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Noble Lords: No!

Lord Hailsham of Saint Marylebone: My Lords, this is what he said:

the prosecuting counsel.

    "That was the first question for the judge. He decided that immunity was properly claimed".

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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

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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

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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 be 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

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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 arms 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 be 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.

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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--

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