Scott Report

HL Deb 26 February 1996 vol 569 cc1228-358

3.2 p.m.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie) rose to move, That this House takes note of the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq (HC 115).

The noble and learned Lord said: My Lords, I very much welcome the opportunity for a measured debate to consider the report of Sir Richard Scott, now that your Lordships have had the opportunity to study it. That was why, as indicated at the time of publication, 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 to arm Saddam Hussein secretly and no attempt to suppress documents which could have led to a miscarriage of justice. Those issues were central to the inquiry, and are now behind us. 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.

Sir Richard's report rightly focused on the serious and defamatory charges that had been made and of which the Government now stand acquitted. But, in the Statement that I repeated 10 days ago, care was taken to draw attention both to the criticisms of Sir Richard and to his conclusions and recommendations on which I should like today to indicate more of the Government's thinking.

Mistakes were made. There are lessons to be learned. 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 recommended by Sir Richard Scott. We have already undertaken further to consider, and most carefully, his 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—I shall say more on that—and we also accept many of Sir Richard's other recommendations.

I should like to turn now to those recommendations and, in particular, to those questions of openness in government and accountability to Parliament.

As the President of the Board of Trade said in his Statement, there is a continuing line of criticism running through the report of the conventions, long-established, whereby successive governments have undervalued, as Sir Richard sees it, the public interest in the disclosure of information.

This Government have a good record in improving openness in government; and the debate on how much further openness in Parliament might go should be seen in that context. For example, we have introduced or supported numerous measures opening up for the first time specific areas of government, even the most sensitive, as with the Intelligence Service Act 1994. More generally, we published the first White Paper on Open Government in 1993 and the code of practice it proposed a year later. As a result of all this and of other Citizen's Charter initiatives, there is now much more information released, whether on the background to government decisions, on medical and other records, or on school, hospital and local government performance data. Over 48,000 previously confidential public records have now been released.

We have avowed for the first time the Secret Intelligence Service and put it on a statutory footing and subject to a statutory Oversight Committee.

The Government have also published detailed lists of ministerial Cabinet Committees and Questions of Procedure for Ministers.

Closer to the issues of foreign policy and export controls, in 1991 the present Secretary of State for Social Security, Mr. Peter Lilley (then at the DTI), took the unprecedented step of publishing the detailed lists—70 pages in all—of the exports licensed for Iraq between 1987 and 1990.

However, despite that good record of government, we hope that we can go further down the route of open government. Indeed, further, as we have already gone, than in the traditional answers to questions on defence sales when answered by the Labour Government in the 1970s when, for example, Mr. Peter Shore stated: It has been the policy of successive Governments not to reveal information on the supply of arms to individual countries".

Moreover, Mr. Michael Meacher had this to say: The list of recipient countries is not published because defence purchases are regarded as confidential".

Erskine May sets out a number of subjects on which successive Administrations have declined to answer questions on grounds of public policy. These 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 raised in relation to parliamentary Questions on the sale of arms or defence related equipment. He said that that long-standing practice should be re-examined. This the Government are content to do. The Chancellor of the Duchy of Lancaster has today placed in the Library of another place 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. I have arranged for the same document to he placed in the Library of this House.

I hope that your Lordships will find that document a useful basis on which to take forward the discussion. There are serious issues here. 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 vital 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.

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

Sir Richard has recognised the potentially divergent and conflicting policy objectives in relation to employment and trade as well as foreign policy and humanitarian considerations. These 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. However, 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 all who are interested in this issue, including in particular those of the Opposition parties.

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. This approach, taken with the significant decision announced in 1985 to inform the House of the guidelines on defence exports, established to assist Ministers and officials in appraising export licence applications against the uncertain and ever changing background of Iran and Iraq in the 1980s, is already in marked contrast to the approach of previous governments.

A major step forward in making ministerial accountability transparent was taken by the Prime Minister in 1992 when he decided to publish the guidance for Ministers known as Questions of Procedure for Ministers. It is worth reminding your Lordships that this had been a classified document under previous administrations. The section of Questions of Procedure for Ministers to which Sir Richard Scott refers states that, Ministers have 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. 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 Scott 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". These include, inter alia, matters that are sub judice, commercially confidential information, and sensitive security and foreign policy matters. I doubt whether those exceptions would be seriously challenged in your Lordships' House.

I turn to what he has to say about the role of Customs and Excise. He first addresses in his report the possible changes to the Customs and Excise Management Act 1979 to clarify various powers and definitions. In addition to these and other specific legal provisions, Sir Richard Scott 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 Solicitors' Office and the Customs Investigation Department. Sir Richard's recommendations relating to Customs' legislation and internal procedures are largely accepted by the Government, subject only to further consideration of some detailed technical legal matters.

Sir Richard also considered the position of the Customs and Excise as an independent prosecuting authority; a role that has remained unchanged for many years. He recommends the introduction of a formalised system of supervision by the Attorney-General of export control prosecutions. At the same time he 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 whom are subject to the superintendence of the Attorney-General, whereas the Customs and Excise, as a prosecuting authority, is not. Sir Richard notes that acting in this capacity, the Attorney-General exercises a quasi-judicial role and does not act as a Cabinet Minister; his actions and decisions are not, for example, subject to Cabinet collective responsibility.

While the analogy Sir Richard draws with the Crown Prosecution Service and with the Serious Fraud Office is not an exact one, the Government nevertheless accept that there are benefits in Sir Richard Scott's 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. The Government are urgently developing proposals on the precise nature and scope of this increased supervision, and I understand that the Attorney-General will be reporting further in another place on this 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 as to 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 DTI, the Ministry of Defence and Customs and Excise. As a result, modern information technology systems have been introduced and new internal distribution arrangements 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 committee, chaired by Mr. Tom King, of other improvements which have been made. I have no doubt that this committee, which was specifically set up to deal with such matters, will want to satisfy itself, and in due course to reassure Parliament, that an adequate response has been made to Sir Richard's observations.

One of the key areas was, of course, that of prosecution procedures and PII certificates. The opening words of Sir Richard Scott's final chapter on PII certificates are, The law on public interest immunity in civil and in criminal trials is judge made. I do not believe that legislative intervention is necessary or, at present desirable".

The decision in 1994 in ex parte Wiley, Sir Richard Scott describes as providing, a sensible practical guide that any Minister or Official trying to decide whether or not a PII claim should be made … can easily follow". With that observation I respectfully agree. However, the criticism in his report of the actings of the Attorney-General are not that he ignored or misunderstood that sensible practical guide which came, after all, some two years after the Matrix Churchill case, but that he effectively misunderstood the law as it then was.

In the course of the last 10 days I have had to set against the view of Sir Richard Scott that the law in 1992 was effectively no different from the present law, not only my own understanding of a range of prominent decisions but also the views of a current Lord of Appeal in Ordinary, the Master of the Rolls, my noble friend Lord Alexander of Weedon, a number of distinguished judges who were Treasury Counsel, prominent Silks who advised the Attorney-General at the time and three of the counsel who represented the defendants in the Matrix Churchill trial. I accept that others, in expressing their opinion, have gone the other way. However, the Government have good cause to believe that the preponderance of settled legal opinion at the time favoured the Attorney-General's view.

Sir Richard Scott may wish that the authoritative statement in Wiley had come sooner, but it would be a novel proposition to castigate the Attorney-General for failing to anticipate the evolution of the law some years before it was declared. Indeed, it would have been perverse if he had sought to do so.

It is now time to look to the future. There is, happily, little disagreement on the present law. The Wiley decision has had the effect of introducing into current practice a number of points made by Sir Richard. As a result of that decision, Ministers can now disclose PII documents without the prior approval of the court when they consider that that is in the overall public interest.

There is a further point on PII that I should like to make. PII claims have been made in criminal cases, both before the Matrix Churchill trial and since, and both on a contents and class basis. Sir Richard recommends that in future PII claims in criminal cases on a class basis should not be made. I understand from observations made 10 days ago that the Opposition would support that. If the public have been bewildered or bored by the apparent sterility of the legal wrangle, I trust that they will now be engaged in a coherent debate over what that might entail.

There could be a real risk of prosecutions having to be abandoned in, say, terrorist cases or in those related to drugs or weapons in prisons, where the issue was one of informants. Moreover, it should be appreciated that PII does not only apply to government documents and to confidential police information but also to the important work of other agencies such as the National Society for the Prevention of Cruelty to Children in relation, for instance, to child abuse cases.

The law on public interest immunity is made by the courts, but the Government will consider Sir Richard Scott's recommendations in the light of developing case law, particularly given his view that the time is opportune for a collective reappraisal by Ministers. As part of that consideration, as the Attorney-General has announced this afternoon, the Government would welcome views on future developments in the use of public interest immunity certificates.

Sir Richard devotes two chapters of recommendations to export control powers and licensing procedures. However, before I come to his recommendations I should like to cover our policy regarding the export of defence equipment to Iran and Iraq.

Our policy was to remain neutral in that 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 which could have prolonged or intensified the conflict. A set of guidelines was introduced to assist the application of that policy, which was far stricter than those of our main international competitors. The guidelines were exactly that: they were guidelines, 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 a 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".

As the author of a different guide wrote about guidelines: They must not be allowed, by an over-rigid application that fails to take into account the consensus of each case, to become a constraint on effective and sensible case management".

Those words were penned last year by Sir Richard Scott himself in the preface to the Chancery Guide.

I turn now to Sir Richard Scott's recommendations. 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 in the report. We shall then produce a consultation paper covering those points, as Sir Richard Scott recommends. I should make it clear at this stage that the Government are committed to an export control system which is easy for business to use and understand yet which allows the Government to take restraining action where that is necessary for wider policy reasons.

There is one further point that I should like to pick up now. That relates to the extent of parliamentary scrutiny of export control orders. I should like to make it clear that the Government have no difficulty with the proposition that, if the current export control Act, which reflects the 1939 legislation, is replaced future legislation on export control should include provision for parliamentary scrutiny. The Government had previously indicated to the inquiry that they would expect to see that achieved through making export control orders subject to the negative resolution procedure. That would be entirely in keeping with the Government's approach of enhancing the transparency and openness of their activities where that is appropriate.

Sir Richard Scott's report contains some 50 pages of recommendations. He has repeatedly enjoined not only the Government but all those who wish to comment on the matter not to do so in limited soundbites. I have sought to lay before your Lordships' House that the Government accept that the report contains criticisms as well as the important vindication to which I have already referred. The Government have indicated that, in addition to those recommendations on which they have already taken action, they will consider carefully and positively Sir Richard's other recommendations. Not all of them are for the Government alone to consider. However, even where it is for others, including Parliament, to reach a view, the Government have been prepared to give a lead, as our placing of a document in the Library relating to informing Parliament about exports demonstrates clearly.

We are committed to pursuing the issues raised by Sir Richard's recommendations in a positive, detailed and co-operative spirit. We look to others to adopt a similarly constructive approach. I beg to move.

Moved, That this House takes note of the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq (HC 115).—(Lord Fraser of Carmyllie.)

3.28 p.m.

Lord Richard

My Lords, I begin by congratulating the Minister. It was a not inconsiderable achievement to spend some 26 minutes discussing the Scott Report without once mentioning the name of Mr. Waldegrave. His tactics were fairly predictable: he declared an acquittal in the first second and, having declared the acquittal, then spent the rest of the 25 minutes talking about something else. His Back Benches were enthralled by the pungency and vigour of his defence to the attack that is being made on the Government. If the Government think they can get away with that they underestimate the sense of outrage felt by the public outside.

I propose to talk about the Scott Report and the allegations that have been made and to try to put those allegations into context. There is no doubt whatever in my mind, having now read every word of the Scott Report, that Mr. Waldegrave misled Parliament deliberately, designedly and intentionally, not once but 38 times, in ministerial letters and in answer to many parliamentary questions. It is, frankly, breathtaking that he remains in office.

What I want to try to do today is to look at the facts. I think that they can be quite simply stated. Three Ministers—two of whom, Mr. Alan Clark and the noble Lord, Lord Trefgarne, (I am glad to see that he is to give us the benefit of his special knowledge in the course of the debate today), are no longer in the Government—decided to change the policy on the sale of equipment to Iraq. Having so decided, they then determined that the matter should be concealed from Parliament and the public. They drafted a revised form of the old guideline (iii) which was intended to incorporate that change of policy. In answer to many Parliamentary Questions and 38 letters from Members of Parliament and Members of your Lordships' House, they decided on a form of words that should be used in reply. That form of words was false.

I will, if I may, quote from some parts of the report—not just one half sentence of what Sir Richard Scott may have said at a press conference but perhaps a little more—so that before the House this afternoon is the full flavour of the consideration that Sir Richard Scott gave to the whole affair. It is important that we get the record straight.

First, was there a change in policy? What does Scott say on that'? He concludes in unequivocal terms that there was. He says this: Whatever subsequent events might show to be the result of the ,:hanges that were being discussed, the contemporary documents make it impossible, in my opinion, to quarrel with the expression 'a more liberal policy' as being a fair and accurate description of what die players, including Mr. Waldegrave, had in mind at the time… die words, 'a more liberal policy', describe in ordinary and simple language the reality of what he and his colleagues were discussing". Later in the report, after an exhaustive analysis of the documents, and having heard the evidence—one should not forget that he is the only person who heard all the evidence—he concluded: The viewpoint"— that there was no change— sis one that does not seem to me to correspond with reality … To describe [the] revised formulation as no more than an interpretation of the old, is, in my opinion, notwithstanding the many Advocates who espoused the thesis, so plainly inapposite as to he incapable of being sustained by serious argument". On the following page he says: But, however the agreement reached by the junior Ministers be described, if the substance of the agreement was to change the ,criterion that would be applied to applications for licences to export defence equipment to Iraq, they were, in any ordinary use of language, agreeing on a change of policy. I regard the explanation that this could not be so because the approval of the senior Ministers and the Prime Minister had not been obtained as sophistry". An acquittal, my Lords? An acquittal in the way that the noble and learned Lord described in the opening part of his speech? Some acquittal!

There are two further pieces of evidence in the report which have not been quoted quite so often but which seem to me to amount to massive corroboration of the conclusions reached by Sir Richard. On page 423 of the report there appears a minute written by Sir Timothy Daunt, then Deputy Under-Secretary of State for Defence at the Foreign Office, and sent to the Foreign Secretary's private secretary. The minute reads thus: It is now much clearer that in late 1988/early 1989 the three Ministers of State concerned … spent a lot of time discussing changes to policy on exports to Iraq. They agreed to change the guidelines to take account of the cease-fire; and at the same time that their application"— the application of the guidelines— would be relaxed. They also made a conscious decision … not to make any announcement. Their reasoning appears to have been that any announcement, however carefully drafted, would upset somebody". It most certainly would have, and that is why none was made.

Later Sir Timothy Daunt says: Much of the revision that is the policy resulting from revision to the guidelines— had clearly been implemented for the past 18 months and not announced". That seems to me to be fairly powerful corroboration. However, if one wants a little more, there is an answer given by the noble and learned Lord, Lord Howe, who took part in this affair. He was examined in detail by Scott. He admitted this to the inquiry in a damning but little noted answer on Page 476. The report states: And, in answer to the question: 'The guidelines were reformulated were they not?' Lord Howe replied: 'Yes I think for practical purposes they were, but there was no disclosure of a reformulation. That was the last thing that people wanted to do". So that is the answer to the first question. The evidence establishes beyond doubt that there was a clear agreement to change government policy which the proposed new guideline (iii) was intended to enshrine. Policy thereafter proceeded on the new, not the old, basis and it is that new policy which matters, not merely the drafting of guidelines.

Not unnaturally, your Lordships may think, Members of Parliament and Members of your Lordships' House were concerned at what seemed to be happening. A stream of Parliamentary Questions and letters followed. Many of those are set out in the report. I do not propose to weary your Lordships with over-quotation. However, let us take the letters first. There were in all not one but some 38. How were they dealt with'? The report states: A form of response to be incorporated in the letters sent to the MPs in question was settled in the FCO. The response included the following two sentences (or the gist of them): 'British arms supplies to both Iran and Iraq continue to be governed by the strict application of guidelines which prevent the supply of lethal equipment or equipment which would significantly enhance the capability of either side to resume hostilities. These guidelines are applied on a case by case basis'". That was the agreed form of answer. In many of the letters the formula was preceded by the statement that: The Government have not changed their policy on defence sales to Iraq or Iran". In one letter there was even a reference to, our firm and even-handed position over arms sales to Iran and Iraq". Scott concluded in these words: The reference in each of these letters to the criterion that governed the supply of non-lethal defence equipment to Iraq was not accurate … The inaccuracy should have been noticed by Mr. Waldegrave, who had been one of the midwives at the birth of this new formulation". Later he states: The statement in the letters that 'The Government have not changed their policy on defence sales to Iraq or Iran' was untrue". There then follows these damning sentences: Mr. Waldegrave knew, first hand, the facts that, in my opinion, rendered the 'no change in policy' statement untrue … The proposition that the Government's position over 'arms sales to Iran and Iraq' was 'even-handed' had been untrue ever since the decision, taken as a consequence of the Rushdie affair, to 'return to a more strict approach to Iran'". In the face of those findings of fact, how can it be maintained that they did not know'? Is there any corroboration'? Let us look elsewhere, other than the parties directly concerned and their immediate documentation. Is there any corroboration that they did in fact know? Mr. Mark Higson was the desk officer in the Foreign Office dealing with Iraq. Of his evidence Lord Justice Scott wrote: Mr. Mark Higson, who gave evidence to the Inquiry, was, from 23 March 1989 until January 1990 when he left the ECG, the desk officer for Iraq within MED. One of his duties was to prepare drafts of the letters to be sent by FCO Ministers answering queries relating to Iraq". Therefore he drafted some of the letters, and in particular one to Dame Elaine Kellett-Bowman. In his oral evidence to the Inquiry on 15 July 1993, Mr. Higson made clear that he regarded the 'no change in policy' statement contained in the letter as untrue". So are we supposed to accept that the desk officer knew that the answers were untrue but that the Ministers who signed the letters did not'? Are we asked to believe that Sir Timothy Daunt knew that there had been a change but that the Ministers who initiated and implemented the change did not know that there had been one? Are we asked to accept that Mr. Waldegrave genuinely believed in the truth of a statement of government policy which Sir Richard Scott characterises as: incapable of being sustained by serious argument"? It really will not wash. I should be somewhat ashamed of putting such arguments on behalf of a defendant before an Old Bailey jury and, if I did, I think I would know what the jury would think of the arguments. Exactly the same applies to Parliamentary Questions. Sir Richard concludes that the answers given to Questions were neither adequate nor accurate.

And so it goes on until we come to the final judgment of the report: The answers to [Parliamentary Questions], 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 and was an inevitable result of the agreement between three junior Ministers that no publicity would be given to the decision to adopt a more liberal, or relaxed, policy, or interpretation of the Guidelines, originally towards both Iran and Iraq and, later, towards Iraq alone". Finally, the report states: In the circumstances, the Government statements in 1989 and 1990 about policy on defence exports to Iraq consistently failed, in my opinion, to comply with the standard 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". Some acquittal! However one looks at it, this is a damning indictment. It is frankly not good enough for the Government to allege that nothing is wrong because Mr. Waldegrave thought there was nothing wrong. Common sense, if nothing else, tells us that Mr. Waldegrave must have known that his answers were inaccurate and misleading. If he did, his actions are culpable; if he did not, his actions are incomprehensible, save on the basis that somehow he convinced himself of the truth of that which he already knew to be false. It is not merely the change in the wording of the guidelines that matters. It is the change of policy that matters more. To say that they believed that it had not changed when they knew that it had, when it was they who had engineered and implemented that change, is just impossible to accept.

Someone in the Government is responsible for this mess. We cannot just forget about it in the way that the noble and learned Lord invites us to, as if it were merely some trivial, inconvenient episode now to be put behind us. This misleading of Parliament was deliberate and prolonged. If Mr. Waldegrave and his other two colleagues were not responsible, who on earth was?

I turn now to the position of the Attorney-General. I shall not give way.

Lord Trefgarne

My Lords, the noble Lord included me in the criticism which he made of Mr. Waldegrave. Like Sir Richard Scott, he has relied heavily upon the evidence of Sir Timothy Daunt and Mr. Higson. Will be remind me which of those gentlemen was at the meeting to which he referred'?

Lord Richard

My Lords, I do not think either was. The noble Lord, Lord Trefgarne, was, we know that. With great respect, I shall be interested to hear what he has to say. Of course Sir Timothy Daunt was not at the meeting, nor was Mark Higson. Higson was a desk officer in the Foreign Office who became so sickened at being asked to draft what he considered to be lying replies to Parliamentary Questions that he left the Foreign Office as a result.

Let me now turn to the Attorney-General. His activity, or rather the lack of it in respect to the Matrix Churchill case, is in marked contrast to that of his predecessor to Sir Patrick Mayhew in the supergun affair. The same point emerged there: namely, that the Government knew the objects for which the licence was requested. The then Attorney-General, Sir Patrick Mayhew, took the view that the prosecution would not succeed and the case should be stopped. Despite the objections by Customs when he gave them that advice, he threatened to enter a nolle prosequi if the prosecution were not dropped. It then was.

Contrast that with the behaviour of the present Attorney-General. He took no interest in the case until it arrived at the point where Mr. Heseltine refused to sign a PII certificate. That was on the grounds that he at least did not think that the documents should be concealed and that they were clearly relevant to the case for the defence. He also believed that disclosure would not cause any damage to the public interest. When told that he had to sign them, despite those views he queried the advice. It is at that stage that the Attorney-General comes into it. He wrote Mr. Heseltine a letter setting out the grounds on which he alleged that Mr. Heseltine was under a duty to sign. The Attorney-General did not read the documents, though he clearly should have. Indeed, he had not even read the documents by 1994 when he ,gave evidence to the Scott Inquiry.

Mr. Heseltine eventually signed the certificate under protest, requiring that his concerns he passed on to the trial judge. They were not. Indeed, Mr. Moses for the prosecution expressly told the judge that all the Ministers had signed on the same basis. Mr. Heseltine had written a letter to the Attorney-General setting out his concerns. Unfortunately, it seems that the letter remained unread by the Attorney until after the trial had started; that is, for at least three, and possibly as much as seven, weeks.

The two main grounds for complaint against the Attorney-General, according to Lord Justice Scott, are that he got the law wrong and that his advice as to the duty of Ministers to sign certificates was erroneous; and, secondly, that he was personally at fault in not ensuring hat Mr. Heseltine's views were passed on to leading counsel and to the judge. Those are powerful criticisms.

On Matrix Churchill, the position that emerges from the report, it seems to me, is this. First, the Government knew the purposes for which the tools were intended, just as they knew the facts in relation to the supergun and exports by other firms. Secondly, they tried to conceal that knowledge by the unprecedented use of class public interest immunity certificates in a criminal trial, although Mr. Heseltine and the intelligence services themselves had no objection to discovery of their documents. Thirdly, the Government, through Mr. Clark, clearly knew that Matrix Churchill, together with other manufacturers, had been given a nod and a wink as to how to frame their export licence applications.

Fortunately for the interests of justice, the judge in the trial decided that the certificates were in the main unjustified and that the documents should be disclosed. It was fortunate—I see a noble Lord nodding—because another judge could well have taken exactly the opposite decision and did so in the Ordtec case. It is surely wrong to elevate the judge in a criminal trial to be the arbiter of what is or is not in the public interest. In a case in which a senior government Minister, the Secretary of State, Mr. Heseltine, had expressed to the Attorney-General that he thought that it was in the public interest to release the documents, not to conceal them, that fact underlines the problem that the Attorney-General now faces. If the documents had not been made available, it would not have been possible for Mr. Geoffrey Robertson, appearing for Henderson, to have cross-examined Alan Clark in the way that he did and thereby bring the trial to an end.

The trial should never have been brought. Sir Richard Scott himself recognises that, though he says it with hindsight. However, it is not hindsight but the lack of foresight that I criticise. Defendants were placed in jeopardy as a result of the Government trying to conceal facts. For that the Attorney-General must bear some of the responsibility. He lifted not a finger to prevent it, unlike Sir Patrick Mayhew in the supergun affair. On the contrary, he aided the prosecution by pressing Mr. Heseltine and other Ministers to sign the certificates on a view of the law which Lord Justice Scott has found to be erroneous.

So there we have it. That seems to me to be a summary of the allegations set out in the Scott Report. I said last week that this was a murky and disreputable affair. So it is. Ministers lied to Parliament and apparently no one is responsible. Defendants were placed in jeopardy and apparently no one is responsible. Someone is responsible and they should accept that responsibility and face up to it.

The report reveals the workings of Whitehall in a way in which they have rarely, if ever, been revealed before. What it reveals reflects little credit on either the Ministers concerned or some of the government departments involved. The overriding objective was concealment. "When in doubt, keep it hidden", seems to have been the guiding principle, irrespective of where the truth lay or even whether defendants might be convicted, when in reality they should never have been tried at all.

The whole affair reveals a contempt for Parliament, the British people and indeed the criminal justice system which, in our view, was and remains culpable.

3.50 p.m.

Lord Jenkins of Hillhead

My Lords, it is almost impossible to imagine a greater contrast between the emollient speech which the Minister, the noble and learned Lord, Lord Fraser of Carmyllie, addressed to the House this afternoon and the aggressive partisanship of the Statement that he was caused to repeat 11 days ago.

Over the past couple of weeks I have fluctuated between the view that the Scott Inquiry and Report was simply the longest running of all the Whitehall farces, and the belief on the other hand that it was a further devastating nail in the reputation of this Government. What has increasingly swung me in the latter direction has been a mounting feeling of indignation—of anger even—about the Government's presentation of the report 11 days ago to Parliament and the country.

By that, I do not mean the ham-fisted nonsense about offering us incarceration in padded cells or sealed capsules. That was good for a two-day joke, but it would be an inadequate foundation in itself for a more settled view. But two weeks ago I rather innocently thought that the Government were guilty merely of a natural discourtesy, of which in my experience some parts of government are well capable. What did not then occur to me was that there was, on the contrary, a coldly calculated plan to give the Government eight days' license to prepare a deception of both Houses of Parliament, and through them the British people. In the race to the microphone, having given themselves several laps' start, the Government won. But it was a victory that has been corning apart ever since, and one which those who perpetrated it will regret.

There is no doubt that the Statement to both Houses of Parliament presented a distorted picture of Scott's conclusions; and there is no doubt either, now, that that is the view of Lord Justice Scott himself. I regard the Government's grossly partisan handling of the publication of the report as being almost as reprehensible as the evil into which Scott was set to inquire. It is a compounding of sins if ever there was one. I regard the dissimulation in the Statement by the President of the Board of Trade as being almost as bad as anything of which Mr. Waldegrave is accused.

But it is not just a question of individual Ministers—one reason why I have never thought that the rolling of a few heads would settle the matter. It is much more a question of the whole ethos of the Government. There has never in my experience or to my knowledge been a government who have set a lower premium on honour and a higher one on clinging to office at all costs.

The responsibility lies with the Prime Minister as much, or more, than with anyone else. He appointed Scott. I do not find the result of that appointment the most succinct, pellucid or even syntactically distinguished report. But that is another matter, and in any event is the responsibility of the judge and the appointer. The Prime Minister is very good at snatching at short-term solutions, whether it be Nolan, Scott or the Mitchell Committee, and then complaining when his own chickens come home to roost.

Mr. Waldegrave and the Attorney-General have also been lucky to follow in the wake of Ms. Harriet Harman's troubles. On the PM's form of a year or so ago, the two peccant Ministers would have been entering a great danger zone just about now. But Ms Harman was given blanket protection by Mr. Blair, and the Downing Street mood is "anything you can do, I can do better". It is not exactly what you would call leading from the front, but it gives a better support to those two Ministers than was received by those who were in the past promised undying sustenance.

In any event, I do not think that their fate is the central issue. The Prime Minister himself is nearly as vulnerable as they are. It amazes me that in a debate of this importance, with the life of the Government almost at stake, he should not intervene in any of the discussions—or indeed the Leader of the House in this House today. It is the general conduct of the Government that is at stake.

The recommendations of the report had, until the last few hours one might say, until the speech of the noble and learned Lord this afternoon and presumably the speech made in another place, been almost totally swept away by the desire of the Government—not the most confident indication of innocence—to protect themselves at all costs.

Eleven days ago, I curdled in disbelief at the suggestion in the Statement that the noble and learned Lord, Lord Fraser, had to repeat; namely, that Mr. Cook ought to resign. Resign from what? It was not altogether clear—but from something at any rate. I hold no particular brief for Mr. Cook, but the proposition was childish. What is more important, it was wildly inappropriate for a ministerial Statement presenting a judicial report to Parliament. The so-called "information pack"—always be suspicious of an information pack; it is a term more appropriate to cheapjack advertising than to the objective presentation of facts—which was put out officially, I believe by the Cabinet Office, was also a disgrace. That, I fear, is an indication that 17 years of a one-party government threatens the integrity of an independent Civil Service which persisted from Palmerston to Callaghan (if the noble Lord will excuse me) and maybe for a few years after that. The correct response of officials responsible for the carrying on of that tradition ought to have been: "Put out your half-truths if you will, but do so under the stamp of Conservative Central Office, which is tailor-made, like most other party machines, for precisely that purpose, but not under that of high officialdom".

I turn to the position of the Attorney-General. The honour of the Attorney-General, it is said (and I half agree with that at least) is not directly at stake; although I must say that his failure even to read a letter from a senior Cabinet colleague, now Deputy Prime Minister, when a fair trial—which trial he ought not in any event have allowed to take place—turned on the luck of finding a courageous and non-executive-minded circuit judge, and then not to convey Mr. Heseltine's reservations, suggests that at the frontier incompetence and dishonour march fairly close to each other.

What is hardly in dispute is that the Attorney-General has been guilty of incompetence. I enjoyed his defence that he took the best legal advice. But the Attorney-General, if he is up to his job, is supposed to be the best legal advice. I simply cannot imagine the great attorneys, from Coleridge to Charles Russell to F.E.Smith to Douglas Hogg to Hartley Shawcross sheltering behind a formula of taking the best legal advice. They thought they were that, and on the whole they were. But Sir Nicholas Lyell, who in that respect is a modest man with much to be modest about, rested upon others and by so doing illuminated like a flash of lightning a new politico-legal landscape.

On performance, the Attorney-General certainly ought to resign. But there is one thought to give one pause. What Queen's Counsel is there in the other place who would be much better—on either side, or on all three sides, if one likes to be fair? The fact of the matter is that the race of great lawyer-politicians which has fortified our politics for two and a half centuries has become effectively extinct. From Erskine at the beginning to Shawcross or perhaps Monckton at the end, it underpinned our politics. Now it is dead; killed, I think, by the petty and excessive demands of modern constituencies. Brougham would not have been much good at coffee mornings. I would not set Sir Edward Carson to move from advice bureaux to bridge parties. One ought to recognise that the present holder is the last station on the line. Future governments, I fear—in itself I regret it, because the old system worked well—ought to look for law officers outside politics. It is only in that way that they will get Silks worthy of the tradition.

s We recently saw the spectacle of half the Bar—perhaps not quite half but a large part of it—and some of the judiciary lining up to say that Scott is wrong on PIls; and the other half and other judges indicating the reverse. Apart from the fact that the gravamen of the charge against the Attorney-General is not, in my view, that he misinterpreted the law of PIIs; there is the graver one that he did not stop the trial or pass on Mr. Heseltine's reservations.

Quite apart from that, the attempt to overturn Scott by weight of letters to The Times is surely a most extraordinary procedure for judicial gentlemen to engage in. Scott was specially chosen by the Government to pronounce upon this issue—to try the case, if one likes. He spent a rather excessive time doing so, in the course of which he must have become an expert on the issue. But now the Government say that he is just one opinion among many. It is as though an accused person, when informed of the sentence by the judge, were to say, "My Lord, your opinion is very interesting but I am informed that many other legal authorities take a different view. Until you have consulted them—have taken a poll of them—I do not propose to take any notice of your sentence."

I make one last layman's point in relation to this legal morass. I simply cannot accept and have not been able to accept from the beginning the absolute duty of a senior Secretary of State or other Minister to obey the instructions of the Attorney-General and sign automatically. I have always found that a good way to try to avoid excessive hypocrisy is to ask myself whether, as a Minister, I might have committed—I repeat, might have committed—the fault complained of. Quite often the answer is yes. One hopes that one would not have done so and one may believe that one would not have done so, but it is not unimaginable. That, however, is not the case with the automatic signature. I simply cannot imagine myself as Home Secretary, say, acceding to such an instruction from an Attorney-General. The two I dealt with in that capacity were better lawyers than Sir Nicholas Lyell; but, even so, I cannot imagine accepting such an instruction. If the duty is automatic, what is the point of the signature as opposed to a rubber stamp from a clerk'? If the duty is automatic, what right did Mr. Heseltine have to hesitate and make his reservations?

So we come to this debate, which has brought out such a remarkable attendance and participation. In my view there have been better reports; there have probably been greater deceptions of Parliament; but never in my experience has there been a more cynical handling of a major report produced at their own request by a British Government. What has been displayed is a partisan aggressiveness born out of weakness. Until the past few hours there has been no hint of lessons learnt or improvements to be made. Those changes which have now been announced give every impression of being made not out of conviction or even shame but out of fear—fear of further defections. My Lords, it is a very discreditable chapter.

4.7 p.m.?

Lord Lloyd of Berwick

My Lords, I hope that I am not the only one of your Lordships not to have read the entire Scott Report. But I can say that I have read the whole of the section which relates to the Matrix Churchill case—some 400 or 500 pages—and I have also read Sir Richard Scott's recommendations on public interest immunity. I should like to say a few words on that now. I speak as a serving Law Lord, and so naturally, as your Lordships would expect, I shall stick strictly to my last. I shall not trespass outside the law to discuss more controversial matters.

As to the law, ever since the great case of Conway v. Rimmer decided by your Lordships in their judicial capacity in 1965, a clear distinction has been drawn between two aspects of the public interest. The first aspect concerns the proper functioning of government. That public interest may require the withholding of certain classes of documents—for example, Cabinet papers or papers relating to the conduct of foreign relations. That is one aspect of the public interest. The other aspect is of course the administration of justice. The problem arises as to what is to be done where there is a conflict between those two aspects of the public interest—a conflict which quite frequently arises in all classes of case, both civil and criminal cases.

The way in which the courts have sought to resolve that problem is quite simple, in theory, at any rate. It is for the Minister to assert in the first place that the documents in question fall within a protected class, whatever that class might he. It is then for the judge to decide whether the interests of the litigant should, in the specific circumstances, prevail. It is for the judge to balance those two interests when they conflict. That, as many judges will verify and I can say from my own experience, is what happens in practice. I have often had to do it myself. I can assure your Lordships that Mr. Justice Smedley was not the first to have to make a decision of that kind.

There are two reasons why your Lordships may think it better that the judge should carry out that balancing operation rather than the Minister. The first is a purely practical one; that is, that Ministers are, one supposes, busy men and cannot be expected to have the detail of every case in their minds when they have to exercise the function that they exercise in that respect. In many cases, at the time when they have to exercise that function, the issues in the case will not yet have been clearly formulated. By contrast, it is the judge who knows the issues in the case and who will take account of them as they develop; it is therefore the judge who is the best and only person who is in a position to say which of the documents within the class are likely to be of importance to the litigants and must therefore be disclosed, and which are of little if any importance and therefore may be withheld. That happens all the time.

The second reason is perhaps more theoretical. If it were for the Minister to carry out the balancing operation himself, even if he could, it may be said against him—it almost certainly would be said against him—that he was picking and choosing; that he was disclosing those documents which helped his case and concealing those which hindered it. It is to avoid that very danger that the courts have held consistently that it is the duty of the Minister to sign a PH certificate when the documents in question come within the class in question.

That was certainly the law in 1992 when the Attorney gave his advice to Ministers. But it had been the law long before 1992. There has been much talk of the Makanjuola case—a decision of the Court of Appeal—and the language of Lord Justice Bingham in that case. But in that case the Court of Appeal was merely summarising the law as it had been stated by your Lordships' House in many great cases going back to 1965. I shall mention three. It was the law as stated in the Lewes Justices case in 1973; in the Burmah Oil case in 1980 and in the Air Canada case in 1983. There was nothing new in what Lord Justice Bingham said about it being the duty of the Minister to sign.

Then comes the next question. It may be said that that is all very well for civil cases, but what about criminal cases? Until the Matrix Churchill case, I had never heard it suggested that there was any difference. The reason is very simple; that is, that precisely the same principle applies whether in civil or in criminal cases. Of course, in a criminal case, the balance is much more likely to come down in favour of disclosure; it almost always will come down in favour of disclosure. However, the principle is the same. It is because the balance almost always comes down in favour of disclosure that there have been so few reported cases in which the point has been tested in criminal proceedings until the Osman case. The judgment of Lord Justice Mann in that case came as no surprise to any lawyer. It was plainly right and has been followed in a number of recent decisions by the Court of Appeal with the Lord Chief Justice presiding.

The Osman case therefore cannot be dismissed on the basis that it was only concerned with habeas corpus. It was making the point which was being made all along that there is no distinction between criminal and civil cases in that respect. My noble and learned friend Lord Woolf, when he was the Treasury devil, was asked to advise on that point as long ago as 1978. Without hesitation he advised that the same principle applies in criminal cases as in civil cases. One of the landmark cases, the Lewes Justices case, which is often cited, was itself a criminal case; it was a case of criminal libel.

When Sir Richard Scott says in paragraph G18.54 that the Attorney's advice as to the application of public interest immunity was based, as he puts it, on a "fundamental misconception", I can only say, with great respect, that I disagree. I believe that most judges—not all—would share my view. I differ with great regret from Sir Richard because he is a judge for whom I and all my fellow judges have the greatest admiration. The thought occurs to me however (and it may be an unworthy thought) that possibly he allowed his strong views as to what the law ought to be, to colour his view as to what the law actually was in 1992.

