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Lord Ackner: My Lords, I wonder whether my noble friend would read the rest of the quotation.

Lord Williams of Mostyn: My Lords, I certainly shall. I am giving page by page references so that no one is misled. The Attorney stated at page 1354,


I am most obliged to the noble and learned Lord, Lord Ackner, for asking me to read that out as I shall return to the matter later. The Attorney continued, referring to the limited scope of paragraph four of the certificate,


    "which can if necessary be emphasised by counsel for the Crown".

We shall discuss in a moment or two whether counsel for the Crown was either put in possession of information to make that emphasis; whether he was instructed to make that emphasis; or whether he felt bitterly aggrieved that he had been kept in the dark. As I said, we shall discuss that matter in a moment or two.

Page 1355 concerns the Heseltine certificate. It states,


    "In making this certificate I emphasise that my concern is only with the question whether the documents to which I have referred fall within classes of documents which are prima facie immune from production. Whether in fact all or part of any individual document or documents should be disclosed is a matter for the Court".
A letter written by Mr. Heseltine on 11th September is referred to on page 1357,


    "I am glad that a way has been found of reconciling the fact that I am under a legal duty which I cannot waive, to claim immunity from disclosure of certain documents on grounds of public interest with the fact that, in my view"--
these are the words that matter--

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    "at least some of them ought to be disclosed in the public interest".
Mr. Heseltine gave this letter wide circulation within the DTI. Copies went to junior Ministers and senior officials. He took steps to try to ensure that the other Ministers who had signed PII certificates were made aware of the limited nature of his own certificate. I have already referred to page 1357. I shall not quote further from that page but should noble Lords wish me to read further sentences from it I shall be happy to do so.

Lord Ackner: My Lords, will the noble Lord read the top of page 1357 before he leaves it?

Lord Williams of Mostyn: Certainly, my Lords. Page 1357 begins,


    "Mr. Heseltine signed the Certificate in its redrafted form. Before doing so--"
as I have already indicated quite plainly--


    "he read with some care the All England Report of the Makanjuola judgment and marked the passage at p.623 between g and h. The sentence ... 'the ultimate judge of where the balance of public interest lies is not him [i.e the Minister] but the Court' was, said Mr Heseltine, 'the clinching part as far as I was concerned'".
He quite plainly therefore was saying that he felt driven to sign a certificate. Even then he signed an amended form and he signed it with reluctance.

There is a difference of view between the Attorney and the Deputy Prime Minister about what one had said to the other. Page 1358 states,


    "The Attorney General has commented to the Inquiry that Mr. Heseltine had not put his concerns in the kind of language which he used in evidence to the Inquiry".
The conclusion that Sir Richard reaches is the following,


    "I have already noted that Mr. Heseltine was not aware that he could, in a clear case, agree to disclosure. Having regard to the last sentence of the main passage cited above from Miss Wheldon's Note of 4 September (Mr. Heseltine 'does not want to be party to the suppression of documents which are helpful to the defendants'), it should have been obvious that Mr. Heseltine was indicating in layman's terms that, where (as he believed to be the case) the documents were helpful to the defendants, they ought to be disclosed".

I am assisted as always by my noble friend Lord Merlyn-Rees in making me conscious of the fact that time is passing and that I must not trespass too long. However, these are important matters which perhaps might bear even a second or two more to be squeezed out of the orange. I have to omit some pages of the report but I shall continue as quickly as possible. Page 1369 states that Mr. Moses, QC, as prosecutor,


    "asked repeatedly to be supplied with copies of the flagged documents ... His exasperation is evidenced by a manuscript note dated 29 September 1992 ... The note refers to Mr. Moses 'crawling up the wall' on account of his lack of instructions on PII ... He has made the reasonable point that all documents relevant to Government knowledge ought to have been shown to him and that, to the extent that they were not shown to him, it was impossible for him to discharge his responsibilities as leading counsel".
That prosecution was being directed by the leader of the Bar of England and Wales--the present Attorney.

I wish to refer to a matter in parenthesis. The noble Baroness, Lady Denton, was a junior Minister in the DTI at that time. She is now, of course, a well regarded--and affectionately regarded--and trusted

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junior Minister at the Northern Ireland Office. She was pressed to sign one of these certificates for several hours. On page 1370 it is reported:


    "At the end of the meeting, Baroness Denton had decided 'she did not feel confident to sign the certificate' and would not do so".

There are many other citations I can offer.

The burden of the criticism against the Attorney-General is this. Alan Moses, QC, was not fully instructed. The Attorney-General recognised what was as plain as a pikestaff; namely, that he needed to take an overall view and responsibility. Indeed, he said that he was doing so. He failed to do so. The Heseltine reservations were not properly put before the trial judge. They were not properly put to Mr. Moses, who bitterly complained to Sir Richard Scott--rightly, as Sir Richard found.

I do not suggest for one second that Sir Nicholas Lyell behaved in a wilfully wrong manner, that he was motivated by wicked intent or anything of that kind. I do not suggest that for a second, as I hope I have made plain throughout the last 22 minutes. However, he was derelict in his duty. The summary of Sir Richard Scott finds him personally to blame and constitutionally responsible. That is a thrust to the heart. Under an honourable government this Attorney-General would have had to go.

7.41 p.m.

Lord Rawlinson of Ewell: My Lords, two years ago I publicly expressed my anxiety about the procedures in the Scott Inquiry. That was long before the draft report, let alone the final report, was published. I have some experience of public inquiries. I was a witness in the Denning Inquiry into the Profumo case, which was a form of inquiry so condemned by Lord Salmon that we hoped we would never see it again. I have been counsel for a party in other inquiries and counsel as a Law Officer in several. Nothing I have learnt since has altered my opinion that this procedure was hopelessly flawed.

The judge sat alone, eschewing assistance. My noble and learned friend Lord Howe referred to various recent tribunals where there was assistance. I look back to the Lynskey tribunal or the bank rate tribunal where again the judge would not have dreamt of sitting alone. Only in minor criminal cases before the stipendiary magistrate does a judge sit alone. If it is a serious criminal case he has a jury. In a libel action, where honour and repute are at stake, one is entitled to a jury because it is dangerous to trust the decision of one man. Therefore, I regretted that Sir Richard Scott made the decision to sit alone.

He then adopted Chancery procedures, with the written questionnaire, the reply and the accusatorial cross-examination by counsel. It was extraordinary that counsel should sit beside him. I have been counsel in tribunals, but I would not have dreamt of sitting beside the inquirers. It is strange that Sir Richard Scott should have permitted that.

Sir Richard then proceeded without allowing any confrontation by legal representation, public submissions or argument. That was an immense flaw. It

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is not a procedure for inquiries which should be followed again. It is axiomatic in our society, as it is in the United States' constitution and the European Convention on Human Rights, that one is allowed legal representation to play a public part in proceedings. Sir Richard Scott's defence was that it would have been too unwieldy and was unnecessary. As my noble friend said, it would not have been as unwieldy as this exchange of documents. It would have been easy to identify those people who should be given representation.

Thirty years ago the Labour Government set up a D-notice inquiry by Privy Counsellors. It was said that the Daily Express had breached D-notices warning the press against publishing matters which were contrary to the public interest. The Daily Express published a report that overseas telegrams were read and examined before they were sent. There was a public outcry. The Government set up the inquiry under Lord Radcliffe with Selwyn Lloyd and Emanuel Shinwell. The outcome of the inquiry was that the Daily Express was exonerated and it was said that there was no breach of the D-notice. The Labour Government published a White Paper rejecting the report of the inquiry which they had themselves set up.

Years later Mr. Harold Wilson, as he then was, spoke to me. I had been counsel for the Daily Express and Sir Max Aitken, and had been allowed to make submissions and cross-examine the then Foreign Secretary, Mr. George Brown. That was an experience not to be forgotten. Mr. Wilson told me that he knew that he had made a great mistake in not ensuring that the Government had been represented at that inquiry by the Attorney-General to make public the Government's case which, he said, had gone by default. Fairness, he felt, had not been seen to apply.

Lord Radcliffe spoke in the debate on the matter because the Government had rejected his report. However, he did not give a press conference. It is a little rich for the ubiquitous secretary to the Scott Inquiry to complain that the press and Ministers had used soundbites when Sir Richard Scott had held a press conference and had not left his report to be read for itself.

I come now to the question of the Attorney-General. Apart from myself, only the great noble and learned Lord, Lord Shawcross--who is now 94 and, I am glad to say, going strong--and Sir Patrick Mayhew have had experience of the role of Attorney-General. For those who do not know the office--one of my successors as Chairman of the Bar, who has just spoken--it is an immense burden. The Law Officers' Department is a very small department. It has a mass of business. In my time the Law Officers used to spend much time in court when major government interests arose and conducted major prosecutions. I accept, but regret, that that is now rare. There is now an immense burden of giving advice.

The advice of the Attorney-General is not based, as the noble Lord, Lord Jenkins of Hillhead, seemed to think, on the Attorney-General's personal legal expertise. I have looked up the opinions of some of the noble Lord's heroes of the 19th century. They had a

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great deal of assistance from junior counsel. The advice that the Attorney-General gives is based on research and assistance from the lawyers in his department, by the lawyers of the Treasury Solicitor and government departments' lawyers, and also by Treasury Counsel, who are in private practice and chosen because they are pre-eminent in their field.

To illustrate the calibre of those who advise the Attorney-General, when I was Attorney-General, among those who gave me advice, which combined to form the Attorney-General's opinion, was the noble and learned Lord, Lord Slynn of Hadley, who was my junior in common law. The noble and learned Lord, Lord Woolf, was my junior in the Revenue. Lord Justice Gibson was my junior in Chancery. Judge Edward Cussen was my Treasury Counsel in crime. They were specialists. That is what is meant by the Attorney-General's opinion. All those come together; whether it is Chancery, Revenue or crime, one gets the best assistance. Therefore, the Attorney-General's advice has a weight and authority which is usually greater than that of ordinary advice. But it does not always mean that it is right. As with all legal opinion, it is not always found to be correct. Nor is any judgment, until eventually we reach the noble and learned Lords on the Judicial Committee who eventually pronounce; and that then is the law.

