DTI
THURSDAY 15 FEBRUARY 1996
STATEMENT BY THE PRESIDENT OF THE BOARD OF TRADE
THE SCOTT REPORT
Madam Speaker, I should like to make a statement about the Report
published today of the Inquiry by Sir Richard Scott which my Rt Hon
Friend the Prime Minister commissioned in November 1992, following
the end of the Matrix Churchill trial.
The Government has arranged for the Report to be debated in both
Houses of Parliament on 26 February. During the past 3 1/4 years the
Inquiry, with the full cooperation of the Government, has received
many tens of thousands of pages of documentation from Government
files and has taken written or oral evidence from 268 witnesses. All
Ministers, former Ministers, and civil servants who were asked to
give evidence did so conscientiously and thoroughly. The detailed
procedures of the Inquiry were left to the discretion of Sir Richard
Scott himself.
The House will realise the diligence with which Sir Richard Scott and
his team have scrutinised the events covered by their remit, and for
which the Government is most grateful. The report is wide-ranging
and detailed, extending to five volumes and some 2,000 pages. In
addition, the Inquiry will be making available as soon as possible
several thousand copy documents. The House will recall that the
essence of the Inquiry, as reflected in its Terms of Reference, was
to establish whether the relevant Government Departments, Agencies
and Ministers operated in accordance with the Government's policies,
and to report on decisions by the prosecuting authority in the Matrix
Churchill case and by those signing Public Interest Immunity
Certificates.
No Arms to Iraq
Let me turn first to the question of whether arms were supplied to
Iraq. The Report confirms, and I quote, "the Government was not
prepared to countenance the supply of lethal equipment to either Iran
or Iraq." Sir Richard Scott goes on to say in his Report, and again
I quote, "Ammunition, guns, tanks, bombs, mines and the like were not
licensed for export to Iraq. Nor for that matter were they licensed
for export to Iran".
The Inquiry also considered whether defence equipment supplied to
countries other than Iraq might have been diverted to Iraq's armed
forces. During the 1980's some evidence existed that certain other
countries might have diverted goods to Iraq. As far as British goods
were concerned, steps were taken to counter this. No British arms or
ammunition were found in Iraq at the end of the Gulf war. Sir
Richard Scott investigated a number of allegations to the contrary
and found no evidence for them.
On more general non-lethal defence equipment, Sir Richard Scott
recognises that the Government strove to balance the interests of
employment in this country with the objectives of our foreign policy.
He makes no criticism of the Government's policy. He does however
make strong criticisms of what he sees as a lack of openness on this,
to which I shall return later. Nevertheless the Government's
restrictive policy on exports is in sharp contrast to many of our
international competitors who, during the eight year conflict between
Iran and Iraq, in addition to non-lethal defence equipment were also
content to sell fighter aircraft, guided missiles, munitions and
other lethal equipment. This country did not.
No Innocent Men to Gaol
Madam Speaker, I turn now to the most important reason why my Rt Hon
friend the Prime Minister set up the Inquiry in the first place.
This is the grave allegation that Ministers, by signing Public
Interest Immunity Certificates, conspired in a way which could have
sent innocent men to prison. Sir Richard Scott's Report demonstrates
that this allegation is false and without foundation.
I quote from Sir Richard's words: - "Finally, I must refer to the
charges made and repeated in the media that the Ministers who signed
the PII certificates were seeking to deprive defendants in a criminal
trial of the means by which to clear themselves". Sir Richard Scott
concludes, after over 3 years of painstaking investigation that all
Ministers who signed PII certificates did so without any impropriety.
There is no criticism of them for so doing. There was no attempt to
gag. There was no conspiracy to gaol innocent men. Ministers who
signed PII certificates did so in the knowledge that the judge was
the final arbiter of what should be disclosed to the defence. There
is no case for them to answer. As Sir Richard says, and I quote,
"The charges to which I have referred are not, in my opinion
well-founded".
This conclusion gives the lie to the many scurrilous comments by
honourable members on the benches opposite and by many in the media.
For three years, several of my Rt Hon friends have had to endure
repeated abuse and attacks upon their honour and integrity of the
most offensive and unpleasant nature over their signing of Public
Interest Immunity certificates. They now stand wholly vindicated by
the Report.
As one example, I remind the Hon Gentleman, the Member for
Livingston, that he said on 7 November 1995 in respect of the PII
certificates - I quote - "Once again we see Ministers caught trying
to cover up their role in arming Saddam Hussein". The quotation
continues: "Not only did they try to arm Saddam Hussein and keep it
quiet but they were willing to cover up even at the expense of
sending businessmen to court, knowing that those businessmen would be
convicted, and knowing that if convicted they might well have gone to
prison."
The same criticisms were made by others on the benches opposite. As
recently as last week, the Rt Hon Gentleman the Deputy Leader of the
Labour Party said, and I quote, "Next week, we'll have more evidence
with the Scott report. Showing how Ministers were prepared to send
citizens to jail to cover their own backs."
