Examination of Witnesses (Questions 40
THURSDAY 21 MARCH 2002
MP, MR WILLIAM
40. Have you flown on the flight deck?
(Mr Straw) I think so. The very first occasion was
when I went with Mr O'Neill to Ghana via Lagos and with Kate Hoey,
who promptly fell down an empty hole.
Chairman: Are you sure this should not be in
41. May I tell you that I did spend considerable
number of hours on the flight deck of a British Airways 747 from
Kenya to London. The point I want to make is that the radar infrastructure
in Africa is so appalling that the only way in which airline safety
is assured is by the pilots of civil airliners speaking to each
other through a particular channel to report their positions every
ten minutes. This is the way that collision avoidance is secured.
Therefore, would it not be the case that the export of excellent
British systems to Tanzania would be of benefit not only to Tanzania
but to all those travellers in the air over the continent of Africa?
(Mr Straw) Mr Howarth, thank you and I note what you
say. I was made aware yesterday of the letter that you were sent
and, indeed, what was said in this letter. It was plain to me
that this matter is now very fully on your record and therefore
I should do my best to speak about it in this session. However,
if I may make this clear, the question per se of what it
feels like to fly over Africa in a civilian airline is again not
a relevant criterion. What we have sought to do is simply to apply
the criteria and come to the best judgments that we can.
Donald Anderson: Secretary of State, you seemed
a little surprised that Mr Baldry having teed up the ball so well
in respect of this did not actually strike the ball.
Tony Baldry: I got the answer that I wanted.
42. You said that the Government were indeed
indivisible. Can one have any other construction then of the Secretary
of State for International Development's decision other than that
the Government disapprove of this contract?
(Mr Straw) There is neither an issue of approval or
disapproval, it is working within the framework of the rule of
law and of policy and different criteria apply. This is why I
made the point I did a few minutes ago when I drew to the public's
attention, as well as the Committee's attention, that there is
no issue directly of the British taxpayers' money being involved
in this contract and so the question is do we license others to
make the export or not? Impalpably, Mr Anderson, quite different
criteria apply where British taxpayers' money is at stake. If
it is we who are buying the equipment or paying for it directly
or, as it happens in respect of any country who are recipients
of aid where we are providing aid, it is entirely right and proper
and also has to be lawful that the relevant Secretary of State
has to apply to himself or herself the criteria which operate
in that case. That is what Clare [Short] is doing here, as any
other Secretary of State for International Development would do.
I am sure I will think of examples when I get out of this room,
Mr Berry, but I can think of plenty of examples from my time certainly
as Home Secretary where I would make a decision on one set of
criteria in Government which was different from decisions which
were also right which had to be made on a quite separate set of
43. The Tanzanian Government might not have
been quite so keen to welcome the decision as put forward by Mr
Howarth if they had known as a consequence of that decision their
bilateral development aid budget was going to be suspended.
(Mr Straw) That is a judgment that I cannot make.
44. I think we have to move on to other topics.
Can I ask a new question about the information in the report,
Secretary of State. In relation to information on refusals, your
response to our questions seems to suggest that disclosure of
more information on refusals was something that you were not particularly
enthusiastic about. My question would be would this not be an
effective way of, as it were, naming and shaming our competitors,
perhaps EU partners, who engage in undercutting, assuming, of
course, that we never engage in that practice?
(Mr Straw) I do not think we do. It is perfectly possible,
for the reasons I explained right at the beginning, that, on our
best judgment, we may come to a decision to approve a licence
and other EU partners may come to the opposite decision. I say
again some of these are very, very finely balanced judgments indeed.
There is no part of our consideration to go into what is called
undercutting but, as I say, that is possible. On some of the detail
about European Union practice, other European Union countries,
with respect I need to deal with that in a closed session.
45. My next question was going to be whether
you would be prepared to tell a little more about the possibility.
(Mr Straw) Yes.
46. Foreign Secretary, if we can turn to wider
policy issues. This is a rather big question I acknowledge. Where
do you think the balance lies in policy between doing good by
restricting arms sales and doing good by encouraging the UK's
defence manufacturing industry?
(Mr Straw) I think there is a balance there, as there
usually is in Government decisions. In the longer term I do not
happen to think that the two are in conflict. At any one moment
these two objectives of trying to create a safer world through
an effective international and bilateral system of arms control
and the other side having a profitable and viable defence industry
can be in conflict, because I am always conscious of the fact
that where I refuse a decision that is going to have consequences
for the turnover, profitability and the employment of the individual
firm at the time. It is in the long term, and even in the relatively
short term interests of this country we should make the international
community as safe as possible. It is not that you can ever avoid
conflict using military weapons, we are not a country which has
a pacifist policy as far as international relations are concerned.
