public.

I wish to raise the involvement of Allivane International and Allivane International Group Ltd. in the export of arms to both Iraq and Iran. There is an important distinction in the names of the two companies which will become obvious. I wish to highlight the case of one of my constituents, Mr. Frank Machon, and his company, Polmadie Storage and Packaging Ltd. of Glasgow.

Mr. Machon is not some fly-by-night, get-rich-quick person seeking to make a fast buck at someone else's expense. He is extremely hard-working. In 1988, he was contracted by Allivane to move 1,000 tonnes of fuses and high explosives between Allivane's factories in Glenrothes and Cumbernauld and the royal ordnance factory at Bishopton, and even to the Brocks factory at Sanquhar, Dumfrieshire. The final destination of those lethal weapons of war was supposed to be Saudi Arabia. The job took 17 weeks, and Mr. Machon's lorries were running 24 hours a day.

Allivane's contract was worth $17 million, but it could not cope with it. The Ministry of Defence was involved in looking after everything and it was desperate not to upset the Saudis. This led to several matters of great public concern taking place involving the police, the special branch and Army logistics.

For example, I understand that the first loads were 5.3 tonnes per lorry, which was the legal maximum. The Ministry ordered that they carry 15 tonnes, nearly three times the legal limit. On one occasion the M8 was closed in the early hours of the morning to allow seven lorries to speed through. As Allivane had not paid its bills to the royal ordnance factory, Mr. Machon's lorries were kept out of Bishopton. On one occasion he had seven fully loaded lorries containing over 100 tonnes of explosives in his warehouse overnight. They were guarded by armed police.

How can such things be allowed to happen? Think of the appalling carnage in the centre of Glasgow if something had gone wrong. Such events must not be allowed to happen again, and the matters to which I am referring must be thoroughly investigated.

During the period of the contract, Mr. Machon became concerned about receiving payment as a result of Allivane's apparent insolvencies. He states that he received a verbal guarantee from the Ministry of Defence that he would be paid even if Allivane went bust. He states also that the then Secretary of State, Lord Younger, was the person responsible for the guarantee, and that he had no reason to doubt that he would be paid if he completed the contract.

By June 1988, Mr. Machon had transported all the explosives and he thought that his troubles were over. Far from it, however—they were only just beginning. He was owed £68,000 in the form of the invoices that he had issued to Allivane. He had to pay value added tax on the invoices although he never received one brown penny of the £68,000. Needless to say, Allivane never paid him. In passing, it is interesting to note that Allivane received at least £147,000 in grants from the Scottish Development Agency to locate in Scotland.

Mr. Machon is a persistent, stubborn and resourceful person, and he has spent the past four years trying to get paid and to get justice. He has yet to get either. His efforts have cost him over £200,000 in legal costs alone. They have taken him to several countries and have led him to piece together the jigsaw that was Allivane and its role in the international arms trade. He has unravelled a great deal about the operations of the trade and the lengths to which Governments and Government agencies will go to cover up their actions and prevent the truth from coming out.

In November 1988, Mr. Machon went before the Queen's Bench of the High Court in London—the case was heard by Mr. Justice Otton—where he took an injunction against Aerotechnologies, Allivane's successor company. The company paid £150,000 into court, and the court later allowed the money to be withdrawn. I believe that that decision was taken on the basis that it was shareholders' money. I understand also that the judge was changed before the case was finished. In the event, Mr. Machon did not get anything.

This year, in Glasgow sheriff court, Mr. Machon was awarded £68,825.48 plus interest at 15 per cent. from September 1990, plus expenses against Aerotechnologies. It is a worthless award, because he was told that he would have to get the money from Lagan Investments, which is the parent company of Aerotechnologies and registered in Panama. What hope has he of getting any money from Panama?

During Mr. Machon's investigations, he discovered, and alleges, that Allivane International Group was the name used, with the Government's knowledge, to ship arms to both sides in the Iran-lraq war, in clear breach of the embargo on the sale of arms to Iran since 1983 and to Iraq since 1985. He has many documents which detail everything, including letters from the Registrar of Companies failing to reveal any trace of a company called Allivane International Group.

However, Mr. Machon has letters from that company and from BCCI referring to that company. He has copies of DTI export licences issued to Allivane International Group—the ghost company—from the Registrar of Companies about the change of names between Allivane International Group and Aerotechnologies Limited and also from Allivane International to the DTI, and so on. It is all very complicated—probably deliberately so.

It is interesting to note that Customs and Excise and the police twice raided the Scottish offices of Allivane, but the Crown office in Edinburgh took no action. Nor did it give any reason for its decision, which some Customs officers allege followed interference from Whitehall.

Mr. Machon wrote to the then Prime Minister, now Lady Thatcher, but received a brush-off from Mr. Charles Powell, her private secretary. Mr. Machon tried again with the present Prime Minister. In a letter on 29 January 1991, he said: What does alarm me most of all is that Britain has been supplying Iraq and creating a funnel through which every arms manufacturing country, even Eastern Bloc countries. have had the facility made 'available' to them to complete the shipment to the Gulf through Britain since 1983 up to 1990 … Since 1988 I have amassed thousands of documents, many in original form, which in the eyes of my Legal Counsel prove that we were to be sacrificed financially to safeguard the British secret … I appeal to you … to offer me the opportunity of discussing these papers in detail with you. On 26 February, Mr. Charles Powell replied: The Prime Minister has asked me to thank you for your letters of 29 January and 21 February. He has asked me to pass on to you his regrets that his diary commitments are such that he is unable to accept your invitation to meet. By coincidence—I assume that it could not possibly be anything else—Customs and Excise also wrote to Mr. Machon on 26 February threatening to proceed with the liquidation of his company. So much for writing to the Prime Minister.

It is still not too late for the Prime Minister to take up Mr. Machon's invitation to discuss the whole business with him, and I hope that he will do so. I also hope that Lord Justice Scott will invite Mr. Machon to give evidence to his inquiry. I know that Mr. Machon is anxious to do so.

Is it not strange that the Ministry of Defence should work closely with Allivane—a company set up by Terry Byrne Junior, who had worked for James Guerin, an arms dealer and founder of International Signal and Control, the company which tricked Ferranti in a £400 million arms contract scam? Mr. Guerin, now in gaol, also had links with Carlos Cardoen, a Chilean arms dealer who controls Lagan Investments of Panama. Allivane also supplied SRC, the space research company headed by Gerald Bull, which was involved in the Iraqi supergun affair.

Is it not also strange that the ghost company, Allivane International Group, should have used the failed BCCI as one of its bankers? Or perhaps it is not so strange —perhaps that is how the MOD and the DTI do business.

Is it not strange, too, that on 6 February 1990, immediately after the end of the hostilities, the Lloyds Bank International operations centre in Birmingham wrote to a technological corporation in America: We are requested to advise you that Central Bank of Iraq, Baghdad, Iraq, have opened their Documentary Credit Number"— it gives various details— in favour of S.R.C Engineering S.A. who have lodged a transfer in your favour in accordance with the following details". It then gives the account, the amount—just under $3 million—and the expiry date of 14 April 1990 in Birmingham, England. It states: This credit is available by payment of your draft(s) at sight on Central Bank of Iraq, Baghdad, Iraq". Perhaps some Minister will tell us how it was possible, at that moment in time, for that to happen. Did it need Government approval? Was it approved, and if so, by whom? It is my opinion that there are few people in this country who do not believe that the British Government supplied arms to both Iran and Iraq between 1983 and 1990, because the Government are now wholly bereft of any moral standards. They have forfeited the respect of the great British electorate, and the sooner they go, the better for everyone.

8.4 pm

Sir Geoffrey Johnson Smith (Wealden)

I hope that the hon. Member for Glasgow, Shettleston (Mr. Marshall) will understand if I do not follow him. I did not quite understand the complexities of all he said. No doubt he will have an answer later. However, I listened closely to his final comments. He said that the majority of British people would believe that between 1983 and 1990 the Government were culpable by sending vast quantities of equipment to Iran and Iraq.

That sort of remark is one of the problems of debating such an issue in the House. Although it is useful to have a debate, I am glad that the whole matter will be thrashed out in greater detail through a wide-ranging judicial inquiry. I suspect that after the facts are revealed, shorn of the sort of pejorative comments made by the hon. Gentleman at the end of his speech, we will be in a better position to make up our minds about where the truth lies.

I want to say something about the sale of arms. I have always taken a great interest in defence. There are certain matters that we should tolerate in this country, and we should try to get rid of a great deal of the hypocrisy. On the question of support in the middle east during that turbulent time, of course I remember that we were trying to arrange a sales deal with the Shah and that his overthrow led to cancellation. I do not attack Britain for what it did during the Iran-Iraq war. Compared with other countries, the British were knights in shining armour. The main contributors to the conflict were France and the Soviet Union, with the Federal Republic of Germany playing its part in gas warfare. Those countries sent death-dealing equipment—anti-tank guided missiles, SAMs, combat aircraft and a whole list of other equipment that we would regard as helping to sustain a war. We did not supply those.

Hon. Members may think that the guidelines were drawn too broadly. They stated: We should maintain our consistent refusal to supply any lethal equipment to either side". That is fairly clear. They also state that, subject—this is where the vagueness begins to creep in— to that overriding consideration, we should attempt to fulfil existing contracts and obligations". As my hon. Friend the Member for Leeds, North-West (Dr. Hampson) said, one of the most confusing aspects of the debate is not the selectivity of quotations, but the selectivity of dates. Some companies had contracts before the embargo was introduced. They had to be fulfilled, so it appears that the sales of certain equipment occurred after the embargo.

The third condition in the guidelines is: We should not, in future, approve orders for any defence equipment which, in our view, would significantly enhance the capability of either side to prolong or exacerbate the conflict". We all know how to interpret that. It is a broad guideline. I believe that we came out of the whole business a darn sight better than any other western European country. The guidelines also stated: In line with this policy, we should continue to scrutinise regorously all applications for export licences for the supply of defence equipement to Iran and Iraq. Behind the debate is the feeling not just that we consistently broke our rules with death-dealing equipment —which we did not—but that somehow the whole concept of arms sales is wrong. We all know that there is a murky side to that, but it was not long ago in this House when anxious voices on both sides questioned whether we could develop, produce and sell the European fighter aircraft. The great argument on both sides was that jobs were at stake. However, it was not the compelling argument, which must be whether the manufacture of a particular piece of defence equipment will sustain our security. That is the important factor. If we correctly understood the argument of the right hon. Member for Chesterfield (Mr. Benn), he would have none of it.

I do not believe that arms cause wars. Most of us have learnt the lesson that the nation that thinks that is a nation that puts itself in peril.

Mr. David Winnick (Walsall, North)

Does the hon. Gentleman recognise that, when we were dealing with Iraq, we were dealing with a murderous dictatorship which carried out continuous oppression of its own people? The gassing of the Kurds in March 1988 illustrated the point. Moreover, from 1988 onwards it was obvious that Saddam Hussein had territorial ambitions. Although no one could say for certain that he would invade Kuwait, it was obvious that he was a dictator who could be irrational and might invade one of the neighbouring countries. Surely that should have been a prime consideration, in addition to the nature of the dictatorship.

Sir Geoffrey Johnson Smith

That is one of the reasons why the hon. Gentleman should look at the records. He should not lay the blame at the door of the British Government. Iraq was not equipped with British tanks or guided missiles. My point is that when we consider the supply of arms, another side needs to be put. Otherwise, there is a danger that those who read the debate will believe that we should never make any arms and, least of all, that we should sell those that we have produced.

Arms help to sustain our security. The sale of arms to our allies and those whom we think may be threatened helps not only to sustain our arms industry and enable us to be more effective in the use of our productive skills but to provide employment and defend countries which we suspect might be in turn attacked.

