BMARC (Hansard, 19 June 1995)

HC Deb 19 June 1995 vol 262 cc39-80 39

§ Madam Speaker
I have selected the amendment standing in the name of the Prime Minister. Given the number of hon. Members who are seeking to speak, I must limit speeches from Back Benchers to 10 minutes.

4.32 pm

§ Dr. John Cunningham (Copeland)
I beg to move, That this House calls for an independent inquiry into the BMARC affair. Once more the nation has been rocked by disclosures of incompetence, negligence and perhaps worse at the heart of this decrepit Government. Again we learn that, after years of denials, stated Government policy on arms sales to Iran was covertly undermined and widely breached. Again we learn that, in a wide variety of answers to parliamentary questions—as my hon. Friend the Member for Leyton (Mr. Cohen) has highlighted—Ministers have held to the fiction that the policy was being rigorously observed when it was being easily and regularly breached.
Finally, and most astonishingly, we learned this weekend that more potentially crucial documents had been lost, overlooked or forgotten, and that evidence germane to investigations, prosecutions and inquiries had been mislaid—by accident, of course—by the Ministry of Defence police, the very people responsible for their care. Like the last chapter of "Huckleberry Finn", no doubt they were locked in an attic somewhere. It is no wonder that in respect of this Government's stewardship—a period that has seen Government officials coin phrases such as "being economical with the truth" and "the truth is a difficult concept"—Mark Twain's words still apply: Rumour is half way around the world before truth has got its boots on". The Government seem to have removed the laces from the boots of truth in these matters.
The issues go to the heart of the credibility, competence and integrity of government in our country. They raise fundamental questions that demand rigorous investigation, especially as we need to be convinced that Ministers were not conniving all along in a covert policy of providing arms to Iran while pretending publicly to prevent weapons sales.
There is an astonishing parallel with the arms to Iraq scandal, which has been under investigation by the Scott inquiry since November 1992. The Government's stated policy on arms sales to Iran and Iraq was set out by Lord Howe in October 1985 when he was Foreign Secretary. He informed the House of the following set of guidelines to all deliveries of defence equipment to Iran and Iraq: (i) We should maintain our consistent refusal to supply lethal equipment to either side; (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; (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.] 40 After years in which three different Foreign Secretaries, six different Trade and Industry Secretaries and four different Defence Secretaries told the nation that those policies were being implemented effectively, we now know that their statements were false. Their statements are worth recording, although time limits me to only a few quotations. In December 1990, the then Minister of Trade, the right hon. Member for Hove (Sir T. Sainsbury), said: 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) 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". That statement is hardly justified in the light of the announcement by the President of the Board of Trade last week; nor does it fit with the Prime Minister's guidance to Ministers which 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". The right hon. Member for St. Albans told my hon. Friend the Member for Rhondda (Mr. Rogers)—

§ Sir Timothy Sainsbury (Hove)
Will the hon. Gentleman give way?

§ Dr. Cunningham
I will give way in a moment.
The right hon. Member for St. Albans told my hon. Friend: Each application for a licence is considered on its merits in consultation with other Departments taking into account the type of equipment, its end use and end user".—[Official Report, 17 December 1990; Vol. 183, c. 66.] The right hon. Member for Witney (Mr. Hurd) told the House: Arms embargoes are in place with regard to Iran and Iraq".—[Official Report, 28 November 1990; Vol. 181, c. 884.] The right hon. Member for Thanet, South (Mr. Aitken) was very active in answering questions on the subject in his role as Minister of State for Defence Procurement. In a written answer, he told my hon. Friend the Member for Kirkcaldy (Dr. Moonie) that the Government's policy was to permit exports to Iran only within the policy announced by the then Foreign Secretary on 29 October 1985".—[Official Report, 24 November 1992; Vol. 214, c. 645.] The right hon. Member for Thanet, South told my hon. Friend the Member for Clackmannan (Mr. O'Neill): There has been a substantial sea change in Whitehall under the leadership of my right hon. Friend the Prime Minister, away from the old habits of unnecessary secrecy … Now there is greater emphasis on a new era of more responsible openness in all matters."—[Official Report, 30 June 1992; Vol. 210, c. 706.]

§ Sir Timothy Sainsbury
Will the hon. Gentleman give way?

§ Dr. Cunningham
I shall give way when I have finished my quotations.
41 On 13 May 1992, the right hon. Member for Thanet, South said in a written reply to my hon. Friend the Member for Clackmannan: I would add, however, that since 1984, the United Kingdom has refused to supply any equipment which could prolong or exacerbate the Iran-Iraq conflict"—[Official Report, 13 May 1992; Vol. 207, c. 156.] We now know that none of those statements were true.

§ Sir Timothy Sainsbury
The hon. Gentleman started his speech with a number of sweeping allegations. He went on to read a lengthy list of quotations from Ministers. He is now saying that every one of those ministerial statements was not only untrue but, by implication, that the Minister who made it at the time knew it to he untrue. Is not his whole case based on the idea that, when somebody sets out to break the law or avoid regulations, those whose law or regulations they are seeking to break or breach are aware of that person's intentions?

§ Dr. Cunningham
Is not the right hon. Gentleman making the case for an independent inquiry? We need to know the answer to his question. The House and the country need to know exactly what was going on in government at the time.

§ Sir Timothy Sainsbury
Will the hon. Gentleman give way?

§ Dr. Cunningham
No. I am not giving way again.
Similar assurances were given about the return of documents withheld by the Ministry of Defence. On 30 March this year, I wrote to the Prime Minister about the withholding of documents, asking him three specific questions. In his reply of 5 April, he said of the papers: These were in the temporary possession of the Ministry of Defence Police after they had been taken from Astra and BMARC during an investigation into corruption. These were sent to the receivers in mid-1993 when the investigations were completed. As we now know, that statement is completely false, as has again been revealed apparently by accident and not through any desire for openness.
Similarly, on 4 April this year, my hon. Friend the Member for Wallsend (Mr. Byers) was given the same answer by the Leader of the House. We now know that those answers were untrue.
We have established that the right hon. Members for Huntingdon (Mr. Major), for Witney, for Thanet, South for St. Albans and for Braintree (Mr. Newton) have all given answers that now cannot withstand examination because they are untrue. I am sure that, given time, many more untrue answers to questions and interventions will emerge from the records of the past few years.
The matters have come to light only because of the persistence of my hon. Friends the Members for Rhondda, for Newcastle upon Tyne, Central (Mr. Cousins), for Wallsend, for Cunninghame, North (Mr. Wilson) for Clackmannan, for Kirkcaldy and others, and not because the Government have been open.
The President of the Board of Trade was obliged to lift the veil on the real state of affairs in his statement to the House last week because he could not answer the questions from my hon. Friend the Member for Cunninghame, North, although a plethora of his predecessors had willy-nilly answered similar questions—wrongly, as it turns out.
42 Many questions, however, remain unanswered. In the circumstances, how can anyone accept that we know all there is to know? We have learnt by experience that the Government cannot be trusted on such issues, any more than they can be trusted on their promises on taxation.

§ Mr. Winston Churchill (Davyhulme)
Before the hon. Gentleman waxes holier than thou, is he aware that the Labour Government under the late Lord Wilson supplied counter-insurgence Puma helicopters to South Africa in contravention of mandatory United Nations sanctions, without giving the facts to the House?

§ Dr. Cunningham
I am aware that the Wilson Government stopped selling arms to South Africa.
Last week, in his wish to help his Cabinet colleagues, the President of the Board of Trade made a statement blaming officials. He blamed the failure to circulate intelligence reports properly. He blamed almost everyone but Ministers. He said that so many things had to be checked that' his Department was swamped and, as a consequence, 36 per cent. of BMARC applications were not properly supported by documentation.
Apparently, by a remarkable coincidence, the very things that Ministers were trying to block—guns and ammunition—got through. There were a lot of guns—naval cannon. If all the guns exported to Singapore had been used by the Navy there, the Malacca straits would probably be blocked by capsized warships. No one in the Government noticed; or did they notice but not want to know? The Conservative Government ensured that the combatants did not have lap-top computers in the trenches on the battlefield, but they made sure that they had guns.
In a debate on arms to Iraq in November 1992, the President of the Board of Trade said: 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. The right hon. Gentleman told the House that the detail of all the judgments had to be scrutinised, not just the superficiality. That is what he said was happening, but we know from his statement last week that it could not possibly have been true.
In the same speech, the right hon. Gentleman continued: Secondly, it is obvious that any interpretation of those rules require careful consideration of individual export licence applications."—[Official Report, 23 November 1992; Vol. 214, c. 640–41.] If what the right hon. Gentleman told the House in that debate was happening, how did those weapons escape the net? That could have occurred only because what he claimed was happening was not actually happening, so on that occasion the right hon. Gentleman was not being particularly accurate or candid with the House, of which his statement to the House last week was absolute confirmation.
In his statement to the House on 13 June, the President of the Board of Trade painted a picture of the treatment of intelligence in Whitehall that frankly defies belief. 43 Are we to believe that the 1986 intelligence, which he says was not distributed to DTI, simply sank without trace in the rest of Whitehall? He acknowledges that it went to other Departments. What did they do with it? Did they ignore it? Did not one Sir Humphrey pick up the phone and say, "Bill, I think you should know about this. It affects your Department"? Did not one person in the FCO, the MOD or the Cabinet Office, which presumably received the intelligence, consider that there was something to act upon, perhaps even to check with the Department of Trade and Industry and ensure that it was informed about what was happening? It is just not credible.
Are we to believe that, in the period before 1988, when, we are told, two intelligence reports were distributed to the DTI, no assessment was made of intelligence for distribution around Whitehall and to Ministers who took it into account? I find it difficult to accept that, because an intelligence report was not distributed to the DTI, the Department can be assumed to have been in complete ignorance of its contents for several years. The point just does not bear scrutiny.
In his statement to the House, the President painted this picture in a very odd way, completely unconvincing on subsequent analysis. In any case, even when intelligence reports were distributed to the DTI, as in the two 1988 cases, much good did it do. When there were not very difficult links between Oerlikon and BMARC to be made, the Department simply failed to make them. The President says that arrangements for the distribution and handling of intelligence, both generally and in the DTI, have been "substantially improved" since 1988, but I put it to him that it is not the distribution and handling of intelligence that needs improving: it is the reading and using of the reports by Ministers and their officials where the improvement is long overdue.
Did officials, on the other hand, know from Ministers that they did not want to hear? It is an unusual experience for me to find myself in agreement with Baroness Thatcher, yet I cannot help feeling that she was correct when she told the Scott inquiry, commenting on the handling of intelligence reports, that one would expect Ministers, when dealing with such an issue, to ascertain whether there was any intelligence to be considered, or to ask someone to put an inquiry through to see if there was any.
As with Iraq, so apparently with Iran. No one, including Ministers, seems to have asked—perhaps because they did not want to know the reply.
Last week, in a series of media interviews, the President described all these failures as "a cock-up". Apparently the lost papers this weekend were another cock-up. Government by cock-up is what this country has under the President of the Board of Trade and his right hon. Friends. We have non-executive directors who do not read minutes or agendas. We have Ministers who do not read intelligence reports, or even ask intelligent questions about them. It can all be summed up by saying: negligence, incompetence and a lack of integrity, too.
The guidelines were issued in 1985; project LISI began in 1986, 12 months later. Directors at BMARC say that Whitehall knew the guns were going to Iran via Singapore from the very beginning. Intelligence reports said that a UK company was avoiding export controls by shipping 44 weapons via a subsidiary in Singapore—but no one in the Government apparently made the connection. The right hon. Member for Thanet, South, who was recruited by BMARC exactly because of his knowledge of the middle east, knew nothing about one of the company's largest orders; when at least three former directors of BMARC have stated publicly that, as all directors were regularly briefed on all aspects of project LISI, the right hon. Gentleman must have known who the end user was.
Are we to believe that a man who says he took his non-executive duties seriously did not see fit to press his fellow directors as to the real nature of project LISI—a project under which naval cannon were ordered by Singapore, despite the fact that its navy did not have enough boats capable of mounting a fraction of the weapons provided?
It is a basic principle of company law that a non-executive director has the same obligations and is subject to the same liabilities as any other director. He has a duty to keep himself informed about the business activities of the company. The fact that the Chief Secretary may not have bothered to find out the basic facts of one of his companies' largest orders does not excuse him. The right hon. Gentleman failed in his duties as a non-executive director; and the same is true of Ministers and their Departments. Ministers have a responsibility to keep themselves informed about the workings of their own Departments.
This is not just a question of one person's guilt or otherwise. This is a matter that encompasses many Government Departments and many Ministers—for instance, the Department of the President. Not only did his Department fail to make a connection between BMARC's export licence applications and the intelligence reports distributed, but during the period of project LISI, 1986 to 1989, full supporting documentation concerning end users was not supplied—was apparently never asked for by the Department—yet the licences were granted. How on earth does this statement fit in with Lord Howe's assertion, repeated so often by so many Ministers to the House, that the Government would continue to scrutinise rigorously all applications for export licences"?—[Official Report, 29 October 1985; Vol. 84, c. 450] Anyone genuinely concerned for the right hon. Member for Thanet, South should support the call for an independent inquiry. After all, even his own publicity adviser's faxes seem to support the need to clear up the matter once and for all. The Chief Secretary said publicly last week that he would welcome a fuller inquiry.
The concern of the President of the Board of Trade for his right hon. Friend shone through his extraordinary performances last week, in the House and in media interviews. As the book of Samuel puts it: I am distressed for thee, my brother Jonathan. The President is, as we all know—and his colleagues know only too well—in the clear. He has nothing to fear from an independent judicial inquiry; he was out of government for most of the time. Indeed, he might positively benefit because, as has been noticed—as much by his right hon. and hon. Friends as by us and the media—he increasingly resembles a man who hopes to keep his head while all around are losing theirs.
The Scott inquiry is dealing with arms to Iraq. We do not want to delay it any longer. The Trade and Industry Select Committee has already held one inquiry into these 45 issues. We now know that it was denied papers and evidence. Not surprisingly, the report was inconclusive. I know that my hon. Friend the Member for Sheffield, Central (Mr. Caborn) is trying to clarify the position, not just of the President but of the whole Government, on these issues.
The House is facing new revelations in what are, by any test, extraordinary circumstances. That is why we believe that the BMARC affair should be the subject of a fully independent judicial inquiry, quite separate from the Scott inquiry. This new inquiry should have access to all documents and reports relevant to the BMARC affair. It should be headed by a judge; the person appointed should satisfy him or herself that the terms of reference are effectively drawn up. The issues raised in the BMARC affair go to the heart of the integrity and competence of government in our country. They should be independently and rigorously investigated.
Most of all, I am surprised that the President of the Board of Trade is not supporting our motion, which reflects the seriousness of the allegations and issues under debate—negligence, honesty, ministerial competence and integrity. The right hon. Gentleman certainly supported such an approach in the past, for in 1992 he had this to say about very similar accusations: 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…That is the only way in which the matter will be seriously investigated to the satisfaction of the House and a wider public…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."—[Official Report, 23 November 1992; Vol.214, c. 644–53.] The Conservatives' amendment does not seek that today—but then, as so often before, the right hon. Gentleman has shifted his ground. I nevertheless urge the House to support our motion tonight.

