Major faces battle to save cabinet colleagues over Scott Inquiry

SINCE last Friday British attention has naturally been focused on the Docklands bomb and the collapse of the IRA ceasefire

SINCE last Friday British attention has naturally been focused on the Docklands bomb and the collapse of the IRA ceasefire. But even as he has struggled to manage that crisis, Mr John Major has been conscious of another device ticking ever more loudly under the cabinet table.

The Scott Report is set to be published at 3.30 p.m. this afternoon. Mr Major expects to be severely embarrassed but hopes to avoid the resignation of senior ministerial colleagues. The Opposition however, scents the blood of one, and possibly two, members of his cabinet.

Mr William Waldegrave (former Foreign Office minister, now Chief Secretary to the Treasury) and the Attorney General, Sir Nicholas Lyell, stand in the firing line alter a three year inquiry which has its origins in the Iran Iraq war and the status and conduct of British arms policy in its aftermath.

The report based on some 200,000 pages of documentary evidence, and 400 hours of oral evidence from 200 witnesses is expected to extend to 1,800 bages and five volumes, and to carry no fewer than 50 recommendations. Sir Richard Scott, its author already the victim of a preemptive offensive from the heart of the British establishment is expected to deliver a withering critique of Westminster and Whitehall, and their prevailing culture of cynicism and dissembling.

READ MORE

The report will trail the dark and complex worlds of the arms trade and the secret intelligence services. It will lay bare the practice of economy with truth, the relationships between civil servants and ministers and between ministers and the House of Commons. It will grapple with the legal complexities of ministerial responsibilities, and the use of Public Interest Immunity Certificates when issues of grave national security are invoked.

Mr Major appointed the former Lord Justice Scott to conduct this inquiry provoked by the belated parliamentary outcry which followed the collapse of the Matrix Churchill trial in November 1992.

Whitehall was thrown into pan the government itself was in the dock following the unsuccessful prosecution of three Matrix Churchill directors on charges of selling arms related equipment to Iraq in breach of government guidelines.

It emerged that ministers had secretly relaxed the arms embargo imposed by then Foreign Secretary Sir (now Lord) Geoffrey Howe in 1985, in compliance with the decision of the UN. In a "tilt" towards Iraq and without reference to parliament the go ahead was given for the export of equipment knowing it could be used by President Saddam Hussein's weapons making machine.

On the day the Matrix Churchill case collapsed, Mr Major received highly unwelcome news from the Cabinet Secretary, Sir Robin Butler. An official chronology contained a note, dated December 1988, stating "Department of Trade and Industry, Ministry of Defence and Foreign Office ministers agree unpublished relaxation of the Iran Iraq guidelines." (Of the three ministers involved in that decision, Mr Waldegrave is the only one surviving in government.)

Mr Major had repeatedly assured MPs that the Howe guidelines had been scrupulously adhered to from 1985 until Mr Saddam's invasion of Kuwait in August 1990 and subsequently explained that he had not been advised of a change in policy either as Foreign Secretary or as Prime Minister.

But here was the damning evidence that machine tools known to be intended to make fuses for missiles and artillery shells were being supplied to Iraq just six days before the invasion of Kuwait took place.

More damning still was the charge that ministers had signed PII certificates ("gagging orders") which would have withheld evidence crucial to the defence in the Matrix Churchill case and without which the accused businessmen could have been wrongfully imprisoned. One of the accused, Mr Paul Henderson Matrix Churchill's former managing director had actually been supplying the secret intelligence service, Ml6, with information about Iraq's weapons programme.

By asking the former Lord Justice to conduct the inquiry, Mr Major at the time nearly drowning in a sea of political troubles hoped to limit the damage, while protecting himself against the charge of choosing a compliant judge. But the narrow inquiry he hoped for was not to be. And the independent minded Sir Richard seems set to produce a blistering expose of how Britain is governed.

Attempts to damage the judge and his report in advance have been numerous and diverse. Lord Howe has led the assault on the "inquisitorial" nature of the inquiry. The sustained suggestion has been that the learned judge has simply failed to grasp the complexities of modern government. Complexity indeed, will be one of the government's weapons as it launches its rescue effort.

But Labour led on this by the forensically brilliant Mr Robin Cook can be relied on to provide simplicity and clarity. In all the fog of detail and minutiae, two simple questions stand out and require to be answered.

Did Mr Waldegrave knowingly and deliberately mislead the House of Commons by insisting the arms sales policy had not been changed? And was the Attorney General, Sir Nicholas Lyell, right when he advised ministers (who, with the exception of Mr Michael Heseltine, complied without question) to sign the gagging orders which could have sent the Matrix Churchill directors to jail?

Timing will be of the essence. After today's statement, MPs will have to wait until February 26th for a full Commons debate on the affair. But the crucial perceptions will be set by this afternoon's exchanges. Mr Major thinks he can ride the storm, and save the scalps of both ministers. And Labour will not know the strength of its attack until it receives the report just one hour before Mr Ian Lang rises to the despatch box. But the combination of Mr Cook's forensic skills and Mr Tony Blair's high moral tone suggests an epic battle in which the Conservative government's reputation, and its capacity for recovery, will once again be sorely tested.