Scott Report

HC Deb 26 February 1996 vol 272 cc589-694

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]

Madam Speaker

I must tell the House that speeches by all Back Benchers will be limited to 10 minutes.

3.35 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

The House will welcome the opportunity afforded by this debate to consider Sir Richard Scott's report, now that all hon. Members have had the opportunity to study it. That is why the Government deliberately allowed 10 clear days to elapse between publication and debate.

We welcome the central conclusions of the report: that there was no plot secretly to arm Saddam Hussein, and no attempt to suppress documents that could have led to a miscarriage of justice. Those issues were central to the inquiry. But today I want to look forward. I want to look in detail and with care at Sir Richard Scott's recommendations and criticisms, as he asked the Government to do.

Dr. John Reid (Motherwell, North)

Just before the right hon. Gentleman leaps forward, will he tell the public whether he accepts the findings of Scott in sections D4 and D8, that the Chief Secretary to the Treasury "deliberately" and "designedly" misled Parliament? If he does, how can the Chief Secretary remain with honour in the Cabinet?

Mr. Lang

With respect to the hon. Gentleman, those were not Sir Richard Scott's words. If he contains himself, however, I shall try to cover all points of relevance as I proceed.

Mr. Menzies Campbell (Fife, North-East)

rose—

Mr. Lang

I must get started. The report rightly focused on the serious and defamatory charges that had been made and of which the Government now stand acquitted. But in my statement 10 days ago, I also took care to draw attention to Sir Richard's criticisms, to which I referred repeatedly, and to his conclusions and recommendations on which I should like today to indicate more of the Government's thinking.

To recap on my earlier remarks, mistakes were made. There are lessons to be learnt. The Government have accepted the inquiry's criticisms concerning the distribution of intelligence material, and have already taken action to improve it. We have accepted the criticism about export controls and licensing procedures and have already undertaken to publish a consultation paper on that, as Sir Richard Scott recommends.

We have already undertaken to consider further and very carefully Sir Richard's comments on the use of wartime export control legislation. We accept the principle of the need now for greater supervision by the office of the Attorney-General of Customs and Excise prosecutions in relation to export control matters, and I shall say more on that. We also accept many of his other recommendations.

Mr. Menzies Campbell

Will the Secretary of State give way?

Mr. Lang

If I give way now to the hon. Gentleman, I shall not be able to give way to him later.

Mr. Campbell

Does the Minister accept the Scott report's central conclusion, which was that policy was changed and that the change was deliberately kept from Parliament?

Mr. Lang

No, I do not; there is a difference between the Government and Sir Richard on that matter. I accept his report's two central conclusions, on the question of secretly arming Saddam Hussein and on the question of gagging the courts and risking the imprisonment of innocent men.

I should like to address the recommendations that I have mentioned, including, in particular, the issues of openness in government and accountability to Parliament.

Mr. Gerald Kaufman (Manchester, Gorton)

rose—

Mr. Lang

No, I must make some progress, if the right hon. Gentleman will allow me to do so.

As I said in my statement, there is a continuing line of criticism running through the report of the conventions—which are long established in the House—whereby successive Governments have undervalued, as Sir Richard Scott sees it, the public interest in the disclosure of information. The Government have a good record of improving openness in government, and the debate on how much further openness in Parliament might go should be seen in that context. We have, for example, introduced or supported numerous measures that, for the first time, open up specific areas of government, even the most sensitive, as with the Intelligence Services Act 1994. More generally, we published the first White Paper on Open Government in 1993, and the code of practice that it proposed a year later.

As a result of all those measures, and of other citizens charter initiatives—which was another first for the Government—much more information is now released, whether on the background to Government decisions, on medical and other records, or on school, hospital and local government performance data. More than 48,000 previously confidential public records have now been released.

The new departmental Select Committee system was introduced under this Government, in 1979, as a major step towards more open and accountable government. We have avowed, for the first time, the Secret Intelligence Service, put it on a statutory footing and made it subject to a statutory oversight committee. The Government have also published—they have been the first to do so—detailed lists of ministerial cabinet committees and "Questions of Procedure for Ministers", which are causes dear to the heart of the right hon. Member for Chesterfield (Mr. Benn), to whom such openness was denied by the previous Labour Government.

Closer to the issues of foreign policy and export controls, in 1991 my right hon. Friend the Secretary of State for Social Security, who was then my predecessor at the Department of Trade and Industry, took the unprecedented step of publishing the detailed lists—70 pages in all—of the exports licensed for Iraq between 1987 and 1990.

Despite the Government's good record, I hope that we can go further down the route of open government—further, as we have already gone, than in the traditional answer, which I quoted to the House 10 days ago, to questions on defence sales when answered by the Labour Government in the 1970s. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) then said: It has been the policy of successive Governments not to reveal information on the supply of arms to individual countries".—[Official Report, 10 June 1974: Vol. 874, c. 396–97] We hope to go further, too, than the answer given by the hon. Member for Oldham, West (Mr. Meacher), who said: the list of recipient countries is not published because defence purchases are regarded as confidential".—[Official Report, 20 December 1976; Vol. 923, c. 26.]

Mrs. Helen Jackson (Sheffield, Hillsborough)

A year ago, I was given a misleading answer to a parliamentary question. Since then, and after a great deal of pressure from my right hon. Friends on the Labour Front Bench, I have received an apology, which was printed in Hansard on 9 February. Why is it that, when Sir Richard Scott and the Government recognise that so many misleading and false parliamentary answers have been given, no apology has yet been made to any of the hon. Members concerned?

Mr. Lang

Sir Richard Scott has identified answers that he concluded are misleading, but he has also recognised that they were given in good faith by Ministers who thought that they were accurate.

Mr. Peter Shore (Bethnal Green and Stepney)

I am grateful to the right hon. Gentleman for having the courtesy to inform me that he was likely to mention my name. I am inclined to think that, in recent days and weeks, no ministerial speech is complete without some mention of the fact that, when I was the Secretary of State for Trade, I stated clearly and with agreement the doctrine that we did not give information about exports of defence and weapons equipment to other countries. That has made good sense, but if I may say so, that is not the issue. The issue—the basic issue—is whether we should have been supplying the amounts of defence-related equipment that we did to the two most odious regimes in the world.

Mr. Lang

That is an issue to which I shall come shortly. At the moment, I am addressing the question of openness in government and the conventions in the House that have been observed by successive Governments, including the ones of which the right hon. Member for Bethnal Green and Stepney was a Member.

Dame Elaine Kellett-Bowman (Lancaster)

Following on from the intervention of the hon. Member for Sheffield, Hillsborough (Mrs. Jackson), is my right hon. Friend aware that I was sent a letter by my right hon. Friend the Member for Bristol, West (Mr. Waldegrave) when he was a Foreign Office Minister? Is he further aware that I was not in any way misled by that letter, and that I wrote to inform Sir Richard Scott that that was the case? On 4 May, the Minister told me that the guidelines were applied on a case-by-case basis in the light of prevailing circumstances, including the ceasefire.

Those words were not tablets of stone, and should not be applied in a mechanical way. It would be madness to expect guidelines to be so imposed. Although the Government remain committed to those guidelines, I was not misled, and I do not see why anyone should say that I was.

Mr. Lang

I am most grateful to my hon. Friend for making that point clear.

"Erskine May", the standard authority on the conventions and procedures of this House, sets out—

Mr. Mike O'Brien (North Warwickshire)

Will the right hon. Gentleman give way?

Mr. Lang

No, I must make progress.

"Erskine May" sets out a number of subjects on which successive Administrations have declined to answer questions on grounds of public policy. At present, those include discussions between Ministers, or between Ministers and their official advisers; the proceedings of Cabinet, or its Committees; security matters; operational defence matters; and details of arms sales to particular countries.

Here I come to the particular point that Sir Richard Scott has raised in relation to parliamentary questions on the sale of arms or defence-related equipment. He said that the long-standing practice should be re-examined. The Government are content to do this and my right hon. Friend the Chancellor of the Duchy of Lancaster has today placed in the Library of the House a document setting out the current position in relation to informing Parliament on the export of arms, together with an explanation of how that practice has evolved.

That is an important step forward and I hope hon. Members will find that document a useful basis on which to take the discussion forward. Serious issues are involved. The Government's policy on defence sales is based on a respect for the right of other countries, and sovereign states, to protect their independence and to exercise their right to self-defence. That right is recognised explicitly by article 51 of the United Nations charter.

The countries to which we export arms have a legitimate right to maintain the confidentiality of the strength of their armed forces and the equipment they have available. Strategically, the export of defence equipment benefits our own defences through reducing the overall cost of equipment.

At the same time, the export of defence equipment is beneficial to the health of the British economy. Total defence expenditure, including overseas sales of equipment, provides employment for more than 400,000 people in industry in this country. And our success in overseas defence markets also helps our much bigger and broader export trade in normal commercial goods. No one should understate the importance of jobs in considering those issues.

Despite our economic interests—

Mr. Mike O'Brien

Will the right hon. Gentleman give way?

Mr. Lang

No, I have a lot of ground to cover.

Despite our economic interests, the Government maintain a strict policy on the control of defence exports—stricter than any other country, even though that involves denying to British firms valuable overseas markets, involving not just the sale of weapons for defence, but non-lethal equipment and potentially dual-purpose goods, which has a knock-on disadvantage to purely commercial civilian export opportunities, all of which our international competitors have no hesitation in exploiting.

Mr. Robert Jackson (Wantage)

My right hon. Friend is determined to do justice to Sir Richard Scott. I have looked at the Franks report on the Falklands, a matter of war and peace; I have looked at the inquiry on Aberfan, which involved the death of large numbers of school children and looked at a variety of other important recent tribunal reports. All of them came out at less than 150 pages. Does my right hon. Friend think that the public might be entitled to feel that there has been a certain loss of sense of proportion concerning the Scott report?

Mr. Lang

It is not for me to judge the requisite length or content of a report. The Government carefully and deliberately gave Sir Richard Scott an entirely clear hand as to how he should go about preparing his report.

Sir Richard Scott has recognised the potentially divergent and conflicting policy objectives in relation to employment and trade as well as foreign policy and humanitarian considerations. Those are conflicting issues with which all Governments have to wrestle. Sir Richard himself recognises that the moral case for refusing to allow defence exports to a particular country has to be set against the damage to British economic interests.

As the publication of the document placed in the Library shows, the Government are willing to play their part in public debate about the issues raised and would welcome the views of hon. Members and others on this issue, including in particular those of the opposition parties. In the light of those comments, we will consider what changes might be made, and bring forward any specific proposals for discussion in the House.

On a further important point on openness, before I turn to the report's other recommendations, I refer to the question of accountability, which has been raised in particular in relation to Government agencies, on which the Public Service Select Committee is currently taking evidence. If that Select Committee, which is currently undertaking an inquiry into these matters, were to be content to consider the question of accountability and responsibility more widely, the Government would propose to submit their views on the issue to it. I hope that the Select Committee will be willing to take up that opportunity and, in due course, to put forward its considered proposals.

Thus, in addition to being content that the parliamentary convention that the Government do not answer questions about exports of arms and defence-related goods should be reviewed in the light of modern circumstances, as Sir Richard recommends, the Government are also willing to consider positively Sir Richard Scott's wider views about ministerial accountability and responsibility. I hope that the House will welcome those proposals. That approach is already in marked contrast to the approach of previous Governments.

Mr. Allan Rogers (Rhondda)

The Secretary of State said that the Government have a long, well-established record of controlling arms exports. Why is it stated, on page 873 of the Scott report, that only seven out of 26 export licences to Iraq were actually seen by Lieutenant-Colonel Glazebrook in the Ministry of Defence? Is that the form of control that the Government exercise?

Mr. Lang

The control of the licences lay in the approval of some 76,000 export licence applications that came before the appropriate officials during 1988–89.

A further major step forward in making ministerial accountability transparent was taken by the Prime Minister in May 1992, when he decided to publish, as I have already mentioned, the guidance for Ministers known as "Questions of Procedure for Ministers". That had been a classified document under previous Administrations.

The section of "Questions of Procedures for Ministers" to which Sir Richard Scott refers states that Ministers have the duty to give Parliament, including Select Committees, and the public, as full information as possible about the policies, decision and actions of the Government. There are, and have long been, a number of conventions and accepted reasons why full information cannot be made public and therefore cannot be given to Parliament. As Sir Richard says in his report, It is generally accepted, and rightly so, that there have always been and always will be some subjects in respect of which full information, or sometimes any information cannot be given. Those include, inter alia, matters that are sub judice, commercially confidential information, and sensitive security and foreign policy matters.

That is recognised now even by the Labour party in its new guise as an advocate of open government. I am aware, of course, that concern about freedom of information derives in some cases more from genuine conviction than simple political opportunism. For example, my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) has on numerous occasions set out his views on this issue, which I know he has held with consistency and great sincerity.

The question of a full-blown Freedom of Information Act is one that the Government have had the opportunity to examine in considerable depth over several years, both in the context of responding to the Right to Know Bill introduced by the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) and in formulating our "Open Government" White Paper in 1993.

Several hon. Members

rose—

Madam Speaker

Order. I regret interrupting the right hon. Gentleman. It is apparent that the Secretary of State, at this stage, is not willing to give way. Therefore, hon. Members should be aware of that and should not persist at this time.

Mr. Lang

We have become persuaded as a result that that sort of approach—a Freedom of Information Act—is not the right way towards a fundamental opening up of government.

Nor have recent events changed our view on that. The Bill introduced by the hon. Member for Stoke-on-Trent, Central, in common with all overseas countries' freedom of information regimes, would have exempted a number of classes of material from disclosure, including policy advice. All of them tend to impose a legalistic approach, which is more inflexible in its application and much more expensive to those who use it and which risks undermining the role of Parliament and accountability to the House. I believe that that is something about which we should always be careful. But the debate over the alternatives should continue and the Government will be willing to participate.

Mr. Donald Anderson (Swansea, East)

The Minister is trying to distract the attention of the House from Ministers' culpability by introducing a rather academic screed on accountability. Will the right hon. Gentleman return to Ministers and set out the precedent for a Minister remaining in office when, as with the Attorney-General, he has been found personally at fault by an official inquiry?

Mr. Lang

The hon. Gentleman is wrong. I am not seeking to distract the House about the central issues. Now that the two central charges levelled by the Labour party have been disproved and dismissed by the report, the essential underlying theme of the report is about openness and accountability to the House. These are deeply important issues that the House should have the opportunity to address.

Mr. Robin Cook (Livingston)

Will the Minister give way?

Mr. Lang

No. I will not give way to the hon. Gentleman. Well, I will give way to him if he comes to the Dispatch Box to apologise for his behaviour over the past three years.

Mr. Cook

On a point of order, Madam Speaker.

Mr. Lang

rose—

Madam Speaker

Order. I am trying to deal with a point of order.

Mr. Cook

The President of the Board of Trade referred to a paper that has been deposited in the Library. We have just been advised that the paper is subject to an embargo until the right hon. Gentleman resumes his place. It is proper for the Minister to refer to a paper deposited in the Library if that paper is not available to Members calling at the Library? Should not the President of the Board of Trade be willing for the paper to be circulated so that he can be questioned on it while he is on his feet?

Mr. Lang

rose—

Madam Speaker

Order. I intend to respond to the point of order. I have no doubt that the President of the Board of Trade will provide information to the House.

It is entirely for the right hon. Gentleman to decide what papers he puts in the Library and what embargo he puts on them. Perhaps he might now enlighten the House about the matter.

Mr. Lang

I had no part in the placing of any embargo. I would be entirely content for the paper to be available at once to Members.

The Scott report makes important recommendations concerning the role of Customs and Excise, to which I said I would return. Lack of co-ordination and guidance here lay at the heart of some of the criticisms that Lord Justice Scott makes, with hindsight, on the way in which the Matrix Churchill trial was pursued by Customs and Excise.

The report first addresses possible changes—

Several hon. Members

rose—

Madam Speaker

Order. The House must come to order to hear what the Secretary of State has to say.

Mr. Peter L. Pike (Burnley)

On a point of order, Madam Speaker. It appears that the document that has been referred to, which has been placed in the Library, is being passed along the second Bench on the Government side of the House. That seems most inappropriate.

Madam Speaker

I am not aware of what is passing along the second Bench on the Government side of the House. I am interested in what the Secretary of State is saying, as the House should be.

Mr. Lang

rose—

Mr. Nigel Spearing (Newham, South)

On a point of order, Madam Speaker. Would it be in order, the Secretary of State having said that he would be content for Members to obtain copies of the paper, for the right hon. Gentleman to tell us whether he has distributed the document to the press or any other sections of the media?

Madam Speaker

It is for the Secretary of State to give what information he wants to the House.

Mr. Lang

I have not given the document to anybody. It has been placed in the Library. It should have been placed there at the beginning of my speech.

Mr. Alan Williams (Swansea, West)

Further to that point of order, Madam Speaker. I accept entirely the point made by the Secretary of State, but you indicated in your ruling that it is for the Minister to determine whether the document should be the subject of an embargo. A document has been placed in the Library which should be available to Members. The Minister has said that he has not put an embargo on it, but someone has. Will you, Madam Speaker, as protector of the House, ascertain exactly who is responsible for the embargo?

Madam Speaker

I am curious as to what embargo has been placed on it and who has done that. The Secretary of State says that he has not placed an embargo on that paper, and I accept that.

Mr. Lang

I am addressing the question of Customs and Excise. The report addresses possible changes to the Customs and Excise Management Act 1979 to clarify the various powers and definitions. In addition to these and other specific legal provisions, Sir Richard recommends a number of other changes to internal Customs and Excise procedures. As he recommends, there will be a review of the relationship between the Customs solicitor's office and the Customs investigation division. Sir Richard's recommendations relating to customs legislation and internal procedures are largely accepted by the Government; and we have asked for them to be implemented subject only to further consideration of some detailed technical legal matters. We will report back to the House on the changes that are being made once the implementation plans are finalised. I hope that that, too, will be welcome to the House.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

Will the Secretary of State give way?

Mr. Lang

No, I must make some progress.

The report also considered the position of Customs and Excise as an independent prosecuting authority, a role that has remained unchanged for very many years. It recommends the introduction of a formalised system of supervision by the Attorney-General of export control prosecutions. At the same time, Sir Richard affirms the important constitutional principle that a prosecuting authority should be independent and free from political direction. He considers the analogy with the Crown Prosecution Service and the Director of Public Prosecutions, both of which are subject to the superintendence of the Attorney-General, whereas the Customs and Excise prosecuting authority is not. Sir Richard notes that, acting in that capacity, the Attorney-General exercises a quasi-judicial role. His actions and decisions are not, for example, subject to Cabinet collective responsibility.

Although the analogy that Sir Richard draws with the CPS and the Serious Fraud Office is not exact, the Government accept that there are benefits in his recommendation: that in future the role of the Attorney-General should include the exercise of increased supervision of Customs and Excise prosecutions in relation to export control matters.

Mr. David Ashby (North-West Leicestershire)

Does my right hon. Friend accept that, in this instance, Customs and Excise looked as though it was out of control—and probably was—because it is not responsible to anyone? Is not it time that we got rid of it and amalgamated it with the police and the Crown Prosecution Service so that it would be subject to proper controls?

Mr. Lang

That is not what Sir Richard recommends, but perhaps my hon. Friend will have an opportunity to advance his view during further consideration of the matter.

The Government are urgently developing proposals on the precise nature and scope of the increased supervision, and my right hon. and learned Friend will be reporting further on that to the House as soon as possible.

In relation to the use of intelligence by Government Departments, Sir Richard makes it clear that he does not feel qualified to make recommendations on how the various systems and procedures might be improved. He acknowledges that a number of improvements have been made and sets out a number of areas in which he considers that problems existed.

Since 1992, major reviews have taken place in the Foreign and Commonwealth Office, the Department of Trade and Industry, the Ministry of Defence and Customs and Excise. As a result, modern information technology systems have been introduced and new internal distribution arrangements have been adopted. In addition, the requirements of users are now more fully reflected in the intelligence-gathering process.

Sir Richard also makes a procedural recommendation, which he has not published for security reasons, concerning intelligence personnel, which will be discussed with the chairman of the parliamentary Intelligence and Security Committee. The Government also propose to inform the Intelligence and Security Committee, chaired by my right hon. Friend the Member for Bridgwater (Mr. King), of other improvements that have been made. I have no doubt that that Committee, which was specially set up to deal with such matters, will want to be satisfied, and in due course to reassure the House, that an adequate response has been made to Sir Richard's observations.

Mr. Foulkes

I am grateful to the President of the Board of Trade for giving way. I congratulate him on accepting a number of Sir Richard Scott's detailed recommendations, but if Sir Richard has reached the correct conclusion on all these matters, can he explain to the House why the Government believe that, on the specific allegations relating to the Chief Secretary to the Treasury and the Attorney-General, Sir Richard reached the wrong conclusions? Is that not a curious comparison?

Mr. Lang

It would be very curious if the Government did not exercise their judgment on all the recommendations and criticisms in Sir Richard Scott's report, and that is what we have done.

Let me now turn to prosecution procedures and public interest immunity. On the question of prosecution procedures, Sir Richard notes that the Criminal Procedure and Investigations Bill is before Parliament, and that his proposals in that regard will have to be considered in the light of whatever legislation is eventually enacted. In relation to public interest immunity, Sir Richard has made a range of detailed proposals. In respect of his report, the Government are clear that the legal advice given by my right hon. and learned Friend the Attorney-General was correct at the time of the Matrix Churchill and other trials. His view is supported by a range of decisions in the higher courts; in addition, eminent lawyers—including a current Law Lord and a Master of the Rolls—have made clear their agreement with it. But Sir Richard's concluding chapter also focuses on suggestions for the future of this judge-made and evolving legal procedure.

Mr. Michael Stephen (Shoreham)

Has there not been a wicked deception of the British people? [Interruption.]

Madam Speaker

Order. Come along.

Mr. Stephen

Has there not been a wicked deception of the British people by the press and the broadcasting media, who for the past three years have referred to public interest immunity certificates as "gagging orders"? They are no such thing. The effect of a public interest immunity certificate is to bring documents out of the archives of the Department involved and place them before a judge, so that he can decide whether they should or should not be admitted in evidence.

Mr. Lang

My hon. Friend is right. The first point that I want to make on the subject is that the law has moved on significantly as a result of the House of Lords decision in 1994 in ex parte Wiley. That has already introduced into current practice a number of the points made by Sir Richard. As a consequence of that decision, Ministers can now disclose PII documents without the prior approval of the court when they consider it to be in the overall public interest.

Mr. Alex Carlile (Montgomery)

Will the right hon. Gentleman give way?

Mr. Lang

No, not now. I have given way a great many times, and I still have a good deal of important information to divulge to the House.

The second point that I should like to make clear is that, contrary to the Opposition's assertions, PII claims have been made in criminal cases both before and since the Matrix Churchill trial, and have been upheld in the courts. The abandonment of PII claims in criminal cases, which I understand that the Opposition propose, would result in cases against serious criminals and terrorists having to be dropped. That would be necessary, for example, to protect sensitive sources of information, and those whose lives might otherwise be at risk. Moreover, PII applies not only to Government documents and confidential police information but to the work of other agencies, such as the National Society for the Prevention of Cruelty to Children, in relation to child abuse cases.

The law on public interest immunity in civil and criminal cases is made by the courts, and Sir Richard Scott does not consider legislative intervention necessary or, at present, desirable. The Government, however, will consider his recommendations in the light of developing case law—in particular, his view that the time is opportune for a collective reappraisal by Ministers. As part of that consideration, the Government would welcome the views of hon. Members and others on future developments in the use of PII certificates.

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

Will the right hon. Gentleman answer a question that I have been asked by a number of my constituents? Why did the Attorney-General refuse to pull the prosecution—to end the trial—when he knew that Henderson was working for MI6? Scott says that he could have done so.

Mr. Lang

The matter is not one for my right hon. and learned Friend the Attorney-General. The trial was conducted properly and fairly. All the appropriate documents were placed before the judge; the judge commented on them and said that he was satisfied, and three defence counsel concluded that a fair and proper trial had taken place.

Mr. Alex Carlile

On a point of order, Madam Speaker.

Mr. Lang

The report devotes—

Madam Speaker

Order. I have yet another point of order.

Mr. Carlile

Is it right for the President of the Board of Trade to assert to the House that it is not possible for the Attorney-General to pull a trial, as it was put, when it is the Attorney-General and the Attorney-General alone who has the right to stop criminal proceedings before they reach judgment?

Madam Speaker

That is not a point of order, but a point of argument.

Mr. Lang

The report devotes two chapters of recommendations to export control powers and licensing procedures. Before I come to those recommendations, I should like to cover, as I did in my statement, our policy regarding the export of defence equipment to Iran and Iraq.

The Government's policy was to remain neutral in the Iran-Iraq war.

Mr. Campbell-Savours

On a point of order, Madam Speaker. Is it possible for the Attorney-General to come to the Dispatch Box to give a ruling on the point made by me and the hon. and learned Member for Montgomery (Mr. Carlile) because it is important and significant in this whole affair?

Madam Speaker

The Secretary of State is at the Dispatch Box and I am sure that he is capable of responding to the points that have been made.

Mr. Lang

Thank you, Madam Speaker. I understand that points of order are for you, which is why I did not respond to the previous one, but I am sure that if the hon. and learned Member for Montgomery (Mr. Carlile) catches your eye, he will pursue his point.

Dr. Keith Hampson (Leeds, North-West)

Will my right hon. Friend give way?

Mr. Lang

If my hon. Friend will forgive me, I must make progress.

The Government's policy was to remain neutral in the Iran-Iraq war. As Sir Richard recognises, no lethal weapons were sold to either side and the Government took vigorous measures to prevent the export of non-lethal goods that could have prolonged or intensified the conflict. As the House knows, a set of guidelines was introduced to assist in the application of that policy, which was far stricter than that of our main international competitors. The guidelines were exactly that. They were for guidance, essentially for internal use, to assist officials in dealing with export licence applications. They had no legal basis and were not intended to set out the complete policy. As Sir Richard Scott acknowledges in his report: I would readily accept that, in relation to defence sales to Iran and Iraq, the Guidelines were not, and were never intended to be, an exclusive exposition of Government policy".

Mr. Spearing

The President of the Board of Trade has made it clear that the guidelines were not necessarily related specifically to policy, which was a different matter. Why is it then that, in paragraph D4.3, Sir Richard quotes a statement included in letters by Ministers on four occasions that The Government have not changed their policy on defence sales to Iraq or Iran"? Does not the President of the Board of Trade agree that all the evidence clearly showed that the Government had?

Mr. Lang

I do not accept the hon. Gentleman's point. On the question of guidelines, let me quote the author of a different guide on guidelines, who said: They must not be allowed, by an over-rigid application that fails to take into account the circumstances of each case, to become a constraint on effective and sensible case management. Those are the words not of myself or the Government. Those are the words in a preface to the Chancery guide written by Sir Richard Scott himself.

My point is that Ministers and officials in all three Departments believed—and Sir Richard Scott accepts—that they were applying the Government's policy on the export of defence equipment in a way that remained within the guidelines announced by the then Foreign Secretary in 1985, with all their inherent flexibility. While honest opinions can and do differ—

Mr. Kaufman

rose—

Mr. Barry Sheerman (Huddersfield)

On a point of order, Madam Speaker.

Madam Speaker

I think that it is a point of frustration, but either way.

Mr. Sheerman

The Secretary of State has been on his feet for 37 minutes. Support for parliamentary democracy in this country is ebbing and haemorrhaging away every second that he speaks. Will you, Madam Speaker, direct him to answer the main charges of Scott before it is too late?

Madam Speaker

That is not a point of order.

Mr. Lang

The central tenet of our parliamentary democracy is freedom of speech. I have given way many times in this debate. I have a great deal of information to lay before the House and I wish to do that so that the debate can continue.

Mr. Kaufman

rose—

Madam Speaker

Order. The right hon. Gentleman must resume his seat. The Secretary of State has indicated that he is not giving way at the moment. Is that correct?

Mr. Lang

indicated assent.

Madam Speaker

The right hon. Member for Manchester, Gorton (Mr. Kaufman) must therefore resume his seat.

Mr. Lang

Officials in all three Departments believed, and Sir Richard Scott accepts—

Mr. Kaufman

On a point of order, Madam Speaker—[Interruption.]

Madam Speaker

Order. I have yet another point of order.

Mr. Kaufman Th

e President of the Board of Trade gave way to my hon. Friend the Member for Newham, South (Mr. Spearing) and purported to give a response to him in which he deliberately misinformed the House. It is essential that the House have a chance—

Madam Speaker

Order. I am sure that the right hon. Gentleman will want to rephrase what he has said. I am sure that he will do so—[Interruption.]

Mr. Kaufman

Yes, Madam Speaker. Of course I will rephrase my point of order in response to what you have said. The President of the Board of Trade gave a response to my hon. Friend in which he will have misinformed the House unless he allows that to be corrected by giving way to me.

Madam Speaker

That is what a parliamentary debate is made of. Thank you.

Mr. Lang

I look forward to listening to the right hon. Gentleman's speech.

Mr. Kaufman

rose—

Hon. Members

Give way.

Mr. Lang

No.

Madam Speaker

Order. I require the right hon. Member for Gorton to resume his seat.

Mr. Lang

As I have said, we will be placing in the Library a document that sets out our current approach to informing Parliament about our policy on arms sales. In the light of comments that we receive, we will bring forward any specific proposals for discussion in the House. I am also placing in the Library a note on how that policy operated between 1980 and 1990.

I return to Sir Richard Scott's recommendations on export controls. The Government accept that the current export control powers and procedures should be reviewed and that there should be wide consultation in the course of such a review. That review will take into account the points made by the report. We will then produce a consultation paper covering those points, as Sir Richard Scott recommends. I should make it clear that the Government are committed to an export control system that is easy for business to use and understand but allows the Government to take restraining action where it is necessary for wider policy reasons. I am sure that the House will approve progress in that area.

It is important to put the issue of defence equipment sales and the operation of those guidelines into clear perspective. Let it not be forgotten that the whole debate on guidelines is not about the sale of arms such as guns, missiles, bullets and bombs, but about non-lethal defence equipment. Moreover, the issue is not about the sale of such equipment by the Government, but about the steps taken by the Government to control sales by manufacturers and others to unacceptable destinations. The details of the export licences to Iraq in the crucial years have all been published.

I invite the House to contrast that point with the policy pursued by Labour Governments in the 1960s and 1970s, when the issue was not about non-lethal equipment but the sale of lethal weapons. It was not about the Government controlling such sales. Indeed, the Government helped to do the selling.

In 1966, the Ministry of Defence, under the then Secretary of State for Defence, Lord Healey, set up its own defence sales organisation tasked not with the control of overseas defence sales, as this Government's guidelines have sought to do, but with the specific purpose among others of organising sales, campaigns and presentations and of negotiating major deals—deals be it noted not in spare parts for microprocessors or field telephones, but in lethal weapons. At what countries did the Labour Government direct their sales campaign? I have done a little research and found that in 1975, 1976 and 1977, during the run-up to the Iran-Iraq war, British defence sales to Iran averaged more than £50 million a year, including the sale of lethal weapons.

Still more interesting is the previous Labour Government's record at the same time with another country: Argentina. I have discovered that the previous Labour Government helped to secure contracts to sell to Argentina—again, not a country renowned at the time either for its democracy or its human rights record—such choice consignments as 42 Sea Dart surface-to-air missiles, 120 Blowpipe surface-to-air missiles and two Lynx helicopters. Those are not spares for radar sales or metal detectors; they are weapons of war that were sold to the Argentine dictatorship.

If we go back a little further, we find that Labour Governments were selling to Argentina two type 42 destroyers and—direct, at their own hands—eight Canberra bombers. There we have it: destroyers, missiles, helicopters and bombers—it is a case of "Don't fly for me Argentina". Those lethal weapons were sold direct by a Labour Government. Is not the real contrast between Labour and ourselves that in the Gulf war against Iraq, British forces risked facing no British weapons in the hands of the enemy, but in the Falklands war against Argentina, they did? There can surely be no more sickening example of hypocrisy than that—Labour saying one thing and doing another. [Interruption.]

There remains the unfinished business of the hon. Member for Livingston (Mr. Cook), who has been shown by the Scott report to have systematically misled the House and the country over three years with the repeated charges that we secretly conspired to arm Saddam Hussein with lethal weapons and that we gagged the courts to suppress the evidence.