I remember the Thalidomide case. It was a test case brought at the suggestion of Mr. Harry Evans, editor of The Sunday Times, on which I had not only advised but, strangely enough, had been also a party and counsel. We set off on that great chase. I won in the Divisional Court, with three judges on my side: three nil. I lost in the Court of Appeal, with the noble and learned Lord, Lord Denning, and two others against me: three all. I was upheld in the House of Lords: five up. The decision of the noble and learned Lord, Lord Denning, was reversed. Later that controversial court, the Court of Human Rights, criticised the United Kingdom law of contempt. But the point was not what the UK law ought to be but what it was meant to be at the time. So the noble and learned Lord, Lord Denning, got it wrong. The noble Lord and learned Lord, Lord Denning, was often reversed. The House of Lords was continually reversing his decisions. I am sure that opinions of Sir Richard Scott have been reversed. Are you meant to resign? Are you meant to leave office if you have been reversed because a senior and superior court has a different opinion? Of course you are not. It is utter nonsense.

One of the wisest statements in the report is at page 1536. I promise noble Lords that this will be the only part that I shall quote. Sir Richard Scott says,


    "Judges are fallible".
By heavens, my Lords, so they are, as every judge knows.

So this inquisitor--because that is what he was--had to look, as he should do, at what the law was then. He should then have asked, whether or not he agreed with the answer in the end, "Was the Attorney-General's opinion a respectable, tenable opinion backed by the opinion of other distinguished lawyers and founded on

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reasonable interpretation of judicial decisions?" If it was, even if he disagreed with the decision, he had no right to make a condemnation. That was grossly unfair.

But was the Attorney-General wrong? Your Lordships have heard quite clearly today that he was not wrong. We have already heard from the noble and learned Lords, Lord Lloyd of Berwick and Lord Slynn of Hadley, that he was not wrong. They disagreed with Sir Richard Scott. To reach his decision, Sir Richard Scott had to disagree with the decision of the noble and learned Lord, Lord Woolf, when he was counsel; he had to disagree with Mr. Justice Collins when he was counsel (he later criticises him); he had to disagree with Mr. Justice Laws when he was counsel; with Mr. Kalisher QC, at that time chairman of the Criminal Bar Association; and with Mr. Richards, Mr. Charles, Mr. Moses QC, and Mr. Justice Hodgson. Over whether public interest immunity applied to criminal cases, he had to disagree with Lord Justice Phillips. With regard to there being a balancing exercise in criminal cases, he had to disagree with the Lord Chief Justice, Lord Justice Simon Brown; and he disagrees with Lord Justice Bingham and the noble and learned Lord, Lord Donaldson, and Lord Justice Mann in the Osman case.

In his tortuous paths--I fear that they were extremely tortuous--to prove that the Attorney-General's advice in 1992 was wrong, he rejects, or slides around, the opinions of many distinguished counsel and rejects the judgments of distinguished judges. He then comes out with the condemnation. To brand the Attorney-General as culpably incompetent, as suggested by the leader of the Opposition, is grotesque.

In the House of Commons on the Opposition Front Bench, I used to shadow Sir Elwyn-Jones, as he then was. As happens from time to time--I hope that it will not occur in a year or two--things change. I was on the Government Front Bench and Lord Elwyn-Jones on the Opposition Front Bench. As a matter of principle, we tried to keep matters of law apart from the rush and tumble of party politics; and that, I believe, is what ought to be done.

As regards Matrix, the Attorney-General has constitutional responsibility because he has the ultimate sanction of entering a nolle prosequi. As to his personal responsibility, I disagree with the noble Lord, Lord Williams of Mostyn. He must be allowed to rely on an experienced prosecutor--and there is no fairer and more experienced a prosecutor than Mr. Moses--and on the solicitors for Customs and Excise. He does not superintend, although I agree that he should superintend, the prosecutions of Customs and Excise, as he does the Crown Prosecution Service and the Serious Fraud Office. He should be able to superintend them because, as has been said, they are too much of a loose cannon.

He did not read the papers because he was asked a specific question on public interest immunity as to what was the duty of Ministers and what was the law. He answered that, and he answered it correctly. He saw prosecuting counsel and the Customs and Excise solicitor. He assured himself that the prosecution was fair. He was confident. The situation was not unique.

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Listening to the noble Lord, Lord Hutchinson of Lullington, one would think that the position was extraordinary. It was not unique. Judges have to look at documents which are the subject of public interest immunity. He knew that the judge would have to do that.

Judge Smedley (now Mr. Justice Smedley) saw, as Mr. Kalisher QC, emphasised, Mr. Heseltine's certificate. Mr. Kalisher states that it makes Mr. Heseltine's views clear from its terms. All defence counsel save one--and he was the one the BBC, of course, paraded on television--stated in the clearest terms after the trial that the issue of disclosure had been properly, fairly and openly dealt with by the Attorney-General and prosecuting counsel.

Finally, I confess that with a report of an inquiry so flawed in procedure, so contrary to principles of natural justice in this country, I would be tempted to throw in my hand and return to the more rational, adult and certainly more lucrative life of the Bar. But I would do that not because I ought to but because I have been sickened by the misconceptions of the role and of the conduct of an Attorney-General by those who have never held the office and do not understand it. I have been sickened by modern party political battles which are so much less civilised than they were in my day. I have been sickened by the power of an ignorant, ill-informed, malevolent and unscrupulous television media, and some of the rather woolly minded columnists, one of whom I read today.

Sir Nicholas Lyell has decided to tough it out. That is the braver course. For that he is to be admired and not to be traduced.

7.58 p.m.

Lord Wilberforce: My Lords, my only excuse for addressing a few words--they will be only a few--to your Lordships this evening is that I find myself at three points very much in empathy with the Scott Report. First, many years ago I spent a period in the upper reaches of the Civil Service. Therefore, by contrast with most of my judicial colleagues, I have perhaps a little understanding of the way in which government works from the inside. Secondly, I had the honour to be a member of the judiciary for a short period in the same section as Sir Richard Scott.

Thirdly, I have presided over some inquiries under different procedures. That has given me, no doubt, an opportunity of appraising the value and the high quality of the Scott Report. It has also enabled me to form some opinion as to the procedure adopted in that report. I shall not go into that, but I must say that I find myself very much in line and in sympathy with what has been said by that formidable trio on the second Bench--the noble and learned Lord, Lord Howe of Aberavon, the noble Lord, Lord Rippon of Hexham, and the noble and learned Lord, Lord Rawlinson.

From the period that I had in the Civil Service I learnt three things: first, the enormous complexity of the nature of government in the formation and carrying out of policy, especially where several departments are concerned. It is difficult to obtain a clear, consistent,

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easily describable picture. The whole thing is muddy and not transparent. Secondly, I received a clear impression which I retain to this day of the remarkably high standard of integrity--and that hardly needs saying--and also of concern in the Administration for constitutional propriety, especially in relations with Parliament. There is an almost obsessive care in securing the accuracy of information supplied to Parliament. It exists and always has existed. Thirdly, I recognise a degree of tension between the Executive on the one hand and the legal system and the judiciary on the other. There is the consciousness that out there, in the legal system, are methods of thought, sets of values, and conventions which are different and which above all use a different language from the methods, conventions and language used by those who form government policy.

One has to bear that in mind when listening to criticisms of the Scott Report. Of course, Sir Richard, as a highly intelligent judge, is quite conscious of the possible gap in the relationship and of the difference in methods of thought between the two worlds. He has made great efforts to adjust to them, but the difference remains, underlying his approach. I shall return to it in a moment.

I do not wish to discuss the subject of public interest immunity. Your Lordships have heard an authoritative statement by my noble and learned friend Lord Lloyd of Berwick. Other noble Lords have joined in and I have no doubt that any loose ends will be more than adequately gathered up by my noble and learned friend Lord Ackner who is to speak later. I leave it entirely to them.

I wish to say something about misleading Parliament which has occupied so much attention in the media, to the extent of becoming almost a witch hunt. It has been powerfully taken up this evening by the noble Lord, Lord Richard. It is quite clear that Sir Richard Scott, in his report, has accepted in full that Mr. Waldegrave had no intention to mislead Parliament. His honour is totally cleared; it ought never to have been impugned. What is in some dispute perhaps is whether what he said or wrote about the Government's policy was objectively misleading to Parliament. The Scott Report says yes, and that we have to consider for ourselves.

There we return to the difference in approach which I mentioned a moment ago. The lawyer's approach, which is basically the approach of the report, is to take the words used, compare them with a set of facts which is found to be established and then to judge whether there is a discrepancy between the two. If so, it is misleading. That is what Scott did in the report. He took the words used by Mr. Waldegrave, quoted them and said: "No possible reading of those words used could be taken to conform with the facts". That is what the noble Baroness, Lady Thatcher, described as legal "exactitude".

However, there is another approach which I believe the Government urge upon us and which was commended to us by the noble Baroness. It is an altogether broader approach. We must consider what was said in the context in which it was used. The context

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is of an accepted practice, known well to Parliament, that one does not give particulars of arms sales, especially where two different states are concerned. I need not emphasise to your Lordships that the states concerned are Iran and Iraq, which presented a situation of particular sensitivity all through the relevant period. We must consider statements in the context of the guidelines which were confessedly and purposely made flexible. We must consider that it was obvious to everyone, as the noble and learned Lord, Lord Hailsham, made clear that Guideline 3 could not continue to apply after the ceasefire. That was self-evident and therefore there had to be some change. In the admirable words of the noble Baroness, Lady Thatcher, there was an,


    "evolution of the guidelines",
under changing circumstances. That is what existed and it was part of the context.

We must also consider that the context of what was involved was not the supply of weapons or what is called "lethal" equipment, but mainly machine tools. We must consider the context that what was relevant and important in the way of intelligence had not been made available to the Ministers concerned. All that was part of a complex system, worked out across the departments and known well to exist by Parliament, to whom the statements were made.