We recognise the importance of having strong viable defence forces
because such is the nature of the worldas we have seen
in Afghanistanthat they have sometimes to be used and used
effectively. The more we can control the flow of arms and the
more we can deal with states which are in turn supporting rogue
states and terrorists by their own sale and supply of arms the
better it will be for the overall international environment. Then
we can come back to the issue of prosperity because what we know
for certain is that where countries are riddled by conflict then
they quickly slip into poverty and if anybody wants a better example
of that they only have to look to Africa, Central and Southern
Africa. If one looks, for example, at the trade other than of
minerals from countries in Central Africa, it is tiny and it is
tiny because of conflicts which have been caused there.
47. In your travels around the world now, since
you became the Foreign Secretary, how have you found your reception
in those countries where Britain has been an exporter of defence
equipment? Have you found them to be particularly appreciative
of Britain's support?
(Mr Straw) Support for?
48. For defence exports to those countries,
have you found them to be appreciative of that? Have you found
them to regard that as the actions of a friend and ally in assisting
them and has the export of defence equipment thereby assisted
in promoting not only stability in the region but also promoting
(Mr Straw) It is hard to generalise.
49. I did say those countries who did.
(Mr Straw) When I visit any other country on a bilateral
visit, indeed in many cases when I am in international fora as
well, I ask for a briefing on any representations which I can
properly make on behalf of British companies and British exporters.
That by no means just includes defence and related suppliers but
any other British company. I do my best to represent the interests
of British exporters and British business, obviously within the
framework of international law at the same time. Mr Howarth, you
asked me how far my representations are appreciated, I think much
depends on who I am talking to whether they are convinced.
50. Sorry, Foreign Secretary, I did not mean
those countries where you have a brief, as it were, to promote
a particular British contract which is under discussion but those
countries, obviously Saudi Arabia, where we have been an important
contributor to their defence posture, and there are other countries
around the world. I wonder, have you felt that has been an important
factor in cementing a relationship with the United Kingdom?
(Mr Straw) It is one factor is the answer and it varies
from country to country. The nature of any industrial commercial
relationship is one factor in the relationship but there are countries
around the world, particularly in Africa, where our trade is relatively
small but our relationship is a very strong one. I give you perhaps
the example of Uganda where I speak from recollection, we are
currently providing about £45
million of aid to Uganda. It has been a very successful programme
which Clare Short has developed over the past five years there
and one of the consequences, for example, is there is now the
universal primary education because of the kind of leadership
we are providing there. At the same time when I visited Uganda
I noted that our trade with Uganda at £37 million is less
than the aid we provide to them. I do not draw any conclusion
about that but I would accept this is a country which has been
through the most terrible deprivations in the past and that we
are right to support it through aid. We have a pretty close relationship
with President Museveni and his colleagues there. Over time as
the aid trails off we will look forward to a time when Uganda,
along with other African countries, becomes a lot more prosperous
and with a bit of luck in time there will then be a natural demand
for British goods.
51. Do you acknowledge the importance of defence
exports to Britain's defence manufacturing capabilities?
(Mr Straw) Yes.
52. Because we have a limited market in our
own country, would you not agree that, to obtain the economies
of scale we need to have a defence export capability as well?
(Mr Straw) Yes, I do. The answer that Peter Hain gave
on 26 October 2000 which picked up in this particular respect
what Robin Cook said on 28 July 1997 sets out very clearly the
context in which we would take account of the importance of the
British defence industry and it is important but not to the point
where the importance of the British defence industry could be
allowed to override key considerations like countries which are
in breach of their human rights obligations or engaged in internal
repression or where they are a risk to regional stability. If
you are asking me outwith these consolidated criteria could we
have as efficient armed forces as we have without a pretty significant
and successful defence industry sector, and could that defence
industry sector be as successful as it is without exports, the
answer to both those questions is no, I am aware of that. Those
two considerations cannot ever justify a breach of these consolidated
53. Do you think we should be exporting more?
(Mr Straw) Provided they are within the criteria and
not outwith the criteria, yes, of course we should, as we should
in every other field.
54. Can I ask about the International Trade
In Arms Regulations with the United States. During a recent visit
to Washington of the Defence Committee we discussed the lack of
progress on reform on those International Trade In Arms Regulations
on a number of occasions. Very much the majority response of those
we discussed it with was that there was no justification for the
bureaucracy and delays that the present system had caused. I really
want to ask you, Secretary of State, whether any progress has
been made towards agreeing with the United States a waiver for
the UK from the US International Trade In Arms Regulations? Also,
what are the remaining sticking points?
(Mr Straw) May I ask Mr Ehrman to answer this. I am
happy, obviously, to take supplementaries.
(Mr Ehrman) Thank you. The discussions with the United
States on this issue are continuing. They are continuing constructively
and amicably. The issues still to be finalised and discussed are
some of the technical points relating to the compatibility of
our export licensing regulations with the proposal of the United
States to allow unclassified equipment to come to this country.