Ms. Short

Will the hon. Gentleman give way?

Sir Geoffrey Johnson Smith

No, I wish to continue. We have heard so much from the Opposition today. I wish to give the obvious reasons why, when in office, the Labour party believes on the whole that it is right to have and sustain our defence industry and not deprive it of the opportunity to sell the equipment that we make to those whom we believe we should sustain for our own security reasons and for reasons of international security.

It is true that throughout history countries have not developed policies that would preserve the peace. However, countries change, just as Britain has changed. Alliances change from one decade to another. There is no reason why we should cease the sale of arms abroad.

I move on to the matter of the arms embargo from 1985. I said earlier that it was clear that the Government had drawn the guidelines broadly. They said that we could embrace but not sell lethal equipment that would significantly enhance military capability. Having listened to the speeches from the Front Bench and other hon. Members, I cannot conclude, with the degree of certainty that the hon. Member for Livingston (Mr. Cook) seems to have concluded, that the Government are guilty of not merely laxity but a grave injustice to those from Matrix Churchill who sold the machinery. I cannot come to that conclusion yet, and I hope that I will not have to come to that conclusion. That is why I welcome the judicial inquiry.

We know that the company was bought by the Iraqis in 1987. I understand that it wished to sell machine tools. Machine tools do not automatically create lethal equipment. They are not described as lethal equipment. Such tools can make pots and pans just as much as they can help to produce missiles. According to the record, an assurance was given that the machine tools would be sold to Iraq for peaceful purposes.

Mr. Henderson, who was the managing director, said that he believed, or it was suggested to him, that it was to the advantage of not simply his company but to the country to know if the arms went into the wrong hands for the wrong purposes. The intelligence of our country would be enhanced. We would have a better idea of what was happening in Iraq. That sort of thing has happened before, and it has been done by other countries. There is nothing intrinsically evil in it. One turns a blind eye because one believes that it is in the interest of the country to know through intelligence where a piece of equipment goes.

Two of my hon. Friends have suggested that the motives of Mr. Henderson originally were not as pure as they might have been. I do not know about that. All I know is that he had to go through the awful process of a trial. I must sympathise with someone who is put in that position.

Madam Deputy Speaker

Order. I am sorry, but the time limit has fallen.

8.14 pm

Mr. Peter Kilfoyle (Liverpool, Walton)

I am particularly taken with the statement in the Government's amendment that their overriding consideration was not to supply any lethal equipment and to restrict the supply of any defence equipment. There is an impression abroad that one or two companies are involved in this scandal of trading with Iraq despite the guidelines. We have all heard the names of companies such as Learfan and Matrix Churchill, but many other companies are involved in a similar cover-up.

Earlier the hon. Member for Leeds, North-West (Dr. Hampson) made the point that Opposition Members should be able to give dates which fit into the context of their argument. I certainly intend to do that. The conclusion that I draw from the dates and information that I have about a company in my constituency is that there was either acquiescence or incompetence of a gross order at a high level in the Department of Trade and Industry. I am also mindful of the characterisation of Conservative government by Disraeli as organised hypocrisy. That has certainly entered into my thinking.

I draw attention to a company in my constituency called Microwave Modules. Certainly as early as July 1988, Customs and Excise investigated the company. It drew the conclusion by September that the company had been illegally involved in supplying intelligence surveillance equipment to the Iraqis. The company had dealt with two agents. One of the agents was a major in the Iraqi army, Mr. Lathe Al Rawa, and the other was a procurement agent for the Iraqi Government in the United Kingdom, a man named Mr. Gadhir.

Information was available at the time which showed that the company was deeply suspect in a variety of ways. It was dealing with several other companies at the time. The names of those companies will ring a bell. For example, Microwave Modules was shipping through Reynolds and Wilson in Surbiton equipment which was designated for agricultural use. The former director of the company became concerned when he discovered that his original company, Microwave Modules, had purchased shares in a company called RPV Ltd.—a company which designed and manufactured pilotless aircraft for crop spraying.

Sky News carried an item at the outset of Desert Storm which suggested that RPV aircraft were deployed on the Iraqi front line against allied troops. A Conservative Member mentioned hindsight. With hindsight, we can all make many assumptions. The company Reynolds and Wilson had an Iraqi director who was shown in customs investigations to be involved in the importation of krytrons, nuclear triggers and capacitors which were seized at Heathrow. That discovery figured largely in the investigation of a later application to the DTI by Microwave Modules for an export licence.

There is a sensitive technology section at Kingsgate house which deals with this type of technology. We should bear it in mind that Microwave Modules was already being investigated heavily at the time. Letters from Ministers acknowledged that that was the case.

Mr. Rod Richards (Clwyd, North-West)

Will the hon. Gentleman give way on that point?

Mr. Kilfoyle

No. I shall come back to the hon. Gentleman later.

Microwave Modules applied for an export licence and was told that it did not require one for the equipment that it wanted to export to Iraq. The equipment was described in the application as a special power supply to the Iraq state electricity board. Without being too technical, the equipment has a specified duty cycle with an on-time of 45 or 50 minutes, but no specified off-time. That suggests a one-time use. Similar technology, developed by Paige Aerospace in Sunbury and seen by the DTI, suggests the accuracy of the definition that I supplied earlier to the hon. Member for Leeds, North-West of a power control system used in missiles fired by an explosive charge—that is, a supergun.

That went before the DTI, but, to all intents and purposes, the Department did not spot anything. That equipment included radiation-hardened and other components to a military specification. That company was obviously suspect and was investigated by Customs and Excise, but submitted a specification very similar to a military specification that included parts specifically designed for apparent use in a power control system for a supergun, for example. Nevertheless, it was deemed unnecessary to provide that company with an export licence.

That information was made available to Ministers. Earlier this year, a private secretary at 10 Downing street, in a letter dated 10 March, referred all that information from the hon. Member for Liverpool, Mossley Hill (Mr. Alton) to the Department of Trade and Industry. There followed a letter from a Minister of State at the DTI, pointing out that it was a matter for Customs and Excise.

The company's founding director resigned when he discovered the way in which the firm was operating and that products that he thought had been developed in good faith for harmless purposes were being traded with the Iraqi Government. Ever since, he has been attempting to persuade someone in authority to take his charges seriously. He has been frustrated at every turn and still has received no answer. I await an explanation from the Government of why no inquiries were made in respect of a company manufacturing an item which, in the circumstances, can only be seen as a vital component of the infamous supergun.

8.21 pm

Mr. Andrew Robathan (Blaby)

It is not often that I find myself mentioned in a motion, albeit not by name but as one of the British service men who may have been exposed to fire from shells and rockets made in munitions factories equipped by Britain". I am grateful to members of the Labour Front Bench for their concern about my welfare. I was not in the front line so I did not encounter many shells—and the only rocket to which I was exposed was an ancient Soviet one. Luckily, it did no more than disturb one's sleep—shaking the earth with a tremendous explosion. Others were not so lucky, when they were targeted by Scuds.

It is true that ploughshares can be turned into swords. Screwdrivers and spanners are necessary in munitions factories. The machine tools in question could be used—and perhaps they were—in the Iraqi armaments industry. However, which Member of Parliament representing a Coventry constituency—perhaps excluding the former Member of Parliament for Coventry, North-East, who took a rather unconventional view of life—would not protest to the House if Matrix Churchill had been forced out of business because no export licences were available to the company?

There was a need for balance. Viewing a situation with the benefit of hindsight is not always wise. At the time of which we speak, the west was buying oil from Iraq. Some friendly countries, including Japan relied on it. We were not at war at the time.

Ministers were motivated by an attempt to help British industry, not Iraqi munitions factories. At that time, there were dealings between Iraq and Saudi Arabia and between Jordan and Iraq, and even Kuwait itself was assisting Iraq. In the eyes of those involved in such dealings, they were necessary because of the strength of their neighbour—and at that time there was a fear of Iran.

The European position then was most regrettable. Those of us in the Gulf were most frightened of Iraq's chemical and biological warfare capabilities. It may not generally be known that we were all given inoculations against anthrax because of fears of Iraq's potential for delivering anthrax against us. We also had to take extremely unpleasant pills to resist nerve agents, which were a very real threat.

It appears that most of that capability came from Germany, which was the top western exporter of arms to Iraq. The United States Senate Foreign Relations Committee listed 87 companies exporting to Iraq. Defence products worth billions of deutschmarks were legally exported to Iraq in the 1980s. As my right hon. Friend the President of the Board of Trade pointed out, besides constructing Sadam Hussein's bunker, the Germans supplied chemical warfare technology and substances to Iraq and upgraded the Scud missiles for delivering them.

My hon. Friend the Member for Wealden (Sir G. Johnson Smith) made mention of France, which exported Puma helicopters, Mirage and Etendard aircraft, and Exocets. We remember the damage the Exocets did in the Falklands in 1982. Most worrying of all, the French were instrumental, at the beginning of the 1980s, in helping with the construction of a nuclear plant at Osirak which, fortuitously, was destroyed by Israel in 1981. Even now, I remember the howls of outrage from Labour Members when Israel destroyed that plant. Thank goodness it did so. I suggest that Labour Members concentrate on raising with the European Parliament the issue of those exports by our European partners. That should be done especially by Liberal Democrat Members—conspicuous by their absence from the Chamber—who would have had us in a federal Europe long before the Gulf war.

Sadam Hussein's armaments were mostly Soviet and east European—T62s, T54s, Scuds, and AK47s. The debris on the battlefield was like that of the old Soviet army. Luckilly, the tactics that the Iraqis employed were as usless as those of the Soviet army turned out to be.

The Matrix Churchill affair shows that, if allegations and complete nonsense are repeated often enough, the public will start to believe them. A Gallup poll in The Sunday Telegraph yesterday showed that 83 per cent. of the public believe that Ministers are not telling the truth, yet nothing could be clearer than the remark of the defence counsel in the Matrix Churchill trial that there was no question of anyone attempting to suppress evidence.

I suspect that Lord Justice Scott will find that mistakes were made; that there was some naivety, as the hon. Member for Livingston (Mr. Cook) said, and that there was inefficiency in bringing the case in the first place. The greatest mistake that Lord Justice Scott could uncover is that we failed to finish the job on 28 February last year, though I imagine that the right hon. Member for Chesterfield (Mr. Benn) would not have been keen on us marching on Baghdad.

Whatever mistakes Lord Justice Scott finds, I am sure that he will not discover a conspiracy, yet Labour Members continue to claim that one existed. In The Sunday Telegraph yesterday, the hon. Member for Livingston is quoted as saying: The Conservatives not only ensured that Britain provided the machines that made the weapons that were ultimately turned against British troops. They also saw to it that Britain paid for that equipment. Britain did not provide machines to make weapons that were turned against British troops. That is complete nonsense.

Those who see conspiracies everywhere tend to be either deranged or dictators. Sometimes they are both. Hitler firmly believed in a worldwide conspiracy of international Jewry and of freemasons to boot—a curious combination. Saddam Hussein, rightly, suspects a conspiracy behind every door. I do not suggest that the hon. Member for Livingston is deranged, or that the right hon. Member for Yeovil (Mr. Ashdown) has delusions of authoritarian grandeur. But nor can I believe, and nor can the House believe, that these Minsiters conspired and connived—as the motion suggests—to send innocent men to gaol.

Mr. Winnick

Will the hon. Gentleman give way?

Mr. Robathan

I fear that I cannot do so at this stage.

We must judge the concern expressed by the hon. Member for Livingston for our service men—and his concern for me, for which I have expressed my gratitude—in the light of his past position in regard to defence. We must bear in mind his determination to do away with our nuclear weapons: only last year he described himself as a unilateral nuclear disarmer, not nine months after we had needed our deterrent to keep Saddam Hussein and his potential nuclear weapons from us. [Laughter.] Hon. Members may laugh. Let me also remind the House that, in early-day motion 948, the hon. Gentleman called on the Government to cancel last year's Gulf victory parade. Neither position would have found favour with our service men.