Mr. Kaufman

On a point of order, Madam Speaker. As I heard it, the right hon. Gentleman accused my hon. Friend the Member for Livingston (Mr. Cook) of having misled the House. If that is so, surely he is culpable.

Madam Speaker

If there were not so much noise, we could all hear precisely what is being said. Is it a fact that the Secretary of State used those words? [Interruption.] Order. I want to hear the Secretary of State, not the Opposition.

Mr. Lang

Yes it is, Madam Speaker, and if you rule that to be unparliamentary I shall withdraw the words "misled the House", but I shall leave in place the words "misled the country". I shall do so because for three years the hon. Gentleman went around the country accusing the Government of secretly arming Saddam Hussein and of attempting to gag the courts. Those two serious charges are completely rejected by the report and the hon. Gentleman now tries, vindictively and contemptibly, to shift his ground in order to continue the odious smear campaign. He shows a standard of behaviour that renders him unfit to be trusted by either the House or any foreign country even in the shadow post of Foreign Secretary. The House continues to await and demand an apology.

The Government welcome their acquittal by the Scott report of the two serious charges that caused the inquiry to be set up. We accept, as I have said today—and, indeed, in my statement 10 days ago—that there have been mistakes. There have been shortcomings and there is a need for improvement in several areas. I have today mapped out a number of ways in which the House can proceed. I have done so in a positive and forward-looking spirit, recognising that long-established conventions and practices of the House and elsewhere need to be looked at in a fresh light. I invite the House to respond in that spirit and to support the Government in the Lobby tonight.

4.22 pm

Mr. Robin Cook (Livingston)

I shall respond in a moment to the Secretary of State's purple peroration, but I shall first comment on the announcements that he has made today. That need not detain the House for long, because the length of the passage in the right hon. Gentleman's speech cannot conceal the shortness of the specifics in those proposals.

I shall respond on three counts. First, we welcome the fact that Customs is to have supervision of the prosecuting role. In the light of the grave criticisms by Sir Richard Scott of the conduct of the Matrix Churchill trial, it would have been astonishing if the right hon. Gentleman had not proposed changes to the prosecuting role of Customs.

Secondly, I agree with the Government that we require a review of ministerial accountability. After all, one of the key conclusions in the closing section of the report is that, during the inquiry, example after example has come to light of the failure of ministerial accountability. What I find surprising is that, having had 18 days to study the report, the right hon. Gentleman could still produce no proposal as to what might be done to strengthen ministerial accountability.

Today, the one initiative that the right hon. Gentleman announced was that the Government will give evidence if the Select Committee holds an inquiry into ministerial accountability. I would hope so—after all, it is their duty to give evidence to Select Committees if they are asked to do so. However, the initiative does not shed any light on what single proposal they will make in that evidence to avoid us ever again having to debate a report that, in its closing chapter, details seven specific cases in which ministerial accountability was broken.

Mr. Nicholas Budgen (Wolverhampton, South-West)

rose—

Mr. Cook

I shall finish my point, and then give way to the hon. Gentleman.

Thirdly, we shall certainly consider the Government's paper on parliamentary questions on arms exports.

Mr. Budgen

rose—

Mr. Cook

I will give way to the hon. Gentleman in a moment—he should relax; his time will come.

I have in front of me the paper that has been deposited in the Library, and I shall share its conclusion with hon. Members: This note summarises the position in relation to the release of information on defence related exports and has been prepared in order to assist further discussion on this subject. Not a single proposal is contained in the document. We shall enter into the spirit of these discussions as fully as possible, but these discussions would have been assisted further if the paper had contained a single idea.

Mr. Budgen

Does the hon. Gentleman agree that it would be extremely difficult to lay down any rules for ministerial accountability, because, essentially, it is a question for the House, and a question as to how much the House wants information? For instance, as far as negotiations with the IRA were concerned before the ceasefire, the House came to a misunderstanding as to the state of discussions between the Government and the IRA. However, when my right hon. Friends the Prime Minister and the Secretary of State for Northern Ireland came to this House, it was pleased to accept a slightly changed expression of those relationships. Is that not an example of how the House decides what information it wants?

Mr. Cook

At a later stage in my speech, I shall return to the question whether it is justifiable at any stage not to share information with the House. I cannot accept for one moment the hon. Gentleman's claim that it is impossible to make any rules about ministerial accountability. Indeed, the Government keep issuing rules about ministerial accountability. In relation to those rules, Sir Richard Scott states in chapter 8 of section K: Paragraph 27 of Questions of Procedure for Ministers identifies as one of the facets of Ministerial accountability to Parliament `the duty to give Parliament, including its Select Committees, and the public as full information as possible about the policies, decisions and actions of the Government, and not to deceive or mislead Parliament and the public'. Then Sir Richard Scott—whom the Government appointed to judge on this point; he was their choice—said: In the course of the Inquiry example after example has come to light of an apparent failure of Ministers to discharge that obligation. The right hon. Gentleman' commitment to openness was a lot less convincing when he ruled out a freedom of information Act. Secrecy made this scandal possible. The five volumes of the Scott report provide the firmest foundation yet of a case for a freedom of information Act. There were never better witnesses for a freedom of information Act than the long parade of officials and Ministers who queued up to explain to Sir Richard Scott that the public interest was best served by not letting the public know what they were deciding.

Mr. David Mellor (Putney)

Does the hon. Gentleman accept that those who seek to hold Members of the Government accountable must expect to be held accountable themselves? The hon. Gentleman said: First, they armed Saddam; secondly, when he used those arms against a British ally. they covered up the fact that they had provided the arms; and thirdly, as the cover-up unravelled, rather than own up, they were willing to see three executives of Matrix Churchill go to prison."—[Official Report, 23 November 1992; Vol. 214, c. 638.] Is the hon. Gentleman aware that not a word of that is true, and will he now withdraw it?

Mr. Cook

No. The right hon. and learned Gentleman is wrong on every single count, and I shall demonstrate that all those charges were justified.

The right hon. and learned Member for Putney (Mr. Mellor) has echoed the allegation made by the President of the Board of Trade. What made the latter's speech so remarkable was the absence of any acceptance by any Minister of any responsibility for the errors set out in the report.

Confronted with those errors and five volumes of supporting evidence, the President of the Board of Trade and the right hon. and learned Member for Putney have produced the novel constitutional principle that it is the Opposition's duty to accept responsibility and resign. Every time they produce it, a wave of hilarity crosses the nation and drowns them.

Hon. Members

Answer the question.

Mr. Mellor

rose—

Mr. Cook

I will answer the question.

The Government are fond of lecturing the rest of the nation on its need to accept responsibility. Parents are held responsible for actions; teachers are held responsible for the performance of their pupils; local councillors are held legally and financially responsible; yet, when it comes to themselves, suddenly, not a single Minister can be found to accept responsibility for what went wrong.

Sir Peter Hordern (Horsham)

rose—

Mr. Mellor

rose—

Mr. Cook

I will not give way. I shall answer the right hon. and learned Gentleman, and he will not like the answer.

In the past week, several right hon. and hon. Gentleman, of whom he is only the latest, have expressed their version of Labour's charges against the Government. I have no doubt that they are trying to be helpful, and I am grateful for their assistance, but I hope that they will forgive me if I rely on the charges that the Opposition actually made. [Interruption.] Yes, they were all set out in the debate. They were in the motion that I moved three years ago, on the last occasion that the House debated the issue. There were four charges, not three. I shall deal with each of those four charges, and demonstrate how Sir Richard Scott's report convicts the Government on every one.

The first charge in the motion was that the Government had acted in clear breach of the Howe Guidelines of 1985".—[Official Report, 23 November 1992; Vol. 214, c. 631.] Sir Richard returns a verdict of guilty. You can tell, Madam Speaker, the importance that he attaches to the conclusion, because, like all his key findings, it is expressed as a double negative: It is clear that policy and defence sales to Iraq did not remain unchanged. Indeed, Sir Richard reserves the most scathing passages in his report for those witnesses who tried to argue that the guidelines had not changed. The Chief Secretary submitted that the guidelines were not changed, but were only interpreted more flexibly. Sir Richard dismisses his view as one that does not seem to me to correspond with reality". For good measure, Sir Richard quotes a minute that says: Mr. Waldegrave is content for us to implement a more liberal policy on defence sales". That minute was from what was then the private office of the Chief Secretary. It was signed by his private secretary. Sir Richard observed: Mr. Waldegrave did not find the expression jarring at the time. He did not do so for the reason that the words, 'a more liberal policy', describe in ordinary and simple language the reality of what he and his colleagues were discussing. When he made his statement to the House, I asked the right hon. Gentleman whether the Government accepted—

Mr. Mellor

rose—

Mr. Cook

I shall answer all three questions.

I asked the right hon. Gentleman whether the Government accepted all the conclusions of the Scott report, and he replied: Yes, the Government accept the conclusions".—[Official Report, 15 February 1996; Vol. 271, c. 1148.] To avoid all doubt, I shall refer to the statement that he made to the House, which appears in the Hansard. Let us hear what he said one more time. I ask to hear it again because, while the right hon. Gentleman was telling me on the Floor of the House that the Government accepted the Scott report's conclusions, his information officers were in the Press Gallery handing out a press pack. It claimed that the Scott report exonerated Ministers, and it stated: There was no change of policy in 1989". As a press guide to the conclusions of the Scott report, that was flatly untrue.

Can the President of the Board of Trade confirm whether the Government accept those conclusions? Do they accept the conclusions, or, when the right hon. Gentleman said, "Yes, we accept the conclusions," did he mean that the Government accept only those conclusions that support their position? If the right hon. Gentleman will not tell us, what about his boss?

Mr. Mellor

rose—

Mr. Cook

I give the right hon. and learned Gentleman an undertaking that I shall give way towards the end of my speech, because, by then, every single one of his charges will be nailed. At the moment—[Interruption.]

Madam Speaker

Order.

Mr. Cook

At the moment, I am playing some bigger fish.

What about the right hon. Gentleman's boss? When he set up the inquiry, the Prime Minister wrote to me and said: Whether Ministers themselves breached their own guidelines is one of the things that will be established by the inquiry". That fact has been established. Will the Prime Minister accept that Ministers broke their own guidelines? He told me that the inquiry was set up to investigate that issue, so will he now accept the result?

Upon reading the Scott report, I am unclear why an inquiry was needed to establish whether the guidelines were changed. In the week that the Prime Minister set up the inquiry, he was minuted by his private secretary, whose remarks appear in paragraph D4.51 of the report. He told him: as Chancellor of the Exchequer you knew that the Government had decided to change the guidelines". In his evidence to the Scott inquiry, the Prime Minister said: One of the charges at the time"—

Mr. Lang

The hon. Gentleman may want to assist the House by pointing out that that occurred in July 1990, which was long after the time in question. It was a decision taken by a Committee presided over by the Foreign Secretary, about which my right hon. Friend, the then Chancellor and present Prime Minister, was subsequently told. That recommendation was not passed on to the Prime Minister for approval, because the imminent invasion of Kuwait by Iraq ruled it out. The matter was not proceeded with.

Hon. Members

Withdraw.

Mr. Cook

The right hon. Gentleman should listen to what he has just said: the month before Saddam Hussein invaded Kuwait, the Government were willing to relax the guidelines still further.

Mr. Kaufman

As the President of the Board of Trade has intervened inaccurately—to describe it in friendly terms—upon my hon. Friend, we should draw attention to the fact that Mr. Wall's statement to the Prime Minister— as Chancellor of the Exchequer you knew that the Government had decided to change the guidelines"— was dated 13 November 1992. In that submission to the Prime Minister, his private secretary said: the Howe Guidelines of 1985 were amended by Ministers in December 1988 but the amendment was never announced to Parliament". That is why, knowing those words, the President of the Board of Trade was too timorous to give way to me.

Mr. Cook

My right hon. Friend is absolutely right. The nub of the memorandum is: why did the Prime Minister and others feel able to tell the House that the guidelines had not been changed when they had that evidence?

I return to the right hon. and learned Gentleman's other charge, about the Government arming Saddam Hussein. It was in our motion, which said: British servicemen may have been exposed to fire from shells and rockets made in munitions factories equipped by Britain". Sir Richard's report reveals that, three years before the Gulf war, there were intelligence reports that Iraq had placed multi-million pound orders with four British companies, including Matrix Churchill, to equip its armaments factories at Nassr. The same intelligence reports warned that annual production targets for Nassr were 10,000 missiles, 150,000 artillery shells, 100,000 mortar shells and 300,000 fin-stabilised shells.

Mr. David Shaw (Dover)

They were not British.

Mr. Cook

The hon. Gentleman says that they were not British. They were made on British machines. That is what I am reading out.

Mr. Shaw

That is not the same.

Mr. Cook

The hon. Gentleman says that it is not the same, but it was never our case that Saddam Hussein would shove the machine tools down gun barrels and fire them at his enemies. Our case was always that he would use those machine tools to turn out shells, some of which may well have been fired at British forces in the Gulf war.

Sir Richard paints a scandalous picture of the failure of intelligence reports by Whitehall to reach those who needed information—although, once again, no Minister will accept responsibility for that departmental failure—but enough information did reach Ministers to ring alarm bells, if they had wanted to hear them.

Mr. Phil Gallie (Ayr)

Can the hon. Gentleman help me on this point? He said that British companies had sold machines to Iraq. I heard him make the statement that they had secretly sold arms to Saddam Hussein. It does not refer to anyone having secretly sold machines to Saddam Hussein. It referred to secretly selling arms. The hon. Gentleman has a reputation for propagating porkies, so will he answer that question?

Mr. Cook

I have to say to the hon. Gentleman that to claim that selling machine tools that produced the shells that went into those gun barrels was not arming Saddam Hussein is—to borrow a word from Sir Richard Scott—sophistry. Perhaps I should explain to the hon. Gentleman that sophistry means a plausible answer that, on further investigation, is plainly misleading.

Sir Timothy Sainsbury (Hove)

Will the hon. Gentleman give way?

Mr. Cook

No. I must continue with my speech. [HON. MEMBERS: "Give way."] Perhaps I should give way to the right hon. Gentleman, as he was one of those who came to the Dispatch Box and repeatedly denied that there had been a change in guidelines.

Sir Timothy Sainsbury

Will the hon. Gentleman have the grace to admit that, if anything in the entire episode lacks credibility, it is his suggestion that, when he said that the Government had armed Saddam Hussein, he was trying to do anything other than give the impression that lethal weapons had been sold?

Mr. Cook

I have it here. The motion that I moved in the House three years ago stated: British servicemen may have been exposed to fire from shells and rockets made in munitions factories equipped by Britain". That has consistently been our argument. Moreover, they knew where those machine tools were going as early as February 1989. The right hon. Gentleman shakes his head, but it is in paragraph D6.94.

In February 1989, when he was in the very act of negotiating change in guidelines with his colleagues, the Chief Secretary was given a minute that told him: The Iraqis intended to use Matrix Churchill to supply machinery for the new armaments and munitions factories of the Nassr and Hutteen State Establishments". They knew what they were approving, and the knowledge went much higher than the Chief Secretary. It would be unfair if he were left to take the rap.

A year earlier, an intelligence digest warned the then Prime Minister that Matrix Churchill has been heavily involved [in the supply of equipment to Iraq for use in arms production]". The problem was that Ministers kept turning a deaf ear to the alarm bells. When the Chief Secretary was warned that some of the machine tools might go into the Iraqi nuclear programme, he replied that screwdrivers are also required to make hydrogen bombs.

After the Gulf war, the International Atomic Energy Agency found 30 Matrix Churchill lathes in Iraqi nuclear plants. Faced with that evidence, how dare Ministers still claim that they did not arm Saddam Hussein?

The right hon. Gentleman played the trade card and justified the decision to equip Saddam's armaments factories on the commercial grounds that it was good for business. Perhaps one of the Conservative Members can help me. After all, they claim to be the party of business. Could one of them explain to me how it can be good for business to approve a contract for which one does not get paid?

That is what happened. Saddam did not pay for the machine tools that went into his factories—we did. The British taxpayer has been left with a bill for about £700 million for our total exports to Iraq. Incurring a bad debt of £700 million would surely be enough to get someone sacked from any organisation in Britain except the Conservative Government.

Mr. Bill Walker (North Tayside)

Will the hon. Gentleman tell the House, on which weapons sales—and I mean weapons sales, including the destroyers sold by the former Labour Government—were debts not paid? Can the hon. Gentleman answer that? He should think very carefully before he does so.

Mr. Cook

As Ministers are for ever saying, not without notice. But one cannot find any example in the history of export credit guarantees of such a vast debt with one country. That debt was the direct result of ministerial decisions to increase export credit guarantees to Iraq, and to allocate one fifth of the total for defence sales.

The last of those decisions was in September 1988, when export credits to Iraq were increased by £340 million, despite mounting evidence that Iraq did not have the cash to service existing credits. Sir Richard notes: The Chief Secretary endorsed the proposed new offer". The Chief Secretary in question is, of course, the current Prime Minister.

When Lord Howe gave evidence to the Scott inquiry, he explained that the decision to give no publicity to the change in guidelines was that the decision might appear cynical to the public. For once, I must defend Ministers. I would acquit them of the charge of cynicism. What I find striking about their attitude is its naivety and the innocence with which they believed that if they armed a brutal dictator, he would use his military capacity in manner consistent with HMG's foreign policy and would pay all invoices on time. Their policy was both a strategic blunder and commercial disaster. It is no wonder they wanted to keep it quiet.

Mr. Richard Needham (North Wiltshire)

Will the hon. Gentleman give way?

Mr. Cook

I shall return to the points raised by the right hon. Member for Hove (Sir T. Sainsbury), as I have another of his charges to answer. I am glad that I have his support.

I come to the third charge that we laid against Ministers three years ago—that hon. Members were persistently misled by assurances that the Guidelines were being observed". Sir Richard's conclusion is set out at the end of 600 pages in which he examines the Government's conduct of arms exports to Iraq. The final sentence records: Parliament and the public were designedly led to believe that a stricter policy … was being applied than was in fact the case. In short, Parliament was misled, and was designedly misled.

Mr. Mellor

Will the hon. Gentleman give way?

Mr. Cook

Of course.

Mr. Dennis Skinner (Bolsover)

Is he still here?

Mr. Mellor

I am still here, and I will be here for a long time yet.

The hon. Member for Livingston (Mr. Cook) has invented the third point. He has dealt with the question—typical of him—that arms are to be equated with multi-use machine tools. The third charge that I quoted from the hon. Gentleman's speech on 23 November 1992 was: as the cover-up unravelled, rather than own up, they were willing to see the three executives of Matrix Churchill go to prison."—[Official Report, 23 November 1992; Vol. 214, c. 638.] That is an outrageous slur, and nothing in Scott gives the hon. Gentleman the right to maintain that accusation. He should withdraw it.

Mr. Cook

I hope that the right hon. and learned Gentleman will not be stretched too far if I ask him to count up to four. I said that there were four charges in our motion, and I will come to that charge. The right hon. and learned Gentleman did not do our charge sheet sufficient justice when he left out this charge, so let us make sure that we get it on the record.

Sir Richard concluded that the failure to inform Parliament of the truth was deliberate, and was the inevitable result of the agreement among three junior Ministers that no publicity would be given to the decision. Let us try them out again. Will the Secretary of State tell us whether the Government accept that conclusion?

Perhaps the Prime Minister would like to answer. Three years ago, the Prime Minister told the House: The suggestion that Ministers misled the House is a serious and scurrilous charge and has no basis whatsoever in fact."—[Official Report, 17 November 1992; Vol. 214, c. 136.] The suggestion does have a firm basis, in the five volumes beside me. I agree with the Prime Minister that it was a serious charge. Will he now accept that, far from being scurrilous, it was entirely accurate? [HON. MEMBERS: "Answer."] Suddenly, we have a row of limpets stuck to the Treasury Bench.

Where does that leave the Chief Secretary? In the six months after the guidelines were changed, the Chief Secretary signed not one or two, but 30, letters to Members of Parliament denying any change in the guidelines. The matter should concern not only Opposition Members, because 23 of those letters went to the Chief Secretary's colleagues on the Tory Benches—to each of them he refused to admit any change in the guidelines.

Sir Richard observed that the Chief Secretary knew, first hand, the facts that … rendered the 'no change in policy' statement untrue. Of course the right hon. Gentleman was in a position to know at first hand—he was at the meetings at which the changes in the guidelines were changed.

Sir Richard's summing up is damning. He concluded: Government statements … consistently failed … to comply with the … Questions of Procedure for Ministers and, more important, failed to discharge the obligations imposed by the constitutional principle of Ministerial accountability. The desk officer for Iraq who drafted those letters for the Chief Secretary knew that they were untrue, and he said so to the Scott inquiry. That desk officer resigned from the foreign service, rather than be obliged to continue drafting them. Tonight, the House must judge whether he is the only person who should resign over the misleading of Parliament.

I come to the last of the four charges in our motion of three years ago. We said that the Government were willing to see citizens put on trial for exports at which Ministers had connived and to put their liberty at risk by attempting to prevent the disclosure of documents crucial to their defence".—[Official Report, 23 November 1992; Vol. 214, c. 631.] Section G, in which Sir Richard considers the conduct of the Matrix Churchill case, is one of the longest in his report. Anyone who has read it in its entirety will know that it is not we who should apologise in the light of Sir Richard's conclusions.

He concluded that the Matrix Churchill case should never have been brought to court, and that the claims of public interest immunity that were made in the course of it ought to have had no place in a criminal trial. Sir Richard sums up that the Government's attitude to disclosure of documents to the defence was consistently grudging. The approach ought to have been to consider what documents the defence might reasonably need and then to consider whether there was any good reason why the defence should not have them. The actual approach.…seems to have been to seek some means by which refusal to disclose could be justified. Not every means by which refusal was justified appears to have impressed Sir Richard. The claim by the then Minister of State, Foreign and Commonwealth Office, in his PII certificate that disclosure would cause "unquantifiable damage" to the public interest is dismissed by Sir Richard as "risible". Perhaps that is not surprising, as the Minister hardly helped himself at the inquiry by claiming that the word "unquantifiable" could have meant unquantifiably small, not necessarily unquantifiably large.

Mr. Donald Anderson

Does my hon. Friend agree that not only could the Attorney-General have stopped the prosecution at any time in the light of his knowledge of all the facts, but that the Government were quite prepared effectively to leave the guilt or innocence of the three Matrix Churchill executives to the robustness or otherwise of the trial judge? It happened that Judge Smedley was a robust judge and stood for justice. Another judge might have been less strong.

Mr. Cook

My hon. Friend draws attention to one of the Government's defences—that, in laying the public interest immunity certificates, they were only bringing the documents to the attention of the trial judge. However, there is the awkward matter of the second certificate, signed by the then Secretary of State for Trade and Industry. His first certificate contained a list of the documents covered by it. The second certificate, which was used at the trial, omitted that list. The minute to the Secretary of State that accompanied the doctored certificate stated that to retain the words might increase the risk that the judge will call for copies of the documents. Having seen those documents, Sir Richard observed that it was "very obvious" that any defence counsel would give his (or her) eye teeth for them. There is no need to ask the right hon. Gentleman whether he accepts those conclusions. From the moment of publication, the whole Government have been loud in their complaints that the Vice-Chancellor of Chancery Division does not understand the law. They were led by the right hon. Gentleman in his statement to the House that the Government's interpretation of the law was supported by such distinguished judges as Lord Scarman."—[Official Report, 15 February 1996; Vol. 271, c. 1141] The force of that argument was somewhat blunted, when Lord Scarman wrote to The Times five days later: The Attorney-General was wrong … the Attorney-General was under a duty to advise the Crown that in this case justice required immediate disclosure and an end to the prosecution.

Sir Ivan Lawrence (Burton)

I know that the hon. Gentleman would not want to mislead the House about the effect of the contents of the documents in question. If they were so essential to the defence, can the hon. Gentleman explain why the trial did not stop immediately following their disclosure, but continued for five weeks, until the evidence given by Alan Clark was heard?

Mr. Cook

Anybody who has read the transcript of the trial knows that the prosecution case collapsed under the cross-examination of Alan Clark, when his evidence in chief was plainly inconsistent and unsustainable against the documents then obtained by the defence.

Sir Ivan Lawre

rose—

Mr. Cook

The hon. and learned Gentleman should read the transcript.

Sir Ivan Lawre

rose—

Mr. Cook

The hon. and learned Gentleman has lost his point, but he must not lose his rag.

There is a large problem with the Government's response. Sir Richard was the distinguished judge whose opinion the Government sought. Now that they do not like it, it is a bit rich to tell us that that opinion is not worth having, because Sir Richard is not distinguished enough.

The self-serving nature of this complaint can readily be understood if the House contemplates, just for a minute, what Ministers would be saying about Sir Richard Scott if he had told them what they wanted to hear. Then we would be told how conclusive his opinion was; how it was the product of three years' careful research and examination of all the legal judgments; how it was made on the authority of a long and respected career on the Bench.

Those facts are all still true. After three years' exhaustive research, Sir Richard concluded that there was no legal authority for the type of class claims for public interest immunity made in the Matrix Churchill trial. He also recommended that such class claims should never again be made in a criminal trial.

Mr. Stephen

rose—

Mr. Cook

Not again; the hon. Gentleman has had his chance.

I note that there was one recommendation that the President did not endorse in his speech. I understand why. Although Sir Richard makes a compelling case in the interests of justice for his recommendation that class claims for PIICs should not be used again in criminal trials, the Government dare not announce that they accept it, because to do so would be to concede that they were wrong in the Matrix Churchill case.

Mr. Neil Hamilton (Tatton)

May I take the hon. Gentleman back to the charge levelled by my right hon. and learned Friend the Member for Putney (Mr. Mellor), which the hon. Gentleman himself has described as the fourth charge in the Opposition's indictment, and from which he has moved somewhat in the course of his speech?

I do not know whether the hon. Gentleman's attention span faltered before he reached the last paragraph of volume III of Sir Richard Scott's report, but if I read it to him perhaps he would like to answer it: I must refer to the charges … that the Ministers who signed the PII Certificates were seeking to deprive defendants in a criminal trial of the means by which to clear themselves of the charges. Sir Richard comes to this conclusion, in the very last sentence of volume 3: The charges to which I have referred are not, in my opinion, well founded. Would the hon. Gentleman now withdraw his allegation?

Mr. Cook

I accept that paragraph in its entirety. Will the hon. Gentleman do likewise? Will he accept the passage in the middle of that paragraph which has been omitted from the central office crib sheet, but which states that the legal advice that Ministers received had no authoritative precedent in a criminal trial. If Conservative Members are going to rely on the idea that Ministers acted only on legal advice, they must accept that that legal advice was wrong, and that it was given to them by another Minister.

Mr. Neil Hamilton

rose—

Mr. Cook

No. The hon. Gentleman has had his chance—

Mr. Hamilton

On a point of order, Madam Speaker. The hon. Gentleman asked me a question. I now seek an opportunity to answer it.

Madam Speaker

The hon. Gentleman has been here long enough to know that the Member at the Dispatch Box is unlikely to give way now.

Mr. Cook

Not all Ministers acted on that legal advice. There was one shining example to all the rest of them. The Deputy Prime Minister has been very free in bandying my name around every studio that would let him in over the past week. I have given his comments careful consideration. I have concluded that what would hurt him most would be if I were to praise him. Let me now do so.

I praise the right hon. Gentleman willingly, because he was the first person to introduce the term "cover-up" to the discussion. Two years before anyone else thought of the term, the Deputy Prime Minister objected to the attempt to withhold documents because it would look as though he had been engaged in an attempted cover-up". I praise the right hon. Gentleman deservedly, because his reluctance to claim public interest immunity is praised by Sir Richard Scott as showing an instinct for the requirements of justice that was fully justified and corresponded with the legal principles correctly understood". The right hon. Gentleman is a collector of titles. To his roll call of Deputy Prime Minister and First Secretary of State, perhaps we should now add Attorney-General-in-Chief. Certainly there should be a vacancy to fill. Some Conservative Members know that, even if they will not vote for it tonight. The hon. Member for Coventry, South-West (Mr. Butcher) illustrated their thinking with the helpful headline in the Coventry Evening Telegraph: Sack Lyell—but not yet". It must be a comfort to the Attorney-General to know that he has that quality of support behind him.

The Deputy Prime Minister (Mr. Michael Heseltine)

Why should anybody trust the hon. Gentleman's judgment against the views of the Attorney-General, when two of the defence counsel acting in the Matrix Churchill case thought that the Attorney-General was right?

Mr. Cook

I regret having to correct the Deputy Prime Minister while trying to achieve a spirit of unity with him, but this is a debate based on the five volumes of the views of Sir Richard Scott. [HON. MEMBERS: "Answer."] That is the answer. Sir Richard Scott finds the Attorney-General personally at fault for failing to convey to the court the reservations expressed by the Deputy Prime Minister.

Mr. Nigel Evans (Ribble Valley)

Stop dodging the question.

Mr. Cook

I am not dodging it. I am arguing closely from the five volumes in front of me. It is the Attorney-General who is dodging. Three years ago, on the day the inquiry was announced, the Attorney-General said: There could be no better way of examining whether ministerial responsibility should be pinned in any particular area". Well, Sir Richard has certainly pinned ministerial responsibility in this area. He has concluded that the Attorney-General bears "major responsibility" for the inadequate instruction of the prosecuting counsel. Now that responsibility has been pinned on him by the inquiry that he appointed, will he accept it? Will he recognise that the Government should never have put on trial a man who was an agent of our security services and who had been the prime source of our intelligence on Iraq?

The Deputy Prime Minister

The Attorney-General advised me and my colleagues that the judge would consider the documents, and, if they were necessary for the defence, would order their release. The Attorney-General was proved right. Two of the defence counsel said that he was right. The hon. Gentleman has been attempting to wriggle out of the charges he originally made, but the hollow and synthetic allegations he has been publishing across the country for three years have now been exploded in his face.

Mr. Cook

I regret having to be combative with the Deputy Prime Minister, but at least we have got him to his feet. It would perhaps have been helpful if the Prime Minister had risen to his. May I remind the Deputy Prime Minister of what he told Sir Richard? I had been assured that my certificate would send a clear message to the judge. The right hon. Gentleman was then asked: Do you think a clear message of the kind you were intending was sent to the judge? The Deputy Prime Minister replied: No, and it should have been. It is this failure for which Sir Richard holds the Attorney-General personally at fault. Yet tonight, no one is going to accept responsibility—no one is going to go. As the Secretary of State said a week ago, there are to be no regrets, no resignations. This is not just a Government who do not know how to accept blame: they are a Government who know no shame. That is an appropriate judgment from which to approach how we should each vote tonight.

Last week, I again heard the Deputy Prime Minister on the "Today" programme, gently remonstrating with the presenter, as is his style. He said: You keep looking at it in terms of will the Government be defeated. That isn't the way to look at it. You ought to rejoice we live in a democracy. I must confess that I was a bit surprised to hear that subconscious echo of his old opponent in the invitation to us all to rejoice—but, once again, I find myself in agreement. Conservative Members should heed his advice. They should not think of tonight's vote in terms of whether it is a defeat for the Government; they should look on it as a vote that will decide the quality of the democracy in which we live. They should remember Sir Richard's summing-up. In his final chapter, he said: A failure by Ministers to meet the obligations of Ministerial accountability undermines the democratic process". The first function of Parliament is to hold the Government to account. The first duty of hon. Members is to defend the rights of Parliament against any Government who threaten those rights. That is why Parliament cannot allow the current Government to ignore the findings of the Scott report: hon. Members were designedly misled, and Ministers consistently failed in their duty of accountability to the House.

Of course the hon. Members on the other side of the Chamber were elected as Conservative Members, but that does not lessen their obligation to defend the rights of Parliament. On the contrary, there was a time when insisting on individual responsibility and upholding the sovereignty of Parliament would have been seen as conservative values.

Tonight Parliament has the opportunity to insist that Ministers must accept responsibility for their conduct in office and to assert that the health of our democracy depends on the honesty of Government to Parliament. That is what we shall vote for tonight. Of course Conservative Members have enough votes to defeat us. If they vote to reject those principles, however, they will demonstrate not only that the two Ministers who have been most criticised in the Scott report should leave office, they will convince the public that this is an arrogant Government who have been in power too long to remember that they are accountable to the people, and that the time has come when the people must turn them all out of office.

