Did the government break its own restrictions?
The Conservative government takes unfriendly fire over the Arms-to-Iraq scandal.
“Did a Conservative government brazenly and knowing violate its own rules?” will forever be the anthem of 2020, but it is not an original melody. Johnson and Sunak are a cheap cover band, playing their own arrangement of an old Tory ostinato of hypocrisy, cover up, and ministerial conspiracy. John Major’s band had his own version explode in November 1992 and rounded out what had been a challenging year for the government.
A collapsed trial sparks intrigue
On November 9, 1992, a trial against three executives from Coventry-based machine tool manufacturer Matrix Churchill collapsed in unusual circumstances. The executives stood accused of breaking export controls in the late 1980s and early 1990 by selling tools designed to make fuses for artillery shells to the Iraqi government. The prosecution alleged that Matrix Churchill had falsely claimed the tools had no military use when they applied for their export license and had therefore deceived the Department of Trade.
Bizarrely, the case collapsed when the former Minister for Defence Procurement Alan Clark admitted, in oral testimony that contradicted written pre-trial statements, that he had known about the deals and encouraged Matrix Churchill to be “economical” with the truth in their application, stressing the peaceful uses for the machinery.
Alan Clark reflects on the decision to provide arms for Indonesia’s war in East Timor
In addition to a former minister foiling the prosecution’s case, four Conservative ministers—Michael Heseltine, Kenneth Clarke, Malcolm Rifkind, and Tristan Garel-Jones—had recognised the potential scandal brewing and applied for a public immunity certificate that would keep the case documents sealed. The judge overruled the application and when the case collapsed, the court documents and evidence of a ministerial coverup were made public.
Over the coming days, Shadow Trade Secretary Robin Cook released documents from the trial that showed the incident wasn’t an isolated case. 73 licenses for exporting defence equipment to Iraq were presented in the Matrix Churchill case, suggesting either the Conservative government had lifted the export controls and failed to inform parliament, or the government was complicit in a plot to circumvent its own restrictions. Either way, it wasn’t a good look.
Why break their own rules?
The government’s official position, as laid out to Parliament by the then-Foreign Secretary Geoffrey Howe in 1985, was that exports of “lethal equipment” or equipment which would “significantly enhance” the military capability of either side in the Iran-Iraq were not permitted.
Aside from the economic advantages of sustaining a covert trade in industrial machinery, there were possible geopolitical motives. The Thatcher government saw Saddam Hussein as a useful bulwark against Iran and its brand of Islamic fundamentalism. It was widely believed Britain was secretly supporting Hussein in the conflict. This fact was further confirmed in the days after the Arms-to-Iraq scandal broke when the Daily Mirror reported that British soldiers had found boxes of British-made ordinance in an Iraqi weapons cache during the Gulf War.
“[Henderson] at no stage deceived the government. On the contrary, he was himself deceived by a government which refused to defend its real actions in public, then apparently expected him to go to prison without disclosing the truth.”—Geoffrey Robertson QC, Henderson’s defence counsel
The government also used the deals to collect intelligence on Iraqi military capabilities. Paul Henderson, one of the Matrix Churchill executives on trial, had fed information to MI6 after his trips to the country. Matrix Churchill was also owned by the Iraqi-owned Technology Development Group, which gave executives regular access to Iraqi officials and further opportunities for espionage.
Preserving this access to intelligence may have played a role in the ultimate decision to prosecute the Matrix Churchill executives. In September 1990, Henderson and others made a bid to buy the company. Twenty-four hours before the deal was due to go through, they were arrested and charged. However, it more likely only influenced the timing of the arrest, not the decision to prosecute, as Ordtech, another firm involved in sales to Iraq at the time, had also been providing British intelligence with information yet faced similar legal issues.
Call an inquiry, muddy the water, and reframe the debate
The sales had been made under the Thatcher government, but John Major was still positioned at the centre of the scandal. He had been Chancellor of the Exchequer at the time of the deals and several ministers involved, including Michael Heseltine, held prominent positions in his cabinet.
“People will find it pretty distasteful if the government broke its own publicly announced guidelines. This is a matter that goes right to the heart of the integrity of the government” Paddy Ashdown, Liberal Democrat Leader
The Conservatives employed a three-pronged strategy for riding the scandal out. John Major announced an independent judicial inquiry the day after the story broke into whether ministers misled Parliament and conspired to withhold information about lifted export restrictions on Iraq. It was a clear attempt to stymy public debate. As with the later Chilcot, Hutton, and Leveson inquiries, Major’s calculation was that by announcing an inquiry, he’d be seen to be taking action, but the final report would come long after the issue had faded from the public debate and after the main characters had moved on, containing the political fallout.