Talk of connivance and conspiracy stretches our credulity to breaking point. Lord Justice Scott will find that most of it is much ado about nothing. The motion is unworthy of Opposition Members, and the House will rightly reject it.

8.30 pm

Mr. Geoffrey Robinson (Coventry, North-West)

First, I declare an interest: a public company of which I am chairman recently bought from the receiver the remains of the Matrix company, and the spare parts rights for Churchill. Needless to say, no exports have been made in the period concerned accruing to any overseas country requiring a licence.

Sadly, the hon. Member for Blaby (Mr. Robathan) seems blindly ignorant of all the information that has appeared in the press in recent weeks. I shall go straight to the heart of the matter and say that it is obvious from all the documents which have come to my notice—I intend to quote from them, Mr. Deputy Speaker, mindful of Madam Speaker's ruling—that before the granting of the first export licence in December 1987, the whole Government were aware of exactly what was going on.

I quote a paragraph from an MI6 contact report. It states: I had hoped to use most of this session to photograph drawings of sheets obtained from TI company files. That is a reference to the previous parent company of Matrix Churchill.

Unfortunately, (or fortunately, depending on view-point)"— having read "Spycatcher", I am amused to see that reports such as this can have their ludicrous aspects— my A4 sized photographic equipment was not man-enough to cope with 100 sheets of 3' x 2' drawings. If a photographer was available, we agreed to repeat the session on Friday 30 October. Many Conservative Members talked about context and dates, but it is impossible to be clearer than that: the licence was not issued until December. There was then something of a debate within the Government about whether it should have happened.

Lest there is any question about who knew at that stage of the extent of the intelligence department's involvement, I will quote from a confidential minute circulated in January 1988. I shall not quote what was said by civil servants—a good lead was given in that connection by the former leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) Having read all this, however, I am dismayed at the extent of the compliance and the lack of moral fibre and resistance were eroded by the bullying tactics of the former Prime Minister, Baroness Thatcher. It is a great pity, and a disservice to the civil servants of this country. The document states: The intelligence community recommends against revoking the licences as they fear for the safety of their source, and they also believe that far more important information could cease to become available as a result. It could not be clearer than that.

The document went to 17 people, and must have reached the Foreign Office and the Department of Trade and Industry. If the President of the Board of Trade cannot tell us today whether he knew or not, that is the clearest possible proof that he did know. I only regret that he would not give way to me so that I could make the position clear to him and the House.

It is clear from the confidential briefings of those who attended the meetings in January that the Government were in on the matter. The advice was that the application should be supported by voluminous material —the application should be biased technically—the application should be made as soon as possible. It was also stated that the application should stress the peaceful use of material.

I agree that all Governments should promote exports. I was vociferous in defending the European fighter programme. There is, however, a difference between co-operating with regimes which have some semblance of democratic processes and a tradition of friendship with this country, and co-operating with a regime such as Saddam Hussein's. I could quote many other interesting documents, but the rigidly imposed 10-minute rule forces me to skip them. I hoped to be called earlier.

I come now to the link between the Government and Customs and Excise in this sad affair. I have a letter from the principal private secretary, Department of Trade and Industry, to the chairman of Customs and Excise allowing him to go ahead and start the investigation, but adding: You assured me that the visit to the Matrix Churchill premises would be used for fact finding only, and no action would be taken as a result without consulting Ministers. It is pretty clear that the Government had a strong handle on the way in which, and the extent to which, Customs and Excise was to conduct its investigation. However, it went ahead, and the rest took place after the ceasefire and the easing up of policy, with the continuing connivance and co-operation of Ministers. One man—Gore-Booth—stood out against it. I think that he should be complimented, and I name him for that reason.

I will not be drawn into saying whether the affair had any electoral significance. The period that it covered made it sub judice. After the election, however, it came to trial. What I find most puzzling is how it was ever allowed to come to trial. It is clear that the public interest immunity certificates were rushed through. Some, like the Home Secretary, may have acted in ignorance of what was in them; some may have read them but not understood their significance; some, like the President of the Board of Trade—and many have complimented him on his approach—may have acted with great reluctance. But that sort of Pontius Pilate attitude—"We will leave it to the good judge to decide; that is his job, is it not?"—is not good enough.

In the 1950s, it was ruled that such certificates should not be used in criminal cases. It is clear from a case in Reading, which has not been mentioned so far, that the mere threat of such a document being issued is sometimes sufficient for a judge to back off, a plea of guilty to be entered and a suspended sentence to be imposed. I think that that should be looked at.

What have the Government achieved? Ministers have behaved with cowardice and irresponsibility; at best, they have hidden behind a judge. The evidence came out in court only because—against the advice of counsel for the other two defendants—Geoffrey Robertson sued to have it brought out. He was able to obtain it only by waiving his right to be silent during the defence's case. That is how difficult it was—and now Ministers are saying that they were happy to sign a statement that the judge would be willing to bring them out if he thought it relevant. That meant that Paul Henderson had to reveal in court the full extent of his links with MI6. Had that not happened, the public interest immunity notices would have been conducive to the perversion of the normal course of justice. That is how severe the charge was, and there is no way in which anyone involved can dodge it.

There is now a complete lack of trust between civil servants and Ministers, and between MI6 and industry. Above all, several crucial issues have to be faced, especially with regard to the three defendants. One of them, and somebody else who is not a co-defendant but who has been named, have had their livelihoods severely prejudiced. Moreover, their very security has been put at risk.

The Government say that the judge obtained the information, but how did he obtain it? He obtained it only by the Government having revealed the full extent, in advance of the defence's case, of the MI6 links. Therefore, we have to ask the Government what they intend to do to protect those gentlemen whose lives as well as livelihoods they have so wantonly exposed. In addition, how do the Government intend to restore the basis upon which they can regain their livelihoods?

It is sad for me to have to make these charges in the House. I did not think that members of this Government, some of whom we had respected, would stoop so low to protect their own necks. I do not believe that there is any solution other than their resignation, to clear the good name of the House and of British justice.

8.40 pm

Mr. Rod Richards (Clwyd, North-West)

I intend to refer to the international context of the issue—the worldwide desire to prevent the proliferation of nuclear weapons.

Since the second world war, one of the greatest dangers of world peace has been the very real risk that certain third-world countries would acquire nuclear technology and develop nuclear weapons. Most recently, the Gulf war reminded us that nuclear weapons in the wrong hands might have led to a global disaster. The successful prosecution of that war by conventional means alone was also a timely reminder of the importance of monitoring closely attempts by third-world countries to become nuclear powers, in contravention of the non-proliferation treaty.

Almost invariably, the countries that have been most active in attempting to acquire a nuclear capability have been countries in the world's political hot spots. Some of their leaders have been, at best, aggressive; sometimes they have been unstable and likely to use nuclear weapons pre-emptively.

Under successive British Governments during the past 20 to 30 years, the intelligence community has pursued a consistent policy of monitoring attempts by third-world countries to develop and produce a nuclear capability. Under successive British Governments, the intelligence community, whenever and wherever possible, has sought also to frustrate attempts by non-nuclear powers to become nuclear.

In order to be in a position to arrest the progress of nuclear aspirants, it is surely necessary to gain intelligence access to the procurement process of the countries involved. One of the means by which such access might be achieved is in the grey area on the fringes of official guidelines where there is some flexibility in interpretation, particularly when certain types of components, or tools, or equipment have peaceful nuclear uses, or non-nuclear uses.

The practice for many years has been to exploit, where feasible and where Government policy allows, some of the opportunities that arise when British companies, and companies in other countries, are in a position to export goods that are readily available in many parts of the world but which have dual use. There are foreign powers that have set up front companies in many parts of the world, whose sole purpose has been to acquire components and equipment to enhance their nuclear weapons programme.

There are those, I am sure, on the Opposition Benches who would say that if such companies are discovered in the United Kingdom or elsewhere, they should be exposed and closed. That is a naive view of the world. Were such action to be standard procedure, the offending Government would merely set up new front organisations. The intelligence community would then have the additional task of locating and penetrating them anew. In the meantime, our ability to monitor and frustrate the activities of which I speak would be correspondingly diminished and the threat to world peace correspondingly increased.

In my experience under both the last Labour Administration and the first Administration of this Conservative Government, the intelligence community of this country, together with its intelligence allies, worked diligently in pursuit of what must be a worthwhile goal —the prevention of local nuclear conflict. They achieved that with great skill. Such preventive action was possible only because the intelligence community under Governments of both political persuasions were able to penetrate authorised trade to certain foreign countries and exercise thereby some control over their activities and progress. Had the practice been discontinued, many countries that do not now have a nuclear capability would probably have become nuclear powers, with possibly catastrophic consequences.

In my view, the Labour party's actions in recent weeks have damaged significantly the prospects for future success in that area. The most spectacular operation to stifle nuclear proliferation was undertaken by the Israeli air force in 1981, as my hon. Friend the Member for Blaby (Mr. Robathan) mentioned, when it destroyed Iraq's experimental nuclear reactor at Osirak, which was almost certainly intended as a nuclear fuel reprocessing plant.

Early attempts by Iraq and others to develop a nuclear capability were closely monitored by intelligence communities in all parts of the world during the 1970s and 1980s. We now hear, however, from the Labour party that such activity in recent years is tantamount to connivance by Ministers in this Government—connivance by Ministers in the Ministry of Defence, the Foreign and Commonwealth Office and the Department of Trade and Industry. I do not accept that for one moment; nor should the Labour party insist upon pursuing it, because these activities also took place in 1978 and 1979.

At that time, the right hon. and learned Member for Monklands, East (Mr. Smith) was the Secretary of State for Trade in the then Labour Government. If the Labour party believes that what Ministers on the Treasury Bench have done is wrong, according to their logic so too were the actions of the right hon. and learned Member for Monklands, East. We have heard nothing but sanctimonious cant from the Labour party during the debate. While it is universally recognised and accepted that the Labour party has a duty to oppose the Government, what it is doing today and what it has been doing during the last few weeks amounts to opposing and undermining this country and its attempts to maintain world peace.

8.48 pm

Mr. Gerald Bermingham (St. Helens, South)

I listened with interest to the speech of the hon. Member for Clwyd, North-West (Mr. Richards). I wondered for a moment, however, what it had to do with the subject matter of the debate. I thought that the debate was about a simple issue, and it must be about a simple issue. It is not about whether arms were sold. We all know that they were. It is about the rights of the individual as against the rights of the state. We lose sight of that fact at our peril in a democracy.

We have to remember what has happened in the case of Matrix Churchill. I declare an interest as a practising barrister and as the senior partner for many years in Mr. Henderson's defence firm. Three men went on trial. The state held certain papers that were germane and material to their defence. Ministers were asked to sign a public interest immunity certificate, and they did so.

It is not for me to say who knew what, because that does not concern me and it will come out during the inquiry of Lord Justice Scott, a man of immense integrity; what is important is the risk that society ran, because this was not the first trial. A judge at Reading—His Honour Judge Spence—was served with a similar certificate in February, when four men went on trial. I do not know the details of the case, but, interestingly, the certificate was upheld. The then Attorney-General, who is now Secretary of State for Northern Ireland, must presumably have given some advice either to Ministers or the court and counsel in the case.

Did that judge have the same papers as His Honour Judge Smedley when he reviewed the certificates? His Honour Judge Smedley struck a blow for freedom because he began to tear back the veil of secrecy, and justice was done. I appreciate that sometimes the public interest must be taken into account.