Several hon. Members

rose—

Madam Speaker

Order. Before I call the next hon. Member to speak, I should say that the right hon. Member for Swansea, West (Mr. Williams) has asked me to inquire about a document in the Library that was said to be embargoed. I have made some inquiries about it. The document was sent over to the Library from the office of the Chancellor of the Duchy of Lancaster. There was no intention whatsoever to embargo that document; it was to be made available to hon. Members immediately, as the accompanying letter says.

Several hon. Members

rose—

Madam Speaker

Will hon. Members allow me to finish, please?

"Embargo" was written on a brown paper envelope that was with the document. I believe that that word was written by someone who is not in a very high position—[Interruption.] I believe that there was no intention whatsoever to embargo the document.

5.13 pm

Mr. Douglas Hurd (Witney)

The hon. Member for Livingston (Mr. Cook) has been telling the House about the Scott report for three years now. It sometimes seemed to us that he got not three hours' notice but about three years' notice of the Scott report. He seemed to have very extensive inside information about what it would contain. My right hon. and learned Friend the Member for Putney (Mr. Mellor), however, is quite right. What the hon. Gentleman has constantly predicted is not what has occurred.

The hon. Member for Livingston has constantly predicted that the Scott report would show a conspiracy of Ministers to do two indefensible things: to arm Saddam Hussein in secret; and, in that cause, to allow innocent men to be sent to prison. That is not what the Scott report has revealed. The hon. Gentleman has shown us an elegant sideways movement, so that he can claim that what he now alleges is what he has always alleged.

On the point about conspiracy to arm Saddam Hussein, what the hon. Member for Livingston said is wholly characteristic, because he omits—it is crucial—to say what Sir Richard Scott said about the conduct of my right hon. Friend the Chief Secretary. He said that if my right hon. Friend, when considering the licence for Matrix Churchill, had known the current intelligence about the destination of the lathes for export, he would not have approved the licence.

That movement is typical of what has happened to the accusations. What starts as an accusation of conspiracy becomes a criticism of the circulation of defence material. My right hon. Friend the President of the Board of Trade has acknowledged—as anyone would acknowledge—that there is a problem. The problem has already been addressed to some extent, and it can be further addressed. However, a problem about the circulation of intelligence material to Ministers of State is light years away from the accusation that the hon. Gentleman persists in making, that my right hon. Friend was in some way privy to a secret decision to arm Saddam Hussein. Exactly the same movement has occurred, as I shall seek to show, on the question of sending innocent men to prison.

I have no particular axe to grind in this matter. [HON. MEMBERS: "Oh?"] No; Sir Richard Scott deals very reasonably with my difference of opinion with him about Jordan. He did the Home Secretary and me a favour by once more correcting the sloppy and inaccurate press reporting about the PII certificates that we signed on the Ordtech appeal, which once again showed that the certificates were upheld by the court and not repudiated by them.

Mr. Giles Radice (North Durham)

Will the right hon. Gentleman give way?

Mr. Hurd

I do not wish to give way.

Nevertheless, I find the Scott report—I speak entirely for myself—a disappointing document. Sir Richard has been timid in one important matter in which he could have been bold and, in other passages, partly through ambiguity, he has allowed the Opposition and the press to convey to the country an impression of policy making that I know to be wrong.

Sir Richard makes an immense analysis of the PII certificates—I obviously do not have time to follow it—and I believe that there are three conclusions be drawn about them. The first conclusion is that there is a need for such certificates—the hon. Member for Livingston did not deny it—in both criminal and civil trials. There will be occasions on which it is right for a Minister to point out to a judge that the documents in question would, if published in their existing form, cause harm to the servants or interests of the Crown. Sir Richard may be right in saying that, in criminal cases, there should not be a class objection but only an objection as regards a particular document and its contents. The inquiry can look into that.

The second conclusion is that there is no such thing as a gagging order, and that there has been no such thing as a gagging order since the Conway v. Rimmer case, in 1968. Ever since then, the law has been clear, and as my right hon. and learned Friend the Attorney-General explained it to the Ministers in question. A Minister can give a view about the document; he is competent to do that and he ought to do that. What he cannot do is to give a view on the trial—on the question of the influence of that document or its publication on the guilt or innocence of those involved in the trial. That is not a matter for a Minister; it is a matter for the judge. Only the judge can see the total picture and decide whether and, if so, in what form the document should be released.

Mr. Rupert Allason (Torbay)

Will my right hon. Friend give way on that very point?

Mr. Hurd

No, although I am sure that it is on that very point. Madam Speaker, I am sure that my hon. Friend will have a chance to catch your eye.

That is the doctrine of Conway v. Rimmer, in 1968. That is the doctrine that the Attorney-General explained to the Ministers and, in my view, it must be right.

My third conclusion is more controversial. I am driven to the conclusion, from some experience in this subject, that we need legislation on it. I am not happy about the latest judgment, the Wiley judgment after the Matrix Churchill case. With the best of motives, the judges in the Wiley case have invited Ministers back on to that treacherous ground of performing a balancing act. They have invited Ministers to balance the merits or demerits of publishing the document against the interests of the trial. I do not think that Ministers should have anything to do with that balancing act.

Sir Richard Scott believes as a judge—in this he is too timid—that the matter should be left to waft from trial to trial on some flying carpet of case law. I do not believe that. One can hardly open the pages of The Times or The Daily Telegraph these days without reading about some distinguished judge or Queen's Counsel trying to blow the flying carpet in the direction that he favours. That judgment is not guidance that Ministers can successfully operate. Several of us have had rueful experience of that. I believe, reluctantly, that we need legislation to make matters clear and I hope that the review will lead to that conclusion.

On the second question about the portrait of policy making that emerges from the report, I cannot spend much time on the question whether paragraph (iii) of the guidelines was altered, modified or changed or whether the guidelines were more flexibly interpreted. I have read the essential papers on that point three times now. I read them in 1992, when it first became controversial; I read them in 1994, before I gave evidence to the inquiry; and I read them in the report itself. I can see that different officials described what happened in the spring of 1989 in different ways, and clearly, in practice, it did not seem to them at that time that the difference between one phrase and another was crucial. It had nothing to do with the Matrix Churchill trial or the guilt or innocence of those involved.

On that particular point I rest my case on two things: first, my absolute confidence, derived over several years of working with him, in the integrity of my right hon. Friend the Chief Secretary; and, secondly, the fact that when in July 1990 the Prime Minister of the day asked me to review the guidelines, what we then reviewed were the original Howe guidelines, without reference to any changes of interpretation or modification that might have occurred in 1988 or 1989. We believed that the Howe guidelines held the field and that it was they that fell to be reviewed.

The fundamental problem is that Sir Richard Scott set himself to reconstruct a set of discussions among Ministers and officials on a specific, narrow point of policy four or five years after those discussions took place. He made the effort, he tried and in my view he failed to reconstruct those discussions successfully. The fault may lie less with the report itself than with the interpretation of it that has been current in the press ever since.

The issue of arms to Iraq has been dealt with. There were no arms to Iraq authorised by the Government in the normal sense of that word. There were no gagging orders. I do not believe that the House has been misused. I do not believe that, as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) has said, we expect Government to make impossible the task of government. My worry about the report is that the interpretation of it is casting a slur on the way in which policy making in this country is carried out. That does harm to the House and to all those who strive or who may in the future seek to strive to carry out effective policy for this country. I hope that the House will avoid that trap.

5.23 pm

Mr. Tony Benn (Chesterfield)

I opposed the establishment of the Scott report because I thought it was totally wrong that political matters should be handed to a judge who knew nothing about administration. That had the effect of depriving the House of Commons of its proper function, which is to hold Ministers to account.

Having had some experience of ministerial office, I am also of the view that on matters of arms sales all Ministers know what is happening all the time because they are fully briefed. Whatever Lord Justice Scott might or might not have said, I do not believe for a moment that Ministers were in any doubt as to what they were doing by keeping the House in the dark. I cannot interpret the Attorney-General's motive in seeking public immunity certificates except that it must have been done with a view to putting to the judge the case for suppressing relevant documents.

I want to turn my mind to something else that has hardly been touched on. What would we have achieved if two Ministers resigned? I think that they both should resign, and I think that public opinion is now totally persuaded of the case against them recapitulated so devastatingly by my hon. Friend the Member for Livingston (Mr. Cook). We should now, however, ask ourselves where those resignations lead us. Whether we call them arms for Iraq or non-lethal equipment, the fact is that the British Government authorised the supply of equipment for Iraq that was designed, ordered and purchased to strengthen Iraq's military machine.

It has been suggested that in a high-tech war the only lethal weapon is a gun that fires a bullet, but everyone knows that is not so. Just look at the list that even The Daily Telegraph extracted from the report. The equipment sold included high-tech communications equipment; aircraft engines; flight simulators; armoured vehicles; tank helmets; artillery parts; mortar-locating radar; battlefield surveillance; night vision goggles and laser rangers. Was that not equipment to strengthen Saddam Hussein? What a pretence to argue about non-lethal weapons. Two hundred and seventy export licences were granted, worth £400 million, and the idea of whether the equipment was lethal or not is absolutely irrelevant to the question that the House is considering.

I am sorry that another matter has not been discussed so far in the debate. What else have the Government done to Iraq? What happened throws a completely new light on the Gulf war. During the debate on the Gulf war, in which I participated, having asked for the House to be recalled, I warned that there would be hundreds of thousands of casualties. There were between 200,000 and 250,000 Iraqi casualties in that war caused by the high-tech weapons used by the allies against Iraq. Since then, we have seen the impact of sanctions on Iraq. I cite United Nations figures, which are more important than the future of two Ministers, because I think they will all be out of office soon.

According to the figures published by the UN mission to Iraq, more than 4 million people, a fifth of Iraq's population, are at severe nutritional risk; 2.4 million children under five, some 600,000 women or nursing mothers, and destitute women, as well as hundreds of thousands of elderly, are at risk. The incidence of malnourishment and stunted growth within newborn children has risen by 23 per cent. and 70 per cent. of pregnant women in Iraq suffer from anaemia. The following figures sum it all up: there were 110,000 aerial sorties which dropped 850,000 tonnes of explosives—the equivalent of seven and a half Hiroshimas—on Iraq, and more than half a million Iraqi children have died because of sanctions.

Not only did the Government agree to the sale of equipment to one of the most ruthless dictators in the world, but then, by going along with the sanctions, they have imposed something that I believe makes them almost an accessory to genocide in Iraq. That goes far beyond the future of two Ministers.

I do not want to detain the House, but we should look at another aspect of the matter—the arms trade. If we do not discuss the international arms trade, we will be betraying many people outside the House who are concerned about it. I have looked up the figures, which reveal that, in 1994, $22 billion-worth of arms were sold in the world. The developing world bought $12.5 billion-worth. Britain is the fourth largest supplier of arms—$6 billion-worth—and we subsidise them to the extent of £1 billion a year, which is £12,500 for everyone working in the arms industry.

If we consider the recipients of those arms, we see that. between 1990 and 1994, Saudi Arabia bought £9 billion-worth of weapons. What is the record of human rights in Saudi Arabia? Turkey, with a hideous record of repression against the Kurds, bought £7.8 billion-worth. Iran bought £3.2 billion-worth and Indonesia, where 200,000 people in East Timor have been killed, bought £2.3 billion-worth. We are now selling Hawk aircraft to Indonesia, with the East Timor question still before us.

It is not surprising that the Bishop of Coventry with two other bishops wrote to The Times the other day to point out that 4 million civilians have been killed in conflicts in the past four years, and the world's arms manufacturers very often supply arms to both sides of a conflict. On a religious programme yesterday, it was pointed out that 85 per cent. of all the weapons sold in the world are sold by the five permanent members of the Security Council. I recall, as a young man coming back from the war, reading the first words of the charter of the United Nations: We, the peoples of the United Nations, determined to free humanity from the scourge of war which twice in our generation has brought untold suffering to the peoples of mankind". Eighty-five per cent. of weapons are sold by Security Council members that are supposed to be part of the United Nations to preserve peace.

When these weapons are used, Governments demand a ceasefire. During the ceasefire, the arms manufacturers pour in to find out which weapons worked best so that they can sell more of them. That happened in the Falklands war. As soon as that war was over, the Exocet missile became the most popular missile in the world because it sank HMS Sheffield. The utter hypocrisy of Governments who supply weapons in that way is what is at stake, not just the careers of the Ministers.

I recognise—the point has been made, and my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) may speak shortly—that all Governments have supplied weapons. During the cold war, those weapons were supplied allegedly to protect us from communism. Now, as in the multiplicity of conflicts that have occurred, the weapons are fuelling world conflicts that are now motivated by nationalism, religious fervour and other factors. There is a terrible danger that those arms supplies will precipitate even more such conflicts.

I believe that those engaged in the arms trade are accessories to genocide. I do not acquit anyone who has been responsible for that. I believe that Parliament has a duty to control the sale of arms. There is nothing more important than that there should be proper supervision by Parliament of what weapons are sold and to whom.

I also believe that we must recognise that, in taking Sir Richard Scott's report as a solution, we have abdicated our responsibility. That is not only the fault of the Government or of the Ministers, because the House of Commons should never have agreed to subcontract such decisions to somebody who knew nothing about politics and nothing about how Government worked. We are now spending our time crawling over every dot and comma of some judge's report. We should take our own responsi-bility, because on that the peace of the world may hinge.

5.32 pm

Mr. Tom King (Bridgwater)

It is interesting that I follow a member of a former Government who approved sales of lethal arms to Iran, but we refused to supply lethal arms. That Government also refused to publish guidelines on arms exports, but we supplied such guidelines.

My interest is most marked in the last comments by the right hon. Member for Chesterfield (Mr. Benn), in which he totally undermined the position of the hon. Member for Livingston (Mr. Cook) by criticising Scott for knowing nothing about politics and government. The hon. Member for Livingston leant heavily on the Scott report as part of his evidence.

My interest in these matters goes back to 1982 when I led a Department of the Environment mission to Baghdad, where I met Saddam Hussein. I saw then the efforts that were being made by all countries to export to Iraq. Many people have forgotten the background to some of these issues. At that time, the Department of Trade and Industry and other trade ministries had identified Iraq as a most interesting trade prospect. There were some question marks about the regime, but the debates and comments on the report have reeked of hindsight. I remember how many British companies were working on sensible, good projects in Baghdad, including attempts to improve the water supply, to tackle sewerage problems and to build decent housing to improve the condition of the people. At that time, there was a major campaign in Iraq to spend the funds from their oil reserves.

I later saw Saddam Hussein in a different light. I witnessed the super-gun affair and the web of deceit that was created, so I found the Scott report very interesting reading. I envied Sir Richard Scott because he was able to freeze the frame and examine every detail of the events of that time. The Government work in real time and have about 400 different problems to deal with at the same time. Before people lampoon hard-working officials and civil servants who gave evidence, they should remember how many other problems and challenges were on officials' plates. Officials were trying to cope with many problems and sometimes they could not give smart and accurate answers to every question. But I have no doubt—from my personal experience, which is all that I can put before the House—about the overwhelming sincerity and commitment of those officials who genuinely try to work as Parliament and the country would wish.

I accept that mistakes were made and I applaud my right hon. Friend the President of the Board of Trade for recognising that. Those mistakes must be addressed, but I must tell the hon. Member for Livingston and his right hon. and hon. Friends that acting like a political lynch-mob does no service whatever to the serious issues that need to be addressed.

I will pass quickly over the issue of public interest immunity certificates—I have signed them in my time in the strong belief that the principles that the Attorney-General laid down were correct. If there are problems with that—and I know that the position has changed—I leave it to the judges, because the law is judge-made, to sort out the fairest basis for the future. I have no doubt that that needs tackling.

I believe that Customs and Excise got off lightly in some aspects of the report. Everybody knows that the Attorney-General was not directly responsible for the prosecutions of Customs and Excise, which has an independent power of prosecution. One does not have to look hard for part of the reasons for the problems that arose.

I turn now to the key issue that affects my right hon. Friend the Chief Secretary. The argument hinges on how great was the flexibility and at which moment flexibility became a change of policy. Of course, there had to be guidelines. One could not handle something as sensitive as defence sales to overseas countries under any other arrangement. There had to be flexibility of interpretation. Ministers could not, every time they exercised that flexibility, come to the House to explain the reason.

One criticism that I have of the Scott report in connection with not making public statements is that Sir Richard picked up too quickly the single point about public reaction feeding overseas to cause embarrassment. The real reason—which was rightly given by Sir Richard Luce in his evidence—and why we did not publish the guidelines for nearly a year after they were made, was concern about the reactions that they might cause and the effects on British interests in the Gulf region.

One has only to stop and think to realise that it would be a lunatic approach to come to the House every time that there was a different interpretation of the guidelines. Ministers would have had to come to the House after the problems with the hostages in Beirut, after the fatwa, the killing of the Kurds, and the execution of Mr. Bazoft, and after the sinking of shipping by the Iranians. It would be lunacy for Ministers to have to come to tell the House that aircraft tyres were off the list and radar equipment was on the list—or vice versa—for supply to one country or another.

I would have been one of the Ministers who would have had to approve a change of policy. It is true, as my right hon. Friend the Member for Witney (Mr. Hurd)—a former Foreign Secretary—said, that the policy came forward for consideration in July 1990. At that time, we considered whether the policy should be changed. Of course, we sell lethal arms to other countries, but our policy was that we did not sell them to Iraq and Iran. We stuck to that policy and we had guidelines with flexibility to govern how non-lethal defence equipment should be handled.

I do not go as far as the right hon. Member for Chesterfield in his description of Sir Richard Scott's approach. He was rather tough on Sir Richard. I think that Sir Richard tried genuinely to understand the workings of government and of Parliament. Similarly, I do not agree that there was a change of policy. There was proper use of the guidelines. I believe that my right hon. Friend the Chief Secretary was right. I happen to know quite a bit about the circumstances and the policy to which we were adhering. It was only at a later stage that we considered changing that policy.

Did the policy work? I tell the House again that I saw captured equipment. I was driven up and down row upon row of captured equipment in Al Jubail, which is by the Kuwait border. All the equipment that we had captured from the Iraqis stretched for as far as the eye could see. If anyone is interested, he or she can obtain aerial photographs from the Ministry of Defence. It was only from the air that such a mass of equipment could be photographed.

Among the equipment, I found French Exocets. We all knew about the existence of French Mirage jets. I found a range of Chinese and Russian rocket launchers. There were ranges of artillery, tanks and armoured personnel carriers. There were many types of guns. Among it all I found one Land Rover with a Racal radio. That was the sum total of British equipment. If someone asked me whether the Government kept faith with their policy, I would answer yes. That cost us billions of pounds.

We are great at looking back and contemplating something that faced us eight years ago. I agree, however, with something that the right hon. Member for Chesterfield said about arms and arms sales. We are debating events of some years ago but in the meantime Russia has trebled its exports of arms. There is no adequate control over certain nuclear materials, including weapon-grade plutonium. In Kazakhstan, the Ukraine and other areas of what was the Soviet Union—they are in desperate need of foreign exchange—there is a real danger that the export of arms to several regimes will continue without sufficient control.

I doubt whether anyone in this place has yet focused on the Wassenaar arrangement, which will be examined in April when 28 countries will try to establish a new arms control arrangement. I take the opportunity that is presented by the debate to tell Ministers that several countries have reduced their support to the arms control effort and the support that is given to some of the former Soviet republics. That is false economy. I hope that it will be recognised before it is too late that extra effort should be directed to arms control. If that does not happen, we shall see an influx of extremely dangerous weapons into countries that should not have them and would never pass our arms tests or controls.

5.42 pm

Mr. Menzies Campbell (Fife, North-East)

I entirely agree with the last point made by the right hon. Member for Bridgwater (Mr. King). I fear that there was almost nothing in the remainder of his speech with which I could agree.

Sir Richard Scott and the hon. Member for Livingston (Mr. Cook) have demonstrated eloquently that by ministerial design Parliament was denied the opportunity to hold the Government to account over their policy on the supply of arms to Iraq. The Parliament that today does not assert that right will merely compound and homologate the breach of constitutional responsibility that has been identified on so many occasions by Sir Richard. As the Government refuse to impose any sanction on themselves, only Parliament can now do so, even in the artificial terms that are offered to us by a Division at 10 o'clock.

This is a Government who refuse to accept any responsibility. Mistakes were made; who made them? This is a Government who have ignored distortions and who have denied the main findings of the Scott report. Neither the Ministers involved nor the Prime Minister, who carries ultimate responsibility, will acknowledge any fault. Blaming the system is a well-worn and unconvincing excuse for indefensible behaviour. The fault found in the report was compounded by the fault in the handling of the report.

There were disgraceful efforts to undermine the report in advance. Silly arrangements were made for publication. The statement made by the President of the Board of Trade a week ago on Thursday was disingenuous. There was a failure to reflect the overall weight of the report. The Treasury's press release had to be acknowledged to be wrong by the Government. Selective quotations at the press conference so angered Sir Richard that he felt compelled to intervene in the debate.

If you, Mr. Deputy Speaker, need corroboration of the arrogance of government that is identified in the report, it is to be found in the arrogance that has surrounded its publication. The central charges that Sir Richard has made against the Government are that policy was changed in 1988, the text of the guidelines published in 1985 was altered, no publicity was given to that change and the failure to inform Parliament was deliberate. The overriding reason for all that was the fear of public opposition. The relevant reference is D4.42. Everything else flows from that conclusion.

The Government have sought to describe their unwillingness to accept Sir Richard's simple conclusion as something of an "honest difference in opinion". I doubt whether Sir Richard would describe it as such. Such a description is wholly unjustified.

What is the alternative view? To summarise Sir Richard's words, that view does not correspond with reality. The alternative view, again to reflect on Sir Richard's words, is incapable of being "sustained by serious argument". The alternative view is misleading. I refer the House to paragraphs D3.121, 122 and 123.

Mr. Edward Leigh (Gainsborough and Horncastle)

The hon. and learned Gentleman has referred to paragraph D4. In the light of Sir Richard's conclusion in that section that the Chief Secretary did not intend to be misleading, is the hon. and learned Gentleman solemnly telling Parliament that either the Attorney-General or the Chief Secretary deliberately lied to Parliament?

Mr. Campbell

I am not saying that and I have never made that charge. I am saying, however, that both the Attorney-General and the Chief Secretary, as Ministers of the Crown, have a duty to accept the consequences of their actions. The alternative view, which Sir Richard Scott dismisses, was set out by the Chief Secretary. Perhaps he did so out of a strong sense of duty. He is described by Sir Richard as "strenuously and consistently" asserting his belief, in the face of … overwhelming evidence to the contrary, that policy on defence sales to Iraq had … remained unchanged. That is all the more curious when we consider that Sir Richard finds elsewhere that the Chief Secretary had been one of the midwives of the changed guidelines.

This is not merely a matter of interpretation. Sir Richard Scott had in support of the conclusion that he had reached compelling evidence from three separate sources. The first was Mark Higson, to whom reference has already been made. He was the desk officer for Iraq at the Foreign and Commonwealth Office between March 1989 and January 1990. He wrote some of the letters that were received by hon. Members on both sides of the House—letters that did not reveal the true situation. Mark Higson ultimately resigned.

The second source was Mr. John Goulden, then an official at the Foreign and Commonwealth Office. He gave evidence to the Select Committee on Trade and Industry during the super-gun inquiry. He told the inquiry that the third guideline was amended to take account of the ceasefire. The Government did not challenge that finding when the Select Committee's report was made public.

The third source was Sir Timothy Daunt. I refer to his minute of 18 November 1992. He wrote that it was his judgment that three Ministers had agreed to change the guidelines, to relax their application and not to make any announcement. He added that what they had done may be represented as culpably failing to inform Parliament of a significant change to the guidelines of October 1985.

Dr. Hampson

The hon. and learned Gentleman and I were both members of the Select Committee to which he has referred and I recognise that he has taken up an important statement. But why does he think that when the Select Committee published a statement that the guidelines had been changed no member of his party, no occupant of the Opposition Front Bench and no other Member of this place complained that he or she had been badly done by? No one raised the issue, yet now we have so much synthetic noise.

Mr. Campbell

We did not challenge it because we accepted it. The reason why the Government did not challenge it, we are now told, is that they did not accept it. If one is looking for "Alice in Wonderland", one will find her more easily on the Government Front Bench than anywhere else.

This all shows that Sir Richard was entitled to reach the conclusion, which he sets out in his report, that between the ceasefire and the war between Iran and Iraq in 1990 Parliament and the public were designedly led to believe that a stricter policy towards non-lethal defence exports and dual use exports to Iraq was being applied than was in fact the case. This all makes the Government's assertion that Sir Richard Scott found that no arms were sent to Saddam Hussein wholly unconvincing. I remind hon. Members of the atmosphere in the House when we were recalled during the summer recess to debate the Gulf war. At that time, as the right hon. Member for Bridgwater will remember, as he and I had private conversations about this, there was considerable anxiety about the extent of casualties that British forces might sustain in a war in the Gulf. Let us suppose that Saddam Hussein had used nuclear weapons. Would we have been able to go to the parents or relations of any of our constituents who had been the subject of nuclear attack and say, "It's all right. We didn't sell them nuclear weapons. We sold them only the machine tools by which they might be made"?

Mr. Henry Bellingham (North-West Norfolk)

If the Liberals had been in power, we would have possessed no deterrent!

Mr. Campbell

If the hon. Gentleman thinks that Saddam Hussein has the kind of rational mind that will be affected by the finer points of nuclear deterrence, the history of the past five or six years stands substantially against him.

Let us suppose that some of our constituents had been killed by shells manufactured by Saddam Hussein. Would it have served us much to say to their friends, relations or parents, "We didn't sell him shells. The Royal Ordnance factory didn't send them. Matrix Churchill supplied him with machine tools for that purpose." That is a wholly artificial distinction in the minds of the British public, and the artificiality of the distinction is emphasised by the brutal honesty of Mr. Alan Clark. Remember him? We do not hear much about him these days. There has not been a Gadarene rush from the Government Front Bench to assert his integrity, but he is the person who, at the meeting on 20 January 1988, told the Machine Tool Technologies Association, and Mr. Henderson, who later stood trial, to emphasise the civilian and not the military use of any machine tools that might be sent to Iraq.

Are we to believe that Mr. Clark kept all that to himself? From his diaries, he does not seem to be a man who keeps very much to himself—of anything. Are we to believe that he was conducting some clandestine policy of his own, quite separate from the Government? [HON. MEMBERS: "Yes!] Apart from alliteration, the idea has nothing to commend it. Alan Clark was right at the centre of government. He was playing Darnley to Queen Elizabeth. He was the favourite of the monarch in No. 10. The idea that he was going around conducting some secret policy and telling only the Machine Tool Technologies Association of his views simply does not bear scrutiny.

Once the central conclusion of the report is accepted, all else flows from it. Paragraph 27 of "Questions of Procedures for Ministers" was ignored. The convention of ministerial accountability to the House was ruptured. Why did that happen? Because the public would not have liked the idea of assisting Saddam Hussein to build up his arsenal; because they would not have liked the idea that we were assisting a dictator who had used chemical weapons, with devastating effect, on his own countrymen at Halabja; and because they would have wanted to know not only why we were selling him arms but why we were financing those sales, or at least the means to make them. Do the Government think that the public were not entitled to know of those things? If so, let them say so and then the public can make their own judgment.

Some say that this should not be a witch hunt. "Why", they ask, "should the Chief Secretary take responsibility?" I do not reflect on the Chief Secretary's honour, but I ask him to reflect on this. What confidence can the public have in Ministers of the Crown if they are not willing to take the consequences of their actions? The Chief Secretary was, as Sir Richard Scott found, the midwife of the policy change. He agreed to it being kept from public and Parliament. He wrote letters or answered questions that did not give accurate answers. His explanations of how he behaved in that regard have been dismissed as sophistry. As a result, he was responsible for a breach of ministerial rules and, ultimately, for a rupture of the convention of ministerial responsibility.

I do not reflect on the Chief Secretary's honour. I merely ask him to consider whether he thinks that, in those circumstances, he commands the confidence not just of his party but of the House and the country. If he survives, he must know that he will have done so not because of the strength of the Government but because of their weakness. He will survive, perhaps, on the abstentions of hon. Members from Northern Ireland. Even according to the modest aspirations of the Government, that is hardly a ringing endorsement. If he survives, he will be a constant reminder of a breach of the principle of ministerial accountability. He may even have his place in history, because whenever such circumstances arise—whatever the Government—his example will be used as a justification. In short, he may well become a dangerous precedent.

More than any other, the office of Attorney-General demands public confidence, because as well as being a Minister the Attorney-General has wider responsibilities independent of government. The case against him falls into two parts. Put relatively simply by Lord Justice Scott, despite a long and detailed analysis of the law relating to public interest immunity, the Attorney-General was wrong in law in the advice that he gave. I have read and tried to follow in detail Sir Richard's analysis of the law, and it is clear that even if Conservative Members are able to draw our attention to eminent jurists, either on or off the Bench, who support the position of the Attorney-General on public interest immunity, and even if there is room for doubt on the legal advice that he gave, there is absolutely no room for doubt about his failure to take responsibility for ensuring that the Deputy Prime Minister's reservations were properly conveyed to prosecuting counsel. Hon. Members will have noted that that is an issue on which the Government have been blindingly silent.

The Secretary of State for Northern Ireland (Sir Patrick Mayhew)

Does the hon. and learned Gentleman intend to convey to the House the fact that he accepts, in view of his recent remarks about the law, that it cannot possibly be a matter of culpability on the part of the Attorney-General that he gave the advice that he did on the law? It cannot possibly be a matter for culpability in the light of the conflicting opinions that have been voiced recently.

Mr. Campbell

I made it clear that I believe that Sir Richard Scott is correct and that his judgment on the Attorney-General's advice is correct. In that respect, I support Sir Richard Scott. His conclusion, without any equivocation, was that it was wrong advice. I have had some small experience of prosecuting, and if I gave wrong advice in a matter of this importance I would certainly consider my position. From what I know of the right hon. and learned Gentleman and the way in which he conducted himself when he appeared before the Select Committee on Trade and Industry to give evidence in relation to the prosecuting authority—HM Customs and Excise—I suspect that he would have taken a similar view.

The real issue for the Attorney-General to face is his failure to advise prosecuting counsel of the reservations of the then President of the Board of Trade.

We must have some sympathy for the then President of the Board of Trade, who has now left the Chamber. Sir Richard Scott gave him a medal, but he cannot wear it: if he does, he will merely show up the fact that others did not win medals. It might be said that he will show up their inadequacy, but, in particular, he will show up the inadequacy of the Attorney-General.

The Attorney-General accepts that the brief sent to Mr. Alan Moses was inadequate. Sir Richard Scott concludes that it was inadequate because there were no copies of the correspondence that had passed between the Attorney-General and the then President of the Board of Trade. He goes on to say that the instructions given to Mr. Alan Moses were contrary to the wishes of the President of the Board of Trade and that the major responsibility for that inadequacy must be borne by the Attorney-General. The stand taken by the President of the Board of Trade raised issues that were not mundane, routine or run of the mill". Those issues needed the Attorney-General's supervision.

In what I consider a devastating passage, Sir Richard says that the views of the then President of the Board of Trade raised serious issues of a legal and constitutional nature, and that the Attorney-General should have recognised that. The absence of personal involvement that the President of the Board of Trade's stance made necessary is a criticism levelled against the Attorney-General.

I examined the evidence given by the then President of the Board of Trade to Sir Richard Scott at the oral hearing. The hon. Member for Livingston has already referred to one question and answer. The right hon. Gentleman was asked: Having now looked at the passages we have drawn your attention to during the submissions that were made to the Judge, do you think a clear message of the kind you were intending was sent to the judge? He replied: No, and it should have been. He was asked: And, in fact, having looked at it, does it seem to you now the message sent to the judge was that your certificate was like everyone else's? He replied: I understand that is what did happen. The right hon. Gentleman was asked, "Does that concern you?", and he replied, "Of course."

A little later, in response to a rather longer, rambling question, the right hon. Gentleman said: No, it was only after all of this that I saw what was being said in the court. I thought that I had done all that was necessary, and I asked the question whether the Judge would get a message and I was assured he would and indeed you can see clearly that that was the reply to me. I thought I had done all I properly could to indicate to the judge what I thought the position to be, and I find it difficult to explain the way in which events worked out. A little while ago, the present Deputy Prime Minister came loyally to the Dispatch Box, but I did not understand his intervention to depart in any respect from the opinion that he expressed during the giving of oral evidence to the Scott inquiry on 28 February 1994. It is not a question of honour; it is a question of competence. We must ask—I believe that the Attorney-General must ask—how he can command public confidence in the light of these matters.

