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7.53 pm
Sir Kenneth Carlisle (Lincoln): I am glad to take part in this debate, especially as I was appointed a Minister in the Ministry of Defence 10 days before the Gulf war broke out. All of us can agree that Scott wrote a weighty report that certainly deserves a considered response. There are lessons to be drawn from the report, to which I shall return.
If we are to consider the report properly, we must get away from the fevered efforts to gain political advantage from it which, perhaps inevitably, have grabbed the limelight since publication. Those efforts are assisted by the fact that any interpretation can be drawn from such a lengthy document and we can all find quotations to support our lines of argument. If we take the time to stand back and review the central issues on which the inquiry was established, we see that in reality the facts simply do not bear out the main charges made. Scott resolved the report in favour of those who were charged, and that conclusion needs repeating and reiterating.
First, there was simply no conspiracy to send innocent men to gaol.
Mr. Sheerman:
On a point of order, Mr. Deputy Speaker. Is not this yet another abuse of Parliament and yet another former Minister who has been sent by the Tory Whips to sing exactly the same song from the same hymn-sheet?
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Order. I sense that that might be a criticism of the Chair.
Mr. Sheerman:
No, it is a criticism of the Whips.
Mr. Deputy Speaker:
Order. If it was a criticism of the Chair, I would be grateful if the hon. Gentleman would withdraw it.
Mr. Sheerman:
I totally withdraw any criticism.I never intended any criticism of the Chair, but we all know that behind the Speaker's Chair certain pressures are applied by the Whips. It is very suspicious that very few independent Back Benchers have spoken from either side of the House.
Mr. Deputy Speaker:
Order. The Chair knows nothing about what happens behind the Speaker's Chair.
Sir Kenneth Carlisle:
I resent that allegation most strongly. I have my own views. I am not standing for
The two main decisions were, first, that there was no conspiracy to send innocent men to gaol and, secondly, that lethal arms did not go from this country to Iraq during the period in question. We must consider those two issues.
In an article recently in The Times, Lord Alexander of Weedon, a former chairman of the Bar Council, described the Attorney-General as
It would surprise me if the House did not agree with those sentiments.
There will always be disagreement about the interpretation of the law--indeed, that is why we have an appeals system from one court to another--but my right hon. and learned Friend the Attorney-General gave careful consideration to the issues. It seems to me that the bulk of legal opinion backs his views. Significantly, the Master of the Rolls backed my right hon. and learned Friend's use of public interest immunity certificates in criminal cases. We must remember that the rules on PII certificates are judge-made. They are not made by politicians but by law as interpreted by judges.
Some commentators have mischievously described PII certificates as gagging orders and the Opposition have sought to reinforce that in the public mind, but that is not the case. As we all know, it is for the judge to decide what documents are required by the defence to secure a fair trial. In the Matrix Churchill case, the system worked as it was designed to work. The defence lawyers agreed with the working of the system and the men were not found guilty. The Attorney-General also alerted the Treasury solicitor to the reservations of my right hon. Friend the Deputy Prime Minister. If the House is prepared to set aside politics, we should accept that the Attorney-General's interpretation of the law was well grounded. There was no evidence that anyone was gagged and the judge had sight of all the relevant documents. The system worked well and just as it was intended to do. There was certainly no conspiracy to convict innocent men, as some have so ignorantly claimed.
I now turn to the case of arms sales. It is self-evident--and I have some experience of this--that as a country we have the most careful and meticulous of policies among arms manufacturing countries. We are more careful about the countries to which we export arms than, I think,any other country. Anyone who reads the Scott report will be informed of the almost endless meetings and discussions that reflect our concern. There is a struggle to find the right balance between the ethical approach, national security and a valid wish to protect industrial jobs that are so precious to those who have them. Would there have been such meticulous discussions in other European countries, such as France? Would other European countries have agonised over the interpretation of the guidelines? I submit not.