Mr. Peter Hardy (Wentworth)

Is my hon. Friend aware that the case that he mentioned at Reading was not the first step along a sordid route, because three gentleman from Forgemasters were taken to a police station in my constituency on the day that the Select Committee was due to commence its investigation? Does he agree that Lord Justice Scott may consider the supergun aspects of the affair?

Mr. Bermingham

My hon. Friend is perfectly correct. It was interesting that no prosecution was brought over the Rawmarsh incident.

I do not know what happened at Reading, but three men received prison sentences, albeit suspended, and, as is said in the trade, certain matters were raised between the parties.

Is it right in a democracy that a man should go on trial when documents are available that may lead to his acquittal? The answer is no. In the Court of Appeal recently, the Lord Chief Justice, sitting with other judges, ruled in the Ward case on the question of disclosure. Under English law, public interest immunity certificates were not meant to be involved in criminal trials: civil trials involving property, yes, but criminal trials, no. Why have they suddenly begun to emerge in criminal trials?

If the Attorney-General and the Government believe that allowing a man a fair trial with full disclosure will be harmful to the public interest and a document is held that could lead to this acquittal but which in their considered opinion should not be disclosed, a simple step is available: the Attorney-General intervenes and issues a nolle prosequi. I agree with the Attorney-General's interpretation of his role, but his proper role is to ask for the certificate and to deliver the documents to the judge. If the judge concludes that the documents should be disclosed, they are disclosed; otherwise he issues nolle prosequi; in other words, stop the prosecution.

That is how the judge protects the rights of the individual, and it is the right of the individual in a criminal trial to expect that any document or matter germane and material to his defence to be disclosed. If that is swept away, justice is destroyed and no democracy is entitled to send a single innocent man or woman knowingly to prison.

Mr. Mike O'Brien (Warwickshire, North)

Does my hon. Friend agree that, when the President of the Board of Trade said that he was not entitled to waive his signature on the certificate of public interest immunity, he was being somewhat disingenuous, because in 1989 Lord Bingham said that in exceptional circumstances Ministers could refuse to sign such certificates and allow documents to be produced? Surely in a case where someone was innocent that would be exceptional. In addition, because there is no statutory form of public interest immunity certificate, the Secretary of State could have included a clause in the form alerting the judge to the fact that these men were innocent.

Mr. Bermingham

My hon. Friend makes the point that I was going to make.

There are three lessons to be learned: first, that the individual is paramount in our consideration; secondly, that the issue of disclosure in criminal trials must be considered, particularly for sensitive matters; and, thirdly, that the Attorney-General must lay down proper guidelines or indicate to the judiciary that a judge must examine the document and that, having done so, it is for him to decide whether to disclose. Above all, the Attorney-General must remember that when an individual is at risk but documents are available to clear him or her, the Attorney-General must issue a nolle prosequi.

I thought that the Prosecution of Offences Act 1985 centralised the prosecution service—in other words, one Attorney-General, one Director of Public Prosecutions and the Crown prosecution service. I have been in the trade long enough to know about prosecutions brought by the Inland Revenue, the Department of Trade and Industry and Customs and Excise, but this case must tell us that when other bodies prosecute the Attorney-General and the Director must exercise the same degree of control over their prosecutions as they do over the Crown prosecution service. It seems ludicrous that the Commissioners for Customs and Excise can go their own way.

Let us learn some lessons from this, but let us never forget that the individual is more important than the state.

8.57 pm

Mr. John Butcher (Coventry, South-West)

the Matrix Churchill company is in the centre of my constituency. One of its directors, Mr. Paul Henderson, is my constituent. So the House would expect me to speak for those who have not been mentioned today, the truly forgotten people in this debate: the 600 highly skilled men who used to work for Matrix Churchill and who now contemplate the shell of a building and a company, the rump of which now manufactures only a fraction of the output which Matrix Churchill produced so successfully in recent years.

I should like my right hon. and learned Friend the Secretary of State for Defence to answer a question for me. As the Scott inquiry can be given "further and wider terms" if need be, can it be widened to include compensation, not just for the directors but for the work force, if it can be shown that the actions of Government agencies contributed to the downfall of the company? I do not suggest that I will judge the answer to that question today, but before I conclude I should like to give my right hon. and learned Friend some information which may help him to decide whether he can undertake to widen the inquiry to include aspects of compensation.

It may help the House if I provide a potted history of the company. Those of us who take an interest in the health of manufacturing industry, and in the machine tool industry in particular, should be aware that the company's past reads like a roll call of the very best of British machine-tool-making companies. TI Churchill took over Alfred Herbert in 1983. If ever there was an aristocracy among skilled workers in this country, and in Coventry, it was to be found at Alfred Herbert, a company which produced generations of bright, gifted engineers whose skills were the envy of the world. The company was brigaded in with Matrix and Coventry Tool and Gauge to complete the amalgamation of a prodigious and prestigious portfolio of famous machine tool manufacturers' names.

Matrix Churchill was formed in 1987 when TMG, with its Iraqi shareholding, bought the company for £6.5 million. Many hon. Members today have spoken of the "crown jewels" in the context of a legal case. I say that when TMG bought the company for £6.5 million it bought the crown jewels of the British machine tool industry. All that has been thrown away in the course of the past 12 months.

From the mid-1950s onwards, the company developed CNC lathes, which benefited from an enlightened development policy on the part of a management team, including some who have been mentioned today, led by Paul Henderson. They were popular on the shop floor, they had the respect of their work force, and they invested blood, sweat, tears and money in the company. They produced a range of automated machining centres for CNC lathes, manufacturing systems and engineering products which boded well for the future.

Even without an Iraqi order book, the company would have been likely to have a good future. Some of my hon. Friends and some Opposition Members have asserted that there may have been collusion between the security services, the DTI, other Whitehall agencies and Customs and Excise. If the results of the work of various Government agencies are to be objectively assessed, the chaos produced by the lack of interaction between them certainly contributed to the redundancies of up to 600 people who once had jobs in my constituency and other parts of Coventry.

I should like to draw to the attention of my right hon. and learned Friend the details of one period in the company's history. In the autumn of 1990 the management, together with British financial backers, attempted to buy out the Iraqi shareholding. On 21 September 1990, the directors of the company cleared a statement with the DTI which read as follows: The directors are more confident that the deal to buy out the Iraqi financial interest will succeed … At a meeting this week, the Department of Trade and Industry recognised our efforts and indicated that a speedy resolution of our plans to acquire 100 per cent. equity in the business would be welcomed. Within days of the statement, the directors were arrested as a result of Customs and Excise investigations and detained in custody—an overnight experience that none of them will forget. The deal of which the DTI had been advised—the DTI had helped them to clear their press statement—was aborted almost immediately. Financial backers will always run when something like this comes to light, and that is just what they did: the financial institutions ran away.

Will my right hon. and learned Friend the Secretary of State for Defence consider the length and manner of the Customs and Excise inquiry to assess whether it may have, been a contributory factor to the demise of the company as we knew it at that time? To give my right hon. and learned Friend a flavour of what happened, when the investigators went in in September 1990—a very sensitive time, given the state of the negotiations on the buy-out —they left the premises, waved airily and said, "See you in December." That does not strike me as a vigorous, clinical and urgent investigation. That length of time and the overlap with the negotiations on the buy-out may have caused the company insuperable problems.

Customs and Excise have their own rules and they are objective and impartial. They must work to rules of evidence. But they also have draconian powers, some of which would be envied by the fraud squad. Can the terms of reference of the inquiry be widened to assess whether the investigations—albeit by an independent agency, but none the less a Government agency—prejudiced the successful rescue of that company? If they did, does the question of compensation arise not just for my constituent, Paul Henderson, but also for the 600 men who were pushed on to the scrap heap after having been the aristocrats of the machine tool industry?

We have not heard enough today about the Opposition's much-vaunted concern for the manufacturing sector. Opposition Members have been hunting for a scalp, but they may not get one. The inquiry will look into all that. However, someone somewhere must remember those 600 forgotten people in the aftermath of this sad and sorry affair.

9.6 pm

Mr. Llew Smith (Blaenau Gwent)

I am most grateful to be called to speak in this debate, because I possess some detailed information about secret armament deals by British companies, and I will refer to those documents in my speech. Since May, I have tried to establish the accuracy of some of the documents by tabling a series of parliamentary questions. About 30 of them have been blocked by the Table Office for a variety of reasons, including the fact that they are repetitious or that I was fishing for facts.

I plead guilty to both charges, because I believe that fishing for facts is a right and proper role for hon. Members. Indeed, that is what the debate is about. I do not complain about the Table Office, but about the rules under which it is expected to operate. Surely it is not in the interests of Parliament that hon. Members are unable to establish the facts.

British nuclear assistance to Iraq has a long vintage. For example, in May 1957 the House was told that he United Kingdom had contributed £30,000 to the Baghdad pact nuclear centre. The Prime Minister and other Ministers have been at pains to tell the House that the 1985 embargo assistance to Iraq was upheld. At the same time, Ministers have consistently refused to answer to the House about specifics of military equipment sales and arms deals with Iraq or other military dictatorships, such as Indonesia.

Of the many instances of ministerial shyness in respect of telling Parliament the full facts about defence exports —as Ministers call them—let me just cite two. On 21 November 1986, the year after the guidelines on exports to Iraq were announced to the House, when asked about specific sales of military, industrial and chemical equipment to Iraq and Iran since 1981, the Ministry of Defence, through the then Parliamentary Under-Secretary of State for Defence Procurement, stated: It has been the consistent policy of this and previous Administrations not to reveal details of specific defence exports to other countries."—[Official Report, 21 November 1986; Vol. 105, c. 355.] In April 1989, on the eve of the evil Baghdad arms fair which was bloated with British companies, the former Prime Minister, Baroness Thatcher, told my hon. Friend the Member for Leyton (Mr. Cohen), when asked if there had been any change in the current policy of prohibiting the export to Iraq of weapons that could enhance its offensive capability: The Government have not changed their policy on defence sales to Iraq. Applications for export licences continue to be considered on a case-by-case basis, according to the guidelines.—[Official Report, 21 April 1989; Vol. 151. c. 311.] Baroness Thatcher may have been disingenuous in that reply, in the light of the revelations now made in public about the Matrix Churchill affair, yet the matter is graver still. Not only were Government Departments conniving in secret to circumvent their own export guidelines, but, according to information brought to my attention and mentioned by my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), Mr. Frank Machon strongly suggests that the MOD in particular knowingly dealt with a front company to ensure that ammunition, military fuses, shells and other armaments were exported to Iraq and Iran, notwithstanding successive assurances by Ministers in the House that no such sales were happening.

I know that the charges that I am about to place on the record are grave, but I believe them to be true and accurate. I want to add to and support the points made by my hon. Friend the Member for Shettleston. The case involves a company called Allivane International Ltd. which became Aerotechnologies before it went bust in 1988. It involves another apparent company called Allivane International Group.

I say "apparent company" advisedly, because the letter from Companies house in Cardiff, dated 19 August 1991, stated that no such company is registered. Information given to me by Mr. Frank Machon indicates that Allivane International Group was created with the knowledge and probable connivance of the MOD as the shadow company for Allivane International Ltd.

Is it not fair to say that, if someone wanted secretly to import arms from this country using a company such as Allivane International Group, which does not need to be registered at Companies house, that would be an obvious method, because its activities are difficult to trace? Allivane International Group and Allivane International Ltd. have the same company number. According to BCCI, their affairs were dealt with by the very same receiver.

In October, I asked the MOD what it knew about Allivane. I was given four addresses in a letter dated 27 October, and the Minister added an interesting disclaimer.