The system may be unsatisfactory. The very great value of the Scott Report is that it gives the arguments and the materials and it points the way for a change in approach if Parliament chooses to take it, in the direction of less secrecy or further examination by Parliament. But it would be wrong and wholly unjust to lay criticism, and still less sanctions, on those persons who, let us remember, were not centrally in the policy area and who bona fide--and I emphasise bona fide--had been working the system in what they saw to be the national interest. There is no dispute about it, in the end it was in the national interest. Again, I refer to what the noble Baroness, Lady Thatcher, said. On the issue, whatever we find in the Scott Report, I suggest that Parliament can and should take its own view. Let us hope that both here and in another place that view will be just.

8.7 p.m.

Lord Campbell of Alloway: My Lords, I totally accept all that the noble and learned Lord, Lord Wilberforce, said, particularly about the practical approach to the problem to which my noble friend Lady Thatcher referred. The report has great intrinsic value which lies in its findings and recommendations. They lead and have already led to better dissemination of intelligence reports, consultation as to how to update export controls, perhaps a review of the PII system, all-party talks on ministerial accountability, better disclosure of departmental documents and so on, in an effort to improve the ordering of government.

In that regard, Sir Richard has assuredly rendered an important public service and he is much to be congratulated. That is the purpose for which an inquiry of that nature is set up. It is not to put Ministers on trial

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and convict them for misconduct, as is recognised by the absence of any summary of conclusions. The leader in The Times entitled "The Bad Attorney", referred to by my noble friend Lord Rippon of Hexham, found Mr. Attorney guilty of incompetence which rendered it his duty to resign. That was a vilification. It was based on a series of erroneous assumptions of fact, corrected by Mr. Attorney in his reply in The Times today.

Adverse comment, based on a wholly erroneous substructure of fact, albeit on a matter of public interest, may never be considered as fair. Talk about trial by the newspapers. This about takes the biscuit! On the same substructure of erroneous fact adopted by the noble Lord, Lord Richard, we have trial by the noble Lord, Lord Richard, who also finds the Attorney-General guilty, and Mr. Waldegrave as well. That was a similar order of trial, and was similarly unfair.

At least, the noble Lord, Lord Jenkins of Hillhead, did not set out on a head-hunting expedition to find his scalps after the fashion of the noble Lord, Lord Richard. However, the noble Lord, Lord Jenkins, fell into serious error on one or two occasions. He referred to Scott being appointed "to try". Scott was never appointed to try anything. He was appointed to inquire, report and recommend. The noble Lord referred to the duty to sign being automatic. It is nothing of the sort. The Minister had to decide for himself--nothing was automatic--whether the documents fell within the class. However, there is no merit at this hour in picking out small objections.

The purpose is to assert that the conduct of the Attorney-General was totally correct, as was his advice; and that the integrity of Mr. Waldegrave has been unjustly impugned; that there was no ministerial conspiracy to cover up; and that the proceedings were properly instituted. To make good those assertions one has to enter a sort of maze of pick-and-choose, indulge in a novel pastime and selective interpretation of passages in a voluminous report to seek to establish which findings are made in which context and which inter-relate. Already, this sodden field has been trampled into a quagmire. And already, the order of contention has reached a storm in a very nasty, very dirty political tea-cup, from which the papers and other media avidly imbibe--today, alas, in company with the noble Lord, Lord Richard.

Before entering the maze, noble Lords may wish to consider whether the findings in this inquisitorial process are apt to found serious allegations of misconduct on which to hound my right honourable friends out of office. There has been no finding of misconduct by any recognisable judicial process. Under this inquisitorial process there is no specific charge of misconduct to answer. The inference of misconduct was nebulous and evolved, or emerged, from the answers of witnesses under sustained adversarial questioning, to which my noble and learned friend Lord Howe and my noble friend Lord Rippon of Hexham referred. That is a potent ground of appeal if adopted by a judge in any judicial proceedings. There was no opportunity for the witness to question the questioner, or any other witness. There was no legal representation. There was no

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opportunity to answer any specific charge of misconduct, and none was ever formulated. An opportunity to comment on or correct a draft was not offered.

It is not the inquisitorial process as such that is open to criticism, but the manner in which it was applied. My noble and learned friend Lord Howe, my noble friend Lord Rippon and the noble Lord, Lord Armstrong of Ilminster, referred to that, and I agree with them. But most of all the problem is the use to which these findings have been put since publication of the report: using such findings as definitive judicial determinations of misconduct. That is a use to which they were put today by the noble Lord, Lord Richard. They are not, and could not properly have been, anything of the sort.

As to the findings in the report critical of the advice given by the Attorney-General as to Ministers' duty to sign, enough has been said by those who carry far more authority than I could ever master.

I turn to the conduct of the Attorney-General. That has been criticised, and there is no cause for such criticism. There was no cause for the Attorney-General to read the papers, for the reasons already given. He was asked what was the position in law, and it was his duty to answer. It is the judge who reads the papers and forms the view. There was no basis before him on which he could have entered a nolle prosequi. The Attorney-General has no statutory supervisory duty over the C&E, but he did satisfy himself that the proceedings were fairly instituted. He reasonably assumed that his correspondence with my right honourable friend Mr. Heseltine would have been available in court, as copies were sent by him to the Treasury Solicitor and, as my noble and learned friend Lord Hailsham said, apparently they reached the judge. The Department of Trade and Industry did not reply to the Treasury Solicitor's letter suggesting that counsel should be instructed to make representations to Mr. Heseltine. When the newspaper report suggested that Mr. Alan Clark had given a nod and a wink to breach the guidelines, the Attorney-General saw to it on his own initiative that Mr. Alan Clark should be asked whether his written statement, in which no mention was made of this, was correct. This was done on 18th September 1992 by telephone, because Mr. Clark was busy and for some reason could not come to London. Again, on 11th October, the day before the trial, Mr. Alan Clark confirmed that his statement was correct. It was confirmed twice: on 11th October and 12th October. Before the trial started on the 12th, all the relevant material had been disclosed to which the certificates were related.

It was suggested that in relation to the guidelines Mr. Waldegrave lied to Parliament and did so deliberately, and that he also lied in certain correspondence. Sir Richard found as a fact that my right honourable friend regarded the relaxed interpretation of Guideline 3 as revised (when the old one was overtaken by events) as being a justifiable use of flexibility believed to be inherent in the guidelines. The rectitude of such belief was subsequently affirmed by a Cabinet Office paper on 15th February in the government information pack. Sir Richard also found as

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a fact that my right honourable friend did not regard the agreement that he had reached with his fellow Ministers--namely, the revision of Guideline 3--as a change of policy towards Iraq. Sir Richard also found expressly that there was no insincerity in any of his answers.

The noble and learned Lord, Lord Wilberforce, as usual, probably holds the key; namely, from which end of the telescope does one look at the matter? Does one take the lawyer's approach or the practical, ordinary, commonsense approach? On the practical, ordinary and commonsense approach is not the noble and learned Lord totally correct? Here there is a system in which for years there has been a policy of no information on arms sales for various reasons--foreign policy, trade policy and all sorts of policy. There are guidelines in force and flexibility. Is one to suppose that a Minister of State, who does not look at matters like a lawyer but as an ordinary, commonsense person, would think that there had been a change of policy? Anyway, that did not happen. My noble friend Lady Thatcher says that there was not. My noble and learned friend Lord Howe says that there was not. Good heavens, I should have thought that that alone would be enough. But Mr. Waldegrave says that there was not and my noble friend Lord Trefgarne says that there was not. The only person who says there was is Mr. Alan Clark. That was a fanciful suggestion made to an answer in cross-examination which was wholly misconceived.

One wonders whether those who maintain that Mr. Waldegrave deliberately lied to Parliament are entirely familiar with the guidelines and in particular Guideline 3, which was revised after the ceasefire. It has been referred to already. That revision, as noble Lords may not remember, was proposed by Mr. Alan Clark, who discussed it with Mr. Waldegrave and with my noble friend Lord Trefgarne. It was approved by the Secretaries of State, the DTI, the FCO, the MoD and the Prime Minister.

The Matrix Churchill application for the licence stated that the end use was for civilian purposes, which it was not. But Mr. Waldegrave, whose integrity I seek to defend, would not have granted it in any case if he had seen the intelligence reports. At no time has a deceitful application been allowed, encouraged or condoned. All suggestions of Mr. Alan Clark to the contrary, under cross-examination, were misconceived.

The flexibility is self-evident in the guidelines and in particular in Guideline 3. The exercise of discretion took account of such matters as the ceasefire, the fatwa, the execution of Bazoft, hostages in the Lebanon, the capability and likely use of equipment, the viability of engineering concerns (and employment) in competition with those in other countries which had no export restriction, and so on--a myriad considerations. It was found by Sir Richard that the overriding and determinative reason was to protect British industries.

I ask your Lordships whether it is realistic to maintain that, in answer to a parliamentary Question in either House at that time, the guidelines should have been disclosed together with the case-by-case manner of discretionary enforcement. Even if Sir Richard's finding

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were correct, surely this was the kind of special situation in which, having regard to the other factors taken into account, the withholding of information could well be justified apart from the intelligence factor, which was not known to Mr. Waldegrave. On this matter, is it not reasonable to accept that the agreed response to parliamentary Questions and correspondence gave an adequate description of government policy: that the,


    "guidelines are kept under constant review and are applied in the light of prevailing circumstances, including the ceasefire and developments in the peace negotiations",
as indeed was the case? Reference has been made to Erskine May. My noble and learned friend Lord Fraser of Carmyllie referred to it. These guidelines, as the term expressly recognises, have no legal efficacy or mandatory effect and had inherent flexibility.

The question of the conspiracy seems now to have been dropped. I conclude with a short word about the institution of proceedings. Matrix Churchill applied to export to Iraq two machine tools: one computer programmed to make shell cases and fuses and the other to make multi-parts for a multi-launcher rocket system. The end use to which such dual purpose, non-lethal defence equipment was to be put was one of the main factors which had to be taken into account in granting the application. The application falsely stated that the end use was for civilian purposes. If the true purpose had been stated, no licence would have been granted. The licence was obtained by serious and material deception. The Customs and Excise had no way in which they could not prosecute.

8.27 p.m.

Lord Rodgers of Quarry Bank: My Lords, despite the intervening speeches and the passage of time, I hope that your Lordships will understand that I cannot forbear to mention the maiden speech of my noble friend Lord Taverne. We have been close friends for almost 50 years, though it does not seem like it, and political allies in many battles. It is a very great personal pleasure to find him here. I thought that his speech was marked by great clarity, conviction and intellectual strength. I know that the qualities seen today are qualities that he will bring to your Lordships' House in the period ahead.