4.59 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: recognises the independence of the all-party Select Committee for Trade and Industry; welcomes the Government's assurance that if that Committee decides to examine the issues raised by the allegation that Singapore was used as a conduit for arms to Iran then it will co-operate fully; and recognises that as far as intelligence is concerned the Government will establish procedures with the Select Committee in the light of the Intelligence Services Act 1994.". In the ordinary course of events, Mr. Deputy Speaker, I would begin with your characteristic title, but the whole House will want to recognise that in one material way your title has changed since I was last able to address you. I do not in any way seek to change your title, but the spirit of my congratulations is deep and heartfelt.
It was not until the 27th minute of the speech of the right hon. Member for Copeland (Dr. Cunningham) that it appeared that there was a substantial difference between the thrust of what he was saying and the reasons why I made an oral statement a week ago. I accept at once that my statement arose directly from the fact that my hon. Friend the Under-Secretary of State and I had three written questions to address from the hon. Member for 46 Cunninghame, North (Mr. Wilson). As a result of those questions, we did what the House would expect Ministers to do, which was to ask the basic questions and to seek the basic information so as to give a full answer to the House.
My hon. Friend and I were not satisfied with the answers which were in front of us, and therefore asked for further information. As a result of the further information which was brought to our attention, it became apparent that there was a serious issue which Ministers in my Department first had to address. The right hon. Member for Copeland was correct when he said that there is a range of quotations, letters and parliamentary answers which needs to be revisited in the light of my statement.

§ Mr. D. N. Campbell-Savours (Workington)
May I take the President of the Board of Trade back a few sentences to clarify his position? He said that the first drafts which were placed before him were unsatisfactory. Does that mean that civil servants put drafts before him which they knew to be misleading?

§ Mr. Heseltine
No. I realise that the Labour party has not been in government for a long time. It is common—

§ Dr. John Cunningham
Patronising.

§ Mr. Heseltine
I am not patronising the hon. Member for Workington (Mr. Campbell-Savours): I am commenting on a merciful release for the country, which has been spared the phenomenon of a Labour Government.
It is common for Ministers to change the drafts of parliamentary answers. That is what Ministers are supposed to be in a position to do. The thrust of the questions of the right hon. Member for Copeland is that we should have done that earlier, as opposed to not doing it at all. Perhaps the Labour party will try to understand the normal workings of government. It is—[Interruption.] I never said that they were dishonest. I merely said that my hon. Friend the Under-Secretary of State and I were not satisfied that the responses answered the questions to our full satisfaction. Looking back, without the drafts in front of me—this is if I remember correctly—I thought that we could give fuller answers. I thought that, in giving fuller answers—[Interruption.] There is no surprise in any of this. The House will appreciate that it is precisely for those reasons that I came before it with an oral statement.

§ Mr. Allan Rogers (Rhondda)
Will the President of the Board of Trade give way on that point?

§ Mr. Heseltine
No.
I am sure that the House will appreciate the enormity of the fact that the Labour party wants an independent judicial inquiry, which would take a long time. It is now trying to press an inquiry into a few moments across the Dispatch Boxes. I must be allowed to try to explain as fully as I reasonably can the circumstances and the decisions that the House will have to face this evening.
I have made it clear that my hon. Friend the Under-Secretary and I asked for further details lying behind the original answers which were presented to us. As a result of further details, we became convinced that there was a need to bring to the House, in one form or another—I shall discuss that in a moment—fuller information, which would mean that earlier information would have to be modified, adjusted or even changed in all the circumstances.

§ Mr. Rogers
Questions were tabled on issues similar to the one that we are discussing for over five years. Even last year, the particular issue had been brought to the attention of the right hon. Gentleman's Department. Why did he realise that the answers were unsatisfactory? Were abilities and perceptions peculiar, or did he know that there was a gap in the information? If so, how did he find out that there was a gap?

§ Mr. Heseltine
The hon. Gentleman has asked a specific question. I happen to remember one of the reasons that influenced me at the time. With my hon. Friend the Under-Secretary, I had asked for certain information in a form which had not been asked for before. It so happened that that was one of the questions that I had asked.
The precise question tabled by the hon. Member for Cunninghame, North happened—I have no criticism of this—to focus upon the particular inquiry that I had made within a matter of weeks, or days probably. He asked for information which I had just commissioned. The information was in my possession and that of the Department, and I could see no reason for not providing it. That information, however, revealed information which was new to the House and new to Ministers.
That was one of the reasons why I had information available to me which had not been available previously to Ministers. That is one of the reasons why my hon. Friend and I were in a position to give a different answer from that which Ministers had been able to give earlier.
Given that we had decided that there was a need to answer fully, fairly and frankly the questions which had been put to us, how did we deal with the issue? We could have done what would have been perfectly proper in the circumstances—I have been criticised for not following the route—and answered a written question with a written answer. That would have been a defensible response. I would not have been prepared to do it, but technically I could have used a device which all Governments have employed from time to time in different circumstances. I could have sought a bland form of words which would have skated over the issues. I did not try to do that.
If the House wants to discuss these matters seriously, it should be acknowledged that we all know that there are, and have been throughout time, answers to questions which do not reveal the whole story. I could have sought a form of words which would have had that effect. I was not prepared to do that.
The next option was a written answer. I knew perfectly well that a serious matter was before me. I thought that the House would wish to ask questions about it immediately it became aware of the issue. I knew that if the House did not want to, although I knew that it would, there would be an immediate inquiry by the media over 24 hours until, by means of a private notice question, I was back at the Dispatch Box the next day going through precisely what seemed to be the right thing to do, which was to make a statement in the first place.
That was the precise position that we decided to adopt.

§ Mr. Brian Wilson (Cunninghame, North)
Will the right hon. Gentleman give way?

§ Mr. Heseltine
No.
That led to the next inevitable question—

§ Mr. Wilson
rose—

§ Mr. Heseltine
I give way to the hon. Gentleman.

§ Mr. Wilson
I am obviously grateful that my questions brought the right hon. Gentleman to the House. We shall discuss the problems in the wider context of what he says later. It is interesting that the right hon. Gentleman has revealed that he had already set parallel inquiries in train. What prompted him to do so?

§ Mr. Heseltine
There was a range of other questions, and I had been looking at them. The House must realise that it was not an isolated event. There was a series of questions, and I was looking at answers to them. We had been able to answer some of them quickly. We could not answer the right hon. Gentleman's questions quickly, as we did not have the information. It took us some six weeks, if I remember correctly. In the course of answering other questions, I undoubtedly would have pursued lines of inquiry, which, when the precise question came from the right hon. Gentleman, would have been relevant to it.

§ Dr. John Cunningham
I am grateful to the President for giving way again. He just told the House, Sir Geoffrey, and I take this opportunity to congratulate you—[Interruption.] I say that, because Sir Geoffrey was not in the Chair when I began my speech. The President just told the House that he could not answer the questions of my hon. Friend the Member for Cunninghame, North (Mr. Wilson). Why, then, over a number of years, did his Ministerial colleagues go on giving answers to similar questions with such apparent authority and ease?

§ Mr. Heseltine
The right hon. Gentleman will understand that the evidence available to my ministerial colleagues in the answers that they gave had appeared satisfactory. On the evidence that was available to them at the time, the answers appeared to be accurate. It was because of the precise investigations that we had begun, as I have explained to the House, that we became aware that there was cause for concern. That is why I took time to answer the questions, and, when I had the answers, came to the House with a full explanation, as I believed it to be then, and still do, in a way in which I thought appropriate.

§ Mr. Rogers
rose—

§ Mr. Heseltine
No. I am not giving way. I am trying to take the House through difficult issues. [Interruption.]

§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
Order. The President of the Board of Trade has been asked questions, and he has a right to be able to answer them without interference.

§ Mr. Heseltine
The next question which, inevitably would have been asked, would have been: "Given that the President of the Board of Trade has answered a question in a way which changes evidence before the House, in the form of answers, should there be an inquiry?"
It was evident that that question would be asked, and I felt therefore that, with my ministerial colleagues, we should address it. Therefore, far from covering up, my statement categorically suggested that, if the Select Committee on Trade and Industry wished to conduct an inquiry, we would give it the fullest possible co-operation.

§ Mr. Campbell-Savours
Will the President of the Board of Trade give way?

§ Mr. Heseltine
No.
49 That seemed to me an absolutely clear indication that the Government recognised that this was a proper subject for an independent inquiry. There was no issue between myself and the right hon. Gentleman on this matter.

§ Dr. John Cunningham
The difference between us is that we are calling, as the right hon. Gentleman did in the question of arms to Iraq, for an independent judicial inquiry. To revert to the right hon. Gentleman's course of argument, does he not think it a remarkable coincidence that, over five years, in the face of sustained questioning, every one of his Cabinet and ministerial colleagues had come to the same conclusion: there were no questions to answer in this matter? What was so remarkably different about the evidence and information available to him?

§ Mr. Heseltine
The right hon. Gentleman simply does not seem to have grasped the whole significance of the debate: to answer these questions, we have suggested an independent inquiry. That was what I said a week ago. The only issue that the right hon. Gentleman should have addressed in his speech, and which he hardly mentioned, was not the substance of the debate but the means of pursuing an independent inquiry. That is the only difference between us.

§ Mr. Campbell-Savours
rose—

§ Mr. Rogers
rose—

§ Mr. Heseltine
The two hon. Members have had a fair crack of the whip—[Interruption.]

§ Mr. Deputy Speaker
Order. The President of the Board of Trade has made it very clear that he is not giving way.

§ Mr. Heseltine
The issue is not whether there should be an inquiry but the form of the inquiry.
The right hon. Gentleman has tried to suggest that I blamed officials. I did not blame officials. There is nothing at all in the amendment tabled by my right hon. Friend and myself to restrict the inquiry to civil servants. There was nothing in my statement that said that civil servants got it wrong. I came to the House. I am answerable. I provided the answers to the questions.
It is because the right hon. Gentleman, throughout the entire matter, has been trying to find a way of putting the blame on Ministers before there has been any sort of inquiry that I reject his allegations. I did not blame officials. With the agreement of my colleagues, I said that I thought that there should be an inquiry into these matters.
The right hon. Gentleman suggested that this was all about a cover-up exercise, that, by suggesting a Select Committee rather than a judicial inquiry, we were somehow trying to get around the matter via the back door. The whole House is fully aware that the Labour party, which, to quote words that I jotted down peradventure, is interested in more responsible openness, is currently conducting eight inquiries into the practices of Labour local authorities: Birmingham, Leicester, Manchester, Nottingham, Paisley, South Tyneside, Tower Hamlets, Bradford—

§ Mr. Deputy Speaker
Order. The President of the Board of Trade is straying a little. The debate is not about local authorities. [Interruption.] Order. The Chair will decide.

§ Mr. Heseltine
The Chair will indeed decide, but the House, in witnessing the decision, will not lose sight of the fact that all those eight inquiries are being conducted in private—[Interruption.]

§ Mr. Deputy Speaker
Order. The House must now settle down. The Opposition spokesman was given a reasonable hearing, and the President of the Board of Trade must have the same.

§ Mr. Heseltine
I was settling down, but apparently without any cause, Mr. Deputy Speaker, because you were not on your feet.
If one is to have a Select Committee inquiry, it is entirely a matter for the Select Committee to decide whether it should make such a decision.

§ Mr. Barry Porter (Wirral, South)
Does my right hon. Friend agree with the implication in the right hon. Gentleman's speech: that the Trade and Industry Select Committee, which is chaired very ably by the hon. Member for Sheffield, Central (Mr. Caborn), first, is not capable, secondly, would not be independent, and thirdly, would not be objective? If that was the implication, it is quite wrong. Provided that the Committee has all the information, which perhaps we did not have on the Iraq investigation, it seems to be an entirely appropriate way, but I disapprove strongly of the suggestions made by the right hon. Gentleman.

