Ministers were considering selling even more sophisticated jamming equipment just months before Iraq invaded Kuwait, Lieutenant-Colonel Richard Glazebrook, a senior Army officer who monitored Iraqi exports, said.
Military advisers vetting the exports were under increasing pressure to permit more, despite security fears. They were told that Alan Clark, former Minister for Defence Procurement, was particularly 'gung ho' on defence sales and would not 'necessarily accept security advice'.
Lt-Col Glazebrook said that MoD sales officials tried getting around objections by the military advisers. One way was to refer applications to his senior officers in the hope of a more favourable response.
Another was to re-submit applications and contest them for a long time. Officials then said a decision was urgent and submitted the matter directly to Mr Clark, often with a complaining letter from the company. Defence sales would also include a memo claiming it had become 'too embarrassing to refuse'.
Lord Justice Scott's inquiry is investigating claims of collusion between ministers and civil servants in defence exports to Iraq which breached official guidelines and export controls.
Lt-Col Glazebrook said the right balance had to be struck between encouraging exports to help industry and preventing anything detrimental to the interests of British soldiers. 'If you are talking about pure security we would not sell nothing to nobody. On the other hand that would make the British manufacturing side broke tomorrow.
'However, if we are selling the nation's silver, at least you make sure you aren't leaving the door to the safe open so that they can come back and help themselves. That is the balance to be struck, that and just no more.'
The group of military advisers vetting the exports was told in February 1990 that Mr Clark wanted an explanation of why they had objected to three defence export applications.
Lt-Col Glazebrook said he provided 'good strong reasons' in a memo to the minister, which said the exports would 'erode' any advantage Nato troops had in battle, they would 'seriously injure the interests of the nation', and would have 'serious implications for the defence of UK interests within the range of Iraqi missiles'. He stressed the word 'serious' in capital letters.
He was later told the minister approved one application for a system to detect vehicles. Mr Clark also approved licences for helicopter spares, which had previously been refused.
A ministerial decision to allow Matrix Churchill to export machine tools, despite reports they were being used to make shells, prompted him to write to his superior, Major-General, now Lt-Gen, Sir Jeremy Blacker, to say the decision was made on 'inadequate information'. He was assured that ministers had 'all the evidence'.
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