In the end, the supply of military equipment to the evil regime of Iraq was minuscule. My right hon. Friend the Member for Bridgwater (Sir T. King), with whom I had the honour to serve in the Ministry of Defence, has vividly brought reality to the House. We should take note of his words.
The Scott report clears the Government on the main charges, but we should consider carefully the proposals for reform. There are lessons to be learnt. I agree with my hon. Friend the Member for Aldridge-Brownhills(Mr. Shepherd) that we require more open government. We have been moving towards it, but we can do more. We should be more open except where national security makes that impossible. Every Minister--this applies to Ministers of all Governments, and I was a Minister in this Government--knows how easy it is to give unhelpful answers. We all know how easy it is to stonewall. I am glad that we are considering again how we could be more forthright with the House.
My right hon. Friend the President of the Board of Trade made a fulsome response to some of the recommendations that are set out in the report. For example, we are to re-examine the information that is available on arms exports. We shall consider export controls and the licensing procedure. We shall consider also the role of Customs and Excise in prosecutions and the relationship of that body with the Attorney-General. We shall explore the scope of PII certificates. At the same time we must always consider the practicalities. Government is difficult. My right hon. Friend the Member for North Wiltshire (Mr. Needham) produced some carefully worded guidelines on how difficult government is and how practical we should seek to be.
Mr. Jim Cunningham (Coventry, South-East):
We have had about four and a half hours of debate on the Scott report. So far, however, I have heard no mention of the consequences of the collapse of Matrix Churchill and the effect of Ministers' actions, directly or indirectly, on the employees of the company. For various reasons the employees were not allowed to present a case for compensation. They were allowed to give written but not oral evidence. In effect, they were not given their day in court. We claim that we are a just society, but in a major investigation--probably one of the biggest this century--some of the principal players were not allowed to give oral evidence.
We have heard much about the national interest, but what about the local interest? What about the people of Coventry? What do they think about these events? Ministers and Conservative Back-Bench Members have not said a word about the feelings of the people of Coventry. They have not talked about those who were employees of Matrix Churchill. That is well documented, however, and I do not want to go through it this evening.
It was the collapse of Matrix Churchill in 1992 that triggered the Scott inquiry. That in itself merits an investigation. The collapse left over 600 skilled men and women--many in my constituency--out of work. It is an area that had already witnessed the decline of the manufacturing and engineering industry. Those employed
in the manufacturing industry in the west midlands, and especially in Coventry, had experienced the traumatic recession of the 1980s. Yet these people were denied access to justice through an inquiry into the collapse of Matrix Churchill.
An inquiry would have served several purposes.It would have established whether Matrix Churchill would have collapsed without Government interference in its affairs. It would have established also whether ex-employees were entitled to compensation for loss of employment. It would have given ex-employees the chance to present their case. As I have said, that opportunity was denied them during the Scott inquiry, except for written evidence. It has been suggested for some while--at least since Sir Richard Scott defined the remit of his inquiry--that there should be a second inquiry. That is the only way in which the ex-employees will get justice.
Ministers and civil servants had the opportunity to defend themselves and present their version of the truth. While that took place, the ex-employees watched from afar. They were not allowed to give oral evidence at the Scott inquiry, despite the fact that their livelihoods vanished with the collapse of Matrix Churchill. They are the forgotten victims. I remind the House of their grief, their loss and the need for justice on their account.
The Government have claimed consistently that there is no case for a separate inquiry into the collapse of Matrix Churchill. The Government's principal argument has been that the company was over-reliant on the Iraqi market. When United Nations sanctions were imposed on Iraq after the invasion of Kuwait, the market was lost and the company collapsed. The Government said in April 1994 that the company was trying to find orders at what can be described only as a very bad time. They said that it was as simple as that. Such loftiness would be laughable were the future of more than 600 people not at stake. But the case is far from simple.