As to the future, as your Lordships have heard, the law has been taken forward by the recent decision in the Wiley case, to which I was a party. Some may think that we went too far in that case and others that we did not go far enough. Probably Sir Richard Scott would count himself in the latter category. It is not easy in these cases to know quite where to draw the line. However, as to what the law was in 1992 there can be no shadow of doubt. The Attorney-General was bound by the law as it then was, just as were all other Ministers of the Crown. With great respect to the noble Lord, Lord Jenkins of Hillhead, it was not for the Attorney-General to change the law; that is for the courts. It was not for the Attorney-General to relapse the law in order to meet the needs of that specific case.

I wish to make one last point. I am glad to see that Sir Richard Scott does not think that legislation in this field will be either necessary or desirable. Like the Minister, I entirely agree with him on that. The trouble with legislation is that it tends to crystallise and ossify the law. If the law had been put on a statutory basis after the case of Duncan v. Cammell Laird in 1942, we should never have had the great liberating decision in Conway v. Rimier in 1965. If the law had been put on a statutory basis in 1965 we would never have had what I hope is a liberating decision recently in your Lordships' House in Wiley. That is an area above all other areas where the law should be taken forward as best it can be by judges on a case by case basis, as it always has been in the past.

4.19 p.m.

Lord Hailsham of Saint Marylebone

My Lords, I do not often trouble your Lordships these days in debate. This is due to the increasing frailty of old age and an ailing wife. I hope, therefore, that I may be forgiven for saying a few words on this occasion.

I cannot tell your Lordships with what admiration I have just listened to the speech of my noble and learned friend, if he will allow me so to call him, Lord Lloyd of Berwick. He spoke with far greater authority than ever I would claim to command but exactly stated a good deal of what I thought I was going to say but which I now will not say. He gave an absolutely authoritative and, so far as I know, absolutely correct statement of what the legal principles involved in this case are.

We are a House of Parliament, and it is in my mind to say how grateful I am to the two Front Benches for conducting this debate in a form in which no Division will take place. That is in contrast to what is taking place a little way down the corridor. Parliament is the Great Council of the nation. In order that we might retain our tradition as the Great Council of the nation, it is absolutely vital that we should retain—or alas I must now say attempt to recapture—the ability to conduct a civilised and important discussion in an objective way. Clearly we have differences of opinion; clearly we have different political parties; and clearly there must be freedom of speech and opinions strongly expressed. But the habit of civilised discussion is, in my judgment at any rate, fundamental to all parliamentary debate. I am sorry to say that some of the recent exchanges of opinion have not lived up to that requirement.

I wish to give one or two statements about this matter—shorter than I was going to give in the light of the immediately preceding speech of my noble and learned friend Lord Lloyd—reminding ourselves, as I think we should all do, that we are discussing a document in length rather longer than my copy of the authorised version of The Bible. In my copy, from Genesis to Malachi there are about 1,155 pages, and in my copy of the New Testament, from Matthew to Revelation there are another 255 pages. The Scott Report is a document weighing—I do not know how much. It costs £45 to the ordinary citizen, although most of us have been able to obtain a free copy. All quotations from it are, if Sir Richard Scott will forgive me for saying so, by their nature, and by the nature of what he has himself written, selective quotations. Having said that, there are just one or two remarks that I want to make about individual matters.

The first relates to personalities. I take, first, Mr. Waldegrave. He has been known to me for some years, both through his family and as a Fellow of All Souls. I would venture to say that he is and always has been the soul of honour. It greatly grieves me to hear the wild and sometimes unsubstantiated accusations which have been made about him in connection with this matter. I believe that the report, viewed properly, bears this out. Perhaps I may say this in speaking of Mr. Waldegrave. I was deeply moved to read the complete absolution given to him in the columns of The Times in a short letter by my noble friend Lord Carrington, a testimony all the more remarkable owing to his own selfless and absolutely flawless performance in relation to the Falklands dispute. His opinion carried all the more weight because of that.

I now turn to the Attorney-General and to the PII certificates. I am probably one of the very few Members of your Lordships' House who has had to sign such a certificate as a Minister. I may not be what the noble Lord, Lord Jenkins, referred to as one of the great lawyer-politicians, and certainly not up to the Douglas Hogg to whom he made previous express reference. But I was greatly troubled by this. I inquired as to the law and I discovered what the law was. I knew that there were certain types of certificate which related to individual documents. We can forget those because they did not enter into this case. But there were also class certificates, which is the type I had to sign.

I was greatly troubled as to what I should do, especially as the honour of one of the parties was at stake. I researched the law. The researches bore out exactly what my noble and learned friend Lord Lloyd of Berwick has just told us. It is the duty of the Minister to ascertain that the documents belong to a particular class of document. He cannot shirk that duty and he must also satisfy himself that the class is one which attracts Crown immunity. What does he do then? The answer is that it is his duty in the main, as my noble and learned friend has just told the House, to sign the certificate. I was greatly worried before I did this—I do not mind saying that—but I had no doubt that the law was as I have just stated. It is true that it was much stiffer when Lord Simon was Lord Chancellor and the case of Duncan and Cammell Laird was decided, but since Conway v. Rimmer, and the powerful speech of my late noble and learned friend Lord Reid in that case, it has been the duty of the Minister to sign the certificate.

As I faced the issue I realised that if I tried to enter into the merits of the case I should be usurping the function of the judge. The Minister having signed the certificate, it is for the judge to say whether the interests of justice in the particular case where he has studied the issues override the class protection given to the class of documents for which the certificate is signed. That has been the universal opinion since Conway v. Rinuner and I do not myself regard the much later case of Wiley, which took place after the events we are discussing, alters that in the least.

I should like to add a few words of quotation from the defence counsel in the Matrix Churchill case, which is what triggered off this whole affair. In 1994, Mr. James Hunt and Mr. Michael Stokes in a letter and Mr. Gilbert Gray in an article, all in the columns of The Times, while the Scott Inquiry was going on and after the result of the Matrix Churchill prosecution was known, said the following. I quote first from Mr. Gilbert Gray QC, who was one of the defending counsel: It must be borne in mind that the prosecution was brought by Customs and Excise. The Attorney-General has no formal involvement in their cases, more's the pity"— "More's the pity" would have been echoed by Sir Richard Scott— Too often, prosecutions by Customs and Excise are characterised by 'Yo ho ho and a bottle of rum' tactics. They behave like privateers with planks"— I do not know whether that is just The prosecution case was not so conducted by Alan Moses, QC. He was the embodiment of fairness. The prosecution failed, but he succeeded. He sought no victory and suffered no defeat. Neither did the Attorney-General. Now blame is being heaped upon the Attorney-General; it should not be. He is attacked in respect of the claims to protect certain classes of documents from production by means of public interest immunity certificates signed by ministers". In the case of Mr. Heseltine's doubts, they were duly passed on to the trial judge—

Noble Lords

No!

Lord Hailsham of Saint Marylebone

My Lords, this is what he said: The wording of the certificates varied, and that on Mr Heseltine's was drawn to the judge's notice by Mr Moses", the prosecuting counsel. That was the first question for the judge. He decided that immunity was properly claimed". Mr. Gray goes on to say that the judge then considered that the interests of justice prevailed and that, with two minor exceptions, all the documents should be admitted. Mr. Gilbert Gray writes: How this narrative of fairness can be fabricated into an indictment of the Attorney-General, I fail to follow. I never had the impression that he stooped to conquer or tried to gag. The Bar esteems him greatly for his honour and integrity, and so do I. At no time did the trial judge ever suggest that the Attorney-General or Mr Moses could be criticised". The two other defence counsel of one of the other defendants stated: The plain fact of the matter is that counsel for the Crown, Alan Moses, QC, said at the outset, when placing the public interest immunity certificates before the court, that the question of disclosure was a matter for the trial judge and not for the ministers concerned. Public interest immunity cannot be waived by either the prosecution or the ministers. It was for the judge to decide whether the interests of justice in ensuring a fair trial for the defendants outweighed those considerations of public interests referred to in the certificates. There was no question of anyone attempting to suppress evidence. In the event, the judge decided in favour of disclosure and the documents were immediately produced. Although views may differ as to the importance of the documents, the approach of counsel for the Crown to the question of public interest immunity was entirely in accordance with our understanding of the decided cases". How in the light of those published documents at the time the noble Lord the Leader of the Opposition in this House or the noble Lord, Lord Jenkins of Hillhead, could have allowed themselves to make those attacks on individuals I simply do not understand.

There are two other points that I should like to make. One is that not only in the Matrix case, where the case was stopped at the request of the prosecution by Mr. Moses, not by the Attorney-General or by the defendants or by the judge in the first place (although the judge had to rule), and as the result not of the admission of the documents but of the fact that one of the witnesses changed his evidence in the cross-examination, was that dropped. In all the other cases, either at first instance or on appeal, the defendants ended by getting their acquittal. Our system of justice worked. In my experience, no system of justice is perfect, but our system of justice worked, and it worked for the benefit of the accused in every relevant case.

I turn briefly to one other and more political aspect. There is no doubt that the guidelines remained the stated policy of the Government. For what it is worth and contrary to what has been said hitherto, I am convinced that where the Government went wrong, if at all, was in sticking to the guidelines, because they had ceased to be predicated upon anything other than a shooting war which was going on at the time they were adopted in December 1984 between Iran and Iraq. Three of them were kept to the letter. The first was that we should maintain our consistent refusal to supply any lethal equipment to either side that is, to Iran or Iraq. That was kept. The second guideline was that subject to that consideration, we should attempt to fulfill existing contracts and obligations. That was kept. Lastly—I leave out the third guideline for the moment because I shall return to it—the fourth guideline was that in line with that policy we should continue to scrutinise rigorously all applications for the supply of defence equipment to Iran and Iraq. That was done.

All four of the guidelines, including the third which stated that 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—that is, the conflict between Iran and Iraq—ceased to have effect after the ceasefire took place, and did not resume.

In my opinion, where people went wrong was in sticking to the guidelines and not reformulating them. I do not think that Parliament was deceived. I do not think that it was deceived at all, because it was obvious that all four guidelines were predicated upon the existence of a shooting war between Iran and Iraq. What we and all civilised countries were faced with was a regime in Iran and a regime in Iraq which did not live up to civilised standards in many respects. I can only remind the House of the abominable and blasphemous fatwa issued by the so-called Ayatollah Khomeini against Mr. Salman Rushdie. We need not go further into the record of Iraq leading up to the Gulf War because only yesterday or the day before there appeared in the press news of the abominable murders of two returning exiles who could have been led to return only by some promise of immunity.

The truth of this matter is that it was wrong to rely on guidelines predicated upon the existence of a shooting war between Iran and Iraq. We were faced with a constantly changing situation between two uncivilised powers which disregarded the fundamental rules of human righteousness and which could only be dealt with, and ought now to be dealt with, on the basis of agreement between the civilised powers of the world and one of their world organisations. There is the truth of the matter.

Boring as I may have been, I have tried to live up to the standards without recrimination of Parliament in discussing a most weighty matter. I am obliged to the House for listening to me so patiently.

4.40 p.m.

Lord Callaghan of Cardiff

My Lords, I do not know whether your Lordships will be relieved or not to hear that I do not intend to follow the two previous speeches. In any case, I would be quite unable to do so. I have heard more legal cases quoted this afternoon than I knew existed. Therefore, I propose—although perhaps I may be permitted a marginal note at the end of what I have to say—to carry us into the more familiar waters of policy and administration in which I guess that most of us feel at home. Therefore, I intend to return to the issues that I picked out of this meticulously written—perhaps too meticulously written—and mammoth document, which fastened my attention. Your Lordships certainly cannot expect any of us to take in every aspect.

The aspect on which I want to focus attention is concealment, which, in my view, cost the Government all of the matters which have so troubled Parliament and the people. Unlike my old noble and learned friend Lord Hailsham, who was an adversary for 50 years, I do not propose to resume bombing hostilities on this occasion. I go back to the beginning because the Government were in trouble from the start. Their practice did not conform to their public posture. Their public posture clearly announced that they were to be impartial, even-handed and neutral. I shall not give references for all that I am going to say because that would be too boring. If any noble Lord challenges me, I hope that I shall be able to respond by referring to the paragraphs of the report to which I am speaking.

The Government stated that their policy was not to license lethal weapons. They also said that they would fulfil existing contracts to Iran, basically in ships and spare parts for tanks. Having said that—this is the first criticism that I make and I shall try to maintain the standard—the Government have to be subjected to rigorous but fair criticism. Having said that they were going to be impartial and even-handed, paragraph D1:10 states that at a meeting of the Overseas and Defence Committee—and those minutes were never published—Ministers decided that, every opportunity should be taken to exploit … [the] sale of defence equipment to Iraq. It was not to be lethal equipment, but defence equipment. It was the policy that every opportunity should be taken to exploit the sales of defence equipment. In previous years we were supplying much more to Iran than Iraq.

How could that possibly gel with being impartial or even-handed? It was not. Indeed, in 1984 the situation reached the point when much more equipment was being sold to Iraq than to Iran, although at the start of the war the reverse situation obtained.

Nor were the Government consistent in their interpretation. It must have been a deliberate decision not to define the words "lethal" and "non-lethal". Illustrations are given in the report—which I assume cannot be challenged or they would have been—that in the case of one combatant the equipment was defined as "lethal" and for another combatant the same equipment was defined as "non-lethal". How can that he justified? Who were the Government deceiving? They were not deceiving Parliament, but they were deceiving their own policy in which they had stated that they were to be neutral, even-handed and impartial. I am not surprised that the Permanent Secretary at the Foreign and Commonwealth Office—I do not know who he was, although I am sure I could be told—was reported as saying, There is no principle here—only expediency". Therefore, from the very beginning the Government's policy was deceptive in the way in which it was carried out as distinct from what had been said about it.

Ministers made an attempt to straighten things out. After this kind of comment from a Permanent Secretary, they decided that they should have a go at it. That is the reason for the guidelines; namely, that there could be some understanding as to the way in which these matters should be prosecuted. It was an attempt to reconcile what was being done with what was being said. I applaud the Government for doing that. Obviously, it was very correct that they should get rid of this mess into which they had dropped through the desire to sell as much defence equipment as they could to one of the combatants.

I believe that they then made the basic mistake—and this is where the noble and learned Lord, Lord Howe, is involved—which has troubled them ever since and which I believe has lessons for the future. With the agreement of the Prime Minister at the time, the noble Baroness, Lady Thatcher, he decided not to publish the guidelines but, through the briefing of friendly correspondents, to let them emerge. It was much more subtle than what was done last week. It was another 12 months before the guidelines were published.

Later, as the noble and learned Lord, Lord Hailsham, reminded us, they were amended. Originally the decision was made not to publish. However, the guidelines were published on the first occasion after a lapse of 12 months, but an amendment was not published on the second occasion.

I do not dispute that Ministers had arguable reasons for taking that course. Perhaps I may enumerate them. The United States was strongly opposed to the sale of any anus or defence equipment to Iran because they were holding American hostages. That was a perfectly valid reason. Saudi Arabia and the Gulf States, however, wanted us to sell a lot of arms to Iraq. They were frightened and they thought that it would strengthen their position if Iraq received more arms than Iran. The Government obliged and sold more arms to Iraq than to Iran. That would have annoyed a great many people if it had become known. It would have annoyed Iraq if it had been known that the Government were going to be even-handed, because our political relations with Iraq were then of such a character that Iraq was hoping very much that we would favour them in this particular matter. The British people themselves had a hand in this because of the treatment of the Kurds and the use of chemical warfare in the most horrible and barbaric manner.

There were all those reasons, and I can understand why the Government did not make the guidelines public. It was right to give them proper weight. The House may be slightly amused at another reason why this was kept private, but may not have much sympathy with it. There was an exchange during the evidence of the noble and learned Lord, Lord Howe. With typical candour he was asked why he had not favoured publication. He gave some of the reasons that I have quoted. The questioner said: "Cannot this he explained to the public'?" The noble and learned Lord, Lord Howe, said, "It is not easy. The scope for misunderstanding is enormous. Public debate will be emotional". Then came a follow-up question: "It is a sort of "Government-knows-best" approach, is it not'?". The noble and learned Lord, Lord Howe, said, "Yes". Nothing like it has been said, since Hartley Shawcross told us, "We are the masters now". A Conservative Minister was saying that the Government know best in these particular matters. I do not take it too seriously but one can only admire the brutal frankness of that reply delivered to a mature democracy.

Disclosure would have caused the Government a lot of bother. It would have been a very difficult decision to take. The arms trade is always a potential source of problems and difficulties. As has already been said, there are moral scruples to put on one side and jobs to put on the other. Where does one strike a balance? There are political disagreements, which undoubtedly would have come out. There is also the possible souring of international relations.

This is not the first government to have had such problems. We had them all the way through the Labour Governments from 1945 onwards. Certainly, individual contracts were not disclosed but a number of public issues involving the kind of difficulty that the Government have were disclosed. On the previous occasion on which I mentioned an historic occasion the noble and learned Lord, Lord Fraser, said that he was only 16 at the time and therefore he remembered nothing about it—

Lord Fraser of Carmyllie

I was 16 months old.

Lord Callaghan of Cardiff

My Lords, whatever age he was, I am sure that he looked as young and handsome as he does now! There must be some noble Lords who remember the refitting of the naval ships when I was Foreign Secretary and the fact that we considered that we had to fulfil past contracts. Noble Lords may remember the flack that I took at the time when we had a public debate about the matter, which is the difference. Now they are all hidden away. Surely the refitting of naval ships and sending them, as I did, to Chile, which was under a dictator, was almost on a par with what was being done as regards Iran and Iraq. We thought that it was the right thing to do and we took the flack. There was a public debate about it, and that is the difference.

The Government would have escaped from many of their problems had they not concealed the facts but exposed them to public gaze and public argument. If they had ridden out the troubles, they would have had far fewer problems since. They would have escaped all the wretchedness that has been connected with this business during the past four or five years. I believe that the decision not to publish and not to allow public debate on the issues got them into trouble.

When the guidelines were amended at the end of the Iran-Iraq war the Government did not admit that, as the noble and learned Lord, Lord Hailsham, said. The tenor of their replies led Members of Parliament and the public then to believe that the Government's practice was based on the first guidelines to he published. I do not believe that that can he disputed. All the answers that were given were directed to leading the receiver to believe that what the Government were talking about were the original guidelines and not the amended guidelines. That is the reason for saying that Parliament and the public were misled. That led to a number of evasive replies to parliamentary Questions.

Another serious point is that it led to the Government implementing a policy different from the public statements that they were making. The fact that the guidelines had been amended was discovered only by accident when an official giving evidence to the Treasury Select Committee happened to say so, believing that it must have been known already. It was not. That was the way in which the amendment came out, but it was never admitted by the Government.

I turn to the problem which junior Ministers face. The action led to them almost taking control of the formation of policy in this area for at least two years without either let or hindrance. One Minister would give a nod and a wink indicating how to get round his own Government's policy, which ended up with some people being put in the dock in the Matrix Churchill case.

The action also led to Mr. Waldegrave stating: All applications for export licences … continue to be rigorously scrutinised to ensure that they fall within these guidelines". It was not true and it is not true. I am sorry if Mr. Waldegrave is a man of honour, but the statement simply was not true. He may have deceived himself, but it was not true. Lord Justice Scott concluded that it was not true and one has only to read the paragraphs to see that it was not true. I do not understand how Mr. Waldegrave, an intelligent man, is lamely trying to defend the proposition that a change in implementing policy is not a change in policy. He has rightly been condemned for sophistry, as my noble friend Lord Richard said. I will not make too many quotations, but Sir Richard Scott said: I regard Mr. Waldegrave's view as being not even remotely tenable". He also stated: I did not receive the impression of any insincerity on his part". Let it be said in mitigation that there was no impression of insincerity, so if he was not a knave what was he, a simpleton?

Lord Hailsham of Saint Marylebone

Neither. He is a Fellow of All Souls, Oxford!

Lord Callaghan of Cardiff

My Lords, perhaps then as a Fellow of All Souls he was a clever silly! That is it; I shall spend no more time on that point.

I repeat, I do not argue that every act of high policy can be revealed, excepting issues such as interest rates and exchange values. However, perhaps I may give an example that has not yet been mentioned relating to nuclear issues. Ever since we struck up a relationship with the United States in the early 1940s it was not the practice, in particular during the Cold War, for discussions to take place in Parliament about the nature of that relationship and the pacts that had been entered into. Indeed, the information was not always revealed to the Cabinet but was sometimes kept to a small group of senior Ministers. In respect of one particular narrow but important issue, the relationship with the United States was never disclosed because it was conducted on a personal basis between President and Prime Minister at the beginning of every term of office of a new Prime Minister. Your Lordships do not find me arguing that everything can be revealed; I do not accept that. But since the end of the Cold War circumstances have been much easier. It is possible to be more open even about this matter and greater frankness can be expected.

However, no one can claim comparison between the measures in the public interest which were adopted in our relationship with the United States as regards nuclear issues, when the world may have been faced with a holocaust of a nuclear war, and the supply of machine lathes to Iraq or Iran. The two issues are totally out of proportion and, in my view, there is no reason in the public interest why the matter should not be fully and wholly known to us all.

I have no doubt that the Government could have been better advised to try to gather public support for what they were doing and to face the criticism that would undoubtedly come. They would have escaped the inquiry; but Ministers proceeded on their own.

I wish to make one further point. After the end of the Iran-Iraq war there seem to be little reference to the Cabinet or the Overseas Policy Committee giving much thought to the strategic consequences. I hope to hear the noble Baroness, Lady Thatcher, comment on that. It was known that strategic issues had to be reviewed at the end of the war. Her Secretary, Sir Charles Powell, answered a letter in such terms in 1988, only asking that because those very important issues would have to be measured and decided, the Prime Minister should be kept informed. She was not. Perhaps for two months the letters passed but after that, they faded away. The junior Ministers took over. For a period of about two years, three junior Ministers were handling practically all those important issues. They were not qualified to do so in terms of the strategic issues which have to be answered. Only the Prime Minister and the Foreign and Commonwealth Secretary, together with their senior colleagues, should have done that. Why did they not do so? I hope that the noble Baroness will tell me why, when she was not informed of the progress, she did not follow that up when those important issues were involved.

In the absence of direction from the Cabinet, it was the three Ministers of State who were taking the decisions which led to Parliament being misled. They were an oddly assorted group. There was Mr. Waldegrave who was always pressing for restraint; he wanted to hold back. There was Mr. Alan Clark, with his devil-may-care attitude, who was concerned only with getting jobs and exports and was determined to do that because he thought that the guidelines were a lot of nonsense. Then there was the noble Lord, Lord Trefgarne, who sits in this House. It is difficult to assess him. He was on the side of whichever department he was in. When he was at the Ministry of Defence, on the whole he tended to side with Mr. Waldegrave. When he went to the Department of Trade and Industry, he put off that robe and assumed a new raiment. He was then very much in favour of relaxing the guidelines as quickly as possible. Therefore we can presumably place him as a floating voter.

When one reads the minutes, it is quite clear that each peddled his own departmental interests fiercely but there was no one of sufficient authority—and I ask the noble Baroness why that was so—to settle policy on the main strategic issues that had been raised by Sir Charles Powell in the letter in which he acknowledged the first approach that had been made.

Therefore, for two years events and matters were left in their hands. It was then that Nicholas Ridley raised the issue with the Prime Minister. He was the Secretary of State for the Department of Trade and Industry. He urged a thorough review. I note that the Chief Whip is attempting to rebuke me, but I have not yet heard any of these arguments put and I believe that they are worth putting. Nicholas Ridley urged a thorough review of export policy and the Prime Minister decided that Mr. Hurd should conduct such a review with the other senior Ministers. That was two years later. In the meantime, the Government were getting deeper into the pit because of lack of direction at the top. The most damaging consequence of the failure to grasp this issue firmly was the Matrix Churchill case.

The Government were mistaken in not developing the guidelines so that the public could judge. They allowed it to be thought that export applications were being rigorously scrutinised. As has been said this afternoon, they were not being rigorously scrutinised; they were being scrutinised with a view to seeing how much could be given to one of the combatants.

I have taken too long and I apologise to the House for that. There is a great contrast in the debate today compared with the debate last week. In my view—and I speak with as much fairness as I can muster—the Government have discredited themselves by what has taken place over the past few years in relation to this particular matter. What is worse, they have discredited most of the rest of us because we are all tarred with the same brush; namely, that we have all tried to keep things from people and have acted in our own interests or whatever may be the criticism. I have a feeling that the country will not put up with it for much longer.

5.4 p.m.

The Lord Bishop of Lichfield

My Lords, I am grateful for an opportunity to speak briefly and to take up some of the issues which have already been raised. I should like to say a few words about arms sales; accountability in the light of the report; and I shall also attempt to be constructive.

In 1994 a Church report called Responsibility in Arms Transfer Policy was published. The report was prophetic in that it stated clearly that we need a national policy which is ethically responsible, transparent, publicly accountable and consistent. The coming now of this report brings back that prophetic side of the Church report in 1994.

With regard to arms sales, I suggest that we need to develop a society in which, as Cardinal Hume stated on numerous occasions, there is a moral presumption generally against arms sales unless the case for a particular transfer can be shown. I hardly need to remind your Lordships that arms are not like other goods. Of course they are designed to defend but they are also designed to kill, threaten and injure.

This report and inquiry provides an opportunity to set new standards in this matter because it is clear that in this particular affair the standards of truthfulness, accountability and honesty needed to be adhered to and, whatever the to and fro of this debate, are still not generally perceived to have been observed by many people among the general public.

Therefore, we are reminded that Ministers in positions of public responsibility should be seen to be accountable. That is still not crystal clear in the present state of this discussion. They have a duty to tell the truth—not half truths and not just a presentationally convenient part of the truth. There is a widespread perception that in recent years there has been something of a decline in standards in this matter.

In addition, Sir Richard Scott has shown that an overhaul of the licensing system and parliamentary accountability—both of those issues are mentioned in the report—are required. Technical details must be worked out with a clear need for openness, accountability and honesty. Sir Richard's report makes that clear.

As regards being constructive, I believe that the criteria outlined in paragraph K2.18 of the report presents a good basis for further development. Sir Richard makes recommendations in relation to complying with treaty obligations binding on the United Kingdom; the protection of our armed forces; the prevention of terrorism; and the avoidance of assistance to human rights abuses in foreign countries. Having worked for nearly 10 years in Uganda at the time of the Amin regime, I am particularly sensitive to the importance of that recommendation within the Scott report. He makes recommendations also in relation to avoidance of assistance to serious crime in foreign countries which is an issue that has already been referred to this afternoon; and the avoidance of assistance to aggression by foreign countries.

That clear statement of expert criteria and a recommitment to make such criteria the core of export policy is very much to be welcomed. The supervision of such policy will require vigilance and parliamentary control. Again, those are details which must he worked out.

In concluding my remarks, I should like to go further. I believe that there are other points in the Church report which could strengthen Sir Richard Scott's framework. First, there is the tug of war to which the noble Lord, Lord Callaghan, referred—that is, the tug between commercial needs and what is right. The difficult tension of that struggle between truth, rightness and industrial prosperity must never be relaxed. In particular, the question of political and ethical judgment must always have the upper hand.

The Church report goes on to say that there should be clear separation between arms transfers and the provision of aid, and that there should be a refusal of arms transfers to regions of tension, except to countries which are adjudged by the international community to be under threat and insufficiently armed. There also needs to be—and the report upholds this—a rejection of arms transfers to countries guilty of grave and consistent violations of human rights and those which have an unnecessarily high level of arms spending.

In taking note of the Scott Report, my own hope would be that your Lordships' House will see that there are such deeper issues to do with the arms trade itself and to do with the public perception of ministerial accountability to which I have referred. Principled decisions will need to bear the test of time, but they will always be preferable to the arguments of short-term expediency and quick profit. To take considered and decisive steps on the basis of Sir Richard's inquiry at this juncture would do much to restore confidence in our public institutions.

5.11 p.m.

Baroness Thatcher

My Lords, in order to keep to my 10 minutes, which I had understood to be the maximum time that we had, I shall not honour the right reverend Prelate the Bishop of Lichfield; I shall get on with what I had intended to say. For some time now a great deal has been said about what has been misleadingly called "Arms to Iraq". Indeed, some of the Opposition and the media seemed to have made up their minds in advance that the Scott Report would attribute deliberate intent to the Government, both in breaking their own guidelines which prohibited the sale of lethal equipment to Iraq and Iran and in conspiring to send innocent men to prison. I never believed that Sir Richard Scott would make any such findings, and he does not do so. Indeed, he makes it absolutely clear that the Government did not authorise the sale of any lethal equipment to Iran and Iraq. By contrast, some of our competitors, particularly our fellow European Union members, showed no such restraint.

Nevertheless, the report raises important issues, many of which have been mentioned this afternoon, which merit full discussion and examination. I am sure that the Government will give both to them. As my noble and learned friend said, in that category are improved arrangements for the control of sensitive exports and improved handling of intelligence material in Whitehall—though I personally will always be on the side of those who wish to see the greatest care exercised in dealing with intelligence, remembering that carelessness can very easily put lives at risk. I believe that the Government have already taken action to deal with failure to ensure that Ministers responsible for decisions have access to all relevant intelligence and information.

On the question of public interest immunity certificates, there seems to be a divergence of view between lawyers, with many eminent judges, including the Master of the Rolls, Sir Thomas Bingham, and eminent and learned barristers, including my noble friend Lord Alexander of Weedon, supporting the view taken by the Attorney-General, as, indeed, I do. It is difficult when judges take different views. You might expect that of politicians and, of course, you would expect it in the Court of Appeal and in the House of Lords. But it is difficult when they take apparently different views on the subject.

I am most grateful to the noble and learned Lord, Lord Lloyd of Berwick, for the clearest and most authoritative exposition that I have heard on all the law to date. If I had been in No. 10 I would have said, "Well, that's that; put it into the pipeline and abide by it". I am not quite sure what the pipeline is, but I hope that that will be the case and that we can accept that fact. I have always believed that a public interest immunity certificate could not be final; a judge had to have the ability to disclose documents to the defence. Indeed, you could not have justice otherwise. That does in fact turn out to be the case, as I hope will be made clear.

The most contentious area of Sir Richard's report, as far as it concerns my time as Prime Minister, is his conclusion that the guidelines for the sale of defence equipment to Iraq and Iran were surreptitiously changed in 1988–89 and that this was not reported to Parliament. On that matter, I differ from Sir Richard. The original guidelines came to me for approval in 1984, approval which I readily gave.

Thereafter, no proposal to amend them was put to me until 1990. Then it came in the quite different context of the worldwide relaxation of COCOM controls. When such a change was being considered in 1990, it was explicitly and rightly envisaged that Parliament should be informed. In the event, the change was not made because the Gulf War intervened.

Sir Richard's report shows that there were discussions among junior Ministers and officials about possible evolution of the guidelines in 1988–89. I was not aware of those discussions at the time, but I would not expect to be told every detail of the handling of the guidelines in the light of changing circumstances. You must take account of changing circumstances when applying guidelines. In any event, the report indicates that the discussions were not conclusive and no recommendations for a change were brought forward to MC or senior Ministers.

Equally, it must be remembered that the guidelines were precisely what their title implies: a guide to officials on how to handle applications for the export of certain sorts of equipment. Their core was the firm injunction against selling lethal equipment and that was scrupulously observed. But they retained an element of flexibility for dealing with non-lethal equipment.

That flexibility naturally took account of changing events, including the ceasefire between Iraq and Iran in 1988, as well as a number of other developments. The interpretation of the guidelines evolved to keep pace with those developments, without any need to change the guidelines themselves.

For example, on the big issues, the proposed sale of the Hawk trainer aircraft was rejected out of hand, while on the borderline cases, the Scott Report clearly shows Ministers and officials exercising enormous care in trying to reach decisions. Indeed, I believe that all fair-minded people would agree that the civil servants handling those difficult matters acted conscientiously and in good faith and should not be stigmatised.

If there was no change in the guidelines—and there was not—then the question of deliberately misleading the House does not arise. I am sure that there was never any intent to mislead on the part of Mr. Waldegrave or any other Ministers—and Sir Richard Scott himself concludes that there was not duplicitous intent.

As my predecessor in No. 10 indicated, there will always he issues upon which Parliament cannot be as fully informed as might otherwise be desirable. I believe that he will remember that Parliament was not informed about the upgrading of Polaris to Chevaline. Doubtless there were good reasons for that, and I do not criticise that decision. Both Conservative and Labour Governments have found it necessary on occasion to be reticent with the House. I accept that the presumption should always be in favour of informing Parliament unless there are very strong reasons to the contrary But we should recognise that it will not always be possible, and that has been accepted by previous governments of both parties.

In summary, we should thank Sir Richard for the immense amount of detailed work which he put into the report and study very carefully all the lessons which arise from it. We should bear in mind that government does not always lend itself to the exactitude rightly sought by the law. I come from a period at the tax Bar, so I know what exactitude means; it is quite different from government—we make the law; we do not apply the law.

Finally, amidst the mass of detail we should remember that at the end of the war to liberate Kuwait—in which the British Government and Armed Forces played such a proud role no British lethal equipment was found among Iraqi supplies on the battlefield.

5.20 p.m.

Lord Cledwyn of Penrhos

My Lords, we much appreciated the speech of the noble Baroness. We are fortunate to hear the experiences of two former Prime Ministers, and their speeches have made a significant contribution to the debate. We also welcome our new colleague here, the noble Lord, Lord Taverne, and we very much look forward to his speech.

This long and intricate report has attracted more argument and dissent than any that I can remember, but I think all of us would agree that the main conclusions and recommendations should be made clear to the public because they will not have the opportunity to read its 1,800 pages. For this reason I think Sir Richard Scott was right to intervene last Friday and to correct those who were arguing that he had said there was no conspiracy and no cover up, even though his report contained no such statements. This shows that the long and complex document should be studied with great care.

Sir Nicholas Lyell and Mr. William Waldegrave are in the most exposed position and it is very much in their interests and Parliament's that their actions should be clearly understood. As my noble friend Lord Richard has said, the Matrix Churchill trial lies at the heart of the report. Here three innocent men could have been sent to prison on false charges allegedly to suit the Government's objectives. The report makes plain, however, that the Attorney-General's advice to Ministers about signing the PII certificates was as follows, based on a fundamental misconception of the principles of P11 law and without sound legal foundation". It has been clear from this debate so far that there are differing legal views on Sir Richard Scott's ruling. There is also the additional point that the Attorney-General failed to inform the prosecution that Mr. Michael Heseltine had serious doubts and feared that the withholding of crucial evidence might produce a miscarriage of justice. Fortunately, the learned judge in the case threw out the certificates and the men walked free. The President of the Board of Trade made what I thought was a weak attempt to defend the Attorney-General in another place, though both he and the Attorney himself should have realised that the integrity of British justice was on the verge of being seriously damaged. That is a lesson which should be taught in every law school in the country.

I now turn briefly to Mr. Waldegrave. I find his activities difficult to follow, especially the 38 letters he wrote in 1989 which are held to have misled Parliament. I get the impression that Mr. Waldegrave was wallowing in a mishmash of uncertainty at the time. For example, in a draft Sir Richard Scott writes, Taken overall, the terms of Mr. Waldegrave's letters were apt to mislead the readers as to the nature of the policy of export sales to Iraq currently being pursued by the Government. Mr. Waldegrave was unquestionably in a position to know that that was so". But in the report itself at paragraph D4.12 Sir Richard states, Mr. Waldegrave was in a position to know that that was so although I accept that he did not intend his letters to be misleading". I also regret to say that I feel that Ministers and civil servants interfered far too much in the process and production of this report. The fact is that the Government spent more on monitoring and lobbying the Scott Inquiry, £1.9 million, than the total amount spent on the inquiry itself, £1.8 million. Furthermore, the Prime Minister's Office and other departments have been working full-time in preparing a reply to the report. This is not an attractive scenario. It reveals a nervous and uncertain Government searching desperately for a way out of a quandary. But here again the Prime Minister and his colleagues made things difficult for Sir Richard, who had an extremely difficult task.

Finally, noble Lords will remember that we spent many hours in this House in debates and at Question Time seeking information and clarification about the sale of arms to Iraq and to Iran. This is referred to in detail in the report, as noble Lords will have noted. I hope I may be allowed to read out a question which I put to the Minister at Question Time on 14th December 1989. It was a question which noble Lords in this House and in another place were asking then. Is it not the case that Iraq has an appalling record on human rights and that it is responsible for killing, torturing and imprisoning thousands of Kurds and members of opposition parties? It has imprisoned two British citizens and has not responded to representations made by the Government and others. Is it not further the case that the Government sell arms to this country and give it export credit? What kind of standards are the Government adhering to in these circumstances?".—[Official Report, 14/12/89; col. 1398.] I did not receive a satisfactory reply, although I was supported by a number of colleagues, including the late Lord Grimond on the Liberal Democrat Benches. The reply was inadequate, and the situation has never been made clear to us. This has been one of our problems in considering this report.

The report contains many of these government uncertainties. I am glad that the Prime Minister has agreed to accept and implement Sir Richard Scott's recommendations, as explained by the noble and learned Lord, Lord Fraser, in his opening speech. Yet this is a sad chapter in the Government's record and nor is it primarily a party political matter. When I entered this building 45 years ago I was immensely proud to become a Member of the world's greatest democratic institution. We do not want this Parliament damaged or its reputation destroyed. That is why we must avoid evasion and perversion when we deal with the Scott Report. Ministers will only gain respect if they face the realities and tell us and the people of this country the complete truth about all these problems. I appeal to them to do so.

5.28 p.m.

