The Scott Inquiry: Thatcher entangled in icy battle of wills: Former prime minister put on spot by resolute lawyer, writes David Connett

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THE ICILY POLITE contest between Baroness Thatcher and her inquisitors was in stark contrast to the high temperatures it generated among observers of this battle of wills.

Characteristically, Lady Thatcher seemed to set her feet firmly apart even before the first question was asked. When she entered, she studiously avoided eye contact with Ms Presiley Baxendale QC, the inquiry counsel, only looking up when she stood as Lord Justice Scott made his entrance.

The task of reining in Lady Thatcher's dominant tendencies and keeping her focused on the task fell to Ms Baxendale. Many who had not seen the QC at work did not rate her chances - the former prime minister had seen off too many lawyers in the past.

But her low-key, insistent style proved an effective weapon in bringing Lady Thatcher back to the point as her digressions grew longer as the questioning became trickier.

The style has served her well, overwhelming cocksure civil servants at earlier hearings. She stuck to her task, undeflected by Lady Thatcher's brusque manner.

But this was never going to be handbags at 10 paces as the promise of the opening salvoes quickly showed.

With less-than-faint hints of frayed edges, Lady Thatcher bridled at Ms Baxendale's questioning about why there was an 11-month gap between drawing up guidelines restricting UK defence exports to Iran and Iraq, and their announcement to Parliament and the public.

At one point she suggested to Ms Baxendale, 'with the greatest respect in the world', that she had said all she could on the matter.

The inquiry was told that the guidelines were drawn up in late 1984 but ministers and officials decided not to announce them publicly in a high profile way, opting instead to let them 'trickle out'. They were finally made public after a parliamentary question in October 1985.

Lord Justice Scott questioned Lady Thatcher about this delay. She replied: 'There was a gap. Obviously one wonders about this.'

Her claim that it was the then Foreign Secretary Sir Geoffrey Howe's decision not to publish them and that she trusted his judgement prompted a few hollow laughs from those in the audience not holding their breaths.

'I understand that it was rare for such guidelines to be made public but they were made public,' she added. Ms Baxendale then turned to the delay, clearly annoying the former prime minister with her insistence.

'The policy was placed on record and I think with respect we have already dealt with the gap,' replied Lady Thatcher, her voice alternating between a stern approach to Ms Baxendale and a reasonable, appealing tone to Lord Justice Scott, or 'Your Lordship' as she repeatedly addressed him.

All day, the contest for control of the situation continued to flow back and forth across the few feet that separated the combatants, as the former prime minister attempted to impress upon them the agenda as she saw it and they pulled her back to the matter at hand.

Testily, she accused Ms Baxendale of repeating the same question. 'It still comes back to the same question and the same answer. I don't think I can add anything further.'

Ms Baxendale said: 'I'm not quite sure that you've answered the question. Do you think it satisfactory that it took 11 months for the guidelines to trickle out?'

Lady Thatcher replied: 'The guidelines were coming out. We come back to the same question again and again and again and again. I understand that your criticism is that the guidelines were not published in full immediately. Nevertheless it is a fact the guidelines were applied.' She insisted that questions were answered and that there was no attempt to conceal. At times the proceedings, cloaked in a suffocating politeness, became stifling. A plain-speaking 'Come off it' might have cleared the atmosphere, like a shower of summer rain, but it never materialised and the sparring continued.

Lady Thatcher said that the guidelines were purely guidance for civil servants. 'They are not strict law,' she said, mindful, no doubt of Ms Baxendale's approach.

'They are expected to be followed - that is why we have them,' she continued helpfully, adding the important caveat that they could not be applied in a vacuum but in the light of the relevant, prevailing circumstances.

Pressed, Lady Thatcher conceded: 'It might have been better if we had published earlier.' On several occasions Ms Baxendale referred Lady Thatcher to various government documents, provoking further exasperation.

'I have never seen so much paper,' Lady Thatcher said at one point.

On another occasion she added: 'Miss Baxendale, if I had seen every copy of every minute when I was in government I would have been in a snowstorm.'

The inquiry has been trying to establish how much ministers and civil servants knew about Britain's trade with the regime of Saddam Hussein.

However, Lady Thatcher said that, in her time in office, she could only recall one case being referred to her under the guidelines - the proposed sale of Hawk Trainer jets to Iraq in 1989 - which she refused.

She said that she only got involved if policy matters arose. Administrative details did not concern her. Her ministers only bothered her with the 'big issues'. Her main concern was Iraq should not acquire nuclear weapons or chemical warfare technology.

'The thought of anything nuclear getting into the hands of a Government such as Iraq that would have no scruples about the ultimate weapon was absolutely horrific,' she said.

Lady Thatcher admitted the repeated failure of Whitehall to pick up intelligence warnings that machine tools built by Matrix Churchill were going to Iraqi munitions factories was a 'matter for concern - and inquiry'.

The inquiry has heard evidence of documents being overlooked, of officials not having security clearance to read them, or of simply being 'forgotten'.

Lady Thatcher told the inquiry: 'Either the machinery was there, and it was not effective on that occasion, or else the machinery itself was defective.'

She said that it was a particular matter of concern for the Cabinet Office, whose job it was to co-ordinate Whitehall's intelligence sharing machine.

She also claimed not to know Jordan was being used as a diversionary destination for British-made equipment going to Baghdad in order to evade the guidelines.

Leading article, page 19

(Photograph omitted)