Sir Patrick Mayhew

I am grateful to the hon. and learned Gentleman for allowing me to intervene for a second time.

We must address the question, and the question is whether my right hon. and learned Friend the Attorney-General is personally responsible for what happened. Does the hon. and learned Gentleman accept that, having been a Law Officer for nearly nine years, man and boy, I have never heard of a Law Officer checking instructions to counsel prepared by the Treasury Solicitor's Department, which is presided over by the head of the Government legal service? Would that not impose a wholly unreal standard? In this instance, when the Treasury Solicitor's Department had the relevant correspondence, it was in possession of all that was necessary for it to prepare the appropriate instructions.

Mr. Campbell

I yield to the right hon. and learned Gentleman's experience as a Law Officer; but I wonder whether, in positing certain cases, he is doing more than saying that, in a routine context, that is what happened. This was not a routine case, but a case in which the then President of the Board of Trade declined to sign a public interest immunity certificate until he had engaged in direct negotiation and correspondence with the Attorney-General—and, indeed, until he had received an assurance that his reservations about having to sign the certificate would be properly conveyed to the judge at the trial. I fancy that, in the nine years that the right hon. and learned Gentleman spent as a Law Officer, there were not many cases of that type.

The President of the Board of Trade has made a number of proposals. He may have made them in a rather different tone from the tone that he used 10 days ago, but the position does not seem to have changed. We shall consider the proposals in detail; it is a pity that they were not circulated rather more widely before the debate. I echo the hon. Member for Livingston in saying that, without a commitment to a culture of freedom of information rather than official secrets, we cannot be sure that circumstances of the kind that Sir Richard Scott was forced to investigate will not arise again. The best defence against abuse of power is public scrutiny. The proposals would carry much more weight if they had been accompanied by a frank recognition of responsibility for the catalogue of culpability identified by Sir Richard Scott.

I go further. In their present tentative form, there is no guarantee that, if all those proposals had been implemented in 1988 and 1989, they would have prevented the abuse of both power and position that Sir Richard has identified.

In any event, how can such proposals provide retrospective justification for the Government's manifest failures, as identified in the Scott report? During the period when Parliament was not told of a change of policy, there was a set of standards against which Ministers could test their conduct. They had their own rules in paragraph 27 of "Questions of Procedure for Ministers". By convention, they had to abide by the constitutional principle of ministerial accountability. It was not the absence of rules or principles that allowed Ministers to behave as they did; it was a flagrant disregard for those rules and principles. That is why the House should vote against the Government this evening.

6.6 pm

Mr. Paul Channon (Southend. West)

Clearly, as a layman, I am not in a position to argue with the hon. and learned Member for Fife, North-East (Mr. Campbell) about the legal aspects of the case. I can only say—and I think that the hon. and learned Gentleman will concede this to be fair—that, over the past week, a large number of senior judges and others, including defence counsel, have concluded that what my right hon. and learned Friend the Attorney-General did was right: indeed, we have been told that by no less than the Master of the Rolls. If my right hon. and learned Friend is to be convicted of dereliction of duty, when many senior members of the Bar support what he did, that is exceedingly unfair.

I want to concentrate on the guidelines. For a short time, as Minister of Trade, I was one of those who had to deal with the problems in the early 1980s. I therefore have some experience of dealing with the guidelines. Given the way in which my right hon. Friend the Chief Secretary to the Treasury has been accused over the past few weeks, I feel that there is a fundamental misconception of the role of the guidelines. They were not holy writ, set down like the laws of the Medes and Persians; they were broad guidelines, and officials were asked to examine the suggestion of exporting certain goods in the light of those guidelines. In important cases, Ministers themselves decided whether to allow exports to take place.

Mr. David Shaw

No weapons.

Mr. Channon

I shall deal with the question of weapons in a moment, but my hon. Friend was right to intervene. As the report makes clear, the whole intention was to ensure that no lethal weapons were supplied either to Iraq or to Iran. Of course, the definitions of lethal and non-lethal are not absolutely clear cut in all cases, but that was the honest intention that Ministers had when they applied the guidelines. Nevertheless, there were many cases in the early days—and, I suspect, later—when goods that could probably have been exported under the guidelines were not. It was Ministers who decided; it was not a question of the blind application of a rigid set of guidelines.

Mr. Campbell-Savours

They were applied strictly, not flexibly.

Mr. Channon

I am not sure to what date the hon. Gentleman is referring. I am talking about the early days. That is what I believe may have happened. When the three Ministers concerned later decided to re-examine the policy, they considered the application of the guidelines to find out whether they could be made more flexible. There was no suggestion of a substantial change in policy. How could it have been done? None of the Ministers concerned consulted their superiors. None of the Secretaries of State was consulted. The matter was not put to the Prime Minister. It can be argued that no decision was taken. None of the three Ministers would claim that they had the authority to undertake a major policy change without reporting the matter to senior Ministers.

What took place was not, therefore, a change of policy. Ministers have been pilloried by people who have said that there was a change of policy that Ministers did not reveal to the House of Commons, but that is not justified. I hope that my hon. Friends and other hon. Members will feel that my right hon. Friend the Chief Secretary has been most unfairly criticised in this case. I am naturally predisposed in his favour because he is a member of my party and I know him well, but I would like to think that, if I were on the Opposition Benches, I would be as objective as possible in the face of such serious allegations.

Mr. Radice

rose—

Mr. Campbell-Savours

rose—

Mr. Channon

I am sorry, but I cannot give way. Speeches are restricted to only 10 minutes and I have only a few minutes. I am sure that the hon. Member for Workington (Mr. Campbell-Savours) will be able to make his point later.

The real difficulty with the Scott report is that it is all things to all men. We can all find quotations to suit the argument that we are trying to advance or to rebut. It is a great pity that the report has no conclusions so that we can find out exactly what was intended.

Of course Ministers and others made mistakes. Naturally, when running such a complex policy over a long period, involving hundreds of officials in difficult decisions, difficult choices had to be made. I concede of course that mistakes were made. I assure hon. Members that, if a Labour Government had been in power, mistakes would have been made as well because no Government are foolproof when running such an enormous machine.

We should therefore revert to the serious issues. Did we supply lethal weapons to Iran or Iraq and break our guidelines? The answer is clearly no. [HON. MEMBERS: "The answer is yes."] I disagree. Sir Richard Scott confirms my view. Did we try to send innocent men to prison? There is absolutely no doubt from the report that there was no intention to send innocent people to prison.

Those are the two main charges levied against the Government. I concede that errors have taken place, but, on the basic charges involving important principle, the Government and, in particular, my right hon. Friends principally concerned should be acquitted.

6.12 pm

Mr. Peter Shore (Bethnal Green and Stepney)

A week or so ago, I said in a brief intervention during the statement that it should have been made by the Prime Minister and that this debate should also have been opened or closed by him. After all, he set up the Scott inquiry and, above all, he is responsible for Ministers' conduct. It was up to him to give us his honest judgment on the Scott report. I know that that is difficult. Frankly, he was faced with three possibilities. One was to accept what Scott said, with all the unpleasant consequences that that would have for him and his Cabinet. The second was to reject, in whole or in part, the Scott report's conclusions, but in that case he would have been obliged to put seriously to the House the weight of his argument and judgment. The third option—the one that he chose—was to opt out of those difficult decisions and to organise with his colleagues a sustained misrepresentation of what Scott said.

The Prime Minister has made a serious mistake. The Scott report needs close examination and serious debate. Let us be clear: the voice of Scott is not the voice of God. Although much of the report is persuasive, other parts of it are not. Let me make one thing clear before I proceed: the personal integrity and honour of the Attorney-General and of the Chief Secretary to the Treasury is not an issue. Both are honourable Members and I accept that they have acted throughout in good faith. That does not mean, however—nor did they expect it—that they could escape severe criticism of their conduct and competence as Ministers of the Crown.

The Attorney-General and his handling of the Matrix Churchill trial is the great puzzle. I shall not go into the argument between high-powered judges about whether Ministers were obliged to sign public interest immunity certificates—I leave that apart and am prepared to be neutral on that issue. What worries me and, I am sure, other hon. Members is that Mr. Henderson and his fellow Matrix Churchill directors were prosecuted by Customs and Excise for deceiving the Department of Trade and Industry. I and, I think, most hon. Members believe that those directors should not have been so prosecuted.

Surely sufficient evidence of the involvement of Mr. Henderson with British intelligence—evidence that should have made certain that no prosecution was started was available to Ministers before the trial—was available from the beginning. The Deputy Prime Minister read with care the documents that were submitted to him and refused to sign the PIIC. In his own words: this was telling me … that the Security Services at that time were in touch with Matrix Churchill. If he knew that, why did not the Attorney-General? I regret that the Attorney-General did not know because he had not read the documents that he had asked Ministers—not only the then President of the Board of Trade—to sign. That was a terrible omission.

The Attorney-General (Sir Nicholas Lyell)

Before making his criticism, the right hon. Gentleman was extremely courteous to me and to my right hon. Friend the Chief Secretary to the Treasury. Is he aware that, when my right hon. Friend the Deputy Prime Minister, then President of the Board of Trade, brought his concerns properly to me, I not merely considered the legal position and advised him about his special public interest immunity certificate but, as the Scott report records, immediately summoned a meeting with prosecuting counsel, Mr. Alan Moses QC, a man of great experience, integrity and skill and the solicitor to Customs and Excise, to ask specifically—and he had been handling that case for more than a year—whether there was any reason known to him why the prosecution might be unfair or should not go ahead?

Mr. Shore

Did the Attorney-General point out to the Treasury counsel that Matrix Churchill directors were involved with the secret services? If so, how could the Treasury solicitor have proceeded with his prosecution?

The Attorney-General

The answer is that I did not point it out because neither I nor anyone advising me was aware of it. When one reads section G carefully, one notes that Sir Richard Scott, when he says that, at the end of the day, the prosecution should not have proceeded, emphasises—both at the beginning and at the end of the chapter—that he speaks with hindsight.

Mr. Shore

I partly accept what the Attorney-General says, but, by reading the documents, the then Secretary of State for Trade and Industry knew that Matrix Churchill directors were in touch with the secret services, so Mr. Moses and the Attorney-General would have known the same if he had read those documents. In those circumstances, the trial could not have proceeded. Although the Attorney-General is not directly responsible, as he made clear in his letter to The Times today, for the Customs and Excise legal department, he has, as I have always understood it, an overriding power. He can enter a nolle prosequi—I think that that is the correct term— to bring a trial to an end. I maintain that he should have done that. I find it amazing that such crucial information was not passed on as it should have been.

I shall now consider the Chief Secretary to the Treasury, the United Kingdom's policy on the export of defence equipment to Iraq and Iran and the very serious charge that the House was deliberately misled. The crucial question is this: was the original 1984 guideline policy changed—first in August 1988 and again in April 1989—or were those simply modifications of the existing guidelines and of insufficient importance to warrant a public statement? The answer to that is crucial in determining the answer to the second question—whether Parliament was deliberately deceived.

Scott is clear that the answer to the first question is yes and, consequently, the answer to the second is yes. On balance I agree with Scott, but the answers are not as simple as he suggests. His preoccupation with those two questions leads him away from the simple truth and the most glaring fact that the original guidelines agreed by the Cabinet in 1984 and made public by the Foreign Secretary in February 1985 were designedly so loosely drawn as to be almost meaningless.

The supply of weapons was clearly banned—there is no argument about that—but defence equipment, ranging from Land-Rovers to advanced radar equipment, was not. Such equipment should be refused an export licence only if, according to the Government guidelines, their supply would, significantly enhance the capability to prolong or exacerbate the conflict". There is plenty of leeway there.

Under the change in 1988, following the ceasefire, exports were to be refused only if, in the Government's view, they would be of direct and significance assistance to either country in the conduct of offensive operations". There is plenty of scope there, too. The words are different and the intention was to relax export controls. In the event, though, the change had little practical effect.

The real culprit was the original guideline policy and the misleading distinction drawn between banning lethal weapons and licensing other defence equipment. The truth is that, while Iraq needed lethal weapons and could get all that it wanted from Russia and France, its main strategic aim was to expand massively its own indigenous arms industry so that in future it could supply its own weapons needs.

Since the Gulf war, and from reports of the United Nations arms inspection teams, we know just how massive and dangerous the Iraqi arms industry was, and Britain's exported defence equipment undoubtedly contributed to its growth. One example of that will suffice. The Scott report says that the supply of lathes in 1980 to Iraq was sufficient to equip a factory designed to produce 500,000 155 mm shells a year.

The second shift in policy was in April 1989, after the Salman Rushdie affair, when the export control on defence equipment to Iran was tightened. Although there was a clear shift away from the so-called even-handed policy that had previously prevailed, I can understand the reluctance to make a public statement about it when the fates of British hostages in Iran and of Terry Waite and the other hostages held in the Lebanon by Hezbollah under Iranian control were still at risk. Those were very serious matters and they had to be considered.

I find it odd that the Scott report should censure so particularly the then junior Minister at the Foreign Office. The idea that he and two other junior Ministers from the other Department made shifts of policy without gaining first the tacit or positive consent of their Secretaries of State is simply unbelievable—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. [Interruption.] Order. I have already adjusted the time given to the right hon. Gentleman.

6.23 pm

Mr. Richard Shepherd (Aldridge-Brownhills)

I first want to say how much I appreciate the fact that the Prime Minister set up the inquiry. I must be like the fellow in a Bateman cartoon—the only person on my side who believes parliamentary answers and who would have engaged in argument with my constituents about whether we supplied defence-related equipment during 1988 and 1989 that enhanced the capacity of Saddam Hussein. I was born when one anathema threatened Europe. Many people in this country are aware that Saddam Hussein is another anathema. Thanks to the Prime Minister, we have an account of how we enhanced the defence capacity of Iraq. I find that deeply and profoundly disturbing.

I have tried to list the instances in just the first volume of the report where Sir Richard Scott identified that the Government were intending to mislead or be less than candid with Parliament and the people of this country. I jotted down just a few of the references before I ran out of resources, time and patience. They include: D1.27, D1.151, D1.165, D2.35, D2.36, D2.432. It goes on; there are pages and pages of it.

In D4.3, on page 501, Scott alludes to the evidence of Mr. Gore-Booth, and later to that of Sir Robin Butler. There we see clever men laying out an argument, the substance of which is to argue that half a picture may be an indication of the whole picture. We have to make it quite clear to Sir Robin Butler, Mr. Gore-Booth—an honoured servant who I understand has been promoted to the high commission in New Delhi—and such servants of the state that neither the House nor the country will be governed on the basis of half the picture.

That is profoundly important because as a Back-Bench Member of Parliament, I represent the constituency of Aldridge-Brownhills. In that I am equal to the highest in this land, those who govern us, who are dependent on the authority of their own electorate and answer directly through this House and at times of elections. I am profoundly disturbed that the intent behind the policy, if not to tell an untruth, was to give an impression that was designedly misleading.

At the very end of volume i, Sir Richard Scott says: In the circumstances, the Government statements made in 1989 and 1990 about policy on defence exports to Iraq consistently failed, in my opinion, to comply with the standards set by paragraphs 27 of the Questions of Procedure for Ministers and, more important, failed to discharge the obligations imposed by the constitutional principle of Ministerial accountability. Some of us may have heard Mr. Raymond Seitz on the radio the other day making the observation that one of the features of the United Kingdom is that it has—perhaps— the most powerful Executive of any western democracy. In fact, that was the challenge that worried Lord Hailsham when he wrote about an elective dictatorship. What stands between us and that is the candidness, openness and frankness of those who govern us. When they mislead, how do we know that the premises on which we argue our case are truthful?

Dame Jill Knight (Birmingham, Edgbaston)

rose—

Mr. Shepherd

Please forgive me a moment. We are talking about the most difficult of all areas—the supply of armaments. Let each one of us consider when we relay to our constituents the basis of public policy how we can be certain of it when the dismal array of the intent of a civil service and bureaucracy with—I suggest—the acquiescence of Ministers is allowed to be set out in a report to the House. It is a serious judgment.

Dame Jill Knight

rose—

Mr. Shepherd

If my hon. Friend will forgive me, I shall not give way because we are under a time restraint.

The report is of immense importance to each one of us and we should take it seriously. In the balance of judgment of the all-powerful Executive—more powerful than any in the western world—I must tell my right hon. Friends on the Front Bench that I stand for the people of Aldridge-Brownhills and I will stand for the balance of the power of this Chamber against the Executive.

This is an important exclamation mark in our constitutional affairs, for Sir Richard Scott makes the observation that, time and again, Ministers failed in their constitutional duty to keep the House accurately informed. That is at the heart of our constitutional arrangements. How can I give assurances or say with certainty to anyone whom I represent that a policy is as stated by Ministers? In that, I had confidence, but perhaps I was naive.

Dame Jill Knight

Will my hon. Friend give way?

Mr. Shepherd

If my hon. Friend will forgive me, I shall not give way as I am trying to finish my speech within the terms set out.

I hear from many of my hon. Friends that they know full well that the answer that they are given is meaningless. Unfortunately, I am sufficiently naive that I trust and believe the answers given. Without that foundation and certainty, the House is at grave risk of failing to represent the people who send us here. We in the House have the authority to hold Governments to account—in this country that authority comes from the people, not from the Crown—as we in turn will be held to account within a short time.

The cynical response of some people when addressing the report should make us pause and wonder. Does that not bring about a cynical response in the public? We should think about our standards and what we are meant to stand for. We are abased daily in the press as standing for so little. Is that not perhaps a reflection of the cynicism that we show way in the way in which we treat this matter? I ask my right hon. Friends to reflect on that because, in much of life, it is a mirror as to who and what we are.

I want—I prayed—for a stronger and more vigorous response. I know what needs to be done. First, we need a freedom of information Act. That will not be the complete answer, but I profoundly believe that people who know that, within a certain time, others can look over their shoulders, will act differently. Secondly, our Select Committees must be able to send for papers and men, and have the right to subpoena them without the need for a reference to the House. That will confirm the authority of the House.

Why did the DTI inquiry fail? We all know. The House is partisan—it is part of the constitution that it should be so because we can then argue and test the propositions across the Benches. The Scott inquiry was to try to find out the facts. In page after page of 1,800 pages, the report resonates with a criticism of the conduct of public business. Is anyone accountable? Is anyone responsible? Is no civil servant to be addressed? What is going to happen to Sir Robin Butler? What is to happen to our distinguished ambassador in Saudi Arabia, who believes that half the picture is more than good enough for the House? We must remember that the principle is that the House shall have the information so that we can judge this country's proper public policy. That is the essence—the proper struggle to determine what is correct for this country and what reflects the views and judgment of an informed and interested public. If we dismiss that, we dismiss democracy.

6.32 pm

Mr. Gerald Kaufman (Manchester, Gorton)

I value following the hon. Member for Aldridge-Brownhills (Mr. Shepherd), not only because of the honourable and courageous speech that he has just made, but because he has covered some of the ground that I hope to cover this evening.

The House will be aware that my concern with the change in the guidelines on the embargo on arms exports to Iraq began long before the Matrix Churchill trial that triggered off the Scott inquiry. I wrote to the Prime Minister on 30 January 1992 about the matter. The Prime Minister replied to me on 17 February insisting that the guidelines had not been changed. The Scott report labels that letter inaccurate and misleading, whereas a preliminary draft had contained at least some element of the truth. That draft was doctored by the Prime Minister's Foreign Office private secretary, Mr. Wall, so that a relative truth became a total untruth. Just as the hon. Member for Aldridge-Brownhills asks why certain people can remain in office, I find it impossible to understand how the man who turned the Prime Minister's letter to me into a lie is now the British ambassador to the European Union rather than having been dismissed from the post in which he turned the Prime Minister, unwillingly, into the sender of an inaccurate letter.

However, despite what was done to the Prime Minister's letter to me, the Prime Minister knew the truth about the guidelines. That is made clear from the Scott report at D4.51, which the President of the Board of Trade shrank from allowing me to read out to the House earlier. In that passage, Mr. Wall again made it clear that the Howe Guidelines of 1985 were amended by Ministers in December 1988 but the amendment was never announced to Parliament. He told the Prime Minister that the Prime Minister knew about that when he was Chancellor of the Exchequer.

When the Prime Minister's letter to me became a matter of public controversy in November 1992, the Prime Minister's office made public the fact that the reason why the Prime Minister had not told me that there was a change in the guidelines was that the change, which the President of the Board of Trade denies existed, was already in the public domain. Reference was made to a statement made by Mr. John Goulden of the Foreign and Commonwealth Office to the Select Committee on Trade and Industry.

Mr. Goulden made a statement on 28 January 1992 to the Select Committee in which he said: The guidelines set out by Sir Geoffrey Howe in '85 applied until December 1988, when the third guideline was amended … It was updated to take account of the fact that there was a cease fire. No. 10 Downing street, on behalf of the Prime Minister, drew attention to that statement by Mr. Goulden as evidence of the fact that we were supposed to know about the change in the guidelines even though the Prime Minister was made by Mr. Wall to conceal that change from me.

Mr. Goulden said to the Select Committee: I am here before the Committee to tell you the truth. He was there to tell the truth. The question that the House must answer is: was Mr. Goulden lying on 28 January 1992, when he had no motive to lie and said that it was his job to tell the truth, or are Ministers lying now, when they have every motive to do so?

The question that must also be asked is: why are Ministers putting a totally unsustainable interpretation on the report? The answer is that they exported arms to Iraq and, despite all the evidence that they should adopt a more severe policy towards Iraq, they deliberately adopted a far more lenient and favourable policy towards that country. Some of the arms exports to Iraq were listed in a memorandum to the Select Committee on Trade and Industry from the Department of Trade and Industry in April 1992. The list from the Government to the Select Committee included air defence simulator, armoured vehicle spares, armoured vehicle, artillery fire control, artillery board, explosives, fast assault craft, gun sound ranging equipment, hostile fire indicator, mortar-locating radar, pistols, rifles, shotguns, portable explosive detector and tank helmets. Those items were exported. When I wrote to the then Foreign Secretary—who has now made himself scarce—about those matters, he told me that those exports were considered by the interdepartmental committee and assessed as not breaching the guidelines.

The Government repeatedly adopted an over-friendly attitude to Iraq when evidence was being accumulated to show that they should have been exceptionally and increasingly wary. The Scott report demonstrates at paragraph D3.175 that in September 1988 the Prime Minister, then Chief Secretary, increased export guarantees to Iraq by £244 million above a total that was already £912 million.

A week ago the President of the Board of Trade, in a series of answers that reeked of casuistry, and also today, listed a series of events that he described as general situations of an extremely unpleasant kind".—[Official Report, 15 February 1996; Vol. 271, c. 1156.] He listed a series of malfeasances by Iraq. What did the Government do about them? When Farzad Bazoft was executed, my hon. Friend the Member for Hamilton (Mr. Robertson)—on my behalf and at my direction—asked the Foreign Secretary to reconsider carefully the extensive trade credits that we offer Iraq. The Foreign Secretary said that to do this might do more harm than good.

Later that month, nuclear detonators bound for Iraq were discovered at Heathrow airport. On 29 March 1990, I asked the Foreign Secretary whether the Government would reconsider their attitude towards export credits for Iraq. The Foreign Secretary simply referred to his response to my hon. Friend the Member for Hamilton. I asked for the expulsion of the Iraqi ambassador, and the Foreign Secretary turned me down. The following month, Customs officers seized sections of the super-gun bound for Iraq. After attempting to dodge responsibility, the Secretary of State for Trade and Industry was forced to make a statement to the House on 18 April 1990. When my hon. Friend the Member for Dunfermline, East (Mr. Brown) stressed the seriousness of the situation, Nicholas Ridley accused him of going over the top on a scale outside anything previously experienced. The Government's casual and, indeed, cavalier reactions to these serious events would not have been lost on Saddam Hussein.

In July 1990, the situation became positively threatening. On 15 July, the Sunday Times reported that American customs agents had detained containers of furnace equipment, which they believed was to be used to produce titanium parts for Iraq's rapidly developing missile arsenal. It stated: Two of the giant furnaces are being manufactured near Glasgow by a subsidiary of an American company. On 16 July, Saddam Hussein made a speech about his dispute that had broken out with Kuwait. He said: Iraqis will not forget the saying that 'cutting necks is better than cutting the means of living'. If words fail to protect Iraqis, something effective must be done to return things to their natural course and return usurped rights to their owners. The Times warned of a threat to Kuwait's existence. The American Government pledged support for the individual and collective self-defence of our friends in the Gulf. Yet, following those developments, on 19 July 1990 the Foreign Secretary took the chair of a meeting at the Cabinet overseas and defence committee and decided to relax still further the arms embargo on Iraq.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. The right hon. Gentleman's time has expired.

6.42 pm

Mr. David Mellor (Putney)

I am qualified to contribute to this debate because I was the Minister of State at the Foreign Office from June 1987 until July 1988. My immediate successor was my right hon. Friend who is now the Chief Secretary to the Treasury, the right hon. Member for Bristol, West (Mr. Waldegrave). I shall continue the process begun by my right hon. Friend the Member for Bridgwater (Mr. King), and try to bring a wider context to bear on some of the things that have been looked at under a microscope in Lord Justice Scott's report. I refer to the pressures that were on Ministers at the time that these decisions—which have been minutely scrutinised by Scott—were taken.

I have no quarrel with Lord Justice Scott. I gave evidence before him, it was an amiable encounter, and I have no quarrel with anything that he attributes to me during the course of his report; nor does he have any quarrel with me. I do not rise in this debate in the spirit of resentment or against anything that Lord Justice Scott has said about me. The guidelines were set out and publicly promulgated to this House; however, they could not guarantee what view should be taken about quite a number of categories of equipment—they were not self-defining.

The guidelines had four parts—first, that we should maintain our consistent refusal to supply any lethal equipment to either side. That was done, and there was no question of the Government supplying arms to Iraq. The most that it can be said was done was the supply, at certain points, of multi-purpose machine tools that had a variety of possible uses. Secondly, existing contracts and obligations should be honoured.

Thirdly—this clause always caused difficulties—we should not in future sanction new orders for any defence equipment which, in our view, would significantly enhance the capability of either side to prolong or exacerbate the conflict. Fourthly, all applications for export licences should be rigorously scrutinised. That was done. It is understandable, in that context, that there would have been discussions passing back and forth between various Departments to decide into what category certain applications fell.

In paragraphs D2.148 to D2.167, Lord Justice Scott deals with an argument about rubber boats which engaged the Department of Trade and Industry and the Foreign Office for many months. It was determined—this should be a reassurance to hon. Members about the care that was taken—that those rubber boats should not be exported to Iraq, not because they would significantly enhance Iraq's ability to continue the conflict or to enhance its capability to do so, but because it would appear to be a conspicuously unmutual act. That was the Foreign Office view, stated by my right hon. Friend the Member for Mid-Sussex (Mr. Renton) and then by me, which won the day.

There was nothing discreditable in the Department of Trade and Industry pressing for that export. When the Labour Government were in office, exports to Iraq increased from £50 million to more than £400 million—and I make no criticism of them for that. If Iraq were a properly run country, it would be the second most potentially prosperous country in the middle east—possibly even more so than Saudi Arabia. Iraq is now in chaos because it has been badly run.

Departments were criticised if manufacturers went out of business or when unemployment increased—within the principles that were laid out in this House to advance British interests—and were put under pressure by manufacturers and by Members of this House in whose constituencies the manufacturers carried on their business. The testing of the evidence, which was the role of the Foreign Office in this matter, was carried on by my right hon. Friend the Chief Secretary to the Treasury. It is sad and tragic that he should now be pilloried for this, and—as a result of outrageous and unsustainable claims by Labour Members—that he should stand in threat of having a forced resignation imposed upon him.

As my right hon. Friend the former Secretary of State for Defence made clear, the realities of the situation in which Ministers were working at that time were different from what they are perceived to be now. We need to remember that what is now in the past was once in the future. Saddam Hussein—who was always a nasty piece of work: hence our requirement to put a strong arms embargo on him—had launched an opportunist attack on Iran, thinking that Iran was in such chaos that he would be able to obtain large quantities of territory. He found himself not merely unsuccessful, but on the defensive, running the risk of Iraq being overrun. Today people would say that that was a jolly good thing. However, it did not seem to be a jolly good thing at the time.

Ironically—the history of those days is filled with irony—the people whom Saddam Hussein subsequently invaded and threatened were the people who were saying to us, "You are our friends. Help us to prevent Iraq from establishing hegemony over the whole Gulf region". The Shah—whose reign we now look back on as some kind of golden age—laid claim to the island of Bahrain and to some of the islands that are now part of Abu Dhabi, all countries that we are under defence obligations to defend.

Let us consider the pressure. There was the prospect of an Iranian victory, the Iranians were mining Fujeira harbour, gunboats were being sent out into the Gulf to shoot up the sea lanes, innocent tankers were passing back and forth, mines were placed on the route to Kuwait, British naval vessels were protecting convoys going up, and British merchant seamen were going through the Gulf. The one great thing that can be said about our nation is that we do not get on the first plane out when there is trouble, as some other countries do.

Against that background, the remarkable thing is that we did not loosen the guidelines more than we did. The reason was the reason that the Government are being pilloried—the profound suspicion that Ministers had about Saddam Hussein's motives, long-term interests and concerns.

Miss Emma Nicholson (Torridge and West Devon)

Will the right hon. and learned Gentleman give way?

Mr. Mellor

I would give way, but I have only a few minutes.

My right hon. Friend the Chief Secretary was part of a continuum that maintained tight regulations, in a principled way, against a great deal of pressure. It is only when one looks through a microscope that it appears remotely as though the guidelines changed. They did not; the perceptions changed. The test was the ability of one of the combatants significantly to enhance its capability to maintain the fighting. After a ceasefire, that changes, because a war is not then going on.

The efforts of British diplomats in New York, under the guidance of Ministers, persuading the five permanent members of the United Nations Security Council to work together for the first time, led to resolution 595—the basis on which that terrible war, which cost hundreds of thousands of lives, was finally brought to an end. That is the background and the context.

I listened with interest to the speech by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd). I consider much of what he said in the context to be profoundly misconceived, but who can fail to warm to his eloquent statement about Parliament's right to know? What troubles me is that my hon. Friend should be lined up with the opportunist attack that has been made by the Opposition, and that Opposition Members should nod sagely as those principles, sincerely held by my hon. Friend, rolled forth, when everything that they have done in the debate has been characterised by a lack of principle.

It would be naive to expect any precision from the deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott). Earlier this month, on 9 February 1996, he said: Next week, we shall have more evidence with the Scott report, showing how Ministers were prepared to send citizens to jail to cover their own backs. He has never apologised for that disgraceful assertion.

The same is true of the hon. Member for Livingston (Mr. Cook). He made three charges in the House in November 1992. [HON. MEMBERS: "Four."] No, it is three, and I have the quotation, and I have read it out for those who were bothered to listen. First, he said that the Government armed Saddam; the Government did not. Secondly, he said that those arms were used against Britain; no arms sold by the Government were used against British service men in Kuwait, but arms sold by a Labour Government were used against British service men in the Falkland islands. That is the difference.

The third and most monstrous accusation was: as the cover-up unravelled, rather than own up, they were willing to see three executives of Matrix Churchill go to prison."—[Official Report, 23 November 1992; Vol. 214, c. 638.] That is a disgraceful thing. The whole of the Conservative party—

Mr. Deputy Speaker

Order. Time is up.

6.52 pm

Mr. Giles Radice (North Durham)

I do not know whether the right hon. and learned Member for Putney (Mr. Mellor) noticed, but during his speech he admitted that the guidelines were loosened. That is an interesting omission. I am not sure that Ministers would thank him for it.

I have read most of the Scott report, and the one thing that it does not do is give comfort to the Government. It is a devastating indictment of the Government, especially on the issues of ministerial responsibility, the misleading of the House of Commons and the incompetence of the Attorney-General.

Admittedly, the report's use of language is occasionally opaque, and Lord Justice Scott goes in for the double negative too much. The report is certainly too long, and it is wrong that there should not be an executive summary. That was, in a sense, a cop-out, and it allowed the Government to get away with a disgraceful response at the start.

No apologies were made when the Government came before us a week ago. There were no resignations. There was no sign that the Government considered that anything had been done wrong—that any mistakes had been made. They decided to bluff it out, and they did so.