So we are still in negotiations with them but the negotiations
at the moment are going well.
55. If I could then turn to sustainable development.
If excessive spending on arms is not to adversely affect health,
education and social services of our country, is it not the case
that we need a definition of sustainable development? Does the
Government have, or intend to develop, a workable definition of
sustainable development, and clear benchmarks, setting out what
exports would be likely to hamper a country's sustainable development,
against which licence applications can be assessed? This may or
may not bring us back to the Tanzania air traffic control system.
(Mr Straw) As I say, we are in relatively new territory
here with the principles of sustainable development. There are
two parallel things in train. One is that the Cabinet Office is
undertaking an exercise with relevant Government departments in
assessing the procedures for judging the criteria. It is not possible
to say in advance that goods to X exported to country Y are going
to breach any of the criteria including Criterion 8. You will
be aware that the criteria themselves, which are what we have
to follow, say that they will not be applied mechanistically but
on a case by case basis using judgment and common sense they would
have to be. Sustainable development is an important criteria.
It is also one which by definition is more likely to be the subject
of some difficult judgments because it is a very wide idea. It
is wider than some of these other criteria, that is in its nature.
That is one set of developments which are short term. Secondly,
as I think you will be aware, in the Export Control Bill, as amended,
the Secretary of State if this Bill goes through, as I think it
will do, is required by Clause 7(4) that the guidance required
by subsection 3 must include guidance about the consideration,
if any, to be given when exercising such powers to issues relating
to sustainable development and to issues relating to any possible
consequences of the activity being controlled that are mentioned
in paragraph 3 in the Schedule. So there will be more detailed
guidance there as well.
56. Are you content that a workable definition
of sustainable development exists or should that be produced?
(Mr Straw) What I would sayto use the word
againis we are involved in an iterative system where we
are building up experience, and that is the crucial thing here.
There has been a lot more experience about classic defence military
criteria. There are some possible export licence applications
which do not require more than a milliseconds' consideration because
it is perfectly obvious that if we have an order for arms to a
known and notable rogue state the answer to that is no and that
is the end of it or where it is a military only piece of material,
which has only one application, not dual use, and where it is
clear beyond any peradventure that it would be used for internal
repression far exceeding any need for maintenance in a proper
sense of law and order within human rights bounds. Those are straight
forward cases, as it were. At the other end, not least because
it is a new area and it is an intrinsically wider definition,
there is the issue of sustainable development and what we have
to do is to carry on building on the experience that we have had.
57. Can I just say, Secretary of State, you
do keep referring to making decisions on a case by case basis.
At the end of the day there are cumulative effects. The sum total
is not simply adding up the individual bits, as it were.
(Mr Straw) Yes.
58. Is it not necessary at some stage to get
beyond simply a case by case basis for evaluating some issues?
(Mr Straw) I talk about case by case basis because
that is the basis on which we are required to work. It says these
will not be applied mechanistically but on a case by case basis
using judgment and common sense but that is no different from
any other system of this kind where you try and lay down rules
in advance. You have a system for making judgments on individual
decisions and then you have a system for retrospective scrutiny.
If I can give you an example in which I have been involved, both
in my previous job and in this job, which is a discrete area where
there is a lot of experience. If you take the issue of interception
warrants, there are criteria laid down by Parliament in Acts of
Parliament. You have to deal with each case on a case by case
basis but matching the individual cases before you against the
criteria laid down by Parliament and, as it happens, very detailed
codes of guidance as well. Then behind that, when the Secretary
of State has made his or her decision, there is a system of retrospective
scrutiny which although it takes place in private, because it
has to, is nonetheless very thorough, in this case it is undertaken
by a senior retired Court of Appeal judge, so that is the way
it works. I do not see, in terms of process, any other way of
achieving the end that we all desire which is that we have a good
and straight forward system of export controls. I do think as
what is a relatively new system beds down and experience is built
up then the system can become more predictable because the areas
of real discretion will become less.
59. Just a very quick point really. Do you accept
that because of the new situation with regard to HIPC, with regard
to deals being done between the World Bank and the IMF and ourselves
and poor countries in Africa or elsewhere, that in future it will
not be acceptable to have debt forgiveness and assistance to those
countries unless at the same time we are, when we have a choice,
preventing them from inappropriate behaviour, such as air traffic
control systems which are ludicrously expensive?
(Mr Straw) Mr Worthington, that begs a lot of questions.
My view is that what we have to do, so far as export controls
are concerned, is apply the criteria and apply the criteria in
as fair and appropriate way as we can.
Chairman: Can we move on to prior parliamentary
scrutiny and Sir John Stanley.
1 Note from Witness: The actual sum of bilateral
aid to Uganda in 2001 was £69 million. Back