Madam Speaker, with permission, I should like to make a statement about the report published today of the inquiry by Sir Richard Scott, which my right hon. Friend the Prime Minister commissioned in November 1992, following the end of the Matrix Churchill trial.

The Government have arranged for the report to be debated in both Houses of Parliament on 26 February. During the past three and a quarter years the inquiry, with the full co-operation 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 are 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.

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 1980s 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 that, to which I shall return later. Nevertheless, the Government's restrictive policy on exports is in sharp contrast to many of our international competitors which, 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.

I turn now to the most important reason why my right 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 that could have sent innocent men to prison. Sir Richard Scott's report demonstrates that that allegation is false and without foundation.

I quote from Sir Richard's words—

What page?

Order. The Minister is making a statement. If the hon. Gentleman has questions to ask, he may seek to catch my eye later. Meanwhile, we shall hear the Minister out.

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 more than three 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: The charges to which I have referred are not, in my opinion well-founded". That conclusion gives the lie to the many scurrilous comments by Opposition Members and by many in the media.

For three years, several of my right hon. Friends have had to endure repeated abuse and attacks on 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. Member for Livingston (Mr. Cook) that he said on 7 November 1995 in respect of PII certificates: Once again we see Ministers caught trying to cover up their role in arming Saddam Hussein … 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 other Opposition Members. As recently as last week, the deputy Leader of the Opposition said: 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. 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 are reckless and malicious and they should never have been made. The House will now expect to hear them withdrawn without reservation.

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 those 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.

The report deals with the legislation that has governed the control of imports and exports since 1939. Since the second world war, that legislation has served its purpose effectively in allowing controls to be imposed on the import and export of certain categories of goods.

Sir Richard criticises the continued use of wartime emergency legislation by both Labour and Conservative Administrations over the past 50 years.

The appellants in the Ordtech appeal in early 1995 challenged the Import, Export and Customs Powers (Defence) Act 1939, 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 shall, however, wish to consider further the future arrangements in that area in the light of Sir Richard Scott's comments.

I turn now to the interpretation of the common law as it relates to public interest immunity. The inquiry has suggested that in the period of the Matrix Churchill and Ordtech trials, the law did not support the concept that Ministers had a duty to sign public interest immunity certificates, nor the idea that those certificates could be used in criminal prosecutions.

The Government followed well-established case law, backed up by independent legal advice, in holding both that Ministers 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 that from independent and eminent counsel—and incidentally, the Government's handling of PII was endorsed by three defence counsel in the Matrix Churchill trial.

The proposition that PII claims were a matter of duty was supported by authoritative judgments by such distinguished judges as Lord Scarman, Lord Donaldson of Lymington and Lord Justice Bingham. The applicability of PII to criminal cases has 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 question 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 said in particular that the Attorney-General should personally have supervised them. It must be a matter of opinion whether that was something that 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.

The Government remain firmly of the view that the advice given at the time to Ministers by my right hon. and learned Friend the Attorney-General was correct. There is no doubt that he acted throughout with complete propriety and integrity.

The inquiry has found failings to have arisen in the 1980s in the distribution of intelligence material within and between Government Departments. We accept that there is substance in that 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 that 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 that area have been made.

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 in which 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 right hon. and noble Friend Lord Howe, then Foreign Secretary.

The guidelines established that export orders that would significantly enhance the capability of either side to prolong or exacerbate the conflict would not be approved. Following the ceasefire in August 1988, those 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 fatwa 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 that were continually changing.

Sir Richard Scott concludes that, following the ceasefire in 1988, but not before—

On a point of order, Madam Speaker.

Order. Points of order are always taken at the end of statements.

No. This is a new practice.

Order. The hon. Gentleman will resume his seat.

rose—

Order. The hon. Gentleman will resume his seat.

I have done so, under protest.

There would have been greater protest had I used the Standing Order.

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 that 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 that remained within the existing guidelines and Sir Richard expressly accepts that they were sincere in doing so. However, he does not agree that they were correct in their belief. On that 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.

Discussions 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 the House. As I said, Sir Richard disagrees with them, but accepts that they were sincere in their beliefs.

The crucial issue is whether those junior Ministers intended to mislead this House and the country. Sir Richard gives an unequivocal answer on that. He accepts that the Ministers believed that they were avoiding a formal change to the guidelines and that in holding that belief, they had, to quote his words, "no duplicitous intention". In respect of my right hon. Friend the Chief Secretary to the Treasury, who was at the time one of the junior Ministers concerned, Sir Richard goes on to say: he did not intend his letters to be misleading and did not so regard them. My right hon. Friend is therefore absolved of the charge that he intended to mislead Members of the House or anyone else.

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 that 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 that ought never to have commenced. I stress, as Sir Richard himself does unequivocally, that this is a judgment with the benefit of hindsight.

While Sir Richard dismisses the serious allegations of personal impropriety that have been made about the conduct of 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 that review should take account of an enhanced need for Ministers to provide full and accurate information to Parliament.

That subject will form an important aspect of parliamentary consideration of the Scott report. This Government have made advances in the openness of government which go beyond the position of any of their predecessors. Nevertheless, it is right that we should debate those issues further in the light of the findings in Sir Richard Scott's report, and the Government are 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.

Sir Richard Scott's report contains a substantial section of recommendations. The Government have 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 straight away, such as those relating to export controls and licensing procedures, on which a consultation paper will be produced as Sir Richard Scott recommends.

Other recommendations, such as those on changes to the law relating to prosecution practices and the approach to public interest immunity, for example, 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.

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 those will be closely and urgently studied.

The overall picture that 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.

Not only did Britain sell no lethal weapons to Iraq, but, as Sir Richard Scott's report makes absolutely clear, nor 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 right hon. and hon. Friends whom they have defamed.

The President has just made a statement in which he laid blame on the Opposition, official advisers and the system, but accepted no blame for Ministers. The public outside will not find that a credible or dignified response to such a serious report.

I have spent the past three hours studying the report. It fully vindicates our two central charges—that Ministers changed the guidelines on defence sales to Saddam Hussein and that they repeatedly refused to admit that, either to Parliament or to the courts.

I did not recognise the report that I read from the statement that the House has just heard. The right hon. Gentleman tells us that the Government accept many of the report's recommendations. Those recommendations arise from Sir Richard's conclusions. If the Government are going to accept his recommendations—[HON. MEMBERS: "Question."' Here is the question: does that mean that the Government will accept the conclusions on which the recommendations were based.