The two-page summary produced by the Government for Members of Parliament, purporting to say what was in the Scott report, was a disgrace. It would have been bad enough for Conservative central office, but I am amazed that civil servants lent their name to it. There are at least four totally misleading statements in it, and it should not have been made available as a Government document.

The disturbing message of Scott is that Ministers and civil servants, while paying lip service to parliamentary accountability and openness, believe in keeping things secret. Whitehall is a world where phrases are used such as flexible interpretation of the guidelines", which we have heard so much from so many Ministers; and sentences are used such as: There is nothing necessarily open to criticism in an incompatibility between policy and presentation of policy. That was Lord Howe, incidentally, to the Scott inquiry. That type of statement appears to be commonplace.

It is not only Ministers, but civil servants. Mr. Gore-Booth and Sir Robin Butler said: Half a picture can be accurate"; and Ian McDonald, from the Ministry of Defence, said: Truth is a very difficult concept". Another civil servant said: It is damaging to the public interest to have any decision-making process exposed". Sir Michael Quinlan said that the process of parliamentary answers was "analogous to a game".

Of course foreign policy, defence and especially security are difficult issues in a democracy, but, having listened to many of the Scott hearings and having read the Scott report, I gain the impression that the Government and civil servants believe that those matters are too serious to be considered by Members of Parliament, the House of Commons or the general public. They appear to assume that we in the House are not capable of weighing and balancing the different factors that go into the making of foreign policy and defence policy decisions.

Sir Richard Scott summed up the secretive Whitehall culture in the following terms: We know what is good for you. You may not like it, and if you are made aware of it, you might protest, but we know what is best". That, basically, is the report's message.

It is abundantly clear from the report that Ministers consistently misled the House. They withheld information from Members of Parliament, from Select Committees and from the House of Commons regarding the sale of defence equipment to Iraq, in clear breach of conventions laid down for the House.

We do have a set of standards. There is "Questions of Procedure for Ministers", which the Prime Minister is to be congratulated on publishing, because we know what they are now. We have the Osmotherley rules for Select Committees. We have the new civil service code, which was drafted by the Treasury and Civil Service Select Committee. Together, they are a mini-constitution, and they stipulate that Ministers have a clear duty to give accurate and truthful information to the House and its Select Committees.

If we do not give that information, we undermine the principle of ministerial responsibility, as Sir Richard Scott rightly says. The Treasury and Civil Service Select Committee defined that principle in our report; we said that ministerial responsibility had two vital elements. First, one must be clear about who can be held to account and held responsible when things go wrong". I am not sure that we have been able to do that; certainly the Government have not drawn any lessons from it.

Secondly, we must have confidence that Parliament is able to gain the accurate information required to hold the Executive to account and to ascertain where responsibility lies". We certainly did not get that from the Government, although we have got it from Scott. I believe that our formulation was a good one, and it was endorsed by Sir Richard Scott.

We must now decide, as a Parliament, what we should do. As Chairman of the Public Service Select Committee, which has responsibility for overseeing the civil service code and "Questions of Procedure for Ministers", I have heard from the Secretary of State for Trade and Industry today that, if we were to expand the terms of reference of the inquiry that we are conducting into ministerial responsibility and the next steps initiative, the Government would be gracious enough to give evidence, and give us a statement of what they consider the position to be. That is very good news. Although we have made no formal decision and we do not yet have any terms of reference, we have agreed, in principle, to follow up the Scott report. I am glad that the Government intend to co-operate with the inquiry, as is their duty according to "Question of Procedure for Ministers" and the Osmotherley rules.

Tonight we have an obligation to decide on our approach. We are all Members of Parliament—albeit of different political persuasions—and, as such, we should be concerned about the House and its rights. That is what we must consider tonight. Many Conservative Members were misled by the answers to questions. We were all concerned about the issue and we were misled: we should all learn some lessons from that. If we defeat the Government tonight—I hope we do—we shall send a clear message that, despite all that is said about us, Parliament cares about its rights and about British democracy.

7 pm

Sir Timothy Sainsbury (Hove)

I think that I read a different Scott report from the one read by the hon. Member for North Durham (Mr. Radice)—I certainly drew different conclusions from it. Perhaps we might have had a more informed and rational debate on the serious subjects that he has identified if his hon. Friends on the Opposition Front Bench had had the courtesy to apologise to the House for their disgraceful and unsubstantiated allegations about Ministers and about how the Government armed Saddam Hussein, which they peddled around the country for three years. If any apology were required, that was it.

There can be no doubt about the importance of the report and the value of its recommendations. I welcome what my right hon. Friend the President of the Board of Trade said about accepting and responding to the various recommendations. I think that I am the only Member who served as a Minister in the three principal Departments involved in the matter. As Minister for Trade, I was directly involved with the specifics, and therefore I have some experience of export controls and defence exports and the complexities that they create for Ministers who have responsibilities in that area.

The report identifies quite clearly some things that did not happen and some things that should and some that should not have happened. Perhaps most importantly and most controversially, it identifies something that Sir Richard Scott thinks happened. As I have said already, it is very clear what did not happen: we did not arm Saddam Hussein, in any logical meaning of that phrase. That is absolutely incontrovertible. There is no way that the Opposition, particularly the hon. Member for Livingston (Mr. Cook), can persuade the average person that shipping dual-purpose machine tools or tools which could be used in munitions manufacture could be called "arming Saddam Hussein".

Mr. Frank Cook (Stockton, North)

Will the right hon. Gentleman give way?

Sir Timothy Sainsbury

No, I am afraid that I do not have time.

If that were so, we could not be said to manufacture any cars in this country because, according to the Opposition's logic, if they are manufactured using Japanese machine tools they are Japanese cars. Equally, there was no conspiracy to send innocent men to gaol. I am not a lawyer and many expert lawyers have explained why that is not so; I shall leave that argument to them.

I shall concentrate on something that Sir Richard Scott thinks happened, with which many others—including, I am glad to say, my right hon. Friend the Member for Witney (Mr. Hurd)—and I do not agree. I refer to the allegation to which the Opposition have shifted: that answers given by Ministers, including me, were misleading as the guidelines—it was the first time that defence export guidelines were published—had been changed. I suppose that it is logical for the Opposition to shift to that criticism of the Government, because their more serious criticisms, which they have sustained for so long, have been rejected decisively. As that criticism is now at the forefront of the debate, it should be addressed.

I have always been somewhat sceptical about the allegation. When I became Minister for Trade, I discovered that the guidelines at that time were the same as those published in 1985 and established by the then Foreign Secretary. Having read the report, I am even more convinced that the allegation that the guidelines changed cannot be substantiated. I point particularly to two quotes from the report which confirm that analysis. I direct those hon. Members who like to refer to their text to paragraph D3.100 on page 414. No one has reached for it yet—except the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins). It contains a quote by a senior official at the Ministry of Defence in July 1989—before we began to worry about the issue. He said: The relaxation related to the interpretation of the guidelines, not the guidelines themselves. That is what an official said before the issue of changing the guidelines was raised.

I put it to the House that even Sir Richard recognises that he is putting too much weight on the wording of the guidelines and upon their precise interpretation. In paragraph K8.1, example (iv) on page 1799—that proves that I have read the whole report—he refers to the "adjustment" to the guidelines rather than the "change". We must recognise that talking about changing the guidelines, about how they might be changed or even agreeing on a change of wording is not the same as changing the guidelines.

Recognising that fact, the report concedes that the guidelines were not changed but that, in effect, they were changed because the substance of the guidelines was changed. Therefore, the allegation stands that hon. Members were misled and that Parliament was not informed. I believe that that allegation is unfounded for a number of reasons.

The first good reason can be found in the speech of the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who said that the guidelines were meaningless anyway. That is an extraordinary statement, which seems to undermine any suggestion that the House was misled by a change in the guidelines. A more important point is that the guidelines were not—and were never intended to be—a precise indication of how to respond to any specific export licence application. As the Minister responsible for export licences, I can confirm that fact. The guidelines were not capable of providing such an answer—if they were, we would not have needed the committees to whose minutes and proceedings Sir Richard devoted so much detailed analysis.

Secondly, the alleged change to the guidelines did not affect the volume and scale of our armaments exports, which remained a tiny percentage of total exports. Thirdly, the report gives insufficient weight to the recognised parliamentary convention of not giving details of arms sales. The fact that Sir Richard Scott may disapprove of that convention does not mean that it does not exist. I do not dispute the fact that we should debate the issue, but the information about arms sales to Iraq and elsewhere was always limited and that situation did not change. I would welcome a debate about disclosure—just as I welcome what my right hon. Friend the President of the Board of Trade said about it.

Fourthly, I believe that the charges of misleading are unfounded because Sir Richard's approach is far too legalistic. The report is written by a lawyer, sadly, without the help of assessors who have more knowledge about the real world. Parliamentary proceedings do not equate with drawing up a contract at law: real life is not like that. I am sure that any right hon. or hon. Member who has answered questions at the Dispatch Box would agree that, if his every word were taken down and turned into a legal contract, life would be quite impossible.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker. How many more former Ministers will be wheeled on to attack Sir Richard Scott?

Mr. Deputy Speaker

That is not a matter for the Chair.

Sir Timothy Sainsbury

The reason why Sir Richard gave so much weight to the suggestion that the House had been misled was his widely shared concern about the unnecessary secrecy surrounding Government. That is why he devoted so much attention to the Import and Export Control Act 1990, which was not otherwise relevant to his inquiry, but certainly revealed the Opposition's attitude to informing Parliament.

There are plenty of matters for the House to debate. We certainly need to debate the arms trade, and I hope that we can accept most of Sir Richard's recommendations and follow up the rest. We must recognise, however, that no lethal weapons were exported, that there was no conspiracy and that there are strong grounds for concluding that the guidelines were not changed; therefore the House could not have been misled by any Minister saying that that was the case.

7.10 pm

Mr. Richard Caborn (Sheffield, Central)

I should like to cover three issues. I have a constituency interest in the super-gun, not in Matrix Churchill, and a parliamentary interest in the matter as Chairman of the Select Committee on Trade and Industry dealing, first, with the aftermath of the super-gun and, secondly, with setting up the Committee's terms of reference for the BMARC inquiry.

In 1990, I tabled a series of questions to the then Secretary of State for Trade and Industry and wrote to the Prime Minister of the day asking whether they knew about the super-gun in 1988 or in 1989. Sir Richard Scott confirmed that I was totally misled when he wrote that A direct answer to Mr. Caborn's question on exports of military equipment to Iraq would have required the DTI to accept that they had been aware in June 1988 of possible military implications of Walter Somers"— and indeed the Forgemasters— piping contract. He said that the Government's failure to respond constituted a further example of failure to discharge the obligations of accountability. There was great concern in Sheffield at the time. There were 4,000 jobs at Firth Brown—which used to be Forgemasters—and people were concerned about the way in which the Government had treated them when they had genuinely tried to provide the Government, particularly the DTI, with all the relevant information that they had at hand to prove or disprove whether the contract involved the super-gun. The way in which the Government were treating business at the time was deplorable. The powerful statements that have been made tonight about misleading Members of Parliament, and thereby their constituents, have to be taken extremely seriously and those who are responsible for that misleading should pay a price.

I became Chairman of the Select Committee on Trade and Industry in July 1992. The hon. Member for Leeds, North-West (Dr. Hampson) was wrong in his earlier intervention about following through the report of the Trade and Industry Select Committee, as the election stopped that happening. Immediately I became the Chairman of the Select Committee, the Government responded to the Committee on the export to Iraq of Project Babylon and the long-range gun.

I wrote to the then President of the Board of Trade in July 1992 and the following January I received a reply to my letter in which he promptly told me that the matter would be referred to the Scott inquiry. I know that the Deputy Prime Minister is a past master of the long game, but that takes the biscuit.

At the time, serious issues were raised by the report of the Trade and Industry Select Committee and the problems that the Committee faced in trying to extract information both from Ministers and from civil servants are on record. It became evident that the memorandum of guidance for Select Committees is somewhat weak.

Last year, the President of the Board of Trade requested the Trade and Industry Select Committee to consider the implications of BMARC. Many members of the Select Committee were involved in the super-gun inquiry and were not prepared to be sent on a fishing expedition for information because they knew that their report on the super-gun had run into the sand, partly because of the Select Committee's inability to take evidence from the right people. That calls into question the role of the Select Committee.

There was an exchange of letters between the Select Committee and the then President of the Board of Trade culminating in such an unsatisfactory position that the President of the Board of Trade was asked to meet the Select Committee to clear up at least some of our terms of reference and explain how much access we would have to people and papers. The transcript of that meeting has not been published. I suggest that the Select Committee should be requested to publish the transcript, the correspondence between the President of the Board of Trade and the Select Committee and the guidance notes that the Clerk of the Committee gave the Select Committee for the sitting on 27 June 1995. It is interesting to learn that Ministers had been consulted before the Scott inquiry had been published. Those documents would demonstrate the weakness of the Select Committee structure and the strength of the Executive in controlling the ability of Select Committee to obtain evidence.

Standing Order No. 130, under which Select Committees operate, illustrates those weaknesses. The BMARC inquiry that is now under way will have the same difficulties as the super-gun inquiry. The transcript of our meeting with the President of the Board of Trade will reveal that he provided very little further access to people and papers. What do I mean by that? The Select Committee asked the President of the Board of Trade for access not only to present Ministers and civil servants but to past Ministers and civil servants. We wanted to question those who were making decisions at the time and it is a matter of fact that they included past Ministers and civil servants. Present Ministers and civil servants cannot provide those answers. Scott dealt with the matter adequately in section F of his report.

Members have to take that on board and decide whether we want to bring the balance back into Parliament. Do we want to give Parliament real powers of investigation, scrutiny and reporting back? If so, we have to revisit Standing Order No. 130. Although the Public Service Select Committee will examine that issue—that is one of the concessions that the Government have made—it must be perfectly clear that the powers have to be with the Select Committees and not be biased in favour of the Executive. Select Committees exist to scrutinise, and although one commends the development of Select Committees as part of the Executive, as the hon. Member for Aldridge-Brownhills (Mr. Shepherd) said, we have the most powerful Executive in western Europe. Parliament must take that on board and see how we can bring them under much more scrutiny.

I shall ask the Public Service Select Committee to examine the accountability of present and previous Ministers and access to civil servants, which is also crucial. That, along with the transcripts of the private session, will throw some light on the matter.

Had Parliament been able to scrutinise the Executive more effectively and had the Select Committee been given wider-ranging powers, we would never have had to askSir Richard Scott to undertake his inquiry. It was a political question, but if the House had powers of scrutiny within the Select Committee structure, there would have been no need for Scott. That should be taken on board by all right hon. and hon. Members, to ensure that such an occasion does not arise again—and that Parliament is able to cross-check all the evidence relating to the Executive's actions. That means taking a completely new look at the role of Select Committees.

7.19 pm

Mr. Richard Needham (North Wiltshire)

I am a non-executive director of the General Electric Company, and I was also the longest-serving Minister for Trade in this Administration.

The right hon. Member for Derby, South (Mrs. Beckett) knows that if her party were to come to power, it would be her responsibility and that of the hon. Member for Middlesbrough (Mr. Bell)—if they were so lucky to be appointed—to represent the interests of British industry and to fight for the orders for which British companies compete throughout the world. A large number of the Labour Members seated behind the right hon. Lady do not believe that this country's armaments industry should continue. The right hon. Member for Chesterfield (Mr. Benn) eloquently made that point. The hon. Members for Nottingham, East (Mr. Heppell) and for Cynon Valley (Mrs. Clwyd), who have written to me on numerous occasions, share the same view.

The more disclosure, transparency and discussion there is about the extremely difficult and complicated problems of exporting arms, the less likely it is that the order will be won. The more that British arms exports are undermined, the less this country is able to defend itself. It is impossible to conceive that the British armed services will ever require enough of everything to support an adequate UK defence industry. It will be the job of the right hon. Member for Derby, South and the hon. Member for Middlesbrough, if they have the opportunity, to ensure that this country's national interests are protected.

The hon. Member for Livingston (Mr. Cook) can wander in and out of the Chamber and box and cox, while having no particular interest in or experience of this nation's defence, which is to the fore of the national policy that the right hon. Lady will have to determine.

If more transparency and openness is wanted, perhaps we should consider the words of Sir Richard Scott, who was careful to examine the options. He questioned whether it was right for foreign policy issues to be criteria in determining export licensing: Is it acceptable, for example, for a licence to export goods to Country A to be refused for the reason that the export may be objectionable to … Country B? I imagine that that is the sort of transparency and openness that the House would seek. If such considerations are to be prescribed in legislation, what will happen if a company asks for an export licence to Taiwan? It would have to be granted. What would be the consequences for the UK if we were to be forced by law to grant export licences for defence materials for Taiwan? What effect would that have on China or Hong Kong? If one goes down that route, it is almost unthinkable that one would not be confronted with the most appalling problems of national importance, which were never foreseen by Sir Richard and could never have been.

Arguing the case for greater openness, Sir Richard, suggests the purposes against which export licences should be judged. They include, at K2.18(iv), the avoidance of assistance to human rights abuses in foreign countries". What would that mean? British Aerospace is currently negotiating a Hawk order for India. If the British Government decided to grant that export licence, they would immediately find themselves subject to a judicial review brought by Amnesty International because of the violation of human rights in Kashmir by the Indian Government. That would be a wonderful way to win orders from India. Nobody believes that arms exports could be ring fenced from other types of exports—whether they be of water, telecommunications or electricity generating equipment. If the UK is not prepared to help a country to defend itself, that country will not be interested in placing other types of orders.

The right hon. Member for Chesterfield mentioned Indonesia as an example of a country to which we should not sell arms. What is Labour's policy on selling arms to Indonesia? I was constantly asked that question as Minister for Trade. In May 1994, the hon. Member for Nottingham, East asked whether arms exports to Indonesia should not be stopped. I replied that I thought not. The hon. Member for Livingston said: The Minister will appreciate the fact that this is a major humanitarian issue … He will be aware that Hawk aircraft have been observed on bombing runs in East Timor in most years since 1984. What assurances did he seek, before giving export licences …?" —[Official Report, 11 May 1994; Vol. 243, c. 308.] There is no evidence from the Ministry of Defence that any Hawks have been seen on bombing runs in East Timor in any year since 1984. Perhaps the hon. Member for Livingston should get his evidence from the Ministry of Defence, rather than from dubious television programmes. Anybody reading the hon. Gentleman's remarks would believe that Labour's policy is not to sell arms to Indonesia. Labour's policy was spelt out by the hon. Member for South Shields (Dr. Clark) in the New Statesman in November 1993: As for British Aerospace's proposes sale of Hawk ground-attack … "trainers" … to Indonesia, where the military dictatorship is actively suppressing occupied East Timor, Clark is in favour. South-east Asia needs a stronger security system, he says, and Indonesia must be part of it. This is clearly not the happiest part of the job for Clark. 'I'd like a world where there is no war and no weapons,' he says. Is that still Labour party policy? Will it be the policy of a Labour Government? If Labour's policy has changed, who changed it? Is that the policy of the hon. Member for Livingston, or should I be generous and say that the hon. Gentleman did not know that it was Labour's policy? The hon. Member for Livingston accused two of my right hon. Friends—two men whom I have known virtually all my life, and who have more integrity than almost any other hon. Members—yet the hon. Gentleman's own policy on Indonesia contradicts that of the hon. Member for South Shields. If that is the case now, what on earth will be the position if the hon. Gentleman and his friends ever get in government? We heard something about Argentina. What about Nigeria? I suspect that that issue would not have been open to close scrutiny in the past.

When the right hon. Member for Derby, South speaks, she should show the House that any future Labour Government would act in the best interests of British industry and in the national interest. She should not continue to make cheap party political points, when Labour Members cannot agree policy even among themselves.

7.28 pm

Mr. Andrew Faulds (Warley, East)

The dissertation of the right hon. Member for North Wiltshire (Mr. Needham) might be more relevant on another occasion, when the House is discussing business ethics. Tonight, we are debating the Scott report—the hon. Gentleman occasionally alluded to it.

Both law officers, the Solicitor-General and the Attorney-General, according to the definition in the "Oxford Companion to Law"—I always consult the best works of reference—are appointed from supporters of the party in power and are expected to defend the legality of the actions of Government Ministers. That definition could explain the extraordinary record of the present Attorney-General, the right hon. and learned—I have to use these phrases—Member for Mid-Bedfordshire (Sir N. Lyell). Look at that record, which provides the most cogent argument for the depoliticising of the right hon. and learned Gentleman's job.

Look at the Attorney-General's handling of the Asil Nadir case and the Maxwell brothers saga. Then recall the right hon. and learned Gentleman's dismissal of a Serious Fraud Office forged letter as an April fool's joke—until another turned up. This is the right hon. and learned Gentleman who disregarded the insistence of the right hon. Member for Henley (Mr. Heseltine) that the judge and the prosecuting counsel in the Matrix Churchill case should be informed of the right hon. Gentleman's reservations about signing public interest immunity certificates. Sir Richard Scott said of the Attorney-General—it is in the report: I do not accept that he was not at fault. He stressed that the public interest dictates that the need for a fair trial outweighs the sensitivity of the documents". That is not what happened. The Attorney-General was prepared to allow three innocent men, of whose activities the Government well knew, to go to prison to save the pelt of his Cabinet colleagues—[HON. MEMBERS: "Rubbish."] That is the fact of the case, however much Conservative Members may disagree with it. They should read the report, because most of them have not.

Mr. David Shaw

The hon. Gentleman is acting again.

Mr. Faulds

I make better speeches than pretend parliamentarians with their dishonourable records.

He is an Attorney-General, incidentally, who has never questioned the fact that the Tory party is funded in large part by a crowd of crooks and fraudsters. Any denials? There seem to be none, despite my prompting.

Then there is the Chief Secretary to the Treasury, a man born to the purple who practises the arrogance of the true aristocrat. His very profile breathes disdain. The House should not misunderstand me: some of my best friends are aristocrats, and I have in my collection of English pottery a bulbous Staffordshire creamware mug bearing the motto "Chewton and Hay Forever"—perhaps the hon. Gentleman remembers the phrase. It is in delicate pink lettering, surrounded by roseate wreaths—a lovely piece. The motto is the election memento of one of the right hon. Gentleman's parliamentary ancestors of about the year 1780—I stand open to correction on that.

Such fellows—the right hon. Gentleman and his ancestor—assume entry to Parliament to be their birthright. Such as they judge their privy decisions to be beyond question and, of course, above their responsibility to account to Parliament. The Chief Secretary was one of the gang of three—a bunch of somewhat undistinguished junior Ministers—who composed the changes in the guidelines that permitted an increase in the provision to Iraq of weapon-making equipment, and a shift against Iran. The right hon. Gentleman thought the rewording so inconsequential as not to merit mention to the House; and besides, the public might not like it.

So the right hon. Gentleman denied the implications in a couple of dozen letters to Members of Parliament. Had he had my fortunate experience of playing both Falstaff and Mark Anthony—both brilliantly—and had he remembered their dissertations on honour, he might have had more conception of what honour is.

It is stated in the Scott report that the Chief Secretary's responses were "sophistry". That of course is the gentlemanly way of denoting fibbing. Sir Richard also reported that Parliament was "deliberately" and "designedly" misled. If the Chief Secretary was not deliberately and designedly misleading both Sir Richard and the House of Commons, we can only conclude that he is a simpleton. This fellow of All Souls, this scholar of Eton must be a simpleton. He did not understand the implications of the words that he had written into the guidelines.

The Prime Minister has tried to control—it is only too obvious—the Scott report. Last year Sir Richard produced a provisional report so that those criticised could suggest corrections—in other words, could water down the more direct criticisms. Apparently—this is an astonishing fact—more public money has been spent on civil servants monitoring the passage of the report and managing the response to it than was spent on Sir Richard's tribunal costs.

The personae fingered in the report were allowed eight days of pre-publication examination; but Opposition leaders were granted two and a half hours under strict oversight. Back Benchers, the poor bloody infantry, were permitted 10 minutes to collect their lumpy packages, lug them into the Chamber and study them. What a generous gesture—10 minutes to study a 1,800 page document.

Sir Richard stated that the report should simply have been presented to Parliament and then made available to Government, Opposition, media and public, so that we could examine it properly. That is not asking too much.

There followed the original debate. The right hon. Member for Galloway and Upper Nithsdale (Mr. Lang), who is unfortunately not here now, in a ludicrously aggressive presentation, managed to convince himself that it was all the Opposition's fault and that the Government were blameless. His performance, perhaps after a little thought, this afternoon was somewhat more plodding and pedestrian.

Then followed—this is all part of the history, furious briefings by the Government to manipulate the media response to the whole issue. The conduct of the Government in this respect has been disgraceful and only too obvious. Sir Richard has complained in a letter that his report is being misrepresented by Ministers—how true that is. But the very terms and tenor of the Government's reaction, and their obfuscation, have been counterproductive, as we observe the more honourable Tory Members peeling off the parade.

The more Conservative Members have the political courage and moral honour to cast proper judgment on the Scott report and vote against the Government tonight, the more they will do to restore a little of Parliament's lost standing.

7.35 pm

Mr. Quentin Davies (Stamford and Spalding)

I greatly welcomed the Prime Minister's decision to set up the Scott inquiry. It seemed to me designed to establish higher standards of integrity and openness in public life. It seemed an admission that, if there had been problems or allegations, the Government did not mind having a learned judge take an independent look at the machinery of government. It was a fine and brave decision, and I proudly hoped that we would stay on that high road.

Over the past few days, however, I have been somewhat disappointed. I was disappointed by the speech made this evening by my right hon. Friend the President of the Board of Trade. He made a characteristically able speech, in which he mentioned a great many things—everything and anything, as far as I could see, including arms sales policies of the 1960s and information technology arrangements in the Customs and Excise. Indeed, he mentioned everything except the subject that we ought to be examining tonight.

The subject that we should examine tonight concerns the fact that the learned judge, Lord Justice Scott, has after three years has come back to the House with his five volumes and his 1,800 pages of detailed analysis and with the considered judgment that the Chief Secretary to the Treasury was guilty of misleading Parliament.

Unfortunately, there is absolutely no ambiguity about these judgments. I offer hon. Members three small extracts. The first reads: Mr. Waldegrave knew, first hand, the facts that, in my opinion. rendered the 'no change in policy' statement untrue. That comes on page 475 of the report. The second example comes from page 495 of volume I: The answers to PQs, in both Houses of Parliament, failed to inform Parliament of the current state of Government policy on non-lethal arms sales to Iraq. This failure was deliberate". The third example is to be found on page 507 of volume I: the Government's statements made in 1989 and 1990 about policy on defence exports to Iraq consistently failed … to comply with the standards set by paragraph 27 of the Questions of Procedure for Ministers and, more important, failed to discharge the obligations imposed by the constitutional principle of Ministerial accountability. We have two tasks before us this evening, and we had better fulfil them properly and make sure that people outside this House, and generations to come, recognize that we have faced up to the issues. First, will we accept the judgments of Lord Justice Scott of the type that I have just read out? Secondly, if we accept them, what will we do about them? Before considering these questions, I want to issue a plea: that nothing we do in this House—I am not referring here to the Chief Secretary—can afterwards be said to have left the rest of us open to the charge that we did not always discharge our obligations with the highest degree of good faith and clarity.

Let us, therefore, not deceive ourselves. Let us not be carried away or allow ourselves to fall into the temptation of being diverted so comfortably into talking about something else so that we do not have to face the harsh reality before us. In that context, I hope that we hear nothing more about whether there was a change in the guidelines or whether the guidelines were simply being flexibly interpreted—because of course there was a change in the guidelines. There are two separate sets of guidelines: those of November 1984; and the separate text, which was agreed in December 1988, and implemented from February 1989. They are referred to in the report: the first set is referred to on page 171, and the second set on page 397. I do not have the time, in the 10 minutes that I have to speak, to read them out, but they are there. So let us not fool ourselves; there were two separate guidelines.

When each set was independently valid, from 1984 to 1988 and from 1989 to 1990, it is perfectly true that they could have been interpreted more or less flexibly. But it is absolutely clear beyond a peradventure from all the evidence in the report that the whole of the Whitehall machine was working on the first set of guidelines until February 1989, and then it worked on the second set of guidelines. It is perfectly clear that the third guideline—No. 3 in the Howe guidelines; C in the separate set of Waldegrave guidelines—were conceptually very different and that very different decisions were taken. The acid test—the control experiment—is that there are at least three items for which export licences were refused correctly under the Howe guidelines, in 1988, and were accepted under the Waldegrave guidelines in 1989. Those items were a tactical radar system produced by Plessey and two simulators from Marconi and Ferranti. So let us not fool ourselves about that.

Let us also not talk about whether it is reasonable to make changes in arms sales policy—of course it is. No one is denying that; it is no problem at all. But it is very different to make changes and then pretend to the House that they have not been made. That is the point.

Let us also not fool ourselves and spend time talking about whether we perhaps should not have a policy on the disclosure of arms exports or whether we should have a policy of greater disclosure. I would perfectly accept arguments in the national interest that we should say nothing about our arms exports to the middle east. I would have been perfectly happy to accept that, and if Ministers had done that I would not have quarrelled with it, but they did not. They pretended that they were making statements that were relevant, true and informative to the House; the statements that they made were anything but that.

Let us also not spend too much time—although, of course, the point is important—discussing the integrity of my right hon. Friend the Chief Secretary. I accept his integrity and that he did not wish to mislead the House. I entirely accept that he never thought, "Wouldn't it be nice to mislead the House of Commons? How can I best do that?" I accept that entirely and I accept, as the judge did, his sincerity in that matter but, whatever may have been his subjective sentiment at the relevant time, the objective fact—I shall prove it in a moment—is that he did mislead the House. Therefore, I am afraid that he has made a very serious mistake.

I have no wish at all to deprive the Government of an extremely able Minister and a man for whom I have always had a high personal regard, but I am afraid that he must take responsibility for that mistake. Whatever happens tonight, it must be made clear that someone is taking responsibility and that the principle has been restored that Ministers remain fully accountable to the House of Commons.

I do not have much time for quotations in the short time allotted to me in this debate, but I shall provide a couple to reinforce the point. On 7 February, my right hon. Friend, through his private secretary, replied to Mr. Alan Clark: Mr. Waldegrave is content for us to implement a more liberal policy on defence sales, without any public announcement on the subject. That was on 7 February. Over the next few months of April, May, June and July, my right hon. Friend sent a series—some 30-odd—of letters saying: The Government have not changed their policy on defence sales to Iraq or Iran. We find in the report that, from 8 February—the next day—the Ministry of Defence working group meeting was saying that We now have the new guidelines. We are working on those. The whole bureaucracy went into a new gear and implemented loyally the new guidelines. There is some evidence that some of the civil servants did not approve of them, but that is another matter. They implemented them loyally.

We then have another direct quotation of my right hon. Friend. On 28 March, he wrote an internal memorandum, again to another Minister, to say he saw no reason to change this flexible approach for applications to export defence related equipment to Iraq … we should now revert to the stricter implementation of the present guidelines as applied to Iran In other words

Mr. Deputy Speaker

Order. Time is up.

7.45 pm

Mr. Jim Cousins (Newcastle upon Tyne, Central)

We should remember that we are a working Parliament and that we are rightly proud—if we are to be more than a tourist attraction—of our record in calling successive Governments, whether they were represented by Ministers or by mandarins, to account.

The facts are set out in Vice-Chancellor Scott's report, and it is left to us to form the judgments and to make the conclusions. We should recall, too, that the deceits that are recorded in his report are still continuing.

Only last week, an hon. Member was told in a parliamentary reply that mortar-locating radar was sold to the Iraqis in the 1980s because it was deemed at the time not to be a significant enhancement of the Iraqis' ability to make war. We can clearly see from the Scott report what that meant at the time. The report recounts how Lord Howe, then the Foreign Secretary, reviewed defence sales to Iran. He was told by senior officials that we had sold 10 times as much defence equipment to the Iraqis as we had to the Iranians. The reason was that Iraq was better equipped already, so a given item might well not be a significant enhancement for Iraq, but would be if sold to Iran. So the Iranians, who were poorly equipped and relying on human wave attacks, would find mortar-locating radar very useful—it would be a "significant enhancement"—but the Iraqis were already equipped to mow those attacks down and would not find them such an enhancement. The supply of mortar-locating radar would, therefore, have made only a slight difference to them. That is the quality of argument that Lord Justice Scott found rehearsed between the Foreign Secretary and senior Foreign Office officials on 7 November 1986. How shameful, how disgusting and—as it turned out—how utterly mistaken was that argument.

