Guilty on every possible count

For the past three years, the Scott report has been the Mount Vesuvius of British politics, towering in the background, quiet at times, rumbling at others, waiting to explode. Yesterday, it erupted.

Now, beneath a thick swirling cloud of dust put up as a smokescreen, the hot political rocks are flying and streams of boiling lava are pouring out.

In November 1992, three Coventry businessmen stood in the dock of the Old Bailey, on the brink of prison. They stood accused of illegally exporting arms-making equipment to Iran.

As argument raged about whether government policy had secretly changed, government ministers signed murky-sounding Public Interest Immunity (PII) Certificates, which would have had the effect of denying these men, one of whom worked for British intelligence, a fair trial. The judge refused to comply. The Matrix Churchill trial collapsed in chaos and, amid accusations of government duplicity and collusion in illegal arms dealing, the Scott inquiry was born.

Like the Nolan Commission, the Scott inquiry was a typically Majorish attempt to play for time. But ducking problems only turns explosive issues into time bombs - and this one has now blown up, right at the heart of John Major's government.

Scott has pulled aside the Whitehall curtain which normally hides the workings of our government. And what we see if not a pretty sight. Our system of government is bad - and this particular government is rotten to the core.

The report is about detail. Did government policy change in secret? Were ministers right to use Public Interest Immunity Certificates? A thousand other questions arise.

But the sum of its parts is about secrecy, the abuse of power and the deceit that lies at the heart of our politics. It is about a civil service with a proud independent tradition becoming politicised and abused as never before. It is about the representatives of the British people in Parliament being misled and treated with contempt by ministers. It is about a government so powerful and arrogant that it thought it could avoid telling Parliament, and a Parliament so weak it couldn't do anything about it.

It is about a British government conniving in the export of machinery which made weapons that were used against British troops on the battlefield. It is about Britain in effect helping to arm the world's most brutal dictator. Within weeks of Saddam Hussein's use of poison gas against the innocent Kurds at Halabja in March 1988, the British government extended export credit guarantees for weapons-making manufactures - and went on doing so for at least two years after that.

If the Government has been in the dock, the verdict of Scott is guilty - guilty of abuse of power, guilty of misleading Parliament, guilty of deep duplicity.

Blame lies with individuals. Those who bear personal responsibility will have to defend their actions and, if necessary, go. I cannot see how Sir Nicholas Lyell and William Waldegrave can, with honour, survive as ministers given the clear and powerful condemnations of their actions contained in the Scott report.

Blame lies with the Prime Minister. The buck stops with him - especially for the way this has been handled since the report was published. But John Major was also Chancellor, then Foreign Secretary, then Prime Minister and head of the Security Services during this period. Yet he says he knew nothing of what was going on! Well, if he is innocent of complicity, then he must be guilty of incompetence.

Blame lies with our political system. Decisions are taken in secret, not to protect the country's interest but to protect ministers from scrutiny. Parliament does not hold government to account effectively. That is why reform is so vital. We need a Freedom of Information Act to open up government, parliamentary reform to give MPs more power to scrutinise government and a new culture of openness and accountability.

And finally, blame lies with the whole murky international system of selling arms.

The sale of arms and of "dual use" goods and technologies to countries in gross breach of international law and with appalling human rights records must be stopped. This is already the case in Germany, where companies are barred by law from selling arms to areas of tension.

Instead of tying overseas aid to arms deals we should consider the withdrawal of development aid from states importing arms other than for defensive purposes, or attempting to export arms themselves.

We should be skewing aid to countries which send less on weapons, adopt democratic practices and observe international codes of human rights.

We should be making all international sales of arms public by opening the UN's Register of Conventional Armaments, established in January 1992, and ensure this includes arms sales, military holdings and procurement from national production.

Forget, for a moment, the fate of individuals and the fortunes of this discredited government. If the Scott volcano does nothing else but force a reform of our system of government and focus attention of the shady world of international arms deals leading to tougher rules and grater openness at home and abroad, then Lord Justice Scott's work will have been a powerful shock to established thinking on the eve of the new century.

The writer is leader of the Liberal Democratic Party.