The right hon. Gentleman has just accepted what witness after witness from the Government at the Scott inquiry tried to deny: that the guidelines on defence sales were changed and that the Government failed to inform Parliament of the change. Now that he has accepted that conclusion, will he also accept Sir Richard's conclusion that that failure was, in his words, deliberate and the result of three Ministers agreeing to give that no publicity? [HON. MEMBERS: "Oh."] It is in the report. Will he also accept the conclusion that the reason that they gave it no publicity was that they did not want the public outrage that would greet it?

The President described the statement by the Chief Secretary as inaccurate. Does he accept the conclusion of Sir Richard Scott that the Chief Secretary signed letters to Members of Parliament denying that the guidelines had been changed, which were misleading and that, in the words of Sir Richard Scott, he was in a position to know that was so"? Does the President accept—he did not mention it in his statement—that Sir Richard's conclusion is that Government statements on defence exports to Iraq, in his words, "consistently failed" to comply with "Questions of Procedure for Ministers" and thereby failed to discharge the principle of ministerial accountability?

The President's statement contained no mention of the super-gun. I presume that he is aware that the longest chapter in the report is on the super-gun. Does he accept the conclusion in that chapter that there is, in Sir Richard's words, "clear evidence" that the Government knew about the super-gun a full year before its seizure by Customs and Excise? Does he accept that, in Sir Richard's opinion, Parliament could and should have been told, and that the failure to tell Parliament constituted, in his words, a further example of a failure to discharge the obligations of accountability"? Does the President accept Sir Richard's conclusion that the intelligence information that the machine tools from Matrix Churchill went into the Iraqi arms programme was, in Sir Richard's words, "so strong" that for Ministers to maintain that they were possibly for civilian use was the equivalent to the … use of a blind eye"? Does the President accept the conclusion that public interest immunity certificates, denying the defence in the Matrix Churchill trial an entire class of documents, had never before been used in any criminal trial and Sir Richard recommends that they should never be used again? Will the Government at least give an assurance that they will never repeat the practice that led to that prosecution of Matrix Churchill?

Does the President accept that Sir Richard Scott found "risible" the defence claim by the then Minister of State, Foreign and Commonwealth Office, the right hon. Member for Watford (Mr. Garel-Jones), that the release of the documents would cause "unquantifiable damage" to the public interest? If the right hon. Gentleman does not think that being called risible is a criticism, when will he recognise a criticism?

Does the right hon. Gentleman accept that the Attorney-General was personally at fault in terms of the failure of the Government's Law Officers to instruct the prosecution to tell the trial judge that the current Deputy prime minister signed his certificate with reservations? Will he say whether the Government accept those conclusions—it takes only one word to say it: yes or no? He has had plenty of time to work it out: he has had eight days to study a report that Members of Parliament have had eight minutes to read. His difficulty in answering the question is not that he has not had the time to make up his mind, but that his colleagues could not survive his acceptance of those conclusions.

Are the Government really going to ask us to accept a report that says that the current Chief Secretary signed 27 letters to Members of Parliament that were misleading, and which he was in a position to know were misleading, then tell us that he can remain in office as if the report had never been published? Is the President really going to ask the House to accept a report that shows that the Attorney-General wrongly advised Ministers and failed to tell the court that at least one Minister signed under protest, then tell us that the Attorney-General can also stay in office? Is the President really going to ask the House to accept a report which, over five volumes, demonstrates how this Government misjudged Saddam Hussein, misled Members of Parliament and misdirected the prosecution, then tell us that no one in the Government will accept responsibility for getting it wrong?

Will the President, before he passes the buck any further, confirm that yesterday, civil servants named in the report were told that any public comments they made must be cleared with their head of department, must be consistent with Government policy and must not criticise Ministers? How dare Ministers blame civil servants while ordering civil servants not to blame Ministers.

The report goes beyond the career of individual Ministers or the reputation of some officials. It reveals the price that Britain pays for a culture of secrecy in government. The report documents how Ministers changed the guidelines, but were more worried that Members of Parliament and the public might find out than they were about what Saddam Hussein might do with the weapons.

The President now has a second opportunity to rise to the occasion. Will he now tell us which Ministers accept responsibility for what went wrong while they were in office? Will he tell us whether the Government will dismiss those Ministers who, in the opinion of Sir Richard, failed to discharge the obligation of ministerial accountability to the House? Will he take the steps that are now essential if the Government are to be trusted in office? I warn the President that if he fails to answer those questions, the Government will forfeit any right to remain in office.

The hon. Member for Livingston has twisted and distorted almost every single point to which he referred in answering my statement. [HON. MEMBERS: "Guilty."] He has repeatedly claimed that he has not had enough time to read the report. That did not stop him spending the past three years prejudging its findings and getting them wrong.

The hon. Gentleman was invited to come to the Department of Trade and Industry at 12 o'clock to see the report, but instead of rushing in to see it, he was seen standing outside on the pavement for 10 minutes talking to the press. [Interruption.]

Order. The House must come to order. [Interruption.] Order—on both sides.

When the hon. and learned Member for Fife, North-East (Mr. Campbell) arrived and saw the hon. Member for Livingston talking to the press, he asked his car to go round the block so that he too could stop and talk to the press. So much for the enthusiasm of Opposition Members to read the report; I hope that they will now read it and they will be considerably better informed.

For the past three years, week after week and month after month, the hon. Gentleman has fed the House, the press and the public a sour stream of invective, innuendo and invention. It has been one of the most odious campaigns of manipulation and black propaganda that the House will be able to recall. He repeatedly—as we now know, without a shred of justification—charged Ministers with secretly plotting to arm a foreign dictator and with conspiring to pervert the course of justice. [HON. MEMBERS: "Answer."] Now he tries to sidle off the ground that he so malevolently pegged out for three years and pretend that it does not matter any more, but it does.

In 1992, the hon. Gentleman said: You cannot diminish the level of political scandal of a Government that privately, covertly, without public statement, arms a brutal psychopath who exposes British troops to fire from those arms. In 1993, he was saying: Ministers were prepared to see businessmen wrongly convicted rather than tell how much they knew about the arms trade with Iraq". In 1995, he said: None of these businessmen would have been convicted in the first place if Ministers had not"—[Interruption.]

