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Bmarc

Part of Opposition Day – in the House of Commons at 4:32 pm on 19th June 1995.

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Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Secretary of State, Shadow Secretary of State for Trade and Industry 4:32 pm, 19th June 1995

I am aware that the Wilson Government stopped selling arms to South Africa.

Last week, in his wish to help his Cabinet colleagues, the President of the Board of Trade made a statement blaming officials. He blamed the failure to circulate intelligence reports properly. He blamed almost everyone but Ministers. He said that so many things had to be checked that' his Department was swamped and, as a consequence, 36 per cent. of BMARC applications were not properly supported by documentation.

Apparently, by a remarkable coincidence, the very things that Ministers were trying to block—guns and ammunition—got through. There were a lot of guns—naval cannon. If all the guns exported to Singapore had been used by the Navy there, the Malacca straits would probably be blocked by capsized warships. No one in the Government noticed; or did they notice but not want to know? The Conservative Government ensured that the combatants did not have lap-top computers in the trenches on the battlefield, but they made sure that they had guns.

In a debate on arms to Iraq in November 1992, the President of the Board of Trade said: Scrutiny was to be carried out by the interdepartmental committee on exports to Iran and Iraq, which comprises officials from the Foreign and Commonwealth Office, the Ministry of Defence, the Department of Trade and Industry and other Departments as necessary. Not only would individual licence applications need to be scrutinised, but it was obvious that, in many cases, a judgment would have to be exercised as to whether or not certain potential exports came within the rules. I draw attention only to the words 'significantly enhance' or 'prolong or exacerbate', so that the House may appreciate the detail of the judgment that was bound to be necessary. The right hon. Gentleman told the House that the detail of all the judgments had to be scrutinised, not just the superficiality. That is what he said was happening, but we know from his statement last week that it could not possibly have been true.

In the same speech, the right hon. Gentleman continued: Secondly, it is obvious that any interpretation of those rules require careful consideration of individual export licence applications."—[Official Report, 23 November 1992; Vol. 214, c. 640–41.] If what the right hon. Gentleman told the House in that debate was happening, how did those weapons escape the net? That could have occurred only because what he claimed was happening was not actually happening, so on that occasion the right hon. Gentleman was not being particularly accurate or candid with the House, of which his statement to the House last week was absolute confirmation.

In his statement to the House on 13 June, the President of the Board of Trade painted a picture of the treatment of intelligence in Whitehall that frankly defies belief. Are we to believe that the 1986 intelligence, which he says was not distributed to DTI, simply sank without trace in the rest of Whitehall? He acknowledges that it went to other Departments. What did they do with it? Did they ignore it? Did not one Sir Humphrey pick up the phone and say, "Bill, I think you should know about this. It affects your Department"? Did not one person in the FCO, the MOD or the Cabinet Office, which presumably received the intelligence, consider that there was something to act upon, perhaps even to check with the Department of Trade and Industry and ensure that it was informed about what was happening? It is just not credible.

Are we to believe that, in the period before 1988, when, we are told, two intelligence reports were distributed to the DTI, no assessment was made of intelligence for distribution around Whitehall and to Ministers who took it into account? I find it difficult to accept that, because an intelligence report was not distributed to the DTI, the Department can be assumed to have been in complete ignorance of its contents for several years. The point just does not bear scrutiny.

In his statement to the House, the President painted this picture in a very odd way, completely unconvincing on subsequent analysis. In any case, even when intelligence reports were distributed to the DTI, as in the two 1988 cases, much good did it do. When there were not very difficult links between Oerlikon and BMARC to be made, the Department simply failed to make them. The President says that arrangements for the distribution and handling of intelligence, both generally and in the DTI, have been "substantially improved" since 1988, but I put it to him that it is not the distribution and handling of intelligence that needs improving: it is the reading and using of the reports by Ministers and their officials where the improvement is long overdue.

Did officials, on the other hand, know from Ministers that they did not want to hear? It is an unusual experience for me to find myself in agreement with Baroness Thatcher, yet I cannot help feeling that she was correct when she told the Scott inquiry, commenting on the handling of intelligence reports, that one would expect Ministers, when dealing with such an issue, to ascertain whether there was any intelligence to be considered, or to ask someone to put an inquiry through to see if there was any.

As with Iraq, so apparently with Iran. No one, including Ministers, seems to have asked—perhaps because they did not want to know the reply.

Last week, in a series of media interviews, the President described all these failures as "a cock-up". Apparently the lost papers this weekend were another cock-up. Government by cock-up is what this country has under the President of the Board of Trade and his right hon. Friends. We have non-executive directors who do not read minutes or agendas. We have Ministers who do not read intelligence reports, or even ask intelligent questions about them. It can all be summed up by saying: negligence, incompetence and a lack of integrity, too.