Lord Taverne

My Lords, it is, I understand, the tradition of this House—as indeed it is of another place—that maiden speeches should not be controversial. It may perhaps therefore surprise some noble Lords that I have chosen to make my maiden speech on the Scott Report whose publication has not been altogether without a measure of dispute. Let me therefore say that I hope to avoid controversy, certainly party controversy. If I stray into saying anything which may appear controversial—even designedly so—I assure your Lordships I have no intention to be controversial, and certainly have no duplicitous intent.

As many have observed, the Scott Report is somewhat contradictory. It reminds me somewhat of a verdict by a jury in Southend at a time before the drinking and driving laws were changed in 1967. In those days a jury had to decide whether a defendant was unfit to drive through drink. In that particular case the jury reached a verdict: "drunk but not unfit to drive". It was the kind of verdict that led to a change in the law. There will now, it seems from the noble and learned Lord's opening statement, also be changes in the approach to public interest immunity certificates.

I want to speak today as an ex-Minister rather than as an ex-lawyer. It is a very long time since I have practised law. It is also a considerable time since I practised as a Minister. I want to make a few comments on the Matrix Churchill case and ask where we should go from here. In order to see where we should go it is important to look at what happened.

It has been very strongly argued by the Attorney-General, and in this House by the noble and learned Lord, Lord Lloyd of Berwick, that Sir Richard Scott was wrong in the view that he took of the law on public interest immunity certificates. The noble and learned Lord, Lord Lloyd, said that there was no doubt that the law was clear. I was a little surprised to hear him say so since other eminent lawyers, including the noble and learned Lord, Lord Scarman, felt that the law was clear in an opposite direction. The Attorney-General and the noble and learned Lord, Lord Lloyd, have strongly contended that, if these certificates cover documents within the right categories, Ministers have a duty to sign them and they should not concern themselves with questions as to whether the actual documents for which the immunity is claimed should be disclosed to the defence.

Let me assume that the law was as the Attorney-General and the noble and learned Lord, Lord Lloyd, say that it was. If that is so, it led to some very strange results. Was it really the case that Ministers must not concern themselves in these kind of circumstances with the issues of justice and the miscarriage of justice? Are questions whether someone may be wrongly tried or convicted perhaps to be regarded as questions too difficult or too technical to be considered by Ministers? Are they questions which should be reserved only for lawyers and the courts? That is what the doctrine seems to imply. Are Ministers to be, as my noble friend Lord Jenkins pointed out, rubber stamps? In which case, why do not civil servants sign the certificates? That is a question which was asked by Sir Richard. Indeed, it was a question asked by Mr. Heseltine.

No doubt there will be many cases in which Ministers will not be in a position to judge whether documents are relevant or should be disclosed. But the Matrix Churchill case shows how perverse the consequences of that doctrine can be. Here was a case which had had widespread publicity before the trial started. The Prime Minister, the Secretary of State for Defence and other members of the Cabinet were kept informed of the progress of the case. Ministers in the Department of Trade were to he witnesses in the case. The documents for which immunity was claimed were documents produced by the Department of Trade and Industry. Yet Mr. Heseltine, the head of the department which was centrally involved, was solemnly told that he had to sign a certificate to exclude from disclosure to the defence DTI documents which he thought were clearly relevant to the defence. He was told that it was his duty not to express any view on relevance. That was for the experts—the lawyers—not for him. Even though he felt that the defence needed the documents, and that if they were not disclosed innocent people might perhaps he convicted, he was told that he could not say so in his certificate. He did not say so in the certificate in the end, and he was told that he had to sign it.

What are Ministers for? Contrary to popular belief, they do not see as their ultimate role model the right honourable James Hacker. Mostly they are concerned with justice. And issues of justice and injustice, relevance or irrelevance, are not always so difficult or technical that they are beyond the wit of lay Ministers to judge. In fact, in the Matrix Churchill case the Minister concerned, Mr. Heseltine, actually had a clearer view of the relevance of the certificates than prosecuting counsel, who argued that they were irrelevant.

If the law was as the Attorney-General and the noble and learned Lord, Lord Lloyd, say it was, it is also not surprising that it led the Attorney-General into a rather embarrassing position. The Attorney-General accepted at a certain stage that he should take an overview of the case. That is something which he did not mention in his letter to The Times today, but it was an important feature. Nevertheless, he still felt no need to examine the documents which had caused Mr. Heseltine such concern. He did not find any need to mention Mr. Heseltine's concerns to the prosecuting counsel when he had a conference with prosecuting counsel a few days later.

If one was an ignorant outsider one might perhaps say that this was an extraordinary omission, that perhaps it was even negligent or irresponsible. But, good heavens, no, it was apparently his duty under the law as he saw it to see that the PII certificates were properly issued and signed and it was solely for the courts to decide whether they were relevant.

It has always been assumed that the judge was bound to look at the documents. However, on the best legal advice I have been informed that at that stage it was not customary for judges necessarily to look at the documents. Indeed, there have been some recent decisions in which judges have been told to be very hesitant about going beyond the certificates. In fact, counsel for the prosecution argued that there was no need for the court to look at the documents. He said, quite fairly, that he was happy for them to be disclosed, but he said that there was no need and he later argued that they were irrelevant. So Judge Smedley emerges as one of the two heroes of this rather sorry story.

If then, my Lords, the law was as the Attorney-General contends, and what it appears to be according to the noble and learned Lord, Lord Lloyd—and I realise that there are many eminent people far more learned than I who argue that that is the correct view of the law—and Sir Richard and the noble and learned Lord, Lord Scarman, are wrong in their view of the law, the conclusion seems to follow that the law was wrong. Indeed, an irreverent outsider who was not constrained by the inhibitions of making a maiden speech might even say that the law was an ass—but I could not possibly comment.

I welcome the fact that after the Scott Report there will now be a general discussion of PIICs. I hope that the Government, in the course of taking part in those discussions, will take into account the fact that Ministers cannot be expected simply to act as rubber stamps.

There must also be a sea-change in the whole culture of secrecy in government and Whitehall, not just this Government but all governments. It seems to me that the Scott Report presents a very powerful argument for a new freedom of information Act.

5.37 p.m.

Lord Simon of Glaisdale

My Lords, it is a real privilege to be the voice of your Lordships in congratulating the noble Lord on his admirable maiden speech. The noble Lord has had a distinguished career in the law and has been a distinguished departmental Minister in more than one department. He has also been concerned in commercial administration. Perhaps I may mention one other achievement which he brings to this House. He was one of the founders of the Institute of Fiscal Studies, whose activities have been so valuable. Indeed, he was its first president. So he comes to your Lordships' House bringing valuable gifts. Your Lordships will want to hear him again soon and will be all agog to hear him when he can be really controversial. In the meantime, I express the hope of all your Lordships that we may hear him speak again soon and often.

Important issues are raised by this report. The list of speakers is of great length and includes people whom your Lordships will want to hear on particular aspects. Therefore, I propose to confine my remarks solely to the question of the PII certificates and the advice given by the Attorney-General. In my respectful submission, that advice was not only given in good faith but was entirely correct in law. In that, I am reinforced by what has been said by my noble and learned friends Lord Lloyd and Lord Hailsham.

It was the duty of a Minister, clearly established as a duty and not a privilege or a discretion, to indicate clearly to the court the degree of confidentiality or secrecy which attached to any evidence, particularly documentary evidence, that might be advanced to the court. It was the duty of the litigant who desired to know the content of that evidence to urge the contrary. It was the duty of the court to weigh those two conflicting aspects of the public interest one against the other and to decide which should prevail. That is indeed precisely what the learned judge did in this case.

I need refer only to one of the seminal cases which has been mentioned today—Duncan v. Cammell Laird. I merely draw to your Lordships' attention that if the many documents—contracts, blueprints and so on—for which immunity was claimed had been divulged they would have shown a new type of torpedo tube fitted to the submarine. We were at war and that was highly secret. Therefore it is quite wrong to talk as though a class claim is merely a matter of a minute made by a minor official.

The law in that case was stated by Viscount Simon. He indicated that there were two categories: a contents document where the contents would be dangerous against the public interest if divulged; or a class of document which should not he divulged for the proper functioning of the public interest. However, he went far beyond what was necessary to decide that case. He said, for example, that the claim of immunity by the Minister was conclusive. He also stated broadly the claim on the class basis. That was lapped up with great glee by officialdom. It gave them a blanket cover. Professor Wade in his famous book on administrative law said that, that case having given officialdom a blank cheque, officials could hardly be blamed if they overdrew on the account.

I mention only one case where there was an overdrawing because it is relevant to the consideration which your Lordships have. That is Odlum v. Stratton in 1949. It was a libel action in which the professional competence of a farmer was in question. A series of reports on his competence was in the hands of the Ministry of Agriculture. The Ministry claimed that it was immune from disclosure except for two documents. Those two documents told against the plaintiff. He wanted to see the others, but those were the only two for which immunity was waived. The judge had no doubt at all, nor do I think would anyone reading a transcript have had any doubt, that the documents were divulged precisely with the objective of discrediting the plaintiff.

Does that not show how dangerous it is to leave to a Minister the right to pick and choose as to what evidence should be divulged to the courts? Fortunately the answer was given in the case of Conway v. Rimmer. It was not for the Minister to argue conclusively. It was for the court to decide, weighing on the one hand what the Minister said as to the degree of secrecy and confidentiality, and, on the other, what the litigant said as to why the document was germane to his case.

That was the leading case up until the time that the Attorney-General had to advise in the present case. In other words, the Attorney-General's position was that he was bound to advise the Ministers that they should not attempt themselves to judge where the balance lay. That was for an independent court. He could point, though he did not so far as I know, to Odium v. Stratton to show how partial the ministerial view might he. So it was vouchsafed to an independent judge. It was on that base that the Attorney-General gave his advice in the case which your Lordships are now reviewing. In my respectful submission, it was entirely right for the reasons that have been given by both my noble and learned friends.

Since then we have had later cases which have thrown more light, giving a greater discretion to the Minister. However, your Lordships may think that they should be viewed in the light of Odium v. Stratton, in which a one-sided view of where the public interest lay was vouchsafed by the Minister.

What is the correct position? It is for the Minister to say where, from his departmental point of view, the public interest lies; it is for the litigant to say why that is not sufficient; and it is for the judge to do his judicial duty and choose between them. That is what happened in the Matrix Churchill case.

There is this also to be said. The judge took his view in the light of all the circumstances. On the one hand, he weighed the public interest asserted by the Minister. and, on the other hand, the need for disclosure in a court of justice argued for by counsel; and he decided rightly and fruitfully that all the documents should he disclosed. That was for him and not the Minister. In my respectful submission, the view put forward by my noble and learned friends Lord Lloyd and Lord Hailsham was precisely right. It is for the courts to judge and not for a Minister, however well informed, because he is almost bound to take a partial view.

In my respectful submission, in this case the Attorney-General gave the right advice. It was then open to those who wanted greater scrutiny of the material to argue before the judge, as they did successfully. If the law is allowed to operate in that way, it will do so fairly, as it did in the outcome of the case under review. However, if there is partial interference, the law is liable to miscarry.

For those reasons, it seems to me that the advice given by the Attorney-General in this case was right. We shall have to watch carefully if there is a partial divulgence by Ministers, lest they take an exclusively Executive view. It is far better that they should put forward their view, the litigant should put forward his view and it should be left to the judge to decide.

5.52 p.m.

Lord Howe of Aberavon

My Lords, I should not be one to argue that this case shows a pattern of conduct free from error. Whose can be so? Nor should I begin by trying to minimise the importance of the original crisis, the collapse of the Matrix Churchill trial. That was the cause of the original public dismay which the inquiry was designed to allay. The tragedy is that it has taken us so little distance along the way towards clarity in the matter.

The noble Lord, Lord Cledwyn, referred to his difficulty in analysing the conclusions. We much welcomed the maiden speech of the noble Lord, Lord Taverne, who gave a rather harsh, if rather uncontroversial, judgment on it when he compared the case with the verdict of a Southend jury. I am not sure whether we look forward to the development of the noble Lord as a former lawyer or as a former politician, but we look forward to hearing him develop his talents in both fields.

The tragedy is all the greater because the story is one in which there are no villains and almost no villainy. I say "almost no villainy", because one cannot accept the reckless part played, I am afraid, by my honourable friend Alan Clark in the early stage in the matter. For the rest, all the actors were concerned only to promote or reconcile legitimate British interests or, at the least, interests which they were legitimately entitled to pursue. Yet we are left with many uncertainties. They are due to the form of and procedure adopted by the inquiry, about which I have said much in the past and to which I shall address myself again in a minute.

It is harder now to justify the procedure adopted even than when I first began launching my criticisms, if only to judge by the reactions that have followed publication of the report. First, there is shock, amounting almost to disbelief, at the length and density of the documents presented to us. Secondly, there is the universal difficulty in securing agreement on the substance of almost any of the conclusions, even on the law affecting PII. Finally, there is dismay—which I share—at the sharpness of Her Majesty's Government's reaction to the report. That was understandable, however much people may regret it, because the Government's defence had never been positively put forward in the course of the proceedings. The key conclusions positively in favour of the Government were scattered, buried in the body of the text. In Volume II, page 784 and volume III, page 1538, there were the clear acquittals on the key charges that Britain supplied no weapons to either side and that Ministers did not conspire to send innocent men to jail. Other misunderstandings are a consequence of proceeding, for example, by circulation of drafts from which leaking was almost inevitable, although the defence case at that time had never been heard. There were drafts where it was hard for the defence to secure the changes that they required. When they sought to procure the changes or even when Sir Richard Scott made them, the noble Lord, Lord Cledwyn, said that the Government were devoting efforts to getting at Sir Richard. They were intended to get at him in that way. In a newspaper headline shortly afterwards, the Independent said that Scott had been nobbled by the Government. But the procedure was designed to expose his thinking so that he might he nobbled.

It is less than satisfactory. The inevitable result has been confusion and unfairness because the procedures were fundamentally flawed by the standards of the Salmon Commission reporting 30 years ago. It is important to understand the background to that. Salmon designed procedures specifically to correct the faults of the inquisitorial procedure. He did so because of the concern at that aspect of the masterly report produced by the noble and learned Lord, Lord Denning, on the Profumo affair. The noble and learned Lord complained at having been required to act as detective, inquisitor, advocate and judge.

Therefore, Lord Salmon and his colleagues deliberately introduced elements of adversarial procedure, notably defined as: the elementary right of being represented". It is for that that I was pressing, but not in this case essentially for the right to cross-examine because that was hardly necessary. Certainly those of us who gave evidence were subjected to nothing but cross-examination. We were all treated in the same way. Virtually all the public and press saw of that part of the inquiry was the case for the prosecution being presented by the tribunal against us. What I was pressing for above all was that the tribunal should hear counsel, argument and representations on behalf not only of individual Ministers like us but also on behalf of the great departments of state whose records were being examined by the tribunal. I urged the Government specifically to seek the same right.

It is hardly surprising, in the absence of their having done so, that so much of their case has gone by default and had to be recovered by intemperate methods when the report finally came out. But Sir Richard would have none of that. He gave a long lecture to the Chancery Bar Association, summarised in the report. Its conclusions may be summed up in one sentence: An insistence on an essential role for witnesses' lawyers in oral hearings is in my view unnecessary". Lawyers before the tribunal could specifically he seen but not heard. The Secretary to the inquiry, in a letter addressed to me on 28th February (to be found in Appendix A, Part D) said that appearance by counsel would be "otiose and impractical". So there was the emphatic dismissal of the elementary right of being represented. That produced injustice to those who had to face years of critical and satirical tribulation—and I think particularly of William Waldegrave. Of all the Ministers, he was the most concerned to uphold the proper control of arms exports. Yet he, with other colleagues, has been exposed through three-and-a-half years to pre-emptive recrimination. But it was not only that about which I complain but also that the procedures disabled the inquiry itself by ensuring that the judge and those working with him were in a condition of almost total isolation from human exchange, dialogue or advocacy on behalf of the inhabitants of the outside world.

The inquiry went beyond that by making almost a virtue of such isolation. Mr. Muttukumaru gave a lecture, unusually, about the procedure while the inquiry was going on. He said that the judge had an unrivalled insight into the whole picture". In the same letter to me of 28th February 1995, he said that the judge had: the best overall perspective on the matter". It is hard to think of a better way of defining the claim to a panoptic vision denied to everyone else, but therefore, by definition, almost closed to advocates on the outside. That is true a fortiori, when one reflects, again unusually, that the judge was accompanied by no lay expert assessors at all. They are available in any form of inquiry. For example, in the Franks inquiry into the Falklands affair they were available, when it was set up in that way. They were available to me in a much more humble setting when I had to inquire into allegations of cruelty in Ely hospital in South Wales. There I enormously benefited from the presence alongside me of a hospital administrator, a senior nursing officer and a consultant psychiatrist. So I had lay experts. They were available to Lord Justice Edmund Davies in Aberfan. They were available to Lord Justice Bingham in the BCCI inquiry. In his report he paid tribute to the invaluable insights and guidance that he obtained from them. These are the deficiencies.

I do not believe that, had Sir Richard Scott heard oral representations from counsel and been equipped with lay assessors, it would have lengthened the proceedings. On the contrary, between counsel many matters could have been cleared up and the proceedings would have been substantially shortened. I venture to suggest that it would certainly have improved the clarity of the conclusions. I therefore devoutly hope that this pattern of inquiry will never be taken as a model for a future inquiry, and that it will not be taken as having overridden the crucially important recommendations of the Salmon Commission. That would be virtually to rule out any such inquiry in the future.

I now turn to the foreign policy aspects and, above all I am afraid, to the eponymously named Howe Guidelines. A necessary premise of this debate, mentioned by others, is that a state is entitled to defend itself, and for that purpose to manufacture or acquire weapons and to promote by trade the success, economic as well as military, of its own defence industries. For that very reason the Labour Government (with half its Cabinet scattered across a variety of Benches in this House) established many years ago for that purpose the Defence Export Sales Organisation. It is equally important, as the right reverend Prelate the Bishop of Lichfield said, to ensure that that arms and defence equipment export trade is properly controlled: control over certain types of weapon; ruthlessly effective control, which we certainly upheld, on the supply of atomic, biological or chemical weapons; similarly for missile technology. One requires control also over the customers to whom these weapons go: whether they are hostile or potentially so; whether or not they are repressive of their own population. One has to recall also that regimes may change: from Simonstown, about which my noble and learned friend Lord Rawlinson and I advised many years ago, to Sharpville; from the Shah to the Ayatollah. As such changes take place, although the contract is still in existence, governments can and must adjust their attitudes towards them, in a fashion that takes account of people's sensitivity but also of the interests of the British people who have until that moment been making equipment to sell in those countries.

As the noble Lord, Lord Callaghan, should recall very well, the truth is that international affairs are not only polygamous, but they are also kaleidoscopic. The noble Lord described the embarrassment that he faced in handling one, as it were, monogamous relationship with Chile. I gave that as an example to Sir Richard Scott: the defence in relation to Chile of the legitimacy of selling battleships but the illegitimacy of selling troop-carrying vehicles—the one for use on the high seas, the other in the repression of population. It requires a degree of duplicity to present that argument. In this field, there are few absolute rights and even fewer eternal truths. Governments are obliged to seek the best, not just of both worlds, but often of all possible fast-changing worlds. The implementation and presentation of policy is bound to be more than flexible and opportunistic.

Even so—and I do not quarrel with this at all—Parliament and the public are entitled to know, so far as possible, what policy Government are seeking to follow. But the key words are "so far as possible". Those responsible for the conduct of foreign, diplomatic and economic policy have always been obliged to safeguard a wide range of information: from many hostile or competing nations, institutions and individuals around the world whose principal interests include competing against, outwitting or otherwise damaging the interests of this country.

During the past 17 years, as the Minister said in opening the debate, this Conservative Government have made many moves in the direction of open government. It has to be said that they have not always been made without some prompting from press, Parliament and the European Commission of Human Rights. But we have made them. The awkwardness that we had when first we began talking about GCHQ we overcame. The Interception of Communications Act was put on the statute book by our Government; the Security Service and the SIS have also been brought into the outside world.

But even today, as the Leader of the Opposition has, I fancy, still to learn—and long may be await the opportunity!—the entire process of government cannot be conducted in a goldfish howl. Publication to Parliament is publication to a world that is often hostile to this country. So Parliament has on some occasions to be content with a picture that is less than complete and less than completely up-to-date. That is rightly and inevitably so. That is the fundamentally legitimate argument that is not really grappled with or fairly evaluated in this report, nor in certain circumstances accepted as it should have been.

There are two points at which it should have been recognised as legitimate. The first is on the timing of publication of the Howe guidelines. Remarkably enough, Sir Richard sets out in three separate paragraphs the reasons why the guidelines were not immediately announced in December 1984: fear of diplomatic and trade repercussions, adverse to British interests, from Iran's Arab neighbours (which might actually have prevented delivery of two Yarrow ships to Iran following pre-revolutionary contracts, at great cost in jobs and compensation). We were right to go ahead with that contract, but right at that stage not to publicise it. Yet by October 1985 it then made sense—again Sir Richard records this—to announce the guidelines to defend the fulfilment at that time of the remaining pre-revolutionary contracts for armoured vehicle spares. Characteristically, I am afraid, in one paragraph Sir Richard says that those reasons "appear clearly enough"; yet in another he finds them, "no easier to accept than previous explanations". The truth is, they were legitimate and should have been accepted.

The second place where Sir Richard equally misdirects himself relates to the way in which the guidelines were applied in May 1989. My noble friend Lady Thatcher dealt with that, and I endorse her remarks absolutely. There was no change in essential policy at that point.

I go further than that: even if there had been a "change of policy" (of which, even on his own analysis, Sir Richard Scott accepts I had no reason to know), I should maintain what Sir Richard himself describes as the "more realistic" defence which I then put forward to him that it would have been wrong to disclose such a shift.

Sir Richard says (paragraph D4.9) that he, can understand that the balance of British interests to which I referred". might, in my judgment, have required that there be no public disclosure of the relaxation of restrictions on defence sales to Iraq or of the divergence between the defence sales policy being applied to Iran and Iraq respectively". Of course he can understand that. A shifting from one side to another in response to particular grievances might have jeopardised the safety of British hostages in the Middle East and British prisoners in the gaols of those reprehensible countries. So Sir Richard in one paragraph can understand why that required me to accept no public disclosure.

Nevertheless, he goes on to recommend changes in the presentation of government policy which he says could have avoided any dissimulation but which could in fact well have revealed the very things which he accepts ought not to have been revealed. Improvement, perhaps but certainly not a subject for reproach. The criticism illustrates. I am afraid, the extent to which a judge sitting alone, however distinguished, can sometimes take insufficient account of the pressures of clay-to-day ministerial and official life.

I told Sir Richard, and I astonished myself, that I calculated that during my six years as Foreign Secretary, taking home on average three boxes a night five or six nights a week 40 weeks a year for six years, the weight of paper that crossed my midnight desk was 24 tons. That is a rather different perspective from the attention with which members of the Court of Appeal can address themselves to the case then in hand. It is no wonder that my colleague in the United States, George Shultz, said that being Secretary of State was "like trying to get a drink out of a fire hose". The noble Lord, Lord Callaghan, will remember that well enough, and it is important for us to remember it.

That is why, as I told Sir Richard, other countries adopt very much the same position as ourselves. Even those that have freedom of information Acts exclude from the scope of those Acts information about export—export control; export licence applications. Where such matters have been disclosed to congressional committees, it has happened on terms that they be not further disclosed. In other words, so far as the inquiry troubled to look into that matter, it upheld the case that I have sought to make.

I make one closing point. There is some reason to fear that Sir Richard, during his three-and-a-half years, and the rest of us in different ways to a different extent, have been unexposed to arguments which could and should have been put forward by the Government to the inquiry itself. We have been exposed instead to a massively enthusiastic press, clamouring above all for openness before everything else, carried beyond limits which at one time even the press itself would have regarded as legitimate.

Early in this story—I quoted this to Sir Richard as well—the Independent, which is not notably today a champion of any restraint in this field, on 9th December 1993 said: The realities of foreign policy—and the tendency of public opinion to take impractical moral stands—may make it hard to debate the details of arms sales openly on the floor of the House of Commons. But outside the glare of publicity, there can be no excuse for keeping policy secret from two or three trustworthy and senior members of a Parliamentary Committee overseeing policy or intelligence on foreign affairs". At that time, the Intelligence and Security Committee on which I have sat as a member in its first 12 months had not been brought into existence by this Government. It has been now and it becomes an appropriate vehicle for considering these matters. But it does not make it appropriate to go so far as to open them completely to public opinion.

My last remark is this. I warn against the danger for the judiciary as well as for Parliament of being swept unthinkingly too much further along that road. Soren Kierkegaard, writing almost 150 years ago—I ask noble Lords to listen perhaps with half a tongue in half a cheek—said: Complete publicity makes it impossible to govern … No one has understood that better than the daily press; for no power has watched more carefully over the secret of its whole organisation … as the daily press. which then continually cries out that the government should be quite public. Quite right; the intention of the press was to do away with the government—and then itself govern, and that is why it safeguarded the secrecy which is necessary in order to be able to govern". Take heed, my Lords. Let us be warned.

It is, I am afraid, no surprise that Her Majesty's present Government, having placed their fate so exclusively for three years in the hands of a single Chancery judge, however distinguished, and having made no arrangements during that time for the case for the defence of themselves and their Ministers to be presented to that tribunal, should have ended up in certain difficulties. They cannot expect to be overwhelmed by sympathy. They do need our understanding. They certainly do not deserve our denunciation.

6.13 p.m.

Lord Merlyn-Rees

My Lords, this is a "take note" debate, which I imagine is undertaken in a quite different way from that at the other end of the building. That difference and the very nature of this House were exemplified in the way in which the noble Lord, Lord Taverne, and others have spoken. There will be no cries of resignation or calls for the fall of the Government. Noble Lords will not be accused of playing the orange card, as I understand will be argued at the other end of the building.

I shall concern myself with what went wrong, what was in the report and what changes should be made. My remarks will be based on my own experience. I do not want to warn in a grandiose way but I should like to ask noble Lords not to underestimate the effect that this report has had on opinion outside the House. It has reinforced views that cast politics in a light that I have never known in my lifetime. The report and the way in which it was handled when it first appeared at the Board of Trade 10 or 12 days ago was unpleasant and foolish. It was dealt with in the wrong way.

As a member of the Franks Committee—there were two Franks Committees, one of which dealt with the Falklands War—I shall make only one very brief comment about the report. Over the weekend, I have endeavoured to read most of the report and I wished that there had been a short report of 200 pages or so to front it, stating the views and referring to appendices, as we endeavoured to do with the Franks report. However, let that be as it may. I want to comment on what went wrong and what needs to be done.

I speak on the basis of experience as a junior Minister in defence relating to the Army and the Air Force, a junior Minister in the Home Office and later as Home Secretary and Northern Ireland Secretary. I had ample time to learn about the machinery of government. When the phrase "the machinery of government" is bandied about these days, I find that young people tend to say, "I have done an A-level course on the role of the monarchy, the role of the Lords and the role of the Commons." The machinery of government is more subtle than that and is about how government works in practice. Perhaps 1 may add—I shall speak further about it in a moment—that I worked very closely with MI5 in Northern Ireland. I was "responsible" for it when I was Home Secretary.

First, I refer to accountability to Parliament. When the noble Lord, Lord Tebbit, spoke 12 days ago, he said that he had acted impulsively and looked to see whether he was referred to. I did not do that until I had read what he had said and then I did the same. I found that I had put down a parliamentary Question to the (now) noble and learned Lord, Lord Howe, on this issue. His answer to me said that the Scott Report was not accurate, was false and misleading; the Government had changed their policy and it was a breach of accountability. I do not make that up. I do not read the Independent except on Thursday and then I read the rugby pages. But the Scott Report says that I personally was misled. I leave the matter there. It has provoked me to speak in this debate.

I know that there are many times when information cannot be given publicly. The security of the nation at this point of time would make it plain foolish for the Secretary of State for Northern Ireland to reveal what is going on with Sinn Fein and the IRA. It would be foolish for the Home Secretary to reveal the information that is available about proposed bombings in London. Things of that nature, let alone less important problems, have to he protected. So it seems to me, when I consider this report, that there was confusion in the mind of the Government or people in government between the public interest, the national interest and the interest of the Government. Reading through the report and between the lines, it seems that the machinery of government was befogged and not clear. It seems to me that there were departments which did not know what they were doing. So far as I am concerned, I am informed that I was misled.

With regard to the machinery of government, in the Franks Committee we were asked whether the Falklands War could have been prevented. We should have needed a great deal of hindsight to answer that question. However, we did say that the machinery of government could have been better used. This report refers to the machinery of government. So two reports have referred to the machinery of government. The Franks Committee referred to defects on the Joint Intelligence Committee, lack of resources, lack of co-ordination and lack of assessments at a different level. That is said in this report. So there are two things in common: the machinery of government and intelligence.

Let me refer first to the intelligence side. There was a failure to make proper use of intelligence information which could have come from MI6 (of which I know nothing). We hear that changes have already been made in defence intelligence. It may be that we should not be told of those changes. I only hope that they will protect future Mr. Hendersons and prevent cases such as the Matrix Churchill case. That should be borne in mind. Whose responsibility is it within government to ensure that relevant intelligence information is brought to the notice of Ministers?

So far as concerns the Home Office, for 200 years it has lived with intelligence of some kind. That is not true of the DTI or the Board of Trade, although the Board of Trade is a very ancient office which goes back into the 18th century and perhaps the 17th century. Procedures must be introduced whereby information that MI6 is used to keeping to itself—for very good reasons—is readily available, though it need not be circulated around the department. That certainly would not happen in the Home Office. That is where Ministers come in. Ministers who are Secretaries of State and not junior Ministers need to be advised of that information.

The noble and learned Lord, Lord Howe of Aberavon, referred to the changes that have taken place in relation to the accountability of the security services. That is absolutely right and I commend them for it. But MIS is used to working on the home front. It knows that there is a place called Parliament. Members of the department read the newspapers daily. That may not be true of MI6, cached up in Aden or the Yemen, whose members may not be used to parliamentary accountability.

When I read through the report and tried to read between the lines I sensed that intelligence officers did not realise the importance of reporting to Parliament in some way. I do not mean completely. "Realise" may not be the right word; perhaps they were afraid of so doing because of what they had read over the years when they were abroad, which did not put the House of Commons in too good a light in relation to that kind of thing.

The reason I raise that point is that I hope that this matter will not be dealt with in a "machinery of government" way. I hope that the Opposition will be consulted. It may well be that there will be a change of government within the next 14 months. They will be faced with a fait accompli as to the changes that have occurred and that will not be good enough. Incoming governments are faced with situations of fait accompli all the time. In the first few months they will be facing up to a new life, considering what they said in Opposition and what they are going to do now. They will not have time to worry about the machinery of government. I hope therefore that it will not be an internal inquiry in relation to intelligence. Just as the Franks Committee found that intelligence was dealt with wrongly, so have we found in this case, but at a different level.

I want to say a word about the machinery of government and public interest immunity certificates. I was grateful to read in the lecture given by Lord Justice Simon Brown to the Civil Service staff on this subject in 1994—it answered a question that I had been asking myself—that up until 1973 it was Crown privilege and in 1973 it changed to public interest immunity certificates. Crown privilege had its own certificates. I read on and the report showed how the situation has changed over the years.

I want to relate the report to the question of junior Ministers. There is always a danger in speaking about what a junior Minister is doing, particularly when one becomes a Secretary of State and forgets that one was Once a junior Minister. I observe that there appear to be far more junior Ministers today than there were previously. When one reads of the life of Rab Butler, who, for six or seven years, was a Parliamentary Secretary standing in more often than not for the Foreign Secretary, one realises that there was only one junior Minister in the department at that time. There are hundreds of them now; they are all over the shop. When one takes into account the PPSs, it is like the Portuguese Navy; everybody is an admiral.

However, there have to be junior Ministers and they perform a vital task. But I am clear on one thing that I learnt as Northern Ireland Secretary and Home Secretary: there are decisions that only a Secretary of State can take. Whether it is in relation to telephone tapping, detention in Northern Ireland or releasing from detention in Northern Ireland, only one person can do it. Reading through this report it seems to me that, quite apart from the proper functioning of a junior Minister answering Questions in Parliament and so forth, decisions of a legal nature are being taken that should only be taken by the Secretary of State, and I come back to the earlier point I made in regard to the DTI, in no derogatory sense of the term.

Since writing my notes I have asked myself the question—the one person who can tell me whether I am right or wrong has now appeared in the Chamber; he appeared at the wrong moment—whether I have ever signed a public interest immunity certificate. I can only remember signing one. I look for a nod from the noble Lord, Lord Armstrong, to make sure that it was not two, but there is only one that I can remember. Is not that surprising? I spent nearly three years in Northern Ireland and nearly three years at the Home Office and yet signed only one public interest immunity certificate. In this report they seem to have been signed like confetti; all around are signing public interest immunity certificates.

Why are there so many PII certificates about these days? There has been a great change in that respect. But I signed one and what I remember about it is that the Permanent Secretary came and put the facts in front of me. He did not say that he had come via the Attorney-General, though it must have come via the courts because it was a case about telephone tapping in Colchester or some such place in Essex. I was not advised that the Attorney-General had a role. I was given the facts of the case and was advised that we had to protect the sources of the telephone tapper. I signed that certificate, quite rightly. But the Attorney-General played no part and I was not told that I had no option. That is one of the points that I find strange when I listen to legal luminaries talking. I was not told that I had to sign. I had a choice and I decided of my own free will.

I have had my time and the rest of what I intended to say is all very interesting but will go into the drawer where I have kept 30 years of speeches that I did not complete. I have advised my children that they can publish them one day and no doubt they will be read with great interest; but they should not expect to get any money out of them. The Scott Report does not show a conspiracy; it does not show villainy; it shows that a lot of people did not know what they were doing.

6.28 p.m.

Lord Slynn of Hadley

My Lords, I am conscious that many of the issues with which your Lordships are concerned in this debate are a far cry from the daily round of the Judicial Committee of your Lordships' House. But there is one matter on which it is appropriate that a Law Lord should comment—that is, whether the Attorney-General got the law wrong; whether he misunderstood the legal position in relation to public interest immunity certificates.

We have been told many times that judges and members of the Bar are divided—it has even been said 50:50—on this question and therefore it is right to declare my position. For more than six years as junior counsel to the Treasury, I advised successive Attorneys-General—four of them; two Labour and two Conservative—on matters of this kind. The subject therefore is not one with which I am entirely unfamiliar.

I wish to make only two or three points. I shall be brief in view of what has been said before and I shall try—he is no longer in his place—not to encumber the noble Lord, Lord Callaghan, with the names of any further cases. First, I have the clear impression that some of those who are criticising what the Attorney-General has done, what was seen as the law in this case, do not give effect to the changes and developments which have taken place both in practice and in procedure. The noble Lord, Lord Merlyn-Rees, reminded us of the existence of Crown privilege. It is not so long since a claim to keep documents out of litigation and out of the public eye—a claim for Crown privilege—disabled a litigant from having access to those documents. Indeed, a claim in respect of a contents plea for Crown privilege was at one time virtually unassailable.

As we moved on, Crown privilege became known as public interest privilege, the name better indicating that documents should not be produced because it was contrary to the public interest, that they as a class, or because of their contents, should not be revealed to the parties to a dispute or to the world at large. We have moved on, and in the Wiley case to which reference has hcen made the Judicial Committee of the House recognises that changes need to be made. Ministers are apparently now to be encouraged not to claim the privilege in a very clear case. But even in that case I felt it right to leave open the question as to whether a claim to keep documents out of the papers in a case could include a class rather than the contents of an individual document. The changes which have taken place have been considerable. We must judge what the Attorney-General did by the law at the time.

Secondly, some of the comments which have been made seem to suggest that the decision for a Minister and for a judge whether public interest immunity should be claimed is a clear cut, black and white issue. But these questions have always been extraordinarily difficult. The noble Lord, Lord Merlyn-Rees, was lucky in that he was spared, apparently, a large number of these questions. As Treasury counsel, I found that the questions were very often extremely difficult. How should one balance, on the one hand, the desire of government departments and the need of the state not to give away sensitive information, the confidentiality of which needed to be preserved in the interests of good government, as against the need of the litigant to prove his case or to attack the case of a government department? In order to protect the citizen against unjustified claims I believe it was right that the examination of this question was entrusted to a judge. He knows in a detailed way what the case requires. He can be informed as to the conflicting public interest which is concerned in excluding the documents and he can then decide.

The noble Lord, Lord Taverne, whom I should like respectfully to congratulate on a polished maiden speech, appeared to regard these as essentially clear cut matters; it is not difficult to see what is essential for the trial; it is not difficult to know what is relevant. That, in some cases, is undoubtedly true; but there are clearly cases in which this is a difficult matter. Therefore the balance between the view of the Minister and the decision of the judge is an extremely important safeguard for the citizen who litigates.

The Master of the Rolls is reported as having said that he considers that the Attorney-General approached the matter, on the basis of the law as it stood, in the right way. I am in full agreement with that opinion. But even if the Master of the Rolls is wrong, which is unlikely, and even if I am wrong, which may be more likely, I consider that the Attorney-General's decision to let the matter go to the judge for him to decide was quite clearly and unarguably a way which was open to the Attorney-General to follow. I believe he took the right course in this case on the law as it stood in referring the matter to the judge, and in any event it seems to me that he was entitled to do it.

I have spoken so firmly, and I now conclude, because I am quite confident in my own mind that if the Attorney-General had been Mr. John Morris or Mr. Alex Carlile I would have said exactly what I have said up to this moment. It would be very unfortunate if the passions generated by the other questions which arise in this very serious debate and this serious inquiry should blind the country or drive the country and Members of this House to a conclusion on a particular issue which is both unfair and is wrong.