Order. Hon. Members will have an opportunity in 10 days' time—[Interruption.] Order. They will have an opportunity then to tell us what is in the report. I shall spend the weekend reading it, as all hon. Members may. The Secretary of State has the freedom of the House to say what he wishes. [Interruption.] Order. Hon. Members will have an opportunity to put their points of view later.

Now the hon. Member for Livingston has been found out: it was all without foundation, and the Scott report shows that. It was a cheap and nasty smear campaign, with his whole party joining in the chorus. Their behaviour was contemptible.

The hon. Gentleman asked me whether the Government accept the conclusions. On all the essential issues that concern the public, yes, the Government accept the conclusions. The hon. Gentleman referred to the changing of guidelines and to the quotation from the report, that the failure to inform Parliament about the current state of Government policy was deliberate. The point is that my right hon. and hon. Friends, as Ministers in the Departments concerned, were of the complete and sincere belief—which Lord Justice Scott accepts—that they had not changed the guidelines. There is no question of his suggesting that they had deliberately misled the House. He accepts their good faith and their integrity.

The hon. Gentleman raised the question of super-gun. If he reads the report, he will find that it is accepted that the Government did not know about that until 1989. He also raised the question of the use of PII in criminal cases. The use of PII is judge made; it is court made. It is not decided by Ministers. The use of PII in criminal cases has been supported in a series of judgments, including by the Lord Chief Justice.

The hon. Gentleman referred to the prosecution in Matrix Churchill. That is a matter for the independent prosecuting authority. He suggested that my right hon. and learned Friend the Attorney-General wrongly advised on PII. My right hon. and learned Friend has the support of the four judges to whom I referred in my statement on that matter.

The hon. Gentleman raised the question of the treatment of civil servants. That is a matter for the Departments concerned. Sir Richard Scott's report will be examined carefully and any action taken will be in accordance with normal civil service discipline procedures. No disciplinary action will be taken if civil servants acted conscientiously, in good faith and in accordance with Government policy.

By his behaviour in the past three years on the issue and by his failure to apologise at the Dispatch Box today, the hon. Gentleman has blighted the rest of his career in this place. He will never be trusted in the House again. There is one course open to the hon. Gentleman: he should seek to make a personal statement and apologise to the House, or he should resign.

I am glad that I caught your eye. Madam Speaker. I received my copy of the Scott report at only 3.32 pm. Although there are many references to me in the index, I have not yet had time to read them—although of course I shall do so. However, I must say to the hon. Member for Livingston (Mr. Cook)—

Order. I shall put the proceedings in their proper context: we are questioning the Secretary of State.

Between 1985 and 1987, I was the Minister of State at the Foreign Office responsible for implementing the guidelines—[HON. MEMBERS: "Question."] I say that because some hon. Members were not here at that time and they should know the background. Can my right hon. Friend the Secretary of State confirm my memory of events: we were the only country to introduce a published set of guidelines, in addition to export licence applications, for the export of defence equipment to Iran and Iraq? We were the only country to do that.

Does my right hon. Friend further agree with my abiding impression, from two years at the Foreign Office, of the immense amount of trouble taken by Ministers and civil servants alike to see that the guidelines were implemented fairly and effectively? Is there any reason to believe that that ethos in Whitehall and that ingrained custom of caution about the guidelines was not every bit as prevalent in 1989–90 as it was in 1985–87? I can assure the House that that was so.

I am grateful to my right hon. Friend and I assure him that that is the case. I cannot find another country that operated such a principled and carefully controlled policy on defence exports as the United Kingdom. My right hon. Friend might like to know that France was exporting Exocets and Mirage fighters to Iraq; Belgium was exporting ammunition; and the Soviet Union was selling tanks, aircraft and missiles. This country exported no lethal weapons to Iraq and Sir Richard Scott's inquiry has confirmed that.

Why did the President of the Board of Trade not refer us to paragraphs D4.42 and D4.43? Is not it blindingly clear from those paragraphs that the Government stand condemned of deliberately failing to inform Members of Parliament and Parliament itself of a fundamental change in policy and of a consistent failure to discharge their constitutional responsibilities?

When the Government's chief Law Officer, who has responsibilities beyond those of being a Minister, gives wrong legal advice on such matters as the use of public interest immunity certificates in criminal trials and fails to ensure that the reservations of the then President of the Board of Trade are passed to the court, how can the House and the public have confidence in him?

Why is it that the President of the Board of Trade failed to refer us to paragraphs D3.123, D3.124 and D3.125? How can anyone have confidence in the Chief Secretary to the Treasury when, in those paragraphs, his views are rejected by Sir Richard Scott as "misleading", "sophistry" and not … to correspond with reality"?

Let me tell the hon. and learned Gentleman that the legal advice given by my right hon. and learned Friend the Attorney-General has been supported by all the distinguished judges to whom I referred, including the Lord Chief Justice. The Government believe that the advice given at that time was correct.

As far as the question of sophistry is concerned, the hon. and learned Gentleman is asking the House to believe that my right hon. Friend the Chief Secretary, with two other Ministers, single-handedly changed Government policy without telling the Secretary of State—against the advice of many of his officials—and sustained that change for several years with nobody knowing. That is palpably incredible and Sir Richard Scott accepts that, although the guidelines changed over a period of time, they were not deliberately changed by my right hon. and hon. Friends, who sincerely believed—as did all Ministers and as the Government continue to do—that the 1984 guidelines remained in place throughout their existence.

As someone who, in his time, had to sign PII certificates to protect essential intelligence information, but who did so always on the clear understanding that the judge had full access to the information and could decide whether it ran the risk of prejudicing the rights of defendants, may I say how pleased I am to hear that, as I understand Sir Richard Scott has made clear, there is no evidence whatever of some conspiracy to send innocent men to gaol?

In answer to the second smear, that in some way we sent lethal arms to Iraq, is my right hon. Friend aware that I walked round the largest lorry park in the world at Al Jubail at the end of the Gulf war and personally inspected a vast range of equipment that we had captured from the Iraqis? I found there lethal equipment from a whole range of countries but, from the United Kingdom, I found one Land Rover. That bore out my own evidence and impression that Sir Richard Scott's conclusion—that we scrupulously observed the guidelines about the sale of lethal weapons—was correct.