§ Mr. Heseltine
I will now be able to abbreviate my speech, because of the excellent intervention of my hon. Friend. I was going to come to the very point that he has so eloquently made.
The issue that arises once one has decided that there is a case for an inquiry—there is no difference between the two sides of the House on this matter—is what the inquiry should investigate. Again, it is entirely a matter for the Select Committee to determine, within the discretions that it has and the motions that we are discussing, how it should go about its task.
The right hon. Gentleman has spelt out clearly that he wants a full judicial inquiry into the matter. He made the point that I was in favour of it, and suggested it over Iraq, but he does not seem to have appreciated that any such inquiry that started from scratch with a clean sheet of paper would have to examine the licensing and intelligence dissemination arrangements, and that it would have to look at a range of other issues, but all from a starting point where it was not part of any existing inquiry.
As the whole House is aware, Sir Richard Scott has exhaustively examined the licensing arrangements in my Department as they apply to Iraq. No one is trying to suggest—no one could suggest—that things were done in a way that one would want to defend today; but what on earth is the point of setting up another judicial independent inquiry to go over all that ground all over again? We broadly know the facts.
A similar argument applies to the dissemination of intelligence. Those matters—again, in the context of Iraq—have been examined, and are being examined, by Sir Richard, whose conclusion we do not yet know. I do not think that a case can be made for the need to start from the very beginning, discounting all the work that has been done over nearly three years.

§ Mr. George Walden (Buckingham)
It strikes me as both insulting and absurd of the right hon. Member for 51 Copeland (Dr. Cunningham) to accuse Ministers of covert connivance in the supply of weapons to revolutionary Iran. On the other hand, does my right hon. Friend agree that a question does arise about British defence exports as a whole? I suspect that the issues involved in the Pergau dam affair, the Scott inquiry and the little problems that we are having here today spring not from ministerial malfeasance of any kind, but from the fact that this country has become a little too dependent on arms exports.
When the Select Committee has completed its present job, perhaps it could look into the whole question of our over-reliance on arms exports, the opportunity cost in terms of research, technology and manpower and the long-term effect on the country—

§ Mr. Deputy Speaker
Order. Long interventions of that nature do not help in short debates.

§ Mr. Heseltine
My hon. Friend has raised an important point, but I consider his approach ill conceived. The research and national resources that go into the production of defence equipment are not there to sell arms overseas; they are there to equip our armed forces with the equipment that they consider necessary to the performance of their job. That is what the defence budget is designed to achieve.
Once our military planners and equipment manufacturers have achieved it to the best of their ability, we must ask ourselves whether we should take advantage of the information, professionalism and quality of equipment available to us by selling overseas, under the regulations and regimes that we have put in place. I can find no argument that suggests that, if Britain has the equipment and the right relationship with the country concerned, we should stand back and allow the French, rather than our own people, to make the sales and create the jobs.

§ Sir Timothy Sainsbury
In emphasising the advantages of building on a corpus of knowledge that is already there rather than starting with a blank sheet, does my right hon. Friend bear in mind—I suspect that he does—that the Select Committee has already examined, exhaustively and rather effectively, the very licensing arrangements to which he has referred? It did so in 1992.

§ Mr. Heseltine
My right hon. Friend is right to draw attention to that.
The option of a new judicial inquiry of the sort that the right hon. Member for Copeland wants has serious disadvantages. First, it would repeat a considerable amount of the work on matters that Sir Richard Scott has already explored exhaustively and is continuing to explore, and would take the same amount of time.

§ Dr. John Cunningham
The President is making much of this point. The Select Committee on Trade and Industry, however, will not have Sir Richard's conclusions, or the conclusions that he has drawn about the very matter to which the right hon. Gentleman refers. It, too, will have to start with a blank sheet of paper, will it not?

§ Mr. Heseltine
I shall come to the precise point that the right hon. Gentleman has made. There is, however, an 52 alternative, and I am surprised that he did not raise it: Sir Richard could have been asked to continue his inquiry. [Laughter.] I am sure that Sir Richard will gather any impressions that he wishes from the amusement that that has engendered among Labour Members.
Let me say at once that I am not in favour of that solution, because I think that it is in the public interest for Sir Richard to finish his report. By the time it is concluded, it will probably have taken virtually three years to complete, and cost the best part of £2 million. That is a matter of concern, and the House and a wider public would like the matter to be concluded.
I am not convinced, however, that the House now wants another inquiry of that sort, any more than I am persuaded that the House wants Sir Richard, having finished with the Iraq inquiry, to be invited to extend his inquiry to deal with the wider issues involved in the Iran process.

§ Mr. Donald Anderson (Swansea, East)
rose—

§ Mr. Heseltine
It becomes apparent to me—adopting a step-by-step approach—that, by acclaim, the House has reached the very judgment that the Government reached a week ago. It does not want Sir Richard to go on; I do not think that it wants to start another Scott inquiry costing another £2 million, taking another three years and stretching into the next Parliament—which is what the right hon. Member for Copeland has asked it to do.
I am not persuaded that the right hon. Gentleman has made a case of any sort. All he has done is reveal, first, that the Government behaved properly in making an oral statement; secondly, that we were right to recognise the need for an independent inquiry; and thirdly, that we were right to suggest that the independent inquiry should be carried out by the Select Committee on Trade and Industry, if it was so minded.
Immediately after my statement, the Committee's Chairman said that most of his colleagues would like to see a sharp inquiry into it quickly and not for it to drag on. To all that I say amen. That is precisely the point that the right hon. Gentleman has not taken on board.

§ Mr. Donald Anderson
rose—

§ Mr. Heseltine
What I find most questionable and doubtful about the right hon. Gentleman's position is the assumption that an inquiry carried out by a Select Committee of the House is not independent.

§ Mr. Anderson
rose—

§ Mr. Heseltine
No, the hon. Gentleman cannot intervene on that point. He has been trying to intervene for some minutes, and he now wants to try to link his question to the point with which I am now dealing, but he will not have the chance.
I happen to agree with my right hon. Friend the Member for Hove (Sir T. Sainsbury), who has now left the Chamber, that the Select Committee—under the chairmanship of the hon. Member for Sheffield, Central (Mr. Caborn)—does an impressive job. When I have appeared before it, it has never occurred to me that there is any escape from the rigorous questioning to which I am subjected. I have never for a minute believed that Labour or Liberal Members are in some way minded to make it easier for Ministers to escape the questions by giving the wrong answers.
53 I believe that—in terms both of the desirability of moving the process forward and dealing with the questions as rapidly as possible, and of achieving a degree of independence that I personally believe members of the Committee to be uniquely charged with achieving, and to have proved themselves capable of achieving—the Government amendment is correct.
The Chairman of the Select Committee has now written several letters to me on the subject of the mechanisms and procedures within which his Committee will work. I have tried to answer them; I did not answer the one that arrived at 3.25 pm today, but I shall do so at the earliest opportunity.
My intentions in suggesting this route for the House were to enable it to deal with the matter with dispatch, to co-operate with the Select Committee within the proper rules of the House and to answer questions that the House is entitled to ask and have answered. I commend the amendment to my right hon. and hon. Friends.

5.29 pm

§ Mr. Richard Caborn (Sheffield, Central)
In the light of what has been said, I had better clarify the position. The hon. Member for Buckingham (Mr. Walden) spoke about the United Kingdom's reliance on arms exports. The Select Committee on Defence and the Select Committee on the Treasury and Civil Service are jointly meeting on that very issue and will, one hopes, report before the recess.
It is important for me to update the House on the current situation and on the response of the Select Committee on Trade and Industry to the request by the President of the Board of Trade for an inquiry into BMARC and exports to Singapore and Iran. The Committee discussed those matters on Wednesday and, as is right, we take the President of the Board of Trade's request seriously. What will happen after tonight's vote is a matter for the House and not for the Select Committee.
To the best of my knowledge and that of my officials, this is only the second time that a Secretary of State or, in this case, the President of the Board of Trade, has requested a Select Committee to hold an inquiry. It is usually the other way round. For the record, the only other request related to the closure of 31 pits.
When the members of the Committee discussed the matter last week, we were mindful of the inquiry by the previous Select Committee on Trade and Industry into exports to Iraq, Project Babylon and the long-range gun. Anyone who revisits that inquiry will see that its report was inconclusive because the Committee did not have access to a number of Departments outside the Department of Trade and Industry.
The President will probably recall that my first action on becoming Chairman of the Select Committee on Trade and Industry was to write to his Department asking for clarification of that issue. Perhaps he would like to check the record on that. I said that it was unfortunate that the Select Committee could not reach a conclusion because it was denied access to people and papers.
The other area in question relates to Customs and Excise. On Wednesday, the Select Committee wanted to make sure that it would be able to get access to all the information that has been available to the Department of Trade and Industry—the information that was referred to in the President's statement.

§ Mr. William Cash (Stafford)
The hon. Gentleman speaks about information, which he could obtain from civil servants. Does that include advice tendered to Ministers? What was the attitude of the Department in that respect?

§ Mr. Deputy Speaker
Order. I remind the House that there is a 10-minute limit on speeches.

§ Mr. Caborn
When all the information in the letters is revealed—and I do not intend to do that in this debate—the House will see that, as the President said, a number of letters passed between the Department and the Select Committee. The answer to the hon. Gentleman's question is that the matter has been raised and that we are still awaiting answers.
As has been said, we are dealing with a subject that is nearly a decade old and many of the civil servants who were in place then may no longer be there. That was another area of concern when the Select Committee was scrutinising the issue of the Iraqi super-gun.
A number of key areas make the inquiry unique and dispensation may be required from some Ministers. I shall not go into detail but I can tell the House that the Select Committee is corresponding with the Department to resolve that. I hope that the Committee will have resolved those questions by Wednesday and will decide, first, whether to proceed with the inquiry and, secondly, on the terms of reference. The Committee operates under Standing Order No. 130, but that will need to be expanded if we are to carry out a thorough inquiry. As the President said, it may be short. I hope that it will be and that we shall be able to focus on clear terms of reference and to present a report to the House.
Select Committees are responsible to the House, and we must balance the President's request, which we take seriously, and the information, people and papers that the Government will allow for scrutiny against the credibility of the Select Committee system. As Chairman of the Select Committee on Trade and Industry I am the custodian of its credibility. The DTI and the President must allow the Committee access to information which it believes is necessary for a thorough inquiry.

§ Sir Cranley Onslow (Woking)
The Committee has not yet had an opportunity to discuss the exchanges that the hon. Gentleman has had. I hope that he will not presume to anticipate the Committee's collective decision.

§ Mr. Caborn
The right hon. Gentleman is a member of that Committee and knows that I do not anticipate anything, because things can go badly wrong. I assure him that all the information that has passed between the DTI and me over the past seven days will be presented for objective analysis. I hope that all members of the Committee will ensure its credibility by making sure that we have access to all the information because if we do not do that, our report will be inconclusive. That will depend on the House's decision, but if the Select Committee is asked to conduct an inquiry it will do a thorough job.

5.36 pm

§ Sir Nicholas Bonsor (Upminster)
I agree with my right hon. Friend the President of the Board of Trade. Plainly, we do not wish to have another long inquiry. We must dispose of this matter briskly and ensure a swift conclusion that the House can consider. The best way to 55 do that would undoubtedly be for the Select Committee to look into the issue. As Chairman of the Select Committee on Defence, I can endorse all that the President said about the impartiality of Committees. I assure him that Conservative and Opposition Members rigorously scrutinise what Ministers tell them.
I should like to put the debate into its wider context. In one year, 1993, we exported £7 billion-worth of arms. I totally disagree with my hon. Friend the Member for Buckingham (Mr. Walden) who, unfortunately, is not in the Chamber. More than 500,000 people are involved in arms production. Our armed services need to be able to use British equipment where possible. We need the best equipment, and we can afford to produce it only if we succeed in exporting arms because that supports the logistics and the necessary research and development. The idea that we should cut our arms supplies is absurd, and would cause deep and lasting damage to our country.
We should compare the £7 billion-worth of arms exports in 1993 with exports to Iran and Iraq in the 1980s. During that entire period, exports to Iran totalled £35 million, while those to Iraq amounted to some £569 million. That was over 10 years, and when it is contrasted with the exports in 1993 one sees the relative insignificance in terms of money and equipment that the House is debating.
In 1987, there were some 98,000 applications to obtain the necessary licences under the then rules, and only a handful succeeded. It is not surprising that the Department of Trade and Industry was inundated with such work and that its officials occasionally allowed something to slip through.
Project LISI is the title of the BMARC export that we are debating. No one has yet mentioned that when the contract for that was signed the project was being handled by, and BMARC belonged to, Oerlikon, which is a Swiss company. It was not until nearly two years after that contract was entered into that the new management of Astra, headed by Mr. James, bought BMARC and continued with that contract.
As I understand it, in 1988 the intelligence community realised that Oerlikon—not a British company—was exporting arms via Singapore to Iran but it did not specifically mention BMARC. It is again, therefore, not surprising that, in this very complicated net of applications and other matters which were being examined by the intelligence community, the DTI and the MOD, a comparatively small contract might have slipped through.
I should like to move on from that as I appreciate that I have only a minute or two to deal with two specific issues that have been raised this afternoon. The first relates to my right hon. Friend the Chief Secretary to the Treasury. He has come under attack on three bases.
First, The Independent newspaper, which normally I think is reliable and accurate, has today published one of the most appalling and inaccurate headlines that I have read in the media, saying that papers showed that "Aitken knew" about the arms deal. Nothing in the text of that article or what anybody has said—there is no evidence from any source whatsoever—suggests that that is an accurate statement. My right hon. Friend has categorically denied it. For a national newspaper to use such a headline is irresponsible, and journalism of the worst kind.
56 The second attack on my right hon. Friend, which was made by the Opposition Front Bench, can be summed up in the words, "If he did not know, he certainly should have known." I am sorry that the right hon. Member for Copeland (Dr. Cunningham) is not here, but I have no doubt that he will read the report. If he were here, I would ask him to tread very carefully when lecturing the House about the duties of non-executive directors. I happen to know that the right hon. Gentleman is a non-executive director of two chemical companies. I know nothing against the activities of those chemical companies, but I will wager that some of the contracts undertaken by those companies have been made without the express knowledge of any of the non-executive directors.