I want to demonstrate to the House that, setting aside the clear-cut case of Matrix Churchill, there is now ample evidence against what the Prime Minister told the House last Tuesday when he said: The suggestion that Ministers misled the House"— over arms deals to Iraq, Iran and elsewhere— is a serious and scurrilous charge and has no basis whatsoever in fact."—[Official Report, 17 November 1992; Vol. 214, c. 136.] In fact, last Thursday, the Prime Minister suggested also that previous charges laid upon the Government over their conduct regarding BCCI were also "utterly unfounded".

Using documents provided to me by Mr. Frank Machon on the Allivane affair—documents also forwarded to 10 Downing street over the past few years by Mr. Machon—I want to show the House not only that arms and other military equipment were exported to Iraq and Iran since the mid-1980s, despite the export ban, but that those arrangements were undertaken with the financial backing of the BCCI, in conjunction with the discredited Space Research Corporation, run in Belgium by Dr. Gerald Bull, builder of the supergun.

One document, for example, in my possession shows that, on 20 May 1987, BCCI was prepared to ensure the sale of 50,000 sets of fuses by Allivane International Group. The fuses for artillery shells were bound for the middle east, to be shipped via dealers in Portugal. Evidence suggests that Royal Ordnance was also involved, within months of its sale to British Aerospace early in 1987. The Independent further claims that Allivane held several accounts with BCCI. What do the Government know of that?

Documents in my possession also show the Allivane International Group's connection with the Space Research Corporation. A letter from Stuart Blackledge of SRC to Allivane's company chairman, Terry Byrnes Junior, on 3 August 1987, shows an order for mark 3 155 mm Elite shells by SRC to Allivane International Ltd. The contract was worth in the region of £965 million, according to another informant of mine.

In a written reply, I was told by the Minister of State for Defence Procurement that the Ministry had no record of any contract between the Army's logistic executive and Allivane for the export of military equipment since 1987.

One contract was signed in 1988 for short-term storage of ammunition in Ministry of Defence facilities, which was subsequently exported for the company. On 7 September, The Independent gave details of how those exports were being used as a cover for an illegal consignment of arms, which was ultimately destined for Iran.

I have given the House merely a fraction of the information that I and my hon. Friend the Member for Shettleston have been sent on breaches of military sales embargos to Iraq and Iran.

Mr. Machon wrote to the Prime Minister in January 1991 with information, and on 31 January 1991 the Prime Minister told Parliament: for some considerable time we have not supplied arms to Iraq".—[Official Report, 31 January 1991; Vol. 184, c. 1102] Two days before that, Machon had written to the Prime Minister: I have read arid listened to many statements made in newspapers and by politicians of all parties regarding the supply of armaments and ammunitions to Iraq being carried out by every country except Great Britain. What does alarm me most of all is that Britain has been supplying Iraq and creating a funnel through which every arms manufacturing country, even Eastern bloc countries, has had the facility made 'available' to them to complete the shipment to the Gulf through Britain since 1983 to 1990. That should have concerned every one of us and our Prime Minister, who should have acted on that and other information which was sent to 10 Downing street during the past few years.

Mr. Benn

On a point of order, Mr. Deputy Speaker. During the speech by the President of the Board of Trade, I raised a point of order with you that he was quoting from official papers, and you said that they were not state papers. I have secured the words of the Speaker when she ruled on the matter. She said: Where a Member of the Opposition or any Back Bench Member refers to an official document, they do not have to lay it on the Table as a Minister has. I think that I am right in saying that that requires further consideration. Can you assure me that the Speaker will look into the matter, in the light of my point of order?

Mr. Deputy Speaker (Mr. Michael Morris)

I understand that Madam Speaker has indicated her readiness to investigate the precise nature of the document that has been quoted.

9.17 pm

Sir Ivan Lawrence (Burton)

It is a legitimate subject for political argument whether or not this country should trade with tyrants, whether we should do away with our arms industry or our machine tools industry when they could be used to make armaments, whether we should put thousands of people out of work, and whether we should let our competitors take all our markets. Those subjects have been argued from Government to Government for many years, and they will continue.

It is also a legitimate matter for political discussion whether those hon. Members who seek to criticise a policy when they are in opposition upheld the same policy when they were in power, whether they objected to the policy that the Government are pursuing in the years that mattered and whether they are making mischief because they have no sensible policies of their own and are merely being hypocritical, as they were over their arms trade with Argentina and other unpleasant regimes. Those are double standards, and they are a legitimate subject for political debate.

However, in one of the great Parliaments of the world, it ought not to be legitimate political debate to talk nonsense, in ignorance of the facts, and to persist in talking nonsense when those facts are explained.

First, it is nonsense to say that public interest certificates were used as a cover-up in an attempt to stop the truth being used to acquit innocent men, as the hon. Member for Livingstone (Mr. Cook) has said repeatedly. The fact is that public interest certificates have, and had in this case, precisely the opposite effect. They brought to the notice of the defence and of the judge the existence of documents which might have helped the defence, and which it could not have known about. The prosecution, when it knew of the relevance of the documents to the defence case, brought them to its attention and that of the court. The court then ruled that the documents should be revealed, and the trial continued.

The documents were not the end of the matter; rather it was Alan Clark's evidence which, as I understand it, was considered capable of leaving the defence with the belief that it had his support in breaking the regulations. That is why the defence barristers have said in their letter to The Times: We must have been present in an altogether different court … There was no question of anyone attempting to suppress evidence. That is game, set and match so far as the cover-up allegation is concerned, yet the hon. Member for Livingston and his supporters have no compunction in continuing to talk nonsense.

Secondly, it is utter nonsense to say that Ministers connived at a trial and the risk of imprisonment to the defendants, knowing that the allegation that Matrix Churchill broke the regulations was false. It will be for Lord Justice Scott to decide whether the argument between the Foreign Office and the DTI about the future of the guidelines should have prevented a prosecution, but two facts are beyond argument: first, that the Ministers have to sign —it is their duty under common law—a public interest certificate if security and confidentiality between civil servants and Ministers are involved; secondly, that Foreign Office Ministers and DTI Ministers have no power or control over prosecutions.

The strength of our reputation as a decent society is precisely based on the fact that the prosecuting authorities and the judicial authorities are not influenced by political convenience. Customs and Excise was the prosecution; it saw all the relevant documents and statements. [Interruption.] I notice that Opposition Members are not even bothering to listen.

Customs and Excise could have said no to a prosecution if it had known that the Minister had been economical with the actualité. There was a case against Matrix Churchill until Alan Clark's evidence was heard. That is the fact of the matter, and allegations that Ministers launched, or could have stopped, the prosecution, in the knowledge that what Alan Clark had said to them was false, is nonsense peddled by the hon. Member for Livingston and his supporters.

As Simon Jenkins said in The Times of last week of the hon. Member for Livingston: I have watched him in the past week hyper-ventilating. For my part, I would rather have these matters sorted out by common sense, by the integrity of my right hon. Friends and by the independence of Lord Justice Scott than leave it to the hyper-ventilating activity of the hon. Member for Livingston.

9.22 pm

Dr. David Clark (South Shields)

As I waded through 500-odd pages of evidence submitted to the court and I read the interactions between various Departments and the explanations of Ministers and civil servants, a couplet by Sir Walter Scott kept coming back to me, O what a tangled web we weave, When first we practise to deceive! I came to the firm conclusion that that would be a suitable epitaph for the Government.

For many, the debate merely represents the culmination of two weeks' intense activity following the collapse of the Matrix Churchill court case. As we know, however, the Government's involvement in the sale of defence equipment to Iraq has been of concern to Opposition Members for more than five years. Literally question upon question has been tabled to Ministers, only to be met, time and time again, with evasive and misleading answers.

Colleagues such as my hon. Friends the Members for Newport, West (Mr. Flynn), for Rhondda (Mr. Rogers) and for Workington (Mr. Campbell-Savours) have sought, time and again, to bring out the truth.

My predecessor, my hon. Friend the Member for Clackmannan (Mr. O'Neill), has repeatedly tried to ascertain what was going on, but to no avail. We now know why. What is so tragic is that, while those hon. Members were plying Ministers with questions and trying to get to the truth of the matter, the Government were conspiring to allow the export of machinery to be used to build up the military arsenal of the dictator, Saddam Hussein, some of which would be used against British service men fighting to liberate Kuwait. For many of us, such duplicity is unforgiveable.

Mr. Robathan

Exactly what equipment made by Matrix Churchill machine tools was used against British servicemen in the Gulf last year?

Dr. Clark

That is an interesting question and I thank the hon. Gentleman, who I know was in the Gulf. As he knows, we still have no explanation about how certain Tornados were shot down. It was certainly done with anti-aircraft fire. We do not know where shells from tanks used against British service men came from. They probably came from equipment provided by Matrix Churchill. I shall pursue that matter later.

It is interesting that, time and again, Ministers have professed their innocence and the President of the Board of Trade has done so again today. The tragedy is that hardly anyone believes it. The President will have seen the publication in yesterday's Sunday Telegraph showing that 83 per cent. of people questioned did not believe that the Government were telling the truth, the whole truth and nothing but the truth.

We do not make those serious allegations against the Government lightly. We feel fully justified in doing so on account of the Government's behaviour in the sale of that arms-making equipment to Iraq in recent years. This afternoon we have repeatedly heard from hon. Members who felt that they had been misled by Ministers over the years. My hon. Friend the Member for Livingston (Mr. Cook), at his most clinical this afternoon, provided forensic analysis proving the allegation beyond all doubt.

The Labour party is still dissatisfied with the President's explanation about the public interest immunity certificates. Although Ministers may have been advised that they had to sign them, that is not the whole picture. As the Secretary of State for Defence is winding up the debate tonight, I put the same question to him as was put to the President. Did he know that one of the three defendants had helped the Government? If he had known, would he have signed the document? I doubt whether he would have signed it. I think that he would have gone to the Attorney-General and explained the position. Will he tell the House whether he knew of the involvement of one of the defendants in the case?

To compound those two charges, we question the morality of Ministers who ordered British troops into action in Desert Storm to face an Iraqi army that was partly equipped through the Government's policy. We regard that as a hypocritical policy, which is why we felt fully justified in tabling our strong motion.

Now that the Government's facade has been peeled away with the publication of those documents in the past two weeks, we can see that the inside is rotting. The rot concerns not merely one Government Department but affects the whole machinery of government, and we look forward to Lord Justice Scott's report.

Mr. Richards

Will the hon. Gentleman give way?

Dr. Clark

No, because I gave away much of my time to the hon. and learned Member for Burton (Sir I. Lawrence).

We were surprised to hear the President of the Board of Trade say that, if Lord Justice Scott felt it appropriate, a tribunal could be held under the 1921 Act, as the Opposition requested. If that is so, why did not the Government come clean at the beginning? Why did not they offer us that at the beginning and why were not the terms of reference drawn up in consultation with the leaders of the Opposition? That would have given extra credibility to the inquiry. What we do not want is a ministerial inquiry headed by a judicial figure. We want a tribunal, and we hope that that will be the outcome, as the President this afternoon intimated would be possible. Perhaps we can be given a further assurance on that.

One of the arguments that has appeared in the documents and the debate has involved the issue of guidelines. We are all agreed that there were guidelines in 1985, announced by the then Foreign Secretary, Lord Howe. I had assumed that everyone also accepted that those guidelines were amended following the cessation of hostilities between Iraq and Iran. I was completely surprised to hear the President say today that that was not the case. What was said today flies in the face of the evidence in the documents.

Everyone accepts that there were changes made at the beginning of 1990, but they were not admitted to Parliament. Why the Government misled hon. Members is beyond me. We wonder what they are ashamed about. I find it incredible that the previous Prime Minister, on 21 April 1989, said that the Government had not changed their policy. That was repeated as recently as 17 February this year, when the current Prime Minister wrote to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) pretending that the 1988 changes had not been made and the 1985 guidelines were "enforced carefully and strictly."