As many other noble Lords have done, my noble friend spoke about Volume III of the Scott Report. My text is contained in Section D of the report, and particularly Chapters 1, 3 and 4. They are all to be found in the first volume between pages 151 and 507. They concern defence policy. Many differing views have been strongly expressed in this debate, as one would expect. No doubt they and more views expressed in another place will be widely reported in tomorrow's newspapers. But I ask those who do not trust politicians any longer--they are many--and those who do not trust newspapers either, to read the report or at least read parts of it. Certainly, I should be happy to leave the final verdict to those who read the report.

I do not find Volume I of the report wordy, obscure or too long. It has a powerful internal momentum and a cumulative force. Its message is plain. Section D of the report sets out to answer two simple questions. First, was the policy on defence sales to Iraq changed after

26 Feb 1996 : Column 1305

the ceasefire? Secondly, if the policy was changed, was Parliament told? To the first question Scott answers yes and to the second no.

I listened carefully to those who spoke today in defence of Ministers and the Government's position. I cannot understand how anyone reading the evidence in the report can disagree with the verdict of Sir Richard Scott. It is not a question of whether the guidelines for defence sales to Iraq should have been changed; there may have been a case for that. The question is simply whether they were changed.

If the guidelines were changed, it cannot conceivably be claimed that Parliament should not have been told. After all, the Howe guidelines were reported to Parliament, even if almost a year late. The noble and learned Lord, Lord Howe, is not in his place, but I have to say that I found his reasons for the delay quite unconvincing. However, Parliament was at last told in October 1985. If indeed the Howe guidelines were reported to Parliament, then any change in those guidelines, however that change is explained, should have been reported as well. Sir Richard Scott's view on disclosure is unequivocal. It has already been quoted, so I shall not repeat it; it is to be found in paragraph D1.165 on page 221. His view is beyond dispute. Scott's view is also unequivocal and beyond dispute on the question of the change in policy.

I should tell the House that for two-and-a-half years in the mid-1970s I was Minister of State for Defence and directly involved in the procurement of equipment and in defence sales. Earlier I had served in both the Foreign Office and the Board of Trade, or the DTI as it became. The briefings, the exchange of minutes, the meetings described in the report by Sir Richard Scott are entirely familiar. There is nothing surprising about the course of events, except the foolishness of it all.

First, there are the remarks of an official, Mr. Simmons, of the Foreign and Commonwealth Office who says in paragraph D3.7, page 374:


    "The first phase of changing our approach would take the form of a relaxation of our interpretation of the guidelines".
The later claim that,


    "a relaxation of our interpretation of the guidelines",
did not mean a change of policy is surely logic chopping. Everyone who has served in government will know exactly what that meant. That was followed, in paragraph D3.30, by the briefing from Mr. Waldegrave which stressed the need,


    "to update our policy in the light of the ceasefire".
There was a later reference in the briefing to "shifting policy".

Finally--it has been referred to and is a major feature of the report--there was the ministerial meeting on 21st December between Mr. Waldegrave, Alan Clark and the noble Lord, Lord Trefgarne. The important text, reported in paragraph D3.36, refers to the minutes of the meeting contained in the letter written by Mr. Waldegrave's private secretary, which said:


    "The Ministers agreed after discussion that it would now be right to consider modifying [the guidelines]".

26 Feb 1996 : Column 1306

Reference is made to "adjusting our public policy" and to "the attached revised guidelines".

I do not believe that anybody reading the report and following that course of events can doubt that there was a change. It is entirely perverse--and a remarkable argument--to argue that, as any change of policy should have been sanctioned by senior Ministers and the Prime Minister, and such a sanction was not asked for, no change of policy had occurred. That simply does not stand up in the way that government works. Scott called it "sophistry"; I simply call it laughable. Of course senior Ministers should have been told. If it were not the Ministers of State themselves who conveyed the message, it should have been their private secretaries. Ministers of State--I served as one in three different departments--were out of control if they did not report to their Secretaries of State the decision that they had reached, or their private secretaries failed to do so. It is quite foreign to all my experience of government.

The best summary of what happened in this case was given by the noble Lord, Lord Richard, when he referred to the minute to the Foreign Secretary from Sir Timothy Daunt, Deputy Under-Secretary of State for Defence in the FCO, dated 18th November 1992. I shall not repeat it now. I say only that that was confirmation from the Foreign Office itself, if confirmation were needed, that there had been a change. I say that again without prejudice as to whether or not the guidelines should have been changed.

I believe that I have some experience of the context in which Ministers--in this case Ministers of State and particularly at the Ministry of Defence--make their decisions when arms sales are at stake. First, there is an exaggerated climate of secrecy in which defence matters are concealed from Parliament and the public that are harmless and common currency in discussions, for example, in Washington. The noble Baroness, Lady Thatcher, referred to the development of Chevaline, which was reported to Parliament as updating Polaris. The noble Baroness was quite right to quote that as an example of a government in which I served using such language. But I thought then, and I say now, that it was quite unnecessary to fail to report to Parliament those most important developments on nuclear policy when they were fully understood and talked about among our NATO allies.

Secondly, there was a question of commercial confidentiality, which is invoked at all times to justify the denial of information to Parliament. The Minister referred to that today. Though there is sometimes justification, it is greatly overdone.

Thirdly, there is immense pressure from the defence industry, including the trade unions within it, to maximise the sales of defence equipment. I accept the Minister's figure that there may be up to 400,000 employees of such firms.

Fourthly, Ministers who hesitate to give approval to defence sales are always told, "The French will sell to anyone, so what is the point of giving the market to them?" That is a way of persuading them, quite often, to act in a way which otherwise could not possibly be justified.

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Fifthly--there is a whole story in this which I cannot develop tonight--Ministers are also told that the export potential of defence sales will be enhanced if they first buy the equipment, despite budget restraints, for our own Armed Forces. There is a circle of persuasion, which in my view is very dangerous and seductive.

Finally, the Head of Defence Export Sales is a powerful voice in the department, with a large staff behind him. It produces a tough culture of its own, where selling arms is almost a patriotic duty which marks off the men from the boys. In those circumstances, Ministers must always stay cool and never forget their obligations to Parliament.

I am not against defence sales in principle. As I said, I participated in the making of policy many years ago. But as the right reverend Prelate the Bishop of Lichfield said, it is important that the political and moral case always has the upper hand. It must never be forgotten by Ministers, whatever the pressures upon them.

There are many countries in the world to which we can sell arms. It would be foolish not to sell arms to our NATO allies. But beyond that there must be clear and precise guidelines for defence sales; those guidelines must be agreed at the highest level of government; they must be put on record by being fully and promptly reported to Parliament; they must be implemented in the letter and the spirit without gloss or interpretation and any changes must be treated in the same way. Against such criteria it is clear from the Scott Report that the Government failed in the period 1984 to 1990 and particularly in 1988 and 1989. As others have said, it would have been far better if the Government had admitted that, both in their evidence to the inquiry and since. In refusing to do so, they have made a rod for their own back.

8.39 p.m.

Lord Monkswell: My Lords, I thought it would be useful if I explained why I am speaking in the debate, what I have learnt and my conclusions from that. I was concerned 10 days ago about the Government's Statement suggesting that everything was all right. I was also concerned about the Opposition response to that Statement which suggested that everything was all wrong. As a result of the exchanges on that day I determined to read the report and make my own judgment. I would also say in passing that I put down a Question for Written Answer asking who in the Government had had access to the report beforehand, for how long they had had it and on what terms they had had it. I can report to the House that I am still awaiting a reply to my Question.

The Scott Report is very even-handed. I liken it to a judge summing up at the end of a criminal trial. A judge who is summing up at the end of a criminal trial has to be careful that he explains the whole case even-handedly and does not sum up in favour of one side or the other--otherwise he would be subject to appeal. The report itself reads like a thriller. It is not quite as snappy as the TV programme "The A Team", where good guys like Mr. T hammer the bad guys. The report is nevertheless a thrilling read. I am only sorry that more Members of

26 Feb 1996 : Column 1308

your Lordships' House who have contributed to the debate have not read the report. We are the jury. Initially, we parliamentarians have to decide who the good guys and the bad guys are. But ultimately it will be the British public who will decide in a general election.

I had two central questions to which I sought answers in reading the Scott Report. First, did Ministers mislead Parliament? Secondly, did government action through withholding evidence for the defence put at risk the liberty of innocent men? Having read the Scott Report, I find the Government guilty on both counts. I shall not quote directly, but Volume I makes it clear that in February 1989 the guidelines were changed by the three junior Ministers, only one of whom is still in the Government, and that through 1989 and 1990 Parliament--Conservative Members, Labour Members and Liberal Democrat Members in both Houses--was advised that the guidelines had not changed. Parliament was misled.

With regard to the second charge, Volume III of the report sets out the whole shabby story. Again I shall not weary your Lordships by quoting chapter and verse. That has been done quite adequately by a number of noble Lords on this side of the House. I was curious how the Government could insist that Ministers had a duty to sign public interest immunity certificates. The way it came across was that they had no discretion in the matter--they were required to sign pieces of paper put in front of them without any regard to their own judgment. The advice given by the Attorney-General was that Ministers had to sign the PIICs as a matter of duty.

I started asking myself: a duty to whom; a duty to what; what kind of duty was it that compelled someone to sign the document using no judgment of their own? However, the reality is a little different. As I understand it--it comes through clearly if one reads the report--it is the Minister who has to make a judgment whether a document should or should not be disclosed in the public interest. It is not Law Officers but individual Ministers who have that duty. If the Minister makes a judgment that the document should or should not be disclosed, then he has a duty effectively to make that public by signing a public interest immunity certificate. The noble and learned Lord, Lord Hailsham, from a sedentary position, says that I am wrong. I call in aid Lord Justice Scott and also the interpretation that Mr. Heseltine clearly had. He felt that documents should be made available to the court but was wrongly advised by the Attorney-General that he had to sign a PII certificate about them. Mr. Heseltine was right and the Attorney-General was wrong. It was luck rather than judgment that innocent men did not go to gaol. That is not good enough.