In the course of the discussions which have taken place—and even in your Lordships' House—some fairly harsh things have been said about the Attorney-General which appear to go beyond the particular issue with which we are concerned. I do not accept those broader criticisms of the Attorney-General, even leaving aside today's discussion. It ought to be said in this House that Sir Nicholas Lyell was a very successful Solicitor-General to Sir Patrick Mayhew as Attorney-General. No one in the law could possibly have been surprised when Mrs. Thatcher (as she then was) as Prime Minister and subsequently Mr. Major appointed him to succeed Sir Patrick Mayhew and to continue as Attorney-General. Let us not forget that he has rendered eight years of loyal and able service to the nation and to Parliament. In my judgment, leaving aside entirely the present dispute, he has been a good Attorney-General.

6.36 p.m.

Lord Hutchinson of Lullington

My Lords, after three and a half hours of debate I suggest that we have rather lost sight of the central issue of the report which is the miscarriage of justice which was perpetrated on three employees of Matrix Churchill. Paul Henderson, managing director, was arrested in October 1990, locked up, interrogated, charged with criminal deceit and dishonesty, kept in suspension for two years, put through the ordeal of a six-week trial at the Old Bailey and ultimately acquitted—with his business in ruins, thrown on the scrap heap with 600 other employees and his character largely destroyed, a victim of a prosecution which Scott says, should never have been commenced". The noble and learned Lord, Lord Hailsham, said that our system worked. Well, it did not work and a human miscarriage of justice occurred for which someone must be responsible.

The sickening account peddled by responsible Ministers and the media—that everyone behaved with honour, that they laid all the evidence fairly before the judge and that a fair trial was obtained with a predictable result—is a travesty of the contents of Volume III of the report. Their cry has been, "We deserve an apology. We have suffered for the past three years". I am sure your Lordships' hearts all bled to hear the noble and learned Lord, Lord Howe, left without a member of the Bar to represent him before Sir Richard Scott. Who is really owed the apology? Is it not Paul Henderson and his two colleagues? What is their injustice compared to the injustice to those three defendants'?

Who is Paul Henderson? He was, said his intelligence contact, a very brave man … an extremely brave man … Few people I've met would take such risks". He was a spy in the land of Saddam. On hearing that evidence, Mr. Moses, the prosecuting counsel, had Sir Brian Unwin, head of Customs, asked whether it was proper in the public interest to continue the prosecution. Sir Brian's reply was that it should he firmly continued and, further, he penned a letter to Sir Colin McColl, head of intelligence, saying: We were extremely surprised to say the least at the nature of the testimonial given by one of your junior officers". He then referred to the effect that that might have upon the jury. That is symptomatic of this prosecution.

Two months after his arrest, the Sunday Times carried an "Insight" article saying that Henderson had been tipped the wink by the Minister, Alan Clark, and gave the place and the date, 20th January 1988, where that encouragement was given. That led to a meeting between Alan Clark and the Prime Minister. Sir Robin Butler made a note of what was said and sent it to Mr. Alan Clark. Scott found that that note was "significantly" altered in such a way, that it was at least as consistent with the impression that Henderson and others received". on that occasion. That vital note, filed by the Cabinet Secretary, a note which as good as proved Mr. Henderson's veracity, was never disclosed. It never got to the Old Bailey. In effect, it was suppressed throughout.

Later, in August 1992, the Sunday Telegraph carried an interview with Clark in which he was said to have agreed that he tipped off the manufacturers. On reading it, Mr. Moses, the prosecuting counsel, demanded that Clark should be interviewed by his solicitors, for if what he read was true he would drop the case. Incredibly, that never happened. If it had happened, the prosecution would never have continued.

Scott finds that no investigation was made into MoD documents, that witnesses potentially favourable to the defence were not interviewed and that proofs of evidence of junior officials were altered by their seniors in order to reflect departmental policy. By October 1991, Customs and everyone officially concerned knew that Mr. Henderson was acting as an agent for MI6, yet no effort was made to get details of his 26 meetings with his contact or of his handing over blueprints of the very missiles which were going to be made. If that had been done, the prosecution would never have continued.

As we all know, as the trial date approached, Mr. Heseltine refused to sign PII certificates in relation to documents which he could see showed that what Henderson was saying was true. He said that it was in the public interest to disclose the documents. Then came the saddest moment of the whole story when the Attorney-General told his colleague that in law he must sign a certificate to say that his view was that it was in the public interest not to disclose those documents.

As a criminal lawyer and as one who is used to the criminal courts, I am amazed at the inability of civil lawyers to understand the fundamentals of the criminal law. Over and over again today there has been talk of "litigants". There are no litigants in criminal courts. There is the Crown on one side and the defendants on the other. If that was the law, then, not making a maiden speech, I can say to my noble friend Lord Taverne that I am prepared to say that the law was an ass. It was a monumental ass.

If I may say so to the noble and learned Lord, Lord Lloyd, it is not a question of balance. It is not a question of going to a judge and saying, "On the one hand, but on the other", and of taking along 10,000 supporting cases; it is a question of using your eyes and seeing that a miscarriage of justice is about to occur. Surely any Attorney-General who has any knowledge of the criminal law would have given such advice to his colleagues. Like, I am sure, most noble Lords in the Chamber, I entirely agree with Sir Richard's description of that interpretation of the law as "absurd". If the Minister has no discretion, what on earth is the point of asking him to sign a certificate'?

The President of the Board of Trade signed under protest and on condition that his views were expressed to the judge at the trial. He reiterated that in a letter to the Attorney-General. In The Times today, the Attorney-General writes: Mr Heseltine's … letter thanking me … was not 'left unread'". It was not a "thank you" letter. It was a letter in which a Minister reiterated his view that documents should be disclosed in a criminal trial and that he wanted them to he disclosed. As Sir Richard says, the President of the Board of Trade gave that letter a large circulation. Your Lordships may feel that that is curious in regard to a "thank you" letter. Scott says: I find it astonishing that a letter … from a senior Minister dealing with a subject of difficulty should have been left unread for a period of between three … and seven weeks". The Attorney-General also writes this morning that he called a meeting with Mr. Moses and was, assured that the prosecution was … fair and proper". Of course prosecuting counsel would not advance a case which was not in his opinion fair and proper. Scott finds that at that meeting Michael Heseltine was never mentioned. Michael Heseltine's letter was never shown to Mr. Moses. At that meeting he finds that Mr. Moses was not asked expressly about the contents of any particular documents but merely for an assurance that everything was all right. Can one imagine any Attorney-General behaving as Her Majesty's Attorney-General behaved and taking such a meek and hopeless course as that when, as I have said, a miscarriage of justice was staring him in the face?

The last matter which the Attorney-General raises in his letter today is vital. Kenneth Clarke, then the Home Secretary, released information involving intelligence which, of course, was subject to PII. He released it using his own discretion. That meant going against all the theory and all the law about which we have heard so much today which says that Ministers must never exercise their discretion. He exercised his discretion. Why? Because the Crown wanted the information, wanted a statement from that member of MI6 and wanted to call it in rebuttal of Mr. Henderson's defence. That is the point. The Attorney-General left the letter unread; left the documents unread; failed to interview Alan Clark; failed to read the intelligence reports; failed to interview Sir Robin Butler; failed to tell Mr. Moses to inform the judge; failed to apply the law even-handedly; failed to supervise prosecuting counsel; and instead of immersing himself in the niceties of the civil law of PII certificates, remained blind to the miscarriage of justice which was shining like a beacon from the Central Criminal Court. Dishonesty is not an issue in this report; the issues are incompetence, judgment and ignorance of the workings of the criminal law.

The last thing I have to say is that the Government have tried to say—and it has been said again today—that the prosecution case was perfect; that everything went according to the rules; that the documents were given to the judge and he was asked to make up his mind about them. That is another travesty of what happened, because prosecuting counsel spent more than two or three hours attempting to persuade the judge not to read the documents, not to release them and, as has already been said, that they were irrelevant to the defence. That is what happened in the trial.

The idiocy of having these PII certificates in a criminal trial is shown when Mr. Robertson, the defending counsel, had to argue for their release without having been allowed to see one of them about which he was making his submissions. That is the situation. He argued for a day, and, as a result the judge, being a robust judge, released one part of the documents. But he was adamant that the SIS documents should not be released.

At that, most counsel would have sat down, but not Mr. Robertson. He argued for another day to have the SIS documents showing Mr. Henderson's relations with his contact go before the jury because they would prove his innocence. In the end Mr. Moses, being a fair-minded prosecutor, saw another miscarriage of justice was on its way and submitted to the judge that he ought to release them. When that happened then at last the judge released those documents.

That is the reality of this sort of certificate. A circuit judge, faced with Pus eight or nine pages long, hearing argument in detail as to how the interests of the nation will suffer, how people's lives will be put in danger and so on, is then expected to say, "Here I am. I know nothing about politics. I have to balance the possibility that this man may go to prison for a year against people being killed and the interests of the country being at stake. How can I make such a decision?". Of course, in 90 per cent. of cases such a judge would simply say, "I do not allow these documents to be released". That is the reality and the mischief of these documents.

Now we have come to a situation where, after all these weeks, all this damage has been done to these individuals who all suffered from a prosecution which never, never should have been started and once started should never, never have been allowed to go on. I ask the Minister—who knows, as we all do, a great deal about justice—at the end of this debate to tell the House who is responsible for all of this and who is going to give an apology to Mr. Henderson and his colleagues?

6.55 p.m.

Lord Rippon of Hexham

My Lords, to the manifest disappointment of many people, including sections of the media, Sir Richard Scott's report was fairly summarised by he himself as no conspiracy and no cover-up. I believe that we can also say that there were no dishonest or dishonourable Ministers. Of course, a report of five volumes and weighing 171bs cannot be dealt with in a few sentences or even, if I may say so, in a few ounces of Hansard.

There are many difficult and complex issues of law and administration. They deserve careful and dispassionate consideration. As I understand it from my noble friend the Minister, that is exactly what the Government are doing. All this demands a much calmer approach than is currently provided by the politically motivated witch hunt against two Ministers of known integrity.

The original accusation was allowing innocent men to go to gaol. That has been completely destroyed. The noble Lords, Lord Richard, Lord Jenkins of Hillhead and Lord Hutchinson of Lullington said that the trial should never have taken place. I ask your Lordships to consider this: given Mr. Alan Clark's original evidence—and my noble and learned friend Lord Howe said that there is some evidence that he had behaved rather recklessly throughout—what sort of uproar would have arisen if the Attorney-General or the Government had attempted to interfere with the judicial process? We would then have had the name of Sir Patrick Hastings raised in almost every speech.

I am glad that my noble friend the Minister had something to say about Customs and Excise because there are no doubt difficulties where they are involved in a prosecution. I know that because I had a note left on my desk by my wife when we were negotiating to enter the Community. It says this: Crispin telephoned"— He is Sir Crispin Tickell now— 1. There is trouble over French cauliflowers. 2. Customs and Excise say principles are involved. 3. You are asked to telephone the Treasury and say either that no principles are involved or fresh principles must be found". That was a difficult exercise. All I can say about it now is that I have no recollection about how it was dealt with.

The leading article in The Times of last Saturday was a particularly deplorable example of prejudicial media comment. It says that accepting that it was arguable whether the Attorney-General actually misread the law, The Times stated that Sir Richard Scott finds him "guilty" on this count. Presumably, any judge who is overruled by a superior court is guilty. In this instance, I suggest that the weight of legal opinion both inside this Chamber today and outside shows that the Attorney-General acted by the hook throughout on the basis of the law as it then stood.

The Times goes on to denigrate the legal competence of the Attorney-General. I am sure that many of your Lordships, as well as the noble and learned Lord, Lord Slynn of Hadley, know as I do from personal experience that the Attorney-General is a first-class lawyer who has undoubtedly made a considerable financial sacrifice as a result of his public service. I believe that the editor of The Times, and some others, would do well to study very carefully the Priestland Memorial Lecture given last October by the noble Lord, Lord Habgood, which of course did not attract much attention in the media. In it he makes the point that the media—indeed all of us—should consider the damage done to our society by the culture of contempt. As he puts it, "What we are witnessing is more than a justifiable reaction against abuse of authority, but rather a reaction against the concept of authority itself".

There was a time when the other place could deal with matters concerning the conduct of its Members, whether Ministers or Back-Benchers, but, sadly, even the Select Committee on Privileges has faded away. I remember that Select Committee as being objective and non-partisan as well as being knowledgeable about parliamentary practice and the administration of government. It is no reflection on Sir Richard that he is inevitably not so familiar with these matters.

Then, in Volume I, Chapter I, I find rather puzzling what he describes in page after page as the, constitutional and democratic significance of not applying as a minimum die negative resolution procedure in the context of the Import and Export Control Act 1990". Your Lordships will know that the negative resolution procedure is hardly an effective way of controlling the Executive in matters of constitutional and democratic significance. Even the affirmative resolution procedure is not much good. In those circumstances, it could be argued that the Act itself should properly include any matter of constitutional and democratic significance and with primary legislation needed to amend it.

Sir Richard states that the Opposition as well as the Government fail to realise the constitutional and democratic significance of the negative resolution procedure in these circumstances. Your Lordships may think it appropriate for our Delegated Powers Scrutiny Committee to consider and report on the value of Sir Richard's observations in that regard.

Enough has been said about national security and the need for some control over matters which are sometimes not even given to the Cabinet as a whole, as was said by the noble Lord, Lord Callaghan. I recall that when I had responsibility for such things, I had to tell my new Minister that the custom was for me to give him an oral report on certain nuclear matters and for him to give an oral report to the Prime Minister. Probably no one else would have the information at all.

Finally, I wish to comment on the conduct of the inquiry. I fully share the anxieties expressed by my noble and learned friend Lord Howe of Aberavon. I was disturbed by the confrontational nature of the hearings. I believe that my noble and learned friend's views on the shape and pattern of the inquiry deserve respect. He suggested—and I believe that he is right—a more conventional tribunal with lay assessors, free-standing counsel for the tribunal and legal representation and not necessarily cross-examination. Above all, I cannot understand why we should depart from the principles laid down by the late Lord Salmon. I agree also with my noble and learned friend Lord Howe that that might be fairer to all concerned and also more expeditious and effective. It could hardly be less so. I urge the Government to join my noble and learned friend in considering as soon as possible whether there is a much more effective way of dealing with the kind of matters that we are debating today.

7.3 p.m.

Lord Armstrong of Ilminster

s: My Lords, the noble Lord, Lord Merlyn-Rees, is incontrovertibly right in saying that we now have more junior Ministers than we had before the Second World War. As he referred to Mr. R.A. Butler, perhaps your Lordships will allow me a moment's diversion. I was Mr. Butler's Private Secretary when he was Chancellor of the Exchequer. I remember that once when we were walking together he was carrying a cane with a silver head. He explained that in 1938, at the time of the events in Munich, he had been a junior Minister at the Foreign Office. He said, "It was very difficult for me. I had no responsibility for formulating the policy or deciding what the policy should he. I just had to explain it in the House of Commons because my Secretary of State was in the House of Lords. I had no share in saying what it should be". There was a pause and then Mr. Butler waggled his cane at me and said, "Since that time I have never carried an umbrella".

I share the views of the noble and learned Lord, Lord Howe, and the noble Lord, Lord Rippon, that there is room for doubt about whether the inquiry should have taken the form that it did. When the reputations and livelihoods of people may be at stake it is questionable whether one man on his own should be asked to combine the roles of inquisitor, prosecutor and adjudicator. I know that it is said that a full-dress tribunal of inquiry under the 1921 Act would have taken even longer and would have cost even more, and I think that there is room for doubt about that. But should those be conclusive considerations when it is important that justice should not only be done but should also be seen to be done and should be felt by those most closely affected to have been done?

However that may be, there can he nothing but admiration for the thoroughness with which Sir Richard Scott pursued his inquiry and his determination that the evidence on which his conclusions are founded should be made as fully available as possible. His quintuply voluminous report will remain a quarry for analysts of government and students of British political history for many years to come. He has described in the minutest detail, paper by paper and meeting by meeting, not only the processes by which the guidelines for the issue of export licences for the sale of defence-related equipment to Iran and Iraq were set and reviewed but also the handling of a succession of applications for such licences. At every stage, if he considered that things should have been handled differently he did not hesitate to say, with all the benefit of hindsight, what in his opinion should have been done. I suspect that there are few administrative processes inside or outside government which would emerge unscathed from such an intense ex post facto scrutiny.

But the perspective and clarity of hindsight should not blind us to the fact that things cannot have looked anything like so clear at the time. For example, Sir Richard has drawn attention to deficiencies in the handling and communication of intelligence material. There were deficiencies and we are assured that steps are being taken to remedy them for the future. But the fact remains that, for this and other reasons, those who were having to deal with these matters at the time were operating in a fog of uncertainty. It is a familiar experience that when you are in medic rebus—an elderly retired mandarin cannot resist the occasional Latin tag—you have to do the best you can with the information that is available, even when it is incomplete or uncertain. Of course, you are probably having to do that when you are having to do many other things too.

Therefore, it comes as something of a relief that Sir Richard should be able to comment that up to the cease-fire in August 1988 the official processes for considering export licence applications conscientiously endeavoured to apply the then existing guidelines and that recommendations made and decisions taken were broadly consistent with the guidelines. I warmly agree with the noble Baroness, Lady Thatcher, that the conscientiousness with which the public servants concerned addressed these matters shines out from the report. I would have expected nothing less but I am nonetheless glad that it attracted the attention of Sir Richard Scott and, in today's debate, of the noble Baroness, Lady Thatcher.

What went wrong thereafter? The third guideline, which denied approval for exports of defence equipment, which would significantly enhance the capability of either side to prolong or exacerbate the conflict", had been overtaken by events. All concerned thought that the cease-fire offered scope for some relaxation of the strict interpretation of the guidelines. The Department of Trade and Industry and to a lesser extent the Ministry of Defence, with the possibility of increased export sales, the need for British industry to be able to compete with its foreign rivals, who, as the noble Baroness said, were less inhibited, and with the implications for jobs in this country uppermost in their minds, wanted to allow greater relaxation than did the Foreign and Commonwealth Office, which had considerations of foreign policy and international relations uppermost in its mind. I believe that that ambiguity at the heart of the policy was never resolved, at any rate in relation to Iraq and not at senior ministerial level.

The third guideline was provisionally rephrased so as to deny approval for exports which would be of direct and significant assistance to either country in the conduct of offensive operations. One may discuss how great was the actual significance of that alteration. But I am sure that some Ministers thought quite genuinely that that was no more than a necessary reinterpretation of the original third guideline to take account of changed circumstances. Others may have thought that it went further than that, although not nearly as far as they would have liked because they wanted to be freer to approve exports of non-lethal but still defence-related equipment.

But all settled for that rewording because they agreed that, while there was scope for some greater flexibility in the application of the guidelines, there were considerations of public policy, notably in relation to the constantly changing situation in the Middle East, which made it undesirable to indicate publicly that there had been any change in the wording of the guidelines or indeed any change in the application of the policy.

It was a messy situation and an uneasy compromise. Whether it would have been possible to resolve the situation in a way which would have enabled Ministers to have been more forthcoming in their public statements at the time it is now impossible to say. But the fact is that, from time to time, governments find themselves in situations where there is no solution which satisfies all the conflicting considerations.

Sir Richard Scott clearly thinks that Parliament should have been told and he seems to regard that as the overriding consideration. As in some other matters, Sir Richard Scott's opinion is extremely significant but not, I think, conclusive. I can only say from my own experience under Conservative and Labour Governments that situations may arise where that cannot be the overriding consideration and other considerations must be and are legitimately taken into account. I can understand why this was genuinely and honourably thought at the time to be such a situation.

I accept Sir Richard Scott's conclusion that there was no "duplicitous intent". It clearly was the case—self-evidently was the case—that Parliament and the public were not told of any relaxation in the application of the guidelines, let alone of a change of wording in the guidelines. Ministers are entitled to claim that, in their opinion at the time, there were valid reasons of public policy for that. It seems to me that that is the judgment which has to be defended.

The question of the issue of public interest immunity certificates is not one on which I propose to spend any significant time. I should he foolish to rush in where so many noble and learned angels are treading with such weight and distinction. I say only that what actually happened in this case coincided with what was my understanding, when I was in the public service, of what was supposed to happen. It was for Ministers to certify as a duty that documents were such, or of such a class, that they should not he disclosed as a matter of public policy, it was for the judge to say whether their disclosure was indispensable for the due administration of justice in a particular case; and, if the judge said that it was indispensable, then either the documents must he disclosed or, if the Government thought that that disclosure would he too embarrassing, the proceedings must be dropped.

As to what the law was at the time, I can say only that, if I were the Attorney-General and I had the noble and learned Lords, Lord Lloyd of Berwick and Lord Slynn of Hadley, the Master of the Rolls, the noble Lord, Lord Alexander of Weedon, Mr. Justice Laws and Mr. Charles Gray, QC, to name but a few, on my side, I should feel reasonably comfortable.

There is one other point which I should like to make before I sit down. It has been argued this evening, notably by the noble Lord, Lord Taverne, in a maiden speech on whose eloquence, although not on whose completely uncontroversial nature, I should like to congratulate him, that this affair demonstrates the need for a freedom of information Act. There may be good arguments in favour of such legislation but this affair is not one of them. First, in any freedom of information Act there would be some categories of information which would he exempt from its requirements. Those categories would certainly include national security, prejudice to international relations and information which was commercially confidential. Papers about export licences for arms sales would be likely to be exempt on all three counts.

Secondly, a freedom of information Act should not extend to cover documents passing inside government while a decision or an issue is under consideration. As one noble Lord said, in government, just as in other organisations, decision-making cannot go on in a goldfish howl. It must be possible to carry on discussion in private. Only full and frank discussion in private gives people, and particularly Ministers, the opportunity freely to change their minds before a decision is taken. If the noble Lord, Lord Jenkins of Hillhead, accuses me of plagiarism, I shall accept the charge willingly. Without that right to decide and if necessary to change one's mind in private, the collective responsibility on which, as we have seen so often lately, good government depends will unravel.

Of course Ministers are, and must be, accountable to Parliament. I favour greater openness in the sense that I should like to see fuller public exposition of the facts and considerations taken into account in making a decision when that decision is announced. It is not possible to give a full statement if that announcement is being made in the form of a Statement in this House or in another place because time considerations do not make that possible. Therefore, such a Statement should he accompanied by a parliamentary paper or some such other document which would give a much fuller account. In my view, that would make for both better government and better public understanding of public issues and policies. But an attempt to apply freedom of information legislation to papers relating to decision-making while the process of making a decision was taking place would for many reasons merely drive the process into channels which a freedom of information Act could not reach. That would be conducive neither to good government nor to public knowledge and understanding of public issues and policies.

7.18 p.m.

Lord Williams of Mostyn

My Lords, I know Sir Nicholas Lyell, the present Attorney-General. When I was chairman of the Bar Council, he was Attorney-General. I knew him as a colleague and still do and I think that it is fair to say that we had friendly relations. I do not know Mr. Waldegrave as well. The noble and learned Lord, Lord Hailsham, said that in private life he is an honourable man and I do not dissent from that. The real question is: what has caused two otherwise decent men to be afflicted by this degree of considered criticism by Sir Richard Scott? I suggest that one reason—and it is a criticism of the Government as a whole—is that this Government, after too long, have become careless. They have become careless of the proposition that party political interest does not always perfectly coincide with the public interest.

What happened about the management—and many, including myself, would call it the mismanagement—of Scott's report; and, not least, what happened in your Lordships' House a few days ago was properly described as shameful. It will be a lasting shame to this Government. On that occasion, I was present when the suggestion was being put that a former Chancellor of the Exchequer and Home Secretary and the Leader of the Opposition in your Lordships' House, both Privy Counsellors, should not be subject to the insult of what was offered. They rightly rejected it. My noble friend Lord Callaghan of Cardiff, to whom I paid attention, said that it was an abuse of the parliamentary process.

Therefore, I wrote to the Minister with three simple questions, the second of which I shall read to your Lordships. It said: Could you provide me with a definitive list of all those who received a copy of the report prior to its being made generally available in the Printed Paper Office? It would help me if you could indicate on what date each individual received his or her copy". The Minister courteously replied on 22nd February saying: You asked for a definitive list". I omit some words— I can tell you that the Report was received by the Government during the afternoon of 7th February"— I knew that— I shall answer the rest of your question as soon as practicable". I have had no answer. I see that the noble and learned Lord wishes to respond. I give way.

Lord Fraser of Carmyllie

My Lords, I am much obliged. Before the noble Lord expands on that theme, perhaps I could invite him to look at the parliamentary Questions that have been tabled in another place and, indeed, in this place. If I understand the convention of both Houses correctly, if there is an opportunity to give such information in a parliamentary Answer, then that will be the appropriate place to do so rather than to advance it to one particular Member or noble Lord. That is the reason for my adopting such an approach. I hope that the noble Lord will accept from me that I certainly did not have any intention of depriving him of that information for the purposes of today's debate.

Lord Williams of Mostyn

My Lords, I accept what the Minister says, but the question remains in my mind: if the material was fully available in detailed form, who had what and when; and why was it not possible to reply to my letter either indicating what the information was or where I might reasonably discover it'?

The third question in my letter outlined my concerns about the expenditure of public funds on representation before Scott. I wanted to know how much had been spent and who had been in receipt of legal assistance; that is to say, of taxpayers' money. The noble and learned Lord told me that the total of f1,210,000 had been paid. I omit some words from it, but the noble and learned Lord has a copy of his own letter. If I do not correctly paraphrase the contents, then I apologise in advance. However, I believe that I do. He said that the Government do not consider it right to identify the individuals who have received legal advice either directly or indirectly. Have the Government learnt nothing'? The noble and learned Lord, Lord Fraser of Carmyllic, speaks on behalf of the Government. I do not attach personal blame to him of course; I am attacking the message, not the messenger. In opening today's debate, the noble and learned Lord said that this Government are devoted to openness. Well, well!

I propose, I hope at not too great a length, to give your Lordships some quotations from the report. They will not he selected quotations, because they lay the trail that I wish to follow for a moment or two. I have no animus against the Attorney-General; indeed, I am sorry for the position in which he finds himself'. I believe it to be an intolerable position and one which can only be properly resolved by his departure from his post. I regret to have to say that, but I am inevitably driven to that conclusion.

As long ago as September 1991, according to Volume III of the report at page 1268, the instructions from the DTI to then junior counsel Mr. Nigel Pleming (who is very experienced in that class of work) said: It is anticipated that Counsel for the Defendants will submit that the Government knew and encouraged the trade to be less than frank in their licence applications". Those were the prosecution instructions. At page 1269 of the same volume it states that Mr. Pleming, thought it likely that there would he two strands to the defence; firstly, that DTI turned a blind eye to the military possibilities, and secondly that … HMG were in any event aware of the full facts". I continue. Prosecuting counsel was Mr. A. Moses. He was assisted by junior counsel Mr. Grenfell and Mr. Calvert-Smith. Those counsel were kept in the dark. On page 1240 of Volume III, Mr. Moses said that, if that connection [referred to in the documents] was known at the time, I do not see how the prosecution could have continued. It seems to me to show not just suspicion but knowledge of the intended use. I do not understand why this information was not brought to my attention". Similarly, on the same page, Mr. Grenfell said: I think (absent a satisfactory answer to the matters I have indicated would need to he investigated) that the prospects of conviction in the light of this material and its effect on the jury's views, would be so reduced that one would have advised the prosecution should not proceed". On page 1241, Mr. Calvert-Smith said: I saw none of this nor was I told of it … I would not have advised a prosecution". Because I do not believe that one should take party advantage of a mis-statement of what one believes the law then to have been, I entirely accept that it was reasonable to have a different view from the one which has subsequently been expressed by Sir Richard Scott. I refuse to join the bandwagon which says that the Attorney-General was inevitably wrong at the time. I believe that what the noble and learned Lords, Lord Slynn and Lord Lloyd, among others, have said, is certainly correct as one possibility of a view that could have been taken. I will go further because I do not think that one should take small-minded advantage. I think, with great respect, that the view expressed by the noble and learned Lord, Lord Lloyd, was the majority view then subsisting.

However, the majority view then subsisting was expressed at page 1260 in the case of Makanjuola. That ease is not in fact authority for the proposition that, once asserted, the right must be maintained. Makanjuola quite plainly says—and, indeed, the Attorney-General referred to this in correspondence—that in some circumstances it is not necessary for a public interest immunity right to continue to be asserted. Therefore, the criticism which I believe to be rightly made against the conduct of the Attorney-General is not that he got the law wrong; indeed, he may have got it right.

I believe that it is conscientiously fair to say that the majority view at that time would have supported the Attorney-General. I respectfully dissent from the proposition put forward by the noble Lord, Lord Jenkins of Hillhead, that the Attorney-General is the best legal advice—that is not so in my experience. What he does, quite rightly and legitimately, is to go outside for other legal advice. That is what this Attorney-General did. He went to the present Mr. Justice Laws, Michael Kalisher QC, and others. Therefore, I do not fault him in that respect. Others may wish to do so for different and more ignoble purposes.

I believe that the case of Makanjuola is worth a second view. At page 1260 it says: This does not mean"— that is, PII— that in any case where a party holds a document in a class prima facie immune he is bound to persist in an assertion of immunity even where it is held that, on any weighing of the public interest, in withholding the document against the public interest in disclosure for the purpose of furthering the administration of justice, there is a clear balance in favour of the latter". The one person who read Makanjuola correctly was the then President of the Board of Trade. I believe that he presently holds a different job. But he got it right, and he got it right having looked at Makanjuola.

As has rightly been pointed out, the Home Secretary declined to be bound by the stricter view. He authorised the evidence to be given by a "Mr. T". "Mr. T"—not, perhaps, one of the usual suspects—was someone who was identified in that way for reasons of anonymity. Mr. T's statement was released to the prosecution because the Home Secretary (it may well have been a perfectly legitimate view because the Home Secretary of the time was Mr. Clarke) wished that material to be used by the prosecution; as, indeed, the noble Lord, Lord Hutchinson, pointed out earlier.

Those are not lawyers' quibbles. The strength of feeling which I believe informed the speech of the noble Lord, Lord Hutchinson, is that there was a serious danger not of a wrong view of PII law but of a negligent conduct of a prosecution. I am sorry to say this again against someone who has been a personal colleague, but that is the charge that I make and sustain against the present Attorney. That gives me no pleasure.

I give a few further examples. I refer to page 1352 of Sir Richard's production. The virtue of not having a summary is that it drives one to read it all. I refer to the reference to Mr. Heseltine on page 1352 in a note written by Miss Wheldon. I just pause for a moment. When the history of legal and parliamentary business in our time is read, if he has no other achievement he shall have gained the following one. It is stated on page 1352 that, Mr. Heseltine—the president— as he was then called— apparently accepts the PII classes in question exist and indeed that it is in principle against the public interest for documents in those classes to be disclosed. The problem is that he thinks it is in the public interest for the documents in this case to he disclosed, despite the fact that they fall within a class. I gather that he is unhappy about the Customs prosecution and does not want to be party to the suppression of documents which are helpful to the defendants". The note written by Mr. Heseltine's assistant, Miss Wheldon, is again mentioned on page 1353, Miss Wheldon enclosed with her Note the whole file so that the Attorney General could see the extent of his office's involvement and warned that 'The prosecution may yet come to a sticky end—. The Attorney-General endorsed that note. It was not a case of, "I was not there. I cannot remember. I was too busy"; he endorsed the note. At page 1353 he stated, I wish to take an overview of the prosecution to assess the pros and cons". This is the whole substance and basis of what I regretfully press as a charge against him. The Attorney further stated, I have an overall responsibility and this problem having been drawn to my attention I think stock should be taken". The Attorney sent a letter to Mr. Heseltine. The letter is reproduced on page 1353 and states, It would be quite wrong for you to make assertions which you believe to be untrue —that is in respect of a claim for PII.

At page 1354 the Attorney stated, having only a short while earlier said that he wished to take an overview, I have not myself read the documents in question". He ought to have done so, particularly when the President of the Board of Trade had raised that issue. The latter was not a junior Minister or a clerk; he was someone who had considered this matter with care.

Lord Ackner

My Lords, I wonder whether my noble friend would read the rest of the quotation.

Lord Williams of Mostyn

My Lords, I certainly shall. I am giving page by page references so that no one is misled. The Attorney stated at page 1354, I have not myself read the documents in question but the relevant classes are long established and important to the Government generally. The drafting of paragraph 4 of the certificate is unusual and the judge and defendants will be alert to its limited scope". I am most obliged to the noble and learned Lord, Lord Ackner, for asking MC to read that out as I shall return to the matter later. The Attorney continued, referring to the limited scope of paragraph four of the certificate, which can if necessary be emphasised by counsel for the Crown". We shall discuss in a moment or two whether counsel for the Crown was either put in possession of information to make that emphasis; whether he was instructed to make that emphasis; or whether he felt bitterly aggrieved that he had been kept in the dark. As I said, we shall discuss that matter in a moment or two.

Page 1355 concerns the Heseltine certificate. It states, In making this certificate I emphasise that my concern is only with the question whether the documents to which I have referred fall within classes of documents which are prima facie immune from production. Whether in fact all or part of any individual document or documents should be disclosed is a matter for the Court". A letter written by Mr. Heseltine on 11th September is referred to on page 1357, I am glad that a way has been found of reconciling the fact that I am under a legal duty which I cannot waive, to claim immunity from disclosure of certain documents on grounds of public interest with the fact that, in my view"— these are the words that matter— at least some of them ought to be disclosed in the public interest". Mr. Heseltine gave this letter wide circulation within the DTI. Copies went to junior Ministers and senior officials. He took steps to try to ensure that the other Ministers who had signed PII certificates were made aware of the limited nature of his own certificate. I have already referred to page 1357. I shall not quote further from that page but should noble Lords wish me to read further sentences from it I shall be happy to do so.

Lord Ackner

My Lords, will the noble Lord read the top of page 1357 before he leaves it?

Lord Williams of Mostyn

Certainly, my Lords. Page 1357 begins, Mr. Heseltine signed the Certificate in its redrafted form. Before doing so— as I have already indicated quite plainly— he read with some care the All England Report of the Makanjuola judgment and marked the passage at p.623 between g and h. The sentence … 'the ultimate judge of where the balance of public interest lies is not him [i.e the Minister] but the Court' was, said Mr Heseltine, 'the clinching part as far as I was concerned'". He quite plainly therefore was saying that he felt driven to sign a certificate. Even then he signed an amended form and he signed it with reluctance.

There is a difference of view between the Attorney and the Deputy Prime Minister about what one had said to the other. Page 1358 states, The Attorney General has commented to the Inquiry that Mr. Heseltine had not put his concerns in the kind of language which he used in evidence to the Inquiry". The conclusion that Sir Richard reaches is the following, I have already noted that Mr. Heseltine was not aware that he could. in a clear case, agree to disclosure. Having regard to the last sentence of the main passage cited above from Miss Wheldon's Note of 4 September (Mr. Heseltine 'does not want to be party to the suppression of documents which are helpful to the defendants'), it should have been obvious that Mr. Heseltine was indicating in layman's terms that, where (as he believed to he the case) the documents were helpful to the defendants, they ought to be disclosed". I am assisted as always by my noble friend Lord Merlyn-Rees in making me conscious of the fact that time is passing and that I must not trespass too long. However, these are important matters which perhaps might hear even a second or two more to he squeezed out of the orange. I have to omit some pages of the report but I shall continue as quickly as possible. Page 1369 states that Mr. Moses, QC, as prosecutor, asked repeatedly to be supplied with copies of the flagged documents … His exasperation is evidenced by a manuscript note dated 29 September 1992 … The note refers to Mr. Moses 'crawling up the wall' on account of his lack of instructions on PII … He has made the reasonable point that all documents relevant to Government knowledge ought to have been shown to him and that, to the extent that they were not shown to him, it was impossible for him to discharge his responsibilities as leading counsel". That prosecution was being directed by the leader of' the Bar of England and Wales—the present Attorney.

I wish to refer to a matter in parenthesis. The noble Baroness, Lady Denton, was a junior Minister in the DTI at that time. She is now, of course, a well regarded—and affectionately regarded—and trusted junior Minister at the Northern Ireland Office. She was pressed to sign one of these certificates for several hours. On page 1370 it is reported: At the end of the meeting, Baroness Denton had decided 'she did not feel confident to sign the certificate' and would not do so". There are many other citations I can offer.

The burden of the criticism against the Attorney-General is this. Alan Moses, QC, was not fully instructed. The Attorney-General recognised what was as plain as a pikestaff; namely, that he needed to take an overall view and responsibility. Indeed, he said that he was doing so. He failed to do so. The Heseltine reservations were not properly put before the trial judge. They were not properly put to Mr. Moses, who bitterly complained to Sir Richard Scott—rightly, as Sir Richard found.

I do not suggest for one second that Sir Nicholas LyeIl behaved in a wilfully wrong manner, that he was motivated by wicked intent or anything of that kind. I do not suggest that for a second, as I hope I have made plain throughout the last 22 minutes. However, he was derelict in his duty. The summary of Sir Richard Scott finds him personally to blame and constitutionally responsible. That is a thrust to the heart. Under an honourable government this Attorney-General would have had to go.

7.41 p.m.

Lord Rawlinson of Ewell

My Lords, two years ago I publicly expressed my anxiety about the procedures in the Scott Inquiry. That was long before the draft report, let alone the final report, was published. I have some experience of public inquiries. I was a witness in the Denning Inquiry into the Profumo case, which was a form of inquiry so condemned by Lord Salmon that we hoped we would never see it again. I have been counsel for a party in other inquiries and counsel as a Law Officer in several. Nothing I have learnt since has altered my opinion that this procedure was hopelessly flawed.