I am most grateful to my right hon. Friend, and I am happy to reassure him on public interest immunity. The report confirms the behaviour of all right hon. and hon. Members who signed PII certificates. The Government's clear view is that the advice given by the Attorney-General is supported by a range of senior judges—that Ministers had a duty to sign, the trial judge decides, PIIs are not gagging orders and PII law is court-made law, not Government law.

My right hon. Friend is absolutely right about evidence on the ground in Iraq and Kuwait. Any variation in the application of guidelines is the result of the oncome of peace in 1988. That was the major change that led to the application of guidelines affecting different products.

Will the right hon. Gentleman refer to the section in the report that deals with the letter that the Prime Minister sent to me on 17 February 1992, which Lord Justice Scott says was misleading? [HON. MEMBERS: "Oh."] I shall certainly do every justice to the Prime Minister. Will the Secretary of State refer to that letter, in which the Prime Minister wrote: Guidelines laying down which types of equipment could be licensed for export, and which could not, were first introduced in 1980, were revised and made more stringent in 1984, and were announced to the House by Geoffrey Howe in 1985. The guidelines announced by Geoffrey Howe remained in force until the invasion in 1990 when they were replaced by a total embargo."? Sir Richard says that that letter was "misleading". He says also, at paragraph D4.16: I do not doubt Mr. Major's evidence that he signed the letters believing the statements they contained to be accurate, but I do not accept that they were in fact accurate. If the Secretary of State looks further at that section, he will see that the Prime Minister unknowingly sent me an inaccurate letter, because an originally truthful letter was deliberately doctored by the right hon. Gentleman's private secretary at the Foreign Office, to remove the truth. If the Secretary of State will refer to paragraph D4.13, he will see that the root of the untruth that the Prime Minister unknowingly sent to me lay in the action of the present Chief Secretary to the Treasury. Sir Richard Scott makes it clear that the letter that the Chief Secretary sent to the hon. Member for Lancaster (Dame E. Kellett-Bowman) was untrue. Sir Richard confirms that the Chief Secretary sent a letter that was untrue. How can he remain in office?

This whole question turns on whether or not the guidelines were changed. Sir Richard Scott concludes that the guidelines were changed, but he accepts that all Ministers throughout the period in question were of the view, and continued to be of the view, that the guidelines had not changed, that they acted entirely in good faith and that the flexibility that they used was applied in the light of changing circumstances.

After the ceasefire, items that had been refused before it—such as hovercraft spares to Iran and mobile radar equipment to Iraq—were approved, but still refused in those continuing guidelines were high-grade secure radios, Hawk trainer aircraft, phototypesetting spares, metal detectors, modems and optical disc drives. I thought that the right hon. Member for Manchester, Gorton (Mr. Kaufman), having read the report's findings, would bear it in mind that he said in 1992: this Government have no excuse at all for a cynical operation aimed at arming a dictator".—[Official Report, 23 November 1992; Vol. 214, c. 667.] I thought that the right hon. Gentleman would come to the House to apologise, having slandered the Government.

Does my right hon. Friend accept that it is perfectly clear from the Scott inquiry that in the difficult decisions that Ministers had to take over a long period, they acted honourably—and that the people who have acted dishonourably are Opposition Members, with their smear campaign? Does my right hon. Friend agree that it is important to remember that the defence industries are among our most important exporters and largest employers in the country? If the Opposition had had their way, they would have banned arms exports to innumerable countries, with the loss of millions of jobs and millions of pounds' worth of exports. Should not the whole thing be put in that context as well?

My hon. Friend is right, but as a result of the strict control and strict policy on defence-related exports that this country followed between 1985 and 1990 we contributed only around 1 per cent. of Iraq's defence-related imports. Under the last Labour Government, the value of total exports to Iraq rose from £61 million in 1974 to £427 million in 1979.

Is it not the case that the report makes clear that the guidelines were changed, that certain named Ministers changed them, however much they have forgotten the significance of the change in the words, and in that case, why was the House lied to?

The House was not lied to. Sir Richard Scott accepts that no Minister deliberately misled the House and that all Ministers believed sincerely throughout the period that the guidelines that they were using remained the same as the ones originally set up in 1984.

Did defence counsel acting for Matrix Churchill have any cause for complaint in the handling of the public interest immunity certificates? During the Scott inquiry, was there any evidence, on the part of my right hon. Friend the Chief Secretary or my right hon. and learned Friend the Attorney-General, of deliberate misleading of the House? If that were the case, such a charge, to the knowledge of my right hon. and hon. Friends, would be a most ludicrous one.

My right hon. Friend raises the question of defence counsel in the Matrix Churchill trial. That counsel specifically supported the signing of PII certificates. The judge in that trial acknowledged that PII claims were properly made. He saw all the documents: he instructed the disclosure of some and not others, and he expressly noted the terms of the PII certificate of my right hon. Friend the Deputy prime minister. On the question of misleading the House, with regard to the signing of letters by my right hon. Friend the Chief Secretary, Sir Richard Scott's report says: I accept that he did not intend his letters to be misleading and did not so regard them. Sir Richard makes no charge against any Minister of having deliberately misled the House.

Despite your wise advice on 7 February, Madam Speaker, may I point out that, despite a request to the Department of Trade and Industry for prior access to the report for Plaid Cymru and the Scottish National party, that facility was not afforded to us. That is an abuse of a situation in which a request was put directly to the President of the Board of Trade. Therefore my comments can be only brief. I refer the right hon. Gentleman to volume IV, chapter 8, which clearly states that in 1985: Guidelines were deliberately not disclosed in answer to a parliamentary question. The following page states that there was a deliberate concealment from Parliament of the circumstances under which Mr. David Hastie had attended the Exhibition in Baghdad. That obviously impinges severely on the arms trade issue in general. I hope that we can discuss that matter in detail in the next debate. Will the President of the Board of Trade now tell us who was refusing to disclose the guidelines and who was organising the concealment?

The hon. Lady should understand that the guidelines are not statutorily based but self-imposed. They were established by my right hon. and noble Friend Lord Howe when Foreign Secretary as an operational arm of policy to assist in decision-making. It was felt that there was no immediate need to publish them. When they were published in October 1985, some nine months after they had originally been drawn up, that drew no complaint and no unexpected attitude on the part of any right hon. or hon. Member who discovered them. They were not the full embodiment of policy; they were the way by which decisions were made on a day-to-day basis on many tens of thousands of export licence applications so that the Government's strict control over arms and defence-related exports to Iraq could be carried out.