The guidelines were issued in 1985; project LISI began in 1986, 12 months later. Directors at BMARC say that Whitehall knew the guns were going to Iran via Singapore from the very beginning. Intelligence reports said that a UK company was avoiding export controls by shipping weapons via a subsidiary in Singapore—but no one in the Government apparently made the connection. The right hon. Member for Thanet, South, who was recruited by BMARC exactly because of his knowledge of the middle east, knew nothing about one of the company's largest orders; when at least three former directors of BMARC have stated publicly that, as all directors were regularly briefed on all aspects of project LISI, the right hon. Gentleman must have known who the end user was.

Are we to believe that a man who says he took his non-executive duties seriously did not see fit to press his fellow directors as to the real nature of project LISI—a project under which naval cannon were ordered by Singapore, despite the fact that its navy did not have enough boats capable of mounting a fraction of the weapons provided?

It is a basic principle of company law that a non-executive director has the same obligations and is subject to the same liabilities as any other director. He has a duty to keep himself informed about the business activities of the company. The fact that the Chief Secretary may not have bothered to find out the basic facts of one of his companies' largest orders does not excuse him. The right hon. Gentleman failed in his duties as a non-executive director; and the same is true of Ministers and their Departments. Ministers have a responsibility to keep themselves informed about the workings of their own Departments.

This is not just a question of one person's guilt or otherwise. This is a matter that encompasses many Government Departments and many Ministers—for instance, the Department of the President. Not only did his Department fail to make a connection between BMARC's export licence applications and the intelligence reports distributed, but during the period of project LISI, 1986 to 1989, full supporting documentation concerning end users was not supplied—was apparently never asked for by the Department—yet the licences were granted. How on earth does this statement fit in with Lord Howe's assertion, repeated so often by so many Ministers to the House, that the Government would continue to scrutinise rigorously all applications for export licences"?—[Official Report, 29 October 1985; Vol. 84, c. 450] Anyone genuinely concerned for the right hon. Member for Thanet, South should support the call for an independent inquiry. After all, even his own publicity adviser's faxes seem to support the need to clear up the matter once and for all. The Chief Secretary said publicly last week that he would welcome a fuller inquiry.

The concern of the President of the Board of Trade for his right hon. Friend shone through his extraordinary performances last week, in the House and in media interviews. As the book of Samuel puts it: I am distressed for thee, my brother Jonathan. The President is, as we all know—and his colleagues know only too well—in the clear. He has nothing to fear from an independent judicial inquiry; he was out of government for most of the time. Indeed, he might positively benefit because, as has been noticed—as much by his right hon. and hon. Friends as by us and the media—he increasingly resembles a man who hopes to keep his head while all around are losing theirs.

The Scott inquiry is dealing with arms to Iraq. We do not want to delay it any longer. The Trade and Industry Select Committee has already held one inquiry into these issues. We now know that it was denied papers and evidence. Not surprisingly, the report was inconclusive. I know that my hon. Friend the Member for Sheffield, Central (Mr. Caborn) is trying to clarify the position, not just of the President but of the whole Government, on these issues.

The House is facing new revelations in what are, by any test, extraordinary circumstances. That is why we believe that the BMARC affair should be the subject of a fully independent judicial inquiry, quite separate from the Scott inquiry. This new inquiry should have access to all documents and reports relevant to the BMARC affair. It should be headed by a judge; the person appointed should satisfy him or herself that the terms of reference are effectively drawn up. The issues raised in the BMARC affair go to the heart of the integrity and competence of government in our country. They should be independently and rigorously investigated.

Most of all, I am surprised that the President of the Board of Trade is not supporting our motion, which reflects the seriousness of the allegations and issues under debate—negligence, honesty, ministerial competence and integrity. The right hon. Gentleman certainly supported such an approach in the past, for in 1992 he had this to say about very similar accusations: That brings me to the allegation that, while rules were in place, they were flouted with ministerial connivance, if not positive encouragement. The seriousness of such allegations cannot be overstated, but nor can they be examined with the care that is appropriate without a full and independent inquiry…That is the only way in which the matter will be seriously investigated to the satisfaction of the House and a wider public…Conservative Members want an independent inquiry to be carried out by a distinguished judge, with all the evidence, and that is what our amendment seeks."—[Official Report, 23 November 1992; Vol.214, c. 644–53.] The Conservatives' amendment does not seek that today—but then, as so often before, the right hon. Gentleman has shifted his ground. I nevertheless urge the House to support our motion tonight.