Shadow Trade Secretary Robin Cook then ratcheted up the pressure by bringing the scandal closer to Number 10’s doorstep. He revealed a secret Foreign Office document sent in 1989—while Major was briefly Foreign Secretary—that warned of Matrix Churchill equipment being used for arms production in Iraq and potentially even for crafting components on a nuclear explosive device. The memo’s author called for the revocation of Matrix Churchill’s export license.
Major’s second approach was to muddy the water and sow confusion about whether the export controls had been violated at all. At Prime Minister’s questions on November 15, John Major insisted it was unclear that the embargo on Iraq had been breached and argued that ministers’ attempts to block the public release of court documents was “them doing their job”.
The shadow cabinet met and forced a full Commons debate on the issue on November 23. This allowed the government to showcase the third prong of its crisis mitigation strategy. Major missed the debate as he was on a trip to Brussels. It would fall on Trade Secretary Michael Heseltine to defend the government’s position by reframing the debate.
In the debate, Robin Cook accused John Major of personally extending a line of trade credit to Iraq during the Iran-Iraq war worth £436 million while he was Chief Treasury Secretary, arming “one of the world’s most brutal regimes.” He also argued the Conservative government had misled Parliament by covertly lifting export restrictions on Iraq in 1988 following the end of the war.
Heseltine’s response was to reframe the issue as a question of whether the government was right to sell the equipment to Iraq. A debate over realpolitik vs. idealism put the government on more solid ground than a debate over whether or not it had misled Parliament or kept MPs in the dark about a change in trade policy. Heseltine argued that nobody could have known Iraq would invade Kuwait and Britain would soon be at war with Hussein’s troops. He accused Labour of “nauseating hypocrisy” and reminded MPs that Labour governments under Wilson and Callaghan had sold arms to Argentina before the Falklands War.
Labour’s charge that ministers misled Parliament was defeated by 45 votes and a government amendment deploring Labour’s “sensationalised attempts” to anticipate the findings of the inquiry was carried.
Why didn’t the scandal get more play?
On face value, the Arms-to-Iraq scandal should have stirred greater public outrage. It wasn’t just a case of government urging voters to “do as I say, not as I do”, but likely led to British troops taking fire from weapons and ordinance made with British-produced tools and could have contributed to the deaths of the 47 servicemen that lost their lives in the Gulf War. So why were the public and backbench Tories mollified?
Major dealt with the scandal sensibly. Lord Justice Scott, appointed to lead the inquiry, had impeccable credentials. Even in 1992, the story was just far enough in the rear-view mirror to feel dated. Thatcher had already had her political comeuppance and was no longer prime minister. By the time the report was released in 1996, it was truly old news (more on the circumstances of its publication in a future post). Alan Clark had already left politics, and there wasn’t enough hard evidence linking the deals to any sitting Tory MP to synthesize public fury around a call for a resignation.
The export restrictions that the government flaunted were also only a very minor legislative burden on a very small subset of the British public. Most Britons did not have plans to export machinery or arms, and those that did, could have found other markets. The Major government breaking Thatcher-era export restrictions, while an example of blatant hypocrisy, didn’t show the same level of contempt for the British public as Johnson’s violation of lockdown guidelines did. Britons had not made anywhere near the same level of personal sacrifice to comply with the export controls.
The details of the affair were also more complicated. Export controls aren’t the sexiest of sanctions to begin with—like say, relieving a corrupt oligarch of his football club. The government didn’t directly sell anything to Iraq. Matrix Churchill wasn’t selling actual weapons, only machinery. These extra layers to the story made the scandal slightly more inaccessible and helped to soften the political blow.
Just like the music of early 1990s Britpop, Major’s response to hypocrisy from his own government was easier-on-the-ears than today’s Downing Street din. The scandal broke just two months after Black Wednesday, in the midst of an ongoing struggle with the miners over pit closures, and Robin Cook and the Labour opposition adeptly applied maximum pressure by gradually releasing new details and keeping the story in the headlines. It could have gone worse for Major. But ultimately, he was able to keep MPs in line and hobbled into 1993 weakened after a tumultuous year, but with plenty of time for rehabilitation before the next election.
I'd forgotten all about this incident (and to be honest I'm not sure I totally understood it at the time!) - thanks for such a clear refresher. It's got the makings of a good TV courtroom drama.