The judge sat alone, eschewing assistance. My noble and learned friend Lord Howe referred to various recent tribunals where there was assistance. I look hack to the Lynskey tribunal or the hank rate tribunal where again the judge would not have dreamt of sitting alone. Only in minor criminal cases before the stipendiary magistrate does a judge sit alone. If it is a serious criminal case he has a jury. In a libel action, where honour and repute are at stake, one is entitled to a jury because it is dangerous to trust the decision of one man. Therefore, I regretted that Sir Richard Scott made the decision to sit alone.

He then adopted Chancery procedures, with the written questionnaire, the reply and the accusatorial cross-examination by counsel. It was extraordinary that counsel should sit beside him. I have been counsel in tribunals, but I would not have dreamt of sitting beside the inquirers. It is strange that Sir Richard Scott should have permitted that.

Sir Richard then proceeded without allowing any confrontation by legal representation, public submissions or argument. That was an immense flaw. It is not a procedure for inquiries which should be followed again. It is axiomatic in our society, as it is in the United States' constitution and the European Convention on Human Rights, that one is allowed legal representation to play a public part in proceedings. Sir Richard Scott's defence was that it would have been too unwieldy and was unnecessary. As my noble friend said, it would not have been as unwieldy as this exchange of documents. It would have been easy to identify those people who should be given representation.

Thirty years ago the Labour Government set up a D-notice inquiry by Privy Counsellors. It was said that the Daily Express had breached D-notices warning the press against publishing matters which were contrary to the public interest. The Daily Express published a report that overseas telegrams were read and examined before they were sent. There was a public outcry. The Government set up the inquiry under Lord Radcliffe with Selwyn Lloyd and Emanuel Shinwell. The outcome of the inquiry was that the Daily Express was exonerated and it was said that there was no breach of the D-notice. The Labour Government published a White Paper rejecting the report of the inquiry which they had themselves set up.

Years later Mr. Harold Wilson, as he then was, spoke to me. I had been counsel for the Daily Express and Sir Max Aitken, and had been allowed to make submissions and cross-examine the then Foreign Secretary, Mr. George Brown. That was an experience not to be forgotten. Mr. Wilson told me that he knew that he had made a great mistake in not ensuring that the Government had been represented at that inquiry by the Attorney-General to make public the Government's case which, he said, had gone by default. Fairness, he felt, had not been seen to apply.

Lord Radcliffe spoke in the debate on the matter because the Government had rejected his report. However, he did not give a press conference. It is a little rich for the ubiquitous secretary to the Scott Inquiry to complain that the press and Ministers had used soundbites when Sir Richard Scott had held a press conference and had not left his report to he read for itself.

I come now to the question of the Attorney-General. Apart from myself, only the great noble and learned Lord, Lord Shawcross—-who is now 94 and, I am glad to say, going strong—and Sir Patrick Mayhew have had experience of the role of Attorney-General. For those who do not know the office—one of my successors as Chairman of the Bar, who has just spoken—it is an immense burden. The Law Officers' Department is a very small department. It has a mass of business. In my time the Law Officers used to spend much time in court when major government interests arose and conducted major prosecutions. I accept, but regret, that that is now rare. There is now an immense burden of giving advice.

The advice of the Attorney-General is not based, as the noble Lord, Lord Jenkins of Hillhead, seemed to think, on the Attorney-General's personal legal expertise. I have looked up the opinions of some of the noble Lord's heroes of the 19th century. They had a great deal of assistance from junior counsel. The advice that the Attorney-General gives is based on research and assistance from the lawyers in his department, by the lawyers of the Treasury Solicitor and government departments' lawyers, and also by Treasury Counsel, who are in private practice and chosen because they are pre-eminent in their field.

To illustrate the calibre of those who advise the Attorney-General, when I was Attorney-General, among those who gave me advice, which combined to form the Attorney-General's opinion, was the noble and learned Lord, Lord Slynn of Hadley, who was my junior in common law. The noble and learned Lord, Lord Woolf, was my junior in the Revenue. Lord Justice Gibson was my junior in Chancery. Judge Edward Cussen was my Treasury Counsel in crime. They were specialists. That is what is meant by the Attorney-General's opinion. All those come together; whether it is Chancery, Revenue or crime, one gets the best assistance. Therefore, the Attorney-General's advice has a weight and authority which is usually greater than that of ordinary advice. But it does not always mean that it is right. As with all legal opinion, it is not always found to be correct. Nor is any judgment, until eventually we reach the noble and learned Lords on the Judicial Committee who eventually pronounce; and that then is the law.

I remember the Thalidomide case. It was a test case brought at the suggestion of Mr. Harry Evans, editor of The Sunday Times, on which I had not only advised but, strangely enough, had been also a party and counsel. We set off on that great chase. I won in the Divisional Court, with three judges on my side: three nil. I lost in the Court of Appeal, with the noble and learned Lord, Lord Denning, and two others against me: three all. I was upheld in the House of Lords: five up. The decision of the noble and learned Lord, Lord Denning, was reversed. Later that controversial court, the Court of Human Rights, criticised the United Kingdom law of contempt. But the point was not what the UK law ought to be but what it was meant to be at the time. So the noble and learned Lord, Lord Denning, got it wrong. The noble Lord and learned Lord, Lord Denning, was often reversed. The House of Lords was continually reversing his decisions. I am sure that opinions of Sir Richard Scott have been reversed. Are you meant to resign? Are you meant to leave office if you have been reversed because a senior and superior court has a different opinion? Of course you are not. It is utter nonsense.

One of the wisest statements in the report is at page 1536. I promise noble Lords that this will be the only part that I shall quote. Sir Richard Scott says, Judges are fallible". By heavens, my Lords, so they are, as every judge knows.

So this inquisitor—because that is what he was—had to look, as he should do, at what the law was then. He should then have asked, whether or not he agreed with the answer in the end, "Was the Attorney-General's opinion a respectable, tenable opinion backed by the opinion of other distinguished lawyers and founded on reasonable interpretation of judicial decisions?" If it was, even if he disagreed with the decision, he had no right to make a condemnation. That was grossly unfair.

But was the Attorney-General wrong? Your Lordships have heard quite clearly today that he was not wrong. We have already heard from the noble and learned Lords, Lord Lloyd of Berwick and Lord Slynn of Hadley, that he was not wrong. They disagreed with Sir Richard Scott. To reach his decision, Sir Richard Scott had to disagree with the decision of the noble and learned Lord, Lord Woolf, when he was counsel; he had to disagree with Mr. Justice Collins when he was counsel (he later criticises him); he had to disagree with Mr. Justice Laws when he was counsel; with Mr. Kalisher QC, at that time chairman of the Criminal Bar Association; and with Mr. Richards, Mr. Charles, Mr. Moses QC, and Mr. Justice Hodgson. Over whether public interest immunity applied to criminal cases, he had to disagree with Lord Justice Phillips. With regard to there being a balancing exercise in criminal cases, he had to disagree with the Lord Chief Justice, Lord Justice Simon Brown; and he disagrees with Lord Justice Bingham and the noble and learned Lord, Lord Donaldson, and Lord Justice Mann in the Osman case.

In his tortuous paths—I fear that they were extremely tortuous—to prove that the Attorney-General's advice in 1992 was wrong, he rejects, or slides around, the opinions of many distinguished counsel and rejects the judgments of distinguished judges. He then comes out with the condemnation. To brand the Attorney-General as culpably incompetent, as suggested by the leader of the Opposition, is grotesque.

In the House of Commons on the Opposition Front Bench. I used to shadow Sir Elwyn-Jones, as he then was. As happens from time to time—I hope that it will not occur in a year or two—things change. I was on the Government Front Bench and Lord Elwyn-Jones on the Opposition Front Bench. As a matter of principle, we tried to keep matters of law apart from the rush and tumble of party politics; and that, I believe, is what ought to be done.

As regards Matrix, the Attorney-General has constitutional responsibility because he has the ultimate sanction of entering a nolle prosequi. As to his personal responsibility, I disagree with the noble Lord, Lord Williams of Mostyn. He must he allowed to rely on an experienced prosecutor—and there is no fairer and more experienced a prosecutor than Mr. Moses—and on the solicitors for Customs and Excise. He does not superintend, although I agree that he should superintend, the prosecutions of Customs and Excise, as he does the Crown Prosecution Service and the Serious Fraud Office. He should be able to superintend them because, as has been said, they are too much of a loose cannon.

He did not read the papers because he was asked a specific question on public interest immunity as to what was the duty of Ministers and what was the law. He answered that, and he answered it correctly. He saw prosecuting counsel and the Customs and Excise solicitor. He assured himself that the prosecution was fair. He was confident. The situation was not unique. Listening to the noble Lord, Lord Hutchinson of Lullington, one would think that the position was extraordinary. It was not unique. Judges have to look at documents which are the subject of public interest immunity. He knew that the judge would have to do that.

Judge Smedley (now Mr. Justice Smedley) saw, as Mr. Kalisher QC, emphasised, Mr. Heseltine's certificate. Mr. Kalisher states that it makes Mr. Heseltine's views clear from its terms. All defence counsel save one—and he was the one the BBC, of course, paraded on television—stated in the clearest terms after the trial that the issue of disclosure had been properly, fairly and openly dealt with by the Attorney-General and prosecuting counsel.

Finally, I confess that with a report of an inquiry so flawed in procedure, so contrary to principles of natural justice in this country, I would be tempted to throw in my hand and return to the more rational, adult and certainly more lucrative life of the Bar. But I would do that not because I ought to but because I have been sickened by the misconceptions of the role and of the conduct of an Attorney-General by those who have never held the office and do not understand it. I have been sickened by modern party political battles which are so much less civilised than they were in my day. I have been sickened by the power of an ignorant, ill-informed, malevolent and unscrupulous television media, and some of the rather woolly minded columnists, one of whom I read today.

Sir Nicholas Lyell has decided to tough it out. That is the braver course. For that he is to be admired and not to be traduced.

7.58 p.m.

Lord Wilberforce

My Lords, my only excuse for addressing a few words—they will he only a few—to your Lordships this evening is that I find myself at three points very much in empathy with the Scott Report. First, many years ago I spent a period in the upper reaches of the Civil Service. Therefore, by contrast with most of my judicial colleagues, I have perhaps a little understanding of the way in which government works from the inside. Secondly, I had the honour to be a member of the judiciary for a short period in the same section as Sir Richard Scott.

Thirdly, I have presided over some inquiries under different procedures. That has given me, no doubt, an opportunity of appraising the value and the high quality of the Scott Report. It has also enabled me to form some opinion as to the procedure adopted in that report. I shall not go into that, but I must say that I find myself very much in line and in sympathy with what has been said by that formidable trio on the second Bench—the noble and learned Lord, Lord Howe of Aberavon, the noble Lord, Lord Rippon of Hexham, and the noble and learned Lord, Lord Rawlinson.

From the period that I had in the Civil Service I learnt three things: first, the enormous complexity of the nature of government in the formation and carrying out of policy, especially where several departments are concerned. It is difficult to obtain a clear, consistent, easily describable picture. The whole thing is muddy and not transparent. Secondly, I received a clear impression which I retain to this day of the remarkably high standard of integrity—and that hardly needs saying—and also of concern in the Administration for constitutional propriety, especially in relations with Parliament, There is an almost obsessive care in securing the accuracy of information supplied to Parliament. It exists and always has existed. Thirdly, I recognise a degree of tension between the Executive on the one hand and the legal system and the judiciary on the other. There is the consciousness that out there, in the legal system, are methods of thought, sets of values, and conventions which are different and which above all use a different language from the methods, conventions and language used by those who form government policy.

One has to hear that in mind when listening to criticisms of the Scott Report. Of course, Sir Richard, as a highly intelligent judge, is quite conscious of the possible gap in the relationship and of the difference in methods of' thought between the two worlds. He has made great efforts to adjust to them, but the difference remains, underlying his approach. I shall return to it in a moment.

I do not wish to discuss the subject of public interest immunity. Your Lordships have heard an authoritative statement by my noble and learned friend Lord Lloyd of Berwick. Other noble Lords have joined in and I have no doubt that any loose ends will be more than adequately gathered up by my noble and learned friend Lord Ackner who is to speak later. I leave it entirely to them.

I wish to say something about misleading Parliament which has occupied so much attention in the media, to the extent of becoming almost a witch hunt. It has been powerfully taken up this evening by the noble Lord, Lord Richard. It is quite clear that Sir Richard Scott, in his report, has accepted in full that Mr. Waldegrave had no intention to mislead Parliament. His honour is totally cleared; it ought never to have been impugned. What is in some dispute perhaps is whether what he said or wrote about the Government's policy was objectively misleading to Parliament. The Scott Report says yes, and that we have to consider for ourselves.

There we return to the difference in approach which l mentioned a moment ago. The lawyer's approach, which is basically the approach of the report, is to take the words used, compare them with a set of facts which is found to be established and then to judge whether there is a discrepancy between the two. If so, it is misleading. That is what Scott did in the report. He took the words used by Mr. Waldegrave, quoted them and said: "No possible reading of those words used could be taken to conform with the facts". That is what the noble Baroness, Lady Thatcher, described as legal "exactitude".

However, there is another approach which I believe the Government urge upon us and which was commended to us by the noble Baroness. It is an altogether broader approach. We must consider what was said in the context in which it was used. The context is of an accepted practice, known well to Parliament, that one does not give particulars of arms sales, especially where two different states are concerned. I need not emphasise to your Lordships that the states concerned are Iran and Iraq, which presented a situation of particular sensitivity all through the relevant period. We must consider statements in the context of the guidelines which were confessedly and purposely made flexible. We must consider that it was obvious to everyone, as the noble and learned Lord, Lord Hailsham, made clear that Guideline 3 could not continue to apply after the ceasefire. That was self-evident and therefore there had to be some change. In the admirable words of the noble Baroness, Lady Thatcher, there was an, evolution of the guidelines", under changing circumstances. That is 'hat existed and it was part of the context.

We must also consider that the context of what was involved was not the supply of weapons or what is called "lethal" equipment, but mainly machine tools. We must consider the context that what was relevant and important in the way of intelligence had not been made available to the Ministers concerned. All that was part of a complex system, worked out across the departments and known well to exist by Parliament, to whom the statements were made.

The system may be unsatisfactory. The very great value of the Scott Report is that it gives the arguments and the materials and it points the way for a change in approach if Parliament chooses to take it, in the direction of less secrecy or further examination by Parliament. But it would be wrong and wholly unjust to lay criticism, and still less sanctions, on those persons who, let us remember, were not centrally in the policy area and who bona fide—and I emphasise bona fide—had been working the system in what they saw to he the national interest. There is no dispute about it, in the end it was in the national interest. Again, I refer to what the noble Baroness, Lady Thatcher, said. On the issue, whatever we find in the Scott Report, I suggest that Parliament can and should take its own view. Let us hope that both here and in another place that view will be just.

8.7 p.m.

Lord Campbell of Alloway

My Lords, I totally accept all that the noble and learned Lord, Lord Wilberforce, said, particularly about the practical approach to the problem to which my noble friend Lady Thatcher referred. The report has great intrinsic value which lies in its findings and recommendations. They lead and have already led to better dissemination of intelligence reports, consultation as to how to update export controls, perhaps a review of the PII system, all-party talks on ministerial accountability, better disclosure of departmental documents and so on, in an effort to improve the ordering of government.

In that regard, Sir Richard has assuredly rendered an important public service and he is much to be congratulated. That is the purpose for which an inquiry of that nature is set up. It is not to put Ministers on trial and convict them for misconduct, as is recognised by the absence of any summary of conclusions. The leader in The Times entitled "The Bad Attorney", referred to by my noble friend Lord Rippon of Hexham, found Mr. Attorney guilty of incompetence which rendered it his duty to resign. That was a vilification. It was based on a series of erroneous assumptions of fact, corrected by Mr. Attorney in his reply in The Times today.

Adverse comment, based on a wholly erroneous substructure of fact, albeit on a matter of public interest, may never be considered as fair. Talk about trial by the newspapers. This about takes the biscuit! On the same substructure of erroneous fact adopted by the noble Lord, Lord Richard, we have trial by the noble Lord, Lord Richard, who also finds the Attorney-General guilty, and Mr. Waldegrave as well. That was a similar order of trial, and was similarly unfair.

At least, the noble Lord, Lord Jenkins of Hillhead, did not set out on a head-hunting expedition to find his scalps after the fashion of the noble Lord, Lord Richard. However, the noble Lord, Lord Jenkins, fell into serious error on one or two occasions. He referred to Scott being appointed "to try". Scott was never appointed to try anything. He was appointed to inquire, report and recommend. The noble Lord referred to the duty to sign being automatic. It is nothing of the sort. The Minister had to decide for himself—nothing was automatic—whether the documents fell within the class. However, there is no merit at this hour in picking out small objections.

The purpose is to assert that the conduct of the Attorney-General was totally correct, as was his advice; and that the integrity of Mr. Waldegrave has been unjustly impugned; that there was no ministerial conspiracy to cover up; and that the proceedings were properly instituted. To make good those assertions one has to enter a sort of maze of pick-and-choose, indulge in a novel pastime and selective interpretation of passages in a voluminous report to seek to establish which findings are made in which context and which inter-relate. Already, this sodden field has been trampled into a quagmire. And already, the order of contention has reached a storm in a very nasty, very dirty political tea-cup, from which the papers and other media avidly imbibe—today, alas, in company with the noble Lord, Lord Richard.

Before entering the maze, noble Lords may wish to consider whether the findings in this inquisitorial process are apt to found serious allegations of misconduct on which to hound my right honourable friends out of office. There has been no finding of misconduct by any recognisable judicial process. Under this inquisitorial process there is no specific charge of misconduct to answer. The inference of misconduct was nebulous and evolved, or emerged, from the answers of witnesses under sustained adversarial questioning, to which my noble and learned friend Lord Howe and my noble friend Lord Rippon of Hexham referred. That is a potent ground of appeal if adopted by a judge in any judicial proceedings. There was no opportunity for the witness to question the questioner, or any other witness. There was no legal representation. There was no opportunity to answer any specific charge of misconduct, and none was ever formulated. An opportunity to comment on or correct a draft was not offered.

It is not the inquisitorial process as such that is open to criticism, but the manner in which it was applied. My noble and learned friend Lord Howe, my noble friend Lord Rippon and the noble Lord, Lord Armstrong of Ilminster, referred to that, and I agree with them. But most of all the problem is the use to which these findings have been put since publication of the report: using such findings as definitive judicial determinations of misconduct. That is a use to which they were put today by the noble Lord, Lord Richard. They are not, and could not properly have been, anything of the sort.

As to the findings in the report critical of the advice given by the Attorney-General as to Ministers' duty to sign, enough has been said by those who carry far more authority than I could ever master.

I turn to the conduct of the Attorney-General. That has been criticised, and there is no cause for such criticism. There was no cause for the Attorney-General to read the papers, for the reasons already given. He was asked what was the position in law, and it was his duty to answer. It is the judge who reads the papers and forms the view. There was no basis before him on which he could have entered a nolle prosequi. The Attorney-General has no statutory supervisory duty over the C&E, but he did satisfy himself that the proceedings were fairly instituted. He reasonably assumed that his correspondence with my right honourable friend Mr. Heseltine would have been available in court, as copies were sent by him to the Treasury Solicitor and, as my noble and learned friend Lord Hailsham said, apparently they reached the judge. The Department of Trade and Industry did not reply to the Treasury Solicitor's letter suggesting that counsel should be instructed to make representations to Mr. HeseRine. When the newspaper report suggested that Mr. Alan Clark had given a nod and a wink to breach the guidelines, the Attorney-General saw to it on his own initiative that Mr. Alan Clark should he asked whether his written statement, in which no mention was made of this, was correct. This was done on 18th September 1992 by telephone, because Mr. Clark was busy and for some reason could not come to London. Again, on 11th October, the day before the trial, Mr. Alan Clark confirmed that his statement was correct. It was confirmed twice: on 11th October and 12th October. Before the trial started on the 12th, all the relevant material had been disclosed to which the certificates were related.

It was suggested that in relation to the guidelines Mr. Waldegrave lied to Parliament and did so deliberately, and that he also lied in certain correspondence. Sir Richard found as a fact that my right honourable friend regarded the relaxed interpretation of Guideline 3 as revised (when the old one was overtaken by events) as being a justifiable use of flexibility believed to be inherent in the guidelines. The rectitude of such belief was subsequently affirmed by a Cabinet Office paper on 15th February in the government information pack. Sir Richard also found as a fact that my right honourable friend did not regard the agreement that he had reached with his fellow Ministers—namely, the revision of Guideline 3—as a change of policy towards Iraq. Sir Richard also found expressly that there was no insincerity in any of his answers.

The noble and learned Lord, Lord Wilberforce, as usual, probably holds the key; namely, from which end of the telescope does one look at the matter? Does one take the lawyer's approach or the practical, ordinary, commonsense approach? On the practical, ordinary and commonsense approach is not the noble and learned Lord totally correct? Here there is a system in which for years there has been a policy of no information on arms sales for various reasons—foreign policy, trade policy and all sorts of policy. There are guidelines in force and flexibility. Is one to suppose that a Minister of State, who does not look at matters like a lawyer but as an ordinary, commonsense person, would think that there had been a change of policy? Anyway, that did not happen. My noble friend Lady Thatcher says that there was not. My noble and learned friend Lord Howe says that there was not. Good heavens, I should have thought that that alone would be enough. But Mr. Waldegrave says that there was not and my noble friend Lord Trefgarne says that there was not. The only person who says there was is Mr. Alan Clark. That was a fanciful suggestion made to an answer in cross-examination which was wholly misconceived.

One wonders whether those who maintain that Mr. Waldegrave deliberately lied to Parliament are entirely familiar with the guidelines and in particular Guideline 3, which was revised after the ceasefire. It has been referred to already. That revision, as noble Lords may not remember, was proposed by Mr. Alan Clark, who discussed it with Mr. Waldegrave and with my noble friend Lord Trefgarne. It was approved by the Secretaries of State, the DTI, the FCO, the MoD and the Prime Minister.

The Matrix Churchill application for the licence stated that the end use was for civilian purposes, which it was not. But Mr. Waldegrave, whose integrity I seek to defend, would not have granted it in any case if he had seen the intelligence reports. At no time has a deceitful application been allowed, encouraged or condoned. All suggestions of Mr. Alan Clark to the contrary, under cross-examination, were misconceived.

The flexibility is self-evident in the guidelines and in particular in Guideline 3. The exercise of discretion took account of such matters as the ceasefire, the fatwa, the execution of Bazoft, hostages in the Lebanon, the capability and likely use of equipment, the viability of engineering concerns (and employment) in competition with those in other countries which had no export restriction, and so on—a myriad considerations. It was found by Sir Richard that the overriding and determinative reason was to protect British industries.

I ask your Lordships whether it is realistic to maintain that, in answer to a parliamentary Question in either House at that time, the guidelines should have been disclosed together with the case-by-case manner of discretionary enforcement. Even if Sir Richard's finding were correct, surely this was the kind of special situation in which, having regard to the other factors taken into account, the withholding of information could well be justified apart from the intelligence factor, which was not known to Mr. Waldegrave. On this matter, is it not reasonable to accept that the agreed response to parliamentary Questions and correspondence gave an adequate description of government policy: that the, guidelines are kept under constant review and are applied in the light of prevailing circumstances, including the ceasefire and developments in the peace negotiations", as indeed was the case? Reference has been made to Erskine May. My noble and learned friend Lord Fraser of Carmyllie referred to it. These guidelines, as the term expressly recognises, have no legal efficacy or mandatory effect and had inherent flexibility.

The question of the conspiracy seems now to have been dropped. I conclude with a short word about the institution of proceedings. Matrix Churchill applied to export to Iraq two machine tools: one computer programmed to make shell cases and fuses and the other to make multi-parts for a multi-launcher rocket system. The end use to which such dual purpose, non-lethal defence equipment was to be put was one of the main factors which had to he taken into account in granting the application. The application falsely stated that the end use was for civilian purposes. If the true purpose had been stated, no licence would have been granted. The licence was obtained by serious and material deception. The Customs and Excise had no way in which they could not prosecute.

8.27 p.m.

Lord Rodgers of Quarry Bank

My Lords, despite the intervening speeches and the passage of time, I hope that your Lordships will understand that I cannot forbear to mention the maiden speech of my noble friend Lord Taverne. We have been close friends for almost 50 years, though it does not seem like it, and political allies in many battles. It is a very great personal pleasure to find him here. I thought that his speech was marked by great clarity, conviction and intellectual strength. I know that the qualities seen today are qualities that he will bring to your Lordships' House in the period ahead.

As many other noble Lords have done, my noble friend spoke about Volume III of the Scott Report. My text is contained in Section D of the report, and particularly Chapters I, 3 and 4. They are all to be found in the first volume between pages 151 and 507. They concern defence policy. Many differing views have been strongly expressed in this debate, as one would expect. No doubt they and more views expressed in another place will he widely reported in tomorrow's newspapers. But I ask those who do not trust politicians any longer—they are many—and those who do not trust newspapers either, to read the report or at least read parts of it. Certainly, I should be happy to leave the final verdict to those who read the report.

I do not find Volume I of the report wordy, obscure or too long. It has a powerful internal momentum and a cumulative force. Its message is plain. Section D of the report sets out to answer two simple questions. First, was the policy on defence sales to Iraq changed after the ceasefire? Secondly, if the policy was changed, was Parliament told? To the first question Scott answers yes and to the second no.

I listened carefully to those who spoke today in defence of Ministers and the Government's position. I cannot understand how anyone reading the evidence in the report can disagree with the verdict of Sir Richard Scott. It is not a question of whether the guidelines for defence sales to Iraq should have been changed; there may have been a case for that. The question is simply whether they were changed.

If the guidelines were changed, it cannot conceivably be claimed that Parliament should not have been told. After all, the Howe guidelines were reported to Parliament, even if almost a year late. The noble and learned Lord, Lord Howe, is not in his place, but I have to say that I found his reasons for the delay quite unconvincing. However, Parliament was at last told in October 1985. If indeed the Howe guidelines were reported to Parliament, then any change in those guidelines, however that change is explained, should have been reported as well. Sir Richard Scott's view on disclosure is unequivocal. It has already been quoted, so I shall not repeat it; it is to he found in paragraph D1.165 on page 221. His view is beyond dispute. Scott's view is also unequivocal and beyond dispute on the question of the change in policy.

I should tell the House that for two-and-a-half years in the mid-1970s I was Minister of State for Defence and directly involved in the procurement of equipment and in defence sales. Earlier I had served in both the Foreign Office and the Board of Trade, or the DTI as it became. The briefings, the exchange of minutes, the meetings described in the report by Sir Richard Scott are entirely familiar. There is nothing surprising about the course of events, except the foolishness of it all

. First, there are the remarks of an official, Mr. Simmons, of the Foreign and Commonwealth Office who says in paragraph D3.7, page 374: The first phase of changing our approach would take the form of a relaxation of our interpretation of the guidelines". The later claim that, a relaxation of our interpretation of the guidelines". did not mean a change of policy is surely logic chopping. Everyone who has served in government will know exactly what that meant. That was followed, in paragraph D3.30, by the briefing from Mr. Waldegrave which stressed the need, to update our policy in the light of the ceasefire… There was a later reference in the briefing to "shifting policy".

Finally—it has been referred to and is a major feature of the report—there was the ministerial meeting on 21st December between Mr. Waldegrave, Alan Clark and the noble Lord, Lord Trefgarne. The important text, reported in paragraph D3.36, refers to the minutes of the meeting contained in the letter written by Mr. Waldegrave's private secretary, which said: The Ministers agreed after discussion that it would now be right to consider modifying [the guidelines)". Reference is made to "adjusting our public policy" and to "the attached revised guidelines".

I do not believe that anybody reading the report and following that course of events can doubt that there was a change. It is entirely perverse—and a remarkable argument—to argue that, as any change of policy should have been sanctioned by senior Ministers and the Prime Minister, and such a sanction was not asked for, no change of policy had occurred. That simply does not stand up in the way that government works. Scott called it "sophistry"; I simply call it laughable. Of course senior Ministers should have been told. If it were not the Ministers of State themselves who conveyed the message, it should have been their private secretaries. Ministers of State—I served as one in three different departments—were out of control if they did not report to their Secretaries of State the decision that they had reached, or their private secretaries failed to do so. It is quite foreign to all my experience of government.

The best summary of what happened in this case was given by the noble Lord, Lord Richard, when he referred to the minute to the Foreign Secretary from Sir Timothy Daunt, Deputy Under-Secretary of State for Defence in the FCO, dated 18th November 1992. I shall not repeat it now. I say only that that was confirmation from the Foreign Office itself, if confirmation were needed, that there had been a change. I say that again without prejudice as to whether or not the guidelines should have been changed.

I believe that I have some experience of the context in which Ministers—in this case Ministers of State and particularly at the Ministry of Defence—make their decisions when arms sales are at stake. First, there is an exaggerated climate of secrecy in which defence matters are concealed from Parliament and the public that are harmless and common currency in discussions, for example, in Washington. The noble Baroness, Lady Thatcher, referred to the development of Chevaline, which was reported to Parliament as updating Polaris. The noble Baroness was quite right to quote that as an example of a government in which I served using such language. But I thought then, and I say now, that it was quite unnecessary to fail to report to Parliament those most important developments on nuclear policy when they were fully understood and talked about among our NATO allies.

Secondly, there was a question of commercial confidentiality, which is invoked at all times to justify the denial of information to Parliament. The Minister referred to that today. Though there is sometimes justification, it is greatly overdone.

Thirdly, there is immense pressure from the defence industry, including the trade unions within it, to maximise the sales of defence equipment. I accept the Minister's figure that there may be up to 400,000 employees of such firms.

Fourthly, Ministers who hesitate to give approval to defence sales are always told, "The French will sell to anyone, so what is the point of giving the market to them?" That is a way of persuading them, quite often, to act in a way which otherwise could not possibly be justified.

Fifthly—there is a whole story in this which I cannot develop tonight—Ministers are also told that the export potential of defence sales will be enhanced if they first buy the equipment, despite budget restraints, for our own Armed Forces. There is a circle of persuasion, which in my view is very dangerous and seductive.

Finally, the Head of Defence Export Sales is a powerful voice in the department, with a large staff behind him. It produces a tough culture of its own, where selling arms is almost a patriotic duty which marks off the men from the boys. In those circumstances, Ministers must always stay cool and never forget their obligations to Parliament.

I am not against defence sales in principle. As I said, I participated in the making of policy many years ago. But as the right reverend Prelate the Bishop of Lichfield said, it is important that the political and moral case always has the upper hand. It must never be forgotten by Ministers, whatever the pressures upon them.

There are many countries in the world to which we can sell arms. It would be foolish not to sell arms to our NATO allies. But beyond that there must be clear and precise guidelines for defence sales; those guidelines must be agreed at the highest level of government; they must be put on record by being fully and promptly reported to Parliament; they must be implemented in the letter and the spirit without gloss or interpretation and any changes must be treated in the same way. Against such criteria it is clear from the Scott Report that the Government failed in the period 1984 to 1990 and particularly in 1988 and 1989. As others have said, it would have been far better if the Government had admitted that, both in their evidence to the inquiry and since. In refusing to do so, they have made a rod for their own back.

8.39 p.m.

Lord Monkswell

My Lords, I thought it would be useful if I explained why I am speaking in the debate, what I have learnt and my conclusions from that. I was concerned 10 days ago about the Government's Statement suggesting that everything was all right. I was also concerned about the Opposition response to that Statement which suggested that everything was all wrong. As a result of the exchanges on that day I determined to read the report and make my own judgment. I would also say in passing that I put down a Question for Written Answer asking who in the Government had had access to the report beforehand, for how long they had had it and on what terms they had had it. I can report to the House that I am still awaiting a reply to my Question.

The Scott Report is very even-handed. I liken it to a judge summing up at the end of a criminal trial. A judge who is summing up at the end of a criminal trial has to be careful that he explains the whole case even-handedly and does not sum up in favour of one side or the other—otherwise he would be subject to appeal. The report itself reads like a thriller. It is not quite as snappy as the TV programme "The A Team", where good guys like Mr. T hammer the had guys. The report is nevertheless a thrilling read. I am only sorry that more Members of your Lordships' House who have contributed to the debate have not read the report. We are the jury. Initially, we parliamentarians have to decide who the good guys and the bad guys are. But ultimately it will be the British public who will decide in a general election.

I had two central questions to which I sought answers in reading the Scott Report. First, did Ministers mislead Parliament? Secondly, did government action through withholding evidence for the defence put at risk the liberty of innocent men? Having read the Scott Report, I find the Government guilty on both counts. I shall not quote directly, but Volume I makes it clear that in February 1989 the guidelines were changed by the three junior Ministers, only one of whom is still in the Government, and that through 1989 and 1990 Parliament—-Conservative Members, Labour Members and Liberal Democrat Members in both Houses—was advised that the guidelines had not changed. Parliament was misled.

With regard to the second charge. Volume III of the report sets out the whole shabby story. Again I shall not weary your Lordships by quoting chapter and verse. That has been done quite adequately by a number of noble Lords on this side of the House. I was curious how the Government could insist that Ministers had a duty to sign public interest immunity certificates. The way it came across was that they had no discretion in the matter--they were required to sign pieces of paper put in front of them without any regard to their own judgment. The advice given by the Attorney-General was that Ministers had to sign the PlICs as a matter of duty.

I started asking myself: a duty to whom; a duty to what; what kind of duty was it that compelled someone to sign the document using no judgment of their own'? However, the reality is a little different. As I understand it—it comes through clearly if one reads the report—it is the Minister who has to make a judgment whether a document should or should not be disclosed in the public interest. It is not Law Officers but individual Ministers who have that duty. If the Minister makes a judgment that the document should or should not be disclosed, then be has a duty effectively to make that public by signing a public interest immunity certificate. The noble and learned Lord, Lord Hailsham, from a sedentary position, says that I am wrong. I call in aid Lord Justice Scott and also the interpretation that Mr. Heseltine clearly had. He felt that documents should be made available to the court but was wrongly advised by the Attorney-General that he had to sign a PII certificate about them. Mr. Heseltine was right and the Attorney-General was wrong. It was luck rather than judgment that innocent men did not go to gaol. That is not good enough.

I come now to my conclusions. Because of the way that this Government have acted we live in a world of mistrust. Parliament cannot trust Ministers to give honest answers. The courts cannot trust the public interest immunity certificates that are signed by Ministers. Effectively, every judge who has a PIIC placed in front of him has to read all the papers. He cannot trust what the Minister has signed for. The prosecuting authorities cannot trust what is government policy and therefore in terms of the 1939 Act—now the 1990 Act—the government policy determines what is a criminal offence. This goes to the kernel of the problem. By operating a policy which determined the criminality of an action, in secret—without publicising it—the Government laid themselves open to a situation where an independent prosecuting authority—Customs and Excise—was required to operate its public duty to prosecute but was unaware, because it was never divulged, that the criminal law was different from its interpretation of it. That is an unsatisfactory affair.

Last but not least, the ordinary citizen cannot trust this Government either to tell the truth or not to subject him to arbitrary diktat. I stand here not as a party man in this case but as a parliamentarian. I judge that the Government have misled Parliament and were prepared to see innocent men go to gaol. We have had no word of apology and no sign of contrition from the Government. The whole matter was crystalised for me by the evidence given by a member of the security services, a Mr. T, when be described Mr. Henderson, a defendant in the Matrix Churchill trial, as not only "a brave man"; as not only "a very brave man"; but as "a very, very brave man". In the vernacular, Mr. T iced the bad guys. The bad guys in this case are the Government.

8.49 p.m.

Lord Tebbit

My Lords, today we have had the privilege of hearing some exceptionally fine speeches. It is a great pity that the noble Lord, Lord Monkswell, was clearly not listening to them or he would not have made the speech that he did. He failed to understand a single word said by the most distinguished lawyers of this country whom we have had the privilege of hearing today. It is a pity that the noble Lord did not rewrite his speech since, presumably, hearing those noble Lords speak.

I was fascinated earlier when I heard the speeches of the two ex-Brussels Commissioners, both of whom declared themselves in favour of open government truly a most wonderful change of attitude since they returned home from the Continent. What is more, I fell to wondering what Sir Richard Scott would make of the proceedings in Brussels were he to be unleashed into that place where there is so much corruption, as we know from every year's report of the Court of Auditors. If we had to find another little job for Sir Richard, it might well be to send him across there to make another report which would give us all a great deal of enjoyment. In fact, hearing those two noble Lords I felt that I had never before heard two such blackened old pots pointing fingers at saucepans.

I was immensely impressed by the speech of my noble friend Lady Thatcher, which was so short, so clear and so absolutely to the point. I was also impressed by the speech of my noble and learned friend Lord Howe. I do not think that I have heard him in better form in all my life. He was clear, to the point and immensely impressive in all that he said, as were many other noble Lords, but as I do not want to detain the House I shall not refer to them all.

I wish to confine my remarks to a relatively restricted area for I have no personal insight into the events in which my right honourable friends William Waldegrave and Sir Nicholas Lyell were involved. As far as I can see from scanning the report, William Waldegrave was not involved in any dishonourable act—nor would I have expected him to be for I know few men in politics more concerned to take all of their decisions in the light of what is the best possible practice and to do so in the most honourable way.

As to Sir Nicholas Lyell, the report, the comments on it and our debate today demonstrate the truth of the old adage that he who consults two lawyers is likely to get three opinions. Today the lawyers who gave opinions favourable to the Attorney-General were the ones I have always found the most impressive.

I should like to raise one point of criticism of the Government; perhaps it is not so much a criticism as something that I still do not understand. I still remain puzzled as to why the prosecution against Henderson and others was not stopped before it ever started. I ask myself which Ministers had responsibility, through their responsibilities for MI6, for protecting those who were acting on behalf of the Government.

