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24 Jan 2007 : Column 481WH—continued

11.15 am

Norman Lamb (North Norfolk) (LD): I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing this important debate and I endorse everything that the hon. Member for Kingswood (Roger Berry) has said. I will concentrate on the Tanzanian air traffic control system. Irrespective of the outcome of the investigation by the Serious Fraud Office into the deal, the granting of an export licence for this military air traffic control system is an absolute scandal. I regarded it as such at the time and I continue to be of that view. To be clear, we are talking about selling a military air traffic control system for $40 million to one of the most heavily indebted countries in the world—a country that does not have an air force worth having a name. At the time, there was no justification for the deal. The British Government and the Prime Minister knew that that was the case and yet they sanctioned granting an export licence. It is a stain on this country’s reputation that that deal was permitted.

I will focus on one particular aspect of the deal, which so far has not received much attention: the financing of it. As I have said, the deal was worth $40 million. Tanzania had to obtain approval from the International Monetary Fund to borrow the money because it was a heavily indebted country. To get approval from the IMF, it had to demonstrate that it was a concessional loan. Barclays Bank provided Tanzania with a concessional loan and so, in effect, part of the loan was a grant by Barclays to a heavily
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indebted country. That does not make sense. Commercial banks do not make such concessional loans so why did Barclays Bank? I asked Barclays many times when I was investigating the issue back in 2001-02, but answers were not provided. The spotlight needs to be on Barclays Bank, as well as on BAE Systems and the Government’s role in the deal.

I end by saying that the Tanzanians are now fighting back and want answers to these questions. I have a letter from the Consortium of Concerned Tanzanians International, in which they ask rather a basic question:

The Minister said that he cannot answer questions about that. I do not understand that as it is not sub judice. There are no legal proceedings as it is an investigation. I hope that in this debate or in writing he will be able to provide some answers.

11.18 am

The Minister for Science and Innovation (Malcolm Wicks): I start in the traditional way by congratulating the hon. Member for St. Ives (Andrew George) on securing this important debate. I will widen the discussion and talk about our whole approach to export control in this area. As the hon. Gentleman said, he has asked my office a number of written questions in advance. As he has not had time to ask all of those questions, he will appreciate that I do not have time to answer them all in this brief debate.

Understandably we have talked about Saudi Arabia and Tanzania and, as hon. Members will understand, I cannot comment on either past or ongoing Serious Fraud Office investigations. The Government's decision to issue export licences for an air traffic control system for Tanzania was taken after very careful consideration of the application against the Government's consolidated EU and national arms export licensing criteria. The Government listened and responded at the time to concerns expressed in Parliament and elsewhere.

I can assure the hon. Gentleman that any applications to export to Saudi Arabia are subject to the same degree of rigorous scrutiny. However, I am afraid that I shall disappoint him and other colleagues when I say that I cannot add to the statements that have already been made about the discontinuance of the SFO inquiry. That is partly because my Department does not lead on this issue, but mainly because the Attorney-General and others have already made statements about it. It would not be appropriate for me to say any more than the Government have already said in making their position clear.

It is entirely understandable for hon. Members to be concerned about bribery and corruption. The Government share that concern and are committed to working with our international partners and the business community to ensure that there is effective action here and abroad to tackle the problem of corruption. That is demonstrated by our ratification of the OECD convention on combating bribery of foreign public officials and by the Anti-terrorism, Crime and
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Security Act 2001. However, there were particular issues in this case, which the Attorney-General articulated.

Andrew George: The Minister says that we will understand why he cannot add to the comments made by the Attorney-General or answer the questions that we have reasonably put to him, but I am not sure that I do. After all, the Minister’s comments would not prejudice an investigation that has been discontinued, so he surely has the freedom to address it without creating a sub judice situation. It is important to uphold the standards to which this country subscribes.

Malcolm Wicks: Of course I recognise the hon. Gentleman’s interest and concern, but my Department does not have the lead on this issue. It is a matter for those elsewhere in the Government, and the Attorney-General and others have already given the reasons. At the centre of the issue is a concern about this nation’s security in the face of terrorism, so Ministers will be understandably loth to say a great deal more.

Roger Berry: Does the Minister acknowledge that his Department is responsible for the Export Credits Guarantee Department, which in turn has a clearly defined policy on bribery and corruption, and that some of the questions raised this morning relate to that wider Government responsibility, rather than specifically to the responsibility of the Attorney-General?

Malcolm Wicks: Of course we are involved in export control, and we discussed that at the Quadripartite Committee. However, the decisions in this case were, appropriately, made in other sections of the Government, in which I do not lead. As I said, issues of public security are involved, and it is sometimes difficult for Ministers to say a great deal about the intelligence. However, there will no doubt be other opportunities to raise the matter in the House.

Let me say something about the international arms trade treaty.

Andrew George: Will the Minister give way?

Malcolm Wicks: I am happy for the hon. Gentleman to speak even more.

Andrew George: Of course I shall be interested to hear about the international arms trade treaty—indeed, I congratulate the Government on it, as I said at the beginning—but the fact is that some of my questions can be answered only by a DTI Minister, as the hon. Member for Kingswood (Roger Berry) made clear. They relate to the residue of funds made available through export credits guarantees in relation to the al-Yamamah deal. I do not see why the Minister cannot address those questions.