The exhaustive Scott report details the history of many years. Does my right hon. Friend agree that in the real world the Government must answer two questions: did Ministers conspire to send people to prison? The answer is no. Did the House or the Government connive at exports of a lethal nature to either Iraq or Iran during this period? Again, the answer is no. Does not this report answer in the Government's favour on those two crucial issues?

My right hon. Friend is absolutely correct on both counts.

Is the right hon. Gentleman aware that until hon. Members have had the opportunity to read the entire report they cannot properly assess the conduct of Ministers, whether the House was misled and whether there was a cover-up? Is he aware that Iraqi pilots were trained in Britain until a few days before the invasion of Kuwait? Is he also aware that the charge against the Government is that they were an accessory to aggression and to genocide? The whole question of the arms trade, which was denounced by four bishops in a letter in The Times yesterday, is the real and on-going issue. This country subsidises the arms trade by £1 billion per year, and those weapons are often used to repress people—as is the case with Indonesia and the people of East Timor.

The right hon. Gentleman will be aware that Labour Members repeatedly approached Ministers for support in securing defence contracts for factories in their constituencies. I remember what happened in the 1970s, when the then Labour Government set out to sell frigates and Canberra bombers to Argentina.

I refer my right hon. Friend to paragraph D4.42, in which Sir Richard Scott observed: The answers to PQs, in both Houses of Parliament, failed to inform Parliament of the current state of Government policy on non-lethal arms sales to Iraq. This failure was deliberate and was an inevitable result of the agreement between the three junior Ministers that no publicity would be given to the decision to adopt a more liberal, or relaxed, policy, or interpretation of the Guidelines … I have come to the conclusion that the overriding and determinative reason was a fear of strong public Opposition to the loosening of the restrictions on the supply of defence equipment". Does that not go to the heart of democratic and accountable government? What is the Government's response to that statement?

Sir Richard Scott said: I accept also that the junior Ministers believed they were avoiding a formal change of the 1985 guidelines. He believed that the Ministers acted in good faith. The parliamentary answer that they drafted in early 1989 said: The guidelines on the export of defence equipment to Iran and Iraq are kept under constant review and are applied in the light of prevailing circumstances, including the ceasefire and developments in the peace negotiations, and are not only informative but accurate.

The Chief Secretary told the inquiry that, in some circumstances, it is necessary to say something untrue in the House of Commons. As one of the people named in the report and having received unsatisfactory answers from a number of Ministers over seven years in relation to the question of arms sales to both Iran and Iraq, may I ask the Minister whether he thinks that Ministers who feel that it is necessary to tell untruths in the House of Commons should resign? In particular, does he think that the Chief Secretary to the Treasury should resign now in view of the way in which he misled the House?

Sir Richard Scott accepts that no Minister deliberately misled the House.

Will my right hon. Friend turn his mind to the plight of the people who have been forgotten in all this welter of controversy? I refer to the 600 constituents of mine who used to have jobs at Matrix Churchill. They are a highly skilled team of men, and they are of the view that, if Customs and Excise had not blundered in, a deal in which the City of London and the management were trying to buy out the Iraqi shareholding would not have been aborted. Had they been able to complete that plan, those jobs might have been in existence today.

I draw my right hon. Friend's attention to paragraphs C3.25 to C3.65. Does he agree with my—albeit tentative—conclusion that Sir Richard Scott calls into question whether the Customs and Excise people behaved within the appropriate guidelines? If they did not, is there some question of liability here?

It is clear and generally agreed, with hindsight, that it would have been desirable if the Matrix Churchill trial had not taken place. But Customs and Excise are independent prosecutors and it would be wrong for the Government to seek to intervene in their decision over a prosecution. The report acknowledges that there was strong evidence of breach of controls, and Sir Richard Scott found that the Customs and Excise had observed the code for prosecutors.

Is it true, as alleged earlier this week in the Financial Times, that during the period under review components vital to Iraq's nuclear weapons programme were being shipped to that country? If so, when did the intelligence service learn about it, and when were Ministers informed?

There is no question of the Government having connived at the export to Iraq of equipment for use in the development of the Iraqi nuclear programme. The Matrix Churchill machine tool export licence—which mentions project K1000, to which the hon. Gentleman refers—was not approved: it was still outstanding when Iraq invaded Kuwait and United Nations sanctions were imposed.

May I refer my right hon. Friend to paragraph 25 of chapter K6, on the subject of public interest immunity certificates in criminal cases? Does he agree with Sir Richard Scott's verdict that the use of these certificates on whole classes of documents is "bizarre and unacceptable"? Does he agree that there is a serious danger of a miscarriage of justice when PIICs are used primarily for administrative convenience? Does my right hon. Friend accept that Lord Justice Russell, the precedent used consistently in relation to public interest immunity certificates, said that matters of national security could never be decided by a court but only by Government?

Does my right hon. Friend therefore agree that no prosecution using public interest immunity certificates to ban the disclosure of whole classes of documents should be brought in future? Would it not be appropriate to take this judge-made law out of current use and put it on a statutory footing so that we can all understand it? Does my right hon. Friend accept the need to take a further look at cases, including that of Regina v. David Roche of Plymouth, in which there is a serious danger of a miscarriage of justice in criminal prosecutions in which a public interest immunity certificate prevents the defence from deploying its chosen defence?

As I told my hon. Friend in my statement, the Government intend to consider that matter further. The handling of PII certificates is court driven and case driven, not Government driven. The development of case law has governed the development of the handling of PII certificates. They are not a matter of administrative convenience: as my right hon. and learned Friend the Attorney-General advised the Ministers in question, they had a duty to sign and it was then for the courts to decide on the admission or otherwise of the documents. In a criminal case, every document is seen by the judge. My right hon. and learned Friend's view on the matter is supported by eminent counsel, by three defence counsel in the Matrix Churchill trial and by Lord Bingham, Lord Donaldson, Lord Scarman and Lord Justice Mann, to whom I referred earlier.