I do not know the answers to that question, but I do know something about Part 1 of the report which deals with the export control system, having been a Minister responsible for that matter. I noticed that on 1st November 1994 the Secretary to the Scott Inquiry wrote to the Prime Minister's Private Secretary saying: this section … underpins much of the Report which follows it". He was wrong. It does not underpin it. That section of the report is fatally flawed. Indeed, it rather undermines Sir Richard Scott. I regret to use of Sir Richard words as harsh as those which he uses of more than 20 senior Ministers of both parties. Nonetheless, it is clear to me that through his unwillingness to look fairly at the evidence—indeed, by a willingness to reach conclusions without hearing the evidence—Sir Richard prejudiced himself at an early stage of his inquiry into the matter.

Those are hard words, so I must justify them. In May 1993 Sir Richard sent to the Government a paper concerning the framework for the control of exports. In that paper on page 2, Sir Richard states: It appears to me, however, that the powers, now permanent, conferred on the Government by the 1939 Act, are totalitarian in concept and effect". I repeat that the word used by Sir Richard was "totalitarian". I sent Sir Richard the definitions of that word from the leading English dictionaries and I asked him which he had in mind when writing that letter. Sir Richard never replied.

So here it was that at the beginning of his inquiry Sir Richard began to "underpin" much that followed in his report by a view that is unsustainable except out of prejudice. He began with a false premise—the quite bizarre belief that for half a century Labour and Conservative majorities in Parliament, horn out of free and fair multi-party elections, connived to operate—let me use the Oxford Dictionary definition: a system of government which tolerates only one political party, to which all other institutions are subordinated, and which usually demands the complete subservience of the individual to the State". It was on that foundation that Sir Richard built his report. Totalitarian? Did noble Lords opposite know that they were members of a "totalitarian" regime when they were in office? Sir Richard apparently thinks that they were. And nobody—not Parliament, not the BBC, not the press, not the National Council for Civil Liberties, not the Church, not the CBI nor the TUC—noticed that we were using "totalitarian" legislation until Sir Richard found it out for himself one afternoon. That is what Sir Richard says underpins his report.

Sir Richard finds that: From 1950 at latest until December 1990 there was in my opinion a reprehensible abuse of executive power by successive administrations". I should say that I am grateful to Sir Richard who responded to some robust letters from me by rewriting certain sections of his report to remove the very personal criticisms which he had made of me and my Minister of State, Paul Channon, in the first draft. In his final report Sir Richard now makes it plain that I am no more—nor any less—a totalitarian abuser of power than my 20 or so predecessors and successors in the office of President of the Board of Trade. Perhaps I may list a few of those who held that office between the end of the Second World War and 1990. This is a list of reprehensible abusers of power who used totalitarian legislation. The list includes Lord Wilson and the noble and learned Lord, Lord Shawcross, who was so praised today from the Liberal Democrat Benches; Lord Thorneycroft and the noble Lords, Lord Jay, Lord Mason, Lord Walker and Lord Cockfield; Sir Edward Heath, Anthony Crosland, Peter Shore. Sir John Nott, John Biffen, Sir Leon Brittan and the late John Smith. The man who finds them all guilty of reprehensible abuse of power is himself at least guilty of reprehensible abuse of language or, more likely, a serious lack of judgment.

Sir Richard came to his conclusion believing that the Cold War was not an extension of the hot war of 1939-45 and that Ministers had no need of the powers which were conferred by the 1939 Act. I explained to him that he was wrong. I gave him an example of why the powers had to be wide and immune from delaying tactics. I shall give the House the same example this evening.

While I was Secretary of State my department had granted a licence for the export of certain machinery to Czechoslovakia. We believed that it was not capable of use detrimental to the security of the West. We later became aware, through the activities of an intelligence agency, that we were wrong and that in fact the machinery was vital to the development of the Soviet Union's nuclear missiles. I inquired what had happened and I was told that some of the machinery had gone, but not all of it, and that the most vital parts had not left the country. I did not have long to act: I did not have time to play around. I had to act that day and stop the export of that material. Had there been the possibility of the seeking of injunctions or judicial reviews of my action, that equipment might well have gone to the Soviet Union. That is why we needed powers of that kind.

I do not even know whether the secretary to the inquiry who dealt with all correspondence, ever even told Sir Richard Scott or let him see my letter, for I was never called to give evidence. Sir Richard talks of the abuse of power by more than a score of Cabinet Ministers over nearly half a century. If that had happened, I would have expected there to be an appendix to the Scott Report listing all those who had been outraged by this abuse of power. It is not there. Sir Richard lists three cases which went to law. In each case the Minister was upheld. Sir Richard is unabashed. It seems that the facts should not be allowed to distort a conclusion already reached. He simply says that the cases were not well brought. He says that if they had been brought on other grounds the plaintiffs would have won. I suppose it is always easier to be confident of the outcome of a case if one has not been confused by the evidence.

I have no hesitation in saying that this section of Sir Richard's report is a shoddy document. It attacks the reputation of more than 20 Ministers of both parties, two of whom became Prime Ministers and another, John Smith, who led his party. Few were invited to give evidence. Sir Richard reached his conclusions by being economical with the evidence. He reached a nonsensical view that Parliament allowed a totalitarian measure to be used for nearly half a century. He says that there was no parliamentary procedure to check its use. No parliamentary procedure!

Those of us in particular who have served in another place are aware of the potency of the House of Commons; the ability of Back-Bench Members to defend the interests of their constituents or employers in their constituencies by searching parliamentary questions, adjournment debates and the Select Committee procedures. If ever the Conservative or Labour Opposition had thought that there had been a serious abuse of executive power, they could on a Supply Day, have brought a Motion calling the Ministers concerned to account. In nearly half a century it never happened. Sir Richard's conclusion is that that is because Parliament does not work. My conclusion is that it is precisely because Parliament does work and it is Sir Richard who does not understand how it works. It is not surprising. I would never suggest that I should be appointed to head a law commission.

If there is one lesson to be learnt above all from this affair it is a very simple one and it was hinted at by my noble friend Lord Rippon and indeed by my noble and learned friend Lord Howe; namely, that alleged public scandals involving matters which are not in themselves justiciable, would be better resolved by practitioners of standing in government rather than by judges.

9.6 p.m.

Lord Wright of Richmond

My Lords, I decided to add my name to the long list of speakers in today's debate in view of my involvement in some of the matters during the period covered in Sir Richard Scott's report, first, as ambassador to Saudi Arabia from 1984 to 1986 and, secondly, as Permanent Under-Secretary in the Foreign and Commonwealth Office from 1986 until my retirement from the Diplomatic Service in 1991. I should add that I am not the Permanent Under-Secretary referred to by the noble Lord, Lord Callaghan, although I am the Permanent Under-Secretary who should probably apologise belatedly to the noble and learned Lord, Lord Howe, for having added so significantly to the 25 tonnes of paper that he took home every night.

I do not propose to enter into the political controversy about ministerial, or indeed official, responsibility for the mistakes and confusions criticised in the report beyond saying that, having worked with the right honourable gentleman Mr. William Waldegrave throughout his time as Minister of State in the Foreign Office, I wish to associate myself fully with the comments made by the noble Lord, Lord Carrington, in his letter to The Times of 20th February. I would add that many of the officials named or criticised in the report are former colleagues and personal friends of mine about whose integrity and conscientious attention to duty I have no doubts whatever.

The point that I would like to address tonight relates principally to the guidelines covering the export of defence-related equipment to Iran and Iraq, both before and after the ceasefire between those two countries. It is perhaps understandable that the Scott Report should give paramount importance to the role which the guidelines played in decisions being reached on the export of equipment, since that was part of the inquiry's remit. Although there are frequent references in the report to other considerations which Ministers and officials had to take into account in reaching their decisions, the impression emerges that the overriding consideration at all times, whether before or after the Iran/Iraq ceasefire, was a virtually automatic and rigid application of the guidelines. That, no doubt, explains the heavy emphasis given in the report to the Government's failure to publicise the modification of the guidelines after the ceasefire.

The fact is that a host of other considerations had to be taken into account on each occasion by both officials and Ministers in reaching decisions about the export of equipment to Iran and Iraq. These included foreign policy considerations, including the effect which both individual exports and any apparent departure from the guidelines might have on our political and commercial interests in the Gulf and with our allies; treaty commitments on the control of exports under COCOM, the Missile Technology Control Regime, the Non-Proliferation Treaty and the Australia Group on Chemical Exports; consular considerations, including the threat to our hostages in the Lebanon and to British subjects in Iran and Iraq; the possible threat to our Armilla Patrol in the Gulf; the human rights record of both countries, including the flagrant abuse of human rights by Iraq in Kurdistan; the continued restriction of arms exports to Israel arising from the Israeli occupation of South Lebanon; technical considerations of whether potential exports were, in fact, licensable under existing legislation; and, of course, the effect which refusal of export applications would have on the British firms concerned and on British commercial opportunities in the Gulf set against the willingness of others to supply.

Those were only some of the considerations which officials and Ministers had to weigh up on each occasion and, indeed, which ambassadors in the region such as myself had to bear in mind in making our recommendations. A telegram which I sent from Riyadh, arguing against the supply of helicopters to Iran, and which the report claims carried weight in ministerial discussions, reflects only one aspect of the heavy and constant pressure to which I was subjected by the Saudi authorities to restrict even further our exports to Iran and to relax our exports to Iraq; pressure which, somewhat ironically in the light of the subsequent Iraqi invasion of Kuwait, was reflected in other Gulf posts.

I recall, in particular, a long-running dialogue which I had with Prince Saud, the Saudi Foreign Minister, on the meaning of the word "lethal", with the Saudis arguing on one occasion, with, I am bound to say, some logic, that large tyres for lorries should not be exported to Iran since they could be used to ferry Iranian guerrillas across the Shatt al Arab. In considering cases of this kind, the guidelines can have served as no more than a kind of rough benchmark; the political and other considerations to which I have referred will have had much greater influence on the final decisions taken by Ministers.

The only other point on which I would like to comment is the report's criticism of the failure to inform Parliament of the modification to the guidelines after the ceasefire. I can recall countless examples during my 36 years in the public service when ministerial Statements or replies to Questions in Parliament have had to be constrained by the effect which fuller disclosure could have had on our political and commercial interests abroad and occasionally on the security, if not the lives, of British nationals.

I believe that those who agree with Sir Richard Scott that any modification to the guidelines should have been publicised and reported to Parliament missed the point. The guidelines were—and rightly in my view—designed to be flexible. No British Government could have hound themselves to a rigid set of rules in such a complex and changeable situation. Least of all would that have been sensible in circumstances where the Government had constantly to take account of and adjust to the shifting range of the foreign policy, commercial and strategic considerations which I have described, many of which were the subject of frequent Statements and replies to Parliamentary Questions and of consideration in the Foreign Affairs Committee of another place.

In summary, foreign policy is not a matter of following rigid or immutable guidelines. It is a matter of exercising judgment and reacting in a flexible, responsible and considered way to rapidly changing international circumstances in a way that will best promote and protect our national interests.

9. 15 p.m.

Lord Carlisle of Bucklow

My Lords, one of the disadvantages—or your Lordships may think that it is an advantage—of being the 26th speaker in a debate of this nature is that practically everything that one intended to say has already been said. I am conscious of the fact that it is now a quarter past nine and there are still 12 of your Lordships to take part in the debate. Therefore, I propose to be very brief in my remarks.

However, I wish to challenge the conclusions reached by the noble Lords, Lord Williams of Mostyn and Lord Hutchinson of Lullington, as to the attitude of the Attorney-General. As we know, the Attorney-General has been attacked on two grounds. First, he was attacked because it was said by Lord Justice Scott that he was wrong in law to advise Ministers that they had a duty to sign the public interest immunity certificates when the documents that they were facing fell within the class which is normally caught by public interest immunity.

I was surprised by the view which Lord Justice Scott had taken. I had always thought and believed that it was the view of those practising at the Bar that, where the issue of public immunity arose, if the documents came within the class upon which Ministers are advised that immunity should be taken, then the Minister had a duty to sign those documents and leave it to the judge to weigh against that claimed immunity the interests of justice which require that a document should be disclosed.

That argument has been advanced with eloquence by the noble and learned Lords, Lord Lloyd and Lord Slynn. If I take a momentary move into fantasy and imagine myself sitting as a third member of the Judicial Committee of your Lordships' House, I need add no more than to say that I agree and have nothing to add.

The noble Lord, Lord Hutchinson, appeared to deride those noble Lords who have taken a different view by saying that they did not really understand the workings of the criminal courts. The noble and learned Lord, Lord Rawlinson, read out a list of judges to your Lordships. It is not those judicial figures only with whom Lord Justice Scott is finding himself in disagreement. As one may have seen from the correspondence columns of The Times over the past week, he is at odds with the views expressed by each of the last four senior Treasury counsel at the Old Bailey, with the views of the current chairman of the Criminal Bar Association, with the views of the previous chairman of the Criminal Bar Association, with the views of my noble friend Lord Alexander and in fact with the views of at least one other—Mr. Robert Seabrook, chairman of the Bar Council.

I hope that the noble Lord, Lord Hutchinson, will at least give credit for the fact that he would respect those people, with whom he has often done battle in the past, as men of honour and integrity and accept that they also, as criminal practitioners, believe that what the Attorney-General did was right. But I leave that part of the argument because, as the noble Lord, Lord Williams, said, it is to some extent irrelevant, except that I am sure that he will agree with me that if criticism is based on a misconception of the law, it follows that any criticism which flows from it must be both unjustified and unfair.

I turn to the second part of the complaint that is made against my right honourable and learned friend the Attorney- General. That is to be found when Lord Justice Scott suggests at paragraph G13.125 that the Attorney-General was personally at fault in failing to be sure that, for example, the reservations made by the President of the Board of Trade had been conveyed to Mr. Moses. In fact, I believe that that criticism is unfair because it ignores the steps that the Attorney-General took. Above all, it ignores the pressure under which the Attorney-General works. Indeed, your Lordships have had the good fortune to hear my noble and learned friend Lord Rawlinson remind us of some of those pressures.

However, if I may speak from my own position—not as someone who has been a Law Officer, but as someone who has been a Minister of the Crown—I believe that the pressures upon a judge and the pressures of time upon a Minister are two matters of a totally different nature. I sit in the Court of Appeal in the Channel Islands. There, you can concentrate on one case with all your attention for the whole of the time. But a Minister of the Crown, the Attorney-General, has at any moment many different matters passing across his desk.

So what did the Attorney-General do in this case? Aware of the views and the concerns expressed by the Lord President, aware of the views expressed over what Mr. Alan Clark may or may not have said, he decided—I believe in his own words—to take an overview of the case. It is clear from the report of Lord Justice Scott that he had a meeting with Mr. Moses. Perhaps I may remind the noble Lord, Lord William of Mostyn, of what the Attorney-General said. It is to be found at page 1362 of the report, where he said: I have absolutely the clearest recollection of asking Mr. Moses, (because it was critical—we were, after all, talking about documents for PII and my wish to take stock of the case) quite expressly. 'Is there anything on the documents which renders it unfair to prosecute this case', and I got a clear answer that there was not". That is confirmed by Mr. Moses on page 1364, where he says: I am confident that the Attorney-General's views in relation to this case, were dependent upon his reliance that I would not be proceeding with the prosecution had I believed that there was anything in the documents which I had seen, or in the exhibits or statements in the case, which rendered it unfair to prosecute. Indeed. had I been of that view I would have advised against continuing with the prosecution … The responsibility for considering whether. in the light of all the documents that I had seen, it was fair to continue was mine, and the Attorney-General would have been reassured by the fact that I understood that responsibility, and was attempting to discharge it". I believe that it is reasonable that the Attorney-General should have taken the steps that he did. I also believe that he is entitled to be satisfied by that which he was told.

The noble Lord, Lord Williams of Mostyn, said that Mr. Moses had complained that he had not been informed of Mr. Heseltine's concerns and, therefore, had not been able to convey them to the judge. The noble Lord said that it was a great pity because, although the Attorney-General had not read the documents himself, he had said in his letter to Mr. Heseltine: the drafting of paragraph 4 of the certificate is unusual and the judge and the defendants will be alert to its limited scope, which can if necessary he emphasised by counsel for the Crown orally". The noble Lord said that that was not done. I do not think, with respect, that that was so. Mr. Moses said to the judge in court, Your Lordship will have observed that in the certificate of the President of the Board of Trade he makes it quite clear what he is doing, that is making a class claim. It is very useful that he does so. It does illustrate the fact that it is no part, of course, of the prosecution or any of these departments to do more than exercise their duty to assert this claim". I believe Mr. Moses made it absolutely clear in what was said on that occasion—this has been confirmed in the article written by Mr. Gilbert Gray, and the letter written by other counsel at the time—that he desired and wished that the judge (indeed, Lord Justice Scott accepts this) should read all the documents himself. Mr. Moses accepted that, if the judge took the view that any of the documents were relevant to the defence, they should immediately be shown to it.

I said that I would speak briefly but I have failed in that regard, in that I have already spoken for 11 minutes. I respect the comments made by the noble Lord, Lord Williams of Mostyn, as regards his personal relationship with the Attorney-General. I accept that he, like me, accepts that the Attorney-General is a man of principle and integrity. However, I believe that the noble Lord is quite wrong when he argues before this House that the Attorney-General was at fault, either constitutionally or personally, in a way that he suggests should lead to calls for his resignation. My learned friend the Attorney-General is respected throughout the world. I believe that he has been sorely traduced not by Lord Justice Scott but by much of what has been said in the press and by certain spokesmen of the Opposition about his willingness to see innocent people go to gaol. I believe those charges have been proved to be unfounded. I believe, and hope, that he will continue in office.

9.27 p.m.

Earl Russell

s: My Lords, my respect and indeed my affection for the noble Lord, Lord Rippon of Hexham, are as great as for any noble Lord in this House. But when the noble Lord said tonight that the charges brought against the Government are a politically motivated witch hunt, I am afraid he was mistaken. I have listened to conversation about this report and its aftermath from a considerable number of ordinary people about the shops in my neighbourhood. Being a fair-minded man, even I have been constrained to tell them that the Government are not as black as they think. Ministers do not know when they are well off.

It will not surprise the House to hear that that does not mean I think the Government are anywhere near in the clear on this matter. On the affair of the guidelines, I ask the House, if I may, to listen to one passage in the report which I think illustrates that, although we all understand the force of the arguments for confidentiality in some cases—I listened with care to the noble Lord, Lord Wright of Richmond—in this case it was a secrecy vitiated by not having given enough attention to the basic intelligence principle of the need to know. The number of people who needed to know was too great to make the task of keeping it secret from Parliament at all a practical proposition. For example, the Embassy in Baghdad—if anybody—needed to know. The Ministry of Defence appears to have tipped it the wink. As a result, it received a telegram from the Baghdad Embassy, I understand … that guidelines on defence sales to Iraq have been modified: this involved not just a liberal interpretation of existing rules but a new form of words. not as yet made public. I have not yet seen the new criteria". An official in the Ministry of Defence, whom I shall not name because he cannot answer for himself, reading that telegram annotated it "Oh dear!". He added, in case there should be any chance of misinterpreting that comment: We can expect trouble … as there is a chance of this leaking. It is marked CONF however". That was a futile attempt at whistling in the dark.

British business needed to know, both about the first and the second guidelines. The first guidelines were briefly reported in British Business several months after they came into effect with a reference to existing contracts, which was misleading because it appeared to date from the date of the announcement when in fact it dated from six months earlier. Sir Richard comments: The Government was, in a sense, hoist with its own petard of secrecy. Once the decision had been made not to announce the Guidelines. the Government could not say that 'existing contracts' meant pre-December 1984 contracts without disclosing the existence of the guidelines". I understand the need for secrecy, but this was unintelligent secrecy because it was secrecy for the Government's own convenience rather than secrecy based on genuine reasons of state. If one is judge in one's own interest of when one is entitled to be secret, that is a mistake it is extremely easy to make.

We have heard a very vigorous reaction to this report. Executives are a little like two year-olds: when they do not get their own way they throw a tantrum. Since I have been in this House we have heard tantrums aimed at the judges, the European Union and the press. When have we heard tantrums aimed at Parliament? I am not sure that we should be flattered by the silence. The noble Lord, Lord Tebbit, said a few minutes ago that he would rather be judged by a politician of standing than by any judge. Those among us who are politicians of standing should not be flattered either. The crucial point which emerges if we consider the answers which Sir Richard was able to get from senior Ministers, and which we are not able to get, is that because of the judicial powers of contempt judges are able to get answers with a freedom which I fear is sadly lacking in this House.

So if we ask who is to blame I think in the end Parliament is to blame. When I say Parliament, my Lords, I mean you and me. If we had been able to get answers, it would not have been necessary to set up this inquiry in the first place. If we had been able to call Ministers to account when the story came out, again it would not have been necessary to set up this inquiry in the first place. We are using the judiciary to do what should have been our work. That is a matter on which we need to do a good deal of thinking.

We should not merely blame Ministers for the fact that answers to parliamentary Questions are not always informative. That is a culture, and that culture stretches far wider than the area covered by the report. In fact, it is a general problem. Most of us can remember, when we were at school, being in trouble for things for which our defence, spoken or unspoken, was that everybody does it. If we were wise, that defence was much more often unspoken, because the speaking of the defence can only inflame the authorities.

I am not just talking about the plain failure to answer questions covered in clear categories in Erskine May. I am talking about answers which, as my noble friend Lord Jenkins of Hillhead once put it, are bland rather than informative. I could have taken a good many examples from answers that I have had since the beginning of this Session. But I would not wish for one moment to cast imputation against any particular Minister for doing what is at present culturally acceptable. So I have taken a hypothetical question. Why did the Government take this decision? Answer: The Government took this decision after the most careful consideration of all relevant factors. We have all received answers like that. Having answers like that makes it very difficult indeed to call Ministers to account. If we cannot call Ministers to account now, we have to take account of the growing public dislike for Parliament, and often contempt, which is felt outside these walls. We have to take account of the fact that there is a growing sense among the public at large that it is much better to have Ministers accountable to judges ruder a constitution than to have them accountable to a parliament.

Warts and all, I love this place. But it is pretty nearly our last chance to save ourselves —to see whether we can do something now. If we cannot, the responsibility will be taken away from us and 1, for one, would deeply regret that.

I have considered with some care the question raised by the noble Lord, Lord Callaghan of Cardiff, on the Thursday before last. How did it come about that Mr. Waldegrave, who has so much ability, was nevertheless able to convince himself that he was not misleading when in effect he was? This is where things get interesting, and where the application again goes a great deal wider than the report itself. The key word here is flexibility. We have all heard arguments about flexibility. We have heard the standard defence of Henry VIII clauses over and over again in terms of flexibility.

Let us look at the original grounds for the Howe guidelines. This is again Sir Richard speaking. He states: This use of 'flexibility', in order to permit an apparently objective guideline to change its meaning according to the exigencies of the moment, will ring a bell of recognition for those who have attempted to follow the manner in which the Howe Guidelines were interpreted and applied". That bell of recognition will be heard among a great many people other than those who have been involved in this specific issue.

I heard the arguments of the noble Lord, Lord Wright of Richmond. I understand that there is a need for flexibility in foreign policy. If Parliament is ultimately to be sovereign, some account has to be given to it of the grounds on which that flexibility was exercised.

The noble Lord's arguments reminded me vividly of the arguments used by Queen Elizabeth I against allowing Parliament to have any say in foreign policy. In their wisdom, our ancestors decided otherwise, and since we find ourselves in this situation we have to work in it as we find it. On Privy Counsellor terms it is possible sometimes to tell people that it is not in the national interest to press specific questions, and those terms must be respected or nothing will work.

The noble and learned Lord, Lord Howe of Aberavon, at one point described the guidelines as ectoplasmic. I think that I understand what he meant. But it is that flexibility which tended to emancipate them from parliamentary control. It is like a Minister changing the law by regulations under a Henry VIII clause, rising in the House to say that the law is unchanged. There is a sense in which what he says is true, but that sense is liable to mislead.

Let us take the passage which Sir Richard Scott described as "sophistry", to which the noble Baroness, Lady Thatcher, referred earlier this evening. Mr. Waldegrave said that the guidelines could not be changed without the Prime Minister and senior Ministers being notified. They had not been notified, ergo the guidelines had not been changed. That reminds me of an old Oxford story which I am sure is as well known to Mr. Waldegrave as it is to me. A train not scheduled to stop at Oxford Station came to a halt for a signal opposite the station platform. An undergraduate leapt out. A porter rushed up to him and said: "You can't get off here, sir, it doesn't stop", to which the undergraduate replied: "Well, then, I haven't got off —. That is the argument that Sir Richard Scott described as sophistry and the description is entirely fair.

Beyond that, we have more and more of the business of flexibility. I shall not say any more about it but will only touch on the rule of political resignations —forced resignations on issues of policy. I believe that that rule has operated for 620 years, since the origins of impeachment. It is that the need for ministerial resignations is in inverse proportion to the ease of persuading people that the underlying policy has changed.

Here, the underlying policy which is complained of is secrecy. When I look at the publication of the report, I am not reassured. The report has taught us to look for managing power by withholding information. The late Richard Crossman taught us to look for hanging on to power by giving out too much information all at once, so that it could not be digested. I never thought to see both those policies in operation at once.

9.42 p.m.

Lord Trefgarne

My Lords, in rising to take part in the debate, I start by saying that I am not among those who criticise my right honourable friend the Prime Minister for setting up the inquiry in the first place. Following the ending of the prosecution of Mr. Paul Henderson and his colleagues, there was widespread public concern about the issues. I have no complaint about my right honourable friend's decision, expecting, as I did, that I should be asked to give evidence. I was content then, as now, to have my words and actions of the time fairly judged.

It was soon clear that Sir Richard would have access to an immense volume of papers and the testimony of numerous witnesses. I took some time to make up my mind as to whether or not I should appear. Your Lordships will recall that when the inquiry was set up my right honourable friend the Prime Minister made it clear that serving Ministers and officials were required to attend, while others like me, no longer in office, could decide for ourselves.

I wondered whether there was anything I could usefully add to the huge volume of evidence —not least my own lengthy written submission and, in particular, the evidence of my right honourable friend Mr. Waldegrave. I was concerned too as to whether the procedures which Sir Richard had decided upon were such as to allow witnesses appropriate safeguards and protection which had been regarded as essential ever since the report of Lord Justice Salmon, to which my noble and learned friend Lord Howe of Aberavon referred.

My fears proved to be well founded, but I eventually decided that a refusal to appear would have exposed me to the criticism that I had something to hide or that my former colleagues and friends had something to hide. That was a risk which I did not wish to take. Furthermore, Sir Richard eventually agreed to certain procedures, and gave me certain assurances which allowed me to hope and believe that my concerns had been largely met.

That correspondence between my solicitors and Sir Richard's officials was somewhat lengthy. As I said, Sir Richard in the end agreed to most of the safeguards that I sought and I eventually appeared, accompanied by counsel and with the right to make opening and closing statements. I was, I believe, the only witness accorded all those facilities (which should of course have been available to all witnesses) although I gather that Sir Richard has since suggested that anybody else could have had them if they had asked.

Be that as it may, I was I must say very surprised to read the speech by Sir Richard Scott to the Chancery Bar Association on 2nd May 1995. In that speech, Sir Richard referred in somewhat derogatory and less than wholly accurate terms to the correspondence between my solicitors and his officials —all this in the course of his inquiry and at the very time that he was deliberating upon his evidence and preparing his report. He referred to what he described as a "tediously lengthy" correspondence and then suggested that my solicitors (a leading City firm) had misunderstood the nature of his inquiry. He went on to say that they eventually "subsided".

I do regret that Sir Richard chose to refer to that private correspondence in public, as he did. The fact is that, far from "subsiding", my solicitors eventually got virtually everything that I wanted and it was he who gave in. As well he might. At one point during that correspondence, the inquiry actually wrote to the effect that it really did not matter whether or not I appeared because the judge was already able to make up his mind on my involvement from the papers he had seen. When my solicitors inquired the nature of those conclusions there was, needless to say, a rapid hack-peddling.

I turn now to those parts of the report which concern me and to the evidence that I submitted. Like most witnesses, I received more than 100 pages of questions relating to my time first as Minister for Defence Procurement and later as Minister for Trade, and I spent many long hours and weeks refreshing my memory from the relevant departmental papers and preparing my written response.

At various points in the questionnaires, questions were put that invited me to criticise the actions of officials or others who were advising me at the time, either by implication or directly. I did not think it right to do that. I consider now, as then, that my two principal advisers on export licensing matters at the Ministry of Defence, Mr. Macdonald and Mr. Barratt, were both first-class officials who offered me excellent advice doing their best to take account of all the relevant information on complex and difficult issues. At the DTI the three principal officials who advised me on these matters were Mr. Beston, Mr. Coolican and Mr. Steadman, all of whom gave evidence to the inquiry. As Sir Richard acknowledges, those officials were working in a department, as I was, whose raison d'être was the support and promotion of British industry and British exports, but of course within the context of government policy. I wish to record my appreciation for the work that they did and the advice that they gave me on these subjects at the time, in circumstances no less difficult than those that prevailed at the Ministry of Defence.

I turn now to the guidelines originally enunciated by the then Sir Geoffrey Howe, now my noble and learned friend, and the consideration given to these matters by my right honourable friends Mr. Waldegrave and Mr. Clark and myself. Noble Lords will recall that these guidelines were set in place to assist officials in considering and advising Ministers in connection with defence related export licence applications to Iraq and Iran. The firm and unequivocal evidence of myself, Mr. Waldegrave, and indeed the contemporaneous papers, is that the guidelines were not changed but that we three asked for them to be interpreted more flexibly in the light of the rapidly changing situation at the time. Noble Lords will recall that a ceasefire had been agreed between Iran and Iraq which clearly created a new situation and there were other developments, too; for example, the declaration of the Fatwa in connection with Mr. Salman Rushdie, and subsequently the execution by Iraq of the journalist, Mr. Bazoft.

Guidelines, as their name implies, are not rules. They are designed to guide and not govern. So there was always a degree of flexibility available even before I and my colleagues considered the matter. We all knew perfectly well that to change the guidelines would have needed Cabinet level approval —which in turn would have needed to take into account wider considerations including, for example, the effect of a change upon our relations with other friendly countries in the region and the implications for the British hostages incarcerated in Beirut. The hostages were of special concern to me because I attended the same school as John McCarthy and at that time I had been endeavouring to get letters through to him on behalf of the school.

So I wish to declare in the strongest possible terms that, contrary to Sir Richard's opinion, the guidelines were not changed and thus the line which Ministers subsequently took was entirely justified. I reject outright any suggestion that any of us misled Parliament or anyone else in the matter.

Sir Richard appears to have relied rather heavily (as did the noble Lord, Lord Richard, earlier this afternoon) on the evidence of Mr. Higson, a disaffected Foreign Office official, and Sir Timothy Daunt's subsequent minute. Sir Timothy is a senior and very distinguished member of the diplomatic service. His minute was written in 1992, I think. At the time of the discussions in question, he was our ambassador in Ankara —not exactly the best place from which to draw conclusions in this matter.

I make one final point with regard to the guidelines. Sir Richard appears to be saying that calling for more flexible interpretation of the guidelines, as we did, was tantamount to changing them. But in other cases, Sir Richard appears to take a different view. My right honourable friend Mr. Waldegrave referred to one such in a recent contribution to the Sunday Telegraph. My right honourable friend refers to Sir Richard's own words, where guidelines are: intended to be used as tools to achieve the desired purpose. 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 Sir Richard's own words. Again, in this very report, at paragraph B2.31, he refers to the now celebrated Salmon recommendations and castigates commentators who: regard the six cardinal principles not as recommendations but as rules". Sir Richard cannot have it both ways.

I should like to conclude this passage of my speech with the simple assertion that the conduct of our export licensing arrangements, in so far as my right honourable friend Mr. Waldegrave and I were responsible for them, was entirely proper and carried out with due care and regard to all the relevant information. I do not claim that we always got it exactly right; and of course with hindsight it may be possible to conclude that perhaps we should have given greater weight to this or that consideration. I leave that to your Lordships. My right honourable friend and I were responding in difficult and changing circumstances to the often conflicting interests of British foreign policy, British trade and British security. It is the amalgam of those three that represents the national interest. I think we fully upheld it.

I turn now to the question of the Matrix Churchill trial, which involved the prosecution of Mr. Paul Henderson and his colleagues for alleged offences against the export licensing regulations. I was not involved in the issue of the public interest immunity certificates; but I did make a sworn statement and was prepared to give evidence in the case. But, in the event, the trial ended before I was called.

My own position in this matter is entirely clear. Mr. Henderson came to see me in connection with the relevant export licence applications and assured me that his machines were intended for civil use. Indeed, as Sir Richard accepts, letters from Mr. Henderson before and after that meeting reflect that assurance. I did not know, nor was Mr. Henderson entitled to think that I knew, that he was in touch with the British secret service. By contrast, Mr. Henderson did know that as Minister for Trade I was the Minister ultimately responsible at that time for the issue of export licences; and, as I now know and Sir Richard accepts, he lied to my face. I refer your Lordships to paragraphs D6.141 and G3.16 of the report which endorse my position.

Therefore, I agreed to make a statement about our meetings and to give evidence in support of that statement if called upon to do so. I quite understand why it was necessary to stop the trial; but equally, I understand why the charges were brought in the first place. It is a great pity that Mr. Clark was not able to make up his mind about his evidence at an earlier stage.

I turn to the way in which Sir Richard chose to conduct his inquiry, and I regret that I must be rather critical. It would seem that, having reached some preliminary conclusions following his early reading of the papers, he developed what has been described by my noble and learned friend Lord Howe as an, unquenchable enthusiasm for his own views". He was apparently determined to ensure that no witness appearing personally should be allowed to upset his first thoughts. Although I cannot claim to have been treated unfairly in cross-examination myself (but then I was —uniquely —accompanied by counsel) many witnesses were indeed treated at the least extremely discourteously. I feel particularly keenly that the treatment meted out to some middle-ranking officials, who were there only because they had been ordered to attend, was grossly unfair.

For example, there was widespread indignation at the way Miss Baxendale treated Mr. Steadman and Mr. Barratt, indeed almost all the official witnesses who, I remind your Lordships, were there because they had been so directed. I make no complaint about that; the inquiry would have been difficult without them. But in the circumstance of their compulsory attendance it was, I believe, incumbent upon Sir Richard and Miss Baxendale to have been hypersensitive to the position of witnesses. They were not, and I consider that the reputation of Miss Baxendale emerges just as tarnished as that of Sir Richard.

Not every witness was ill-treated as I have described. Mr. Higson, a former Foreign Office official to whom I referred, was one of the few witnesses who actually agreed with Sir Richard's first conclusions and who claimed that he found it distasteful to draft letters which did not accord with his view of the facts. I gather that he was treated with kid gloves. My right honourable friend Mr. Clark also got off pretty lightly in the circumstances. What a pity his sworn statement and subsequent oral evidence to the Matrix Churchill trial were not more consistent. Of course, I neither saw his statement nor heard his cross-examination. But from what I have read, they could not both be right.

I summarise my speech as follows. Contrary to the process of natural justice, Sir Richard Scott formed his conclusions from a preliminary and incomplete reading of the papers and then proceeded to reject, for no good reason, a huge mass of evidence which pointed in a different direction. The process by which he chose to gather his evidence, especially his oral evidence, was unjust. The witnesses were, for the most part, brought before him by order and were then bullied and hectored by Sir Richard and his counsel in public without even the most elementary protection. No doubt because of the flawed process by which Sir Richard gathered his evidence, he misinformed himself, at least in part. The guidelines were not changed and thus the question of misinforming or misleading Parliament did not arise.

Lord Monkswell

My Lords, before the noble Lord sits down, he referred to the fact that the "guidelines were not changed". Is the noble Lord, Lord Trefgarne, saying that, following the ceasefire between Iran and Iraq, the guidelines remained the same as when they were promulgated by the noble and learned Lord, Lord Howe?

Lord Trefgarne

My Lords, yes.

9.58 p.m.

Lord Jenkins of Putney

My Lords, there has been more heat than is customary in this Chamber over this issue. That is probably due to the fact that we have not been discussing the important issues at all; we have concerned ourselves with individuals and their frailties on one side or the other.

I do not regard the noble Lord, Lord Trefgarne, whom I have known for many years, as a villain. The idea that the man selected by the Prime Minister, and his assistants, are the scoundrels presented to us is not according to my experience. I readily grant that I was not present as often no doubt as the noble Lord. But we have got on to the wrong level and the business of traducing people on either side is a waste of time and unworthy of this Chamber.

I came across an article in tonight's Evening Standard by Mr. George Walden, the Conservative MP for Buckingham. The article is entitled, "Why I won't vote with the rebels tonight", so I thought to myself that there was nothing in it for me. But I was wrong. At the end of his article Mr. Walden comes to the conclusion that he will not vote with the rebels tonight because he thinks that the wrong Motion is being debated. His idea of what is the right Motion is certainly my idea, and I think it may be the idea of quite a large number of Members of both Houses —on both sides of the gap we have drawn between ourselves.

The Motion that Mr. Walden thinks should be debated is: This House deplores our over-dependency on the defence industry". That is true, is it not? It really is the cause of the whole trouble. Because of this overdependence on the defence industry all the problems occur. That is why we are making exports abroad. We are dependent on the defence industry. That is why even in opposition we on the Labour side are saying —not as George Lansbury used to say that pacifism is the line —that we shall have a stronger defence industry, the reason being that we have become economically dependent on it. This over-dependency on the export of the merchandise of death is morally wrong, a point touched on briefly by the right reverend Prelate the Bishop of Lichfield and other noble Lords. Those are the two issues which we ought to have been talking about, but we have not been talking about them at all.

