MPs hold fire on 'arms-for-Iran' inquiry

The Commons Trade and Industry Select Committee is expected to meet within the next few days to consider whether a letter from Michael Heseltine, the President of the Board of Trade, promises enough help to justify setting up an inquiry into the arms-for-Iran affair.

The committee yesterday resisted pressure to hold an immediate inquiry into the controversy and instead sought assurances from Mr Heseltine that it would have access to the full material - including intelligence information - uncovered by his own internal investigations.

The move came amid signs of tension between Tories and Labour members of the committee over whether it should take evidence from Jonathan Aitken, Chief Secretary to the Treasury and a former director of BMARC, the arms company at the centre of the allegations.

On Tuesday, Mr Heseltine said in the Commons "there may be grounds for believing the final destination of naval cannon made by BMARC could well have been Iran".

The Tory-dominated committee bowed to the wishes of its Labour chairman, Richard Caborn, by calling on Mr Heseltine to say what information the department would make available to an inquiry.

In a letter sent to Mr Caborn last night, Mr Heseltine said there was no internal DTI report "as such" but that the department would send memoranda to the committee in the normal way, and that ministers and civil servants would be available to give evidence.

Mr Heseltine promised other departments would co-operate fully but on sensitive intelligence material there would have to be agreement on procedures.

Labour is wary of committing itself to a long inquiry with limited powers. Some Tories are said to favour a more modest inquiry into whether the Board of Trade has sufficiently tightened its procedures for processing military export licences after what Mr Heseltine has acknowledged was a virtual breakdown of the system in the late Eighties.

The Commons clerks were said to have queried whether it would be appropriate for the committee to include in its terms of reference Mr Aitken's period as a non-executive director of BMARC between 1988 and 1990. Mr Aitken has consistently denied he was ever told of the secret "Project Lisi" under which the company contracted to supply weaponry through Singapore to Iran.

On the other hand, Labour MPs were pointing to Mr Heseltine's Commons statement on Tuesday in which he declared that his department would be "very ready" to co-operate should the committee wish "to examine the issues raised by the allegation that Singapore was used as a conduit for arms exported by BMARC to Iran". The terms of Mr Heseltine's statement, it was suggested, paved the way for a wide-ranging inquiry.

Brian Wilson, Labour's industry spokesman, said last night on Channel 4 News that there must be "no backsliding" on the statement.

Parliamentary allies of Mr Heseltine were out in force yesterday to deny in strong terms that he had done anything to undermine Mr Aitken's position, either by his statement or by his relatively cautious answers to questions about Mr Aitken in a series of radio and television interviews. On Radio 4's Today programme, Mr Heseltine said that "of course" he wanted to see Mr Aitken remain in the Cabinet.

"Jonathan Aitken has issued a categoric statement that he knew nothing of them [the alleged illegal arms deals]. That has been accepted by the Prime Minister and the Government," he said.

Mr Heseltine admitted, however, that he was "very conscious" his statement would "lead to questions to Jonathan".

Inside Parliament, page 5