Given the seriousness of the issues covered by the report, and the number of Ministers and Departments involved, would it not have been better if the Prime Minister himself had made the statement this afternoon? As inevitably happens in these exchanges in the House, minds are concentrated on the conduct of Ministers. Surely that, too, goes to show that the Prime Minister alone, entitled as he is to deliver judgment on the conduct of Ministers—just as he is the author of "Questions of Procedure for Ministers", issued in his name—should have answered in the House.

Did the Attorney-General and the Ministers connected with the PIICs know when they signed the documents that Matrix Churchill was in touch with the secret services? If they did, surely they had an overriding obligation to see to it that Customs and Excise were pushed out of continuing the prosecution, just as they were pushed out of the super-gun case? Does not the Attorney-General have power to override Customs and Excise in the bringing of a prosecution by setting out what I believe is called a nolle prosequi?

The report came to me because it was commissioned to be delivered to me as President of the Board of Trade. My right hon. Friend the Prime Minister gave evidence to the inquiry: it was therefore right that the report should come to me.

As for the PIICs, some of my colleagues may well have known about the connection with the secret services—that does not affect the matter. The point was that the Ministers in question had a duty to sign the certificates so that the public interest and the interests of justice could be weighed by the judge, who alone had access to all the documents and who could and did take a decision. The trial proceeded unaffected by the PIIs for four weeks before it was finally abandoned.

May I remind my right hon. Friend that when I was Minister for Trade I was one of those who had occasion to refer to, and give answers in connection with, the guidelines? When I asked to see them, the text that I was shown and the text to which I stuck used exactly the same words as the text given in the House by Lord Howe in 1985.

Does my right hon. Friend further agree that the guidelines are just as they are described—guidelines—which have to be applied with judgment to any specific application for a licence to export non-lethal equipment? The interpretation of the guidelines, as my right hon. Friend has already said, would surely be expected to reflect whether there was peace or war in the Gulf.

My right hon. Friend is absolutely right. The consideration given in early 1989 and late 1988 to revising the guidelines was given precisely to reflect the fact that No.3 guideline referred to the prolongation and exacerbation of the conflict. Once the conflict had changed, it was sensible that Ministers should consider updating the guideline. The wording that they considered using differed in almost no respect other than to reflect that fact. The amended wording, however, was not adopted or put to Secretaries of State. The fatwa intervened in February 1989, which led to a different approach to the application of the existing guidelines.

May I refer the President to the answer that he gave to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), which implied that all or some Ministers signed certificates in good faith, not understanding what had happened? But D4.16 quotes a briefing as follows: Since the ceasefire in August 1988, the Guidelines have been applied with greater flexibility for Iraq (but since last February, with much greater rigidity for Iran)". Surely that shows a marked change of policy. The quotation continues: Our public presentation of our policy on arms supplies to both countries has, however, stayed broadly the same. Will the right hon. Gentleman confirm that that public presentation included presentation to Parliament, whether by all Ministers or by some? Which Ministers made those changes, which clearly represented a difference from earlier guidelines?

It is the clear view of the Government that the policy remained the same and that the guideline was applied more flexibly to reflect changing circumstances. One of the circumstances was the ceasefire in 1988. Another was the Iranian fatwa in February 1989, when Britain broke off diplomatic relations and withdrew her chargé d'affaires. Another was the execution of Farzad Bazoft in March 1990, when the British ambassador was withdrawn from Iraq. There were general situations of an extremely unpleasant kind such as the retention of the hostages, the treatment of the Kurds and threats to British shipping in the Gulf. All those matters caused the existing guidelines to be applied flexibly. The amount of equipment exported to Iraq as a result of the changing circumstances did not alter by any discernible amount, either in number or in the type of licences granted.

My right hon. Friend has confirmed that Customs and Excise, in bringing the prosecution, was acting as an independent taxation and prosecuting authority and did not, therefore, consult the appropriate Minister—which was me at the time—about the matter. Will he also confirm—I think that he said it in his statement—that in bringing the prosecution Customs and Excise acted properly and withdrew it properly when the evidence given in court changed?

I am happy to agree with my right hon. Friend.

Will the Minister respond to allegations made in The Independent in November 1992 by John Gordon, the former head of the Foreign Office nuclear energy department, that by permitting the sale of nuclear-related technology to Iraq the Government breached not only their own guidelines but article 1 of the non-proliferation treaty which forbids the assisting of any other country in the making of nuclear weapons? Did Scott agree that the Government had breached the non-proliferation treaty?

I am disinclined to believe anything that the newspapers have said about these matters in recent days. I urge the hon. Gentleman to read the report.

When it comes to doing business with dictators, does my right hon. Friend remember that to clinch an aircraft deal the last Labour Government invited the megalomaniac Communist tyrant Ceausescu on a state visit and had him put up at Buckingham palace? When it comes to changing tack within Government guidelines, does my right hon. Friend recall that the Labour Prime Minister embarked on the £1 billion Chevaline nuclear missile enhancement programme without—it is said—even consulting his Cabinet? In the light of Labour's record, does not Opposition Members' orchestrated outrage amount to humbug of the highest order?

My hon. Friend is absolutely right. Yet again, the Labour party has said one thing and done another.

Was not the Tory Government's real fear about the Scott report that as many as four witnesses would reveal that the Tory party received arms commissions—money—from some of the firms which were exporting to Iraq and Iran? Did the Tory party receive money from any of those firms and, if so, how much?

If the hon. Gentleman had had any evidence to that effect, I have no doubt that he would have passed it to Sir Richard Scott—in which case, I have no doubt that Sir Richard Scott would have commented on it.

Surely the key question that the House must ask with regard to Ministers' futures is whether they acted with integrity and in good faith. As I could not read the whole report in the few minutes that I had, can my right hon. Friend help me by pointing to anywhere in the report where Sir Richard Scott questions the good faith or integrity of any Minister? I have found one quotation where he says that the Chief Secretary did not intend his letters to be misleading and did not so regard them. Why should any objective person therefore ask the Ministers in question to resign? Will my right hon. Friend reassure me on that point, since they felt that there were acting in the national interest with integrity and good faith?

My hon. Friend is absolutely right. Not only did Sir Richard Scott not find any evidence of any Minister's lack of integrity—he specifically went out of his way on several occasions to pay tribute to their good faith and the way in which they behaved.