It seems likely that the Prime Minister would not have set up the Scott Inquiry if he had realised that it would end in the kind of disputation that has occurred. The truth of the matter is that it is difficult simultaneously to sustain with honesty the roles of mass exporter of armaments and of upholder of international agreements barring such exports to different countries. It becomes a struggle between the interpretation of international obligations and acceptance of or resistance to internal compulsions. The internal pressures carry the votes. They also carry the employment. But if they win entirely, morality goes out of the window.

The major exporting countries seem to find ways and means to bend the rules. So it means nothing when Ministers claim that we are more honest than others. In the arms trade there are no degrees of honesty. So long as this trade remains a major part of our production it would be naive to suppose that a Labour Government could be immune from its immense influence. They could hardly be so inept as the present blunderers, but the pressures on Labour would be no less than those which have persuaded other governments and other Ministers, here and abroad, to say one thing and do another. If one compares the morality of George Lansbury with the stated intention of New Labour to maintain arms production at even greater strength, one can see that even in Opposition power can persuade conscience that wrong is right.

Given the time, I shall devote the rest of my speech to showing how this appalling situation has come about. That is necessary if we are to try to find a way out of it. In the aftermath of the dramatic carnage of the First World War, the arms trade was despised and rejected. Those who plied it were called "Merchants of Death". In that war and after, pacificism grew in the Labour Party and Lansbury, Fenner Brockway and others went to prison rather than take part in the war. Even before that, during the build-up to that war, George Bernard Shaw in his play Major Barbara foresaw the philosophy of the merchants of death —that philosophy prevails even today —and gave Undershaft the best line. When challenged to state his faith by the Salvation Army Major, Barbara, the Merchant of Death says —I shall quote only one rather long sentence: My faith? Why, it is to give arms to all men who offer an honest price for them, without respect of persons or principles; to aristocrat and republican, to Nihilist and Tsar, to Capitalist and Socialist, to Protestant and Catholic, to burglar and policeman, to black man. white man and yellow man, to all sorts and conditions, all nationalities, all faiths, all follies, all causes and all crimes". That is a pretty good statement of the compulsion which exists when you rest your economic prosperity on the arms trade. According to a research article by Gordon Macdonald in the October issue of the journal of the Royal United Services Institute for Defence Studies, in the 1960s Prime Minister Wilson and Chancellor Healey decided, to establish the U.K. as a major arms exporter". Clearly, they did not foresee that they were creating a monster which could command government foreign policy and corrupt the thinking of hitherto percipient politicians. As Scott puts it, export promotion received a higher political priority than export control.

For example, turning to paragraph D6.326, in 1990 the export of some special furnaces to Iraq was being questioned because they could be used to enhance the country's nuclear missile aspirations. The question was put to Mr. Waldegrave, who I agree is an honest man. All men in this issue have merely been doing their duties as they see it —and more damage has been done in the world by men doing their duty as they see it than anything else of which I can think. Mr. Waldegrave ruled that the furnaces should go to Iraq, but in the event they did not because just then, in August 1990, Iraq invaded Kuwait. All exports were then stopped worldwide. But for that, Saddam Hussein might now he threatening the world with nuclear missiles and, who knows, perhaps not only threatening. Sir Richard Scott clearly regarded it as beyond his remit to examine how the United Kingdom in particular and the world in general can get out of this mess.

I must not take up any further time except to make two more brief statements. I hope that the Government will accept the proposals that Scott makes for bringing the present system under better control. What the noble and learned Lord, Lord Fraser, said in his opening statement leads me to believe that that hope may not e entirely misplaced.

I also hope that he will recommend that the Government consider the recommendations of the Campaign Against the Arms Trade for an end to the huge financial support that the Government give to that trade. There is another proposal —and here again I may be pushing at an open door —for an annual report to Parliament on the arms trade. The great need is for recognition that this trade is causal and that if the developed world does not bring it under international control, the merchandise of death in its modern forms will not only destroy morality, it may well destroy civilisation itself.

10.11 p.m.

Lord Beloff

My Lords, it gives me great pleasure, for the first time that I can recollect, to agree with the noble Lord, Lord Jenkins of Putney. I believe that the time of the House would have been much better devoted, for instance, to examining ways in which British industry can be made less dependent on armaments and more dependent on civilian production. How that can be done is not something which either the noble Lord, Lord Jenkins, or any other economist from any direction, has yet been able to suggest.

But if one asks why we are not discussing this and other serious topics raised in our minds by the report that we are considering, the reason is perfectly apparent.

It is that for the past three years a campaign has been waged around the notion of the Scott Report whose purpose has been to destroy the careers of two Ministers in order to advance the cause of the two Oppositions.

Noble Lords

Order!

Lord Beloff

My Lords, it was said and the evidence was given by the noble Earl, Lord Russell. He said that when he went among ordinary people —I am not quite sure what an Earl means by "ordinary people" but let us say the kind of citizen he might meet in a pub, if he ever goes to one —they were horrified by the evidence of malpractice by Ministers. So the campaign was merely reflecting popular indignation. I submit to your Lordships to the contrary: that the indignation which the noble Earl found had been stimulated by a political campaign through the media and in other ways, which has been wholly governed by party political considerations.

Perhaps I may enlarge further on that. As has been referred to in several speeches, when one looks at the discussions that went on about the export of arms —perhaps I may mention the mere fact that we talk about arms for Iraq when no arms were exported there —and defence-related equipment, it has become clear, and it is generally accepted, that the Minister who pressed most strongly to ignore moral or political considerations in relation to permitting such exports, was Mr. Alan Clark. One might ask why Mr. Alan Clark has not been the subject of a campaign from the Opposition. The answer is simple; Mr. Alan Clark is no longer a Minister. Defaming Mr. Clark would give no political assistance to the Opposition. They have concentrated not even on my noble friend Lord Trefgarne, who has moved on and who would have given as good as he got, but on the two people involved who still happen to be Ministers of the Crown.

I too must confess an interest. We must always confess an interest, which has become a post-Nolan fashion. Like Mr. Waldegrave, I am a Fellow of All Souls, which means that I have known him for a very long time. Unlike some noble Lords who come from the legal profession, I see no reason to read portions of a report which I assume all noble Lords who take part in the debate have already read. As I read the report it occurred to me that the one Minister who constantly called the attention of his colleagues in writing to the difficult international problems, referred to by the noble Lord, Lord Wright, and to the moral problems of arms exports was Mr. Waldegrave, as one might have expected. The attack on Mr. Waldegrave, which was prolonged today in what I thought were the least responsible speeches I have ever heard opening a debate from the Opposition Benches, from the noble Lords, Lord Richard and Lord Jenkins of Hillhead —it was a personal assault upon a Minister of honour purely in order to score a passing political objective —is something which I believe they will come to repent.

Lord Jenkins of Hillhead

My Lords, if the noble Lord will do me the honour of reading my speech tomorrow he will see that I made no point against Mr. Waldegrave.

Lord Beloff

My Lords, I agree that the noble Lord, Lord Jenkins, did not. On the other hand, a Member of his party in another place, Mr. Menzies Campbell —

Lord Jenkins of Hillhead

Order, order!

Lord Beloff:

My Lords, I am allowed to refer to other Members of Parliament. I am not allowed to quote them and I shall not. However, Mr. Menzies Campbell and Mr. Cook, who has been the engine of the campaign, appeared together on television to denounce Ministers.

Lord Jenkins of Hillhead

My Lords, I rarely interrupt in your Lordships' House but the noble Lord, Lord Beloff, referred especially to my speech as one of the most irresponsible he had ever heard because of an attack on Mr. Waldegrave. I pointed out to him that I made no mention of Mr. Waldegrave, except for one passing comment. I made no attack on him at all. As the noble Lord then shifted his ground and merely referred to somebody else I believe that he is being discreditable himself.

Lord Beloff

My Lords, I apologise to the noble Lord if he feels that I have defamed him. My impression certainly was that it was not an appeal to the House to consider the issues that arise from the report. They are issues of government organisation —"the machinery of government", to use the words of the noble Lord, Lord Merlyn-Rees —the place of the intelligence services and other issues of major importance to which we could have given a lot of attention had it been the intention of the opening speakers not to concentrate on political issues.

My noble and learned friend Lord Hailsham compared the report with the Scriptures as regards its length and weight. It seemed to me, as I read it, to he something rather different. I would call it the rich man's Le Carre. It is full of the most exciting and interesting sidelights on the problems that arise within governments when major issues depend upon the circulation of information, upon the briefing of individuals and upon cohesion of attitudes. Those are important issues and in opening our debate this afternoon, my noble and learned friend Lord Fraser of Carmyllie indicated ways in which some of Sir Richard's suggestions or hints were being taken up within the machinery of government relevant to those problems.

Those are the matters on which we should have concentrated; but we did not. We have not had as much help as we could have had except from the noble Lord, Lord Wright of Richmond, and to some extent from the noble Lord, Lord Merlyn-Recs. The House has been forced into a political controversy which was strictly unnecessary and I hope that the time to discuss those issues will come on another occasion.

10.21 p.m.

Lord Ackner

My Lords, I gather that there is a score in the test match which is being played in another place; that is, 319 to 320 in favour of the Government. I mention that in order immediately to capture the attention of the House for what I have to say.

Politics is a blood sport, so I was informed by my noble friend Lord Weatherill some years before I had the privilege of joining this House. He told me that merely the scent of blood was sufficient to result in a mad rush by the respective parties for the inevitable kill, irrespective of the damage which unintentionally they would be causing in the process.

The baying for the Attorney-General's blood began before the Scott Report. That the media should lead the pack was totally foreseeable because it falls to the unfortunate Attorney-General to be responsible for prosecuting cases of contempt of court and the media never forgive. In fact, since I have on occasion been critical of the media, I have taken the precaution of informing my wife that on no account should she ever read my obituary.

It is really quite startling that the attack upon the Attorney-General has continued despite the fact that the basis for that attack in relation to PII certificates has been totally destroyed. I should like to go straight to the very few references to the report that I intend to make. I start at page 1257 where Sir Richard Scott says: It will be necessary for me to consider the state of the law on Pll both at the time the Matrix Churchill trial was in preparation and also as it now stands". That was a very pertinent observation. It was necessary to consider the state of the law as it was when the trial was in preparation for the very simple reason that it could only he on the basis of the law as it then was, or was understood to be, that the Attorney-General could be criticised. The law as it now stands is something that could be the subject matter of recommendations for its change, but it would not relate to the basis for any valid criticism of the Attorney-General.

Sir Richard Scott then traces the development of the law until he comes to a case much relied upon in 1992 —namely, Makanjuola v. Commissioner of Police. He sets out on page 1260 of Volume III a fairly sizeable portion of the judgment of Lord Justice Bingham in which it is stated: But it does, I think, mean: (1) that public interest immunity cannot in any ordinary sense be waived, since, although one can waive rights, one cannot waive duties; (2) that, where a litigant holds documents in a class prima facie immune, he should (save perhaps in a very exceptional case) assert that the documents are immune and decline to disclose them, since the ultimate judge of where the balance of public interest lies is not him but the court; and (3) that. where a document is, or is held to he. in an immune class, it may not be used for any purpose whatever in the proceedings to which the immunity applies, and certainly cannot (for instance) he used for the purposes of cross-examination". He does not there refer to the case of Air Canada v. Secretary of State for Trade in 1993.

I shall read a small excerpt from the All England Reports at page 446. I do so because it is part of the speech of my noble and learned friend Lord Scarman who was cited as being on the side of Sir Richard in relation to the criticism of the Attorney-General. My noble and learned friend said: The Crown when it puts forward a public interest immunity objection, is not claiming a privilege but discharging a duty. The duty arises whether the document assists or damages the Crown's case or if, as in a case to which the Crown is not a party, it neither helps nor injures the Crown. It is not for the Crown but for the court to determine whether the document should be produced". Then, a little later on the same page, my noble and learned friend said: It is its duty to bring the objection, if it believes it to be sound. to the attention of the court. It is for the court, not the Crown, to balance the two public interests, that of the functioning and security of the public service, which is the sphere within which the executive has the duty to make an assessment, and that of justice, upon which the executive is not competent to pass judgment". I believe that a reference was made both by the noble Baroness, Lady Thatcher, and the noble Lord, Lord Cledwyn, to the fact that there were differing views between the judiciary and counsel. I can find no trace of any differing views right up until the case which was last pertinent in relation to the Attorney-General's action; namely, the Makanjuola case in 1992. The suggestion made by the noble Lord, Lord Williams of Mostyn, that perhaps the majority of the opinion favoured that which was adopted by the Attorney-General just is not right. There was total unanimity. There has been no ability by anyone to refer to any authority that casts doubt upon the law as it was set out right up until that date. What is very odd is that on page 1260 Sir Richard Scott states, In the dictum above cited, Lord Justice Bingham was dealing with documents. The remarks would, however, be as applicable to information". Then there is this observation: The question that arises from the dictum is whether a Minister is. save in exceptional cases, bound by law to assert a PII claim whenever production is sought of documents, or whenever information is sought, which fall into a class for which P11 class protection has in some previous case been allowed". It looks as if Sir Richard has slipped a gear because the question that arises is not whether the dictum is correct; the question which arises is whether the dictum expressed the law as it then was, because if it expressed the law as it then was, that is the end of any potential criticism against the Attorney-General. That is the point one would have expected at that stage Sir Richard would have concentrated on before turning his attention to his detailed analysis as to whether the Master of the Rolls, the noble and learned Lord, Lord Scarman, and others had misunderstood the law and that it was therefore a matter upon which he should make a recommendation for the future.

There were two bases upon which the Attorney-General could be acquitted of any criticism on PII certificates: the one was that he in fact followed the law as it then stood, and in my submission he clearly did; or, alternatively, if the law was in any doubt —and Sir Richard does not suggest it was; he merely suggests it was wrong —whether the Attorney-General followed a course which a reasonable Attorney-General, on the state of the doubt as it then existed, would have followed. Those were the vital matters upon which one would have expected Sir Richard to have concentrated. One gains the impression, as one reads on and on and on, that he became fascinated with the detailed analysis which, with his great ability, he focused upon what was said to be the existing law, and ultimately reached a conclusion, which is by no means shared by the judiciary, that the law had been in some way misunderstood —a contribution which obviously deserves careful evaluation but not a contribution which has the slightest relevance to the criticism of the Attorney-General.

Your Lordships have heard —and I shall not repeat it —that certainly among the Law Lords who have spoken (and I include the noble and learned Lord, Lord Wilberforce, having confirmed with him, as was obviously the case, that he shared the views of those who had spoken) there is total unanimity that the basis of the criticism levelled at the Attorney-General was quite unjust. I hope that it will not be persisted in in any further part of this debate.

10.34 p.m.

Lord Bruce of Donington

My Lords, I arrived early this afternoon in your Lordships' House, as is my custom. I was looking forward to having a debate on the substance of the Scott Report. I am somewhat disappointed to find —I have been here for most of the hours in which the debate has been going on —that what we really had today is the trial of Sir Richard Scott in absentia. This seems to me to be a little remarkable.

I was present when the Statement was made following publication of the Scott Report, under somewhat peculiar circumstances. There was wide praise from the Government Benches for Sir Richard Scott's perspicacity, intellect and power. Indeed, the Statement from the same Government Benches here was that he had comprehensively dismissed all charges that had been made against the Government.

I know that seven days is a long time in politics, and nine or 10 days is a wee hit longer, but never has there been so rapid a transition by a judge. He was conducted to the gates of heaven by the noble and learned Lord, Lord Fraser, but has made a sudden descent to Hades, to which everyone has been willing to consign him today. That seems to me to be a little odd.

Surely what really happened is that, when the full enormity of the report began to sink in, a new enemy had to be found. Instead of continuous and indignant demands for the resignation of the Shadow Foreign Secretary in the other place, this afternoon we have had an almost continuous denigration of a distinguished judge. I speak as a mere chartered accountant who, with my colleague the noble Lord, Lord Shaw, is interested in the ascertaining, marshalling and presentation of fact. Speaking for myself, I am not well versed in the complexities of the law that have been made clear to us today. I find this all very mysterious.

I did not make any demand for an inquiry. I did not denounce anybody. I know the noble Lord, Lord Trefgarne, very well and I have nothing against him. I did not ask for his resignation. Why should I suddenly he attacked for even looking at a report of this kind?

I was even more puzzled because, when the original Statement was made in which Sir Richard Scott was so warmly praised as having dismissed all the wicked canards against the Government, I said to myself that perhaps he was a very good judge. After all, he was made Vice-Chancellor of the Chancery Division only three weeks ago. That is a not entirely uninfluential post, which has gone to what must be a most distinguished lawyer. We have had a chorus of other distinguished lawyers today.

What have we really learnt from this? For that we should go to the Prime Minister. It was the Prime Minister who appointed the inquiry. There was no pressure on him to do what was done by the Labour Government of 1945 to 1950, which appointed a tribunal to investigate the goings on of Mr. Belcher and one or two more. There was no demand for a tribunal, in which anyone called before it could have the benefit of counsel. Nobody raised a comment at the time, either about the Prime Minister's choice of the person to conduct the inquiry or the manner in which he conducted the inquiry. Nobody complained.

I speak as an outsider, without malice and without rancour, but as time passed it appeared to me that perhaps Sir Richard was getting too near to the truth for comfort. The noble Lord, Lord Howe, criticised the way the inquiry had been conducted and how inquisitorial it was, and how he had had no right to have counsel, or anything of that kind. At the same time, he did not say that any preliminary findings that were made by Sir Richard were forwarded to him to obtain his agreement with or concurrence in, or to pass comment on what was said. That seems to me to be a very fair thing.

Let us go hack to the Prime Minister. The Prime Minister immediately acted as he did. He said that Whitehall was already reviewing the code on open Government; he was considering a form of export controls, in particular as regards arms; he was tightening the rules for Ministers answering Questions in the Commons; he was going to curb the freedom of Customs and Excise to bring prosecutions; he was going to redefine the role and powers of the Attorney-General and the Treasury Solicitor; and he was going to review procedures to prevent future inquiries dragging on for three years or more. Something must have stirred the Prime Minister into action. If everything was so wonderful, so open and above hoard, why is it in need of reform? From the speeches one has heard this afternoon, one would think that everything was already perfect, or as near perfect as goddammit, and that it was a little irritating that Sir Richard had disturbed the sepulchral calm in which a non-political, non-party Government found themselves after some 16 years. That is how it appeared to me. Yet something must he wrong.

I must say how much I concur with the speech of the noble Lord, Lord Hutchinson. He went right to the root of the matter. How did it start? All noble Lords know. We heard the evidence given in front of the trial judge, Judge Smedley, in this case. There was skilled cross-examination by, I think, a Mr. Robertson acting on behalf of Mr. Henderson (or one of the defendants). He gradually questioned Mr. Clark to a point where Mr. Clark suddenly admitted that, like his mentor, the noble Lord, Lord Armstrong of Ilminster, who is unfortunately not present —he coined the phrase "economical with the truth" —he, Mr. Clark, had been "economical with the actualite". From that point the whole case collapsed. It did not collapse because of any admission of the Government. It did not collapse because someone had got the PIIs (or whatever they are) wrong. It did not collapse because 101 legal arguments had been adduced. It collapsed purely because Mr. Alan Clark —to put no finer point on it —admitted that he had lied.

Mr. Alan Clark is very engaging in these matters. I have informed your Lordships from time to time about when he was a Member of the Council of Ministers. I could continue with more stories about when he was at the Department of Employment busily fiddling the employment figures. I use his own words. He is a very colourful person. But he was the person who actually caused the trial to collapse and thus fortunately avoided the possibility —I put it no higher than that; noble Lords know me: I am not given to hyperbole —that two innocent people might have gone to prison.

What really is the trouble? I entirely agree with the noble Earl, Lord Russell. This matter is not shaping well at all. It is extremely unfortunate, but there are lessons in it for us, as implied by the Prime Minister. He proposed to tighten the rules for Ministers answering Questions in the Commons. I hope that the Lords may be included in that. One observes from time to time that the replies received from the Government, both in another place and here, tend not always to be as informative as is desirable in a democracy. To use the words of one civil servant who gave evidence during the proceedings before Sir Richard Scott, answering questions of Members of Parliament tends to be an art form. It is quite permissible to give the minimum information possible; it is part of a tradition.

The reason for that is simple. It is that the powers of Parliament and its Members have declined progressively over the past 20 years. The contempt that Members of the party opposite hold for Parliament has grown proportionately. They almost treat Parliament as though they are above party politics, they are a superior race, not given to the human emotions that assail us from time to time when we pursue a political idea or a course of political action. They are above such things. Your Lordships opposite may have to face it, you have been so arrogant that you have treated Parliament with contempt. In a way, Parliament has deserved it, because Parliament has let power he taken away from it, not only in terms of the persistence in bringing in large chunks of secondary legislation but also in allowing its powers to be abdicated to the Commission in Brussels and the European Union. I know that there I carry the noble Lord, Lord Tebbit, with me. The power of the British Parliament has been lessened.

Our problem today is that, without being jingoistic in any way, without being flag-wavers or anything of that kind, we must restore to Parliament the power that it ought to have. That is the power which great politicians and statesmen like Winston Churchill fully acknowledged. He was a servant of Parliament, he never presumed to dictate to it. Exactly the same applied to my colleague, Aneurin Bevan, who always treated Parliament with the utmost respect.

The fault of the Government and, after many years, senior members of the Civil Service and members of the establishment that serve it is that they have come to regard themselves as being in power in perpetuity. It must stop. If the lessons that can be learnt from Scott are to have any effect, those of us here and in another place who have the privilege of being Members of one of the greatest Parliaments on earth will have to exert ourselves to ensure that our powers as parliamentarians representing the people, as we do in many ways, keep an effective check on the governments that are elected.

10.48 p.m.

Lord Selsdon

My Lords, I must admit that until about five o'clock this afternoon I felt extremely confused by the events of recent weeks since the publication of the Scott Report. I admit that I have trawled though it, ploughed through it, harrowed through it, read most of it and understood a little of it. I am confused. It is as though we are seeing a strange pantomime emerging before us, a hit of Gilbert and Sullivan or for me Alice's Adventures in Wonderland and that lovable character, cunning old Fury. He said: '".I'll be judge. I'll be jury, 'I'll try the whole cause, and condemn you to death'". There were two cunning old Furies sitting on the Benches opposite, the noble Lord, Lord Jenkins of Hillhead, and the noble Lord, Lord Richard. I ask myself what is this debate about, and what are the conclusions. Where is the body? Where is the motive? If it is about public accountability, I do not have the ability to comment on that. But I believe the words of my noble friend Lord Trcfgarne and of many other Ministers that there was no attempt to deceive Parliament. If it is about perverting, distorting or corrupting the course of justice, I have no ability to comment on that at all; except I noted today a score of noble and learned Lords all of whom seemed to say that there was nothing illegal.

It worries me a little that I have always thought I was in the wrong business. It was a tradition in my family that we gave advice, passed down from father to son, that there were only three things that a man could do. First, he could help people to do it —in which case he became a lawyer and joined the professions. Or he could take the credit for them that did it —in which case he became a politician. Or, if he was a man, he went into foreign trade.

I have been involved in trade. I thought originally that trade sparked off this report. And yet, when I read through it, very few people who knew anything about trade were involved. This is not really a criticism of government, but noble Lords will be aware that, perhaps since 1974, there have been 55 different Ministers in the Department of Trade and Industry. In general, civil servants, ambassadors and others change their jobs every three years. There may have been a continuity of policy, but not necessarily a continuity of experience.

Those of us who have been involved in trade are now forced to disclose, as I would do anyway, our relevant interests. I apologise for boring your Lordships, and I will try to be as brief as possible. From 1979 to 1986 I was chairman of the Committee for Middle East Trade, the body that advises government on trade. I was on the BOTB from 1983 to 1986 on general trade. I was on the East European Trade Council for a few years. (I mention that only in relation to defence sales at that time.) I am president of the British Exporters Association and have been for some six years, trying to promote the development of trade, and I chair the international side of the Engineering Industries Association, which deals with small engineering companies that need overseas orders. All those jobs have been unpaid, but I had a pretty good team around me.

On the more commercial side, I am afraid that for many years I worked with Midland Bank, the main correspondent bank for most of the countries in the Middle East. We were also the bank for principal correspondence with Iraq and Iran. We had within our group Thomas Cook, which since 1927 was established in Baghdad and was the only British company to be established there. More than that, we were the managers of the £750 million line of credit backed by ECGD that has been responsible for some of the debts.

I have to disclose another interest. I have been to Baghdad many times. I went there recently. Noble Lords will be aware, and it is reasonable to point out, that you are not allowed to talk to Iraq if you are British without the amazing piece of documentation called "a permission to speak". I am probably the only Member of this House today who has a permission to speak. We have to be extremely careful when we speak, because the permission to speak comes from the Department of Trade and Industry. It states: The Secretary of State, in exercise of powers conferred by Articles 3 and 9 of the Iraq and Kuwait (United Nations Sanctions) Order 1990 (a) ('the UN Sanctions Order'), hereby grants the following Licence… Any expression in this Licence shall have the meaning it has in the UN Sanctions Order or the Import, Export and Customs Powers (Defence) Act 1939 (b)". I make that point to illustrate that this country makes it extraordinarily difficult for anybody to do anything. Eighty per cent. of the expenditure of the Department of Trade and Industry is spent stopping you doing things. Lawyers, with great respect, seem to try to stop you doing things as well; and politicians cut the ground from under your feet.

But on the subject of trade, it is vital to our nation. I shall take noble Lords hack in time and try to emphasise the reason why. Why is the Middle East important to us and why will it be important to us in the future? I go hack to the late 1950s when post-Suez a decision was made that we should no longer seek to promote and protect any interest east of Suez. That decision, for whatever reason, sent a wrong signal to many parts of the world that we were no longer interested in an area that for many years had been under British rule or British protection. Our captive markets started to fade away. We were always blamed for drawing the lines in the sand in the wrong places. That was not necessarily true. But when suddenly in 1974 there was a sharp increase in oil prices and that area took off, we saw a major transformation whereby the British were far too far behind and our industrial competitors seized many of the market opportunities from us.

I illustrate the point by pointing out that in the early 1970s OECD exports, which comprise the bulk of exports to the Middle East, were about 15 billion dollars a year and last year they were 108 billion dollars. Our own trade at that time in visibles, on which I concentrate as they have always been about two-thirds or more of all our business, were about 4.4 per cent. of all British visible exports. That figure then rose last year to something around 11 per cent. Significant to our economy is that for many years we had a surplus invisible trade, until maybe 15 years ago when things started to go wrong as our manufacturing base was eroded.

Last year in the Middle East we had a surplus of about £4 billion and a deficit overall of about LID billion. That means that without Middle East trade our manufacturing sector would have been in deficit to around £14 billion. That is all significant. But I go hack to my own involvement at that time.

As chairman of the committee, my job was to try to persuade industry and government to promote and develop trade with the Middle East. That was no easy task, since nobody was interested in the Middle East. It was made even more difficult because many of the countries which we thought had great potential were, to some extent, off limits. We had on our committee the head of the Middle East side of the Foreign Office, the head of the Middle East side of the Department of Trade and Industry, the Bank of England ECGD and many great luminaries from industry and elsewhere. We had a very private and friendly operation whereby we sought to promote and develop trade.

I return now to Iran and Iraq. Under the previous governments we sold substantial arms to Iran. With the change there and a major cutback in trade, we looked at the Middle East as a whole and we recognised that until a peace process was well under way or until there was a just and lasting peace, there would be the permanent problems of negative certificates of origin, the Arab boycott and so on. We looked at markets that were important and one of them was Iraq.

Iraq had few relationships with the United Kingdom. We wanted to see what we could do to encourage those. It was difficult because the Government always dragged their feet. In the end, my noble friend Lord Carrington stopped off in Baghdad on the way hack from India, and immediately that brief political gesture opened up trade. I was asked to lead the first trade mission out there, which, I have to say, was not a particularly easy or pleasant experience. I was not used to being attacked and accused of being a lackey of the capitalist American pro-Zionist policies that had destroyed the stability of the world, and much of the usual rhetoric. I had not yet rehearsed the reply.

But Iraq and many countries of the Middle East have always felt securer under strong regimes. At the moment there is a strong and ruthless regime. There have been strong and ruthless regimes in other areas. We may not necessarily approve of the regime, nor need we have approved of it at that time, but the potential for trade was there. There was no Iran-Iraq war, and we started to trade in almost everything. Our trade went from virtually nothing to £500 million a year.

At that time there was a worry about defence. We suddenly found that defence sales had overtaken the sales of all other industrial equipment in the Middle East. So we wrote to the Secretary of State for Defence asking for guidance. The decision was made that, as we had trading relationships with Iraq, we could more or less trade in anything we wanted; but there were certain rules.

Those rules were not really guidelines. Guidelines were almost directing principles. It was what people felt was right and what was wrong. Directing principles go hack a long way, and I should like to quote the original ones that I have always enjoyed and commend to your Lordships' House —those of 1st August 1650, known as the Instructions to the Council of Trade. There are 12 principles and I quote but one: Ninthly, they are to take into their consideration whether it is necessary to give way to a more open and free trade and in what manner it is finest to be done: wherein, notwithstanding, they are to take care that government and order in trade may be preserved and confusion avoided". We discussed the issues at that time openly with government departments and others. Again I disclose an interest in that many of the Ministers and officials became good and close friends. It is absolutely impossible, in my view, that the Department of Trade and Industry could ever have encouraged someone to do anything illegal or wrong. Our difficulty was that our Government and government departments, unlike those of our industrial competitors, tended to drag their feet and make decisions rather late in the day. I believe that our standards of trade were extremely high —and are still higher than those of any other nation, which is demonstrated almost by the requirements that we have under the UN sanctions to have a permission to speak before discussing issues on Iran.

When I ceased those various jobs, I thought that the same relations that one had might be used to develop trade and that we should be looking to the future. Some 18 months ago I went to Baghdad, on my own, with full authorisation and knowledge, to look to see what would happen in the future. I went principally to discuss how we would recover the £1.2 billion debt that we were owed and also how developments might take place if and when Iraq conformed to the requirements of the United Nations.

As we know, the Iraqis are a tough hunch. They are not without a certain sense of humour. Most of them have been trained in the United Kingdom, usually in the Manchester area and are supporters of Manchester United or Manchester City. All of them have televisions in their offices and watch CNN and Sky. They respect strong government and I believe that they have a respect for us and believe that the British could play a greater role than we are able to at the moment in solving the problems of the Middle East, in particular those of Iraq and Iran.

Why that is relevant —I regret doing this —is that in the course of my discussions I was told that some debts were owed to them. That related to an organisation that I was sent to see, and I had no idea who I was going to see, called the parent company of Matrix Churchill. This is relevant to some points made by noble Lords opposite, because I am not quite sure what to do about it. In a report I made I said: I suppose it was inevitable that the Matrix Churchill business should appear somewhere on the agenda: and it did. I was asked if, under the heading of 'debt'. I could speak with a company which was owed some $65 million … and wanted to use this amount to purchase drugs for humanitarian purposes, as permitted by the UN. To my amazement this turned Out to be the former parent company of Matrix Churchill. The two directors explained that they had reached agreement to sell their stake to the minority shareholder and contracts had been exchanged. but they had not received the payment due. A legal action had taken place in the UK, but judgement had been given against them. The UK consultant was now advising that they should take further legal action to try and recover the debt and they asked for guidance. They told me that they did not think they or the company had broken any British Law, and they had deliberately tried to keep Matrix Churchill going to prevent the loss of some 600 jobs. However, if under law they were owed money what should they do". If they are owed money, I suppose it gets taken into account in the debt. But I explained that there had been so many material adverse changes that there was nothing that could be done on that.

Over time, in dealing with Iraq, one has had some amazing ups and downs. But overall I know full well that there have been no trade breaches in terms of lethal weapons. To the best of my knowledge, we had discussions about it with them before the Iran/Iraq war. I believe that the British Government's policy has been constant, strong and firm and is respected. I hope that when this debate is out of the way we will be able to turn again and look to the future of the development of our trade with the Middle East.

11.5 p.m.

Lord Bridges

My Lords, at this stage of a long debate I must be as brief as I can, and in that I have been assisted by the admirable speech of my noble friend Lord Wright of Richmond, who has provided us with the essential background to the fluid politics of the Middle East which, while not covered in the Scott Report, are an essential part of the whole subject. So I shall speak very briefly on two matters which. I think are relevant.

The first concerns the format of the report. Sir Richard's determination and the accumulation of detail are very impressive. But there are disadvantages in presenting the results in this way. A document of this importance should be readily accessible to legislators, journalists and the public; something that can be read and absorbed within a day or so. I do understand Sir Richard's dislike of the "executive summary", as he said recently, and I fully share that. But even so, a single volume could have contained the essence of his investigation and the conclusion. The present form is rather indigestible, and there can be few of us who have had the time to study it carefully, and fewer still members of the public who were able to pay £45 for the privilege. This has meant that much of the initial comment on the report was based on the Government's own summary. I do not think that is an ideal way of doing it. Let us hope that future inquiries on this scale commissioned by the Government will be presented rather differently. I hope I may be forgiven the reflection that if Sir Richard had been more economical —not with the truth but with words —he might have had less cause to complain at the summaries made of his remarks by others.

My other comment relates to a matter which has been referred to, but not in any detail, by noble Lords who have taken part in the debate. It concerns the future system for the control of our exports. Sir Richard is surely right when he suggests that the legislation on this subject needs a thorough review. I was very glad to hear what the Lord Advocate had to tell us in opening the debate. I agree with Sir Richard that the 1939 Act should be replaced. But I am not in agreement with a number of his other suggestions on this matter. Clearly, Sir Richard would like to see a tightly prescribed procedure, defined in precise legal terms, about the way in which export licences should be applied for, processed and issued. He thinks that an exporter should have the possibility of a formal appeal against the refusal of a licence. He is clear that the body responsible should not be the Department of Trade and Industry, although the department knows a great deal about the subject. Nor, he thinks, should foreign policy considerations play any part in the issue of licences. I should like to quote one sentence from his report. It is to be found in Volume IV, K2.20 on page 1,766. These are his remarkable words: I would doubt whether the maintenance of a technology gap between the United Kingdom … on the one hand and eastern bloc or third world countries on the other hand can still he regarded as a legitimate purpose of export control". I find that remark rather alarming. The sentence I have just quoted does not seem to me to resemble the world in which we have been living or live now. To my knowledge, it has never been our object to hinder the transfer of technology to the third world. There has of course been a vigorous debate about the best means of transferring technology and what would be the best sort to transfer.

As to his remarks on the eastern bloc, first, it has ceased to exist, for the present at least. The reasons for seeking to control our exports of technology there in the past had to do with the maintenance of our own security. The objective was sensible, even if we did not always succeed. Some of the other suggestions look off target to me, not least because we live in a world where, happily, the need for export controls is steadily diminishing and covers only a very small fraction of our external trade. Building a large, new, legalistic edifice does not seem the best way to proceed.

Nevertheless, I agree that the statutes need a fresh look and I hope that the Government will pursue that suggestion, as they evidently intend. A practical suggestion might be to work for a new Act which would embrace both the powers under the 1946 United Nations Act and the authority to enforce EC legislation contained in both the 1972 Act, Treaty of Accession, and the 1955 regulations. Additionally, I believe that we need the power to act on our own, as well as by enforcing the economic sanctions of the United Nations and the European Union. That would be an emergency power, perhaps by means of an order requiring a negative or affirmative resolution. It would be for use on rare occasions; for example, if a foreign dictator were to take British hostages and to threaten action against them. The case of Idi Amin comes to mind. Normally we would expect such sanctions to be agreed and imposed by the European Union, but that might not always be possible, or not possible speedily enough. Sir Richard's suggestion that no foreign policy considerations need be entertained in considering export controls is unrealistic practically since trade and foreign policy are always closely connected —and so they should be if we are to support our exporters as we wish to do.

I have spent some time on a subject which has not attracted much attention in the debate so far; but I suggest that the Government will wish to study Sir Richard's recommendations with their customary mixture of caution and scepticism.

11.12 p.m.

Lord Rees

My Lords, it is fashionable nowadays to declare interests both conceivable and inconceivable. I should therefore like to follow briefly the example of my noble friend Lord Selsdon in declaring that at one brief stage in my career after 1983 I was Minister for Trade and was encouraged to take a delegation of businessmen to Baghdad. I reassure the House that the businessmen were, as far as I can recall, entirely from the construction industry and I have never heard that any of them engaged in building barracks or gun emplacements for the Iraqi regime. I hope therefore that I start this debate with a reasonably clean sheet.

Perhaps I may turn briefly to the report. Like other noble Lords, I find it difficult to thread my way through it. Sir Richard was admirably painstaking and thorough, but I suspect that a report of a quarter of its size would have attracted more than four times the interest and comment.

Picking up on a point raised by the noble Lord, Lord Bruce of Donington, about how Sir Richard came to be in favour at one moment but out of favour at another, and speaking entirely for myself, I find it difficult, but not impossible, to cavil at his findings of primary fact, but I find it relatively easy to diverge from his conclusions of law —I find myself in very good company there —and from his conclusions on political practice and political phenomena. All that leads me to suspect that in other circumstances future Administrations will be very cautious about setting up a similar inquiry, unless with very much more restricted terms of reference.

I am sure that we were all deeply impressed by the robust speeches of my noble friends Lord Howe of Aberavon and particularly Lord Trefgarne, both of whom "suffered", if I may use that expression, by being called personally to explain their conduct and that of the Government, before a slightly inquisitorial —although not "slightly" because that was its design —tribunal.

With that, perhaps I may focus on the substantive issues. At this hour of the night and after over eight hours of debate, the ground has been pretty well tilled. Therefore, I hope that the House will forgive me if I treat the issues which I find important a little summarily.