§ Mr. David Shaw (Dover)
The right hon. Gentleman is an adviser to those companies.

§ Sir Nicholas Bonsor
I have been corrected. He is an adviser, not a non-executive director. None the less, I am sure that, if the right hon. Gentleman is doing his job in advising those companies, he should know what is going on in them. It is precisely that sort of relationship that Lord Nolan, in my view perfectly properly, attacks.
Nothing said in this debate or in the press justifies the sort of behaviour which has been shown from those quarters towards my right hon. Friend. I hope that the House will accept the word that he has given that he did not know what happened and allow him to get back to the excellent job that he is doing as Chief Secretary to the Treasury.
In the few minutes that I have left—

§ Mr. Richard Ottaway (Croydon, South)
Two minutes.

§ Sir Nicholas Bonsor
In the two minutes that I am told I have left, I shall move on to the issue of Mr. Gerald James. Unlike most hon. Members, I have met Mr. James. He provided a lot of papers to me about the Iraqi gun affair when I was appointed Chairman of the Select Committee on Defence, and asked me to instigate the inquiry into it. I told the House that I was deeply disturbed by some of the things that I saw. I did not feel that the Defence Committee had the proper resources to look into that matter. After discussion with the other members, I passed all those papers on to Sir Richard Scott.
I believe that Mr. James has been treated very badly. His misfortune was that his very successful company, Astra, made two unfortunate purchases—BMARC and the other company that supplied the Iraqi gun, PRB. Those purchases led him to disasters with which he was not equipped to deal. He was treated badly by certain members of the Administration, with or without the Government's knowledge. That is something Sir Richard Scott is going to look at, not something for the House to comment on today.
I hope that we will follow the advice of my right hon. Friend the President of the Board of Trade to refer the matter to the Select Committee on Trade and Industry, and that the Committee will look into the matter.

5.46 pm

§ Mr. Nigel Jones (Cheltenham)
We are debating a very serious matter. The President of the Board of Trade told us in his statement on Tuesday 13 June: 57 it does appear that there may be grounds for believing that the final destination of naval cannon made by BMARC could well have been Iran."—[Official Report, 13 June 1995; Vol. 261, c. 596.] That must be one of the biggest confessions ever made in the Chamber that was not followed by a resignation, the establishment of a full independent inquiry or even the slightest acknowledgment of ministerial responsibility.
The arms embargo during the Iran-Iraq war was there for a purpose. I was working in Baghdad at that time on legitimate civilian business, with the full backing of the DTI. Now we are told that, during that time, the DTI was approving the export of arms to fuel the already devastating war in that region. Examples like that, combined with allegations of British troops facing British weapons in the Gulf war shortly afterwards, contribute to the accusations of disgraceful hypocrisy and illegality in British foreign policy. If the Government believe those allegations to be false, an independent inquiry is surely the best way to prove it.
The question of illegal arms sales from Britain to Iran in the mid to late 1980s has, so far, been too narrow in its focus. Of course, the Chief Secretary to the Treasury has still to convince anyone of his innocence in this affair, but to concentrate purely on his role as a non-executive director is to miss the point. The real investigation goes far beyond that. The roles of the DTI, the Ministry of Defence, the Foreign Office and the intelligence services must all be probed in the fullest possible detail if the truth is to be discovered.
A vast array of evidence suggesting serious wrongdoing has been put together, mainly by the media, whom I congratulate on their digging. The denials of the accused have varied from the unsatisfactory to panic. The result is a general air of suspicion that will not go away simply because one Minister cannot remember and another was not even there at the time. If we are to avoid the sort of trial by media that the Chief Secretary so abhors, the plethora of unanswered questions that surrounds the affair must be answered in the appropriate forum.
What are the unanswered questions? Why has it taken the Government so long to put two and two together, considering that the vital clues that prompted the President of the Board of Trade's suspicions were both available in the 1980s? Why have we had to wait seven, eight or nine years for the issue to be addressed? Should not the DTI, with advice from the Ministry of Defence and the Foreign Office as well as the intelligence services and Customs and Excise, have been able to smell a rat at the time? Did the Government really think that the amount of munitions—140 naval guns exported in project LISI—could all be wanted or needed by the navy of Singapore? I represent GCHQ and it is inconceivable that the high standard of intelligence gathering in this country could have missed something as important as the breaching of an arms embargo to Iran.
To what degree should Ministers accept responsibility for the failings of the export control procedures and the breach of the arms embargo? Given reports that Mr. Stephan Kock, one of the co-directors, gave representatives of MI6—with which he had close contacts—a tour of BMARC's factory showing part of the project LISI exports, what exactly was the role of the intelligence services and why did Ministers apparently ignore the advice that they were given? Were the errors made in granting export licences the result of a conspiracy or a cock-up? If those and countless other questions are 58 to be answered, an inquiry with the necessary resources and the right of access to all relevant information must be established.
If the role of the Chief Secretary is to be ascertained, it is only right that he be given the opportunity to give evidence to such an inquiry. There appears to be some uncertainty and possible contradiction in his account of events in BMARC between 1986 and 1988.
For example, how is it that, according to the minutes of BMARC's board meeting on 2 November 1988, it appears that the Chief Secretary made a contribution to discussions at a point after he claimed to have left the meeting? How is it that he failed to read the company's progress report circulated to the board meeting on 28 February, a meeting that he personally attended? This sits very oddly with the Chief Secretary's claim that he took all steps to become well briefed on the company's activities. The Chief Secretary chose to be a director of the company. He shares the corporate responsibilities of all directors and, as a director, he must be presumed to know of the very important contract in question.
It may be that the Chief Secretary is right and his boardroom colleagues are mistaken, but, until the investigation is taken away from the media and given to an official inquiry, the Chief Secretary cannot hope to use his simple sword of truth or his shield of fair play. In the light of this weekend's developments, the onus is still very much on the Chief Secretary to prove that he was unaware of what BMARC was up to. There have been contradictory statements.
Establishing the appropriate means of investigation is something that the Government have so far done everything possible to avoid. In view of the complexity and importance of the countless questions that must be answered, why did the President of the Board of Trade suggest that the Select Committee on Trade and Industry would be able to reach satisfactory conclusions with its limited resources if his own Department, with all its personnel and access to information, had failed to do so?
The suggestion that the Select Committee should investigate the affairs of BMARC is as unrealistic as the Chief Secretary's request that Lord Justice Scott should look into the allegations levelled against him. The Select Committee and Lord Justice Scott have expressed the view that they are not equipped satisfactorily to investigate the affair. To expect them to take on the job, therefore, will be regarded as a whitewash and a sham.
The questions that I have asked deserve investigation and answers. It is not good enough for Ministers to say, "Sorry, I can't remember anything," or "It wasn't me. I wasn't even there at the time." That is all we have been offered so far, but it does not wash. If that evidence was submitted to a court of law, I cannot help but feel that it would be dismissed on the grounds that the witnesses were unreliable.
The idea that Ministers will not take responsibility for the failings of their own Departments is unacceptable to the British people and to the House. We now need a full, independent, judicial inquiry to look into the matter properly. I trust that the Government will not shy away from their responsibility to establish such an inquiry.

5.52 pm

§ Mr. Edward Leigh (Gainsborough and Horncastle)
I am the Member of Parliament whose constituency 59 includes the former BMARC factory at Faldingworth in Lincolnshire. The site is still operational under the new ownership of Royal Ordnance. It assembles shells and fills them with explosives, as it did under BMARC's ownership.
My purpose in speaking today is to establish the fact that, in my view, none of my constituents or anyone involved in BMARC can be accused of wrongdoing. Certainly, there was no question of anyone knowing at the factory that the end user was Iran—shipping freight was simply marked with a code. However, nor do I believe that anyone higher up in BMARC management knew—certainly, a non-executive director could not have known.
The contract for project LISI—the sale of 20 mm guns to Chartered Industries of Singapore—was very clear. BMARC sold the guns to Oerlikon, and not to Singapore, as it was required to do under their licence. Oerlikon shipped the goods to Singapore. Oerlikon in Switzerland, or possibly someone working in Chartered Industries in Singapore, passed them on to Iran without the knowledge of BMARC's staff or management. BMARC was prohibited from trading not only with Iran but with Singapore under the terms of its licence with Oerlikon.

§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
rose—

§ Mr. Leigh
No, I shall not give way as I have only 10 minutes.
I have documentary proof. I have obtained from within the factory copies of the licence put together for the receiver of the company on 28 February 1992. They are, as far as I know, hitherto unpublished—perhaps they are some of the missing documents, but I do not know. They are marked "Private and Confidential". Exhibit 1B states: The following manufacturing and selling rights are granted by Oerlikon to BMARC under the terms and conditions of the Licence Agreement for the below listed material:— —Exclusive manufacturing rights in the UK. —Exclusive sales' rights to the Government of, as well as other end-users in, the UK. —Exclusive sales' rights for worldwide naval applications, except for the countries listed in Exhibit 2". Exhibit 2 states: In the following countries Oerlikon will be the sole distributor for all the Material listed in Exhibit 1B. Therefore BMARC is not entitled to sell any of the Material either directly or indirectly in the below listed countries.:

—Cyprus

—India

—Malaysia

—Singapore

—Sri Lanka

—South Korea

—Taiwan

—Iran

—Saudi Arabia

—all Latin American countries".

The licence is quite clear, but I have today double-checked at some length with Dr. John Pike, the former armaments director in the relevant period and the former managing director of BMARC, as well as with trade union representatives of the work force in my constituency.
60 As far as anyone in the company was concerned, Singapore was the end user of the goods. That was a perfectly legitimate assumption, given that BMARC did not have any direct contract with Singapore. The Singapore navy already possessed these guns and was expanding.
Chartered Industries of Singapore to which the guns were sent by Oerlikon—not by BMARC—was Government-owned and was a proper and legitimate, and likely, recipient of them. However, because the guns were not being sold directly to the Singapore navy, Major-General Donald Isles, a highly respected, responsible and competent former Ministry of Defence employee, and the other full-time directors checked carefully.
There was no reason for them to indulge in shady deals. Why should they risk acquiring a possible criminal record for a deal? In addition, BMARC was a highly respected and successful British company and did not need to break DTI guidelines. Having checked carefully with the DTI, whose officials apparently had the full information at their fingertips, there was no doubt in the minds of the directors that the end user was Singapore, not Iran.
My point is that, if the DTI, with all its specialised resources, did not manage to second-guess the deal, how could a non-executive director such as my right hon. Friend the Chief Secretary?
What about Gerald James? He may indeed have a legitimate grievance—he brought down Astra and BMARC through his misjudgment in buying PRB, and was no doubt sold a con by the Belgian Government—but, as a result of that grievance, he is undoubtedly pursuing a campaign—some might say, a vendetta—against the British Government. Because my right hon. Friend happens to be a member of the Government, he is the target of that campaign.
When Mr. James was asked by Mr. Peter Snow on the BBC's "Newsnight": Did you … at any time brief him"— my right hon. Friend— personally about the nature of the Singapore contract?", he said: No I did not brief him personally at all. I have, from my own sources within the company, obtained more information. After he took over the company, Mr. James apparently took the opportunity when the remaining Swiss employees were out of the company offices for their national holiday to check their papers. He could find no evidence that the guns were going anywhere other than Singapore. I submit that, at the relevant time, no one in BMARC—certainly not the staff or my constituents, or the non-executive directors—had any clue that the goods were going anywhere but Iran—[Interruption]—Singapore. I apologise, that was a slip of the tongue. They were clear that the goods could have gone only to Singapore, not Iran.
In any event, my right hon. Friend joined the company only in 1988 when the contract was already well advanced. It was signed in 1986 and, by 1990, my right hon. Friend had resigned. According to Dr. Pike, to whom I spoke today, it would have been dealt with only in the most cursory fashion, if at all, at any board meetings that my right hon. Friend attended—for example, to check that the goods had been delivered to Oerlikon.
61 There may or may not have been some incompetence on the part of DTI officials—we shall no doubt find out about this—in not making the connection between the Singapore deal and the known fact that Oerlikon was selling to Iran. However, if full-time experienced DTI and intelligence service officials could not make such a connection, I cannot see how my right hon. Friend could have done so.
In any event, he has given his word to the House. He is a much-admired and competent Minister. We should accept it, but the evidence that I have found and that others have alluded to is overwhelming. It shows that he did not know and could not have known. On the contrary, we should back my right hon. Friend and what was an excellent British company, run by extremely responsible and respectable people such as Major-General Donald Isles.
My right hon. Friend is a victim of a discreditable witch hunt by the Opposition and media. He should and must stand his ground, so that truth and honour will be the touchstone by which we conduct our affairs, and not personal vindictiveness and innuendo.