When we start delving into the matter and trying to discover which Ministers knew what, we come up with incredible answers. Perhaps the most incredible of them was the statement made by the Secretary of State for Defence in an answer to my hon. Friend the Member for Linlithgow (Mr. Dalyell), who asked when it was first brought to the Secretary of State's attention that Matrix Churchill goods were used for military purposes in Iraq. The Secretary of State replied that it came to his attention in September 1992. Where has the Secretary of State been all these years? I know that he is only following the lead of the Prime Minister, who goes one better.

My hon. Friend the Member for Hamilton (Mr. Robertson) tabled a question asking the Prime Minister when he was first informed that Matrix Churchill was involved in the export of machine tools to Iraq. The Prime Minister replied today that he would reply to my hon.

Friend shortly. When did the Prime Minister know? Surely the Prime Minister knows when he was first involved—why cannot he give an answer to hon. Members?

The truth is that the Government are all over the place on the guidelines. It has become clear that they changed the guidelines, breached them and, on occasion, ignored them. A Foreign Office memo of 5 January 1988 provides evidence of that. It states that, towards the end of 1987, the Government obtained intelligence, thought by the DIS to be reliable, that the lathes are to go to set up munitions factories to produce missiles and shells in large quantities. Therefore, the Government are saying that licences had been given for equipment to go to Iraq that they knew was to be used to make munitions. They then said that had this information been available at the time", they would have advised the IDC that the military assessment was that the use of the lathes for this purpose would constitute a significant enhancement in Iraq's capability to prolong the conflict with Iran. In spite of knowing all that, the Government continued to allow licences to be granted to the company to export the same lathes to Iraq.

Mr. Richards

rose—

Dr. Clark

I shall not give way.

We argue that the House has been misled by the Government in that respect. We also feel, as my hon. Friend the Member for Livingston said, that Ministers have been naive in the extreme. I was staggered to see that on 12 March 1991 the Minister of State for the Armed Forces said, in answer to my hon. Friend the Member for Clackmannan: It is extremely unlikely that any United Kingdom defence equipment could have enhanced the capability of the Iraqi arms industry to any significant degree."—[Official Report, 12 March 1991; Vol. 187, c. 440.] I ask the question again: where have Ministers been? What have they been reading? Do they not read the reports of their officials, who have been telling them time and again that such equipment can and did enhance the strength of the Iraqi army?

We know that the lathes were not sent for general commercial purposes. Instead, they were set up and established to manufacture shells and fuses. We know that there were trial runs at Coventry to ensure that they would do the job. Yet Ministers have repeatedly assumed that there was no threat to the United Kingdom military by rearming Saddam Hussein's army.

The Government ignored and changed their guidelines as they saw fit. Things come to a head, however, when we move to the weeks leading up to the Gulf war. During those weeks, the Government were considering amending the regulations yet again. The Foreign Secretary chaired a Cabinet Committee that considered the matter. We find it unforgivable that, while the intelligence services were advising the Government that there was a build-up of Iraqi troops on the border with Kuwait and drawing attention to what Saddam Hussein was saying about the oilfields to the north of Kuwait—they were reporting loyally that there was a likelihood of a military invasion by Iraq of Kuwait and saying at the same time that British troops might have to go and fight for the liberation of Kuwait —the Government were involved throughout in actively promoting sales of arms-making equipment to Iraq. We find such duplicity unforgivable.

I move on to the Scud missiles. It was only in New York this week that the right hon. Member for Tweedale, Ettrick and Lauderdale (Sir D. Steel) and my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) heard the Swedish ambassador say that it was eastern hardware that was delivered to Iraq but western technology that allowed the Iraqis to deliver that hardware. As we watched television and saw Scud missiles killing innocent people in the middle east, I do not think that any of us thought that the missiles had had their delivery enhanced by the work of lathes that had been produced in the United Kingdom. We should be ashamed of that. We should be even more ashamed of the way in which this country encouraged Saddam Hussein to develop his nuclear capability.

In February 1989, a Foreign Office memo stated that Iraq was attempting to obtain equipment for the development of gas centrifuge technology for uranium enrichment. This is a serious development which confirms our long-held suspicion that Iraq, although a party to the Treaty on the Non-proliferation of nuclear weapons, has ambitions to develop a programme for itself. In March 1989, three export licences were granted by the Government to Matrix Churchill to supply machine tools to Iraq. Despite public approval, there was concern behind the scenes that the machines could be used for the development of nuclear weapons munitions manufacture or even uranium enrichment. Those words appeared in the Foreign Office memorandum. Part of the justification for the approval was the famous quote from the right hon. Member for Bristol, West (Mr. Waldegrave), the Chancellor of the Duchy of Lancaster, who said that screwdrivers were also required to produce hydrogen bombs. How facile, yet how revealing in many ways.

Since the United Nations has been in Iraq and carrying out investigations, the organisation says that we were involved. In its 11th report, it said: the Iraqi side stated that the small components for the centrifuge prototype were manufactured outside Iraq by three companies"— one of which was Matrix Churchill. Therefore, we have the proof. In its 12th report, the United Nations again refers to the high precision milling and turning machines supplied by Matrix Churchill.

Not only was Britain supplying conventional machinery to the Iraqis, it was supplying machinery that would allow them to develop their nuclear capability. I wonder whether that fits in with the Government policy on nuclear non-proliferation.

The whole sorry fiasco shows that the Government knowingly and, at times, positively encouraged the export of equipment that could be used to improve Iraq's military capability—and it was used for just that. When talking about how the Government have got the signals wrong in relation to other countries, we can even ask what signal was given to the Iraqis and how much we contributed to their confidence when they decided to invade Kuwait. They received covert assistance from the British Government.

Conservative Members may not appreciate how deeply the country feels about the matter. I shall quote a letter from a young boy—Marcus Roberts, aged 11, from Edinburgh—who won the best contribution for the "Children In Need" appeal last Friday on the "PM" radio programme. He wrote: Just before armistice day this year it was disclosed that Matrix Churchill and other companies had been supplying Saddam Hussein with machine tools. These were used to construct weapons including shells and missiles right up to two weeks before the invasion of Kuwait. He continued with a sentence that I shall not repeat in the House because I do not think it called for. However, I make the point that that is the view of a young boy. It is also the view of the majority of people in this country. It is certainly the view of the Opposition.

The President of the Board of Trade said today that the trouble with the Labour party was that it had been out of office for too long. The trouble with the Government is that they have been in office for too long—and that is why they are morally corrupt.

9.42 pm

The Secretary of State for Defence (Mr. Malcolm Rifkind)

In view of all the sanctimonious polemic that we have heard in the debate, I wish to comment on the careful and constructive speeches made by some of my hon. Friends. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) pointed out the dangers of taking isolated remarks and drawing general conclusions. My hon. Friend the Member for Wealden (Sir G. Johnson Smith) pointed to the Opposition's double standards—they oppose arms sales generally while lobbying Ministers for arms sales if they think that they will benefit employment in their constituencies.

I compliment my hon. Friend the Member for Clwyd, North-West (Mr. Richards) on his remarks about the dangers of nuclear proliferation. To my hon. Friend the Member for Coventry, South-West (Mr. Butcher), I say that the terms of reference of the inquiry are a matter for Lord Justice Scott who, if he wants them extended, will put that request to the Government.

The Opposition Front Bench spokesmen would have us believe that they are simple seekers after the truth, merely concerned with high principle and integrity in government. The truth is that they are an aspirant kangaroo court. The hon. Member for Livingston (Mr. Cook) has all the charity of a Robespierre and all the objectivity of a Senator McCarthy. I concede that he is not a muckraker; he is a muckmaker, because that is the ingredient that he puts before the House.

The Government are content to allow Lord Justice Scott to investigate all the allegations. Unlike the Opposition, we do not jump to conclusions. However, as the Opposition have made certain charges against the Government, we have to say to them, "This animal is vicious: if attacked, it defends itself." That is what we intend to do.

The first charge that the hon. Member for Livingston made was that the Government had broken their guidelines by selling arms to Iraq. The Opposition have clearly not paid attention to the fact that the United Kingdom, probably over the past 10 years, has had the most stringent controls over arms sales to Iraq of almost any country, east or west. One need only examine the arms sales that were made to Iraq over those years—not just $8 billion from the former Soviet Union and $579 million from the United States, but almost $3 billion from France. France sold Mirage aircraft, Exocet missiles and weapons which by any stretch of the imagination were lethal weapons, made and designed to kill.

The issue that we have been asked to consider is whether the British Government, who almost alone among western powers refused to sell any lethal offensive weapons, was in breach of guidelines on equipment which could have a dual use.

So passionate are Opposition Members in their attempts to smear anyone in sight that not only the Government have been attacked. The hon Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who is an Opposition defence spokesman, last week published a list of 36 British companies, including eminent ones such as Rolls-Royce, British Aerospace, Thorn EMI, and many others. The hon. Member maintained that he sought only to assist Lord Justice Scott in his inquiry. He said that it was not meant to be a criticism of the companies. However, the press release that he published is headed Labour list shows full extent of embargo breaches. It says: Matrix Churchill represents the tip of the iceberg". So no fewer than 36 British companies, including some of the finest companies in the land, are smeared by the Opposition as part of their campaign.

When the hon. Member for Carrick, Cumnock and Doon Valley was asked to say where he obtained his information, he claimed, according to the Financial Times, that the Labour party had gone out of its way to be as rigorous as possible in checking the information used. That sounds impressive until one finds that among the sources were anonymous informants. Those are the tactics of the spiv and the trickster over the ages. It sums up the behaviour of Opposition Members. We refute the charge. We are prepared to allow Lord Justice Scott to inquire into the matter with all the objectivity that is required.

The second claim in the Opposition's motion is that the Government have misled Parliament and not properly informed Parliament of their policy. Once again, Opposition Members have failed to substantiate their case. They talk about the guidelines, the announcement of guidelines, and whether there where changes in the guidelines. Questions about which statements may or may not have been made, or should have been made, are good debating points, but the fundamental issue is whether there was a sinister motive in any attempt by the Government to withold their policy from Parliament.

We have been told by the hon. Member for Livingston that Lord Howe initially announced the guidelines, as indeed he did, in October 1985. I do not recall the Opposition suggesting at that time, or at any time since, that there was something sinister in the guidelines being decided within Government in December 1984–10 months earlier. The gap that elapsed between the fixing of the guidelines and the announcement by Lord Howe was not seen as sinister, but Opposition Members are so desperate that they grasp at any straw to substantiate their accusations.

Perhaps one of the most pernicious accusations that Opposition Members have made is that the Government, by their policy of promoting certain sales of defence equipment to Iraq, contributed to the loss of life or injury of our troops in the Gulf. The Opposition have not provided a scintilla of evidence to support that accusation. I warn them that they are treading on dangerous ground.

As my hon. Friend the Member for Blaby (Mr. Robathan) said, the Labour Government did not hesitate to sell arms to Argentina.

The Leader of the Opposition was a senior member of that Government. Does he accept responsibility for the fact that the Labour Government of which he was a member sold eight ex-RAF Canberras to Argentina? Does he accept responsibility for the Labour Government's approval of the sale of two type 42 destroyers in May 1970? Does he accept responsibility for the sale of two Lynx helicopters in January 1976 or of 42 Sea Dart surface-to-air missiles in November 1969 and August 1978? Does he accept responsibility for the sale of 120 Blowpipe surface-to-air missiles to the Argentines in 1978?

Is the Leader of the Opposition prepared to accept responsibility for any danger to which our troops in the Falklands were exposed having been a direct consequence of the arms sales policy of the Labour Government? If he maintains that it was all right for the Labour Government to sell arms to Argentina without responsibility for the effect that that might have on our troops, how does he justify the double standard that he displays in conection with the Gulf conflict? It is simply an example of the double standard of which the House and the country are thoroughly sick.

