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Mr. Campbell-Savours: They were applied strictly, not flexibly.
Mr. Channon: I am not sure to what date the hon. Gentleman is referring. I am talking about the early days. That is what I believe may have happened. When the three Ministers concerned later decided to re-examine the policy, they considered the application of the guidelines to find out whether they could be made more flexible. There was no suggestion of a substantial change in policy. How could it have been done? None of the Ministers concerned consulted their superiors. None of the Secretaries of State was consulted. The matter was not put to the Prime Minister. It can be argued that no decision was taken. None of the three Ministers would claim that they had the authority to undertake a major policy change without reporting the matter to senior Ministers.
What took place was not, therefore, a change of policy. Ministers have been pilloried by people who have said that there was a change of policy that Ministers did not reveal to the House of Commons, but that is not justified. I hope that my hon. Friends and other hon. Members will feel that my right hon. Friend the Chief Secretary has been most unfairly criticised in this case. I am naturally predisposed in his favour because he is a member of my party and I know him well, but I would like to think that, if I were on the Opposition Benches, I would be as objective as possible in the face of such serious allegations.
Mr. Channon:
I am sorry, but I cannot give way. Speeches are restricted to only 10 minutes and I have only
The real difficulty with the Scott report is that it is all things to all men. We can all find quotations to suit the argument that we are trying to advance or to rebut. It is a great pity that the report has no conclusions so that we can find out exactly what was intended.
Of course Ministers and others made mistakes. Naturally, when running such a complex policy over a long period, involving hundreds of officials in difficult decisions, difficult choices had to be made. I concede of course that mistakes were made. I assure hon. Members that, if a Labour Government had been in power, mistakes would have been made as well because no Government are foolproof when running such an enormous machine.
We should therefore revert to the serious issues.Did we supply lethal weapons to Iran or Iraq and break our guidelines? The answer is clearly no. [Hon. Members: "The answer is yes."] I disagree. Sir Richard Scott confirms my view. Did we try to send innocent men to prison? There is absolutely no doubt from the report that there was no intention to send innocent people to prison.
Mr. Peter Shore (Bethnal Green and Stepney):
A week or so ago, I said in a brief intervention during the statement that it should have been made by the Prime Minister and that this debate should also have been opened or closed by him. After all, he set up the Scott inquiry and, above all, he is responsible for Ministers' conduct. It was up to him to give us his honest judgment on the Scott report. I know that that is difficult. Frankly, he was faced with three possibilities. One was to accept what Scott said, with all the unpleasant consequences that that would have for him and his Cabinet. The second was to reject, in whole or in part, the Scott report's conclusions, but in that case he would have been obliged to put seriously to the House the weight of his argument and judgment. The third option--the one that he chose--was to opt out of those difficult decisions and to organise with his colleagues a sustained misrepresentation of what Scott said.
The Prime Minister has made a serious mistake.The Scott report needs close examination and serious debate. Let us be clear: the voice of Scott is not the voice of God. Although much of the report is persuasive, other parts of it are not. Let me make one thing clear before I proceed: the personal integrity and honour of the Attorney-General and of the Chief Secretary to the Treasury is not an issue. Both are honourable Members and I accept that they have acted throughout in good faith. That does not mean, however--nor did they expect it--that they could escape severe criticism of their conduct and competence as Ministers of the Crown.
The Attorney-General and his handling of the Matrix Churchill trial is the great puzzle. I shall not go into the argument between high-powered judges about whether
Ministers were obliged to sign public interest immunity certificates--I leave that apart and am prepared to be neutral on that issue. What worries me and, I am sure, other hon. Members is that Mr. Henderson and his fellow Matrix Churchill directors were prosecuted by Customs and Excise for deceiving the Department of Trade and Industry. I and, I think, most hon. Members believe that those directors should not have been so prosecuted.
Surely sufficient evidence of the involvement ofMr. Henderson with British intelligence--evidence that should have made certain that no prosecution was started was available to Ministers before the trial--was available from the beginning. The Deputy Prime Minister read with care the documents that were submitted to him and refused to sign the PIIC. In his own words:
If he knew that, why did not the Attorney-General?I regret that the Attorney-General did not know because he had not read the documents that he had asked Ministers--not only the then President of the Board of Trade--to sign. That was a terrible omission.