5.59 pm

§ Mr. Allan Rogers (Rhondda)
I must admit that I have not heard in this House a more flimsy defence of any situation than the one that we have just heard from the hon. Member for Gainsborough and Horncastle (Mr. Leigh). He accuses us of pursuing a vendetta, but may I put just one point to him? The statement to the House of the Secretary of State for Trade and Industry has brought about today's debate; it was not the Opposition chasing the issue. For what reason did the President of the Board of Trade want to bring it back to the House?
I say this not with any particular hindsight, but because I might have been the first person in the House to raise this issue. I did so back in 1989 when I was shadowing, as I had been for a number of years, the defence procurement portfolio when it was held by the right hon. Member for Hove (Sir T. Sainsbury) and, later, Alan Clark. At that time, it was fairly obvious that something was wrong. If I had time, it would be easy to catalogue the responses I had, but I want to pick up one issue in the limited time available: the lost documents that seem to have become available this weekend.
I find today's response by President of the Board of Trade as remarkable as the fact that those documents are suddenly available, that he suddenly finds a reason for bringing this matter forward, and that he suddenly finds the questions of my right hon. Friend the Member for Copeland (Dr. Cunningham) so stimulating that he finds that there is a gap in the intelligence.
Let me just remind the House that an investigation into Astra/BMARC had been going on for three years. The response to a question that I tabled last year revealed that the cost of that investigation was £2,170,000—more than £2 million had been spent on acquiring the information, and suddenly we are told that it was not available until last week.
In response to a question that I tabled on 19 April last year, the hon. Member for Tatton (Mr. Hamilton) said: The inspectors commenced work on appointment on 16 August 1990 and their report was signed on 7 April 1993 So all the information that is presently available was available all the time that these obfuscations were going on. The then Minister went on to say: 62 the inspectors considered substantial representations received during the course of fairness procedures."—[Official Report, 20 April 1993; Vol. 223, c. 74.] Mr. John Anderson has again been heavily featured in the media this weekend. In relation to the lost papers, when he was Minister of State for Defence Procurement, the right hon. Member for Thanet, South told me: Mr. Anderson was arrested by the Ministry of Defence police … in April 1990. He was detained in connection with a possible case of corruption, interviewed and released without charge. Subsequently, he made a number of complaints concerning the circumstances of his arrest. These have been investigated in accordance with the Police and Criminal Evidence Act 1984 and the report currently rests with the Police Complaints Authority whose decision is awaited."—[Official Report, 26 April 1993; Vol. 223, c. 298.] Those papers relate to BMARC and Astra, the company run by Mr. John Anderson, who was a director at the same time as the right hon. Member for Thanet, South. I find it incredible, therefore, that the information is seemingly suddenly available, as it was supplied to me more than a year ago, and after nearly £2 million had been spent on that report.
The issue of arms exports to the middle east and elsewhere has come about because of a change of culture in our political life during the 1980s. An hon. Member asked for an investigation into arms exports. He probably was not aware, although it was pointed out to him later, that the Select Committee on Trade and Industry had considered the issue—specifically in relation to Iraq, I warrant that, but also in relation to other issues, such as the uses and applications of licences.
If we put it into context, in 1984 in this country there was a tremendous charge for arms exports. I am not questioning the morality or otherwise of arms exports, but that charge for more and more exports generally existed throughout the Department of Trade and Industry, the Ministry of Defence, the Defence Export Sales Organisation, International Military Supplies, and even with the Prime Minister at the time. She accompanied her son, who took a rather lucrative part in these events, and batted for Britain—I cannot think of a better bat—in both Saudi Arabia and Malaysia to get these huge contracts.
A general culture, going through Whitehall and the relevant Departments, allowed such instances to happen. All it requires is a greedy man or men to latch on to that culture or the lack of morality in relation to where arms were going.
We should not forget that the guidelines controlling the export of arms were laid down by this Government—by Sir Geoffrey Howe—in 1984. One of the cardinal criteria was that arms should not go into regions with bad human rights records, and that they should not lead to warfare between countries. On many occasions, the then Secretary of State for Trade and Industry, the right hon. Member for St. Albans (Mr. Lilley), said that arms should not go into regions where they could be used in a way that cut across the Government's guidelines.
The whole issue revolves around that change in culture. It is about arms going not only via Singapore into Iran but into many other areas. The then Foreign Secretary, Sir Geoffrey Howe, said: We should maintain our consistent refusal to supply lethal equipment to either side in the Iraq-Iran war that was going on at that time. That was flagrantly broken by members of his own Government. He also said: 63 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".— [Official Report, 29 Oct 1985; Vol. 84, c. 450.] That guideline was again broken by the Government.
On reflection, probably the only honest man in the whole affair was the then Minister for Defence Procurement, Alan Clark, who has left this House. At least he always made it clear what he was about, and made no apologies for the fact that he knew that arms embargoes were being broken. He said that that was because it was bringing jobs to this country.
I am amazed that the Chairman of the Select Committee should support that view this afternoon. If there are jobs out of people being killed or murdered in other parts of the world, we should not have such jobs in this country. If there is to be an inquiry into arms exports, the first thing we should consider is the morality of it.
People are trying to suggest to us that there are only two options; either it was a cock-up or it was a conspiracy. I believe that it was both. The general climate in the Government Departments I have named, and the inefficiency and incompetence of the Department of Trade and Industry, allowed those who were conspiring to break the arms embargo to carry out that dirty, sordid business, as I pointed out to the then Prime Minister, Baroness Thatcher, in 1989 and to the present Prime Minister in 1992—

§ Mr. Deputy Speaker
Order. Time's up.

§ 6.9 pm

§ Sir David Mitchell (Hampshire, North-West)
The motion refers to the BMARC affair, which is concerned with arms for Iran. The reality is that the motion is a malicious attempt by the Opposition to destroy the reputation and career of my right hon. Friend the Chief Secretary to the Treasury.
There are certain facts that should be brought to the attention of the country and the House. In 1986, BMARC was a Swiss-owned company, and it was at that time that it signed the offending Singapore contract. In 1988, the company was bought by Astra, a British company. In the same year, my right hon. Friend the Chief Secretary was made a non-executive director, a post in which he remained for only 19 months. In practice, non-executive directors are not much more than advisers to the board; they have no powers to interfere in the management of a business.
I now turn to Mr. Gerald James, the chairman and the source of the suggestions that my right hon. Friend knew about the contract. I draw the House's attention to an article on page 25 of The Economist this week, which says: Mr. James says that a group of senior figures at BMARC knew all about these fishy contracts yet thwarted his efforts to find out what was going on. If the chairman did not know what was going on and if the chairman was thwarted in his efforts to find out, how on earth could a temporary, non-executive director be expected to find out and to know?
My right hon. Friend the Chief Secretary has no case to answer. The House should accept the Government's amendment as a cost-effective and speedy way in which to clear the matter up.

64 6.11 pm

§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
The matters before us are serious, but we should not jump to conclusions. What is highly significant is that the Chief Secretary to the Treasury—I do not think that we should dwell on him—shared with the nation on "Question Time" last Thursday the information that he had been briefed that some of the contracts involved were for the Singapore navy. That contradicts the argument put forward by the hon. Member for Gainsborough and Horncastle (Mr. Leigh) that none of the contracts was the responsibility of BMARC itself. If BMARC was simply producing the items and could not sell them, why was it applying for export licences for the relevant items?
The entire matter was exhaustively dealt with in the Department of Trade and Industry report on the Astra group of companies. The report makes it crystal clear that the licence agreement that Oerlikon had with BMARC, which Astra inherited when it took over, did not mean that BMARC—and Astra subsequently—was not the promoter of the sales, albeit that the goods were being produced under a licence agreement with Oerlikon. Those are important matters, which we must seek to get to the bottom of.
The Select Committee on Trade and Industry will face a number of considerable difficulties. First, there is the quantity of information. Some 1 million documents are said to have been removed from the Astra group of companies, either by DTI inspectors, from 1990 onwards, or by Ministry of Defence police. That is a formidable and overwhelming task of investigation. It took the DTI almost three years to produce its report on the Astra group of companies—never mind the efforts of a Select Committee, which will face other lines of inquiry.
The Select Committee will immediately confront the difficulty of intelligence information. It has had an offer from the Chairman of the new Intelligence and Security Committee, but the difficulty is that he was the Secretary of State for Defence at precisely the time when the Ministry of Defence police were going into the Astra group of companies to lift the information. That is a difficulty—a contradiction.
The Select Committee will face the puzzle of understanding why, if the Government did not know about arms sales to Iran, a wholly owned Government company, International Military Services Ltd., had an office in Iran that was open throughout the entire period of the first Gulf war between Iran and Iraq. Those are difficult matters to inquire into.
Another problem, sadly, is the unfortunate coincidence that the company that dealt with the receivership of Astra—Coopers and Lybrand—had a historic connection with Sir Kenneth Cork, who, unfortunately, is no longer with us; I am conscious of what I am saying in this regard. Sir Kenneth had a business connection with the Chief Secretary through his company Aitken Hume International.
Another difficulty is that all the investigations into Astra have been carried out, to some degree, by the Department of Trade and Industry through its inspectors, who took three years to report. Only a year after it had had that report did the Department of Trade and Industry decide to prosecute all but one of the directors of Astra. That legal case is still before the courts. I have a question for the Government. Can they give an assurance that, if a 65 further case, which will cut across many inquiries, comes to court, they will not use the public interest immunity certificate suppression system, although they used it in the Matrix Churchill trial?
These are weighty and serious matters. Although we cannot leap to conclusions, we have here a mystery within several other mysteries. We have to seek the answer to the question why a full explanation of matters has never been given to Parliament.
Only tonight, in a parliamentary answer that I have just received and hardly had time to take on board, is it revealed that, of the 224 private export licence applications submitted by BMARC between 1986 and 1989, 149 had no supporting information about end users. That figure is 66 per cent., and not the 36 per cent. that was used by the President of the Board of Trade in his statement to the House. There is confusion and obfuscation about such a simple matter; the matters under investigation are far more serious.
The issue of Iran and Iraq is not some marginal matter, but one that took up the time of Governments and Departments, as we know from the Scott inquiry, through much of the 1980s. It is one of the great secrets of the 1980s, and it will, sadly, take far more, as I know to my cost as a former member of the Select Committee on Trade and Industry that investigated arms to Iraq, than a Select Committee inquiry to get to the bottom of these very murky affairs.

6.18 pm

§ Sir Jim Spicer (Dorset, West)
It is right and proper for the Opposition to make as much of this matter as they can. I remind everyone in the House, however, that that bloody and bitter war lasted for eight years, and that during that war, many countries supplied both Iran and Iraq with massive amounts of weaponry. At the top of the list of suppliers to Iraq were the Soviet Union and France.
Most hon. Members will know that the French Government—or the French—are still owed some £12 billion for arms supplied during that war. My hon. Friend the Member for Upminster (Sir N. Bonsor), the Chairman of the Defence Select Committee, made it quite clear that, compared with such a scale of supply of arms to both protagonists in that war, what we were doing was on the margin: £75 million to Iran and, over a ten-year period excluding the war—a large part of that period—about £500 million to Iraq.
During that period, Iran and Iraq scoured the world for weapons, and there have been many revelations of just what happened in other countries. At the top of the list of arms suppliers during that time were Austria, under a socialist Government, Belgium, under what to all intents and purposes was a socialist Government, and Sweden under a socialist Government. They have all had scandals involving such sales. Therefore, it is no surprise that parent companies such as Oerlikon should make use of subsidiaries in this country to pursue their lucrative trade with either Iraq or Iran.
My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) has made BMARC's situation and the relationship with Oerlikon absolutely clear. May I remind the House that the war between Iraq and Iran ended in August 1988? It was not until September 1988 that my right hon. Friend the Member for Thanet, South (Mr. Aitken), the Chief Secretary to the Treasury, became a non-executive director.
66 I am sorry that the right hon. Member for Copeland (Dr. Cunningham) is not present. His remarks were not only unfair but showed a total lack of knowledge about the role of a non-executive director of any company whatever.

§ Mr. Rogers
Will the hon. Gentleman give way? Sir Jim Spicer: I am sorry, but I do not have time.
If I had been appointed a non-executive director in September 1988, I would not have known about the affair, because the contract was complete, with one shipment still to go. That one shipment went out through Oerlikon. That is a fact which can become public knowledge, and I hope that it will come before the inquiry when it is held.
The Opposition are asking for an outside independent inquiry. All the evidence of the Scott inquiry shows that such an inquiry would be precisely the wrong way in which to conduct our affairs and to achieve natural justice for those who appear before it, to which they are entitled. There can be no valid reason for any inquiry in which one person becomes the prosecutor, the judge and the jury. The result is muddle and delay. As my right hon. Friend the President of the Board of Trade made quite clear in his speech, there would be delay on a massive scale, which is exactly what the Opposition have said today that they do not want.
Let us have faith in ourselves, conduct our own investigation through the Select Committee on Trade and Industry, and, in the light of its report, decide what we should do.

6.22 pm

§ Mr. Brian Wilson (Cunninghame, North)
We have heard Conservative Members put some pretty wafer-thin arguments this afternoon, but the previous speech excelled. It is astonishing at times such as this how limited, in the view of Tory Members of Parliament, is the role of non-executive directors. As for the Scott inquiry being the wrong way to conduct "our affairs", it might be the wrong way for Conservative Members to conduct their affairs—one can understand their reservations about the Scott inquiry—but Labour Members think that it is a very good way in which to conduct our affairs, the nation's affairs, to get at the truth about complex issues.
We also heard the hon. Member for Gainsborough and Horncastle (Mr. Leigh) put a remarkable defence that the affair was all beyond the reach, knowledge or control of Parliament because a Swiss company was involved initially. Of course it does not matter who owns the company; it is where the arms are manufactured that is critical for export licences. We have heard a very thin—

§ Mr. Rupert Allason (Torbay)
Will the hon. Gentleman give way?

§ Mr. Wilson
I must remind the hon. Gentleman that, for the second time recently, the Government have breached the Jopling rules by arranging to make a statement on an Opposition Supply day. I certainly do not intend to give very much of my time to interventions.

§ Mr. Allason
One point.

