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Tony Worthington: I do not disagree with anything that was said by the hon. Member for Twickenham (Dr. Cable).

What a pity that we are having this debate today, given that the Bill was so welcome. It represents a major step forward and is slightly tarnished by the sustainable development aspect. It is still incomprehensible to me why we are in such a tangle on that issue. I praise the Department of Trade and Industry for its role during the mass lobby of Parliament last week, when it spoke to those who were calling for the poor to be looked after under the trade rules. At the heart of that day was the concept of sustainable development, and it was very good that the DTI, alongside other Departments, was making it clear that the Government's policy genuinely has sustainable development at its heart. Indeed, that goes back to what was said by the Chief Secretary in respect of the following announcement:

"Government Departments have been asked by the Chief Secretary to the Treasury to ensure that sustainable development issues are considered and reflected in their bids for the 2001 Spending Review".

That gave rise to a press release entitled "Sustainable Development at the Heart of Government Policy Development"—an approach that is very welcome and which we want to encourage.

There are other instances in the light of which today's debate is genuinely incomprehensible. On 11 January 2000, the Chancellor made a very important speech. In giving the Gilbert Murray memorial lecture, he called for Government policy to maximise the benefits of debt relief in poverty reduction and economic development by imposing sustainable development criteria. He said:

"Britain's export credits will only support productive investment that assists social and economic development and thus reduces poverty."

That is absolutely clear and it was very welcome. Hon. Members have referred to the consequence of that statement in terms of the Export Credits Guarantee Department. Seemingly, the oddity is that, although any rank and file export that goes to the ECGD must be justified by the test of sustainable development, something that is related to arms does not have to pass that test. As we seem to be getting towards joined-up government, it appears that somebody is undoing a link, which is very unfortunate.

The Secretary of State says that we take sustainable development seriously. That is the trusters' argument, but the case for the trusters is seriously weakened by two

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factors. First—this seems pretty much the crunch factor—no one has ever found an example of an arms export being turned down on the basis of sustainable development. I do not know whether the Minister has received information yet from other sources, but when I addressed a question about the matter to the Foreign Secretary in the Quadripartite Committee in March, he said, prompted by his officials, that there had been no cases in which sustainable development had been the ground on which an export was turned down. Unless something has happened since March—if it had, one would have expected the DTI to remember it—we are being asked to take seriously the assertion that sustainable development is at the heart of Government policy in the DTI, and in terms of export controls, even though there has never been an instance in which it was the reason for turning down an export. That is difficult to accept.

The second weakness in the argument has been the presence in the debate, perhaps for some malevolent reason, of the Tanzanian air traffic control system. If one had had to sit down in the past in a university seminar and devise a project that would fail a sustainable development test, one would have come up with this one. It is a beauty. One section of the Government had been giving debt relief to one of the world's poorest countries on the grounds that that debt was unsustainable, then along came another section of the Government encouraging it to take on £28 million-worth of debt for a civil air traffic control system that did not work and was described in the first International Civil Aviation Organisation report—I have not seen the second report, but I think that it is even more damaging—as being out of date and in need of extra equipment to make it work. One has to wonder how that can be classified as sustainable development.

5.45 pm

The Government's response when BAE Systems came to them in 1997 should have been to acknowledge that their policy was not sorted out and that sustainable development was not at the heart of Government at that time. However, that did not happen. The project went through the strange procedure of being approved by the arms working party, which was virtually the same as saying, "You're licensed." I say that because of 4,000 to 5,000 applications a year, only about five were not licensed at the end of the procedure. It was almost unheard of for someone not to be given permission to move forward by the arms working party, which was composed only of officials from the Ministry of Defence and the Foreign Office, and had no representatives from the Department for International Development. The project was a mess, and it would not go through nowadays.

What puzzles me is that no Minister has been able to say that such a project would be caught by the Bill. It would be welcome to hear the Minister say that the Government are upgrading the sustainable development criteria so that such projects will be caught in future. It was a mess, with Cabinet Ministers quarrelling in public over the decision on whether the project was to go ahead at a time when the system had already been built and was resting in crates on the Isle of Wight. Such things happen. However, we need assurances that projects that so clearly infringe any notion of sustainable development will not be approved in future. It would be encouraging if the

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Minister could say that the Government recognise the need to strengthen the sustainable development criteria and that a project such as the Tanzanian air traffic control system would be caught by the Bill. I hope that he will address those concerns.

Tony Baldry (Banbury): It is a matter of regret that the Government have given so little time to the debate on Lords amendments to the Bill, which has been widely welcomed and on which there is broad consensus. We have only three hours and the Minister took the first half an hour in introducing the Government's response to the first group of amendments.

In respect of sustainable development, in May 2001 the Quadripartite Committee said that

"consideration should be given to putting on the face of the Bill assurances . . . that licensing decisions should have due regard to the general purposes for which controls can be imposed, as set out in the Schedule to the Bill".

I do not believe that the Committee envisaged that the Government would initially give sustainable development a strong profile in the draft measure, subsequently remove it when the Bill was first published and amend the measure to include it in another place. However, the language is rather ambiguous, and I shall briefly act as a boring lawyer and make a couple of boring lawyer's points.

I am a member of the Quadripartite Committee and I chair the Select Committee on International Development. The hon. Member for Clydebank and Milngavie (Tony Worthington) is a member of the latter, and many other members of it are or have been present this afternoon. We have tried to achieve the coherent application of criterion 8 of the EU's consolidated code of conduct for arms export, which ensures, especially in the developing world, that export licences are balanced with the recipient country's economic and poverty reduction policies. Consistent and balanced defence exports are therefore the watchwords.

