New Statesman & Society leader, 16 June 1995
Michael Heseltine has struck a welcome blow for Lord Justice Scott’s inquiry into arms sales to Iraq
“I was not briefed on this contract at any time during my non-executive directorship,” Chief Secretary to the Treasury Jonathan Aitken told the House of Commons in March after docu­mentation emerged proving incontrovertibly that BMARC, an arms company of which he was a director, had in the late 19805 sold naval guns to Iran, exporting them via Singapore to get round the government’s ban on arms sales to Iran or Iraq. The exercise was code-named “Project Lisi” by the company, and it was dis­cussed at board meetings at which Aitken was present. “Seven years after the event,” he said in March, “I have no recollection of ever having heard about Project Lisi or read about it in company reports.”
This week, it became clear that, even if Aitken knew nothing, the British intelligence services knew plenty. President of the Board of Trade Michael Heseltine stunned the Commons by announcing that, as early as 1986,  “intelligence was obtained” that Oerlikon, BMARC’s Swiss parent company until BMARC was sold to the British firm Astra in 1988, had concluded a con­tract with Iran. “The intelligence picture developed in 1987, when it was revealed that naval guns made by Oer­likon had been offered to Iran by a company in Singa­pore. In July and September 1988, two intelligence reports rounded out the picture by referring to naval guns and ammunition being supplied by Oerlikon through Singapore to Iran.”
And yet BMARC continued to be granted permission by the Department of Trade and Industry to export guns to Singapore. The intelligence reports were apparently not passed on to the DTI, and even if they had been it’s a moot point whether anyone would have taken any notice. The DTI Export Licensing Department was in the habit of granting military export licences without full documentation. Between 1986 and 1989, said Hesel­tine, 74 per cent of military export licences were granted without all the relevant papers being presented.
Aitken is sticking to the line that he knew nothing about Project Lisi, which, although even less credible than it was in March, is hardly surprising. Whether it saves his skin is another matter entirely. The chief secretary cannot escape the foul stench of dishonesty and graft that clings to him, and both he and his loyal colleagues know that it will not take many more revelations for his political career deservedly to be cut short.
But this is only a small part of the story. Far more important than the impact of Heseltine’s statement on the fate of Aitken is its devastating effect on the attempt by several prominent Tories to rubbish Lord Justice Scott’s inquiry on the sale of arms to Iraq. The clear impli­cation of Heseltine’s announcement that three-quarters of military export licences were granted without proper documentation is that there was a policy in the late 1980s of allowing just about anything to be sold to just about anyone – regardless of formal restrictions either secret or publicised. It is difficult to think of a more effective way of silencing those Tory politicians who have seized on the occasion of a couple of pre-publication leaks of Scott’s long-delayed report to bleat about the unfairness of the inquiry procedures and to claim that Scott had exceeded his brief. After Heseltine’s statement this week, the problem seems to be that, in concentrating just on Iraq, he has not cast his net widely enough. Indeed, we need nothing short of a full-scale independent public inquiry into the whole of Britain’s arms export business.
Of course, Heseltine has his own reasons to give Scott a boost. Alone among senior Tories in the current govern­ment, he has nothing to lose over the arms-to-Iraq affair. Unlike John Major and Douglas Hurd, he cannot have his competence or integrity called into question over his handling of exports to Iraq in the late 1980s: he was out of government at the time. And unlike Kenneth Clarke, he participated only unwillingly in the bodged cover-up of issuing Public Interest Immunity certificates to prevent a fair trial of the defendants in the Matrix-Churchill case.
But even if Heseltine is using the arms sales scandal in his campaign to seize the keys of Number Ten in the autumn, we should be grateful for his intervention. The attempt of the guilty men – notably William Waldegrave and Geoffrey Howe – to cast aspersions on Scott’s meth­ods and competence has been shameful. Any blow against their cynicism has to be welcome, even if it is delivered from the basest of motives.
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