Madam Speaker, there could hardly be a more serious set of charges
levelled against Ministers of the Crown; and they are now shown to
be utterly unfounded. There was no conspiracy. There was no cover
up. Such charges were reckless and malicious and should never have
been made. The House will now expect to hear them withdrawn without
reservation.
Introduction
Sir Richard Scott has cast his net widely and examined a whole range
of issues. He has made recommendations in a number of areas, and he
has also made some criticisms. I should like to comment now on the
subjects of these recommendations and criticisms, including in
particular Export Control Legislation; the law on Public Interest
Immunity; the Ministerial Guidelines on exports; the Matrix Churchill
trial; and Ministerial accountability.
Export Control Legislation
The Report deals with the legislation which has governed the control
of imports and exports since 1939. This legislation has, since the
Second World war, served its purpose effectively in allowing controls
to be imposed on the import and export of certain categories of
goods.
Madam Speaker, Sir Richard criticises the continued use of wartime
emergency legislation by both Labour and Conservative administrations
over the past fifty years.
The appellants in the Ordtec appeal in early 1995 challenged the 1939
Act, praying in aid Sir Richard Scott's views which he had first
expressed a year earlier. However, in the Court of Appeal hearing on
22 May, before the Lord Chief Justice, the Orders made under the 1939
Act were declared lawful. We will however wish to consider further
the future arrangements in this area in the light of Sir Richard
Scott's comments.
Law on Public Interest Immunity
I turn now to the interpretation of the Common Law as it relates to
Public Interest Immunity. The Inquiry has suggested that the law did
not support, in the period of the Matrix Churchill and Ordtec trials,
the concept that Ministers had a duty to sign Public Interest
Immunity Certificates nor that these certificates could be used in
criminal prosecutions.
The Government followed well-established case law, backed up by
independent legal advice, that Ministers both had a duty to sign PII
certificates and that such certificates were applicable in criminal
cases. It was then for the judge to decide which documents to
release. The Attorney-General took advice on this from independent
and eminent Counsel and the Government's handling of PII was,
incidentally, endorsed by three defence counsel in the Matrix
Churchill trial. That PII claims were a matter of duty was supported
by authoritative judgements of such distinguished judges as Lord
Scarman, Lord Donaldson of Lymington, and Lord Justice Bingham. The
applicability of PII to criminal cases had been established by a
decision by Lord Justice Mann. It has since been confirmed by a
series of decisions of the Court of Appeal presided over by the Lord
Chief Justice, Lord Taylor of Gosforth.
In his report, Sir Richard Scott does not in any way attack the
personal integrity of the Attorney General. He does, however, express
criticism of the adequacy of the instructions to prosecuting counsel
conveying the views of the then President of the Board of Trade, and
in particular that the Attorney General should personally have
supervised them. It must be a matter of opinion whether that was
something which the Attorney General could reasonably have been
expected to do. Sir Richard does, however, accept the genuineness of
the Attorney General's belief that it was not. In the event it made
no difference. The judge exercised his discretion, as the Attorney
General had said that he would, and ordered the release of the
relevant papers to the Defence Counsel.
Madam Speaker, the Government remains firmly of the view that the
advice given at the time to Ministers by my Rt Hon and Learned Friend
the Attorney General was correct and there is no doubt he acted
throughout with complete propriety and integrity.
Distribution of Intelligence material
The distribution of intelligence material within and between
Government departments is an area where the Inquiry has found
failings to have arisen in the 1980s. We accept that there is
substance in this criticism. The report makes it clear, for example,
that the junior Ministers who approved the Matrix Churchill licences
for which the directors were later prosecuted did so without the
benefit of intelligence reports which would have shown the intended
military use of the items covered. Sir Richard concludes that the
Ministers took their decisions on a false footing, which he makes
clear was not their fault. Substantial revisions of procedures have
already been made to prevent as far as possible a repetition of such
failings. Sir Richard's report recognises that improvements in this
area have been made.
Guidelines for Export of Defence Equipment
Madam Speaker, I turn to the Government's policy from the outset of
the Iran-Iraq war in 1980. Our policy was to remain neutral in the
conflict and not to sell lethal weapons to either side. Further, the
Government took steps to ensure that non- lethal defence goods that
could have had an impact on the way the war was prosecuted were
controlled. In support of that policy, and to assist in its
application as events unfolded, a set of guidelines was established
in 1984 by my Rt Hon and Noble Friend Lord Howe, then Foreign
Secretary.
The guidelines established that export orders which would, and I
quote - "significantly enhance the capability of either side to
prolong or exacerbate the conflict" would not be approved. Following
the ceasefire in August 1988, these guidelines had to be applied in
changed circumstances. Opportunities for expansion of legitimate
trade began to emerge. At the same time, relations with Iran and
Iraq were affected by concern over the hostages in Lebanon, human
rights in Iraq, the fatwah against Salman Rushdie, the execution of
Farzad Bazoft, and the safety of British nationals held in both Iraq
and Iran. Ministers and officials were obliged to react to
circumstances which were continually changing.