I come now to my conclusions. Because of the way that this Government have acted we live in a world of mistrust. Parliament cannot trust Ministers to give honest answers. The courts cannot trust the public interest immunity certificates that are signed by Ministers. Effectively, every judge who has a PIIC placed in front of him has to read all the papers. He cannot trust what the Minister has signed for. The prosecuting authorities cannot trust what is government

26 Feb 1996 : Column 1309

policy and therefore in terms of the 1939 Act--now the 1990 Act--the government policy determines what is a criminal offence. This goes to the kernel of the problem. By operating a policy which determined the criminality of an action, in secret--without publicising it--the Government laid themselves open to a situation where an independent prosecuting authority--Customs and Excise--was required to operate its public duty to prosecute but was unaware, because it was never divulged, that the criminal law was different from its interpretation of it. That is an unsatisfactory affair.

Last but not least, the ordinary citizen cannot trust this Government either to tell the truth or not to subject him to arbitrary diktat. I stand here not as a party man in this case but as a parliamentarian. I judge that the Government have misled Parliament and were prepared to see innocent men go to gaol. We have had no word of apology and no sign of contrition from the Government. The whole matter was crystalised for me by the evidence given by a member of the security services, a Mr. T, when he described Mr. Henderson, a defendant in the Matrix Churchill trial, as not only "a brave man"; as not only "a very brave man"; but as "a very, very brave man". In the vernacular, Mr. T iced the bad guys. The bad guys in this case are the Government.

8.49 p.m.

Lord Tebbit: My Lords, today we have had the privilege of hearing some exceptionally fine speeches. It is a great pity that the noble Lord, Lord Monkswell, was clearly not listening to them or he would not have made the speech that he did. He failed to understand a single word said by the most distinguished lawyers of this country whom we have had the privilege of hearing today. It is a pity that the noble Lord did not rewrite his speech since, presumably, hearing those noble Lords speak.

I was fascinated earlier when I heard the speeches of the two ex-Brussels Commissioners, both of whom declared themselves in favour of open government--truly a most wonderful change of attitude since they returned home from the Continent. What is more, I fell to wondering what Sir Richard Scott would make of the proceedings in Brussels were he to be unleashed into that place where there is so much corruption, as we know from every year's report of the Court of Auditors. If we had to find another little job for Sir Richard, it might well be to send him across there to make another report which would give us all a great deal of enjoyment. In fact, hearing those two noble Lords I felt that I had never before heard two such blackened old pots pointing fingers at saucepans.

I was immensely impressed by the speech of my noble friend Lady Thatcher, which was so short, so clear and so absolutely to the point. I was also impressed by the speech of my noble and learned friend Lord Howe. I do not think that I have heard him in better form in all my life. He was clear, to the point and immensely impressive in all that he said, as were many other noble Lords, but as I do not want to detain the House I shall not refer to them all.

26 Feb 1996 : Column 1310

I wish to confine my remarks to a relatively restricted area for I have no personal insight into the events in which my right honourable friends William Waldegrave and Sir Nicholas Lyell were involved. As far as I can see from scanning the report, William Waldegrave was not involved in any dishonourable act--nor would I have expected him to be for I know few men in politics more concerned to take all of their decisions in the light of what is the best possible practice and to do so in the most honourable way.

As to Sir Nicholas Lyell, the report, the comments on it and our debate today demonstrate the truth of the old adage that he who consults two lawyers is likely to get three opinions. Today the lawyers who gave opinions favourable to the Attorney-General were the ones I have always found the most impressive.

I should like to raise one point of criticism of the Government; perhaps it is not so much a criticism as something that I still do not understand. I still remain puzzled as to why the prosecution against Henderson and others was not stopped before it ever started. I ask myself which Ministers had responsibility, through their responsibilities for MI6, for protecting those who were acting on behalf of the Government.

I do not know the answers to that question, but I do know something about Part 1 of the report which deals with the export control system, having been a Minister responsible for that matter. I noticed that on 1st November 1994 the Secretary to the Scott Inquiry wrote to the Prime Minister's Private Secretary saying:


    "this section ... underpins much of the Report which follows it".
He was wrong. It does not underpin it. That section of the report is fatally flawed. Indeed, it rather undermines Sir Richard Scott. I regret to use of Sir Richard words as harsh as those which he uses of more than 20 senior Ministers of both parties. Nonetheless, it is clear to me that through his unwillingness to look fairly at the evidence--indeed, by a willingness to reach conclusions without hearing the evidence--Sir Richard prejudiced himself at an early stage of his inquiry into the matter.

Those are hard words, so I must justify them. In May 1993 Sir Richard sent to the Government a paper concerning the framework for the control of exports. In that paper on page 2, Sir Richard states:


    "It appears to me, however, that the powers, now permanent, conferred on the Government by the 1939 Act, are totalitarian in concept and effect".
I repeat that the word used by Sir Richard was "totalitarian". I sent Sir Richard the definitions of that word from the leading English dictionaries and I asked him which he had in mind when writing that letter. Sir Richard never replied.

So here it was that at the beginning of his inquiry Sir Richard began to "underpin" much that followed in his report by a view that is unsustainable except out of prejudice. He began with a false premise--the quite bizarre belief that for half a century Labour and Conservative majorities in Parliament, born out of free and fair multi-party elections, connived to operate--let me use the Oxford Dictionary definition:


    "a system of government which tolerates only one political party, to which all other institutions are subordinated, and which usually demands the complete subservience of the individual to the State".

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It was on that foundation that Sir Richard built his report. Totalitarian? Did noble Lords opposite know that they were members of a "totalitarian" regime when they were in office? Sir Richard apparently thinks that they were. And nobody--not Parliament, not the BBC, not the press, not the National Council for Civil Liberties, not the Church, not the CBI nor the TUC--noticed that we were using "totalitarian" legislation until Sir Richard found it out for himself one afternoon. That is what Sir Richard says underpins his report.

Sir Richard finds that:


    "From 1950 at latest until December 1990 there was in my opinion a reprehensible abuse of executive power by successive administrations".

I should say that I am grateful to Sir Richard who responded to some robust letters from me by rewriting certain sections of his report to remove the very personal criticisms which he had made of me and my Minister of State, Paul Channon, in the first draft. In his final report Sir Richard now makes it plain that I am no more--nor any less--a totalitarian abuser of power than my 20 or so predecessors and successors in the office of President of the Board of Trade. Perhaps I may list a few of those who held that office between the end of the Second World War and 1990. This is a list of reprehensible abusers of power who used totalitarian legislation. The list includes Lord Wilson and the noble and learned Lord, Lord Shawcross, who was so praised today from the Liberal Democrat Benches; Lord Thorneycroft and the noble Lords, Lord Jay, Lord Mason, Lord Walker and Lord Cockfield; Sir Edward Heath, Anthony Crosland, Peter Shore, Sir John Nott, John Biffen, Sir Leon Brittan and the late John Smith. The man who finds them all guilty of reprehensible abuse of power is himself at least guilty of reprehensible abuse of language or, more likely, a serious lack of judgment.

Sir Richard came to his conclusion believing that the Cold War was not an extension of the hot war of 1939-45 and that Ministers had no need of the powers which were conferred by the 1939 Act. I explained to him that he was wrong. I gave him an example of why the powers had to be wide and immune from delaying tactics. I shall give the House the same example this evening.

While I was Secretary of State my department had granted a licence for the export of certain machinery to Czechoslovakia. We believed that it was not capable of use detrimental to the security of the West. We later became aware, through the activities of an intelligence agency, that we were wrong and that in fact the machinery was vital to the development of the Soviet Union's nuclear missiles. I inquired what had happened and I was told that some of the machinery had gone, but not all of it, and that the most vital parts had not left the country. I did not have long to act: I did not have time to play around. I had to act that day and stop the export of that material. Had there been the possibility of the seeking of injunctions or judicial reviews of my action, that equipment might well have gone to the Soviet Union. That is why we needed powers of that kind.

I do not even know whether the secretary to the inquiry who dealt with all correspondence, ever even told Sir Richard Scott or let him see my letter, for I was

26 Feb 1996 : Column 1312

never called to give evidence. Sir Richard talks of the abuse of power by more than a score of Cabinet Ministers over nearly half a century. If that had happened, I would have expected there to be an appendix to the Scott Report listing all those who had been outraged by this abuse of power. It is not there. Sir Richard lists three cases which went to law. In each case the Minister was upheld. Sir Richard is unabashed. It seems that the facts should not be allowed to distort a conclusion already reached. He simply says that the cases were not well brought. He says that if they had been brought on other grounds the plaintiffs would have won. I suppose it is always easier to be confident of the outcome of a case if one has not been confused by the evidence.

I have no hesitation in saying that this section of Sir Richard's report is a shoddy document. It attacks the reputation of more than 20 Ministers of both parties, two of whom became Prime Ministers and another, John Smith, who led his party. Few were invited to give evidence. Sir Richard reached his conclusions by being economical with the evidence. He reached a nonsensical view that Parliament allowed a totalitarian measure to be used for nearly half a century. He says that there was no parliamentary procedure to check its use. No parliamentary procedure!

Those of us in particular who have served in another place are aware of the potency of the House of Commons; the ability of Back-Bench Members to defend the interests of their constituents or employers in their constituencies by searching parliamentary questions, adjournment debates and the Select Committee procedures. If ever the Conservative or Labour Opposition had thought that there had been a serious abuse of executive power, they could on a Supply Day, have brought a Motion calling the Ministers concerned to account. In nearly half a century it never happened. Sir Richard's conclusion is that that is because Parliament does not work. My conclusion is that it is precisely because Parliament does work and it is Sir Richard who does not understand how it works. It is not surprising. I would never suggest that I should be appointed to head a law commission.

If there is one lesson to be learnt above all from this affair it is a very simple one and it was hinted at by my noble friend Lord Rippon and indeed by my noble and learned friend Lord Howe; namely, that alleged public scandals involving matters which are not in themselves justiciable, would be better resolved by practitioners of standing in government rather than by judges.

9.6 p.m.