The Attorney-General (Sir Nicholas Lyell):
Before making his criticism, the right hon. Gentleman was extremely courteous to me and to my right hon. Friend the Chief Secretary to the Treasury. Is he aware that, when my right hon. Friend the Deputy Prime Minister, then President of the Board of Trade, brought his concerns properly to me, I not merely considered the legal position and advised him about his special public interest immunity certificate but, as the Scott report records, immediately summoned a meeting with prosecuting counsel, Mr. Alan Moses QC, a man of great experience, integrity and skill and the solicitor to Customs and Excise, to ask specifically--and he had been handling that case for more than a year--whether there was any reason known to him why the prosecution might be unfair or should not go ahead?
Mr. Shore:
Did the Attorney-General point out to the Treasury counsel that Matrix Churchill directors were involved with the secret services? If so, how could the Treasury solicitor have proceeded with his prosecution?
The Attorney-General:
The answer is that I did not point it out because neither I nor anyone advising me was aware of it. When one reads section G carefully, one notes that Sir Richard Scott, when he says that, at the end of the day, the prosecution should not have proceeded, emphasises--both at the beginning and at the end of the chapter--that he speaks with hindsight.
Mr. Shore:
I partly accept what the Attorney-General says, but, by reading the documents, the then Secretary of State for Trade and Industry knew that Matrix Churchill directors were in touch with the secret services,so Mr. Moses and the Attorney-General would have known the same if he had read those documents. In those circumstances, the trial could not have proceeded. Although the Attorney-General is not directly responsible, as he made clear in his letter to The Times today, for the Customs and Excise legal department, he has, as I have always understood it, an overriding power. He can enter a nolle prosequi--I think that that is the correct term--
I shall now consider the Chief Secretary to the Treasury, the United Kingdom's policy on the export of defence equipment to Iraq and Iran and the very serious charge that the House was deliberately misled. The crucial question is this: was the original 1984 guideline policy changed--first in August 1988 and again in April 1989--or were those simply modifications of the existing guidelines and of insufficient importance to warrant a public statement? The answer to that is crucial in determining the answer to the second question--whether Parliament was deliberately deceived.
Scott is clear that the answer to the first question is yes and, consequently, the answer to the second is yes.On balance I agree with Scott, but the answers are not as simple as he suggests. His preoccupation with those two questions leads him away from the simple truth and the most glaring fact that the original guidelines agreed by the Cabinet in 1984 and made public by the Foreign Secretary in February 1985 were designedly so loosely drawn as to be almost meaningless.
The supply of weapons was clearly banned--there is no argument about that--but defence equipment, ranging from Land-Rovers to advanced radar equipment, was not. Such equipment should be refused an export licence only if, according to the Government guidelines, their supply would,
There is plenty of leeway there.
Under the change in 1988, following the ceasefire, exports were to be refused only if, in the Government's view, they would be of
There is plenty of scope there, too. The words are different and the intention was to relax export controls.In the event, though, the change had little practical effect.
The real culprit was the original guideline policy and the misleading distinction drawn between banning lethal weapons and licensing other defence equipment. The truth is that, while Iraq needed lethal weapons and could get all that it wanted from Russia and France, its main strategic aim was to expand massively its own indigenous arms industry so that in future it could supply its own weapons needs.
Since the Gulf war, and from reports of the United Nations arms inspection teams, we know just how massive and dangerous the Iraqi arms industry was,and Britain's exported defence equipment undoubtedly contributed to its growth. One example of that will suffice. The Scott report says that the supply of lathes in 1980 to Iraq was sufficient to equip a factory designed to produce 500,000 155 mm shells a year.
"this was telling me . . . that the Security Services at that time were in touch with Matrix Churchill."
"significantly enhance the capability to prolong or exacerbate the conflict".
"direct and significance assistance to either country in the conduct of offensive operations".
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