Scott Inquiry

The Scott Inquiry was a judicial inquiry commissioned by Prime Minister John Major in November 1992 and conducted by Lord Justice Richard Scott (later Lord Scott of Foscote). Formally titled the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions, the inquiry examined the circumstances under which the Thatcher and Major governments had secretly relaxed restrictions on the sale of arms-related equipment to Iraq between 1987 and 1990, while publicly maintaining that the export guidelines had not changed, and the subsequent prosecution of directors of Matrix Churchill - a machine tools company covertly owned by Iraq - for violating export controls, in circumstances where the government knew those directors had been cooperating with British intelligence.¹

Background: Matrix Churchill and the Prosecution

Matrix Churchill was a Coventry-based machine tools manufacturer that had been acquired by Iraqi interests in 1987 as part of Iraq's covert effort to acquire dual-use manufacturing technology for weapons programs. Matrix Churchill directors, including Paul Henderson, were simultaneously cooperating with British intelligence (MI6) - providing information about Iraqi weapons procurement. When the company was prosecuted in 1992 for exporting equipment in violation of arms export controls, the prosecution proceeded while ministers signed Public Interest Immunity (PII) certificates to suppress government documents that would have disclosed both the intelligence cooperation and the government's knowledge that the export guideline changes had made the exports arguably legal.

The Matrix Churchill prosecution collapsed when the trial judge allowed the suppressed documents into evidence and cross-examination of ministers revealed the extent of official knowledge. The collapse prompted the Major government to commission the Scott Inquiry.²

Scott Inquiry Findings

Scott's 1,800-page report, published February 15, 1996, made the following principal findings:

• The Thatcher government had secretly relaxed the Howe Guidelines on arms exports to Iraq in 1988, following the Iran-Iraq War ceasefire, without public acknowledgment.
• Ministers had given "designedly uninformative" (Scott's phrase) answers to Parliamentary questions about the export guidelines, amounting to deliberate misleading of Parliament even if not technically false.
• Public Interest Immunity certificates had been improperly used in the Matrix Churchill prosecution - not to protect genuine national security secrets but to protect the government from political embarrassment.
• MI6 had been running Paul Henderson as a source for years during the period when his company was being prosecuted; the prosecution of a cooperating intelligence source was characterized as a serious institutional failure.
• Ministerial accountability had been inadequate given the seriousness of the deception.

Scott specifically declined to conclude that ministers had acted in bad faith, which became the subject of intensive political controversy: the government argued that Scott's findings did not amount to the condemnations they contained, while opposition parties argued the ministerial conduct described was dishonest by any reasonable standard.¹

Political Impact

The Scott Report's publication in February 1996 was a major political event. The government attempted to suppress the report's impact by giving ministers access to advance copies while giving opposition politicians only ninety minutes to read the 1,800-page document before the Parliamentary debate. The parliamentary session that followed - in which the government survived a vote of confidence on the Scott findings by a single vote - was one of the closest in post-war British parliamentary history.

The Arms-to-Iraq affair and Scott Inquiry, taken together, established that the British government had both secretly armed a dictator later deemed an enemy and had used the intelligence and legal system to conceal that arming from Parliament and the public.²