House of Commons Hansard Debates for 23 Nov 1992

Column 687

though I imagine that the right hon. Member for Chesterfield (Mr. Benn) would not have been keen on us marching on Baghdad. Whatever mistakes Lord Justice Scott finds, I am sure that he will not discover a conspiracy, yet Labour Members continue to claim that one existed. In The Sunday Telegraph yesterday, the hon. Member for Livingston is quoted as saying :

"The Conservatives not only ensured that Britain provided the machines that made the weapons that were ultimately turned against British troops. They also saw to it that Britain paid for that equipment."

Britain did not provide machines to make weapons that were turned against British troops. That is complete nonsense.

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

Mr. Winnick : Will the hon. Gentleman give way?

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

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

8.30 pm

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

Sadly, the hon. Member for Blaby (Mr. Robathan) seems blindly ignorant of all the information that has appeared in the press in recent weeks. I shall go straight to the heart of the matter and say that it is obvious from all the documents which have come to my notice--I intend to quote from them, Mr. Deputy Speaker, mindful of

Column 688

Madam Speaker's ruling--that before the granting of the first export licence in December 1987, the whole Government were aware of exactly what was going on.

I quote a paragraph from an MI6 contact report. It states : "I had hoped to use most of this session to photograph drawings of sheets obtained from TI company files."

That is a reference to the previous parent company of Matrix Churchill.

"Unfortunately, (or fortunately, depending on viewpoint)"-- having read "Spycatcher", I am amused to see that reports such as this can have their ludicrous aspects--

"my A4 sized photographic equipment was not man-enough to cope with 100 sheets of 3 2 drawings. If a photographer was available, we agreed to repeat the session on Friday 30 October."

Many Conservative Members talked about context and dates, but it is impossible to be clearer than that : the licence was not issued until December. There was then something of a debate within the Government about whether it should have happened.

Lest there is any question about who knew at that stage of the extent of the intelligence department's involvement, I will quote from a confidential minute circulated in January 1988. I shall not quote what was said by civil servants--a good lead was given in that connection by the former leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel). Having read all this, however, I am dismayed at the extent of the compliance and the lack of moral fibre and resistance were eroded by the bullying tactics of the former Prime Minister, Baroness Thatcher. It is a great pity, and a disservice to the civil servants of this country. The document states :

"The intelligence community recommends against revoking the licences as they fear for the safety of their source, and they also believe that far more important information could cease to become available as a result."

It could not be clearer than that.

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

It is clear from the confidential briefings of those who attended the meetings in January that the Government were in on the matter. The advice was that

"the application should be supported by voluminous material--the application should be biased technically--the application should be made as soon as possible."

It was also stated that the application should stress the peaceful use of material.

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

I come now to the link between the Government and Customs and Excise in this sad affair. I have a letter from

Column 689

the principal private secretary, Department of Trade and Industry, to the chairman of Customs and Excise allowing him to go ahead and start the investigation, but adding :

"You assured me that the visit"

to the Matrix Churchill premises

"would be used for fact finding only, and no action would be taken as a result without consulting Ministers."

It is pretty clear that the Government had a strong handle on the way in which, and the extent to which, Customs and Excise was to conduct its investigation. However, it went ahead, and the rest took place after the ceasefire and the easing up of policy, with the continuing connivance and co-operation of Ministers. One man--Gore-Booth--stood out against it. I think that he should be complimented, and I name him for that reason.

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

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

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

There is now a complete lack of trust between civil servants and Ministers, and between MI6 and industry. Above all, several crucial issues have to be faced, especially with regard to the three defendants. One of them, and somebody else who is not a co-defendant but who has been named, have had their livelihoods severely prejudiced. Moreover, their very security has been put at risk. The Government say that the judge obtained the information, but how did he obtain it? He obtained it only by the Government having revealed the full extent, in advance of the defence's case, of the MI6 links. Therefore, we have to ask the Government what they intend to do to

Column 690

protect those gentlemen whose lives as well as livelihoods they have so wantonly exposed. In addition, how do the Government intend to restore the basis upon which they can regain their livelihoods? It is sad for me to have to make these charges in the House. I did not think that members of this Government, some of whom we had respected, would stoop so low to protect their own necks. I do not believe that there is any solution other than their resignation, to clear the good name of the House and of British justice.

8.40 pm

Mr. Rod Richards (Clwyd, North-West) : I intend to refer to the international context of the issue--the worldwide desire to prevent the proliferation of nuclear weapons.

