Inside Parliament : `This is a government that knows no shame'

The two ministers most at risk in the arms-to-Iraq affair came under intense pressure from their own Tory backbenchers as well as Opposition parties as the debate on the Scott report proved a chastening experience for the Government.

Tory rebel Quentin Davies called on William Waldegrave to take responsibility for misleading the Commons and minutes before the vote - won by the Government by just one vote - he warned that if nothing was done "the most fearful precedent" would be created.

Another Conservative, Richard Shepherd, said that what stood between Britain and an elective dictatorship was the candidness of those in government.

Mr Shepherd wondered if he was naive to trust ministers' openness but said that without that certainty MPs were at "grave risk" of failing to represent their electorates. "I must tell ministers: I stand for the people of Aldridge Brownhills, and I will stand for the balance of the power of this chamber against the executive."

Mr Waldegrave, the Chief Secretary, sat on the Treasury bench shaking his head as Mr Davies, MP for Stamford and Spalding, said that the former foreign office minister "did mislead the House" over easing of restrictions on the sale of defence related equipment to Iraq.

"I have no wish at all to deprive the Government of an extremely able minister and a man for whom I have always had a high personal regard, but he must take responsibility for that mistake."

Any feeling that the Government might get off lightly in the debate was swept away early on by Robin Cook, Labour's foreign affairs spokesman, in a withering attack on the refusal of ministers to accept responsibility for their actions.

Deploying Sir Richard Scott's findings with piercing accuracy, Mr Cook said the policy on supplying defence-related equipment to Iraq had been both "a strategic blunder and a commercial disaster". The British taxpayer had been left with a bill for pounds 700m for weapons-making machinery supplied to the Baghdad regime. MPs and Parliament had been misled - notably by Mr Waldegrave - and Sir Nicholas Lyell, the Attorney General, was found by Scott to be "personally at fault" in his handling of the Matrix Churchill trial. "Yet no one is going to go," Mr Cook said.

"There are to be no regrets, no resignations. This is not just a government that does not know how to accept blame. It is a government that knows no shame."

Appealing to potential Tory rebels, Mr Cook said: "There was a time when insisting on individual responsibility and upholding the sovereignty of Parliament would have been seen as Conservative values. Parliament has the opportunity now to insist that ministers must accept responsibility for their conduct in office and to assert that the health of democracy depends on the honesty of government to Parliament."

Mr Cook reduced the Tory benches to near-silence. Repeatedly goading ministers, including John Major, over their knowledge of the more flexible policy on exports to Iraq, he observed: "Suddenly we have a row of limpets stuck to the Treasury bench."

The Prime Minister remained impassive, but eventually his deputy, Michael Heseltine, could bear no more and intervened to defend the conduct of the Attorney General and accuse Mr Cook of trying to "wriggle off the wholly synthetic allegations" he had made over the last three years.

Dismissing Tory protests about the charge of selling arms, Mr Cook said that to claim that selling the machine tools that produced the shells was not arming Saddam Hussein was "to borrow a word from Sir Richard Scott - `sophistry'''.

"It was never our case that what Saddam Hussein was going to do was to take those machine tools, shove them down gun barrels and fire them at his enemy."

Opening the debate, Ian Lang, President of the Board of Trade, said the Government had been acquitted of the "serious and defamatory charges" of plotting secretly to arm Iraq and attempting to suppress documents in the Matrix Churchill case. He offered the possibility of more open government and a re-examination of the practice of not revealing details of arms exports in parliamentary questions.

"The countries to which we export arms have a legitimate right to maintain the confidentiality of the strength of their armed forces and the equipment they have available," he said.

Dwelling on the importance to the economy of arms exports, Mr Lang said total defence expenditure, including overseas sales of equipment, provided employment for more than 400,000 people in Britain.

Inviting MPs to "contrast" the situation with policies pursued by Labour governments in the 1960s and 1970s, he went on: "Then the issue was not about non-lethal equipment, but about the sale of lethal weapons."

He said that in 1966 the defence ministry, under the then secretary of state Lord Healey, set up its own Defence Sales Organisation, designed to negotiate "major deals, not in spare parts of microprocessors or field telephones, but for lethal weapons".

Moreover, Labour had sold Argentina two Type 42 Destroyers and eight Canberra bombers: "There we have it. Destroyers, missiles, helicopters and bombers. Don't fly for me Argentina. Lethal weapons, sold direct by a Labour government."

Mr Lang rejected calls for a Freedom of Information Act - made by Opposition parties and Mr Shepherd - claiming it would be legalistic, inflexible and risk undermining the role of Parliament and accountability to the Commons.

But Mr Cook disagreed. "It was secrecy that made this scandal possible," the shadow foreign secretary said. "And there were never better witnesses for a Freedom of Information Act than the long parade of officials and ministers queuing up to explain to Sir Richard Scott that the public interest was best served by not letting the public know what they were deciding."

Menzies Campbell, for the Liberal Democrats, said if Mr Waldegrave survived he would be a constant reminder of the breach of ministerial accountability and could be used as justification on future occasions. "In short, you may well become a dangerous precedent."

And noting Sir Nicholas was slated for failing to properly convey Mr Heseltine's reservations about the PII certificates to the prosecution in the Matrix Churchill case, Mr Campbell told the Attorney General: "It's not a question of honour. It's a question of competence."

Douglas Hurd, the former foreign secretary criticised the Scott report and declared his "absolute confidence" in his former junior minister, Mr Waldegrave.

"Sir Richard Scott sets himself to reconstruct a set of discussions among ministers and officials on a specific, narrow point of policy, four or five years after those discussions took place. He made the effort, he tried and, in my view, he failed to reconstruct successfully those discussions.

"My worry about the report is that it is casting, or the interpretation of it is casting, a slur on the way policy-making in this country is carried out which does harm to this House and to all those who strive, or who may in the future seek to strive, to carry out effective policy for this country," Mr Hurd said.

Conservative MP Rupert Allason, the spy writer Nigel West, accused "spineless bureaucrats" of a conspiracy to put Paul Henderson, the Matrix Churchill managing director, in prison.

Mr Henderson had "volunteered" his services to the security service when travelling in eastern Europe, and was subsequently recruited by the intelligence service, said Mr Allason, MP for Torbay. "In my judgement, officials in Whitehall would have better off trying to find ways of getting him a medal than trying to put him in prison."