The first is this: was the prosecution of the directors of Matrix Churchill properly brought? Secondly, did Ministers, and particularly the Attorney-General, by action or inaction, attempt to prevent a fair trial? Thirdly, did Ministers wilfully attempt to mislead Parliament or Members of it? On the first issue, it would be quite inappropriate now to consider raking over the facts to determine whether there was possibly a prima facie case against the company and its directors. What I believe is fairly clear is this: was the statement of the then Minister of Trade — I do not suspect his motives at all and in one sense I believe that they were of the best, seeking, as he saw it, to promote British trade in a very delicately balanced part of the world —to the MTTA likely to mislead or encourage the directors of Matrix Churchill to undertake the transactions in which they were engaged? Equally, were the contacts —again, it is impossible for anyone not involved in that aspect of the inquiry to judge this completely accurately —with the intelligence services enough to warrant a great deal of reflection before any prosecution should be brought?

I shall merely state briefly at this hour of the evening that I believe that the prosecution should not have been brought. I was not, and am not, entirely reassured by the fact that counsel for the prosecution very honourably and properly withdrew the case with the concurrence of the judge. The question that needs to be considered now, which was identified by Sir Richard Scott, is the role of Customs and Excise as an independent prosecuting agency. Indeed, there may be other independent prosecuting agencies that need to have their role considered against this background. In particular, what about the relations between the prosecuting agency and other Departments of State? Of particular importance in this case were the Customs and Excise, who were enforcing the regulations of another department. The policy was not theirs. Indeed, nothing I say is intended to reflect on the integrity, energy and ability of the Customs and Excise, for whom, at another stage in my life, I had the privilege of answering in another place.

I believe that this was touched on in the opening speech of my noble and learned friend Lord Fraser. It is important to consider whether a Minister, presumably the Attorney-General, should be more closely involved, particularly where government policy is at issue. As I said, that can be explored at leisure and I hope that my words chime in with what my noble and learned friend said in opening. He is nodding, I am glad to say, so may I leave it at that.

The second issue which I identify and which concerned me is, did Ministers, and in particular the Attorney-General, attempt to prejudice a fair trial? I believe it was a finding of fact that cannot be gainsaid that there was no question of a conspiracy here. Indeed, I do not believe that anyone in this House has attempted to argue for that. The question was perhaps the existence of the PII certificates. It must be established clearly by now not only inside but outside this House that the PII certificates are not gagging certificates, but merely pass to the judiciary the responsibility, which may be an onerous one, of striking a proper balance between the interests of government and those of justice. Beyond that there has been much very unfair criticism of the Attorney-General. More able voices than mine have come to his defence.

I understood that at an earlier stage, not in this House, the principal criticism was that he had totally misunderstood the law and was incapable and incompetent of discharging his proper functions as Attorney-General. The overwhelming weight of opinion from noble and learned Lords has persuaded me that almost certainly the Attorney-General got the law right. I know that two voices speaking from Opposition Benches have taken a different view. I can say only that I was not persuaded by what they had to say.

Perhaps the matter can be looked at again. Indeed, there is a case for looking at the whole question of the certificates and seeing whether the process can be reviewed and made a little more humane. I appreciate that the defence in a criminal trial must be extremely constricted if it is uncertain as to whether it can get its hands on something which may be directly material and relevant to its case. I believe that in this regard, too, further action and reflection are necessary. I am extremely pleased that the trial judge, to whom I wish to pay particular tribute, took a very robust view, with or without the Attorney-General's assistance.

I turn finally to the third issue: was Parliament misled? It is unfortunate and unfair that the accidents of public life leave the Chief Secretary alone in the firing line. I fully appreciate that my noble friend Lord Trefgarne and others have been through the mill but they at least have the minor reassurance not only that they have been cleared but that their political careers do not turn on the outcome of today's debates.

Sir Richard Scott's conclusions leave the Chief Secretary's integrity intact, even if his judgment was called into question. However, we cannot do justice to the whole issue unless we view it in its true perspective. There was no question of personal or pecuniary interest; there was no Marconi scandal here. The noble Lord, Lord Jenkins of Hillhead, whose grasp of history is so acute, will recognise that there is nothing of that kind to taint this administration in this particular context. No personal frailties have been disclosed, and the media would certainly have done their best to enlarge the field of debate and inquiry had there been a hint of that.

It emerges clearly from the report that all the Ministers were concerned solely with national economic and foreign policy objectives. The Howe guidelines, if my noble and learned friend still accepts the paternity of those guidelines, were concerned not so much with the formulation of policy as with its implementation. The policy itself was to maintain even-handed neutrality between the interests of Iraq and Iran. What has emerged beyond argument from the evidence is the scrupulous regard with which the Minister tried for a considerable time to maintain that balance.

I was deeply impressed by the speeches of my noble friend Lord Trefgarne and the noble Lord, Lord Wright of Richmond, who gave us the Foreign Office background and implications of the issues which are the subject of these debates. Those speeches emphasised the fact that the guidelines were just that; they were not Holy Writ and they were not law to be applied rigidly. They were the background against which complex cases had to be judged and decisions reached. As so often in government, Ministers and civil servants were dealing with shades of grey and not with black and white questions.

Therefore, I reject utterly the accusation that there was a gross betrayal of the principles of parliamentary life. I am not attributing that to Sir Richard Scott but I do attribute it to some of the grosser attacks which have been made during the past three years and in particular, over the past three or four weeks.

I hope too that the country will recognise that all those decisions made by Ministers at the time had to be taken against a background of what our neighbours were doing. They were unashamedly selling not dual-purpose artefacts but nakedly military equipment. Really we were on the fringe of that trade during the relevant years, as I read the position.

I am bound to say that there is an element of hypocrisy in our national life at times which leaves our neighbours amused and even astounded. Therefore, while I hope that the Government will take very careful note —and I am sure that they will —of the points raised as regards the areas of public policy and practice which need review, I see no case for butchering two able and conscientious Ministers to make a Roman holiday.

11.26 p.m.

Lord Thomson of Monifieth

My Lords, this debate is showing signs of becoming as long as the report with which it deals. Despite its length, it is still an impressive occasion. We have heard from two former Prime Ministers, one former Lord Chancellor and a former Attorney-General. And, of course, we have had a very notable maiden speech from my noble friend Lord Taverne.

The legal profession is always profusely represented in your Lordships' House. I am bound to say that the way in which they rallied round the Attorney-General in another place today rather reminded me of the boilermakers' union in the old days dealing with somebody who had been victimised on the shop floor. The Attorney-General certainly has plenty of friends on the Benches opposite. I do not think that Sir Richard Scott, as another distinguished lawyer featured in today's debate, has had as many friends on those Benches. I believe that the Government have treated Sir Richard Scott fairly shabbily. The Prime Minister invited him to take on a very heavy and onerous inquiry and at the end of the day, as I say, the Government have treated him fairly shabbily. They may very well find it a good deal more difficult in future to persuade distinguished judges to take on such a heavy task in the light of the way in which they have sought to discredit Sir Richard.

However, in general this has been a very different debate from that which took place 11 days ago when feelings ran very high because of the extraordinary behaviour of the Government regarding the publication of the Scott Report. I do not know whether it was a Minister or civil servant who coined the phrase "a controlled environment" as a device applying to a parliamentary opposition doing their job, but I am sure that he will earn his place in the Oxford Dictionary of Quotations.

Now that the dust has settled, as is usual in this House, your Lordships have delved into some deeper issues. The question whether Ministers in another place should resign is essentially for another place and I leave it there. But 11 days ago the Government, in their Statement which was repeated in this House by the noble and learned Lord, Lord Fraser of Carmyllie, relied on two lines of defence. First, they relied on the words which they put into Sir Richard's mouth, as it turned out, at a press conference and then took out of context. I believe that Sir Richard has dealt with that properly and in a way which adds to the sense of shame of the Government over this affair. Their second line of defence was to rubbish the Opposition. Of course, when you have a weak case, abuse the plaintiff's attorney. I am inclined to agree with a letter which I read in The Times the other day by Sir David Crouch, a highly respected former Tory MP whom I know well. He said: Things have surely come to a pretty pass when the Government expects the Opposition to apologise for criticising it. What do they think the Opposition is for"? I do not intend in any way to retrace the ground covered by other speakers as regards whether or not Parliament was misled either in letters or in parliamentary Questions. However, 1 am hound to tell the Minister and those on the Benches opposite that if one wants evidence of the willingness of the Government to mislead Parliament —one cannot say "conspire" to mislead Parliament, because it was a very open conspiracy —one has only to look at the Government's Statement on the publication of the Scott Report and the press pack that was delivered to Peers at the same time.

Over the following weekend, politicians, the press and interested citizens had the Opportunity to look at the report in the round and discover what a glaring gap there was between the Government's special pleading and the reality of the report. For my part, I found it deeply disturbing to discover at the beginning of the press pack a sheet of paper headed simply "Cabinet Office". That page began with the following words: Sir Richard Scott's Report completely exonerates all Ministers and Civil Servants from any sort of conspiracy or cover-up in relation to the sale of arms to Iraq". In my view that Statement —and I well understand the feeling behind it —together with the series of sound bites which followed it, and which it is perfectly legitimate for a Government to put forward in their own defence, should have been headed, "The Office of the Deputy Prime Minister" and not "Cabinet Office".

I have here a letter which the Minister sent to my noble friend Lord Harris on the arrangements regarding the publication of the report. My noble friend asked about the number of officials who had an opportunity to see the report before the press pack was compiled. The answer that was given stated that there was, a very small number of officials in the main Departments concerned in accordance with the procedures agreed with the Scott Inquiry. However, the Scott report covered a wide range of policy issues, and a number of other officials will have contributed to preparation of the Press Pack without sight of the report. It is not therefore possible to give a number". It now turns out that, apparently, an uncertain number of officials helped to compile the press pack without ever having seen the Scott Report. I do not quite know what one can conclude from that fact.

The Scott Report is the second major report into public concerns about standards in Whitehall and Westminster. It follows the report of the Nolan Committee upon which I served, although I am speaking tonight entirely on behalf of my party and not in the least on behalf of that committee. In that report, we dealt with the duty of Ministers: To refrain from asking or instructing civil servants to do things which they should not do". That is in fact a quotation from the document, Questions of Procedure for Ministers which the Prime Minister, to his very great credit, made public for the first time in 1992. The Nolan Committee recommended that the section which I quoted should be strengthened with, for example, (and I quote from our report) a provision that: Ministers must not mislead Parliament … Ministers must keep their party and Ministerial roles separate. They must not ask civil servants to carry out party political duties or to act in any other way that would conflict with the Civil Service Code". Indeed, the Nolan Report emphasised that: The political impartiality of the civil service must be protected". The Government have accepted those recommendations.

I am hound to say that the grotesque gloss of the press pack on the Scott Report puts a great strain on the concept of the political impartiality of the Civil Service. It seems to us to be further evidence that the present Government have been the political masters of the Civil Service for too long. They have placed the leadership of the Civil Service under unprecedented pressures. I believe that it would have been better if successive Cabinet Secretaries had taken a leaf out of the hook of the noble Baroness, Lady Thatcher, who, I am sorry to say, started the process, and said to successive Prime Ministers, including the noble Baroness, "No, no, no!"

However, until today, the Government have largely refused to concede that there were any errors in their behaviour in the matters investigated by Scott. Any concessions seemed to be regarded as a sign of' weakness, and it is only really today that they have spelt out their attitude on the practical recommendations that Sir Richard makes to deal with the weaknesses in Whitehall which he identified, and to encourage a more open system of government. We, of course, welcome what the Government have said even if it is a little late in the day.

The starting point for reform in this area of government policy has to he, as has been mentioned by one or two noble Lords, the murky business of the international arms trade. Short of world disarmament, the arms trade is a necessary evil and the Prime Minister again deserves credit for his part in establishing a United Nations register of arms sales. Smaller, developing countries have the same right as the rest of us to security and self-defence. The trouble is that the arms trade tends to corruption, both morally and sometimes criminally, encouraged by the secrecy which surrounds it. The other day I came across a new organisation called Transparency International, set up recently in Berlin, with a section in the United Kingdom. It is seeking to establish with both governments and industry —I hope that the noble Baroness, Lady Chalker, may be interested in this —an international code of conduct and openness to prevent corruption in international business transactions. It deserves a fair wind. I very much agreed with what the right reverend Prelate the Bishop of Lichfield said in drawing attention to the Church's report on these matters. It is important in terms of the arms trade to make sure that there is an open, moral purpose at the core of export policy in this field. I echo the comments of my noble friend Lord Rodgers in this respect.

Transparency, both national and international, is the real lesson the Government should learn from the Scott Report. Of course, as the noble Lord, Lord Wright, explained to us, there are limits to how far freedom of information can go in conducting foreign policy or foreign trade. Indeed, I agreed with the noble Lord, Lord Armstrong of Ilminster, that there are limits as regards a freedom of information Act in terms of internal decision-making processes. But I must say that all the evidence of the Scott Report is that we still have some way to go before we reach any of these limits. This report shows Whitehall not only in the grip of the culture of secrecy to which my noble friend Lord Taverne referred, but actually divided into separate baronies, each competing with each other in terms of secrecy. The intelligence authorities keep their cards so close to their chest that the Customs authorities are ignorant of their reports. The Customs authorities in their turn cherish their sovereignty as an independent prosecuting authority which does not need to tell the Crown Prosecution Service or the Attorney-General what it is up to. The Attorney-General, in turn, is the guardian of the arcane theology of the public interest immunity certificates. Noble Lords will be relieved to know that I certainly do not intend to enter into that territory at this time of night.

However, I am hound to tell the Minister that I thought in many ways the most powerful speech in this debate was the speech made by my noble friend Lord Hutchinson of Lullington. It requires a serious answer from the noble and learned Lord. If I may say so, it deserves an answer from him in his role as a distinguished Scottish lawyer rather than in his immediate role as a Minister in his own department. Ministers and officials are reinforced by all this, and they themselves play their cards close to their chest with Parliament. Apart from the legitimate considerations that have been mentioned in the field of foreign policy and international trade, the truth is that they have been frightened of being frank with Parliament for fear of the democratic debate it would provide. The Government have been in office now far too long. They have become sloppy in their standards and obviously rattled in their judgment. They have failed to learn that the public mood of today demands much more freedom of information than was true in the past.

The noble Lord, Lord Callaghan, was absolutely right that the rot started with the decision not to publish the guidelines when they were originally put together. Everything followed from that decision. There has been far too much of what my noble friend Lord Russell called unintelligent secrecy about the Government. If only they had been ready to learn the lessons of seeking a much more open society earlier, Sir Richard Scott and his team might have been saved their magisterial and marathon labours, and we would all have been saved a very long read.

11.40 p.m.

Lord Peston

My Lords, I start my speech with a health warning. Some of my remarks about the speeches of noble Lords opposite will be disobliging, even to the point of being downright nasty.

I shall start immediately with the speech of the noble Lord, Lord Beloff. The noble Lord accused my noble friend Lord Richard and the noble Lord, Lord Jenkins of Hillhead, of being political. I nearly fainted away at the use of the word. I was shocked. The noble Lord, Lord Beloff, might care to reflect on the lives of noble Lords I am looking at now who are sitting on the Government Privy Council Bench. What business have they been in all these years? I thought they were in politics. I never thought there was anything wrong in that. What is wrong with the noble Lord, Lord Jenkins of Hillhead, and my noble friend Lord Richard being in politics? I am above that kind of thing, but that is another matter.

Where is the best place to start? The best place to start is with the Prime Minister. He said: My interest is in the facts, which is why I have set up an inquiry. Whether Ministers themselves breached their own guidelines is one of the things that will be established by the Scott Inquiry". I shall go to another authority I hold in the highest esteem, the noble and learned Lord the Lord Chancellor. He said in reply to a noble Lord: The noble Lord will not be surprised to hear that I have the fullest confidence in Sir Richard Scott. He is conducting an inquiry in circumstances and according to a procedure which he has explained publicly". —[0fficiai Report, 20/6/95; col. 147.] In the light of that statement, noble Lords should not be surprised that I regard many of the interventions I have heard as deplorable.

The noble Lord, Lord Trefgarne, in particular referred to Sir Richard Scott's reputation and that of Miss Baxendale as tarnished. There are some tarnished reputations, but they are certainly not theirs. I was sitting here reasonably quietly, nearly asleep, but that remark woke me up.

If I have to choose between the judgment of Sir Richard Scott and that of the apologists for the Government whom I have heard today, I have no doubt whom I trust and believe. More to the point, I have no doubt whom the public trust and will believe.

I gather that I am in a minority, but I regard the report as absolutely fascinating. I regard it as a great achievement, in its uncovering and mastering of the facts, its balanced judgments and its analytical skills. In particular, I appreciate its understatement. I disagree with those who wish it was shorter. I wish that some of the speeches today had been shorter, but that is another matter. I shall continue for quite a long time, so noble Lords may get used to that idea. I have sat through all the speeches, and I feel I have an investment which I am entitled to cash in.

I disagree with noble Lords, including many on my own side of the House, who wanted a simpler account of ministerial failure and incompetence. The essence of this report lies in the detail and the building up of the case. That case is overwhelming. When the history of this Government is written, the Scott Report will be a document of overwhelming importance. The Government's initial response will always he looked at, as will some of the speeches today.

Let me turn immediately to the colleague of noble Lords opposite, Mr. Heseltine. We have discussed quite a lot about the PII certificates and the details. I shall say a word or two on that although I have no legal expertise. In reflecting on some of the views expressed, I wonder whether noble Lords appreciate that they are also saying that the Deputy Prime Minister, Mr. Heseltine, was completely mistaken. My reading of the report is that, apart from Sir Richard Scott, one man who stands out as a human being was Mr. Heseltine. Mr. Heseltine was not going to be pushed around; he was not going to be an apparatchik. He wanted to think for himself. He sensed there was something wrong here.

However, I take it that what noble Lords are saying is that Mr. Heseltine was mistaken. The report states that at first he refused to sign any certificate. He seemed to think it would be unjust to the defendants. To put it in Americancse: "You're damned right he thought it was unjust to the defendants". That is the way in which any ordinary person not expert in law would respond. I have to emphasise to noble Lords that in expressing some of their views, they are saying that their rather distinguished colleague, acting as a decent human being, simply was wrong.

I am left slightly puzzled subsequently by the Deputy Prime Minister. He emerges from the report (if I may use the expression) smelling of roses. He showed common sense and human decency to the highest degree. He reflected on what he was asked to do by lawyers and could hardly believe that what they wanted was right. No one denies that; he could not believe that it was fair and that it would lead to justice.

What I do not understand is how he continues in his current role, a glorified PRO for the Government. Having himself done the right thing, why is he defending his colleagues? When we read his memoirs —I assume that they will be written fairly soon now —we shall perhaps have some enlightenment on that.

Like other noble Lords, I have no intention of intervening on what the law is. If distinguished lawyers tell me that that is the law, I figure that that is the business they are in and I shall not argue with them. I have my views on certain philosophical aspects of the relationship between what they tell me is the law and what I might call justice, but that is another matter and I can save it for another day. What cannot be doubted is that the Attorney-General acted without reading certain important documents, and we know that he did not reveal Mr. Heseltine's doubts to the judge. Those things are established.

Although my question cannot be answered now, noble Lords can take me to one side later. Noble and learned Lords who have spoken today have sought to defend the Attorney-General, mostly on the ground that he is a nice guy —as though that had anything to do with the substantive issue before us. That has nothing to do with the matter. Will the noble and learned Lords who have spoken on this tell us whether they regard what he did, or what he failed to do, as showing appropriate professional behaviour? I am not talking of the law but of his role as a professional person. Separate from the law itself, if those noble and learned Lords were lecturing to some young lawyers, would they recommend the way in which the Attorney-General conducted himself as an appropriate model for those young lawyers? I do not ask the question rhetorically; I should like to know the answer.

It has been suggested that there is something obscure about certain aspects of the Scott Report. My difficulty is that the report seems extraordinarily clear. I refer to the noble and learned Lord, Lord Howe. Perhaps I may establish the ground rules. I believe that one can hold someone in high esteem, as I hold the noble and learned Lord, Lord Howe, and still say that what he says is wrong. I hope that we can distinguish between those two matters. However, on the question of guidelines, Sir Richard regards the noble and learned Lord's attempt to distance the guidelines from policy as no more than a play on words. That is a devastating remark. Scott then says that the letter from the noble and learned Lord, Lord Howe, to the Prime Minister referred to the guidelines as new "policy". The guidelines were frequently publicly referred to by Government spokesmen as policy. Lord Howe himself so referred to them, the Prime Minister too so referred to them". There can be no doubt that underlying all that was exactly what Scott established: a change in policy. That is the central point.

I said that Scott believed in understatement. That is what some people objected to, be uses his language carefully, it is understated but it is more devastating because of that. He uses such expressions as "not accurate", could not truthfully have been made and should not have been made", The draft answer and the actual answer were in my opinion misleading, the draft answer more blatantly so. For the Government to respond to that with: "Well, that's all right then" is appalling, especially bearing in mind the persistence and the scale of the "not truthfullies", "not accurates" and "misleadings". I reiterate the point made by the noble Lord, Lord Jenkins of Hillhead, and many others. The Statement made to your Lordships last Thursday was a disgrace. It was an example of what the report was set up to avoid.

Lord Strathclyde

Oh dear, oh dear!

Lord Peston

It is not "Oh dear, oh dear!" The Government might as well hear what someone thinks of their behaviour, it will do them no harm because they might learn something from it. When I heard the noble and learned Lord, Lord Fraser, repeat the Statement last Thursday, my immediate response was: "What's all the fuss about? Why are we wasting our time?" I was sitting here; happily I was not responsible, my noble friend the Leader of the Opposition was dealing with it. I was absolutely bewildered. However, once I had my copy of the report, it took me no time to be able to answer my question. We have here the largest parliamentary scandal of our time and it is fully documented.

The noble Lord, Lord Rees, said that this was no Marconi scandal. He is quite right, it is the arms to Iraq scandal, that is what will be in the history hooks. It is a scandal. I beg noble Lords' pardon, it is the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions scandal. I am so glad noble Lords asked me to spell it out in detail.

One of the things that has horrified me is the use of language not just in the report but in the whole area. We use words like "non-lethal weapons"; the word "defence" is always used when we mean "attack". No weapons are ever used to kill anyone. It is weasel language when we know what it was about. It was about getting weapons.

In terms of how badly the Government behaved, it is worth considering what the alternative was. That is the central question that concerns me. The Iraq-Iran war was over. The noble Lord, Lord Trefgarne, makes it clear, and I agree, that profitable possibilities existed or were coming into existence of selling military equipment or whatever words one likes to use, in that area. It seems to me that he was right and therefore I do not entirely agree with some of my friends. It was right that British industry ought to be able to go into the market, especially as many of our competitors would do so. That is clearly stated in the report, and I have no objection to it.

However, in order to do that, policy changed. My noble friend Lord Callaghan made the point which was connected with the points made in the brilliant maiden speech of the noble Lord, Lord Taverns. The important and correct action was to say that policy had changed and to argue the Government's case. That seemed to me the correct thing to do. There would have been a terrible row in some quarters, I have no doubt. There would have been what Saddam Hussein might call "The mother and father of a row", the Government might even have been weakened, but I doubt whether they would have collapsed as a result. In choosing the path of openness, the Government would have done the right thing. In particular, they would have behaved like a government. Instead, however, they chose the covert route and, with almost the inevitability of a Greek tragedy, we are where we are today. It has been such a waste, such a destruction of ministerial reputations and all that sort of thing.

I am reminded of something my late mother once said to me. She said, "Really, you mustn't lie". When I inquired why I must not lie, I did not receive a very philosophical answer. I got the answer: "You'll always he found out". You will always he found out.

Finally, one question has not been asked, and must be asked. It relates to the revelations of the report about the behaviour of Ministers and officials. Incidentally, although the report is full of problems to do with officials, I hope that if not a single Minister accepts responsibility, and not a single Minister apologises, no one will launch an attack on officials. It would be outrageous if officials had to carry the can when no Minister is willing to stand up and be counted. The question is whether this kind of behaviour is specific to this case; or is it endemic in Whitehall today?

Our system of government depends on certain standards of honesty and forthrightness, many of which are implicit and need not be articulated. Noble Lords take it for granted that when they ask a Minister a question they will receive an honest answer. I certainly do. They assume that the ministerial statement is factually correct. Of course we all know that we have to ask the right questions and that, when we do not, we may fail to elicit what we want to know. That is part of the game. We understand that. But what is vital is that we receive a factually correct answer.

Let me go further. The noble Lord, Lord Thomson of Monifieth, made this point. I accept that Ministers will wish their actions to be viewed favourably. I have no objection to that. It would be silly if they did not. Certainly, they will want to put a gloss on them. But it must be no more than a gloss. What has happened here is far more serious.

Scott demonstrates —I cannot understand those noble Lords who disagree —that Parliament was misled. He demonstrates that it was misled time and again. He cites example after example. If it were not so late, I would read all of them out. He demonstrates that Ministers at that time were less than frank. I agree with the point made by the noble Lord, Lord Wright. One must sometimes conceal things from the public, in the national interest. There is no doubt at all about that. In fact, I am rather staggered at how much is told about spying and such matters which it horrifies me suddenly to discover set out in the report. But this was not to do with the national interest. This was not a question of not telling people because it was a threat to the security of this country. This was (to use the term that upsets the noble Lord, Lord Beloff) pure politics.

That places noble Lords in serious difficulties. Are we from now on to scrutinise what Ministers say more severely? In particular, from now on are we to work on the assumption that if a ministerial statement in any form cannot be proved to be true, we must assume it to be false? I have to tell the House that that would be a temptation; but I am not yet willing to accept defeat on quite that scale. However, it emphasises the terrible risk that the party opposite has taken with our system of parliamentary democracy.

11.59 p.m.

Lord Fraser of Carmyllie

My Lords, I must begin in traditional fashion by congratulating the noble Lord, Lord Taverne, on his maiden speech and on his eloquence. The noble Lord has long and varied political experience, and I have no doubt that in the fullness of time he will enrich our debates. I particularly admired his audacity in asserting that a speech on this issue was not a controversial one. Although I mention him specifically, I trust that I shall be forgiven, after more than 35 contributions, if I do not mention all the others who have contributed to this debate —and, my Lords, that is a threat.

Let me first repeat what I said when I repeated the Statement. I defy noble Lords to look at anything that I said last week or anything that I said today in opening which can be construed as an attack personally on Sir Richard Scott in what he undertook. I note particularly what he has to say in paragraph A2.10, where he points out that it was a unique decision to leave to him the discretion to publish the report. As he explains, the reason why that was allowed was because of the allegations that had been made outside this House of a cover-up.

Noble Lords may wish to turn to paragraph G18.106, where the report spells out the charges that have been made: that there was a cover-up; that there was a secret conspiracy to sell arms and weapons to Saddam Hussein and to send innocent men to prison to cover that up. This is not a matter of putting up phoney charges and then knocking them down. Charges were made and made in such a serious fashion that Sir Richard Scott considered that he had to address them specifically in his report. What he did at the end of the day was to emphasise the falseness of those charges.

I thought that the noble Lord, Lord Peston, made a quite uncharacteristic speech. I felt that we might have encountered from him for the first time in your Lordships' House something of the honour of the shadow Attorney-General, who, so far as I am aware —I have not heard the debate in the other place this evening —is the only Member of the Opposition Front Bench to acknowledge that the core charges made at the outset when the inquiry was first set up were without foundation. I am very disappointed that no one else has been prepared to do so.

Lord Peston

My Lords, I am sorry that my speech disappointed the noble and learned Lord. I shall do better tomorrow when we discuss chemical weapons. I understood that the shadow Attorney-General did ask for the resignation of Sir Nicholas Lyell. He may note that I did not, but I think that my honourable friend did.

Lord Fraser of Carmyllie

The noble Lord should read Hansard and make a more careful examination of what was said. (I wonder whether the noble Lord would be silent for a moment when I am trying to address a point made by his noble friend). If he looks at the report of Question Time last week, he will see precisely what the shadow Attorney-General said with regard to a number of the charges that were made against the Attorney-General.

The noble Lord, Lord Richard, upbraided me for taking time to spell out what we accepted of the recommendations put forward by Sir Richard Scott and what action we intended to take. He criticised me for doing that. That is about the most astonishing criticism to which I have ever been subjected. Can your Lordships imagine the position if, in opening the debate, I had given no indication whatsoever of the recommendations that we accepted and the action that we intended to take on them? I am grateful to the noble Lord, Lord Cledwyn, who listened to what I had to say and acknowledged that there were a number of areas where we had indicated that we wished to take action. I am grateful also to my noble friends Lord Rippon and Lord Beloff, and, surprising as it may seem, to the noble Lord, Lord Jenkins of Putney, for recognising that we did seek to address a number of the recommendations made by Sir Richard Scott.

I accept that I did not mention my colleague William Waldegrave in my opening remarks. But, if I had done so, I should have quoted in full what Sir Richard Scott had to say about him. I can think of few more obvious examples of tendentious and selective quotation than that by the noble Lord, Lord Richard, who quoted from D4.6: Mr Waldegrave knew, first hand, the facts that, in my opinion, rendered the 'no change in policy' statement untrue". That is where he stopped. The very next sentence is: I accept that, when he signed these letters, he did not regard the agreement he had reached with his fellow Ministers as having constituted a change in policy towards Iraq".

Lord Richard

My Lords, will the noble and learned Lord give way?

Lord Fraser of Carmyllie

My Lords, if the noble Lord wishes me to quote at length I shall do so. I am pointing out that he stopped before reading the next sentence. He certainly did not go to D3.124, where he knows that my right honourable friend Mr. William Waldegrave and his ministerial colleagues were acquitted of having any duplicitous intention.

Earl Russell

My Lords, the noble and learned Lord calls for completeness of quotations. But the one he used runs on, But that that was so underlines, to my mind, the duplicitous nature of the flexibility claimed for the guidelines". Will the Minister address that point?

Lord Fraser of Carmyllie

My Lords, that arises in D3.124, which should be considered in its entirety. If the noble Earl wishes me to quote in entirety every passage on which I want to rely, the noble Earl will be here for a very long time, and I suspect that there will only be the two of us present to hear what I have to say.

I do not need to say anything more about my right honourable friend Mr. William Waldegrave because not only have political colleagues sprung to his defence and stated what an open and honourable man be is, but also a number of political opponents similarly acknowledged that he has that clear and obvious characteristic. That was confirmed also by a number of distinguished public servants who have worked with him in recent years.

The critical feature on which we should focus is that of the Howe guidelines. Of course the guidelines contained a degree of flexibility. They were constructed in that form to allow for just that flexibility. If those who read the report carefully reflect upon it, they will appreciate that from the very beginning, when the guidelines were in their embryonic state, there was the beginning of the idea of flexibility. It is clear from Sir Richard Scott's analysis that he attacked the idea of their having any flexibility built into them at all.

I do not believe that I can usefully elaborate on the arguments that have been fully advanced by my noble and learned friend Lord Hailsham, my noble friend Lady Thatcher, my noble and learned friend Lord Howe and my noble friend Lord Trefgarne. If they will forgive me, it seemed to me that what was more interesting in some respects was the contribution offered on the matter of whether this was an issue of opinion or interpretation. The arguments advanced in that regard by the noble and learned Lord, Lord Wilberforce, and the noble Lords, Lord Armstrong and Lord Wright, need to be clearly appreciated.

There was a difference of view on whether what was said was within the guidelines; within the flexibility that they allowed for, or outwith them. That is a matter of interpretation or opinion. However, it is important to grasp that, once Sir Richard Scott reached the view that they fell outwith the guidelines, he then proceeded to say that there was then a misleading of Parliament. It all flows from that. But at the same time —and I shall quote for some considerable time if necessary —time and time again he acknowledges, on behalf of those who were central to the consideration of the change following on the ceasefire, that there was no intention to mislead.

I leave this matter simply by saying this. It is only right that we emphasise again the context within which the eponymous guidelines of my noble and learned friend Lord Howe were first constructed. We were acting in a fashion that was unique in terms of providing equipment of any sort to those combatants in the foulest of wars.

I turn to the issue of PII certificates. I do not believe that I have ever made an assertion in law which secured the unequivocal support of such distinguished lawyers as the noble and learned Lords, Lord Lloyd, Lord Simon, Lord Slynn, Lord Hailsham, Lord Bingham, Master of the Rolls, Lord Ackner and implicitly Lord Wilberforce. Had that happened to me in private practice, I would be doing a lap of honour, continued indefinitely.

Against that background of opinion it is time once and for all to leave aside the argument which, frankly, has been disgracefully addressed at the Attorney-General. Furthermore, it is a mischievous misrepresentation of the matter to say that he took no interest in the prosecution. He had a conference with Mr. Moses, the prosecuting counsel. Specific reference is made to that meeting; specific reference is made to the form of certificate that was particularly fashioned for Mr. Michael Heseltine. All that was in discharge of the Attorney-General's overall responsibility for prosecution with regard to Customs and Excise. If noble Lords believe that the Attorney-General should have taken on a more interventionist role, I would have anticipated in the course of the debate that they would have welcomed what I said when I indicated that we are developing proposals on the precise nature and scope of the increased supervision of Customs and Excise that Sir Richard Scott recommended. However, I am bound to conclude, with a number of my noble friends, that the attack on the Attorney-General is nothing to do with his conduct; it is, allied with the attack on William Waldegrave, all about trying to secure the maximum political embarrassment for the two Ministers still in office who had any part to play in these affairs.

The most breathtaking contribution in your Lordships' House during these eight and a half hours was that of the noble Lord, Lord Jenkins of HilIhead. He savaged senior Secretaries of State for appending, if I noted him correctly, what were described as automatic signatures to PII certificates. I have to tell your Lordships that the right honourable Roy Harris Jenkins, on or about 3rd June 1966, signed the most famous PII certificate in history; namely, the PII certificate which gave rise to the decision in your Lordships' House in the famous case, repeatedly referred to today, of Conway v. Rimmer. He said: I personally examined and carefully considered all the documents and I formed the view that these documents fell within a class of documents comprising confidential reports by police officers. In my opinion, the production of documents of each such class would be injurious to the public interest". I am very grateful to the noble Lord for signing that certificate. Had he not done so, the law would not have developed as it has. More seriously, I make no criticism of him for doing that because, as the Attorney-General and Ministers did —on that occasion in the Matrix Churchill trial —he followed the advice that was proffered to him. The advice that was proffered to him on that occasion came from the late Lord Elwyn-Jones, who in fact appeared as counsel in the case. He did nothing wrong in doing so. He followed through the advice that was proffered to him.

My noble friend Lord Tebbit focused on a particular feature of Sir Richard Scott's report and the broad criticism of successive Administrations. The noble Lord, Lord Peston, indicated that Sir Richard Scott understated matters. Sir Richard Scott says in C1.67: The impropriety in using in peacetime wartime powers of subordinate legislation without Parliamentary control became entrenched de jure". That was with regard to the 1990 Act. All of us who were in Parliament in 1990 then stand accused of impropriety by Sir Richard Scott. At C1.96 he says that the provision for negative resolution procedures is the minimum that constitutional and democratic propriety required.

Far from using understated language, time and time again Sir Richard uses the most vigorous and robust language, as he is perfectly entitled to do. However, what I think will most surprise noble Lords who have read the passage carefully is the deafening silence that there has been from Mr. Gordon Brown and Ms. Joyce Quin in terms of their participation in the discussions about whether or not it would be appropriate for a negative resolution to be included in any Bill to come before your Lordships' House.

I regret if I caused the noble Lord, Lord Williams of Mostyn, any upset by failing to give him a full reply to his letter. I hope that my intervention explained why that came about.

I must nail one canard. It was no civil servant or Minister who dreamt up the arrangements for access prior to publication for a number of Ministers and other party leaders who wanted to see the report. Sir Richard Scott either required or agreed to all the arrangements that were made. My noble and learned friend Lord Howe of Aberavon sought to have access to the report prior and was refused it, as was my noble friend Lord Trefgarne. There has been some pleasurable fun at the term "controlled environment". That term was before Sir Richard Scott and was agreed to by him.

I readily recognise that we cannot deal with this matter in terms of soundbites or catch-phrases, but I should have thought it appropriate for the noble Lord, Lord Thomson of Monifieth, to refer to the further letter from Sir Richard Scott which was copied to his colleague, Mr. Menzies Campbell, in which he said: The Vice-Chancellor has asked to make clear that his concerns extend to all and any attempts whether emanating from government or opposition spokesmen or from the media to compress the conclusions expressed in the report into soundhite or catch-phrase form". That was not simply a criticism directed at government Ministers but a concern that Sir Richard Scott expressed time and time again. He wanted everybody to read his report in its entirety.

Finally, I turn to the issue of the inquiry procedures, about which some forceful observations were made by my noble and learned friends Lord Howe and Lord Rawlinson and by my noble friends Lord Rippon and Lord Trefgarne. I understand that my noble and learned friend the Lord Chancellor has today indicated that, if anyone wants to put forward views on the proposals offered by Sir Richard Scott on how we should re-examine the way in which inquiries are conducted, he would be pleased to receive them. We are conscious of the criticisms made by my noble friends and want to ensure that the detailed arguments on the proposals are properly addressed. I hope that there will be a positive contribution to that debate.

I conclude by saying that there have been something like nine hours of debate and some very distinguished contributions. I am very grateful to noble Lords who have contributed. I wish that there had been more speeches like that made towards the end by the noble Lord, Lord Bridges, who indicated that he wished to look at the exchange control legislation. I anticipated that that would have flowed from the opening remarks that I made. Far too much of what we have been subjected to has been a phoney attempt to bring about some political embarrassment to the Government. I believe that nine hours of debate have simply revealed that that attempt has failed.

On Question, Motion agreed to.