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Mr. Paul Channon (Southend, West): The exhaustive Scott report details the history of many years. Does my

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right hon. Friend agree that in the real world the Government must answer two questions: did Ministers conspire to send people to prison? The answer is no. Did the House or the Government connive at exports of a lethal nature to either Iraq or Iran during this period? Again, the answer is no. Does not this report answer in the Government's favour on those two crucial issues?

Mr. Lang: My right hon. Friend is absolutely correct on both counts.

Mr. Tony Benn (Chesterfield): Is the righthon. Gentleman aware that until hon. Members have had the opportunity to read the entire report they cannot properly assess the conduct of Ministers, whether the House was misled and whether there was a cover-up? Is he aware that Iraqi pilots were trained in Britain until a few days before the invasion of Kuwait? Is he also aware that the charge against the Government is that they were an accessory to aggression and to genocide? The whole question of the arms trade, which was denounced by four bishops in a letter in The Times yesterday, is the real and on-going issue. This country subsidises the arms trade by £1 billion per year, and those weapons are often used to repress people--as is the case with Indonesia and the people of East Timor.

Mr. Lang: The right hon. Gentleman will be aware that Labour Members repeatedly approached Ministers for support in securing defence contracts for factories in their constituencies. I remember what happened in the 1970s, when the then Labour Government set out to sell frigates and Canberra bombers to Argentina.

Mr. Richard Shepherd (Aldridge-Brownhills): I refer my right hon. Friend to paragraph D4.42, in whichSir Richard Scott observed:

Does that not go to the heart of democratic and accountable government? What is the Government's response to that statement?

Mr. Lang: Sir Richard Scott said:

He believed that the Ministers acted in good faith. The parliamentary answer that they drafted in early 1989 said:

Mr. Martin O'Neill (Clackmannan): The Chief Secretary told the inquiry that, in some circumstances, it is necessary to say something untrue in the House of Commons. As one of the people named in the report and having received unsatisfactory answers from a number of Ministers over seven years in relation to the question of

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arms sales to both Iran and Iraq, may I ask the Minister whether he thinks that Ministers who feel that it is necessary to tell untruths in the House of Commons should resign? In particular, does he think that theChief Secretary to the Treasury should resign now in view of the way in which he misled the House?

Mr. Lang: Sir Richard Scott accepts that no Minister deliberately misled the House.

Mr. John Butcher (Coventry, South-West): Will my right hon. Friend turn his mind to the plight of the people who have been forgotten in all this welter of controversy? I refer to the 600 constituents of mine who used to have jobs at Matrix Churchill. They are a highly skilled team of men, and they are of the view that, if Customs and Excise had not blundered in, a deal in which the City of London and the management were trying to buy out the Iraqi shareholding would not have been aborted. Had they been able to complete that plan, those jobs might have been in existence today.

I draw my right hon. Friend's attention to paragraphs C3.25 to C3.65. Does he agree with my--albeit tentative--conclusion that Sir Richard Scott calls into question whether the Customs and Excise people behaved within the appropriate guidelines? If they did not, is there some question of liability here?

Mr. Lang: It is clear and generally agreed, with hindsight, that it would have been desirable if the Matrix Churchill trial had not taken place. But Customs and Excise are independent prosecutors and it would be wrong for the Government to seek to intervene in their decision over a prosecution. The report acknowledges that there was strong evidence of breach of controls, and Sir Richard Scott found that the Customs and Excise had observed the code for prosecutors.

Dr. John Gilbert (Dudley, East): Is it true, as alleged earlier this week in the Financial Times, that during the period under review components vital to Iraq's nuclear weapons programme were being shipped to that country? If so, when did the intelligence service learn about it, and when were Ministers informed?

Mr. Lang: There is no question of the Government having connived at the export to Iraq of equipment for use in the development of the Iraqi nuclear programme. The Matrix Churchill machine tool export licence--which mentions project K1000, to which the hon. Gentleman refers--was not approved: it was still outstanding when Iraq invaded Kuwait and United Nations sanctions were imposed.

Mr. Rupert Allason (Torbay): May I refer my right hon. Friend to paragraph 25 of chapter K6, on the subject of public interest immunity certificates in criminal cases? Does he agree with Sir Richard Scott's verdict that the use of these certificates on whole classes of documents is "bizarre and unacceptable"? Does he agree that there is a serious danger of a miscarriage of justice when PIICs are used primarily for administrative convenience? Does my right hon. Friend accept that Lord Justice Russell, the precedent used consistently in relation to public interest immunity certificates, said that matters of national security could never be decided by a court but only by Government?

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Does my right hon. Friend therefore agree that no prosecution using public interest immunity certificates to ban the disclosure of whole classes of documents should be brought in future? Would it not be appropriate to take this judge-made law out of current use and put it on a statutory footing so that we can all understand it? Does my right hon. Friend accept the need to take a further look at cases, including that of Regina v. David Roche of Plymouth, in which there is a serious danger of a miscarriage of justice in criminal prosecutions in which a public interest immunity certificate prevents the defence from deploying its chosen defence?

Mr. Lang: As I told my hon. Friend in my statement, the Government intend to consider that matter further. The handling of PII certificates is court driven and case driven, not Government driven. The development of case law has governed the development of the handling ofPII certificates. They are not a matter of administrative convenience: as my right hon. and learned Friend the Attorney-General advised the Ministers in question, they had a duty to sign and it was then for the courts to decide on the admission or otherwise of the documents. In a criminal case, every document is seen by the judge. My right hon. and learned Friend's view on the matter is supported by eminent counsel, by three defence counsel in the Matrix Churchill trial and by Lord Bingham,Lord Donaldson, Lord Scarman and Lord Justice Mann, to whom I referred earlier.

Mr. Peter Shore (Bethnal Green and Stepney): Given the seriousness of the issues covered by the report, and the number of Ministers and Departments involved, would it not have been better if the Prime Minister himself had made the statement this afternoon? As inevitably happens in these exchanges in the House, minds are concentrated on the conduct of Ministers. Surely that, too, goes to show that the Prime Minister alone, entitled as he is to deliver judgment on the conduct of Ministers--just as he is the author of "Questions of Procedure for Ministers", issued in his name--should have answered in the House.

Did the Attorney-General and the Ministers connected with the PIICs know when they signed the documents that Matrix Churchill was in touch with the secret services? If they did, surely they had an overriding obligation to see to it that Customs and Excise were pushed out of continuing the prosecution, just as they were pushed out of the super-gun case? Does not the Attorney-General have power to override Customs and Excise in the bringing of a prosecution by setting out what I believe is called a nolle prosequi?

Mr. Lang: The report came to me because it was commissioned to be delivered to me as President of the Board of Trade. My right hon. Friend the Prime Minister gave evidence to the inquiry: it was therefore right that the report should come to me.

As for the PIICs, some of my colleagues may well have known about the connection with the secret services--that does not affect the matter. The point was that the Ministers in question had a duty to sign the certificates so that the public interest and the interests of justice could be weighed by the judge, who alone had access to all the

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documents and who could and did take a decision. The trial proceeded unaffected by the PIIs for four weeks before it was finally abandoned.

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