The report demonstrates that a Minister approved the diversion of 29 armoured recovery vehicles—tank hulls fitted with cranes—from Jordan to Iraq, in flagrant breach of all the undertakings that had been given to Parliament. That was done, and it was concealed.

The exporters were not always shady outfits from the grimmer reaches of the M25. In one dramatic case, a Government-owned company committed that type of offence. In 1986, a British Government-owned company sold to the Iraqis British designs for a specialist weapons testing centre to be built at Basra. That company, whose sole shareholder was the Ministry of Defence, wrote to the Ministry of Defence that it was conscious of the need for a low profile. The company also stated that the Iraqi officers, who were to be trained to use the weapons testing centre, were to be designated and disguised as civilian Government servants during their stay in the United Kingdom. What did the Ministers and civil servants responsible at that time imagine that the weapons testing centre would be used for? Table tennis? Nor was that deal good business, because the export credits on the contract were never paid. Saddam did not pay and the British taxpayer paid more than £700 million.

There can be no doubt that Britain played its part in building up Saddam's strategic weapons capacity. When a defence intelligence expert was first told of Space Research Corporation's rather odd order in 1988 for the largest forgings placed with a British company since the second world war, he pointed out to his superiors and to the export controllers that his friend, Mick Bayne, formerly of the Royal Armament Research and Development Establishment—one might feel that that was a hint of a clue—worked for Space Research Corporation. Yet no inquiries were made and neither defence intelligence nor the export controllers followed up that very obvious hint. One might feel that an exchange of Christmas cards might have done it—"Dear Mick, how are the kids and what are you doing with the largest forgings built in Britain since 1945 at your company, Space Research Corporation?" Incredibly, it took another 18 months for the super-gun to be discovered. If the intelligence services function like that, they should not be allowed out after dark without a police escort. That is a record of the most demonstrable incompetence and somebody must be called to account.

Of course, when the super-gun was discovered, the reaction of the Government was to lie about it for the next three years and to conceal the truth. Sadly, it was concealed from the Select Committee on Trade and Industry—when it looked into the super-gun affair—that, since May 1989, there had been a specialised Iraqi procurement control operation. It was also concealed from the Select Committee that Sir Robin Butler had conducted an inquiry into the super-gun and had come up with much the same conclusions as the Trade and Industry Committee was later to come to, with one exception. If the Trade and Industry Committee had had the same information at that time, it would have gone further and certainly the Matrix Churchill trial would never have occurred.

If this affair is to pass without correction and without investigation and if we are to have so little control or interest in what Ministers and mandarins do in our name, the rights of Parliament will count for nothing. Certainly if we continue to talk of our honour, anyone still listening to us will rightly start counting his spoons.

7.53 pm

Sir Kenneth Carlisle (Lincoln)

I am glad to take part in this debate, especially as I was appointed a Minister in the Ministry of Defence 10 days before the Gulf war broke out. All of us can agree that Scott wrote a weighty report that certainly deserves a considered response. There are lessons to be drawn from the report, to which I shall return.

If we are to consider the report properly, we must get away from the fevered efforts to gain political advantage from it which, perhaps inevitably, have grabbed the limelight since publication. Those efforts are assisted by the fact that any interpretation can be drawn from such a lengthy document and we can all find quotations to support our lines of argument. If we take the time to stand back and review the central issues on which the inquiry was established, we see that in reality the facts simply do not bear out the main charges made. Scott resolved the report in favour of those who were charged, and that conclusion needs repeating and reiterating.

First, there was simply no conspiracy to send innocent men to gaol.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker. Is not this yet another abuse of Parliament and yet another former Minister who has been sent by the Tory Whips to sing exactly the same song from the same hymn-sheet?

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. I sense that that might be a criticism of the Chair.

Mr. Sheerman

No, it is a criticism of the Whips.

Mr. Deputy Speaker

Order. If it was a criticism of the Chair, I would be grateful if the hon. Gentleman would withdraw it.

Mr. Sheerman

I totally withdraw any criticism. I never intended any criticism of the Chair, but we all know that behind the Speaker's Chair certain pressures are applied by the Whips. It is very suspicious that very few independent Back Benchers have spoken from either side of the House.

Mr. Deputy Speaker

Order. The Chair knows nothing about what happens behind the Speaker's Chair.

Sir Kenneth Carlisle

I resent that allegation most strongly. I have my own views. I am not standing for election again and I have not spoken before in this Session. I have every right to give my sincere views and it is shameful that the hon. Member for Huddersfield (Mr. Sheerman) should take that view.

The two main decisions were, first, that there was no conspiracy to send innocent men to gaol and, secondly, that lethal arms did not go from this country to Iraq during the period in question. We must consider those two issues.

In an article recently in The Times,Lord Alexander of Weedon, a former chairman of the Bar Council, described the Attorney-General as an able lawyer, a good advocate and a man of total decency and integrity". It would surprise me if the House did not agree with those sentiments.

There will always be disagreement about the interpretation of the law—indeed, that is why we have an appeals system from one court to another—but my right hon. and learned Friend the Attorney-General gave careful consideration to the issues. It seems to me that the bulk of legal opinion backs his views. Significantly, the Master of the Rolls backed my right hon. and learned Friend's use of public interest immunity certificates in criminal cases. We must remember that the rules on PII certificates are judge-made. They are not made by politicians but by law as interpreted by judges.

Some commentators have mischievously described PII certificates as gagging orders and the Opposition have sought to reinforce that in the public mind, but that is not the case. As we all know, it is for the judge to decide what documents are required by the defence to secure a fair trial. In the Matrix Churchill case, the system worked as it was designed to work. The defence lawyers agreed with the working of the system and the men were not found guilty. The Attorney-General also alerted the Treasury solicitor to the reservations of my right hon. Friend the Deputy Prime Minister. If the House is prepared to set aside politics, we should accept that the Attorney-General's interpretation of the law was well grounded. There was no evidence that anyone was gagged and the judge had sight of all the relevant documents. The system worked well and just as it was intended to do. There was certainly no conspiracy to convict innocent men, as some have so ignorantly claimed.

I now turn to the case of arms sales. It is self-evident—and I have some experience of this—that as a country we have the most careful and meticulous of policies among arms manufacturing countries. We are more careful about the countries to which we export arms than, I think, any other country. Anyone who reads the Scott report will be informed of the almost endless meetings and discussions that reflect our concern. There is a struggle to find the right balance between the ethical approach, national security and a valid wish to protect industrial jobs that are so precious to those who have them. Would there have been such meticulous discussions in other European countries, such as France? Would other European countries have agonised over the interpretation of the guidelines? I submit not.

In the end, the supply of military equipment to the evil regime of Iraq was minuscule. My right hon. Friend the Member for Bridgwater (Sir T. King), with whom I had the honour to serve in the Ministry of Defence, has vividly brought reality to the House. We should take note of his words.

The Scott report clears the Government on the main charges, but we should consider carefully the proposals for reform. There are lessons to be learnt. I agree with my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) that we require more open government. We have been moving towards it, but we can do more. We should be more open except where national security makes that impossible. Every Minister—this applies to Ministers of all Governments, and I was a Minister in this Government—knows how easy it is to give unhelpful answers. We all know how easy it is to stonewall. I am glad that we are considering again how we could be more forthright with the House.

My right hon. Friend the President of the Board of Trade made a fulsome response to some of the recommendations that are set out in the report. For example, we are to re-examine the information that is available on arms exports. We shall consider export controls and the licensing procedure. We shall consider also the role of Customs and Excise in prosecutions and the relationship of that body with the Attorney-General. We shall explore the scope of PII certificates. At the same time we must always consider the practicalities. Government is difficult. My right hon. Friend the Member for North Wiltshire (Mr. Needham) produced some carefully worded guidelines on how difficult government is and how practical we should seek to be.

As I have said, government is never easy. We all know that. A Minister is surrounded by conflicting issues and contradictory demands. He must find a way through much advice and many difficulties to arrive at sensible decisions. I am convinced that, in the real world, my right hon. Friends conducted themselves correctly and with integrity. Indeed, the Scott report absolves them of the two main charges levelled at them and the Government by the Opposition.

8.2 pm

Mr. Jim Cunningham (Coventry, South-East)

We have had about four and a half hours of debate on the Scott report. So far, however, I have heard no mention of the consequences of the collapse of Matrix Churchill and the effect of Ministers' actions, directly or indirectly, on the employees of the company. For various reasons the employees were not allowed to present a case for compensation. They were allowed to give written but not oral evidence. In effect, they were not given their day in court. We claim that we are a just society, but in a major investigation—probably one of the biggest this century—some of the principal players were not allowed to give oral evidence.

We have heard much about the national interest, but what about the local interest? What about the people of Coventry? What do they think about these events? Ministers and Conservative Back-Bench Members have not said a word about the feelings of the people of Coventry. They have not talked about those who were employees of Matrix Churchill. That is well documented, however, and I do not want to go through it this evening.

It was the collapse of Matrix Churchill in 1992 that triggered the Scott inquiry. That in itself merits an investigation. The collapse left over 600 skilled men and women—many in my constituency—out of work. It is an area that had already witnessed the decline of the manufacturing and engineering industry. Those employed in the manufacturing industry in the west midlands, and especially in Coventry, had experienced the traumatic recession of the 1980s. Yet these people were denied access to justice through an inquiry into the collapse of Matrix Churchill.

An inquiry would have served several purposes. It would have established whether Matrix Churchill would have collapsed without Government interference in its affairs. It would have established also whether ex-employees were entitled to compensation for loss of employment. It would have given ex-employees the chance to present their case. As I have said, that opportunity was denied them during the Scott inquiry, except for written evidence. It has been suggested for some while—at least since Sir Richard Scott defined the remit of his inquiry—that there should be a second inquiry. That is the only way in which the ex-employees will get justice.

Ministers and civil servants had the opportunity to defend themselves and present their version of the truth. While that took place, the ex-employees watched from afar. They were not allowed to give oral evidence at the Scott inquiry, despite the fact that their livelihoods vanished with the collapse of Matrix Churchill. They are the forgotten victims. I remind the House of their grief, their loss and the need for justice on their account.

The Government have claimed consistently that there is no case for a separate inquiry into the collapse of Matrix Churchill. The Government's principal argument has been that the company was over-reliant on the Iraqi market. When United Nations sanctions were imposed on Iraq after the invasion of Kuwait, the market was lost and the company collapsed. The Government said in April 1994 that the company was trying to find orders at what can be described only as a very bad time. They said that it was as simple as that. Such loftiness would be laughable were the future of more than 600 people not at stake. But the case is far from simple.

There are many reasons why there should be a separate investigation into the collapse of Matrix Churchill, some of which I shall outline briefly. Was the company sustainable without the Iraqi market for its goods? The evidence is that, at the very least, there was a good chance that it was. From the 1950s, Matrix Churchill developed and marketed CNC lathes and manufactured thread-grinding machines. As at the time of the collapse there were only four thread-grinding machine manufacturers in the world, Matrix was well placed to divert its energy into that market. In addition, Matrix was the leading lathe manufacturer in the United Kingdom and the most advanced technologically. If any UK company could have branched out into new world markets for lathes, or built on existing ones, the evidence points clearly to Matrix Churchill.

It must not be forgotten that in 1991 the company was planning a new range of lathes, which it was confident would be world beating. Although it is true that it exported heavily to Iraq, the middle east was not its only market. It traded also with Germany and Japan. Indeed, it exported 60 per cent. of its products, excluding those to Iraq. Had the company had the same encouragement to develop its markets in other areas—the encouragement that it was given to trade with Iraq—there may have been many potentially lucrative markets.

It was not only to Germany and Japan that Matrix could have looked. In the early 1990s the company was beginning to build relations with eastern Europe. It was planning to involve itself in the rebuilding of the manufacturing industry of the former eastern bloc. It may be speculative to suggest that eastern Europe could have been a lifeline, but there is strong evidence to suggest that it might very well have been that.

Eastern Europe desperately needed manufacturing expertise. Matrix was a leading UK company, with a proud tradition and a highly skilled work force. It could have become involved in, for example, Poland, the Czech Republic and Hungary. Such markets could have helped to sustain the company. In short, the case that Matrix was nothing without Iraq is far from true. There were other markets in which it could have become involved. An inquiry would have been able to examine whether Matrix would have survived. The very fact that the question is uncertain merits an inquiry, not least because the livelihoods of so many people are at stake.

That brings me to my second point: whether Government involvement was in any way to blame for Matrix Churchill's demise. That is central to the ex-employees' argument for compensation. If Government interference was partially to blame, the case for compensation is irresistible. Again, an inquiry would establish the truth.

It is clear from the evidence, for I want to stick to the evidence, that Matrix Churchill was encouraged by the Government to export to Iraq. If, as the Government claim, the company was over-reliant on Iraq, the Government are to blame. At a meeting between a former Minister of Defence, Alan Clark, and Matrix Churchill executives, Mr. Clark advised on how to make applications for export licences. It was given the nod to export to Iraq. No attempt was made to encourage exports elsewhere. Therefore, had the Government demonstrated reluctance to grant further export licences, Matrix Churchill may have been forced to redirect its efforts. The other markets, which I have described, would have been exploited. Iraq would have been left aside. The Government gave no consideration to that, and for that reason alone there is a strong case for a separate inquiry.

It is evident that Matrix Churchill was being used, through the work of one director, to gather information on Iraqi procurement. Did that contribute directly or indirectly to the collapse? A separate inquiry would establish that. Yet there is one more aspect to consider. There was a chance of a management buy-out—a chance that collapsed with the company. Matrix Churchill was controlled by Iraqi directors through a company called Technology Development Group. The management of Matrix Churchill planned to buy out the Iraqi equity and achieve sole control. That was also the intention of the Iraqi directors. On 21 December 1990, the executives cleared a statement with the Department of Trade and Industry, which read: The directors are more confident that the deal to buy-out the Iraqi financial interest will succeed. It continued: At a meeting this week, the DTI recognised our efforts and indicated that a speedy resolution of our plans to acquire 100% equity in the business would be welcomed. There appears to have been sufficient interest in Matrix Churchill for a buy-out. Financial backing was available. But the arrest of Matrix Churchill directors, leading to a trial that should never have taken place, scuppered the buy-out deal and signalled the demise of the company. That mistake on the part of the Government—a conclusion reached in the Scott report—cost Matrix Churchill its future and the jobs of more than 600 people.

Government chaos and poor intelligence co-ordination contributed directly to the collapse of the buy-out. That must merit a separate inquiry into the collapse. At the very least, it would establish the degree to which the Government are culpable. In addition, it would determine whether the ex-employees of Matrix Churchill are entitled to compensation.

It is ironic that the Iraqi Government are—if reports are true—to be allowed to use frozen assets in this country to claim compensation against the firm that bought Matrix Churchill. How ironic indeed that British courts are to be used to pursue a British company when such action is denied to British employees. I hope that it shows the injustice that has been suffered by the ex-employees. They must not be forgotten in this debate.

8.12 pm

Mr. Rupert Allason (Torbay)

May I remind the House that one of the most important people involved in the debate today is Paul Henderson? He is a man who volunteered his services to the Security Service when he was travelling behind eastern Europe. He was subsequently recruited by the Secret Intelligence Service. In my judgment, and, indeed, that of Mr. T, who gave evidence for him at the Old Bailey, he is a very brave man, particularly as he was willing to go back to Baghdad after the execution of Farzad Bazoft.

In my judgment, officials in Whitehall would have been better off trying to find ways to get Mr. Henderson a medal than trying to put him in prison. It is a fact that there was a conspiracy to put him in prison. If one reads volume 3, and all of section G, one will see that it is quite clear that every possible obstacle was put in the way of his defence. It is also perfectly clear that the support that was given, in terms of documents to the defence, was given grudgingly. That is also in the report.

Mr. Henderson was the subject of public interest immunity certificates, and I shall pursue that issue, as it is important. It is not just a matter for spies and arms dealers. PIIs are used all too frequently, particularly by abusing the term "national security". There are several different ways in which one can apply for a PII certificate, and using the words "national security" takes the matter into a completely different category.

As is made clear in G11.9, in November 1991, the Home Secretary signed a certificate to say that, if documents went to Matrix Churchill defendants, it would result in innocent civilians both inside and outside the United Kingdom being killed. The only innocent civilian who was putting his life at risk and was likely to be killed was Paul Henderson, and all he wanted was confirmation from the Government that he had worked for MI5 and the Secret Intelligence Service.

Mr. Bellingham

Will my hon. Friend give way?

Mr. Allason

I shall not, I am afraid.

There is clear evidence of the abuse of the term "national security". Look at G10.28. Government lawyers took three particular lines. Their third line of defence was applications for PII certificates on the grounds of national security. It is astonishing that the abuse of the words "national security" in applications for PII certificates was disputed by David Bickford, legal adviser to SIS and the Security Service. That is quite clear in G18.40.

The precedents for national security are also quite clear: If a responsible Minister stated that production of a document would jeopardise public safety it is inconceivable that any Court would make an order for its production. That is what Lord Justice Donaldson said was, in effect, a trump card.

I quote again a judgment used as recently as 1993: The decision on whether the requirements of national security outweigh the duty of fairness in any particular case is for the Government and not for the courts; the Government alone has access to the relevant information, and in any event the judicial process is unsuitable for reaching, decisions on national security. It is quite clear that only Ministers can decide these issues. They should not pass the matter to the courts.

Indeed, in a case in which I was directly involved, where I was the defendant, my right hon. Friend the Member for Witney (Mr. Hurd) said in his certificate: The preservation of national security is the duty of the Crown which alone is effectively equipped to judge its dictates. In short, the words "national security" turn PIIs into a trump card, to the disadvantage of defendants.

Mr. Bellingham

Will my hon. Friend give way?

Mr. Allason

No, because time is pressing.

The idea that some of this damage to national security could be "unquantifiable", as described by my right hon. Friend the Member for Watford (Mr. Garel-Jones), is quite risible.

I now deal with the conduct of the Attorney-General, whose integrity I do not doubt for one moment. The fact, however, is that he failed to stop the prosecution at an early stage. It is also the case that somebody somewhere failed to tell the judge of the President of the Board of Trade's reservations about the certificate that he had signed. Most significantly, the advice that the Attorney-General gave regarding PIIs and the duty of Ministers was perceived by Lord Justice Scott to be wrong. If Scott is wrong, the offence is even greater, because there was no even-handed approach to the suppression of the documents going to the defence, because the PIIs were used only to disadvantage the defence.

The fact is that, even after calling in the Matrix Churchill papers, the Attorney-General still had no idea that Henderson was an SIS agent. The question that has yet to be addressed is why the Director General of the Security Service, Sir Patrick Walker, or the chief of the SIS, Sir Colin McColl, simply did not take a stroll down Whitehall to Buckingham gate and tell the Attorney-General, "This is our man." What message does that give to other people who wish to assist our security and intelligence services?

As regards the future, I very much hope that we shall have a complete review of the way in which PIIs are used. I should like to see a Crown Immunity Bill so that we can get rid of the mess of judge-made law. I would like it in statute, so that we can all understand the criteria by which Ministers can or cannot claim public interest immunity. I should also like a substantial review of Customs and Excise to be carried out, removing its right to bring independent prosecutions, and making it subordinate to the Crown Prosecution Service.

It is clear from paragraph 27 of G17 that Customs and Excise was out of control, and working on auto-pilot. The letter from the chairman, Sir Brian Unwin, to Sir Colin McColl complaining about the evidence of his officer in the Old Bailey, describing Paul Henderson as a very, very brave man, is one of the most disgraceful letters that I have ever seen. Sir Brian should be ashamed of himself; but I am delighted that, at least on that occasion, Sir Colin was willing to stand up for one of his officers.

No doubt the compensation issue will be dealt with elsewhere, but the fact remains that 700 people lost their jobs at Matrix Churchill. Some two and a half years ago, I wrote that it struck me as appropriate for about seven others to lose their jobs at Westminster. I hope that, when he winds up, my right hon. Friend will agree that PII certificates should never again be used in a criminal case to cover whole classes of document; I also hope that he will agree that there should now be a presumption of disclosure, not suppression.

As for the squabbling of judges and lawyers in the columns of The Times about who is right and who is wrong about public interest immunity and Crown immunity, let us make that a matter for the House. Let us pass statute law once and for all, so that we never again see such a disagreeable mess—a mess that could have allowed innocent men to go to prison. We must err on the side of disclosure, even if that means redacting documents and blotting out sensitive areas. PII certificates are a legitimate instrument to protect witnesses and the identities of informants, but it is high time the House acted to prevent future abuse.

I do not care so much about the export of dual-purpose machine tools to the middle east, and I am not particularly concerned about the writing of disingenuous letters to my parliamentary colleagues; but I do care about PII certificates, because they can affect all our constituents. I am currently in touch with two gentlemen who feel that they are the victims of injustice, because evidence that they wanted to deploy in their defence was suppressed through instruments of this kind—instruments that can give rise to considerable injustice.

If the House is to send any message to people who wish to support our security and intelligence services in the future, those people must be certain that the full weight of Whitehall supports them. They do not want spineless bureaucrats trying to protect their own backsides, and trying to ensure that innocent men go to prison.

8.22 pm

Mr. Terry Davis (Birmingham, Hodge Hill)

Several Conservative Members have tried to suggest that this whole affair resulted from the Government's concern for exports and jobs. They should try telling that to my constituents who used to work at Matrix Churchill, and lost their jobs in the aftermath of the prosecution of three of its executives. They should try telling it to my constituents working at BSA Tools, whose managing director was arrested and charged. The charges were eventually dropped, because a Government document supporting his defence had belatedly come to light.

The debate is not about exports, jobs or the arms trade; I wish it were. It is about Sir Richard Scott's report. There should be no difference between us about the facts found in that report. Sir Richard says that the guidelines for exports to Iraq were changed, and I make no complaint about that; the Government were entitled to make the decision.

Sir Richard also finds, however, that among Ministers present at the meeting was the present Chief Secretary to the Treasury, the right hon. Member for Bristol, West (Mr. Waldegrave). That cannot be denied. He also finds that it was decided that full disclosure should not be made to the House of Commons. The Government and the Opposition will disagree about whether full disclosure should have been made, but that is not the real point. Sir Richard goes on to find that the right hon. Member for Bristol, West sent 38 misleading letters to Members of Parliament who had inquired about the guidelines for exports to Iraq, and that is wrong.

Lawyers tell me that, according to a legal principle, "The thing speaks for itself." If someone takes action that has obvious and automatic consequences, it can be assumed that that person intends those consequences. I should have thought that sending 38 misleading letters would mean that the intention was there. I can understand someone's making a mistake once or twice; I can understand their sending five misleading letters; but what about 10, 20, or even 38?

The right hon. Member for Bristol, West—the present Chief Secretary—says that he did not intend to mislead those 38 Members of Parliament, and Sir Richard Scott believes him. As the right hon. Member for Bristol, West is not only an honourable Gentleman but a Privy Councillor and therefore a right honourable Gentleman, we must believe him: we must believe that he did not intend to mislead when he signed those letters. Sir Richard says, however, that the letters were designedly misleading, so someone intended to mislead the 38 Members of Parliament.

Of course, we all realise that the right hon. Gentleman did not sit down and dictate 38 letters. They were drafted for him, and they were drafted to mislead the recipients. One civil servant has had the moral courage to resign, but others are still there, and some seem to have been promoted. That is wrong, but it extends to a high level in the civil service.

I see no evidence that the Government will do anything about the way in which the civil service has behaved. The Scott report has destroyed any faith I had in the honesty and integrity of the civil service, and I believe that the same applies to most of my hon. Friends—and, perhaps, many Conservative Members. I am afraid that the question of what is to be done to restore that honesty and integrity, and the respect in which the civil service used to be held, will have to be put to a Labour Government after the next general election, because we shall see no action from the present Government.

The guilt of the civil service, however, does not let the Chief Secretary off the hook. He signed 38 misleading letters. I can think of only two explanations. Perhaps the right hon. Gentleman does not read the letters he signs: perhaps he simply writes "Dear Tom, Dick or Harry … Yours, William", in which case a rubber stamp might as well be issued to civil servants. I do not think that he is as negligent as that, however. We must assume that, in his previous capacity, the right hon. Gentleman signed 38 misleading letters, having read them. He must have been in a position to know that they were misleading—as Sir Richard Scott has found—but did not realise that they were misleading. He just did not understand.

The right hon. Gentleman was present at a meeting that changed guidelines; he signed letters that said that those guidelines had not been changed; but he did not make the connection. He did not understand. Now he says that he did not intend to mislead—but we know that the letters were misleading. The Treasury has admitted that. Having put out a press statement a week ago saying that they were not misleading, it put out a new press statement saying, "Ah—we missed out the word 'intentionally'." The letters were misleading, but they were not intentionally misleading. The Chief Secretary did not intend to mislead 38 Members of Parliament; he just did not understand.

Now the right hon. Gentleman shelters behind his lack of understanding. He is a very honourable—indeed, right honourable—Gentleman, but he shelters behind that lack of understanding, and holds aloft his lack of intelligence. He uses his incompetence as a shield.

We are entitled to ask why the Prime Minister keeps the right hon. Gentleman as Chief Secretary. Some of us think that he does it so that the Prime Minister also has a shield. Others think that perhaps he keeps him as Chief Secretary because the Prime Minister must have someone in the Cabinet he can feel superior to—I do not know. I do know that, if the Prime Minister insists on keeping the Chief Secretary and will not get rid of him, the people of this country will almost certainly get rid of the Prime Minister at the next general election.

8.29 pm

Mr. Michael Alison (Selby)

The hon. Member for Birmingham, Hodge Hill (Mr. Davis) referred to the 38 letters, and I hope to rebut his line by asking hon. Members to focus on one of the letters which was referred to—for those who would like to follow the text—on page 478 of the Scott report. That letter was addressed by my right hon. Friend the Chief Secretary to the Treasury to my hon. Friend the Member for Bolton, West (Mr. Sackville). I shall quote two significant parts from it to rebut the hon. Member for Hodge Hill's argument. It refers to the specific limitation on defence-related equipment.

Mr. Terry Davis

I am sure that the right hon. Gentleman would not want to mislead the House. The 38 letters do not include that one. Paragraph D4.3 shows that all 38 letters were sent before August. The letter that he is describing was sent in August.

Mr. Alison

I leave that aside, and concentrate on one letter that, in relation to the indictments levelled at the Chief Secretary, is nevertheless highly definitive in the way in which Lord Justice Scott handles it. My right hon. Friend's letter states: "These" guidelines specifically prohibit the sale of any lethal equipment or any defence-related equipment which could significantly enhance the capability of either side to prolong or exacerbate the conflict. The fact that the letter and other similar letters contain the phrase

to prolong or exacerbate the conflict must mean that they needed some qualification and interpretation.

When that letter was written, in the middle of August 1989, the conflict between Iraq and Iran was already over. That is why its final sentence was: These restrictions on defence sales are kept under constant review, and are applied in the light of prevailing circumstances, including the ceasefire and developments in the peace negotiations". Clearly that was a necessary qualification to the reference to prolonging or exacerbating conflict.

The Scott report goes on to observe that my right hon. Friend the Chief Secretary

in his written evidence to the Inquiry, contended that the passage I have cited was an accurate statement of Government policy at the time. He goes on to say that the Chief Secretary knew of this new formulation"— that refers to the need to qualify the guidelines relating to the period of conflict between Iran and Iraq—

but regarded it as an interpretation of the original guideline. It is the report's use of the word "interpretation" that I want hon. Members to focus on. Interpretation is at the root of the Scott report's acquittal of my right hon. Friend the Chief Secretary, and of his view as to where the truth lay. I quote the key reference in Scott to my right hon. Friend's complete integrity in the matter: I accept that Mr. Waldegrave and the other adherents of the `interpretation' thesis did not, in putting forward the thesis, have any duplicitous intention and, at the time, regarded the relaxed interpretation, or implementation, of guideline (iii) as being a justifiable use of the flexibility believed to be inherent in the Guidelines … Flexibility that reflects the differences of opinion that may arise whenever an attempt is made to apply a criterion that depends upon a value judgment is inevitable and desirable. For example, whether an enhancement of military capability is 'significant' is a matter on which opinions may differ. If opinions do differ, a decision falling within the spectrum created by those differences can legitimately be described as an application of the criterion. Guideline (iii) had, thus, an inherent and entirely acceptable flexibility. It is worth pointing out that Lord Justice Scott expressed the view that it is possible for guidelines to possess

an inherent and entirely acceptable flexibility. The Scott report goes on to show how value judgments might arise. This is the most important dimension in which the blamelessness of my right hon. Friend comes through.

Mr. Sheerman

Will the right hon. Gentleman give way?

Mr. Alison

I must make progress. The hon. Gentleman knows the problem we have with time-limited speeches.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker (Mr. Michael Morris)

It had better be a serious point of order.

Mr. Sheerman

It is a serious point of order. This debate is about parliamentary democracy, and tonight we have heard from nine former Ministers—six of them ex-Etonians and six ex-Oxford university students—all of whom have a close connection with the Chief Secretary to the Treasury.

Mr. Deputy Speaker

Is the hon. Gentleman criticising the occupant of the Chair?

Mr. Sheerman

I have no intention of criticising the occupant of the Chair, but we all know—

Mr. Deputy Speaker

Order. In that case, perhaps the hon. Gentleman will resume his seat, and think before he speaks on another occasion.

Mr. Alison

Mr. Deputy Speaker, I trust that you will give me injury time, not for being an old Etonian—I can do nothing about that—but for having been interrupted for minute and a half by that assault.

The Scott report goes through three different categories of how the guidelines might be understood. It says in paragraph D2.428 that the equipment subject to the guidelines "included 'defence-related' equipment". That phrase was included in my right hon. Friend's letter to my hon. Friend the Member for Bolton, West, even though the phrase does not, strictly speaking, appear in the original criteria. The report goes on: Defence-related equipment would, in my opinion, normally be taken to include all dual-use equipment save for equipment which was earmarked for a non defence-related use. Dual-use equipment whose intended use, whether for civil or military purposes, was uncertain. ought to have been treated as subject of the Guidelines. This is a matter in which a "value judgment"—the phrase used by Scott in relation to giving flexibility to the interpretation of guidelines—is manifestly appropriate.

Uncertainty as to whether equipment would be for civil or military purposes is manifest in some of the equipment referred to. For example, my right hon. and learned Friend the Member for Putney (Mr. Mellor) mentioned rubber boats. Was that equipment not subject to interpretation? My right hon. Friend the Chief Secretary was entirely right to make the judgments he did. The criticism levelled at him in the Scott report relates entirely to interpretations or value judgments of particular pieces of equipment.

The Scott report is, in fact, doing exactly what it seeks to blame my right hon. Friend the Chief Secretary for doing—being perfectly value-free in its effort to secure that there was a fundamental change. I do not believe that there was a fundamental change. My right hon. Friend was entirely within the scope of Lord Justice Scott's own view that such matters are a matter of interpretation—

Mr. Deputy Speaker

Order.

8.39 pm

Mrs. Margaret Ewing (Moray)

In the short time that has been allocated to me to speak on behalf of the Scottish National party and Plaid Cymru, I do not intend to follow the example of some previous speakers by quoting many of the chapters and verses of the substantial report. I should like again to put on record the fact that our minority parties were not allocated the opportunity of an early sight of the report prior to the President of the Board of Trade making his statement in the House last week, despite Madam Speaker's ruling that she wished to protect the rights of minority parties in the House. We still have not yet had a satisfactory reply from the Department of Trade and Industry outlining its arguments.

All the arguments in the Scott report have been put very eloquently by hon. Members from all parties and have highlighted where the Government have shown their weaknesses. At one stage, we became used to the phrase "lies, damned lies and statistics". As a result of the Government's interpretation of the Scott inquiry we have a new phrase: adjectives, damned adverbs and qualifications. The use of those adverbs, adjectives and qualifications is no excuse for the incompetence that they have shown and will not win back the people's support or faith in the idea of parliamentary accountability or ministerial responsibility.

I shall concentrate on two points of principle arising from the report. Although one Labour Member said that he did not feel that the report was about the arms trade, I believe that it has long-term implications for the arms trade. As a young student in the 1960s, I remember campaigning against the then Labour Government's attitude to the arms trade which was affecting Nigeria and resulted in the virtual eradication of the Ibo tribe in Biafra. That policy was driven by interests in oil and energy.

