The Arms-for-Iraq scandal contributed to the growing dissatisfaction with the administration of John Major and was a cause of the landslide for Tony Blair in 1997.

The scandal was triggered by the collapse of the trial of four directors of Matrix Churchill in 1992. Following the first Gulf War of 1991 there was interest in the extent to which British companies had been supplying Hussein's regime with the materials to prosecute the war. Matrix Churchill was a company that produced machine tools that could be used to manufacture weapons parts. As one of the Directors claimed to have been working for the intelligence services the Ministry of Defence advised Matrix Churchill on how to apply for export licenses of materials that could be used to make munitions in such a way that would not attract attention. When Alan Clark admitted under oath that he had been 'economical with the actualitee' in answering questions about the policy on Arms exports to Iraq the trial collapsed and triggered the Scott Inquiry .