Lord Wright of Richmond: My Lords, I decided to add my name to the long list of speakers in today's debate in view of my involvement in some of the matters during the period covered in Sir Richard Scott's report, first, as ambassador to Saudi Arabia from 1984 to 1986 and, secondly, as Permanent Under-Secretary in the Foreign and Commonwealth Office from 1986 until my retirement from the Diplomatic Service in 1991. I should add that I am not the Permanent Under-Secretary referred to by the noble Lord, Lord Callaghan, although I am the Permanent

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Under-Secretary who should probably apologise belatedly to the noble and learned Lord, Lord Howe, for having added so significantly to the 25 tonnes of paper that he took home every night.

I do not propose to enter into the political controversy about ministerial, or indeed official, responsibility for the mistakes and confusions criticised in the report beyond saying that, having worked with the right honourable gentleman Mr. William Waldegrave throughout his time as Minister of State in the Foreign Office, I wish to associate myself fully with the comments made by the noble Lord, Lord Carrington, in his letter to The Times of 20th February. I would add that many of the officials named or criticised in the report are former colleagues and personal friends of mine about whose integrity and conscientious attention to duty I have no doubts whatever.

The point that I would like to address tonight relates principally to the guidelines covering the export of defence-related equipment to Iran and Iraq, both before and after the ceasefire between those two countries. It is perhaps understandable that the Scott Report should give paramount importance to the role which the guidelines played in decisions being reached on the export of equipment, since that was part of the inquiry's remit. Although there are frequent references in the report to other considerations which Ministers and officials had to take into account in reaching their decisions, the impression emerges that the overriding consideration at all times, whether before or after the Iran/Iraq ceasefire, was a virtually automatic and rigid application of the guidelines. That, no doubt, explains the heavy emphasis given in the report to the Government's failure to publicise the modification of the guidelines after the ceasefire.

The fact is that a host of other considerations had to be taken into account on each occasion by both officials and Ministers in reaching decisions about the export of equipment to Iran and Iraq. These included foreign policy considerations, including the effect which both individual exports and any apparent departure from the guidelines might have on our political and commercial interests in the Gulf and with our allies; treaty commitments on the control of exports under COCOM, the Missile Technology Control Regime, the Non-Proliferation Treaty and the Australia Group on Chemical Exports; consular considerations, including the threat to our hostages in the Lebanon and to British subjects in Iran and Iraq; the possible threat to our Armilla Patrol in the Gulf; the human rights record of both countries, including the flagrant abuse of human rights by Iraq in Kurdistan; the continued restriction of arms exports to Israel arising from the Israeli occupation of South Lebanon; technical considerations of whether potential exports were, in fact, licensable under existing legislation; and, of course, the effect which refusal of export applications would have on the British firms concerned and on British commercial opportunities in the Gulf set against the willingness of others to supply.

Those were only some of the considerations which officials and Ministers had to weigh up on each occasion and, indeed, which ambassadors in the region such as

26 Feb 1996 : Column 1314

myself had to bear in mind in making our recommendations. A telegram which I sent from Riyadh, arguing against the supply of helicopters to Iran, and which the report claims carried weight in ministerial discussions, reflects only one aspect of the heavy and constant pressure to which I was subjected by the Saudi authorities to restrict even further our exports to Iran and to relax our exports to Iraq; pressure which, somewhat ironically in the light of the subsequent Iraqi invasion of Kuwait, was reflected in other Gulf posts.

I recall, in particular, a long-running dialogue which I had with Prince Saud, the Saudi Foreign Minister, on the meaning of the word "lethal", with the Saudis arguing on one occasion, with, I am bound to say, some logic, that large tyres for lorries should not be exported to Iran since they could be used to ferry Iranian guerrillas across the Shatt al Arab. In considering cases of this kind, the guidelines can have served as no more than a kind of rough benchmark; the political and other considerations to which I have referred will have had much greater influence on the final decisions taken by Ministers.

The only other point on which I would like to comment is the report's criticism of the failure to inform Parliament of the modification to the guidelines after the ceasefire. I can recall countless examples during my 36 years in the public service when ministerial Statements or replies to Questions in Parliament have had to be constrained by the effect which fuller disclosure could have had on our political and commercial interests abroad and occasionally on the security, if not the lives, of British nationals.

I believe that those who agree with Sir Richard Scott that any modification to the guidelines should have been publicised and reported to Parliament missed the point. The guidelines were--and rightly in my view--designed to be flexible. No British Government could have bound themselves to a rigid set of rules in such a complex and changeable situation. Least of all would that have been sensible in circumstances where the Government had constantly to take account of and adjust to the shifting range of the foreign policy, commercial and strategic considerations which I have described, many of which were the subject of frequent Statements and replies to Parliamentary Questions and of consideration in the Foreign Affairs Committee of another place.

In summary, foreign policy is not a matter of following rigid or immutable guidelines. It is a matter of exercising judgment and reacting in a flexible, responsible and considered way to rapidly changing international circumstances in a way that will best promote and protect our national interests.

9.15 p.m.

Lord Carlisle of Bucklow: My Lords, one of the disadvantages--or your Lordships may think that it is an advantage--of being the 26th speaker in a debate of this nature is that practically everything that one intended to say has already been said. I am conscious of the fact that it is now a quarter past nine and there are still 12 of your Lordships to take part in the debate. Therefore, I propose to be very brief in my remarks.

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However, I wish to challenge the conclusions reached by the noble Lords, Lord Williams of Mostyn and Lord Hutchinson of Lullington, as to the attitude of the Attorney-General. As we know, the Attorney-General has been attacked on two grounds. First, he was attacked because it was said by Lord Justice Scott that he was wrong in law to advise Ministers that they had a duty to sign the public interest immunity certificates when the documents that they were facing fell within the class which is normally caught by public interest immunity.

I was surprised by the view which Lord Justice Scott had taken. I had always thought and believed that it was the view of those practising at the Bar that, where the issue of public immunity arose, if the documents came within the class upon which Ministers are advised that immunity should be taken, then the Minister had a duty to sign those documents and leave it to the judge to weigh against that claimed immunity the interests of justice which require that a document should be disclosed.

That argument has been advanced with eloquence by the noble and learned Lords, Lord Lloyd and Lord Slynn. If I take a momentary move into fantasy and imagine myself sitting as a third member of the Judicial Committee of your Lordships' House, I need add no more than to say that I agree and have nothing to add.

The noble Lord, Lord Hutchinson, appeared to deride those noble Lords who have taken a different view by saying that they did not really understand the workings of the criminal courts. The noble and learned Lord, Lord Rawlinson, read out a list of judges to your Lordships. It is not those judicial figures only with whom Lord Justice Scott is finding himself in disagreement. As one may have seen from the correspondence columns of The Times over the past week, he is at odds with the views expressed by each of the last four senior Treasury counsel at the Old Bailey, with the views of the current chairman of the Criminal Bar Association, with the views of the previous chairman of the Criminal Bar Association, with the views of my noble friend Lord Alexander and in fact with the views of at least one other--Mr. Robert Seabrook, chairman of the Bar Council.

I hope that the noble Lord, Lord Hutchinson, will at least give credit for the fact that he would respect those people, with whom he has often done battle in the past, as men of honour and integrity and accept that they also, as criminal practitioners, believe that what the Attorney-General did was right. But I leave that part of the argument because, as the noble Lord, Lord Williams, said, it is to some extent irrelevant, except that I am sure that he will agree with me that if criticism is based on a misconception of the law, it follows that any criticism which flows from it must be both unjustified and unfair.

I turn to the second part of the complaint that is made against my right honourable and learned friend the Attorney- General. That is to be found when Lord Justice Scott suggests at paragraph G13.125 that the Attorney-General was personally at fault in failing to be sure that, for example, the reservations made by the President of the Board of Trade had been conveyed to Mr. Moses. In fact, I believe that that criticism is unfair

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because it ignores the steps that the Attorney-General took. Above all, it ignores the pressure under which the Attorney-General works. Indeed, your Lordships have had the good fortune to hear my noble and learned friend Lord Rawlinson remind us of some of those pressures.

However, if I may speak from my own position--not as someone who has been a Law Officer, but as someone who has been a Minister of the Crown-- I believe that the pressures upon a judge and the pressures of time upon a Minister are two matters of a totally different nature. I sit in the Court of Appeal in the Channel Islands. There, you can concentrate on one case with all your attention for the whole of the time. But a Minister of the Crown, the Attorney-General, has at any moment many different matters passing across his desk.

So what did the Attorney-General do in this case? Aware of the views and the concerns expressed by the Lord President, aware of the views expressed over what Mr. Alan Clark may or may not have said, he decided--I believe in his own words--to take an overview of the case. It is clear from the report of Lord Justice Scott that he had a meeting with Mr. Moses. Perhaps I may remind the noble Lord, Lord William of Mostyn, of what the Attorney-General said. It is to be found at page 1362 of the report, where he said:


    "I have absolutely the clearest recollection of asking Mr. Moses, (because it was critical--we were, after all, talking about documents for PII and my wish to take stock of the case) quite expressly. 'Is there anything on the documents which renders it unfair to prosecute this case', and I got a clear answer that there was not".
That is confirmed by Mr. Moses on page 1364, where he says:


    "I am confident that the Attorney-General's views in relation to this case, were dependent upon his reliance that I would not be proceeding with the prosecution had I believed that there was anything in the documents which I had seen, or in the exhibits or statements in the case, which rendered it unfair to prosecute. Indeed, had I been of that view I would have advised against continuing with the prosecution ... The responsibility for considering whether, in the light of all the documents that I had seen, it was fair to continue was mine, and the Attorney-General would have been reassured by the fact that I understood that responsibility, and was attempting to discharge it".
I believe that it is reasonable that the Attorney-General should have taken the steps that he did. I also believe that he is entitled to be satisfied by that which he was told.

The noble Lord, Lord Williams of Mostyn, said that Mr. Moses had complained that he had not been informed of Mr. Heseltine's concerns and, therefore, had not been able to convey them to the judge. The noble Lord said that it was a great pity because, although the Attorney-General had not read the documents himself, he had said in his letter to Mr. Heseltine:


    "the drafting of paragraph 4 of the certificate is unusual and the judge and the defendants will be alert to its limited scope, which can if necessary be emphasised by counsel for the Crown orally".
The noble Lord said that that was not done. I do not think, with respect, that that was so. Mr. Moses said to the judge in court,


    "Your Lordship will have observed that in the certificate of the President of the Board of Trade he makes it quite clear what he is doing, that is making a class claim. It is very useful that he does so.

