Dark world of Britain's secret foreign policy

Yesterday's Ordtech court case casts new light on how government operates as a law unto itself, writes Paul Vallely

You could be forgiven for turning the page. So now the hitherto unimpeachable Douglas Hurd has been fingered in the latest round of the impenetrable and seemingly unending Arms-to-Iraq scandal. And we have a new bit-part player - Paul Grecian, managing director of arms suppliers Ordtech, who managed to spy simultaneously for MI5, MI6 and Special Branch - to add to the dramatis personae of this tortuous epic.

Yet what does it signify? Deceit and double-dealing is the stock-in- trade of the world of diplomacy and the other dark arts of foreign policy. Who cares, beyond the coterie of politicians involved and the obsessive little group of investigative journalists who pursue them?

But wait. There is more to all this than an accumulation of the kind of details we might normally find only in the middle pages of a John Le Carre novel. Yesterday's court case tells us something rather revealing about the way we have been governed for the past two decades.

It casts light on how Whitehall operates as a dark and secret place whose inhabitants know well how to hide the thimble when they need to. It shows how power corrupts by confusing the interests of the party in government with those of the nation itself. It shows how the Cold War undermined the primacy of truth and made it respectable to lie in government.

War between Iran and Iraq began in 1980 and continued until 1988. In its midst, in 1985, Parliament agreed to abide by a UN resolution which imposed an arms embargo on both sides. But on 21 December 1988, four months after the two nations agreed a cease-fire, the Government, at a meeting between the Defence Minister Lord Trefgarne, the Trade Minister Alan Clark, DTI and the Foreign Office Minister William Waldegrave decided that the export guidelines could be relaxed. The decision may have been for sound strategic reasons and in the national interest. But they decided not to tell Parliament.

The wall had not yet fallen in Berlin. Western governments were still immersed in a foreign policy culture in which the truth was not told. The Cold War ethos relegated truth in favour of strategic advantage. A culture of mendacity was created. Before long it went beyond its military purpose and spread insidiously through the whole system of government, encouraging everyone - as was all too clearly to emerge - to obscure the truth for their own reasons.

With the nod from the Government, British firms began supplying the Iraqi leader Saddam Hussein. The Sheffield firm Matrix Churchill shipped out parts for Saddam's intercontinental super-gun. The arms firm Astra through a subsidiary supplied the propellant for the gun. Ordnance Technologies Ltd (Ordtech) sold, via Jordan, shell fuses to the Iraqi dictator.

None of this might ever have been known had it not been for an independent investigation by HM Customs & Excise which, during the Gulf War, was alerted to earlier breaches of the embargo against the nation that was now the national enemy.

In February 1992, a case was brought at Reading Crown Court against four men working with Ordtech. The defendants claimed that the Government was aware that Jordan was being used as a conduit for exports to Iraq. They asked for government documents to be produced to prove their case. But "public interest immunity certificates" declaring that the material was too sensitive for the courtroom were signed by Kenneth Baker, then Home Secretary, and Peter Lilley, then Trade and Industry Secretary. Ordtech's managing director, Paul Grecian, and three others were found guilty.

Were the immunity certificates signed to protect the national interest? Or were they to protect Tory ministers from embarrassment? This is a key issue that Sir Richard Scott's report into the Arms-for-Iraq affair, which is due out soon, will certainly address.

That power corrupts is now a truism. But it does not just apply to the dictators of Africa. It applies to the elective dictatorship which has taken root in Britain since the war whereby governments exercise power largely unchecked by Parliament.

Four uninterrupted terms of Conservative government have made it easy for ministers to think of their own party interests as synonymous with the interests of the nation. Arrogance has crept in. They have begun to assume, not only that they cannot be wrong, but that the motives of those who criticise them are to be mistrusted. It was an attitude not restricted to those outside the party - even within those who raised questions were marked down as not "one of us".

The Ordtech Four were convicted in February 1992. But later that year, in November, a similar case against the Matrix Churchill businessmen collapsed when the judge objected to the use of the immunity device. The next day the Government set up the Scott inquiry into the affair. As it began on its mammoth task - which eventually involved seeing 200 witnesses in 430 hours of evidence supported by 200,000 pages of documents - Ordtech decided to appeal.

One of the most revealing moments in the Scott process was when the former Foreign Secretary Sir Geoffrey Howe decided to launch a blistering attack on it, condemning the eminent judge at its head of being "detective, inquisitor, advocate and judge".

His attempt at a pre-emptive strike was only the first of an increasing number of attacks on judges by leading Tory politicians. The phenomenon prompted some quizzical comments yesterday by Lord Alexander, the former chairman of the Bar Council. He expressed concern at the recent attack on Lord Justice Taylor when he questioned the efficacy of Michael Howard's Tory conference suggestion that parole be scrapped. Lord Alexander also questioned the attempts by government ministers "to ask the public, which has not heard the facts of a case, to write commenting on judicial decisions; to point out that a particular judge has had judgments reversed on appeal before; to whisper, or more, against Nolan or Scott for carrying out their judicial inquiries.

The tendency to perceive judges as not "one of us" has continued. That Tories - from Howe with Scott, to Major this week with Nolan - have turned negative on judges is also an increasing reflection of the truth of Lord Acton's famous dictum about power. Such is the attitude of the powerful to those who try to exercise checks upon their authority.

The process continues. When the Ordtech case came to the Court of Appeal new immunity certificates were issued by the then Foreign Secretary, Douglas Hurd, and the Home Secretary, Michael Howard. But the appeal court judges, led by Lord Justice Taylor, yesterday ruled that the documents concerned should have been made available to the defendants and overturned the original decision. The men's convictions were yesterday quashed.

It is not over yet. Sir Richard Scott is now writing and his report is expected to be published in the new year. The House of Commons has a select committee investigating allegations of arms to Iran. There is also a Customs & Excise inquiry into that matter.

Given the history of endemic secrecy that has surrounded government and the making of foreign policy throughout the Cold War, one has to ask the questions: why has it all come out? Why were the original prosecutions ever allowed? Why did not ministers lean on someone high up in HM Customs and tell them to drop their original investigations?

"I was never able to find out anything which gave even a hint of why that was not done," said someone close to the heart of government policy in this area yesterday.

Ironically, the answer may lie in the instincts of the administration which succeeded that of Mrs Thatcher to row back on some of the excesses of her regime. As Simon Jenkins has chronicled in impressive detail in his recent book, Accountable To None, the Thatcher years - contrary to all their rhetoric about getting power back to the people - saw a great increase in the process of government centralisation under the banner of centralising authority over spending. Its extent was dramatic - in local authorities, housing, schools and universities, the police and legal systems. The quango culture spawned.

It was John Major who - apparently sharing the view that Mrs Thatcher had become overmighty - appointed a minister for open government, established the Citizen's Charter and accelerated the demystification of the secret services in the post-Cold War era. As De Tocqueville pointed out, it is when the lid comes off that the explosions occur.

All round them the Tories now see that their system is falling apart. Time after time they make desperate attempts to grab and save a bit. "Where will it end? Where will it end?" asked Conservative backbenchers plaintively during this week's Nolan debate. Where indeed.