§ Mr. Wilson
I do not think that the hon. Gentleman even attempted to catch Mr. Deputy Speaker's eye. He is certainly not going to waste my time.
67 I want to ask the hon. Member for Dorset, West (Sir J. Spicer) a question. He said that, if he had become a non-executive director of BMARC in 1988, he would have known nothing of contracts entered into in 1986. He appears to consider that a proud boast. But would he, for instance, have known anything of BMARC contracts entered into in 1989, such as the contract to supply fuses to Iraq worth £3 million, via Jordan as a conduit? Would he have regarded that as being any of his business as a non-executive director? If the answer to that is also no, it tells us more about the hon. Gentleman than it does about the duties of non-executive directors.

§ Sir Jim Spicer
If I were a non-executive director, I would not be running the company on a day-to-day basis. I would have a brief report on the work of the company. The board meeting that I would attend would be—perhaps—two hours long and cover a whole range of subjects. The executive directors would have the responsibilities.

§ Mr. Wilson
We understand that, but the hon. Gentleman chose to raise the role and duties of non-executive directors. I asked him a specific question about whether he would have seen it as his duty to know anything about where orders for £3 million worth of fuses were going, when they were going to one of the world's most lethal trouble spots in breach of his Government's rules and laws on the export of arms.

§ Mr. Harry Cohen (Leyton)
My hon. Friend is really touching on the defence of the Chief Secretary to the Treasury, which is basically that he was on the board but did not know about such contracts, especially the LISI project. Is not the real problem that a number of BMARC contracts have ended up in Iran or Iraq and that the response of the Chief Secretary to the Treasury is that he was on the board, but did not know about them? Does not that weaken the right hon. Gentleman's position enormously?

§ Mr. Wilson
My hon. Friend makes his own point. I want to be absolutely clear that, to Labour Members, this debate is not about the Chief Secretary to the Treasury. It is about the firm BMARC and the inquiry into it. Any emerging information that either worsens or secures the position of the Chief Secretary to the Treasury is a by-product of that inquiry.
The issue on which we shall shortly be asked to vote is quite specific. Conservative Members are not being asked to participate in some primary contest for the Tory party leadership or even to demonstrate their support for the Chief Secretary. Incidentally, we can all sympathise with the right hon. Gentleman in his discovery that fax machines, like swords of truth, are two-edged weapons. We are concerned about whether there should be an independent inquiry into what has become known as the BMARC affair.

§ Mr. Allason
Will the hon. Gentleman give way?

§ Mr. Wilson
No, I will not give way.
The case for an independent inquiry similar to the Scott inquiry is, as we have demonstrated in the debate, unanswerable. We have not heard any worthy answers from Conservative Members. The outrageous conduct of Ministers—Ministers who still hold office—towards the 68 directors of Matrix Churchill forced the Government to establish the Scott inquiry, with a remit to investigate only matters related to arms for Iraq. All the prima facie evidence, including that referred to in the statement on Tuesday by the President of the Board of Trade, suggests that BMARC gives rise to questions as serious and as wide-ranging as Matrix Churchill and that arms for Iran is just as much a part of this filthy saga as arms for Iraq. The difference is that Ministers have managed to keep the lid on BMARC and arms for Iran for two years longer than was possible with Matrix Churchill and arms for Iraq.
That success, if it is worthy of the name, should certainly not be rewarded with a process of scrutiny that is any less rigorous than that established under Lord Justice Scott. The President of the Board of Trade did himself no credit today, in a blatant piece of casuistry, when he said that an independent judicial inquiry would have to start with a blank piece of paper. Equally, the Select Committee will have to start with a blank piece of paper unless it is in receipt of the conclusions of the Scott report.
The President of the Board of Trade mentioned a figure of £2 million, as if it were some exorbitant amount, for conducting the Scott inquiry. It is less than the single illegal order to which I referred a few minutes ago. What is the price of the sword of truth? How much is the country expected to pay to find out about the deceits and deceptions that were the stock in trade of the Government for such a long time? Two million pounds does not seem an excessive price for that process.
The Ministers involved in the affair, including the President of the Board of Trade today, have been anxious to suggest that they are dealing with matters that belong to some distant period and that have left a legacy which regrettably now has to be dealt with; far-off events of which they knew nothing. The spate of cock-ups, leading to the suppression of evidence and the misleading of Parliament, in which we are invited to believe give the convenient impression that the matter is something that has nothing to do with Ministers today; that it is all in the past. That is a false impression.
I do not intend to talk about what happened in the 1980s, because that is the proper material for an independent inquiry to deal with. I shall concentrate only on what has happened since the offices of Astra, the parent company of BMARC, were raided in April 1990.
Last Tuesday, from this Dispatch Box, I asked the President of the Board of Trade a straightforward question, which he conspicuously failed to answer. I repeat it now. I said: Does he accept that, as far back as 1990, the Ministry of Defence seized files from Astra, the owner of BMARC, as part of a fraud investigation? Those files referred to Astra and BMARC trade with Iraq and Iran. Were the files handed to the DTI then? If not, why not? If they were, why have we had to wait five years for this statement?"—[Official Report, 13 June 1995; Vol. 261, c. 605.] Tonight I add the words, "and this debate and this inquiry".
Let me bring the summation of events right into the period when the right hon. Member for Henley (Mr. Heseltine) held his present office. On 27 January 1993, Detective Inspector Berry of the Ministry of Defence police wrote to the receivers for BMARC, ostensibly offering the return of all the property seized from Astra holdings and subsidiaries during our inquiries into allegations of corruption. 69 Let us leave aside for a moment the clearly inaccurate use of the word "all". I should be interested to know who gave the political authority to Detective Inspector Berry to make that offer. I should like to know what consultation there was between the Ministry of Defence and the Department of Trade and Industry between the date in 1990 when the raid on the Astra offices took place and 27 January 1993, when the offer, ostensibly to return everything that had been taken, was made.
It is beyond peradventure that the material taken from the offices—all the material, the totality of the material—could have painted a full and startling picture of BMARC's activities during the years in question. It would have brought BMARC within the ambit of the arms to Iraq as well as the arms to Iran inquiries. It would have provided vital information about the role of the intelligence services in facilitating Britain's role as gun runner to the world.
So is it conceivable that the material was merely offered for return to the receivers without its full import being assessed at the highest levels of government and then acted upon? The question is rhetorical. The answer is no, it is not conceivable. The Prime Minister announced the setting up of the Scott inquiry in November 1992. By that time, the researches of the Ministry of Defence police were well advanced. The material obtained from BMARC was in the possession of the Government. Will the President of the Board of Trade confirm that, from that day to this, the Ministry of Defence has returned none of the material that it took from the offices of Astra or BMARC to the Scott inquiry?
Will the right hon. Gentleman confirm that the indictment is even more serious? Will he confirm that the Scott inquiry was set up with a remit restricted to arms to Iraq, to which Lord Justice Scott has subsequently adhered, to the exclusion of the BMARC affair, at a time when Ministers knew that what was in the BMARC papers—the President of the Board of Trade's statement last week was the merest tip of the iceberg—should have led to the Scott remit being widened to include both BMARC and arms to Iran? That is what the Government frustrated, not in the late 1980s but right up to the mid-1990s.

§ Mr. Rogers
My hon. Friend is rightly cataloguing what has been going on. I am not sure whether he heard my speech, in which I quoted an answer given to me by the hon. Member for Tatton (Mr. Hamilton), who was a Minister in the DTI at the time, to the effect that the cost of the DTI's own investigation into Astra over a three-year period had come to £2,170,000. Perhaps the President of the Board of Trade ought to look into where that money went if it did not provide him with sufficient information to answer my hon. Friend's question last week.

§ Mr. Wilson
My hon. Friend makes his own point well. The thrust of what I am saying is that the information was there. It was in the possession of the Government if they had wished to use it. [Interruption.] The hon. Member for Torbay (Mr. Allason) says that that is irrelevant. It is highly relevant.

§ Mr. Allason
I said no such thing. I said that there was not a shred of evidence and you know it. Furthermore, the debate this afternoon is a disgrace. You have not been able to bring home the bacon.

§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. Members on both sides should address each other as hon. Members, not "you".

§ Mr. Allason
Would the hon. Gentleman care to answer this question? Does he agree that the sole issue here is whether end user certificates were misused? If that is the case, does he have the slightest evidence that any one director of BMARC knew that those end user certificates would be misused? The answer clearly is no, and the hon. Gentleman knows it.

§ Mr. Wilson
The hon. Gentleman does not come to the Chamber very often and cannot be expected to know the rules. If he has been busting a gut to get in with that intervention for the past 10 minutes, he really has problems. If he thinks that that is the sole issue, he is very much mistaken and he will find out a great deal to his cost.
Will the President of the Board of Trade confirm that it is essential that all the documentation—this is the reply to the hon. Member for Torbay—removed from the offices of Astra and its subsidiaries should be at the disposal of the independent inquiry that we seek tonight? That includes the documents that so mysteriously turned up at the weekend, but not only those documents. It includes the documents—there are plenty of them—which are still in the possession of the Ministry of Defence or the DTI and also those documents that have already been returned to the receiver.
The point made by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) about the role of the receivers was well taken. Those documents, too, should be put into the hands of an independent curator in order that there can be no question about their total, unqualified availability to those who are charged with inquiry into the affair.
Now we come to the nub. When the Minister sums up, we shall want an answer to the question whether all the papers taken from the offices of Astra and its subsidiaries will be at the disposal of the inquiries that are proposed. That is the absolutely crucial question. Any hedging on the answer will confirm our worst suspicions.
Fortunately, on that point, if on no other, we have assistance from the Chief Secretary to the Treasury. I quote an extract from the transcript of the BBC's "Question Time" last Thursday. It runs: Mr. George Robertson: 'Will they get all the papers, all the documents, MI6, and the rest?' Mr. Aitken: 'Yes, MI6, all the documents, they have been promised all the documents.' Mr. Dimbleby: 'This has happened today, has it?' Mr. Aitken: 'Yes, today.' Mr. Robertson: 'And all the confiscated papers?' Mr. Aitken: 'Which are the confiscated papers? I didn't know there were any. I am sure they can get any papers they want.' We have it on the authority of the Chief Secretary to the Treasury that the inquiry, under whichever auspices it is held, will receive all the papers, the intelligence reports and everything that it needs, including every bit of paper that was removed from the offices of Astra in 1990. We shall want to hear only one answer when the Minister replies to the debate. Does he stand by the promise of the Chief Secretary to the Treasury in that respect or does he not? Will every bit of paper be available to the inquiry or will it not? Those are the only answers on which the Minister will be judged.
71 Let me deal briefly with the position of the Chief Secretary to the Treasury. First, I should sympathise with him over his weekend difficulties with a fax machine. A rather dire message from someone who was apparently trying to help him was faxed to an art dealer in north London. That public-spirited gentleman then supplied it to the public prints. How ironic that the Chief Secretary, who has spent years in cahoots with arms dealers, should have fallen foul in that way to an art dealer.
When, as has now been confirmed, the Ministry of Defence failed to return all the BMARC papers to the receiver, the right hon. Gentleman was Minister of State for Defence Procurement. He is now a Treasury Minister and Customs and Excise is inquiring into the affairs of his former company. He is a Cabinet Minister, whose Cabinet colleague, the President of the Board of Trade, has authorised two inquiries into the company of which he was a director. Is there no level of conflicting interest at which the right hon. Gentleman will step aside—at least until the inquiries are completed—or will he continue to brass-neck it out for as long as he can get away with it? Will he wait, to quote the famous fax, for the straw that breaks the camel's back"? I have a great deal of respect for the Select Committee on Trade and Industry and in particular for its Chairman, but the inquiry is patently not a job for it. It is too big, too complex and too forensic for the procedures of a Select Committee. The case for an independent inquiry, in parallel with the inquiry of Lord Justice Scott, is unanswerable. I warn Ministers that, if they successfully resist that request, it will be a pyrrhic victory. The questions will still be asked and the evidence will still emerge. Those who have sought to present themselves today as honest brokers will be recognised instead as those who have prevented, even at this late stage, a proper inquiry. They will be clearly identified as part of the problem rather than of the solution.
The President of the Board of Trade should remember that the biggest cover-up in modern political history came to be known as "All the president's men". Meanwhile, let me assure the House that the questions will continue to be asked and the sword of truth will gradually turn in the proper direction.

6.41 pm

§ The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor)
This debate has been intriguing. From the Order Paper, it appeared to be a request for a public inquiry, but the way in which Opposition Front-Bench spokesmen have conducted the debate suggests that they do not want an inquiry. They want, instead, to prejudge everything. They have used the debate purely to make accusations based on flimsy evidence and make allegations against Ministers, past and present. They have used words such as "conniving" and other emotive words that are not fitting given that, last week, my right hon. Friend the President of the Board of Trade made it clear that certain information needed to be revealed to the House. He said that that information needed to be followed up in detail. He suggested that the Select Committee on Trade and Industry should look into the matter if it saw fit to do so.
72 The best speech today came from the Chairman of that Select Committee, who clearly understands the implications of what is at stake and has confidence in the authority of the House to take action when such matters are brought to its attention.
Simply because things have happened differently from what people had thought, the automatic response should not be to reach for the nearest judge. The call for an inquiry is not some attempt to keep judges in work. It should not be used as an attempt to prolong inquiries year after year.
The inquiry of the Select Committee on Trade and Industry will attempt, however, to get to the bottom of something that has been brought to the attention of the House. Its Chairman understood that and I am delighted that he addressed some of the substantive issues involved. I am also aware that, on behalf of his Committee, he is in correspondence with the President of the Board of Trade about some of the detailed matters that need to be settled. I hope that they will be settled before the inquiry begins. I understand that the Committee will consider its decision on Wednesday. We look forward to co-operating with the Chairman in pursuit of the attempt to get the documentation agreed.
It may be only the second time that a Minister has offered a Select Committee, certainly the Select Committee on Trade and Industry, such information, but that is what we have done. We have offered the Committee an opportunity to look into the matter. We have agreed to co-operate with it as fully as possible. The details of the documentation will be available. Hon. Members should take those facts into account carefully when considering how to vote.
Anyone in the House who believes that the authority of the House is sacrosanct should accept what two Chairmen of Select Committees have said today: Select Committees are ultimately responsible to the House. I was delighted that the Chairman of the Select Committee on Defence, my hon. Friend the Member for Upminster (Sir N. Bonsor), also said that Select Committees need to consider the matter and are quite capable of doing so.
My hon. Friend the Member for Upminster also made the important point that the issue before the House is not whether arms should be exported. This country exports arms perfectly legitimately and our defence industry employs many people. As I understand it, Opposition Front-Bench spokesmen have never said that they would stop defence exports. I do not believe that that is their policy, but if it were it would certainly be of great interest to many constituencies.