Sir Richard Scott concludes that, following the ceasefire in 1988 but
not before, Government policy towards the export of non-lethal
military goods changed in a way which, he believes, should have been
drawn to the attention of the House. Both Ministers and officials
believed at the time that they were applying policy in a way which
remained within the existing guidelines and Sir Richard expressly
accepts that they were sincere in doing so. However, he does not
agree they were correct in their belief. On this basis, he concludes
that a number of Ministers' letters and answers to Parliamentary
Questions were inaccurate because they restated what Ministers
understood to be the policy but which Sir Richard believes, in
retrospect, had changed.
Discussion about the Guidelines took place on several occasions in
late 1988 and early 1989 between junior Ministers and officials at
the Foreign and Commonwealth Office, the Department of Trade and
Industry and the Ministry of Defence, as the situation developed.
Those Ministers reached no settled decision to change policy which
they regarded as requiring the approval of senior Ministers or an
announcement to this House. As I said, Sir Richard disagrees with
them but accepts they were sincere in their beliefs.
The crucial issue is whether these junior Ministers intended to
mislead this House and the country. Sir Richard gives an unequivocal
answer on this. He accepts that the Ministers believed they were
avoiding a formal change to the guidelines and that, in holding this
belief, they had - to quote his words - "no duplicitous intention".
In respect of my Rt Hon Friend the Chief Secretary, who was at the
time one of the junior Ministers concerned, Sir Richard goes on to
say that - and I quote again - "he did not intend his letters to be
misleading and did not so regard them". My Rt Hon Friend is
therefore absolved of the charge that he intended to mislead members
of this House or anyone else.
Matrix Churchill prosecution
The House will recall that the Scott Inquiry was set up following the
collapse of the Matrix Churchill trial in 1992. Sir Richard has
scrutinised this prosecution.
The Inquiry finds no evidence of impropriety in the way in which the
Matrix Churchill prosecution was brought. There was no conspiracy and
no deliberate withholding of material known to be relevant that might
have helped the defence. It is worth emphasising too that the Court
itself at the time expressed no criticism of the way in which the
prosecution, with the advice of independent and well respected
counsel, was brought and conducted. But, as Sir Richard Scott says,
with the benefit of hindsight this was a trial which ought never to
have commenced. I stress, as Sir Richard Scott himself does
unequivocally, that this is a judgement with the benefit of
hindsight.
Ministerial Accountability
Madam Speaker, while Sir Richard dismisses the serious allegations of
personal impropriety that have been made about the conduct of
Government Ministers, there is a continuing line of criticism running
through the Report of what he describes as the "consistent
undervaluing by Government of the public interest that full
information should be made available to Parliament". One of his major
recommendations is that there should be a review of the long-standing
Parliamentary convention whereby Questions on certain subjects are
not answered or are not fully answered. He recommends that this
review should take account of an enhanced need for Ministers to
provide full and accurate information to Parliament.
This subject will form an important aspect of Parliamentary
consideration of the Scott report. This Government has made advances
in the openness of Government which go beyond the position of any of
its predecessors. Nevertheless it is right that we should debate
these issues further in the light of the findings in Sir Richard
Scott's report, and the Government is ready to do so. In the light
of that debate, the Government will consider whether any amendments
to current practice should be made. It would be unrealistic,
however, if I did not say at the outset that there are bound to
continue to be areas, particularly in the field of international
diplomacy and commercial operations, in which a degree of
confidentiality will sometimes be necessary.
Recommendations
Madam Speaker, Sir Richard Scott's report contains a substantial
section of recommendations. The Government has already taken action
on a number of the issues on which the Inquiry now makes
recommendations, for example, on intelligence handling.
We are able to accept others straightaway, such as those relating to
export controls and licensing procedures, where a consultation paper
will be produced as Sir Richard Scott recommends.
Other recommendations, such as those on changes to the law, for
example, relating to prosecution practices and the approach to public
interest immunity, are technically complex and will need careful and
detailed consideration. They will receive it.
In sum, all Sir Richard Scott's recommendations are under active
consideration and a number have already been accepted.
Peroration
Madam Speaker, the House will recognise that the Scott Inquiry has
been long, searching and thorough. It will want to consider the
Report fully and to discuss the issues raised by it. There are
lessons to be learned from the Inquiry and Sir Richard Scott has made
a number of important recommendations which the Government will now
pursue. The Inquiry has identified areas where systems and
procedures can be improved, and these will be closely and urgently
studied. The overall picture which emerges is that, while mistakes
were made, Ministers and officials acted honestly and in good faith.
This country went to enormous lengths rigorously to enforce a self-
imposed ban on the supply of all lethal and other offensive weapons
to either combatant in the Iran/Iraq war and to remain neutral in the
conflict.
Our policy towards the combatants in that terrible war was sound and
principled. It stands very favourable comparison with that of any
other nation. It was conducted and sustained throughout with
integrity.
Madam Speaker, not only did Britain sell no lethal weapons to Iraq,
but as Sir Richard Scott's Report makes absolutely clear, neither was
there any conspiracy among Ministers to send innocent men to gaol.
Those who alleged otherwise should now withdraw unreservedly and
apologise to the House and to my Rt Hon and Hon Friends whom they
have defamed.
ENDS
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