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    It does illustrate the fact that it is no part, of course, of the prosecution or any of these departments to do more than exercise their duty to assert this claim".

I believe Mr. Moses made it absolutely clear in what was said on that occasion--this has been confirmed in the article written by Mr. Gilbert Gray, and the letter written by other counsel at the time--that he desired and wished that the judge (indeed, Lord Justice Scott accepts this) should read all the documents himself. Mr. Moses accepted that, if the judge took the view that any of the documents were relevant to the defence, they should immediately be shown to it.

I said that I would speak briefly but I have failed in that regard, in that I have already spoken for 11 minutes. I respect the comments made by the noble Lord, Lord Williams of Mostyn, as regards his personal relationship with the Attorney-General. I accept that he, like me, accepts that the Attorney-General is a man of principle and integrity. However, I believe that the noble Lord is quite wrong when he argues before this House that the Attorney-General was at fault, either constitutionally or personally, in a way that he suggests should lead to calls for his resignation. My learned friend the Attorney-General is respected throughout the world. I believe that he has been sorely traduced not by Lord Justice Scott but by much of what has been said in the press and by certain spokesmen of the Opposition about his willingness to see innocent people go to gaol. I believe those charges have been proved to be unfounded. I believe, and hope, that he will continue in office.

9.27 p.m.

Earl Russell: My Lords, my respect and indeed my affection for the noble Lord, Lord Rippon of Hexham, are as great as for any noble Lord in this House. But when the noble Lord said tonight that the charges brought against the Government are a politically motivated witch hunt, I am afraid he was mistaken. I have listened to conversation about this report and its aftermath from a considerable number of ordinary people about the shops in my neighbourhood. Being a fair-minded man, even I have been constrained to tell them that the Government are not as black as they think. Ministers do not know when they are well off.

It will not surprise the House to hear that that does not mean I think the Government are anywhere near in the clear on this matter. On the affair of the guidelines, I ask the House, if I may, to listen to one passage in the report which I think illustrates that, although we all understand the force of the arguments for confidentiality in some cases--I listened with care to the noble Lord, Lord Wright of Richmond--in this case it was a secrecy vitiated by not having given enough attention to the basic intelligence principle of the need to know. The number of people who needed to know was too great to make the task of keeping it secret from Parliament at all a practical proposition. For example, the Embassy in Baghdad--if anybody--needed to know. The Ministry of Defence appears to have tipped it the wink. As a result, it received a telegram from the Baghdad Embassy,

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    "I understand ... that guidelines on defence sales to Iraq have been modified: this involved not just a liberal interpretation of existing rules but a new form of words, not as yet made public. I have not yet seen the new criteria".

An official in the Ministry of Defence, whom I shall not name because he cannot answer for himself, reading that telegram annotated it "Oh dear!". He added, in case there should be any chance of misinterpreting that comment:


    "We can expect trouble ... as there is a chance of this leaking. It is marked CONF however".
That was a futile attempt at whistling in the dark.

British business needed to know, both about the first and the second guidelines. The first guidelines were briefly reported in British Business several months after they came into effect with a reference to existing contracts, which was misleading because it appeared to date from the date of the announcement when in fact it dated from six months earlier. Sir Richard comments:


    "The Government was, in a sense, hoist with its own petard of secrecy. Once the decision had been made not to announce the Guidelines, the Government could not say that 'existing contracts' meant pre-December 1984 contracts without disclosing the existence of the guidelines".

I understand the need for secrecy, but this was unintelligent secrecy because it was secrecy for the Government's own convenience rather than secrecy based on genuine reasons of state. If one is judge in one's own interest of when one is entitled to be secret, that is a mistake it is extremely easy to make.

We have heard a very vigorous reaction to this report. Executives are a little like two year-olds: when they do not get their own way they throw a tantrum. Since I have been in this House we have heard tantrums aimed at the judges, the European Union and the press. When have we heard tantrums aimed at Parliament? I am not sure that we should be flattered by the silence. The noble Lord, Lord Tebbit, said a few minutes ago that he would rather be judged by a politician of standing than by any judge. Those among us who are politicians of standing should not be flattered either. The crucial point which emerges if we consider the answers which Sir Richard was able to get from senior Ministers, and which we are not able to get, is that because of the judicial powers of contempt judges are able to get answers with a freedom which I fear is sadly lacking in this House.

So if we ask who is to blame I think in the end Parliament is to blame. When I say Parliament, my Lords, I mean you and me. If we had been able to get answers, it would not have been necessary to set up this inquiry in the first place. If we had been able to call Ministers to account when the story came out, again it would not have been necessary to set up this inquiry in the first place. We are using the judiciary to do what should have been our work. That is a matter on which we need to do a good deal of thinking.

We should not merely blame Ministers for the fact that answers to parliamentary Questions are not always informative. That is a culture, and that culture stretches far wider than the area covered by the report. In fact, it is a general problem. Most of us can remember, when we were at school, being in trouble for things for which

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our defence, spoken or unspoken, was that everybody does it. If we were wise, that defence was much more often unspoken, because the speaking of the defence can only inflame the authorities.

I am not just talking about the plain failure to answer questions covered in clear categories in Erskine May. I am talking about answers which, as my noble friend Lord Jenkins of Hillhead once put it, are bland rather than informative. I could have taken a good many examples from answers that I have had since the beginning of this Session. But I would not wish for one moment to cast imputation against any particular Minister for doing what is at present culturally acceptable. So I have taken a hypothetical question. Why did the Government take this decision? Answer: The Government took this decision after the most careful consideration of all relevant factors. We have all received answers like that. Having answers like that makes it very difficult indeed to call Ministers to account. If we cannot call Ministers to account now, we have to take account of the growing public dislike for Parliament, and often contempt, which is felt outside these walls. We have to take account of the fact that there is a growing sense among the public at large that it is much better to have Ministers accountable to judges under a constitution than to have them accountable to a parliament.

Warts and all, I love this place. But it is pretty nearly our last chance to save ourselves--to see whether we can do something now. If we cannot, the responsibility will be taken away from us and I, for one, would deeply regret that.

I have considered with some care the question raised by the noble Lord, Lord Callaghan of Cardiff, on the Thursday before last. How did it come about that Mr. Waldegrave, who has so much ability, was nevertheless able to convince himself that he was not misleading when in effect he was? This is where things get interesting, and where the application again goes a great deal wider than the report itself. The key word here is flexibility. We have all heard arguments about flexibility. We have heard the standard defence of Henry VIII clauses over and over again in terms of flexibility.

Let us look at the original grounds for the Howe guidelines. This is again Sir Richard speaking. He states:


    "This use of 'flexibility', in order to permit an apparently objective guideline to change its meaning according to the exigencies of the moment, will ring a bell of recognition for those who have attempted to follow the manner in which the Howe Guidelines were interpreted and applied".
That bell of recognition will be heard among a great many people other than those who have been involved in this specific issue.

I heard the arguments of the noble Lord, Lord Wright of Richmond. I understand that there is a need for flexibility in foreign policy. If Parliament is ultimately to be sovereign, some account has to be given to it of the grounds on which that flexibility was exercised.

The noble Lord's arguments reminded me vividly of the arguments used by Queen Elizabeth I against allowing Parliament to have any say in foreign policy. In their wisdom, our ancestors decided otherwise, and

26 Feb 1996 : Column 1320

since we find ourselves in this situation we have to work in it as we find it. On Privy Counsellor terms it is possible sometimes to tell people that it is not in the national interest to press specific questions, and those terms must be respected or nothing will work.

The noble and learned Lord, Lord Howe of Aberavon, at one point described the guidelines as ectoplasmic. I think that I understand what he meant. But it is that flexibility which tended to emancipate them from parliamentary control. It is like a Minister changing the law by regulations under a Henry VIII clause, rising in the House to say that the law is unchanged. There is a sense in which what he says is true, but that sense is liable to mislead.

Let us take the passage which Sir Richard Scott described as "sophistry", to which the noble Baroness, Lady Thatcher, referred earlier this evening. Mr. Waldegrave said that the guidelines could not be changed without the Prime Minister and senior Ministers being notified. They had not been notified, ergo the guidelines had not been changed. That reminds me of an old Oxford story which I am sure is as well known to Mr. Waldegrave as it is to me. A train not scheduled to stop at Oxford Station came to a halt for a signal opposite the station platform. An undergraduate leapt out. A porter rushed up to him and said: "You can't get off here, sir, it doesn't stop", to which the undergraduate replied: "Well, then, I haven't got off". That is the argument that Sir Richard Scott described as sophistry and the description is entirely fair.

Beyond that, we have more and more of the business of flexibility. I shall not say any more about it but will only touch on the rule of political resignations--forced resignations on issues of policy. I believe that that rule has operated for 620 years, since the origins of impeachment. It is that the need for ministerial resignations is in inverse proportion to the ease of persuading people that the underlying policy has changed.

Here, the underlying policy which is complained of is secrecy. When I look at the publication of the report, I am not reassured. The report has taught us to look for managing power by withholding information. The late Richard Crossman taught us to look for hanging on to power by giving out too much information all at once, so that it could not be digested. I never thought to see both those policies in operation at once.

9.42 p.m.

Lord Trefgarne: My Lords, in rising to take part in the debate, I start by saying that I am not among those who criticise my right honourable friend the Prime Minister for setting up the inquiry in the first place. Following the ending of the prosecution of Mr. Paul Henderson and his colleagues, there was widespread public concern about the issues. I have no complaint about my right honourable friend's decision, expecting, as I did, that I should be asked to give evidence. I was content then, as now, to have my words and actions of the time fairly judged.

It was soon clear that Sir Richard would have access to an immense volume of papers and the testimony of numerous witnesses. I took some time to make up my

26 Feb 1996 : Column 1321

mind as to whether or not I should appear. Your Lordships will recall that when the inquiry was set up my right honourable friend the Prime Minister made it clear that serving Ministers and officials were required to attend, while others like me, no longer in office, could decide for ourselves.