There are many reasons why there should be a separate investigation into the collapse of Matrix Churchill, some of which I shall outline briefly. Was the company sustainable without the Iraqi market for its goods? The evidence is that, at the very least, there was a good chance that it was. From the 1950s, Matrix Churchill developed and marketed CNC lathes and manufactured thread-grinding machines. As at the time of the collapse there were only four thread-grinding machine manufacturers in the world, Matrix was well placed to divert its energy into that market. In addition, Matrix was the leading lathe manufacturer in the United Kingdom and the most advanced technologically. If any UK company could have branched out into new world markets for lathes, or built on existing ones, the evidence points clearly to Matrix Churchill.
It must not be forgotten that in 1991 the company was planning a new range of lathes, which it was confident would be world beating. Although it is true that it exported heavily to Iraq, the middle east was not its only market. It traded also with Germany and Japan. Indeed,it exported 60 per cent. of its products, excluding those to Iraq. Had the company had the same encouragement to develop its markets in other areas--the encouragement that it was given to trade with Iraq--there may have been many potentially lucrative markets.
It was not only to Germany and Japan that Matrix could have looked. In the early 1990s the company was beginning to build relations with eastern Europe. It was planning to involve itself in the rebuilding of the manufacturing industry of the former eastern bloc. It may be speculative to suggest that eastern Europe could have been a lifeline, but there is strong evidence to suggest that it might very well have been that.
Eastern Europe desperately needed manufacturing expertise. Matrix was a leading UK company, with a proud tradition and a highly skilled work force. It could have become involved in, for example, Poland, the Czech Republic and Hungary. Such markets could have helped to sustain the company. In short, the case that Matrix was nothing without Iraq is far from true. There were other markets in which it could have become involved.An inquiry would have been able to examine whether Matrix would have survived. The very fact that the question is uncertain merits an inquiry, not least because the livelihoods of so many people are at stake.
That brings me to my second point: whether Government involvement was in any way to blame for Matrix Churchill's demise. That is central tothe ex-employees' argument for compensation.If Government interference was partially to blame, the case for compensation is irresistible. Again, an inquiry would establish the truth.
It is clear from the evidence, for I want to stick to the evidence, that Matrix Churchill was encouraged by the Government to export to Iraq. If, as the Government claim, the company was over-reliant on Iraq, the Government are to blame. At a meeting between a former Minister of Defence, Alan Clark, and Matrix Churchill executives, Mr. Clark advised on how to make applications for export licences. It was given the nod to export to Iraq. No attempt was made to encourage exports elsewhere. Therefore, had the Government demonstrated reluctance to grant further export licences, Matrix Churchill may have been forced to redirect its efforts. The other markets, which I have described, would have been exploited. Iraq would have been left aside. The Government gave no consideration to that, and for that reason alone there is a strong case for a separate inquiry.
It is evident that Matrix Churchill was being used, through the work of one director, to gather information on Iraqi procurement. Did that contribute directly or indirectly to the collapse? A separate inquiry would establish that. Yet there is one more aspect to consider. There was a chance of a management buy-out--a chance that collapsed with the company. Matrix Churchill was controlled by Iraqi directors through a company called Technology Development Group. The management of Matrix Churchill planned to buy out the Iraqi equity and achieve sole control. That was also the intention of the Iraqi directors. On 21 December 1990, the executives cleared a statement with the Department of Trade and Industry, which read:
It continued:
There appears to have been sufficient interest in Matrix Churchill for a buy-out. Financial backing was available. But the arrest of Matrix Churchill directors, leading to a
trial that should never have taken place, scuppered the buy-out deal and signalled the demise of the company. That mistake on the part of the Government--a conclusion reached in the Scott report--cost Matrix Churchill its future and the jobs of more than 600 people.
"an able lawyer, a good advocate and a man of total decency and integrity".
"The directors are more confident that the deal to buy-out the Iraqi financial interest will succeed."
"At a meeting this week, the DTI recognised our efforts and indicated that a speedy resolution of our plans to acquire 100% equity in the business would be welcomed."
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