Ministers' decision prevented change in guidelines being revealed to MPs

The Scott Report; Six who played a part in the change of rules on arms sales

William Waldegrave:

'One of the midwives at the birth' of changed policy

Then: Minister of State at the Foreign Office

Now: Chief Secretary to the Treasury

William Waldegrave repeatedly made inaccurate and untrue statements to MPs in correspondence when he had been "one of the midwives at the birth" of the changed policy on sales to Iraq, Sir Richard Scott's report concludes.

Sir Richard accuses Mr Waldegrave of "sophistry" in arguing there had been no change of policy because senior ministers and the Prime Minister had not approved one. His view that the new guidelines were no more than an interpretation of the old is "incapable of being sustained by serious argument", Sir Richard says, and "does not seem to me to correspond with reality".

Along with other ministers he made no announcement of the change for fear it would be "politically damaging".

But in what appeared to be a crucial addition to leaked drafts of his report that have been published, Sir Richard adds: "I accept that he did not intend his letters to be misleading and did not so regard them."

That crucial phrase appeared likely last night to forestall Mr Waldegrave's resignation as Chief Secretary to the Treasury, despite the stinging criticism of both his actions and arguments in Sir Richard's report. In addition, while Sir Richard rejects the argument that the new guidelines were merely an interpretation of the old, he accepts that Mr Waldegrave "did not ... have any duplicitous intention" in advancing that view.

Sir Richard says the view that the new guidelines were no more than an interpretation of the old "is, in my opinion ... so plainly inapposite as to be incapable of being sustained by serious argument". It "does not seem to me to correspond with reality." It was equally "sophistry" to argue there had been no change of policy because senior ministers and the Prime Minister had not approved one.

But his strongest criticism comes over 27 letters to MPs that Mr Waldegrave signed between April and July of 1989 stating that Government policy on defence sales to Iraq and Iran had not changed. That, Sir Richard repeatedly says, was "untrue", and the inaccuracy "should have been noticed by Mr Waldegrave, who had been one of the midwives at the birth of this new formulation.

"Mr Waldegrave knew, first hand, the facts that, in my opinion rendered a 'no change in policy' statement untrue. I accept that, when he signed these letters, he did not regard the agreement he had reached with his fellow ministers as having constituted a change in policy towards Iraq.

"In his evidence to the inquiry, he strenuously and consistently asserted his belief, in the face of a volume of overwhelming evidence to the contrary, that policy on defence sales to Iraq had, indeed, remained unchanged. I did not receive the impression of any insincerity on his part in giving me the evidence he did. But it is clear that policy ... did not remain unchanged."

Taken as a whole, Mr Waldegrave's letters were "apt to mislead" their readers, Sir Richard said. "Mr Waldegrave was in a position to know that that was so although I accept he did not intend his letters to be misleading and did not so regard them."

Alan Clark:

'Prosecution would not have continued'

Then: Trade Minister, Defence Minister

Now: Retired from politics

"If he had been carefully and rigorously questioned about his attitude to machine tool exports to Iraq . . . the prosecution would not have been continued."

"If Mr Clark had paid more careful attention to the contents of his witness statement and had corrected the inaccurate statements and nuances it contained ... Mr Clark's attitude to machine tool exports to Iraq, revealed both at the trial and before the inquiry, would have become clear in advance of the trial."

Lord Howe:

Made no 'reference to [Iraqi] atrocities'

Then: Foreign Secretary

Now: Life peer

"It is not in my opinion in the least obvious that the foreign relations reasons identified by Lord Howe were sufficient to justify the repeated provision to Parliament and . . . to members of the public, of information about Government policy that was by design incomplete and in certain respects misleading.

"Neither in Lord Howe's paper to the Prime Minister . . . . was any express reference made to the atrocities committed by the Iraqi government against the Kurds . . . These atrocities had been known to the Government at least since March 1988 . . . the absence of any reference to the 'Kurdish issue' . . . does seem surprising.

"I regard Lord Howe's attempt to distance the Guidelines from 'policy' as really no more than a play on words.

"Both Lord Howe and Mr Waldegrave offered, in their oral evidence, explanations for the absence of any communication to the Prime Minister about the agreement the junior Ministers had reached . . . I find these explanations unconvincing."

John Major:

'These statements

were not accurate'

Then: Chief Secretary to the Treasury, Foreign Secretary, Chancellor of the Exchequer

Now: Prime Minister

"The statement that 'the Government have pursued a policy of impartiality' between Iran and Iraq is to be found in letters from Mrs Lynda Chalker ... from Mrs Thatcher, the Prime Minister, and the other two from Mr Major, as Foreign Secretary. Each letter was a response to a query about government policy on the proposed sale of Hawk aircraft to Iraq ... Each letter said, also, that 'Since October 1985, government policy has prohibited the sale of any lethal equipment or any defence-related equipment which could significantly enhance the capability of either side to prolong or exacerbate the conflict'... These statements were not accurate.

"This briefing did ... put Mr Major on notice that Iraq was receiving more favourable treatment than Iran so far as export licensing of defence equipment was concerned, a state of affairs that, in my opinion, calls into question a continuing stance of impartiality."

Baroness Thatcher: 'Neither consulted nor kept in touch'

Then: Prime Minister

Now: Former Prime Minister

"There is no documentary indication that the Prime Minister was at any stage after December 1988 consulted about or kept in touch with the development of defence sales policy towards Iran or Iraq or informed about the decisions reached in February, pre the Rushdie affair, or in April, post the Rushdie affair."

"I am satisfied that ... the Prime Minister had not been informed of the ministers' agreement and that she had been neither consulted nor kept in touch as she had requested."

"The Government had changed its policy on non-lethal defence sales to Iraq, although Mrs Thatcher had not been kept abreast of the change."

Lord Trefgarne:

'Deliberate and inevitable failure'

Then: Defence Minister, Trade Minister

Now: Hereditary Peer

"His answers to questions in the House of Lords failed to inform Parliament of the current state of Government policy on non-lethal arms sales to Iraq.

"This failure was deliberate and was an inevitable result of the agreement between the three junior ministers that no publicity would be given to the decision to adopt a more liberal, or relaxed, policy, or interpretation of the Guidelines, originally towards both Iran and Iraq, and later, towards Iraq alone."

"A convenient example of the corespondence is Lord Trefgarne's letter to Mrs Gwynneth Dunwoody MP ... Lord Trefgarne's letter .. contained the following: 'Ministerial guidelines ... specifially prohibit the sale of any defence- related equipment to either Iran or Iraq ...' The description of Government policy ... was not in my opinion, accurate."