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

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

Under successive British Governments during the past 20 to 30 years, the intelligence community has pursued a consistent policy of monitoring attempts by third-world countries to develop and produce a nuclear capability. Under successive British Governments, the intelligence community, whenever and wherever possible, has sought also to frustrate attempts by non-nuclear powers to become nuclear. In order to be in a position to arrest the progress of nuclear aspirants, it is surely necessary to gain intelligence access to the procurement process of the countries involved. One of the means by which such access might be achieved is in the grey area on the fringes of official guidelines where there is some flexibility in interpretation, particularly when certain types of components, or tools, or equipment have peaceful nuclear uses, or non- nuclear uses. The practice for many years has been to exploit, where feasible and where Government policy allows, some of the opportunities that arise when British companies, and companies in other countries, are in a position to export goods that are readily available in many parts of the world but which have dual use. There are foreign powers that have set up front companies in many parts of the world, whose sole purpose has been to acquire components and equipment to enhance their nuclear weapons programme.

There are those, I am sure, on the Opposition Benches who would say that if such companies are discovered in the United Kingdom or elsewhere, they should be exposed and closed. That is a naive view of the world. Were such action to be standard procedure, the offending Government would merely set up new front organisations. The

Column 691

intelligence community would then have the additional task of locating and penetrating them anew. In the meantime, our ability to monitor and frustrate the activities of which I speak would be correspondingly diminished and the threat to world peace correspondingly increased.

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

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

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

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

8.48 pm

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

Column 692

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

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

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

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

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

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

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

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

Column 693

material to his defence to be disclosed. If that is swept away, justice is destroyed and no democracy is entitled to send a single innocent man or woman knowingly to prison.

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

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

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

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

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

8.57 pm

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

I should like my right hon. and learned Friend the Secretary of State for Defence to answer a question for me. As the Scott inquiry can be given "further and wider terms" if need be, can it be widened to include compensation, not just for the directors but for the work force, if it can be shown that the actions of Government

Column 694

agencies contributed to the downfall of the company? I do not suggest that I will judge the answer to that question today, but before I conclude I should like to give my right hon. and learned Friend some information which may help him to decide whether he can undertake to widen the inquiry to include aspects of compensation. It may help the House if I provide a potted history of the company. Those of us who take an interest in the health of manufacturing industry, and in the machine tool industry in particular, should be aware that the company's past reads like a roll call of the very best of British machine-tool-making companies. TI Churchill took over Alfred Herbert in 1983. If ever there was an aristocracy among skilled workers in this country, and in Coventry, it was to be found at Alfred Herbert, a company which produced generations of bright, gifted engineers whose skills were the envy of the world. The company was brigaded in with Matrix and Coventry Tool and Gauge to complete the amalgamation of a prodigious and prestigious portfolio of famous machine tool manufacturers' names.

Matrix Churchill was formed in 1987 when TMG, with its Iraqi shareholding, bought the company for £6.5 million. Many hon. Members today have spoken of the "crown jewels" in the context of a legal case. I say that when TMG bought the company for £6.5 million it bought the crown jewels of the British machine tool industry. All that has been thrown away in the course of the past 12 months. From the mid-1950s onwards, the company developed CNC lathes, which benefited from an enlightened development policy on the part of a management team, including some who have been mentioned today, led by Paul Henderson. They were popular on the shop floor, they had the respect of their work force, and they invested blood, sweat, tears and money in the company. They produced a range of automated machining centres for CNC lathes, manufacturing systems and engineering products which boded well for the future.

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

I should like to draw to the attention of my right hon. and learned Friend the details of one period in the company's history. In the autumn of 1990 the management, together with British financial backers, attempted to buy out the Iraqi shareholding. On 21 September 1990, the directors of the company cleared a statement with the DTI which read as follows :

"The directors are more confident that the deal to buy out the Iraqi financial interest will succeed At a meeting this week, the Department of Trade and Industry recognised our efforts and indicated that a speedy resolution of our plans to acquire 100 per cent. equity in the business would be welcomed."

Within days of the statement, the directors were arrested as a result of Customs and Excise investigations and detained in custody--an overnight experience that none of them will forget. The deal of which the DTI had

Column 695

been advised--the DTI had helped them to clear their press statement--was aborted almost immediately. Financial backers will always run when something like this comes to light, and that is just what they did : the financial institutions ran away.