Mr. Churchill

Will my right hon. and learned Friend remind the House that the Labour Government did not sell arms only to Argentina? They also sold British-built Puma counter-insurgency helicopters to South Africa at a critical moment, in defiance of a mandatory United Nations ban on such sales. Perhaps the Opposition would like to explain that.

Mr. Rifkind

My hon. Friend is entitled to draw attention to such matters because they are typical of Labour Governments throughout the ages. We remember clearly the busting of oil sanctions on Rhodesia by Labour Ministers which led to the Bingham inquiry. The Opposition prefer to forget that, too. We have had enough double standards from the Labour party.

One of the most serious charges that the Opposition have chosen to include in their motion is that members of the Government connived at an unjust prosecution, and that four Ministers signed public interest immunity certificates to allow innocent men to go to prison. As one of the four Ministers, I find that accusation deeply offensive, deeply insulting and entirely without foundation. I put one fundamental point to the Opposition and, in particular, to the Leader of the Opposition: it has been implied that public interest immunity certificates were invented by the present Government, but the Leader of the Opposition knows perfectly well that they have been used for the past 50 years and that members of the Government of which he was a prominent member were not slow to use them.

I will share with the House one excellent example of that. A case in 1977 of Burmah Oil Company v. the Bank of England—[Interruption.]

Madam Speaker

Order. We will not have running commentaries from hon. Members, particularly Front-Bench Members. [Interruption.] Order. I call the House to order. The Minister will be heard in the House.

Mr. Rifkind

The case occurred during the period of office of the last Labour Government—[HON. MEMBERS: "It was a civil case."] Whether it was a civil or a criminal case is beside the point. It is well established that the difference between civil and criminal cases is the onus that the judge will use, when the matter comes before him, in deciding where the balance of the public interest lies.

A report of the case to which I refer states that the Bank of England disclosed quantities of material relevant to the issues, but on government instructions resisted production of 62 documents in its possession and control … Objection to production was taken by the Chief Secretary to the Treasury in a certificate stating that he had personally read and considered each of the 62 documents listed in the schedule and had formed the opinion that their production would be injurious to the public interest. The Chief Secretary to the Treasury in the last Labour Cabinet said: the certificate claimed that the preservation of confidence was in the public interest since if it became known that what was imparted in confidence might be revealed publicly, such information, necessary to policy decisions, would cease to be so readily forthcoming. That was an example of a Labour Government using something that Labour now condemns others for using.

Mr. Kaufman

The Secretary of State quoted at length a case that he regards as relevant. Will he tell the House how many people in that case were in danger of going to gaol as a consequence of the use of public interest certificates?

Mr. Rifkind

The right hon. Gentleman appears to imply—[HON. MEMBERS: "Answer."] I will come to that point, but I must tell the right hon. Gentleman that the idea that public interest certificates are totally unacceptable in criminal cases but totally acceptable when the civil rights of citizens are being determined by a court of law is an example of the absurd absence of logic on the Opposition Benches.

Mr. Kaufman

rose—

Mr. Rifkind

I will answer the right hon. Gentleman's other point. There is no way that a Cabinet Minister who has no idea what the defence in a criminal trial might be can come to any judgment as to whether the papers before him are likely to he helpful or harmful to the defence or to the prosecution.

The judge in the Matrix Churchill case decided to disclose the papers after—not before—he had been told what was the defence case. On that basis, he was able to come to a judgment as to whether they were relevant to the matter in question.

The right hon. Member for Manchester, Gorton (Mr. Kaufman) fails to take into account another point. The judge decided that the papers should be disclosed on 5 October. If those papers made the difference between innocent men going to prison or being released, it is of great significance that, despite the papers being released to the defence on 5 October, the prosecution—far from deciding that the case could not continue—began the case a week later, on 12 October, and continued uninterrupted until 9 November. Only after the evidence of Mr. Alan Clark did the prosecution decide that, because of the nature of his evidence, it would be unreasonable to continue the prosecution.

There is no substance, directly or indirectly, in implying that Ministers, by doing their duty and signing the public interest certificates, should be held accountable in the way suggested.

As my right hon. Friend the President of the Board of Trade indicated this afternoon, it is significant that not only Her Majesty's Government but counsel for the defence believe that there was no conflict injurious to the defence. They wrote to The Times to say so. Their remarks are worth repeating to any who did not hear them earlier. In their letter published on 13 November, counsel for the defence wrote that reporting elsewhere has caused us to think that we must have been present in an altogether different court. They went on: Public interest immunity cannot be waived by either the prosecution or the ministers … There was no question of anyone attempting to suppress evidence. The spurious attempts of Opposition Members of various parties to smear the Government and others involved does not bear consideration.

Over the past few months, and particularly over the past few days, Opposition Members have continued to suggest that any arms sales policy is somehow reprehensible. I recall with irony how, week after week, I have been lobbied by Labour Members trying to ensure that the European fighter aircraft goes ahead in the interests of their constituents. When it looked as though the Kuwaitis were going to sell a tank to the Americans rather than the British, the Opposition spokesman attacked the Government for failing to ensure that it was sold in the right direction. There is humbug; there are double standards; there is an attempt to save face. The Opposition should be hounded for the way in which they have behaved.

Mr. Derek Foster (Bishop Auckland)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 265, Noes 310.

Division No. 91]	[10.00 pm
AYES
Abbott, Ms Diane	Byers, Stephen
Adams, Mrs Irene	Caborn, Richard
Ainger, Nick	Callaghan, Jim
Ainsworth, Robert (Cov'try NE)	Campbell, Mrs Anne (C'bridge)
Allen, Graham	Campbell, Menzies (Fife NE)
Anderson, Donald (Swansea E)	Campbell, Ronnie (Blyth V)
Anderson, Ms Janet (Ros'dale)	Campbell-Savours, D. N.
Armstrong, Hilary	Canavan, Dennis
Ashton, Joe	Cann, Jamie
Austin-Walker, John	Carlile, Alexander (Montgomry)
Banks, Tony (Newham NW)	Chisholm, Malcolm
Barron, Kevin	Clapham, Michael
Battle, John	Clark, Dr David (South Shields)
Bayley, Hugh	Clarke, Eric (Midlothian)
Beckett, Margaret	Clelland, David
Bell, Stuart	Clwyd, Mrs Ann
Benn, Rt Hon Tony	Coffey, Ann
Bennett, Andrew F.	Cohen, Harry
Benton, Joe	Connarty, Michael
Bermingham, Gerald	Cook, Frank (Stockton N)
Berry, Dr. Roger	Cook, Robin (Livingston)
Betts, Clive	Corbett, Robin
Blair, Tony	Corbyn, Jeremy
Blunkett, David	Corston, Ms Jean
Boateng, Paul	Cousins, Jim
Bradley, Keith	Cryer, Bob
Bray, Dr Jeremy	Cunliffe, Lawrence
Brown, Gordon (Dunfermline E)	Cunningham, Jim (Covy SE)
Brown, N. (N'c'tle upon Tyne E)	Cunningham, Dr John (C'p'l'nd)
Bruce, Malcolm (Gordon)	Dafis, Cynog
Burden, Richard	Dalyell, Tam

Darling, Alistair	Jowell, Tessa
Davidson, Ian	Kaufman, Rt Hon Gerald
Davies, Bryan (Oldham C'tral)	Keen, Alan
Davies, Rt Hon Denzil (Llanelli)	Kennedy, Charles (Ross,C&S)
Davies, Ron (Caerphilly)	Kennedy, Jane (Lpool Brdgn)
Davis, Terry (B'ham, H'dge H'l)	Khabra, Piara S.
Denham,John	Kinnock, Rt Hon Neil (Islwyn)
Dewar, Donald	Leighton, Ron
Dixon, Don	Lestor, Joan (Eccles)
Dobson, Frank	Lewis, Terry
Donohoe, Brian H.	Litherland, Robert
Dowd, Jim	Livingstone, Ken
Dunnachie, Jimmy	Lloyd, Tony (Stretford)
Dunwoody, Mrs Gwyneth	Llwyd, Elfyn
Eagle, Ms Angela	Loyden, Eddie
Eastham, Ken	McCartney, Ian
Enright, Derek	Macdonald, Calum
Etherington, Bill	McFall, John
Evans, John (St Helens N)	McKelvey, William
Fatchett, Derek	Mackinlay, Andrew
Faulds, Andrew	McLeish, Henry
Field, Frank (Birkenhead)	Maclennan, Robert
Fisher, Mark	McMaster, Gordon
Flynn, Paul	McNamara, Kevin
Foster, Derek (B'p Auckland)	Madden, Max
Foster, Don (Bath)	Mahon, Alice
Foulkes, George	Mallon, Seamus
Fraser, John	Mandelson, Peter
Fyfe, Maria	Marek, Dr John
Galbraith, Sam	Marshall, David (Shettleston)
Galloway, George	Marshall, Jim (Leicester, S)
Gapes, Mike	Martin, Michael J. (Springburn)
Garrett, John	Martlew, Eric
George, Bruce	Maxton, John
Gerrard, Neil	Meacher, Michael
Gilbert, Rt Hon Dr John	Meale, Alan
Godsiff, Roger	Michael, Alun
Golding, Mrs Llin	Michie, Bill (Sheffield Heeley)
Gordon, Mildred	Michie, Mrs Ray (Argyll Bute)
Gould, Bryan	Milburn, Alan
Graham, Thomas	Miller, Andrew
Grant, Bernie (Tottenham)	Moonie, Dr Lewis
Greenway, John (Ryedale)	Morgan, Rhodri
Griffiths, Nigel (Edinburgh S)	Morris, Rt Hon A. (Wy'nshawe)
Griffiths, Win (Bridgend)	Morris, Estelle (B'ham Yardley)
Grocott, Bruce	Morris, Rt Hon J. (Aberavon)
Gunnell, John	Mowlam, Marjorie
Hain, Peter	Mudie, George
Hall, Mike	Mullin, Chris
Hanson, David	Murphy, Paul
Hardy, Peter	Oakes, Rt Hon Gordon
Harman, Ms Harriet	O'Brien, Michael (N W'kshire)
Harvey, Nick	O'Brien, William (Normanton)
Hattersley, Rt Hon Roy	O'Hara, Edward
Henderson, Doug	Olner, William
Heppell, John	O'Neill, Martin
Hill, Keith (Streatham)	Orme, Rt Hon Stanley
Hinchliffe, David	Parry, Robert
Hoey, Kate	Pendry, Tom
Hogg, Norman (Cumbernauld)	Pike, Peter L.
Home Robertson, John	Pope, Greg
Hoon, Geoffrey	Powell, Ray (Ogmore)
Howarth, George (Knowsley N)	Prentice, Ms Bridget (Lew'm E)
Howells, Dr. Kim (Pontypridd)	Prentice, Gordon (Pendle)
Hoyle, Doug	Prescott, John
Hughes, Kevin (Doncaster N)	Primarolo, Dawn
Hughes, Robert (Aberdeen N)	Purchase, Ken
Hughes, Roy (Newport E)	Quin, Ms Joyce
Hughes, Simon (Southwark)	Radice, Giles
Hutton, John	Randall, Stuart
Illsley, Eric	Raynsford, Nick
Ingram, Adam	Reid, Dr John
Jackson, Glenda (H'stead)	Robertson, George (Hamilton)
Jackson, Helen (Shef'ld, H)	Robinson, Geoffrey (Co'try NW)
Jamieson, David	Roche, Mrs. Barbara
Janner, Greville	Rogers, Allan
Johnston, Sir Russell	Rooker, Jeff
Jones, Barry (Alyn and D'side)	Rooney, Terry
Jones, Jon Owen (Cardiff C)	Ross, Ernie (Dundee W)
Jones, Lynne (B'ham S O)	Rowlands, Ted