The Government's assertions in the explanatory notes show that the basis for the latest status of sustainable development is clarifying

"the manner in which sustainable development issues are addressed".

It is not so much the "manner" in which sustainable development is "addressed" as the way in which it is expressed that is ambiguous in the Bill. It states that,

"guidance about the consideration (if any) to be given"

to sustainable development must be provided.

I have two anxieties about the status of such "consideration" of sustainable development. First, I am worried about the weasel wording of the phrase "to be given", which I suspect will mean that sustainable development is often considered but frequently ignored. The wording has not been amended to "have regard to", and the Bill will therefore not move us much further than the consideration that is currently given to criterion 8.

Let us consider a straightforward example. Hon. Members are more than aware of the further developments in the Tanzanian air traffic control debacle, and I shall not repeat them. However, hon. Members may be interested in the initial issues that surround the radar sale, not least the first International Civil Aviation

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Organisation's report to the World Bank. It was published in November last year, when the Government claimed that they took full account of sustainable development.

When the Select Committee on International Development invited the Secretary of State for Trade and Industry to give evidence on the Tanzanian case, she refused but reaffirmed in a letter to us on 17 December 2001,

"the Government's commitment to considering carefully the issue of sustainable development as defined in criterion 8."

If the Government were serious about carefully considering sustainable development, they would not have granted the Tanzanian licence after carefully considering the ICAO's previous submission to the World Bank, which stated that,

"the system, as contracted, is primarily a military system and can provide limited support to civil air purposes".

I understand that the Department for International Development considered the document to be sufficient ground for not granting the licence. The Department of Trade and Industry did not listen to those anxieties, and that demonstrates disingenuousness in the dealings in Whitehall.

In response to a written parliamentary question by me on 28 January 2002, the Under-Secretary of State for Trade and Industry stated:

"The Department of Trade and Industry's Export Control Organisation has received no representation from the International Civil Aviation Organisation on Tanzania's export licences."—[Official Report, 28 January 2002; Vol. 379, c. 66W.]

That statement, which implies that the Department had never seen the relevant ICAO document, contrasts sharply with the response of the Secretary of State for International Development to a question on 5 February 2002. It stated:

"When I received a copy of the letter of 8 November from the International Civil Aviation Organisation (ICAO) to the World Bank, I sent copies to the Department of Trade and Industry, the Ministry of Defence and the Foreign Office. I have since had discussions and correspondence with these Departments on the content of the ICAO letter."—[Official Report, 5 February 2002; Vol. 379, c. 918-19W.]

Not only is the Department of Trade and Industry's response to my parliamentary question somewhat disingenuous, it also reinforces the Department's ambivalent attitude to the "consideration" of sustainable development criteria. As other hon. Members have said, one sometimes has to be suspicious of Government collectively—not any specific Government, but the machinery of government.

That leads to my second worry about the Bill's weasel words on sustainable development status. The Bill contains the caveat phrase, "if any" about sustainable development. Doubtless it means that the Government can flagrantly disregard criterion 8 if they wish, while using wording to make such a dismissal of sustainable development almost impossible to challenge. Under such circumstances, how can the current status of sustainable development ensure coherent export policy? It simply will not.

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There are no two better examples than the early stages of the Tanzanian export control licence application and the first case of defence exports to India. Let us consider the Foreign Secretary's recent evidence to the Quadripartite Committee. On 21 March, he said that,

"it is whether the proposed export would seriously undermine the economy or seriously hamper sustainable development of the recipient country. As with any other criteria, those have to be weighted in the round".

I believe that the Foreign Secretary is suggesting that we read "cost effective" for "sustainable development". Cost effective for whom? Can £1 billion-worth of defence spending be cost effective for a country that has increased its defence spending by 28 per cent. in the past two years? Defence spending of £1 billion by India is worth 10 years of UK bilateral development to India, which is our largest recipient of bilateral aid. I suspect that the money would be better invested in India's under-resourced health and education systems. How can the scale of such defence sales be within the capacity of a country that is the top recipient of the Government's bilateral aid?

Criterion 8 explicitly asserts that export licences should not be granted when that would be incompatible with economic capacity. That was clearly the case when Tanzania's economic stability already depended on the UK's recent writing off of £100 million in debt and richer countries' collectively writing off of $3 billion in debt.

As the Tanzanian case shows, it would be beneficial to developing countries if the phrase "if any" were removed. If hon. Members doubt that, I refer them to the Foreign Secretary's comments to the Quadripartite Committee, when he spoke of,

"careful consideration of whether the proposed export could seriously undermine Tanzania's economy or seriously hamper Tanzanian sustainable development."

Those sentiments echo those of the Secretary of State for Trade and Industry and should make us question whether "cost effective" means moneys for the UK or the recipient country.

Let me put the matter another way. I suspect that the conundrum is made no clearer than by the response of the Under-Secretary of State for Defence on 29 January to a written parliamentary question that I tabled. He said that when the Tanzanian case was initially assessed under the F680 procedure,

"sustainable development was not a specific factor taken into account . . . as . . . Tanzania did not include cost information, it would have been difficult to take any impact related specifically to the financing of the equipment into account."—[Official Report, 29 January 2002; Vol. 379, c. 218W.]

Where on earth is the "weighted in the round" consideration of criterion 8?

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