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

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

We have not heard enough today about the Opposition's much-vaunted concern for the manufacturing sector. Opposition Members have been hunting for a scalp, but they may not get one. The inquiry will look into all that. However, someone somewhere must remember those 600 forgotten people in the aftermath of this sad and sorry affair. 9.6 pm

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

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

British nuclear assistance to Iraq has a long vintage. For example, in May 1957 the House was told that the United Kingdom had contributed £30,000 to the Baghdad pact nuclear centre. The Prime Minister and other Ministers have been at pains to tell the House that the 1985 embargo assistance to Iraq was upheld. At the same time, Ministers have consistently refused to answer to the House

Column 696

about specifics of military equipment sales and arms deals with Iraq or other military dictatorships, such as Indonesia.

Of the many instances of ministerial shyness in respect of telling Parliament the full facts about defence exports--as Ministers call them-- let me just cite two. On 21 November 1986, the year after the guidelines on exports to Iraq were announced to the House, when asked about specific sales of military, industrial and chemical equipment to Iraq and Iran since 1981, the Ministry of Defence, through the then Parliamentary Under- Secretary of State for Defence Procurement, stated :

"It has been the consistent policy of this and previous Administrations not to reveal details of specific defence exports to other countries."--[ Official Report, 21 November 1986 ; Vol. 105, c. 355. ]

In April 1989, on the eve of the evil Baghdad arms fair which was bloated with British companies, the former Prime Minister, Baroness Thatcher, told my hon. Friend the Member for Leyton (Mr. Cohen), when asked if there had been any change in the current policy of prohibiting the export to Iraq of weapons that could enhance its offensive capability :

"The Government have not changed their policy on defence sales to Iraq. Applications for export licences continue to be considered on a case-by- case basis, according to the guidelines.--[ Official Report, 21 April 1989 ; Vol. 151, c. 311. ]

Baroness Thatcher may have been disingenuous in that reply, in the light of the revelations now made in public about the Matrix Churchill affair, yet the matter is graver still. Not only were Government Departments conniving in secret to circumvent their own export guidelines, but, according to information brought to my attention and mentioned by my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), Mr. Frank Machon strongly suggests that the MOD in particular knowingly dealt with a front company to ensure that ammunition, military fuses, shells and other armaments were exported to Iraq and Iran, notwithstanding successive assurances by Ministers in the House that no such sales were happening. I know that the charges that I am about to place on the record are grave, but I believe them to be true and accurate. I want to add to and support the points made by my hon. Friend the Member for Shettleston. The case involves a company called Allivane International Ltd. which became Aerotechnologies before it went bust in 1988. It involves another apparent company called Allivane International Group.

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

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

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

Column 697

I want to demonstrate to the House that, setting aside the clear-cut case of Matrix Churchill, there is now ample evidence against what the Prime Minister told the House last Tuesday when he said :

"The suggestion that Ministers misled the House"--

over arms deals to Iraq, Iran and elsewhere--

"is a serious and scurrilous charge and has no basis whatsoever in fact."-- [ Official Report, 17 November 1992 ; Vol. 214, c. 136.] In fact, last Thursday, the Prime Minister suggested also that previous charges laid upon the Government over their conduct regarding BCCI were also "utterly unfounded".

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

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

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

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

One contract was signed in 1988 for short-term storage of ammunition in Ministry of Defence facilities, which was subsequently exported for the company. On 7 September, The Independent gave details of how those exports were being used as a cover for an illegal consignment of arms, which was ultimately destined for Iran. I have given the House merely a fraction of the information that I and my hon. Friend the Member for Shettleston have been sent on breaches of military sales embargos to Iraq and Iran.

Mr. Machon wrote to the Prime Minister in January 1991 with information, and on 31 January 1991 the Prime Minister told Parliament :

"for some considerable time we have not supplied arms to Iraq".--[ Official Report, 31 January 1991 ; Vol. 184, c. 1102]

Two days before that, Machon had written to the Prime Minister : "I have read and listened to many statements made in newspapers and by politicians of all parties regarding the supply of armaments and ammunitions to Iraq being carried out by every country except Great Britain.

Column 698

What does alarm me most of all is that Britain has been supplying Iraq and creating a funnel through which every arms manufacturing country, even Eastern bloc countries, has had the facility made available' to them to complete the shipment to the Gulf through Britain since 1983 to 1990."

That should have concerned every one of us and our Prime Minister, who should have acted on that and other information which was sent to 10 Downing street during the past few years.

Next Section

Home Page