Ruddock, Joan	Taylor, Matthew (Truro)
Salmond, Alex	Thompson, Jack (Wansbeck)
Sedgemore, Brian	Tipping, Paddy
Sheerman, Barry	Turner, Dennis
Sheldon, Rt Hon Robert	Vaz, Keith
Shore, Rt Hon Peter	Walker, Rt Hon Sir Harold
Short, Clare	Wallace, James
Simpson, Alan	Walley, Joan
Skinner, Dennis	Warden, Gareth (Gower)
Smith, Andrew (Oxford E)	Wareing, Robert N
Smith, C. (Isl'ton S & F'sbury)	Wicks, Malcolm
Smith, Rt Hon John (M'kl'ds E)	Wigley, Dafydd
Smith, Llew (Blaenau Gwent)	Williams, Rt Hon Alan (Sw'n W)
Snape, Peter	Williams, Alan W (Carmarthen)
Soley, Clive	Wilson, Brian
Spellar, John	Winnick, David
Squire, Rachel (Dunfermline W)	Wise, Audrey
Steel, Rt Hon Sir David	Wray, Jimmy
Steinberg, Gerry	Wright, Dr Tony
Stevenson, George	Young, David (Bolton SE)
Stott, Roger
Strang, Dr. Gavin	Tellers for the Ayes:
Straw, Jack	Mr. Peter Kilfoyle and Mr. Thomas McAvoy.
Taylor, Mrs Ann (Dewsbury)

NOES
Adley, Robert	Chaplin, Mrs Judith
Ainsworth, Peter (East Surrey)	Churchill, Mr
Aitken, Jonathan	Clappison, James
Alison, Rt Hon Michael (Selby)	Clark, Dr Michael (Rochford)
Allason, Rupert (Torbay)	Clifton-Brown, Geoffrey
Amess, David	Coe, Sebastian
Ancram, Michael	Colvin, Michael
Arbuthnot, James	Congdon, David
Arnold, Sir Thomas (Hazel Grv)	Conway, Derek
Ashby, David	Coombs, Anthony (Wyre For'st)
Aspinwall, Jack	Coombs, Simon (Swindon)
Atkins, Robert	Cope, Rt Hon Sir John
Atkinson, David (Bour'mouth E)	Cormack, Patrick
Atkinson, Peter (Hexham)	Cran, James
Baker, Rt Hon K. (Mole Valley)	Currie, Mrs Edwina (S D'by'ire)
Baker, Nicholas (Dorset North)	Curry, David (Skipton & Ripon)
Baldry, Tony	Davies, Quentin (Stamford)
Banks, Matthew (Southport)	Davis, David (Boothferry)
Banks, Robert (Harrogate)	Day, Stephen
Bates, Michael	Deva, Nirj Joseph
Batiste, Spencer	Devlin, Tim
Bellingham, Henry	Dickens, Geoffrey
Bendall, Vivian	Dicks, Terry
Beresford, Sir Paul	Dorrell, Stephen
Biffen, Rt Hon John	Douglas-Hamilton, Lord James
Blackburn, Dr John G.	Dover, Den
Body, Sir Richard	Duncan, Alan
Bonsor, Sir Nicholas	Duncan-Smith, Iain
Booth, Hartley	Dunn, Bob
Boswell, Tim	Durant, Sir Anthony
Bottomley, Peter (Eltham)	Eggar, Tim
Bottomley, Rt Hon Virginia	Elletson, Harold
Bowden, Andrew	Emery, Sir Peter
Bowis, John	Evans, David (Welwyn Hatfield)
Boyson, Rt Hon Sir Rhodes	Evans, Jonathan (Brecon)
Brandreth, Gyles	Evans, Nigel (Ribble Valley)
Brazier, Julian	Evans, Roger (Monmouth)
Bright, Graham	Evennett, David
Brooke, Rt Hon Peter	Faber, David
Brown, M. (Brigg & Cl'thorpes)	Fabricant, Michael
Browning, Mrs. Angela	Fenner, Dame Peggy
Bruce, Ian (S Dorset)	Field, Barry (Isle of Wight)
Budgen, Nicholas	Fishburn, Dudley
Burns, Simon	Forman, Nigel
Burt, Alistair	Forsyth, Michael (Stirling)
Butcher, John	Forth, Eric
Butler, Peter	Fowler, Rt Hon Sir Norman
Butterfill, John	Fox, Dr Liam (Woodspring)
Carlisle, John (Luton North)	Fox, Sir Marcus (Shipley)
Carlisle, Kenneth (Lincoln)	Freeman, Roger
Carrington, Matthew	French, Douglas
Carttiss, Michael	Fry, Peter
Cash, William	Gallie, Phil
Channon, Rt Hon Paul	Gardiner, Sir George

Garel-Jones, Rt Hon Tristan	Marland, Paul
Garnier, Edward	Marshall, John (Hendon S)
Gill, Christopher	Martin, David (Portsmouth S)
Gillan, Cheryl	Mates, Michael
Goodlad, Rt Hon Alastair	Mawhinney, Dr Brian
Goodson-Wickes, Dr Charles	Mayhew, Rt Hon Sir Patrick
Gorman, Mrs Teresa	Mellor, Rt Hon David
Gorst, John	Merchant, Piers
Grant, Sir Anthony (Cambs SW)	Milligan, Stephen
Greenway, John (Ryedale)	Mills, Iain
Griffiths, Peter (Portsmouth, N)	Mitchell, Andrew (Gedling)
Grylls, Sir Michael	Mitchell, Sir David (Hants NW)
Gummer, Rt Hon John Selwyn	Moate, Roger
Hague, William	Monro, Sir Hector
Hamilton, Rt Hon Archie (Epsom)	Montgomery, Sir Fergus
Hampson, Dr Keith	Moss, Malcolm
Hanley, Jeremy	Needham, Richard
Hannam, Sir John	Nelson, Anthony
Hargreaves, Andrew	Neubert, Sir Michael
Hawkins, Nick	Newton, Rt Hon Tony
Hawksley, Warren	Nicholls, Patrick
Hayes, Jerry	Nicholson, David (Taunton)
Heald, Oliver	Nicholson, Emma (Devon West)
Heath, Rt Hon Sir Edward	Norris, Steve
Heathcoat-Amory, David	Onslow, Rt Hon Cranley
Hendry, Charles	Oppenheim, Phillip
Heseltine, Rt Hon Michael	Ottaway, Richard
Higgins, Rt Hon Terence L.	Page, Richard
Hill, James (Southampton Test)	Paice, James
Hogg, Rt Hon Douglas (G'tham)	Patnick, Irvine
Horam, John	Patten, Rt Hon John
Hordern, Sir Peter	Pattie, Rt Hon Sir Geoffrey
Howard, Rt Hon Michael	Pawsey, James
Howarth, Alan (Strat'rd-on-A)	Peacock, Mrs Elizabeth
Howell, Rt Hon David (G'dford)	Pickles, Eric
Howell, Ralph (North Norfolk)	Porter, Barry (Wirral S)
Hughes Robert G. (Harrow W)	Porter, David (Waveney)
Hunt, Rt Hon David (Wirral W)	Portillo, Rt Hon Michael
Hunt, Sir John (Ravensbourne)	Powell, William (Corby)
Hunter, Andrew	Redwood, John
Hurd, Rt Hon Douglas	Renton, Rt Hon Tim
Jack, Michael	Richards, Rod
Jackson, Robert (Wantage)	Riddick, Graham
Jenkin, Bernard	Rifkind, Rt Hon. Malcolm
Jessel, Toby	Robathan, Andrew
Johnson Smith, Sir Geoffrey	Roberts, Rt Hon Sir Wyn
Jones, Gwilym (Cardiff N)	Robertson, Raymond (Ab'd'n S)
Jopling, Rt Hon Michael	Robinson, Mark (Somerton)
Kellett-Bowman, Dame Elaine	Roe, Mrs Marion (Broxbourne)
Key, Robert	Ross, William (E Londonderry)
Kilfedder, Sir James	Rowe, Andrew (Mid Kent)
King, Rt Hon Tom	Rumbold, Rt Hon Dame Angela
Kirkhope, Timothy	Ryder, Rt Hon Richard
Knapman, Roger	Sackville, Tom
Knight, Mrs Angela (Erewash)	Sainsbury, Rt Hon Tim
Knight, Greg (Derby N)	Scott, Rt Hon Nicholas
Knight, Dame Jill (Bir'm E'st'n)	Shaw, David (Dover)
Knox, David	Shaw, Sir Giles (Pudsey)
Kynoch, George (Kincardine)	Shephard, Rt Hon Gillian
Lait, Mrs Jacqui	Shepherd, Colin (Hereford)
Lang, Rt Hon Ian	Shepherd, Richard (Aldridge)
Lawrence, Sir Ivan	Shersby, Michael
Legg, Barry	Sims, Roger
Leigh, Edward	Skeet, Sir Trevor
Lennox-Boyd, Mark	Smith, Sir Dudley (Warwick)
Lester, Jim (Broxtowe)	Smith, Tim (Beaconsfield)
Lidington, David	Soames, Nicholas
Lilley, Rt Hon Peter	Speed, Sir Keith
Lloyd, Peter (Fareham)	Spencer, Sir Derek
Lord, Michael	Spicer, Sir James (W Dorset)
Luff, Peter	Spicer, Michael (S Worcs)
Lyell, Rt Hon Sir Nicholas	Spink, Dr Robert
MacGregor, Rt Hon John	Spring, Richard
MacKay, Andrew	Sproat, Iain
McLoughlin, Patrick	Squire, Robin (Hornchurch)
McNair-Wilson, Sir Patrick	Stanley, Rt Hon Sir John
Maitland, Lady Olga	Steen, Anthony
Major, Rt Hon John	Stephen, Michael
Malone, Gerald	Stern, Michael
Mans, Keith	Stewart, Allan

Streeter, Gary	Walden, George
Sumberg, David	Walker, Bill (N Tayside)
Sweeney, Walter	Waller, Gary
Sykes, John	Ward, John
Tapsell, Sir Peter	Wardle, Charles (Bexhill)
Taylor, Ian (Esher)	Waterson, Nigel
Taylor, Rt Hon John D. (Strgfd)	Watts, John
Taylor, John M. (Solihull)	Wells, Bowen
Temple-Morris, Peter	Wheeler, Sir John
Thomason, Roy	Whitney, Ray
Thompson, Sir Donald (C'er V)	Whittingdale, John
Thompson, Patrick (Norwich N)	Widdecombe, Ann
Thurnham, Peter	Willetts, David
Townend, John (Bridlington)	Wilshire, David
Townsend, Cyril D. (Bexl'yh'th)	Winterton, Mrs Ann (Congleton)
Tracey, Richard	Wolfson, Mark
Tredinnick, David	Wood, Timothy
Trend, Michael	Yeo, Tim
Trotter, Neville	Young, Sir George (Acton)
Twinn, Dr Ian
Vaughan, Sir Gerard	Tellers for the Noes:
Viggers, Peter	Mr. Sydney Chapman and Mr. David Lightbown.
Waldegrave, Rt Hon William

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House notes that up to August 1990 Her Majesty's Government granted export licences for the supply of goods to Iraq in accordance with guidelines which had as their overriding consideration not to supply any lethal equipment and which also restricted the supply of any defence equipment; recognises that it will be for Lord Justice Scott, under the terms of his inquiry, to consider whether these guidelines were followed; welcomes the Government's decision to give the inquiry wide terms of reference which will enable Lord Justice Scott to examine all of the facts, including the decisions taken by those signing public interest immunity certificates in the Matrix Churchill case; and deplores the sensationalised attempts of Her Majesty's Opposition to anticipate the inquiry's findings.