Will the right hon. Gentleman confirm that in advancing the defence of the relevant Ministers by describing them as models of integrity and good faith he is using the defence of incompetence and negligence? If they are to be lauded for their integrity and good faith, are they to be punished for their negligence and incompetence?

Sir Richard Scott identified some areas in which mistakes were made. They were largely of an administrative nature—for example, in intelligence handling and in the handling of some export licences. Those issues are already being looked at and action has already been taken to improve the administration of those matters. Sir Richard Scott did not impugn the integrity of any Minister; where there are disagreements, they are of principle and of attitude to proper practice and procedure in the House. The procedures that the Government have followed in relation to answers on defence-related exports are procedures which have been followed by successive Governments of both parties for very many years. I look forward to the debate on the issues so that Parliament can decide whether changes should be made.

Does my right hon. Friend agree that there will always be differences of opinion as to how much information it is in the national interest to make available to Parliament about such sensitive matters as arms sales? Academics, editors and judges will put forward their various views on how much information ought to be made available to a sovereign Parliament, but in the end the decision on how much information should be given must be for the sovereign Parliament alone.

My hon. Friend makes a very sound constitutional point. To illustrate how policy has remained broadly the same over successive Administrations, I quote an answer given on 10 June 1974, which says: It has been the policy of successive Governments not to reveal information on the supply of arms to individual countries."—[Official Report, 10 June 1974; Vol. 874, c. 396–97.] That answer was given by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) when he was a Minister.

The President of the Board of Trade told the House in his statement that the Government knew about the super-gun project in 1989. Can he therefore explain why, in the subsequent three years, a quite different story was told by Ministers and civil servants on numerous occasions? Does he regard that as being the responsibility of Ministers or of civil servants?

As the House has already been told, the report contains a long chapter on the super-gun. I urge the hon. Gentleman to read it. There he will find his answer.

Is it not especially sad that Opposition Members giggle and laugh when there has been a total vindication of the honour of two Ministers? May I direct Opposition Members' attention to paragraph K8.15, the very last page of volume iv, which explains how things can happen? It says: A Minister should not be held to blame or required to accept personal criticism unless he has some personal responsibility or some personal involvement in what has occurred. Sir Richard Scott says that the Cabinet Secretary's point was that the conduct of government has become so complex and the need for Ministerial delegation of responsibilities to and reliance on the advice of officials has become so inevitable as to render unreal the attaching of blame to a Minister simply because something has gone wrong in the department of which he is in charge. For my part, I find it difficult to disagree. Is it not obvious that that is the explanation, and is not my right hon. Friend absolutely right to say that the mistakes—which have undoubtedly been made—will be looked at, and also to say that Ministers of the Crown do not deserve the blame originally attached to them by the hon. Member for Livingston (Mr. Cook) for their behaviour in the matter?

My hon. and learned Friend makes a serious and worthwhile point. These are matters which should be debated. I illustrate the point by quoting from the article in The Times of 24 March by Mr. Gilbert Gray QC, one of the counsel for defence in the Matrix Churchill case. He said: All counsel agreed that great weight should be given to the interests of the accused. The judge ruled that all documents, save those concerning national security, should be disclosed. The case continued. Neither Ministers nor Attorney-Generals sought to intervene on this second question. How this narrative of fairness can be fabricated into an indictment of the Attorney-General I fail to follow. I never had the impression that he stooped to conquer or tried to gag. The Bar esteems him greatly for his honour and integrity and so do I. At no time did the trial judge ever suggest that the Attorney-General or Mr. Moses be criticised.

Why was it that the reservations of the Deputy prime minister were not passed either to Alan Moses QC or to the trial judge?

The judge acknowledged that the PII claims were properly made. He saw all the documents and expressly noted the terms of the PII certificates signed by my right hon. and learned Friend the Attorney-General. Although it may well be, as Sir Richard Scott says, that more specific action should have been taken to ensure that the matter was brought to the judge's attention, it had no effect on the trial. The judge saw the document and expressly noted the terms of that certificate.

May I draw my right hon. Friend's attention to paragraphs F4.56 to F4.66, which concern the accountability of Select Committees to the House? He will be aware that Sir Robin Butler and Sir Michael Quinlan said to the Select Committee that two retired civil servants should not attend to give evidence. That is perfectly understandable in view of the then memorandum of guidance for officials appearing before Select Committees. The memorandum says: the official would remain subject to Ministerial instructions as to how to answer questions". The officials concerned had retired.

Surely the Select Committee sought to inquire into facts, not into ministerial policy. We have, therefore, the suggestion in the report that Ministers' duty to account to Parliament should be recognised as extending to an obligation to assist an investigating Select Committee to obtain the best first-hand experience available. In his review of the recommendations, will my right hon. Friend consider changing or adjusting the memorandum of guidance for officials appearing before Select Committees so that we can avoid the requirement that officials have to follow ministerial instructions on how to answer questions?

My hon. Friend makes an interesting point. All these matters will certainly be further considered.

I refer the Secretary of State to page 487, which says: In March 1989, Mrs. Ann Clwyd MP asked '… if United Kingdom arms manufacturers will be granted export licences for sales to Iran or Iraq in the near future'. A Foreign Office note apparently said: The FCO prefer to stick to the unamended version as used in reply to Teddy Taylor on 18 January … They, like we"— that is, the DTI— wish to avoid the impression that the guidelines in relation to the Gulf conflict are being reviewed in the light of the current bilateral situation. Sir Richard Scott says: In my opinion, neither Mr. Alton"— who had asked a similar question— nor Mrs. Clwyd was given an adequate or an accurate answer. Those of us who witnessed at first hand the victims of Halabja and realised that the shells that were delivered on Halabja were made by the lathes of Matrix Churchill, those of us who saw the wretched Kurds fleeing across the mountain tops in 1991, those of us who heard the shells of Saddam Hussein and those of us who realised the complicity of the British Government in all this are sickened by the Scott report today because it shows clearly that those on the Treasury Bench are the guilty men.

Is it not the case that at the core of the report is the simple big lie—that Britain, a decent democracy, does not sell arms to tyrants? We did so and we still do so. The Government assist in that process and the big lie has now exploded in their face.

The hon. Lady is absolutely wrong. I accept that she has not yet had an opportunity to read the report. When she does, she will find that Sir Richard Scott, after three years of painstaking inquiry, acquits the Government of those charges, which have been repeatedly levelled at them.