I wondered whether there was anything I could usefully add to the huge volume of evidence--not least my own lengthy written submission and, in particular, the evidence of my right honourable friend Mr. Waldegrave. I was concerned too as to whether the procedures which Sir Richard had decided upon were such as to allow witnesses appropriate safeguards and protection which had been regarded as essential ever since the report of Lord Justice Salmon, to which my noble and learned friend Lord Howe of Aberavon referred.

My fears proved to be well founded, but I eventually decided that a refusal to appear would have exposed me to the criticism that I had something to hide or that my former colleagues and friends had something to hide. That was a risk which I did not wish to take. Furthermore, Sir Richard eventually agreed to certain procedures, and gave me certain assurances which allowed me to hope and believe that my concerns had been largely met.

That correspondence between my solicitors and Sir Richard's officials was somewhat lengthy. As I said, Sir Richard in the end agreed to most of the safeguards that I sought and I eventually appeared, accompanied by counsel and with the right to make opening and closing statements. I was, I believe, the only witness accorded all those facilities (which should of course have been available to all witnesses) although I gather that Sir Richard has since suggested that anybody else could have had them if they had asked.

Be that as it may, I was I must say very surprised to read the speech by Sir Richard Scott to the Chancery Bar Association on 2nd May 1995. In that speech, Sir Richard referred in somewhat derogatory and less than wholly accurate terms to the correspondence between my solicitors and his officials--all this in the course of his inquiry and at the very time that he was deliberating upon his evidence and preparing his report. He referred to what he described as a "tediously lengthy" correspondence and then suggested that my solicitors (a leading City firm) had misunderstood the nature of his inquiry. He went on to say that they eventually "subsided".

I do regret that Sir Richard chose to refer to that private correspondence in public, as he did. The fact is that, far from "subsiding", my solicitors eventually got virtually everything that I wanted and it was he who gave in. As well he might. At one point during that correspondence, the inquiry actually wrote to the effect that it really did not matter whether or not I appeared because the judge was already able to make up his mind on my involvement from the papers he had seen. When my solicitors inquired the nature of those conclusions there was, needless to say, a rapid back-peddling.

26 Feb 1996 : Column 1322

I turn now to those parts of the report which concern me and to the evidence that I submitted. Like most witnesses, I received more than 100 pages of questions relating to my time first as Minister for Defence Procurement and later as Minister for Trade, and I spent many long hours and weeks refreshing my memory from the relevant departmental papers and preparing my written response.

At various points in the questionnaires, questions were put that invited me to criticise the actions of officials or others who were advising me at the time, either by implication or directly. I did not think it right to do that. I consider now, as then, that my two principal advisers on export licensing matters at the Ministry of Defence, Mr. Macdonald and Mr. Barratt, were both first-class officials who offered me excellent advice doing their best to take account of all the relevant information on complex and difficult issues. At the DTI the three principal officials who advised me on these matters were Mr. Beston, Mr. Coolican and Mr. Steadman, all of whom gave evidence to the inquiry. As Sir Richard acknowledges, those officials were working in a department, as I was, whose raison d'etre was the support and promotion of British industry and British exports, but of course within the context of government policy. I wish to record my appreciation for the work that they did and the advice that they gave me on these subjects at the time, in circumstances no less difficult than those that prevailed at the Ministry of Defence.

I turn now to the guidelines originally enunciated by the then Sir Geoffrey Howe, now my noble and learned friend, and the consideration given to these matters by my right honourable friends Mr. Waldegrave and Mr. Clark and myself. Noble Lords will recall that these guidelines were set in place to assist officials in considering and advising Ministers in connection with defence related export licence applications to Iraq and Iran. The firm and unequivocal evidence of myself, Mr. Waldegrave, and indeed the contemporaneous papers, is that the guidelines were not changed but that we three asked for them to be interpreted more flexibly in the light of the rapidly changing situation at the time. Noble Lords will recall that a ceasefire had been agreed between Iran and Iraq which clearly created a new situation and there were other developments, too; for example, the declaration of the Fatwa in connection with Mr. Salman Rushdie, and subsequently the execution by Iraq of the journalist, Mr. Bazoft.

Guidelines, as their name implies, are not rules. They are designed to guide and not govern. So there was always a degree of flexibility available even before I and my colleagues considered the matter. We all knew perfectly well that to change the guidelines would have needed Cabinet level approval--which in turn would have needed to take into account wider considerations including, for example, the effect of a change upon our relations with other friendly countries in the region and the implications for the British hostages incarcerated in Beirut. The hostages were of special concern to me because I attended the same school as John McCarthy and at that time I had been endeavouring to get letters through to him on behalf of the school.

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So I wish to declare in the strongest possible terms that, contrary to Sir Richard's opinion, the guidelines were not changed and thus the line which Ministers subsequently took was entirely justified. I reject outright any suggestion that any of us misled Parliament or anyone else in the matter.

Sir Richard appears to have relied rather heavily (as did the noble Lord, Lord Richard, earlier this afternoon) on the evidence of Mr. Higson, a disaffected Foreign Office official, and Sir Timothy Daunt's subsequent minute. Sir Timothy is a senior and very distinguished member of the diplomatic service. His minute was written in 1992, I think. At the time of the discussions in question, he was our ambassador in Ankara--not exactly the best place from which to draw conclusions in this matter.

I make one final point with regard to the guidelines. Sir Richard appears to be saying that calling for more flexible interpretation of the guidelines, as we did, was tantamount to changing them. But in other cases, Sir Richard appears to take a different view. My right honourable friend Mr. Waldegrave referred to one such in a recent contribution to the Sunday Telegraph. My right honourable friend refers to Sir Richard's own words, where guidelines are:


    "intended to be used as tools to achieve the desired purpose. They must not be allowed, by an over rigid application that fails to take into account the circumstances of each case, to become a constraint on effective and sensible case management".
Those are Sir Richard's own words. Again, in this very report, at paragraph B2.31, he refers to the now celebrated Salmon recommendations and castigates commentators who:


    "regard the six cardinal principles ... not as recommendations but as rules".
Sir Richard cannot have it both ways.

I should like to conclude this passage of my speech with the simple assertion that the conduct of our export licensing arrangements, in so far as my right honourable friend Mr. Waldegrave and I were responsible for them, was entirely proper and carried out with due care and regard to all the relevant information. I do not claim that we always got it exactly right; and of course with hindsight it may be possible to conclude that perhaps we should have given greater weight to this or that consideration. I leave that to your Lordships. My right honourable friend and I were responding in difficult and changing circumstances to the often conflicting interests of British foreign policy, British trade and British security. It is the amalgam of those three that represents the national interest. I think we fully upheld it.

I turn now to the question of the Matrix Churchill trial, which involved the prosecution of Mr. Paul Henderson and his colleagues for alleged offences against the export licensing regulations. I was not involved in the issue of the public interest immunity certificates; but I did make a sworn statement and was prepared to give evidence in the case. But, in the event, the trial ended before I was called.

My own position in this matter is entirely clear. Mr. Henderson came to see me in connection with the relevant export licence applications and assured me that

26 Feb 1996 : Column 1324

his machines were intended for civil use. Indeed, as Sir Richard accepts, letters from Mr. Henderson before and after that meeting reflect that assurance. I did not know, nor was Mr. Henderson entitled to think that I knew, that he was in touch with the British secret service. By contrast, Mr. Henderson did know that as Minister for Trade I was the Minister ultimately responsible at that time for the issue of export licences; and, as I now know and Sir Richard accepts, he lied to my face. I refer your Lordships to paragraphs D6.141 and G3.16 of the report which endorse my position.

Therefore, I agreed to make a statement about our meetings and to give evidence in support of that statement if called upon to do so. I quite understand why it was necessary to stop the trial; but equally, I understand why the charges were brought in the first place. It is a great pity that Mr. Clark was not able to make up his mind about his evidence at an earlier stage.

I turn to the way in which Sir Richard chose to conduct his inquiry, and I regret that I must be rather critical. It would seem that, having reached some preliminary conclusions following his early reading of the papers, he developed what has been described by my noble and learned friend Lord Howe as an,


    "unquenchable enthusiasm for his own views".
He was apparently determined to ensure that no witness appearing personally should be allowed to upset his first thoughts. Although I cannot claim to have been treated unfairly in cross-examination myself (but then I was--uniquely--accompanied by counsel) many witnesses were indeed treated at the least extremely discourteously. I feel particularly keenly that the treatment meted out to some middle-ranking officials, who were there only because they had been ordered to attend, was grossly unfair.

For example, there was widespread indignation at the way Miss Baxendale treated Mr. Steadman and Mr. Barratt, indeed almost all the official witnesses who, I remind your Lordships, were there because they had been so directed. I make no complaint about that; the inquiry would have been difficult without them. But in the circumstance of their compulsory attendance it was, I believe, incumbent upon Sir Richard and Miss Baxendale to have been hypersensitive to the position of witnesses. They were not, and I consider that the reputation of Miss Baxendale emerges just as tarnished as that of Sir Richard.

Not every witness was ill-treated as I have described. Mr. Higson, a former Foreign Office official to whom I referred, was one of the few witnesses who actually agreed with Sir Richard's first conclusions and who claimed that he found it distasteful to draft letters which did not accord with his view of the facts. I gather that he was treated with kid gloves. My right honourable friend Mr. Clark also got off pretty lightly in the circumstances. What a pity his sworn statement and subsequent oral evidence to the Matrix Churchill trial were not more consistent. Of course, I neither saw his statement nor heard his cross-examination. But from what I have read, they could not both be right.

I summarise my speech as follows. Contrary to the process of natural justice, Sir Richard Scott formed his conclusions from a preliminary and incomplete reading

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of the papers and then proceeded to reject, for no good reason, a huge mass of evidence which pointed in a different direction. The process by which he chose to gather his evidence, especially his oral evidence, was unjust. The witnesses were, for the most part, brought before him by order and were then bullied and hectored by Sir Richard and his counsel in public without even the most elementary protection. No doubt because of the flawed process by which Sir Richard gathered his evidence, he misinformed himself, at least in part. The guidelines were not changed and thus the question of misinforming or misleading Parliament did not arise.


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