§ Dr. John Cunningham
It is not our policy.

§ Mr. Taylor
I note that the right hon. Gentleman has kindly helped me by making it clear that it is not Opposition policy to stop defence exports.
It is important to establish a licensing procedure and to ensure that it is followed as rigorously as possible. That procedure should enable officials to discover the ultimate destination of the products. All licence application forms have a box that clearly requests a statement about the end user and the ultimate consignee. The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) referred to such information, which on the face of it suggested that in 1988 Department of Trade and Industry officials were given an assurance by BMARC that the exports were destined for Singapore.
73 The thrust of last week's statement from my right hon. Friend the President of the Board of Trade was that officials, having been given that information, then failed, for reasons which, with hindsight, we consider were not justified, to connect it with the intelligence that was available to the DTI in 1988. That raises genuine questions about such licenses as well as questions of procedure. As my right hon. Friend the Secretary of State said this afternoon, and in relation to the Scott inquiry, the licensing rules have been tightened and adjustments made in the light of criticisms and the problems discovered.
The right hon. Member for Copeland (Dr. Cunningham) made certain accusations about activities in the latter part of the 1980s. In one year, 1987, there were 98,000 applications for export requests and the simple connections were not made. That did not happen because Ministers did not want them to be made or because of some malicious attempt to evade export rules, but because of a cock-up. The fact is that life is simply not that exciting.

§ Dame Elaine Kellett-Bowman (Lancaster)
Not again.

§ Mr. Taylor
My hon. Friend may disapprove of that phrase. I did not invent it, but it has been used in the circumstances. It is a good deal more accurate than some of the accusations of Opposition Members. Life is simply not as exciting as they would wish us to believe. It is fortunate that they have not been in government recently; otherwise, they might have discovered that.

§ Mr. Rogers
The Minister has quite rightly drawn our attention to the importance of an effective licensing system to govern our arms export policy. Surely he accepts that part of the Opposition's argument is that at the time Ministers encouraged arms exporters to break the rules. The then Minister for Trade, Alan Clark, documented evidence, which has been submitted to the Scott inquiry, about how he invited people to his office and told them to fill in forms in such a way as to confuse officials. A politician did that, not Ministry officials.

§ Mr. Taylor
Once again, the hon. Gentleman is indulging in allegations. The purpose of this debate is very clear, and it was stated by the right hon. Member for Copeland: it is whether there should be an inquiry, and what form the inquiry should take. If the hon. Gentleman wants to make allegations, he can do so in that context. The Department's willingness to produce documentation is evidence of our openness.

§ Mr. Wilson
Time is getting on, and the Minister has not got round to dealing with my specific questions. Does he endorse the specific assurance given by the Chief Secretary on "Question Time" last Thursday about the total availability of documentation, including everything that was taken from Astra and the intelligence reports?

§ Mr. Taylor
The President of the Board of Trade is having discussions with the hon. Member for Sheffield, Central (Mr. Caborn)—the Chairman of the Trade and Industry Select Committee—about the documentation that is required. The hon. Gentleman, as a responsible Opposition Front-Bench spokesman, will know that certain documents must be handled with caution. [Interruption.] I will not listen to accusations and have fingers pointed at me when Opposition Members know very well that Governments wishing to get intelligence from sources do 74 not reveal those sources immediately. The reality is simple—revealing intelligence sources risks lives, and Governments depend on their intelligence services.
How that intelligence is then handled within Government is a proper matter for discussion. That is what the President of the Board of Trade referred to in his statement, and that is why my right hon. Friend is having discussions with the Chairman of the Select Committee about the documentation that is required, and how that can be handled to allow the Select Committee to start its inquiries. That is the right way to proceed. It is wrong for Opposition Members to point their fingers and jump up and down. They are attempting to cause difficulties which are likely to end—

§ Mr. Wilson
rose—

§ Mr. Taylor
How am Ito reply to the hon. Gentleman if he keeps rising to make points that he clearly forget to make during his own speech?

§ Mr. Wilson
This is precisely a point that I remembered to make in my speech. Is the Minister repudiating the statement made by the Chief Secretary to the Treasury on the BBC's "Question Time" last Thursday night—yes or no?

§ Mr. Taylor
I am answering this debate on the basis not of television programmes that I did not watch but of information that the House has before it as a result of the statement made in the House by the President of the Board of Trade last week. As I have said, detailed correspondence is going on between the President of the Board of Trade and the Chairman of the Trade and Industry Select Committee. If the hon. Gentleman wishes to make specific allegations, I urge him to do so through the proper channels—the Trade and Industry Select Committee.
This debate—even in the terms framed by the Opposition—is not about detailed allegations, but about whether there should be a public inquiry and about what form the inquiry should take. The most suitable way of progressing is to have an internal inquiry by the Trade and Industry Select Committee, which is then accountable to this House.

§ Mr. David Shaw
Does my hon. Friend accept that the Opposition have no basis for saying that they know all about inquiries, because they resisted an inquiry into Monklands district council? In the last hour, it has been confirmed that serious allegations of corruption are to be referred to the police.

§ Mr. Taylor
My hon. Friend has played a notable role in pushing for such inquiries into that matter. That is not the matter before the House this evening and I realise that you, Mr. Deputy Speaker, would stop my continuing on that subject. However, perhaps it does go to show that the desire for information to be made public is not always carried through in detail by Opposition Members in terms of their own affairs.
We have an important responsibility to try to find out more about what might have gone wrong. The Opposition are going from pillar to post in their reactions, and they seem less like seekers of truth and more like seekers of sensation. The hon. Member for Cunninghame, North (Mr. Wilson) said that he wanted the House to have a far more wide-ranging inquiry than anything that has been suggested today."—[Official Report, 13 June 1995; Vol. 261, c. 606.] 75 The Chairman of the Trade and Industry Select Committee has rightly said that most of his colleagues would like to see a sharp inquiry—one that should not be allowed to drag on, as a wide-ranging inquiry would. The right hon. Member for Copeland called for a seven-course banquet of an inquiry. He said that BMARC should be the subject of a fully independent inquiry, quite separate from the Scott inquiry. That new inquiry should have access to all the documents and reports relevant to BMARC, and should be headed by a judge.
One effect of the right hon. Member for Copeland's suggestion would be that we would not know the results of the inquiry for years. The inquiry would incur vast costs, and would not even have the advantages that Lord Justice Scott had from looking into export licensing operations. That is not an argument in favour of a genuine inquiry into the facts. I never give up hope with the right hon. Gentleman, who is a smiling and charming person who listens to arguments. I wish him to listen to this argument.
The right hon. Gentleman cannot really be saying that he wants to push the matter into the public domain with a judge and with all the panoply that we have seen with the Scott inquiry in order to seek the facts rapidly, because the result would be an expensive rigmarole. Why does not the right hon. Gentleman share the confidence of his hon. Friend the Member for Sheffield, Central in the Select Committee system, particularly a Select Committee under the chairmanship of one of his colleagues?
One or two colleagues referred to my right hon. Friend the Chief Secretary to the Treasury. My right hon. Friend has made a clear statement to the House that he was not aware that goods were being exported through Singapore to any other country, including Iran. The House has a proper respect for statements made by Members of Parliament to the House, and the tradition of the House to respect such personal statements should be continued in the circumstances. I believe that my right hon. Friend made a clear statement and—as far as I am concerned—that is that.
The hon. Member for Newcastle upon Tyne, Central picked apart a question to which I replied this afternoon, but it is a fact that the President of the Board of Trade made a perfectly accurate statement to the House last week. It is in keeping with the willingness of the DTI to provide full information that the information that the hon. Gentleman has received this afternoon is accurate in all respects. When the hon. Gentleman looks at the answer that is published tomorrow in Hansard, he will acknowledge that the average overall figure is 36 per cent.
The hon. Member for Cunninghame, North challenged us about various documents found by the Ministry of Defence, but that is a proper matter for the inquiry and I do not intend to go into it this afternoon. The Ministry of Defence police have made a statement over the weekend, and those questions will continue. I am sure that the Trade and Industry Select Committee will look at that matter.
I am afraid that we have not thrown much light on the key subject of whether there should be an inquiry. If Opposition Members were genuinely interested in getting the facts, they would have agreed with Conservative Members that the Select Committee system has been set up for this purpose. The DTI is clearly willing to provide evidence. In the circumstances, the sooner we can proceed to a short, sharp but accurate inquiry, the better it will be.
76 When the President of the Board of Trade and I first heard our officials' findings in relation to BMARC's exports to Singapore, we admit that we were in no doubt about their significance and we kept inquiring for further details. Initially, the President and I asked questions that had been mentioned in the media regarding accusations that were made at the end of March. There has been no sudden desire to ferret out information. We believed that a clear series of events should be examined in the public interest and that resulted in last week's statement to the House.
I believe that it is the House's proper duty to take the matter forward and to ask the Select Committee to do its job. If it can do its job quickly, we will get to the facts and that will benefit all hon. Members.
Question put, That the original words stand part of the Question:
The House divided: Ayes 267, Noes 291

Division No. 165]	[7.00 pm
AYES
Abbott, Ms Diane	Cohen, Harry
Adams, Mrs Irene	Connarty, Michael
Ainger, Nick	Cook, Robin (Livingston)
Ainsworth, Robert (Cov'try NE)	Corbett, Robin
Allen, Graham	Corbyn, Jeremy
Anderson, Donald (Swansea E)	Corston, Jean
Anderson, Ms Janet (Ros'dale)	Cousins, Jim
Armstrong, Hilary	Cunliffe, Lawrence
Ashdown, Rt Hon Paddy	Cunningham, Jim (Covy SE)
Ashton, Joe	Cunningham, Rt Hon Dr John
Austin-Walker, John	Cunningham, Roseanna
Banks, Tony (Newham NW)	Dafis, Cynog
Barnes, Harry	Darling, Alistair
Barron, Kevin	Davidson, Ian
Battle, John	Davies, Bryan (Oldham C'tral)
Bayley, Hugh	Davies, Rt Hon Denzil (Llanelli)
Beckett, Rt Hon Margaret	Davies, Ron (Caerphilly)
Beith, Rt Hon A J	Denham, John
Bell, Stuart	Dewar, Donald
Benn, Rt Hon Tony	Dixon, Don
Bennett, Andrew F	Dobson, Frank
Benton, Joe	Dowd, Jim
Bermingham, Gerald	Dunwoody, Mrs Gwyneth
Berry, Roger	Eagle, Ms Angela
Betts, Clive	Eastham, Ken
Blair, Rt Hon Tony	Enright, Derek
Blunkett, David	Etherington, Bill
Boateng, Paul	Evans, John (St Helens N)
Bradley, Keith	Ewing, Mrs Margaret
Bray, Dr Jeremy	Fatchett, Derek
Brown, Gordon (Dunfermline E)	Faulds, Andrew
Brown, N (N'c'tle upon Tyne E)	Reid, Frank (Birkenhead)
Bruce, Malcolm (Gordon)	Fisher, Mark
Burden, Richard	Flynn, Paul
Callaghan, Jim	Foster, Rt Hon Derek
Campbell, Mrs Anne (C'bridge)	Foster, Don (Bath)
Campbell, Menzies (Fife NE)	Foulkes, George
Campbell, Ronnie (Blyth V)	Fraser, John
Campbell-Savours, D N	Fyfe, Maria
Caravan, Dennis	Galbraith, Sam
Cann, Jamie	Galloway, George
Carlile, Alexander (Montgomery)	Gapes, Mike
Chidgey, David	Garrett, John
Chisholm, Malcolm	George, Bruce
Clapham, Michael	Gerrard, Neil
Clark, Dr David (South Shields)	Gilbert, Rt Hon Dr John
Clarke, Eric (Midlothian)	Godman, Dr Norman A
Clarke, Tom (Monklands W)	Godsiff, Roger
Clelland, David	Golding, Mrs Llin
Clwyd, Mrs Ann	Gordon, Mildred
Coffey, Ann	Graham, Thomas

