The price of openness is jobs and trade

THE SCOTT REPORT

Now we know the only difference between Lord Justice Scott and the Government comes down to whether every minister involved in arms sales to Iraq changed the guidelines and did not inform Parliament, as Scott maintains, or whether, as all those involved assert, they continued to act within those guidelines more flexibly.

Who cares? The Opposition - provided they remain the Opposition - and some elements of the press who want to know everything so that they can disclose everything regardless of its impact on business or jobs. I doubt that customers in the Dog and Fox care much; they are too sensible and know that nobody else issues guidelines to their industry. The French do not, nor do the Belgians, the Americans nor the Russians.

If the result of Scott is a whole new raft of rules and hurdles, the implications for industry will be expensive and deeply damaging. While I was Minister for Trade, I had to deal with three particularly difficult cases involving export licences. Export licensing only came to me if there was a large and complex snag. There are thousands of licences issued in a year and had I wished to be consulted about every difficult case I would have done nothing else.

The two general principles we followed were: first, to conclude what was in the national interest in its broadest sense, against a background of whatever national or international guidelines applied; and, second, what was in industry's interest.

Case one involved a large order for Bedford lorries, which were to be used by the Libyan army for civilian purposes - mainly ambulances and fire engines, or so they claimed. The trucks were standard issue and not adapted in any way for military purposes. On this order depended the future of the company. I came to the conclusion that on balance, the company's licence should be supported. I was strongly opposed by the Foreign Office - as much on political grounds, post-Lockerbie and post-Scott, as military ones. The Ministry of Defence, as far as I recall, stayed aloof. I lost. The company shut down and its factory now lies empty. Fifteen hundred men and women have had to find new work.

The second challenge was with an order for several hundred Rover Discoverys for Croatia. The company had cleared all hurdles as far as international sanctions were concerned and needed no export licence, but decided as a precaution to ask for government approval while the vehicles stacked up on the docks.

My officials told me there was no ground to withhold agreement. There was nothing legally we could do anyway. We checked with the Americans, the Germans and the Japanese and they seemed surprised that we had even been asked, as their companies would never have consulted them. The Foreign Office objected, the company was persuaded to halt the consignment and the order went to the Germans.

The third disputed occasion was the Saracen tank order for Indonesia. Again, the company needed the order to survive. The MoD were supportive, as they did not wish to see the company go under and leave them with only one UK supplier. The Labour Party were generally against supplying arms to Indonesia, even though Tom Clarke, their defence spokesman, had come out in favour of supplying Hawks to Indonesia, saying: "I find it difficult to take a purely moral or moralistic stand." Don't we all!

On this occasion, after much heart-searching involving everyone from the Prime Minister downwards, and with what we considered an adequate assurance on East Timor, we granted the licence.

What conclusions do I draw from these affairs?

First, ministers must make decisions on what is acceptable in private, privately briefed after full internal debate. There are no easy recourses. Scott's suggestions on export licensing will lead only to prevarication. Sir Humphrey will tell his minister: "If there is any doubt, pass the parcel and do nowt. Then someone else will get the business and the problem will go away. One whingeing businessman selling arms can always be handled by the press department."

Second, if because of what Scott has said there is a whole increase in expectation about transparency, openness and parliamentary accountability, prospects for British companies manufacturing sensitive products will be significantly reduced.

Third, as the defence manufacturing base sinks further than it otherwise would, our services will have to pay more and source more overseas.

The divisiveness of our political system counts victory as destroying your political opponent regardless of the long-term interests of British industry and British defence. I am afraid Lord Scott's findings will on balance make matters worse.

The writer was Minister of Trade 1992-95 and is MP for North Wiltshire.