The hon. Lady may like to know that between 1988 and 1989 machine tool exports to Iraq did not increase, as would be implied if the guidelines had been changed in some dramatic way: they actually fell to two fifths of the 1988 level.

Does my right hon. Friend recall that my Constituency is a manufacturing constituency? Firms there are furious that NATO companies and European Community companies export to countries to which they are not allowed to export. I have sent letters to Ministers, I have raised questions on the Floor of the House and I have brought representatives of firms to visit Ministers. Never once have the prescribed guidelines been subject to an exception, whichever Minister I have written to or been to see. Never once has any company in my constituency complained that other British companies got favours that they did not.

My hon. Friend is absolutely right. There can be no doubt that this country, uniquely, conducted a policy that was far more rigorous and far more principled than that of almost any other country involved in the export of arms and defence equipment.

Will the President of the Board of Trade now have the decency to apologise to the House on behalf of the Government, who were responsible for what Sir Richard Scott calls "deliberate" concealment from Parliament? If the Government had any respect for truth and open democracy, they should resign en masse and have a General Election.

When the hon. Gentleman reads the report, he will find that Sir Richard Scott specifically exonerates my right hon. and hon. Friends from any intention deliberately to mislead Parliament. He accepts that their approach was principled and sincere.

My constituents who work in the defence industry and related industries will be appalled if the outcome of the Scott inquiry and the navel-gazing that will go on in the House over the next few weeks is that they will not be able to export legitimate materials or to create jobs. Can my right hon. Friend assure the House that whatever changes are made to the way in which sensitive information is released to the House, it is not done at the expense of British jobs?

My hon. Friend is right to emphasise the importance to our economy of this industry. Some 400,000 jobs in this country are directly or indirectly related to the defence industry. Provided that the policy is conducted in a principled and consistent way, as the policy of this Government consistently has been, it is important to recognise the economic benefits to be derived.

Does the Secretary of State recall that early in 1994 Sir Robin Butler, the Cabinet Secretary, gave evidence to the Select Committee on the Treasury and Civil Service in which he adumbrated the ministerial right to lie to Parliament? Does he further recall that in March 1994 the then Chancellor of the Duchy of Lancaster, now Chief Secretary to the Treasury, told us that ministerial lying to Parliament was part of the natural order of things and that it would be naive to believe it could be otherwise? Now that the Chief Secretary has been convicted of deliberate concealment from Parliament, ought he not to take his odious theories and practices to the Back Benches?

The hon. Gentleman's question is distorted and the premise is unsound. His question has no validity whatever.

Further to the question asked by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), is my right hon. Friend aware that the vast Majority of questions from the Opposition, including the previous one, have been about the role of the present Chief Secretary to the Treasury? I looked at the report and in addition to the section quoted by my hon. Friend the Member for Gainsborough and Horncastle, I saw paragraph 4.12. Sir Richard Scott says that he accepts that the present Chief Secretary had no duplicitous intention. At paragraph D4.6, Sir Richard says: I did not receive the impression of any insincerity on his part in giving me the evidence he did. Surely we can conclude from this that the Chief Secretary's name is now completely cleared by Sir Richard Scott.

I entirely agree with my hon. Friend.

Will the President of the Board of Trade look for a moment at page 495, paragraph D4.42, and perhaps add in the words that were left out by the hon. Member for Aldridge-Brownhills (Mr. Shepherd) when he quoted from that section: and a consequential fear that the pressure of the Opposition might be detrimental to British trading interests. Is not the truth of the matter that the guidelines were changed and matters were hidden because the Government were frightened that if the truth came out, some people in this country—not just Opposition Members—might simply say, "Stop selling to Iraq", because that is what the Government were doing? The Government were permitting lathes, which manufactured weapons of war, to be sold to re-arm Iraq. The Government did not want the truth to be known because, if it had been known, people would have discovered what was going on and the trade would have been stopped.

Sir Richard Scott recognised that British trading interests are a legitimate component of policy and can properly be taken into account. However, he also quite conclusively reached the view that no lethal weapons were sold to Iraq and that none was found at the end of the Iraq-Kuwait war.

Will my right hon. Friend turn to paragraph G18.106 and agree that it exonerates Ministers in relation to their signing of the PII certificates—clearly on the basis that the judge would have been able to look at them? Can my right hon. Friend also clear up the charge, which has been made during the past three years, that the case collapsed once the PII certificates—as gagging certificates—were released by the judge? In fact, the case continued for another four weeks. It was once Alan Clark changed his statement in the witness box—[Interruption.] He may well have done. The reality is that, as my right hon. Friend would agree, once Alan Clark changed his previous statements under oath, the prosecutor asked the presiding judge to withdraw the case.

My hon. Friend is absolutely right. The role of PII certificates in that case has been entirely distorted by Opposition Members. The PII certificate is not a gagging order: it is something that Ministers have a duty to sign so that the public interest can be brought before the judge and weighed against the interests of justice. That is what properly happened in that case.

That being so, will the President of the Board of Trade comment on this? Sir Richard Scott, after three years of examining the issues, stated in his report that he found a Minister to be "personally at fault". What right have the Government to say that they reject that? I am quoting paragraph G13.125 in respect of the Attorney-General. That is the considered view. One cannot pray in aid Sir Richard Scott's report when it exonerates the policy but dismiss it when it states quite specifically that a Minister was personally at fault.

Will the President of the Board of Trade answer a question on a matter of finance? He did not refer even once in his statement to the financing of the arms trade. Will he tell us—I have had no time to read the report, so I do not know—whether at any time the Royal Bank of Scotland, which is the holder of the Conservative party's overdraft, ever received any taxpayers' money through the Export Credits Guarantee Department as a result of financing arms exports to Iran and Iraq?

On the latter point, if the hon. Gentleman cannot find the answer in the report, and if he will table a question, I will make sure that it is answered. As to the views of the Attorney-General, I readily accept that Sir Richard Scott takes a different view on some of these matters from that of my right hon. and learned Friend. My right hon. and learned Friend took great care to get detailed and specific advice from eminent counsel, and he has the support of a number of distinguished senior judges.

Several hon. Members:

rose—

We are now going to move on. Thank you very much.

Several hon. Members:

On a point of order, Madam Speaker.

Order. Points of order come after the business statement.