Grant, Bernie (Tottenham)	Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S)	Michie, Mrs Ray (Argyll & S Bute)
Griffiths, Win (Bridgend)	Milburn, Alan
Grocott, Bruce	Miller, Andrew
Gunnell, John	Mitchell, Austin (Gt Grimsby)
Hain, Peter	Moonie, Dr Lewis
Hall, Mike	Morley, Elliot
Hanson, David	Morris, Rt Hon Alfred (Wy'nshawe)
Harman, Ms Harriet	Morris, Estelle (B'ham Yardley)
Harvey, Nick	Morris, Rt Hon John (Aberavon)
Hattersley, Rt Hon Roy	Mowlam, Marjorie
Henderson, Doug	Mudie, George
Heppell, John	Murphy, Paul
Hill, Keith (Streatham)	Oakes, Rt Hon Gordon
Hinchliffe, David	O'Brien, Mike (N W'kshire)
Hodge, Margaret	O'Brien, William (Normanton)
Hoey, Kate	O'Hara, Edward
Hogg, Norman (Cumbernauld)	Olner, Bill
Home Robertson, John	O'Neill, Martin
Hood, Jimmy	Orme, Rt Hon Stanley
Hoon, Geoffrey	Parry, Robert
Howarth, George (Knowsley North)	Pearson, Ian
Howells, Dr. Kim (Pontypridd)	Pickthall, Colin
Hoyle, Doug	Pike, Peter L
Hughes, Kevin (Doncaster N)	Pope, Greg
Hughes, Robert (Aberdeen N)	Powell, Ray (Ogmore)
Hughes, Roy (Newport E)	Prentice, Bridget (Lew'm E)
Hughes, Simon (Southwark)	Prentice, Gordon (Pendle)
Hutton, John	Prescott, Rt Hon John
Illsley, Eric	Primarolo, Dawn
Ingram, Adam	Purchase, Ken
Jackson, Glenda (H'stead)	Quin, Ms Joyce
Jamieson, David	Radice, Giles
Janner, Greville	Randall, Stuart
Jones, Barry (Alyn and D'side)	Raynsford, Nick
Jones, leuan Wyn (Ynys MÔon)	Reid, Dr John
Jones, Lynne (B'ham S O)	Rendel, David
Jones, Martyn (Clwyd, SW)	Robertson, George (Hamilton)
Jones, Nigel (Cheltenham)	Robinson, Geoffrey (Co'try NW)
Jowell, Tessa	Roche, Mrs Barbara
Kaufman, Rt Hon Gerald	Rogers, Allan
Kennedy, Jane (L'pool Br'dg'n)	Rooker, Jeff
Khabra, Piara S	Rooney, Terry
Kirkwood, Archy	Ross, Ernie (Dundee W)
Lestor, Joan (Eccles)	Rowlands, Ted
Lewis, Terry	Ruddock, Joan
Liddell, Mrs Helen	Salmond, Alex
Litherland, Robert	Sedgemore, Brian
Livingstone, Ken	Sheerman, Barry
Lloyd, Tony (Stretford)	Sheldon, Rt Hon Robert
Llwyd, Elfyn	Shore, Rt Hon Peter
Loyden, Eddie	Short, Clare
Lynne, Ms Liz	Skinner, Dennis
McAllion, John	Smith, Andrew (Oxford E)
McAvoy, Thomas	Smith, Chris (Isl'ton S & F'sbury)
McCartney, Ian	Smith, Llew (Blaenau Gwent)
Macdonald, Calum	Snape, Peter
McFall, John	Soley, Clive
McKelvey, William	Spearing, Nigel
Mackinlay, Andrew	Spellar, John
McLeish, Henry	Squire, Rachel (Dunfermline W)
Maclennan, Robert	Steinberg, Gerry
McNamara, Kevin	Stevenson, George
MacShane, Denis	Stott, Roger
McWilliam, John	Strang, Dr. Gavin
Madden, Max	Straw, Jack
Maddock, Diana	Sutcliffe, Gerry
Mahon, Alice	Taylor, Mrs Ann (Dewsbury)
Mandelson, Peter	Taylor, Matthew (Truro)
Marek, Dr John	Timms, Stephen
Marshall, David (Shettleston)	Tipping, Paddy
Martin, Michael J (Springburn)	Touhig, Don
Maxton, John	Turner, Dennis
Meacher, Michael	Tyler, Paul
Meale, Alan	Vaz, Keith
Michael, Alun	Walker, Rt Hon Sir Harold

Wardell, Gareth (Gower)	Wilson, Brian
Wareing, Robert N	Winnick, David
Watson, Mike	Worthington, Tony
Welsh, Andrew	Wright, Dr Tony
Wicks, Malcolm	Young, David (Bolton SE)
Wigley, Dafydd	Tellers for the Ayes:
Williams, Ftt Hon Alan (Sw'n W)	Mr. Jon Owen Jones and
Williams, Alan W (Carmarthen)	Mr. Stephen Byers.
NOES
Ainsworth, Peter (East Surrey)	Day, Stephen
Alison, Rt Hon Michael (Selby)	Deva, Nirj Joseph
Allason, Rupert (Torbay)	Devlin, Tim
Amess, David	Dicks, Terry
Ancram, Michael	Dorrell, Rt Hon Stephen
Arbuthnot, James	Douglas-Hamilton, Lord James
Arnold, Jacques (Gravesham)	Dover, Den
Arnold, Sir Thomas (Hazel Grv)	Duncan, Alan
Ashby, David	Duncan-Smith, Iain
Atkins, Rt Hon Robert	Dunn, Bob
Atkinson, Peter (Hexham)	Durant, Sir Anthony
Baker, Rt Hon Kenneth (Mole V)	Dykes, Hugh
Baker, Nicholas (North Dorset)	Eggar, Rt Hon Tim
Baldry, Tony	Elletson, Harold
Banks, Matthew (Southport)	Emery, Rt Hon Sir Peter
Banks, Robert (Harrogate)	Evans, David (Welwyn Hatfield)
Bates, Michael	Evans, Jonathan (Brecon)
Batiste, Spencer	Evans, Nigel (Ribble Valley)
Bellingham, Henry	Evans, Roger (Monmouth)
Bendall, Vivian	Evennett, David
Beresford, Sir Paul	Faber, David
Biffen, Rt Hon John	Fabricant, Michael
Bonsor, Sir Nicholas	Field, Barry (Isle of Wight)
Booth, Hartley	Fishburn, Dudley
Boswell, Tim	Forman, Nigel
Bottomley, Peter (Eltham)	Forsyth, Rt Hon Michael (Stirling)
Bottomley, Rt Hon Virginia	Forth, Eric
Bowden, Sir Andrew	Fowler, Rt Hon Sir Norman
Bowis, John	Fox, Dr Liam (Woodspring)
Boyson, Rt Hon Sir Rhodes	Fox, Sir Marcus (Shipley)
Brandreth, Gyles	Freeman, Rt Hon Roger
Brazier, Julian	French, Douglas
Bright, Sir Graham	Fry, Sir Peter
Brooke, Rt Hon Peter	Gale, Roger
Brown, M (Brigg & Cl'thorpes)	Gardiner, Sir George
Browning, Mrs Angela	Garel-Jones, Rt Hon Tristan
Bruce, Ian (Dorset)	Garnier, Edward
Budgen, Nicholas	Gill, Christopher
Burns, Simon	Gillan, Cheryl
Burt, Alistair	Goodlad, Rt Hon Alastair
Butler, Peter	Goodson-Wickes, Dr Charles
Butterfill, John	Gorman, Mrs Teresa
Carlisle, John (Luton North)	Gorst, Sir John
Carrington, Matthew	Grant, Sir A (SW Cambs)
Carttiss, Michael	Greenway, Harry (Ealing N)
Cash, William	Greenway, John (Ryedale)
Channon, Rt Hon Paul	Griffiths, Peter (Portsmouth, N)
Churchill, Mr	Gummer, Rt Hon John Selwyn
Clappison, James	Hague, William
Clark, Dr Michael (Rochford)	Hamilton, Rt Hon Sir Archibald
Clifton-Brown, Geoffrey	Hamilton, Neil (Tatton)
Coe, Sebastian	Hampson, Dr Keith
Colvin, Michael	Hanley, Rt Hon Jeremy
Congdon, David	Hannam, Sir John
Conway, Derek	Hargreaves, Andrew
Coombs, Anthony (Wyre For'st)	Harris, David
Coombs, Simon (Swindon)	Haselhurst, Sir Alan
Cope, Rt Hon Sir John	Hawkins, Nick
Cormack, Sir Patrick	Hawksley, Warren
Couchman, James	Hayes, Jerry
Cran, James	Heald, Oliver
Currie, Mrs Edwina (S D'by'ire)	Heath, Rt Hon Sir Edward
Curry, David (Skipton & Ripon)	Heathcoat-Amory, David
Davies, Quentin (Stamford)	Hendry, Charles
Davis, David (Boothferry)	Heseltine, Rt Hon Michael

Hicks, Robert	Malone, Gerald
Higgins, Rt Hon Sir Terence	Mans, Keith
Hogg, Rt Hon Douglas (G'tham)	Marland, Paul
Horam, John	Marlow, Tony
Hordern, Rt Hon Sir Peter	Marshall, John (Hendon S)
Howard, Rt Hon Michael	Marshall, Sir Michael (Arundel)
Howarth, Alan (Strat'rd-on-A)	Martin, David (Portsmouth S)
Howell, Rt Hon David (G'dford)	Mates, Michael
Howell, Sir Ralph (N Norfolk)	Mellor, Rt Hon David
Hughes, Robert G. (Harrow West)	Merchant, Piers
Hunt, Rt Hon David (Wirral W)	Mills, Iain
Hunter, Andrew	Mitchell, Andrew (Gedling)
Jack, Michael	Mitchell, Sir David (NW Hants)
Jackson, Robert (Wantage)	Moate, Sir Roger
Jenkin, Bernard	Monro, Sir Hector
Jessel, Toby	Montgomery, Sir Fergus
Johnson Smith, Sir Geoffrey	Needham, Rt Hon Richard
Jones, Gwilym (Cardiff N)	Nelson, Anthony
Jones, Robert B (W Hertfdshr)	Neubert, Sir Michael
Jopling, Rt Hon Michael	Newton, Rt Hon Tony
Kellett-Bowman, Dame Elaine	Nicholls, Patrick
Key, Robert	Nicholson, David (Taunton)
King, Rt Hon Tom	Nicholson, Emma (Devon West)
Kirkhope, Timothy	Norris, Steve
Knapman, Roger	Oppenheim, Phillip
Knight, Mrs Angela (Erewash)	Ottaway, Richard
Knight, Greg (Derby N)	Page, Richard
Knight, Dame Jill (Bir'm E'st'n)	Patten, Rt Hon John
Kynoch, George (Kincardine)	Pawsey, James
Lait, Mrs Jacqui	Peacock, Mrs Elizabeth
Lamont, Rt Hon Norman	Pickles, Eric
Lang, Rt Hon Ian	Porter, Barry (Wirral S)
Lawrence, Sir Ivan	Porter, David (Waveney)
Legg, Barry	Portillo, Rt Hon Michael
Leigh, Edward	Powell, William (Corby)
Lennox-Boyd, Sir Mark	Renton, Rt Hon Tim
Lester, Jim (Broxtowe)	Richards, Rod
Lidington, David	Riddick, Graham
Lightbown, David	Robathan, Andrew
Lilley, Rt Hon Peter	Roberts, Rt Hon Sir Wyn
Lloyd, Rt Hon Sir Peter (Fareham)	Robertson, Raymond (Ab'd'n S)
Lord, Michael	Robinson, Mark (Somerton)
Luff, Peter	Roe, Mrs Marion (Broxboume)
MacGregor, Rt Hon John	Rowe, Andrew (Mid Kent)
MacKay, Andrew	Rumbold, Rt Hon Dame Angela
Maclean, Rt Hon David	Ryder, Rt Hon Richard
McLoughlin, Patrick	Sackville, Tom
McNair-Wilson, Sir Patrick	Sainsbury, Rt Hon Sir Timothy
Madel, Sir David	Scott, Rt Hon Sir Nicholas
Maitland, Lady Olga	Shaw, David (Dover)
Major, Rt Hon John	Shaw, Sir Giles (Pudsey)

Shephard, Rt Hon Gillian	Townsend, Cyril D (Bexl'yh'th)
Shepherd, Colin (Hereford)	Tracey, Richard
Shepherd, Richard (Aldridge)	Tredinnick, David
Shersby, Sir Michael	Trend, Michael
Sims, Roger	Trotter, Neville
Smith, Tim (Beaconsfield)	Twinn, Dr Ian
Soames, Nicholas	Vaughan, Sir Gerard
Spencer, Sir Derek	Viggers, Peter
Spicer, Sir James (W Dorset)	Walden, George
Spicer, Michael (S Worcs)	Walker, Bill (N Tayside)
Spink, Dr Robert	Waller, Gary
Spring, Richard	Ward, John
Squire, Robin (Hornchurch)	Wardle, Charles (Bexhill)
Stanley, Rt Hon Sir John	Waterson, Nigel
Stephen, Michael	Wells, Bowen
Stern, Michael	Wheeler, Rt Hon Sir John
Stewart, Allan	Whitney, Ray
Streeter, Gary	Whittingdale, John
Sumberg, David	Widdecombe, Ann
Sweeney, Walter	Wiggin, Sir Jerry
Sykes, John	Wilkinson, John
Tapsell, Sir Peter	Willetts, David
Taylor, Ian (Esher)	Wilshire, David
Taylor, John M (Solihull)	Winterton, Mrs Ann (Congleton)
Taylor, Sir Teddy (Southend, E)	Winterton, Nicholas (Macclesfield)
Temple-Morris, Peter	Wolfson, Mark
Thomason, Roy	Yeo, Tim
Thompson, Sir Donald (C'er V)	Young, Rt Hon Sir George
Thompson, Patrick (Norwich N)	Tellers for the Noes:
Thornton, Sir Malcolm	Mr. Sydney Chapman and
Thurnham, Peter	Mr. Timothy Wood

§ 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.

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

Resolved, That this House recognises the independence of the all-party Select Committee for Trade and Industry; welcomes the Government's assurance that if that Committee decides to examine the issues raised by the allegation that Singapore was used as a conduit for arms to Iran then it will co-operate fully; and recognises that as far as intelligence is concerned the Government will establish procedures with the Select Committee in the light of the Intelligence Services Act 1994.