Antiques 'took priority over exports to Iraq'

THE civil servant in charge of controlling Britain's exports was more concerned with antiques and artworks than defence sales to Iraq, the Scott inquiry was told yesterday.

Eric Beston, former head of the Department of Trade and Industry's export controls and licensing branch, said preventing defence-related exports to Iraq was not his top priority.

Antiques and heritage kept him busy, he said. 'It sounds a little absurd but it was an area of licensing which tended to involve large expensive things owned by rich and powerful people,' he added.

He admitted he 'lost sight' of an export licence application to supply machine tools to an Iraqi factory known to be involved in a ballistic missile project. 'I was on holiday. By the time I got back I forgot about it,' he said.

The inquiry heard how the DTI 'short-circuited' Whitehall procedures designed to stop defence equipment reaching Iraq and ignored or was ignorant of intelligence warnings of UK involvement in Iraq's weapons industry.

It failed to act on an MI6 report in late 1987 warning that British firms, including Matrix Churchill, were helping Baghdad. Mr Beston said he did not see the report and his immediate subordinate, Anthony Steadman, did not have security clearance to read it. Records revealing who else might have read it had gone missing, he said.

Lord Justice Scott suggested nothing would have been done anyway because it was not considered sufficiently important. 'It set off no alarm bells in your department. Your department would have done nothing if defence intelligence hadn't taken action,' he said.

Mr Beston agreed that the DTI saw its role as promotion of defence exports, challenging decisions to refuse licences on behalf of companies involved. He admitted it would not have initiated any action which could have led to licences being revoked.

The DTI granted licences to Matrix Churchill the following year to export machine tools to the 1988 Baghdad arms fair. DTI officials approved the licences, despite an agreement reached earlier with Defence and Foreign Office officials that ministerial approval should be sought.

Mr Beston said he was unaware the licences had been given without Foreign Office or MoD approval. If he had known he would have carried out an inquiry to discover how it happened.

The hearing continues today.