Since then, I have watched the development of arms trade policy over the years and I should like to refer to two issues. First, despite the Government knowing that Saddam Hussein was gassing the Kurds, a distinct preference was given to the Iraqis during the Iran-Iraq war. At the moment, the Government are considering selling Hawk aircraft and Scorpion tanks to Indonesia, despite the atrocities that it is enacting against the people of East Timor.

The Secretary of State spoke about the common conflict between morality in international affairs and jobs at home. There will always be conflicts of interest—I say that as a Member who represents a constituency with substantial defence interests—yet I have heard nothing logical either from the Treasury Front-Bench team or the official Opposition Front-Bench team about a long-term policy on the arms trade. The justification that seems to be given is that everybody else does it. Indeed, the shadow Secretary of State for Defence, the hon. Member for South Shields (Dr. Clark), is on record in The House Magazine during the 1995 summer recess for praising the fact that we are

second only to that of the United States in selling arms abroad. It is incumbent on all hon. Members to consider such a long-term strategy, which is why it is important that we consider the possibility of a defence diversification fund. All political parties face that challenge.

If there is to be a peace dividend, we must recognise that we also have a responsibility for those who are employed in the defence industry. Some hon. Members have made eloquent speeches on the jobs lost as a result of the Matrix Churchill scenario. In its dynamic budget, my party has already planned for £25 million a year in the first four years of independence to be put directly into a defence diversification fund so that people will have security of employment. Jobs and homes are of critical importance to everyone. If the Government were to implement such a policy instead of the short-term concessions that have been made today, they would gain much more respect throughout the country. It would be a positive step forward and it might restore some public confidence in the political process.

The phrase "freedom of information" has been bandied around a great deal since the Scott inquiry was set up and its report published. I first entered Parliament in 1974 and well remember supporting Bills on the freedom of information, introduced by such people as Sir Clement Freud, the then Member for Isle of Ely. They were all defeated by the then Government. Between 1979 and this Session, more than a dozen freedom of information Bills have been introduced—all apparently destined for the scrap heap of Government, Opposition or parliamentary indifference. If the Government were to introduce a Bill on freedom of information—it would undoubtedly receive cross-party support, since all of us believe in freedom of information—it would restore faith in the political profession.

I could say much more about the Scott inquiry, but time constraints limit me. Members of all parties must make up their minds on how they cast their votes. As a Scottish nationalist, I do not argue on the basis of parliamentary sovereignty. I argue the Scottish case for the sovereignty of the people and we must represent the views of our constituents tonight. Although a tumbrel of ministerial heads might bring some short-term satisfaction, the onus on all of us is to look for long-term solutions.

My final plea is therefore to Members representing Northern Ireland constituencies. There has been widespread agreement in this place that we should not—to refer to the words of my hon. Friend the Member for Foyle (Mr. Hume)—play politics with the prospects for peace in Northern Ireland. The Ulster Unionists have been conspicuous by their absence during the debate, although they have given varying messages to the media. I say to them with all genuine sincerity, if potential opposition to the Government and votes have been bought by any arrangements in that sphere, it is a darker shade of deal than any I have ever known.

8.47 pm

Mr. Henry Bellingham (North-West Norfolk)

One reason why I am speaking in the debate is that Mr. Peter Allen, one of the defendants in the Matrix Churchill, was a constituent of mine. He used to work for the firm Cooper Roller Bearings in my constituency.

Two speeches made by Opposition Members in the debate made sense. The hon. Members for Coventry, South-East (Mr. Cunningham) and for Birmingham, Hodge Hill (Mr. Davis) spoke at some length about jobs in their constituencies and the role that Customs and Excise obviously played in the destruction of jobs and an excellent company. My former constituent was a victim of all that.

Apart from those two speeches, the attitude of Labour Members has been hysterical. It was summed up by the number of interventions during the speech of my right hon. Friend the President of the Board of Trade and the number of totally bogus points of order. That is as sure a sign as anything that they are losing the argument and are worried because the debate is going against them.

The Labour party wanted the Scott report to be devastating and find that at least two Ministers had acted improperly and with impropriety. The report did not find that. For the past 10 days, Labour Members have been trying to convince themselves that it did find that. We have had nothing more than hysterical interventions. The one that summed them all up was that of the hon. Member for Huddersfield (Mr. Sheerman), who has made two or three bogus points of order.

Mr. Sheerman

Will the hon. Gentleman give way?

Mr. Bellingham

I shall not give way at the moment.

One of the key aspects of the debate has been the sale of arms.

Mr. Sheerman

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. The hon. Gentleman's previous point of order was out of order.

Mr. Bellingham

The Opposition were shattered because the report did not contain what they wanted.

Mr. Sheerman

rose—

Mr. Deputy Speaker

Order. The hon. Gentleman cannot stand up at will and choose what he wants to say. If he wants to apologise to the House, he can do so after the debate.

Mr. Bellingham

My right hon. Friend the Member for Bridgwater (Mr. King) summed up extremely well the perspective in which we must place the matter. He said that, throughout the period, countries such as France were exporting Mirage jet fighters and exocets. He also mentioned that a number of other countries were exporting lethal weapons. We could add to his list the fact that the Germans exported a variety of chemicals that were subsequently used in the chemical warfare programme.

Miss Emma Nicholson

Will the hon. Gentleman give way?

Mr. Bellingham

No, I shall not give way as I have only 10 minutes in which to make my speech.

My right hon. Friend the Member for Bridgwater said that, when he went to look at the captured weapons, the only British item that he could find was a Land Rover. We can categorically say that not a single British-made Iraqi weapon was used to injure or kill a NATO service man. As my right hon. Friend the President of the Board of Trade made clear, that contrasts with the Falklands war.

My hon. Friend the Member for Dover (Mr. Shaw) asked a question about defence exports. In 1974, the total number of defence exports was £179 million; in 1979, the figure had gone up to £400 million. Many of those exports went to Argentina. As my right hon. Friend said, we are talking about type 42 destroyers, blowpipe missiles and Canberra aircraft—an array of front-line weaponry. Anyone who has been to the Falklands will probably have seen the grave of the first British service man to be killed in that conflict, Flight Lieutenant Nick Taylor, whose Harrier was shot down by a blowpipe missile.

Opposition Members have given a great display of sanctimonious humbug over arms exports. It seems that they have now become little Englanders—they have gone from one extreme to the other. They now say that they do not want defence exports; they are now prepared to put at risk 400,000 jobs and procurement programmes for our armed forces. That point was well made this afternoon by my right hon. Friend the President of the Board of Trade, who made a very good speech.

When we consider that period of arms exports we see that the Government can hold their head up high. I strongly believe that my right hon. Friend the Member for Bristol, West (Mr. Waldegrave) can also hold his head high. I have read through the report—it is not a question of trying to select one or two quotations that may benefit our cause or the Opposition's cause. If Sir Richard Scott had found that my right hon. Friend had acted improperly or had deliberately misled Parliament, he would have said so, but he did not. That is why my right hon. Friend should not resign and I am pleased that he has not done so. I hope that he will remain in his job for a long time.

My former constituent, Mr. Peter Allen, was not involved in working for the security services, but the other two defendants were. I have read carefully the part of the report that deals with the Secret Intelligence Service, and I was interested to hear what my hon. Friend the Member for Torbay (Mr. Allason) said. He made it clear that the security services did not stick up for the two defendants.

The press release issued by the Customs and Excise the other day is revealing. It states: In particular he gave no hint that these contracts concerned the supply of Matrix Churchill to Iraq of equipment specifically for military production. Against this background, Customs obtained an explicit view from the SIS that his involvement with them"— Paul Henderson' s— was not a reason for not prosecuting him. I find it extraordinary—as did my hon. Friend—that the SIS did not make information available to the Customs and Excise about his involvement in the security services. As my hon. Friend the Member for Torbay made clear, Paul Henderson risked his life on many occasions—he went to Iraq, served his country and ran the risk that he would be arrested. He would have been given no mercy. It is extraordinary that the information was not disseminated in a better way.

I hope that my hon. Friend the Member for Torbay will vote with the Government this evening. On the basis of what my hon. Friend has said, I believe that the Attorney-General should not resign. If we consider the detail in the report, we see that, although the first the Attorney-General's office heard about the involvement of the security services was in July 1991, it is clear that the Attorney-General himself was not informed. I believe that, by calling the meeting in September 1992—when he asked the prosecuting counsel and the head of Customs and Excise to talk to him about the case—he wanted to establish whether there were grounds for the prosecution not to go ahead. If he had been in a different position in relation to Customs and Excise—as he is to the Serious Fraud Office and the Crown Prosecution Service—it would have been different. But he was not in overarching control of that prosecution, and he could not have issued a nolle prosequi except in extreme circumstances—whereby prosecuting counsel had recommended that action to him. That is why there must be a change in the rules over Customs and Excise prosecutions—they should be put on the same footing as those of the CPS and the SFO. I hope that my right hon. Friend the Chancellor of the Duchy of Lancaster will address that issue carefully.

I have studied the report carefully and I feel strongly that a speech by one of my hon. Friends sums it up best. My hon. Friend the Member for Torbay has a far greater grasp of the subject than me. He has considered the matter carefully and, on the basis of what he says, I believe that, if Sir Richard Scott had found that the Attorney-General had acted improperly or unwisely, he would have said so and made that crystal clear. But he erred on the side of extreme caution. He did not want to interfere in what he knew to be an independent prosecuting body, Customs and Excise, and he did not have the right information before him, which was the fault of the SIS and, to some extent, Customs and Excise, which by then had much more information. The idea that the Attorney-General should stand down is ridiculous.

The Opposition are hysterical and deeply shattered and disappointed by what has appeared in the report. The Prime Minister asked for a full and comprehensive report, which is what we have received. That report in no way warrants the resignation of any Ministers. I hope that all my hon. Friends will support the Government and that the Ministers will remain in their places and carry on doing the excellent jobs they have been doing.

8.57 pm

Mr. Allan Rogers (Rhondda)

It has been a long time since the events that we are debating took place. As various Conservative Members have said, we should recall the background against which the events took place.

From 1987 until 1992, I was the Opposition spokesman on defence responsible for defence procurement and I had an opportunity to follow this matter quite closely. It should be remembered that at that time the Prime Minister was exhorting everyone to bat for Britain. As a result of her exhortations, we had deals such as Malaysia and Pergau and the involvement of overseas aid to obtain contracts, which has been strongly denied by the Government time and time again; the export of arms to Saudi Arabia, the Al Yamamah deal; and the export of arms to Jordan, which was reneged on—the bill was picked up by the British taxpayer as a result of the funding and support from the Export Credits Guarantee Department. In other words, the Prime Minister turned arms exporting into a virtue. Quite naturally, Government Members were flexible with the regulations, which is perhaps the key to the discussions that have gone on today.

I disagree with the hon. Member for Torbay (Mr. Allason) and with other hon. Members who have said that the Ministers, by withholding public interest immunity certificates, put two innocent men in jeopardy—that they may have had to go to gaol. Quite frankly, in my book, they were guilty: they were senior officers of a company that had been breaking the regulations that were laid down by the Government and they had been conspiring with Ministers to export arms to Iraq. It is beyond me how anyone can claim that they were innocent men who were likely to go to gaol.

Like many other hon. Members, I was disappointed with the Scott report. The report is not clear—which is why there have been so many interpretations of it. However, some fairly basic questions must be asked. The man who, in an odd way, is the most honest in all this has clearly laid out his stall. He was the Minister of State in the Department of Trade and Industry; he then went to the Department of Defence as the Minister of State in charge of defence procurement; and he has been alluded to in other parts of this debate—the right hon. Alan Clark. He pursued with great rigour his Prime Minister's line of batting for Britain.

When the right hon. Member for Hove (Sir T. Sainsbury) was moved from defence procurement to the Department of Trade and Industry and made a statement, I was outside in the Members' Lobby talking to John Sergeant from the BBC. Mr. Clark crossed the Members' Lobby and I asked, "Why aren't you in there making that statement?" He said—I will paraphrase it slightly and leave out his fruity language—"I don't care if those wogs want to kill themselves, as long as I can promote British jobs." That was an honest answer. I asked him, "Why don't you go into the Chamber and say that?" He said, "Because they won't bloody let me." That was the attitude of a Minister of the Crown. We ought to judge the present Chief Secretary and the Attorney-General against that background, because the Government were completely dedicated to developing the arms trade and raising it to the level of a virtue.

A number of simple questions must be asked. Were arms exported against or contravening the guidelines that were laid down? It does not matter whether they were amended or flexible. Did Ministers know that these arms were being exported contrary to the guidelines'? Did Ministers deliberately mislead Parliament? The Government are guilty on all these charges. Regardless of how people try to defend them from certain sections of the Scott report, there is absolutely no doubt about it. Government Members are not condemned by the Scott report—although tonight the issue under discussion is the Scott report—they are condemned out of their own mouths: by the answers that they have given to parliamentary questions and by statements that they made at the time.

No one now can deny that arms were exported. The President of the Board of Trade said earlier that we did not export tanks and aeroplanes; as someone said, that is a silly argument. The ex-Secretary of State for Defence, the right hon. Member for Bridgwater (Mr. King), who is Chairman of the Intelligence and Security Committee, said that all he saw was a Land Rover lined up. That did not mean anything except perhaps that the rest of the Land Rovers could go a hell of a lot faster than the Russian tanks when they were fleeing the battlefield. Undoubtedly, battlefield weapons were exported. My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) summarised the equipment involved.

We did supply lethal weapons; Scott illustrates that. Although it may appear a small item, it is crucial, and shows that the Government were condemned at that time—not by Scott. All Scott does is to illustrate the condemnation and the action that the Governments took.

On pages 853 and 854, the Scott report states that MI6 had reported in 1984, 1985, 1986 and 1987 that Egypt was diverting ammunition to Iraq. On page 858, there is evidence that a company called Allivane had supplied Egypt with more than 1 million large-calibre artillery ammunition fuses. Why were those going to Egypt—to attack Israel, Jordan or Saddam or to build a pyramid? Of course not. Everyone knew that they were being passed to Iraq.

We go to page 873 of Scott to discover where the problem occurred. Lieutenant-Colonel Glazebrook, the MOD official responsible for vetting lethal weapon export licences, confessed to the Scott inquiry that he had seen only 7 of the 26 applications that had been submitted by the company. Between 1981 and 1987, the company exported between 1 million and 3 million artillery fuses to Iraq via Austria, Portugal, Egypt, Jordan and Saudi Arabia. The Government were informed of that by MI6 and did nothing.

Ministers knew what was going on, and they cannot deny it. They obviously contravened the guidelines and obviously they knew. From the Prime Minister down, the Prime Minister at that time—

Mr. Deputy Speaker

Order.

9.7 pm

Sir Michael Marshall (Arundel)

I am grateful for the opportunity to take part in the debate, even at this late stage.

I begin by declaring my interest as a lifelong exporter of English goods and services. In view of the issues that have been mentioned, I should explain that I was adviser to British Aerospace and, as a former Minister, had an opportunity for two and a half years to play my small part, in the dim and distant past, in promoting British defence exports. I emphasise that the views that I express tonight are my own.

I express my incredulity at some of the comments that have been made about defence exports. One of the strengths of the debate has been that speeches have been made by many right hon. and hon. Members who have served in a ministerial capacity, so the House has had the benefit of their direct experience. I commend, to those who may have not heard it, the speech of my right hon. Friend the Member for Bridgwater (Mr. King), who encapsulated the position that arose during the Gulf war and compared, to great effect, our restraint with that of other countries, which had filled the void in the supply of lethal weapons that had been created by our willingness to show restraint.

I hope that we can return to that subject as it relates to defence sales, because those who drew attention to it tonight reminded us that if we had not had the Spitfire and the Hurricane, this country would probably be a German colony today. We must play our part in the defence of our friends around the world.

The hon. Member for Rhondda (Mr. Rogers) queried the appropriateness of some of the projects in which we are involved. He mentioned Al Yamanah, which is a classic example of a project that has brought a huge amount of civil engineering work to this country. It was invaluable in defending Saudi Arabia against invasion by Saddam Hussein. Its airfields—which were provided by Britain—were a key base for allied forces, and the provision of pilot training by British Aerospace and the supply of equipment were crucial to our success in the Gulf war.

Defence sales require commercial confidentiality. There is a certain naive tendency to assume that, as long as we are satisfied, the rest of the world must put up with it. Anyone who follows such matters will know that, if we were to opt for more open disclosure, as some would urge, there would be a real danger of our excluding ourselves from opportunities around the world. Many countries believe that that kind of information is classified, and they would look to other suppliers. In all candour, I am worried that our competitors will go through the report with a fine tooth comb and will quote—even out of context—the arguments about placing future contracts with Britain.

That brings me to the guidelines. It has been well argued tonight that they have no place in statute. Anyone with even modest ministerial experience understands the difference between guidelines and policy. Anyone who reads the report can see that any changes in the guidelines were made with the best intentions and that what occurred thereafter was an attempt to balance many difficult issues.

I pay tribute to the speech of the right hon. Member for Bethnal Green and Stepney (Mr. Shore). He reflected on his ministerial experience, and his answer to parliamentary questions has been quoted several times in the debate. His experience shows that one must balance some extremely difficult issues and that the idea of complete openness raises enormous problems. I welcome an opportunity to debate that issue. However, in the light of what has occurred—particularly from 1988 onwards—the Government's actions seem perfectly clear. They followed closely the precedents set by both the Labour and the Conservative parties when they were in government.

It has been pointed out that Secretaries of State must be involved in any change in policy: it is absurd to assume that junior Ministers could carry forward significant policy changes. Therefore, I am entirely clear about the argument, which is moving in a purely party political direction in attacking my right hon. and learned Friend the Attorney-General and my right hon. Friend the Chief Secretary.

In considering what might occur in the future, we must look carefully at some of the Scott proposals. I pay tribute to that massive work, but we must reflect on the fact that it represents the opinion of only one man. It is perfectly clear that there are many other legal opinions—but I shall leave that matter to the lawyers. Sir Richard Scott's opinion cannot be taken as gospel, although some of his proposals and recommendations are worth careful consideration by the House.

I strongly support any examination of Customs and Excise operations. In my constituency and throughout my ministerial career, I have seen the "pressing on regardless" approach of Customs and Excise and Inland Revenue create real problems. Any reluctance on their part—which is founded on very honourable traditions of ministerial non-intervention in the activities of prosecution in those Departments—must be reviewed. Having said that, I join—perhaps surprisingly—the argument of the right hon. Member for Chesterfield (Mr. Benn). With the benefit of hindsight, it is clear that the inquiry would have been handled better by a special Select Committee of the House. The opportunities that it would have provided in taking evidence to balance the political arguments and to produce more clear-cut and definite recommendations for the future would have been of benefit.

I think back to my five years on the Defence Select Committee. I will retire at the next election and I do not want to embarrass Opposition Members, but one of my most salutary experiences was to find on a Defence Select Committee, when defence was not a very fashionable subject among the Opposition, a number of right hon. and hon. Gentlemen—I shall not name them—whose integrity and motivation in protecting Britain's defence interests was clear. If the Labour party were in power, we would have look to them for our defence.

I return to an argument that I advanced during Prime Minister's questions last week. The hon. Member for Livingston (Mr. Cook) must reflect on the process of defence and defence sales and on the fact that in the real world there has to be a measure of trust. We cannot prescribe in guidelines or legislation something to cover such eventualities as have been described tonight. There must be a willingness to trust, but I would certainly go along with the view that the Select Committee system, which allows for confidentiality and sidelining, provides an opportunity for more openness within Parliament. That is why I would have preferred the matters to have been examined by a special Select Committee rather than by Sir Richard Scott.

In considering the arguments that we have heard against my right hon. Friends, I cannot escape the obvious conclusion that this debate has been a straight party political battle. Scott has provided the opportunity for selective quotations on both sides. That is another reason why we would have done better to have handled the inquiry ourselves. On the central issue of the honour and integrity of my right hon. and learned Friend the Attorney-General and my right hon. Friend the Chief Secretary to the Treasury, hon. Members can use their common sense. They know that there are not two more honourable Members in the House of Commons. I certainly feel fully able to support them in the Lobby tonight and I urge hon. Friends to do the same.

9.16 pm

Mr. Peter Hardy (Wentworth)

In recent years, hon. Members on both sides of the House have devoted considerable time and perhaps made a not insignificant contribution to the development of parliamentary democracy in eastern and central Europe. Recent events, however, lead me to suggest that none of us should now be able to look into the eyes of those with whom we have had conversations over the past few years. The events on silly Thursday 15 February, when hon. Members were engaged in the most farcical demonstration of mismanagement, give the lie to any claim to maturity on our part. The fact that Parliament was prepared to see hon. Members given 10 minutes to collect and study five volumes of an important report is rather ridiculous. That is matched by the campaign of mismanagement—or press management—by the Government in recent months in their attempt to rubbish the report.

Let me refer to two issues that Conservative Members have raised and which are relevant to my constituency. The Government said that no one was in prison, but in my patch there is a police station called Rawmarsh. It is normally used to accommodate thieves, burglars, criminals, vandals and violent drunks. Into that police station went distinguished business men from Forgemasters, who were later released and never charged. They were held for some 30 hours while their offices and homes were ransacked. I believe that they were held there for one particular purpose, to which my hon. Friend the Member for Sheffield, Central (Mr. Caborn) referred—to ensure that a Select Committee of the House could not proceed with a proper investigation into the super-gun. Such conduct might be expected of a banana republic, but not from a Government consisting of the right hon. Members about whom we have heard today. The House was told that the UK does not export lethal weapons, but it did export lathes that manufactured thousands of shells a year. Some Conservative Members will be well aware that RAF Tornados were then expected to fulfil the need to ground the Iraqi air force in the first days of the Gulf war by flying straight and level to drop airfield denial weapons in the face of thousands of shells made on those lathes. Most farcical of all, the UK was never paid for the lathes that made the shells that were fired at our Tornados.

The two right hon. Gentlemen to whom many references have been made can properly be described in adequate parliamentary parlance as right hon. Gentleman, but—as my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) said—they are being used as cover for a Prime Minister who was more aware of the problems and commitment than any other member of the Government. As a former Foreign Secretary, Chief Secretary and Chancellor, the Prime Minister was well aware of the political and economic policies being pursued. The fact that the right hon. Gentleman's policies failed is disgraceful. If Members of Parliament are to serve the principles of democracy that are supposed to be the foundation of this Chamber, they should not vote for the Government tonight.

9.20 pm

Mrs. Margaret Beckett (Derby, South)

There can be no doubt that the Scott report and the ensuing discussions have been difficult for the public to follow because many of the issues are detailed and complex. This debate has given the House an opportunity to react to the report and to reflect on whether there are simple and clear-cut lessons—and if so, to determine what they are.

The House can reflect on whether any matters of fact emerge—whether the UK helped to arm Saddam Hussein, as suggested by the fact that the Matrix Churchill lathes, far from being dual purpose, were set up for arms production. Were some of the individuals involved acting in concert with agents of our intelligence services? Did the certificates signed by Ministers withhold information in the defence of those individuals?

The public have clear pointers to the judgment that they should make amid the welter of charge and counter-charge. There was the pre-publication rubbishing of Sir Richard Scott and his inquiry. Ministers who had chosen the form of the inquiry, and who insisted on it in the face of pressure from the late John Smith, later complained about the inquiry as if Sir Richard were to blame. Ministers sought to undermine the process, evidence and potential conclusions.

In this debate, the Government have chosen to prevent the House from taking a view. Why, if Ministers have no fear of the outcome? The arrangements for the report's scrutiny were further evidence, should any be required, of the arrogance and incompetence of Ministers and of their utter contempt for the House. There has been no precedent set by any Government of any party for the insulting restrictions on Members of Parliament who were allowed a few hours to scrutinise a report that had been in the possession of Ministers for days—and on which they had the support, time and advice of many civil servants. That was all evidence of the Government's desperate desire to shield themselves from effective scrutiny in the first key hours, when Ministers hoped that their version of events would be irrevocably accepted—not least, and perhaps most of all, on the Conservative Benches.

Anyone who wants a touchstone—one simple piece of evidence by which to judge the Scott report and the events that it describes—need look no further than the handling of the report's publication. A Government who have nothing to hide do not shamelessly manipulate publication. A Government who continue to insist on such restrictions and even seem to tighten them after four or five days of sole access to a report's contents are not a Government who have found themselves exonerated in the report's pages.

The Government, after all, had every excuse for leniency. You, Madam Speaker, expressed concern on behalf of this House, as from time to time the Speaker has a duty to do. Sir Richard Scott made it plain that he had not sought and did not support the Government's withholding of the report from others in this way. Yet the Government continued to insist that it was necessary; and on 15 February, at the Dispatch Box, the Secretary of State for Trade and Industry showed us why. It was a snow job. There were, he admitted, people at fault. The handling of intelligence was singled out—then, and repeatedly since. Few commentators have pointed out that this identified defect, acknowledged with a grace awarded to none of the others, could be regarded primarily—perhaps wholly—as a criticism of the civil service.

Ministers also decided that the Labour party was at fault. So civil servants were at fault and the Opposition were at fault, and Ministers alone were found to be without fault—at least by Ministers.

The Secretary of State put on a similar, and similarly disgraceful, performance today. He claimed to be accepting a number of the more technical and practical recommendations of Sir Richard Scott—but, it rapidly became clear, without accepting the basic conclusions from which those recommendations were drawn. The right hon. Gentleman repeated, as I understand he has done again on "Channel 4 News" this evening, there is nothing for any Minister to apologise for; and that the Chief Secretary and the Attorney-General in particular—I quote the news bulletin— did not make mistakes for which they should apologise. So they should not even apologise, let alone take any more serious action.

These were not the findings of Sir Richard Scott. As time has gone on, the Secretary of State and his colleagues have grudgingly admitted that Sir Richard Scott found them to be at fault in some respects, and in forthright terms. In paragraph D3.123, for instance, he found that the guidelines were changed and that the argument that they were not was incapable of being sustained by serious argument". Sir Richard repeats that time and again in the report. Ministers have a simple explanation for it, repeatedly voiced from the Tory Benches in this debate: Sir Richard was just wrong. He was right when he blamed others and when Ministers claim that he failed to find them guilty; he was wrong every time he found Ministers to blame or to be derelict in their duty to this House, and through us, to the country.

Crucially, Ministers claim that Sir Richard was wrong about the key issue of whether the policy changed on the handling of exports to Iraq, and about whether in consequence, as Sir Richard alleged, Parliament was misled. This charge lies especially at the door of the Chief Secretary. His evidence to the inquiry, like his attitude to its findings, suggests an unusual approach. What he seems to have told the inquiry, in essence, is that if the guidelines had been changed senior Ministers and Parliament should have been informed. They were not so informed, so the guidelines did not change.

It is evident that this argument failed to convince Sir Richard, who dismissed it in blunt terms. He said that the right hon. Gentleman repeatedly gave Members of Parliament answers which were misleading. In paragraph D4.62 Scott says that the Chief Secretary gave answers that were "inadequate and misleading".

It would of course be an absolute defence against this charge if the right hon. Gentleman had made such statements in ignorance of the facts that Sir Richard Scott states made the statements misleading. But it is plain that the Chief Secretary was not in ignorance of the facts. Indeed, he was better placed to know them than almost anyone else in Whitehall. But it is equally plain that the right hon. Gentleman has convinced himself that he had no intention to mislead, and he has convinced Sir Richard Scott that that is what he believes.

Is the right hon. Gentleman justified in this belief? His reasoning seems remarkably similar to his reasoning over the change in guidelines and reporting to Parliament: a change would have had to be reported; no change was reported; therefore no change occurred.

Similarly, the Chief Secretary's view seems to be that he is a man of honour, that a man of honour does not mislead the House and that, therefore, he did not mislead the House. Whatever else he may be, that facility in argument and ability to convince himself so fully of the logic of his own argument makes him a very dangerous man, who—on the evidence before Sir Richard Scott and on the evidence before the House—should not remain in office.

Mr. Stephen

Will the right hon. Lady give way?

Mrs. Beckett

No.

Ministers speak as though Sir Richard Scott, and only Sir Richard Scott, had cast doubt on the judgment that led the Attorney-General to tell his ministerial colleagues that they had no choice but to sign PII certificates to withhold a class of documents, irrespective of their contents, from the defence in the Matrix Churchill trial. That decision was said to be without precedent for that type of document in a criminal trial, in which the withholding of such evidence might lead to a conviction and to a possible gaol term—which might have been averted by the production of those documents.

There were clearly other reservations, which varied in kind. There was, for example, the Deputy Prime Minister's express reaction to the advice that he was given, which he described in these terms: no rational person, who had looked at the files, could have said that the documents should not have been disclosed. Sir Richard Scott found that the Attorney-General had a major responsibility for the prosecutor's instructions, and that he was personally at fault for not ensuring that the Deputy Prime Minister's concerns were conveyed to the court. Those and other criticisms cast doubt on the Attorney-General's competence in the functions he carries out in the House, which is why I should like to draw attention to the views expressed in a speech, in November, by the Chancellor of the Duchy of Lancaster, who will reply for the Government in this debate. On the question of ministerial responsibility, he said: My view—indeed, the conventional view—is, I believe, founded on common sense. It is that: Ministers cannot possibly be held personally blameworthy … for everything … the test in any particular case should be the scale of the failure; and whether a decision or action of the Minister's leads directly to it. Tonight we shall discover whether the Chancellor, in the advice that he gives to the House, stands by that judgment. It is very clear to every hon. Member who has read the report and listened to the debate that the named Ministers are seriously at fault, and that their actions directly contributed to that fault.

The events that have been described, the Scott report itself, the media coverage and even this debate have offered a welter of opinion, justification, reason and excuse. I should, therefore, like to single out three matters that are key to the whole affair and on which we can find fact. First, British companies were helping to arm Saddam Hussein, while British Ministers were telling the House that they were not. That is a matter of fact. Secondly, those who were engaged in such sales were known to be assisting, and were assisting, agents of the Government intelligence services, at some considerable personal risk. That is a matter of fact. Thirdly, Ministers, on the Attorney-General's instructions, signed PII certificates that could have withheld evidence of that involvement from the defence, which could have—as it already had in the Ordtech case—led to a conviction and possibly to a gaol sentence. That is a matter of fact. That is what they did. Ministers have repeatedly defended that action by saying that it is for the judge to decide.

Mr. Ian Bruce (South Dorset)

It is all in the report.

Mrs. Beckett

That is just the point, which the hon. Gentleman—who has not even attended the debate, never mind spoken—makes in his sedentary intervention. Ministers say that it is for the judge to decide, that that is "the system" and that the judge's decision shows that "the system" works. The Deputy Prime Minister said that again today.

We, too, have a system in the House. It is called ministerial responsibility. Under the Government, it is honoured more in the breach than in the observance, but today, here and now, we decide whether, under this Government, it any longer exists. Sir Richard Scott states in paragraph D4.63: the Government statements … consistently failed, in my opinion, to comply with … Questions of Procedure for Ministers and, more important, failed to discharge the obligations imposed by the constitutional principle of Ministerial accountability. Many commentators have expressed irritation that Sir Richard Scott did not summarise his conclusions, but left them to be found scattered throughout his report. A number of hon. Members said so in the debate tonight, but Sir Richard's reasons seem plain to me. He wanted to make people read the report to see for themselves the evidence on which he based his conclusions rather than that they should decide to agree or disagree without considering the weight of evidence, as he had done. Secondly, he seems to have been determined to lay out the evidence and the arguments in the five volumes of the report and to leave the verdict to the House and the people whom we are sent here to serve.

Whether we like it or not, I believe that Sir Richard Scott has put Parliament itself on trial. He has flung down a gauntlet to the House. In his judgment, he tells us, after three years of careful study, that Parliament was misled. In his judgment, Ministers failed, and failed repeatedly and deliberately, in their duty of accountability to the House, to all those whom we are elected to serve, and hence, in his words, to our democracy itself. Yet Ministers, by their argument and rhetoric, are asking us not just to accept but to applaud the way in which they have acted in our name.

It is this House that is on trial tonight and the verdict is in the hands of each of us.

9.37 pm

The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman)

I reject completely the allegations from the right hon. Member for Derby, South (Mrs. Beckett) that the publication of the report did not follow the accepted precedents and practice in the House. The publication of the report followed the precedents used in the House. The House has now had 10 days to read the report thoroughly, and has been well prepared for a thorough debate. The Government have behaved entirely properly—[Interruption.]—in the publication of the document, permitting a full debate.

The Government appointed Scott, and Sir Richard has made a number of important and useful recommendations. I should like to start by summarising the recommendations that Sir Richard has made, and the Government's positive and constructive response to them.

First, on the use of intelligence, the Government have accepted the inquiry's criticisms concerning the circulation of intelligence material, and have taken action to rectify those failings. I regret, and the Government regret, the fact that proper intelligence was not fully available to all Departments and to all Ministers before licensing decisions were taken.

We will tell the Intelligence and Security Committee of the improvements that the Government have made and will make.

Mr. Robert Maclennan (Caithness and Sutherland)

Will the right hon. Gentleman give way?

Mr. Freeman

The hon. Gentleman will allow me to respond to the debate. The right hon. Lady did not give way. Ministers were not aware of intelligence about export proposals that would have caused them to stop the exports as breaching export policy, specifically about the military end use of dual-use machine tools.

Secondly, the export control legislation and licensing procedures are, of course, founded upon the Import, Export and Customs Powers (Defence) Act 1939, as amended by the Import and Export Control Act 1990. The Government accept that export control policy and procedures should be reviewed and we intend to issue a consultation paper. There has been much debate, not only today but in 1990, when the Government held discussions with Opposition Front Benchers on the 1990 Bill. It is right in our judgment now to review the powers contained in that Act and the degree to which Parliament should be involved in its implementation.

Mr. Andrew Mackinlay (Thurrock)

What about the charges made by the hon. Member for Torbay (Mr. Allason)?

Mr. Freeman

I am coming to those.

Thirdly, on the supervision of Customs and Excise, the Government accept the principle of the need for greater supervision by the office of the Attorney-General of Customs prosecutions in relation to defence export control matters, and my right hon. and learned Friend the Attorney-General will report further to the House. Fourthly, on Customs procedures, we accept Sir Richard's recommendations relating to Customs legislation and internal procedures. We will report back to the House on changes once the implementation plans are finalised.

I turn to the point raised by my hon. Friend the Member for Torbay (Mr. Allason) about prosecution procedures and the use of public interest immunity certificates. Concern has been expressed during the debate about the scope and procedures for public interest immunity claims. There is a strong case for the House to have an opportunity to consider the circumstances in which public interest immunity should be claimed by Ministers, and, if so, the criteria for those claims. At present, the law is wholly judge-made, and the areas to which it applies include intelligence sources and other sensitive material relating to national security, commercial interests of a public character, and advice to Ministers.

I know that my hon. Friend the Member for Torbay has taken the issue very seriously. Under existing law, Ministers must ensure the maximum disclosure commensurate with the essential public interests to which I have referred. The real question is whether there is a need for class claims, or whether claims should be content-based. In any case, wherever possible, maximum use—in the opinion of the Government—should be made of redaction. Whatever system is adopted, it should remain—

Mr. Allason

Will my right hon. Friend give way?

Mr. Freeman

I will give way to my hon. Friend when I have concluded my sentence.

Whatever system is adopted, it should remain for the judge to decide on disclosure—if justice so requires—on matters of national security or other matters covered by a PII certificate. The House needs a better opportunity to discuss that important issue, and the Government will ensure that such an opportunity arises.

Mr. Allason

Will my right hon. Friend give an undertaking that the presumption in future will always be on disclosure and not suppression? Will he give an undertaking that there will never again be such an abuse of public interest immunity certificates granted on national security grounds?

Mr. Freeman

The presumption should be disclosure, and when the judge read and interpreted the public interest immunity certificates in the Matrix Churchill trial, he made a positive decision on disclosure. I give my hon. Friend the undertaking I gave a few moments ago—the Government will ensure that an opportunity arises in Government time for that matter to be considered further.

Mr. Nigel Griffiths (Edinburgh, South)

Reply to the debate.

Mr. Freeman

If the hon. Gentleman will permit me, I will reply to the debate.

Sixthly, I turn to the centrally important issue raised by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), about openness to Parliament on defence sales and other security issues.

It is a long-held parliamentary convention—it has been followed by Labour and Conservative Governments—that these matters should be subject to the withholding of information. That is documented in "Erskine May". Last November, I repeated the amendment to "Questions of Procedure for Ministers", which referred specifically to this parliamentary convention. The Labour Government used it when upgrading Polaris missile systems with Chevaline. There have been countless examples of the use of the convention over the years.

I accept the sincerity of my hon. Friend the Member for Aldridge-Brownhills on these matters, and I therefore call upon all parties represented in the House to participate—

Mr. Nigel Griffiths

Will the Minister give way?

Mr. Freeman

I am not giving way.

Mr. Griffiths

Why not?

Mr. Freeman

Because I am trying to respond to the debate. Perhaps the hon. Gentleman will listen.

I hope that the House will have a full opportunity to reassess the parliamentary convention that I have described. We welcome the fact that the Select Committee on Public Service may well take an interest in early hearings on the subject. We have today published a paper setting out the present position on the convention. It is important for any Government—Conservative, Labour or Liberal Democrat—when considering informing the House about the details of defence sales always to balance the best interests of the United Kingdom defence industrial base and the importance of confidentiality in its commercial dealings and, for diplomatic reasons, the protection of British interests, against the importance of openness to Parliament.

The hon. Member for Livingston (Mr. Cook), who opened the debate on behalf of the Opposition, has a major problem that he will have to face with his Back-Bench colleagues. The right hon. Member for Chesterfield (Mr. Benn) fairly and squarely nailed his colours to the mast of full disclosure of all arms/defence sales. If the hon. Member for Livingston seeks to act as a senior Minister in a Labour Government, he must decide where he draws the line. Where is the balance for the Labour party? The hon. Gentleman has so far made no contribution to the important debate on what is in the best interests of the British defence industry, which represents 500,000 jobs.

The hon. Member for Livingston must know that many of his right hon. and hon. Friends represent constituencies where, for example, GEC, Rolls-Royce and British Aerospace, have plants. Those are important defence interests that the Labour party cannot ignore. We look forward to the Labour party's positive contribution on the extent to which long-standing parliamentary conventions should be changed.

The Government will bring forward specific proposals in due course on the parliamentary convention that now concerns us.

I move on to the centrally important issue which was taken up by the right hon. Member for Derby, South, which is whether my right hon. Friend the Chief Secretary misled the House. The policy pursued by the Government has been clear: it was not to export lethal weapons to Iraq. As my right hon. Friend the Member for Bridgwater (Mr. King) said, when he visited the battlefield immediately after the Kuwait war, he found only one Land Rover among all the defence equipment left over from that war. The Scott inquiry found that the United Kingdom Government did not condone the export of lethal defence equipment.

The policy was also not to exacerbate the Iran-Iraq conflict when that existed by the export of non-lethal defence equipment. When the conflict ended it was our policy to stop the export of non-lethal defence equipment that could mean the resumption of the conflict by either side. It was—[HON. MEMBERS: "Rubbish."] That is not rubbish. It is a statement of our policy. Non-lethal equipment did not include—

Mr. Nigel Griffiths

rose—

Mr. Freeman

Perhaps the hon. Gentleman will listen to my reply to the debate. I have 10 minutes left to me. Non-lethal equipment did not include—[Interruption.] Perhaps the hon. Gentleman will listen to my reply. I have 10 minutes left.

Mr. Quentin Davies

Will my right hon. Friend give way? [Interruption.]

Mr. Freeman

Let me deal with the debate.

Non-lethal equipment did not include dual-use equipment if intelligence was available that there would be military end use.

Mr. Davies

rose—

Mr. Freeman

I shall give way to my hon. Friend when I come to his contribution. I shall make some progress, and then give way to him when I come to the guidelines.

The guidelines represented, for internal use, how the policy was to be interpreted. They reflected the policies. The guidelines relating to the Iran-Iraq conflict were not, as Scott said in his report, an exclusive exposition of Government policy on defence exports. For example, when there were clear examples of internal repression both by Iraq and by Iran, the Government interpreted our policies and our guidelines to restrict exports.

We have published today and placed in the Library a second document, entitled "Government Policy on the Control of Exports to Iran and Iraq 1980 to 1990".

Mr. Menzies Campbell

rose—

Mr. Freeman

I quote one sentence from it: Guidelines"—[Interruption.]

Madam Speaker

Order. The House must come to order, so that we can hear what the Chancellor of the Duchy of Lancaster has to say.

Mr. Freeman

I shall certainly give way to the hon. and learned Gentleman, but let me just quote this sentence: Guidelines on the export of defence equipment to the two countries, Iran and Iraq, were therefore developed to reinforce the Government's policy and to help in its day-to-day application. As the right hon. Member for Bethnal Green and Stepney (Mr. Shore) quite rightly said, the guidelines were broad. Ministers were given the responsibility of interpreting those guidelines. As my right hon. Friend the Member for Bridgwater said, Ministers operated in real time, having to interpret the guidelines against the great pressure of events.

Mr. Menzies Campbell

If the Government's position was to do their best to ensure that there was no internal repression in Iraq, why, in the immediate aftermath of the use of chemical weapons at Halabja, did the Government extend financial guarantees to Iraq?

Mr. Mackinlay

Yes, why?

Mr. Freeman

The hon. Gentleman should listen to the answer. Financial guarantees under the Export Credits Guarantee Department were the subject of long preparation. They covered not only defence but civilian use, including the building of power stations and schools. The amount allocated for defence was always limited and capped.

I now come to the issue raised by my hon. Friend the Member for Stamford and Spalding. Let me deal with the points he raised, because he is misguided. [Interruption.] My right hon. Friend the Member for Witney (Mr. Hurd), the former Foreign Secretary, clearly told the House that the guidelines did not change between 1984 and the summer of 1990. That was the evidence he presented to the House. The interpretation changed as circumstances required.

My hon. Friend the Member for Stamford and Spalding argued that there was a change in 1988. He therefore disputes the specific evidence provided by my right hon. Friend. As the right hon. Member for Bethnal Green and Stepney said, it was inconceivable that junior Ministers could have changed those guidelines without the agreement of senior Ministers and my right hon. Friend the Prime Minister. The interpretation did, and in 1988 and 1989, junior Ministers interpreted the guidelines to reflect the fact that the war had ended.

Mr. Quentin Davies

I am sure that my right hon. Friend will agree that, if the policy was changed without proper authorisation from senior Ministers, that compounds the offence rather than mitigating it.

Can my right hon. Friend think of a better documented case in the history of this Parliament of the House being misled? If he can, will he name it? Does he not share my fear that, if we do nothing about such a case as a result of tonight's debate, the most fearful constitutional precedent will be created?

Mr. Freeman

Today the House heard from my right hon. Friend the Member for Witney, who told us that the guidelines did not change, and that, when he and other senior Ministers came to review them in the summer of 1990, they had not changed since 1984.

I ask my hon. Friend the Member for Stamford and Spalding to accept that evidence. I ask him to accept my argument that junior Ministers interpreted the guidelines in the different circumstances of the end of the conflict. The Ministers involved interpreted them impartially, to prevent the conflict from starting again. They interpreted them in a strict fashion. Indeed, in comparison with any other nation, we took immense, thorough trouble to interpret those guidelines.

In 1989 and 1990, this country exported £11 million-worth of non-lethal defence equipment to Iraq. That is less than 1 per cent. of Iraq's total imports of defence equipment in those two years. Let me remind the House what Scott said in paragraph D3.124: I accept that Mr. Waldegrave"— my right hon. Friend the Chief Secretary— and the other adherents of the 'interpretation' thesis did not … have any duplicitous intention and, at the time, regarded the relaxed interpretation, or implementation, of guideline (iii) as being a justifiable use of the flexibility believed to be inherent in the Guidelines. The Government have taken positive, clear and constructive action in relation to the recommendations of the Scott report. We very much welcome the commencement of a debate on the parliamentary convention of withholding information on defence sales. The Scott report has completely vindicated my right hon. Friend the Chief Secretary and my right hon. and learned Friend the Attorney-General. It said that they acted in good faith, and the Government contend that my right hon. Friend the Chief Secretary did not mislead.

The charge against the Labour party, and the Opposition as a whole, is clear. First, the hon. Member for Livingston—together with the deputy leader of the Labour party—made the charges that there was a conspiracy to arm Saddam Hussein, and that there was a conspiracy to send innocent men to gaol. Both charges are untrue, and they should withdraw them. They have both refused to withdraw those charges, and Scott has found them to be untrue.

Secondly and finally, in advancing their case, those Opposition Members have taken an irresponsible and naive attitude to Britain's defence industry, and have been unfair to the civil service. They have lacked the courage to balance the need of British industry with the perfectly legitimate need to be open with Parliament. The Labour party will have to face those issues if it aspires to form the next Government.

Twenty years ago, the then Prime Minister, Mr. Callaghan, said that we could not maintain an independent arms industry unless we were prepared to engage in this trade. I ask for understanding. The Labour party has none. It is not fit to govern.

Mr. Donald Dewar (Glasgow, Garscadden)

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

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

Question put accordingly, That this House do now adjourn:—

The House divided: Ayes 319, Noes 320.

Division No. 61]	[10.00 pm
AYES
Abbott, Ms Diane	Clapham, Michael
Adams, Mrs Irene	Clark, Dr David (South Shields)
Ainger, Nick	Clarke, Eric (Midlothian)
Ainsworth, Robert (Cov'try NE)	Clarke, Tom (Monklands W)
Allen, Graham	Clwyd, Mrs Ann
Alton, David	Coffey, Ann
Anderson, Donald (Swansea E)	Cohen, Harry
Anderson, Ms Janet (Ros'dale)	Connarty, Michael
Armstrong, Hilary	Cook, Frank (Stockton N)
Ashdown, Rt Hon Paddy	Cook, Robin (Livingston)
Ashton, Joe	Corbett, Robin
Austin-Walker, John	Corbyn, Jeremy
Banks, Tony (Newham NW)	Corston, Jean
Barnes, Harry	Cousins, Jim
Barron, Kevin	Cox, Tom
Battle, John	Cunliffe, Lawrence
Bayley, Hugh	Cunningham, Jim (Covy SE)
Beckett, Rt Hon Margaret	Cunningham, Rt Hon Dr John
Beggs, Roy	Cunningham, Roseanna
Beith, Rt Hon A J	Dafis, Cynog
Bell, Stuart	Dalyell, Tam
Benn, Rt Hon Tony	Darling, Alistair
Bennett, Andrew F	Davidson, Ian
Benton, Joe	Davies, Bryan (Oldham C'tral)
Bermingham, Gerald	Davies, Chris (L'Boro & S'worth)
Berry, Roger	Davies, Rt Hon Denzil (Llanelli)
Betts, Clive	Davies, Quentin (Stamford)
Blair, Rt Hon Tony	Davies, Ron (Caerphilly)
Blunkett, David	Davis, Terry (B'ham, H'dge H'l)
Boateng, Paul	Denham, John
Boyes, Roland	Dewar, Donald
Bradley, Keith	Dixon, Don
Bray, Dr Jeremy	Dobson, Frank
Brown, Gordon (Dunfermline E)	Donohoe, Brian H
Brown, N (N'c'tle upon Tyne E)	Dowd, Jim
Bruce, Malcolm (Gordon)	Dunnachie, Jimmy
Burden, Richard	Dunwoody, Mrs Gwyneth
Byers, Stephen	Eagle, Ms Angela
Caborn, Richard	Eastham, Ken
Callaghan, Jim	Etherington, Bill
Campbell, Mrs Anne (C'bridge)	Evans, John (St Helens N)
Campbell, Menzies (Fife NE)	Ewing, Mrs Margaret
Campbell, Ronnie (Blyth V)	Fatchett, Derek
Campbell-Savours, D N	Faulds, Andrew
Canavan, Dennis	Field, Frank (Birkenhead)
Cann, Jamie	Fisher, Mark
Carlile, Alexander (Montgomery)	Flynn, Paul
Chidgey, David	Forsythe, Clifford (S Antrim)
Chisholm, Malcolm	Foster, Rt Hon Derek
Church, Judith	Foster, Don (Bath)

Foulkes, George	Loyden, Eddie
Fraser, John	Lynne, Ms Liz
Fyfe, Maria	McAllion, John
Galbraith, Sam	McAvoy, Thomas
Galloway, George	McCartney, Ian
Gapes, Mike	McCartney, Robert
Garrett, John	Macdonald, Calum
George, Bruce	McFall, John
Gerrard, Neil	McGrady, Eddie
Gilbert, Rt Hon Dr John	McKelvey, William
Godman, Dr Norman A	Mackinlay, Andrew
Godsiff, Roger	McLeish, Henry
Golding, Mrs Llin	Maclennan, Robert
Gordon, Mildred	McMaster, Gordon
Graham, Thomas	McNamara, Kevin
Grant, Bernie (Tottenham)	MacShane, Denis
Griffiths, Nigel (Edinburgh S)	McWilliam, John
Griffiths, Win (Bridgend)	Madden, Max
Grocott, Bruce	Maddock, Diana
Gunnell, John	Maginnis, Ken
Hain, Peter	Mahon, Alice
Hall, Mike	Mallon, Seamus
Hanson, David	Mandelson, Peter
Hardy, Peter	Marek, Dr John
Harman, Ms Harriet	Marshall, David (Shettleston)
Harvey, Nick	Marshall, Jim (Leicester, S)
Hattersley, Rt Hon Roy	Martin, Michael J (Springburn)
Henderson, Doug	Martlew, Eric
Hendron, Dr Joe	Maxton, John
Heppell, John	Meacher, Michael
Hill, Keith (Streatham)	Meale, Alan
Hinchliffe, David	Michael, Alun
Hodge, Margaret	Michie, Bill (Sheffield Heeley)
Hoey, Kate	Michie, Mrs Ray (Argyll & Bute)
Hogg, Norman (Cumbernauld)	Milburn, Alan
Home Robertson, John	Miller, Andrew
Hood, Jimmy	Mitchell, Austin (Gt Grimsby)
Hoon, Geoffrey	Molyneaux, Rt Hon Sir James
Howarth, Alan (Strat'rd-on-A)	Moonie, Dr Lewis
Howarth, George (Knowsley North)	Morgan, Rhodri
Howells, Dr Kim (Pontypridd)	Morley, Elliot
Hoyle, Doug	Morris, Rt Hon Alfred (Wy'nshawe)
Hughes, Kevin (Doncaster N)	Morris, Estelle (B'ham Yardley)
Hughes, Robert (Aberdeen N)	Morris, Rt Hon John (Aberavon)
Hughes, Roy (Newport E)	Mowlam, Marjorie
Hughes, Simon (Southwark)	Mudie, George
Hume, John	Mullin, Chris
Hutton, John	Murphy, Paul
Illsley. Eric	Nicholson, Emma (Devon West)
Ingram, Adam	Oakes, Rt Hon Gordon
Jackson, Glenda (H'stead)	O'Brien, Mike (N W'kshire)
Jackson, Helen (Shef'ld, H)	O'Brien, William (Normanton)
Jamieson, David	O'Hara, Edward
Janner, Greville	Olner, Bill
Johnston, Sir Russell	O'Neill, Martin
Jones, Barry (Alyn and D'side)	Orme, Rt Hon Stanley
Jones, Ieuan Wyn (Ynys Môn)	Parry, Robert
Jones, Jon Owen (Cardiff C)	Patchett, Terry
Jones, Lynne (B'ham S O)	Pearson, Ian
Jones, Martyn (Clwyd, SW)	Pendry, Tom
Jones, Nigel (Cheltenham)	Pickthall, Colin
Jowell, Tessa	Pike, Peter L
Kaufman, Rt Hon Gerald	Pope, Greg
Keen, Alan	Powell, Ray (Ogmore)
Kennedy, Charles (Ross, C&S)	Prentice, Bridget (Lew'm E)
Kennedy, Jane (L'pool Br'dg'n)	Prentice, Gordon (Pendle)
Khabra, Piara S	Prescott, Rt Hon John
Kilfoyle, Peter	Primarolo, Dawn
Kirkwood, Archy	Purchase, Ken
Lestor, Joan (Eccles)	Quin, Ms Joyce
Lewis, Terry	Radice, Giles
Liddell, Mrs Helen	Randall, Stuart
Litherland, Robert	Raynsford, Nick
Livingstone, Ken	Redmond, Martin
Lloyd, Tony (Stretford)	Reid, Dr John
Llwyd, Elfyn	Rendel, David

Robertson, George (Hamilton)	Taylor, Mrs Ann (Dewsbury)
Robinson, Geoffrey (Co'try NW)	Taylor, Rt Hon John D (Strgfd)
Roche, Mrs Barbara	Taylor, Matthew (Truro)
Rogers, Allan	Thompson, Jack (Wansbeck)
Rooker, Jeff	Thurnham, Peter
Rooney, Terry	Timms, Stephen
Ross, Ernie (Dundee W)	Tipping, Paddy
Ross, William (E Londonderry)	Touhig, Don
Rowlands, Ted	Trickett, Jon
Ruddock, Joan	Trimble, David
Salmond, Alex	Turner, Dennis
Sedgemore, Brian	Tyler, Paul
Sheerman, Barry	Vaz, Keith
Sheldon, Rt Hon Robert	Walker, A Cecil (Belfast N)
Shepherd, Richard (Aldridge)	Walker, Rt Hon Sir Harold
Shore, Rt Hon Peter	Wallace, James
Short, Clare	Walley, Joan
Simpson, Alan	Wardell, Gareth (Gower)
Skinner, Dennis	Wareing, Robert N
Smith, Andrew (Oxford E)	Watson, Mike
Smith, Chris (Isl'ton S & F'sbury)	Welsh, Andrew
Smith, Llew (Blaenau Gwent)	Wicks, Malcolm
Smyth, The Reverend Martin	Wigley, Dafydd
Snape, Peter	Williams, Rt Hon Alan (Sw'n W)
Soley, Clive	Williams, Alan W (Carmarthen)
Spearing, Nigel	Wilson, Brian
Spellar, John	Winnick, David
Squire, Rachel (Dunfermline W)	Wise, Audrey
Steel, Rt Hon Sir David	Worthington, Tony
Steinberg, Gerry	Wray, Jimmy
Stevenson, George	Wright, Dr Tony
Stott, Roger	Young, David (Bolton SE)
Strang, Dr. Gavin	Tellers for the Ayes:
Straw, Jack	Mr. John Cummings and Mr. David Clelland.
Sutcliffe, Gerry

NOES
Ainsworth, Peter (East Surrey)	Brooke, Rt Hon Peter
Aitken, Rt Hon Jonathan	Brown, M (Brigg & Cl'thorpes)
Alexander, Richard	Browning, Mrs Angela
Alison, Rt Hon Michael (Selby)	Bruce, Ian (South Dorset)
Allason, Rupert (Torbay)	Budgen, Nicholas
Amess, David	Burns, Simon
Ancram, Rt Hon Michael	Burt, Alistair
Arbuthnot, James	Butcher, John
Arnold, Jacques (Gravesham)	Butler, Peter
Arnold, Sir Thomas (Hazel Grv)	Butterfill, John
Ashby, David	Carlisle, John (Luton North)
Aspinwall, Jack	Carlisle, Sir Kenneth (Lincoln)
Atkins, Rt Hon Robert	Carrington, Matthew
Atkinson, David (Bour'mouth E)	Carttiss, Michael
Atkinson, Peter (Hexham)	Cash, William
Baker, Rt Hon Kenneth (Mole V)	Channon, Rt Hon Paul
Baker, Nicholas (North Dorset)	Chapman, Sir Sydney
Baldry, Tony	Churchill, Mr
Banks, Matthew (Southport)	Clappison, James
Banks, Robert (Harrogate)	Clark, Dr Michael (Rochford)
Bates, Michael	Clarke, Rt Hon Kenneth (Ru'clif)
Batiste, Spencer	Clifton-Brown, Geoffrey
Bellingham, Henry	Coe, Sebastian
Bendal, Vivian	Colvin, Michael
Beresford, Sir Paul	Congdon, David
Biffen, Rt Hon John	Coombs, Anthony (Wyre For'st)
Body, Sir Richard	Coombs, Simon (Swindon)
Bonsor, Sir Nicholas	Cope, Rt Hon Sir John
Booth, Hartley	Cormack, Sir Patrick
Boswell, Tim	Couchman, James
Bottomley, Peter (Eltham)	Cran, James
Bottomley, Rt Hon Virginia	Critchley, Sir Julian
Bowden, Sir Andrew	Currie, Mrs Edwina (S D'by'ire)
Bowis, John	Curry, David (Skipton & Ripon)
Boyson, Rt Hon Sir Rhodes	Davis, David (Boothferry)
Brandreth, Gyles	Day, Stephen
Brazier, Julian	Deva, Nirj Joseph
Bright, Sir Graham	Devlin, Tim

Dicks, Terry	Hunt, Sir John (Ravensbourne)
Dorrell, Rt Hon Stephen	Hunter, Andrew
Douglas-Hamilton, Lord James	Hurd, Rt Hon Douglas
Dover, Den	Jack, Michael
Duncan, Alan	Jackson, Robert (Wantage)
Duncan-Smith, Iain	Jenkin, Bernard
Dunn, Bob	Jessel, Toby
Durant, Sir Anthony	Johnson Smith, Sir Geoffrey
Dykes, Hugh	Jones, Gwilym (Cardiff N)
Eggar, Rt Hon Tim	Jones, Robert B (W Hertfdshr)
Elletson, Harold	Jopling, Rt Hon Michael
Emery, Rt Hon Sir Peter	Kellett-Bowman, Dame Elaine
Evans, David (Welwyn Hatfield)	Key, Robert
Evans, Jonathan (Brecon)	King, Rt Hon Tom
Evans, Nigel (Ribble Valley)	Kirkhope, Timothy
Evans, Roger (Monmouth)	Knapman, Roger
Evennett, David	Knight, Mrs Angela (Erewash)
Faber, David	Knight, Rt Hon Greg (Derby N)
Fabricant, Michael	Knight, Dame Jill (Bir'm E'st'n)
Fenner, Dame Peggy	Knox, Sir David
Field, Barry (Isle of Wight)	Kynoch, George (Kincardine)
Fishburn, Dudley	Lait, Mrs Jacqui
Forman, Nigel	Lamont, Rt Hon Norman
Forsyth, Rt Hon Michael (Stirling)	Lang, Rt Hon Ian
Forth, Eric	Lawrence, Sir Ivan
Fowler, Rt Hon Sir Norman	Legg, Barry
Fox, Dr Liam (Woodspring)	Leigh, Edward
Fox, Rt Hon Sir Marcus (Shipley)	Lennox-Boyd, Sir Mark
Freeman, Rt Hon Roger	Lester, Sir James (Broxtowe)
French, Douglas	Lidington, David
Fry, Sir Peter	Lilley, Rt Hon Peter
Gale, Roger	Lloyd, Rt Hon Sir Peter (Fareham)
Gallie, Phil	Lord, Michael
Gardiner, Sir George	Luff, Peter
Garel-Jones, Rt Hon Tristan	Lyell, Rt Hon Sir Nicholas
Garnier, Edward	MacGregor, Rt Hon John
Gill, Christopher	MacKay, Andrew
Gillan, Cheryl	Maclean, Rt Hon David
Goodlad, Rt Hon Alastair	McLoughlin, Patrick
Goodson-Wickes, Dr Charles	McNair-Wilson, Sir Patrick
Gorman, Mrs Teresa	Madel, Sir David
Gorst, Sir John	Maitland, Lady Olga
Grant, Sir A (SW Cambs)	Major, Rt Hon John
Greenway, Harry (Ealing N)	Malone, Gerald
Greenway, John (Ryedale)	Mans, Keith
Griffiths, Peter (Portsmouth, N)	Marland, Paul
Grylls, Sir Michael	Marlow, Tony
Gummer, Rt Hon John Selwyn	Marshall, John (Hendon S)
Hague, Rt Hon William	Marshall, Sir Michael (Arundel)
Hamilton, Rt Hon Sir Archibald	Martin, David (Portsmouth S)
Hamilton, Neil (Tatton)	Mates, Michael
Hampson, Dr Keith	Mawhinney, Rt Hon Dr Brian
Hanley, Rt Hon Jeremy	Mayhew, Rt Hon Sir Patrick
Hannam, Sir John	Mellor, Rt Hon David
Hargreaves, Andrew	Merchant, Piers
Harris, David	Mills, Iain
Haselhurst, Sir Alan	Mitchell, Andrew (Gedling)
Hawkins, Nick	Mitchell, Sir David (NW Hants)
Hawksley, Warren	Moate, Sir Roger
Hayes, Jerry	Monro, Rt Hon Sir Hector
Heald, Oliver	Montgomery, Sir Fergus
Heath, Rt Hon Sir Edward	Moss, Malcolm
Heathcoat-Amory, Rt Hon David	Needham, Rt Hon Richard
Hendry, Charles	Nelson, Anthony
Heseltine, Rt Hon Michael	Neubert, Sir Michael
Hicks, Robert	Newton, Rt Hon Tony
Higgins, Rt Hon Sir Terence	Nicholls, Patrick
Hill, James (Southampton Test)	Nicholson, David (Taunton)
Hogg, Rt Hon Douglas (G'tham)	Norris, Steve
Horam, John	Onslow, Rt Hon Sir Cranley
Hordern, Rt Hon Sir Peter	Oppenheim, Phillip
Howard, Rt Hon Michael	Ottaway, Richard
Howell, Rt Hon David (G'dford)	Page, Richard
Howell, Sir Ralph (N Norfolk)	Paice, James
Hughes, Robert G (Harrow W)	Patnick, Sir Irvine
Hunt, Rt Hon David (Wirral W)	Patten, Rt Hon John

Pattie, Rt Hon Sir Geoffrey	Spink, Dr Robert
Pawsey, James	Spring, Richard
Peacock, Mrs Elizabeth	Sproat, Iain
Pickles, Eric	Squire, Robin (Hornchurch)
Porter, Barry (Wirral S)	Stanley, Rt Hon Sir John
Porter, David (Waveney)	Steen, Anthony
Portillo, Rt Hon Michael	Stephen, Michael
Powell, William (Corby)	Stern, Michael
Rathbone, Tim	Stewart, Allan
Redwood, Rt Hon John	Streeter, Gary
Renton, Rt Hon Tim	Sumberg, David
Richards, Rod	Sweeney, Walter
Riddick, Graham	Sykes, John
Rifkind, Rt Hon Malcolm	Tapsell, Sir Peter
Robathan, Andrew	Taylor, Ian (Esher)
Roberts, Rt Hon Sir Wyn	Taylor, John M (Solihull)
Robertson, Raymond (Ab'd'n S)	Taylor, Sir Teddy (Southend, E)
Robinson, Mark (Somerton)	Temple-Morris, Peter
Roe, Mrs Marion (Broxbourne)	Thomason, Roy
Rowe, Andrew (Mid Kent)	Thompson, Sir Donald (C'er V)
Rumbold, Rt Hon Dame Angela	Thompson, Patrick (Norwich N)
Ryder, Rt Hon Richard	Thornton, Sir Malcolm
Sackville, Tom	Townend, John (Bridlington)
Sainsbury, Rt Hon Sir Timothy	Townsend, Cyril D (Bexl'yh'th)
Scott, Rt Hon Sir Nicholas	Tracey, Richard
Shaw, David (Dover)	Tredinnick, David
Shaw, Sir Giles (Pudsey)	Trend, Michael
Shephard, Rt Hon Gillian	Trotter, Neville
Shepherd, Sir Colin (Hereford)	Twinn, Dr Ian
Shersby, Sir Michael	Vaughan, Sir Gerard
Sims, Roger	Viggers, Peter
Skeet, Sir Trevor	Waldegrave, Rt Hon William
Smith, Sir Dudley (Warwick)	Walden, George
Smith, Tim (Beaconsfield)	Walker, Bill (N Tayside)
Soames, Nicholas	Waller, Gary
Speed, Sir Keith	Ward, John
Spencer, Sir Derek	Wardle, Charles (Bexhill)
Spicer, Sir James (W Dorset)	Waterson, Nigel
Spicer, Sir Michael (S Worcs)	Watts, John

Wells, Bowen	Winterton, Mrs Ann (Congleton)
Wheeler, Rt Hon Sir John	Winterton, Nicholas (Macc'f'ld)
Whitney, Ray	Wolfson, Mark
Whittingdale, John	Yeo, Tim
Widdecombe, Ann	Young, Rt Hon Sir George
Wiggin, Sir Jerry
Wilkinson, John	Tellers for the Noes:
Willetts, David	Mr. Timothy Wood and Mr. Derek Conway.
Wilshire, David

Question accordingly negatived.