Malcolm Wicks: What I can say in general is that the ECGD is another arm of the Government that supports the defence industry, among a range of other customers. It operates on a break-even basis and charges sufficient premiums to cover its risks. The hon. Gentleman asked several follow-up questions about the response originally given by the Minister of Trade on
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9 March 2006. I can simply confirm that the situation remains as set out in that response and I am unable to provide any further information, for the reasons stated then.

However, let me venture into other, very important territory, not least because the hon. Gentleman may want to intervene and congratulate the Government yet again. Export control is, by its very nature, an international activity. Controls stem from international agreements and the UK plays a key role in enhancing those agreements to meet the changing challenges in this area.

The Government have led calls for an international arms trade treaty, known as the ATT, to control transfers of conventional weapons. That is a cross-Government effort, and to this end the DTI is working with the Foreign and Commonwealth Office and other Departments that play a central role in export controls, notably the Ministry of Defence, but also the Department for International Development, to take that important initiative forward.

The precise content of the treaty will be a matter for negotiation, but as the former Foreign Secretary outlined in a speech in March 2005 on ATT, key elements that the UK would like to see in any treaty include the following: it should be legally binding; it should cover all conventional arms not just small arms; it should include core principles that make clear when transfers are unacceptable; and it should have effective monitoring and enforcement mechanisms.

Norman Lamb: Given the fine principles that the Minister has outlined, will he say whether he has any personal anxieties about the justification for his Department’s authorisation of the export of a military air traffic control system, which the United Nations’ own body said was not fit for purpose, to one of the most heavily indebted countries in the world?

Malcolm Wicks: I noted the hon. Gentleman’s remarks about the debate in Tanzania on that issue. It is a key partner in this matter and I welcome any debate in any nation about these important issues. With regard to our overall export control performance, we are doing very well in terms of how we administer it, targets and speed of dealing with applications. All the indicators are moving in the right direction. We have discussed that matter at the Quadripartite Committee and that is a notable success story of joined-up Government.

Andrew George: Will the Minister give way?

Malcolm Wicks: No doubt the hon. Gentleman would like to add to my congratulations to my colleagues on that success. I shall give him the opportunity to do so.

Andrew George: I am sorry, I cannot respond to the Minister’s jibing. He says that the UK is doing well on all the indicators. How are the Government doing with regard to export compliance and their investigations of corruption and bribery? Surely his Department must be aware that when it enters into such contracts, it endorses them, which raises questions about
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conventions and treaties that the Government have signed up to. What assessment have they made of that?

Malcolm Wicks: I have restated the Government’s absolute commitment to tackling bribery internationally. We are part of international agreements on that, but I simply repeat that the Attorney-General and others have dealt with the matter he raises: the discontinuance of the SFO inquiry. Because I am not the lead Minister on that matter, and because others have dealt with it, I cannot add to that statement, but that takes nothing away from our commitment to tackle bribery and corruption, and it takes nothing away from our commitment to develop international treaties to control arms sales in the manner I mentioned earlier, through the treaty we are seeking to develop.

It is relevant in the closing minute to say that many will already be aware that I shall be starting a review of the controls introduced in 2004 under the Export Control Act 2002. That has been timed to commence three years after the new export control legislation was implemented and it is a matter we shall discuss in Parliament, not least with the Quadripartite Committee. I look forward to engaging with colleagues on those issues in this most important area which, as we have seen during this interesting debate, properly excites much attention, and inevitably, much controversy.

11.29 am

Sitting suspended until half-past Two o’clock.

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Innovation Policy

2.30 pm

Mr. Peter Atkinson (in the Chair): Before I call Dr. Ian Gibson, I ask hon. Members to bear it in mind that the winding-up speeches have to start at about 3.30 pm. I am sure that everyone will be able to speak if people keep their remarks reasonably brief.

2.31 pm

Dr. Ian Gibson (Norwich, North) (Lab): Thank you, Mr. Atkinson. It is a pleasure to deliver our ideas about innovation to you this afternoon. I am pleased to see here the doyens of the science and technology fraternity. There are no sisters, but the fraternity—the brotherhood—is here to ensure that we talk about science and technology at a level that is necessary to deliver the innovation and determination of economic development in this country which will not necessarily surpass but will equate with what is happening in the far east, in countries such as China and India. We are not scared pantless about that, but we do worry about how those countries are taking up the issues that we, too, have taken up. We hope that, ultimately, it will be an environment not of competition but of co-operation, in which we can learn from one another, because the science and technology community has always been international and has been very important.

I take the issue of innovation quite seriously. I do so because I heard the ambassador from the United States talking this morning on Radio 4 about innovation and because I hear Prime Ministers, Chancellors and thousands of other people talking about innovation. I have always thought that, as with the term “entrepreneurship”, when people use the term “innovation”, they do not really fully understand the process, how it works and so on. I put myself in that camp, too. That is why I have raised the issue of what innovation really means. I welcome the support that I have had from many different groups, which I shall mention in a moment. It is interesting to learn how they see innovation. They are scientific groups and non-scientific groups, but they are all people who have taken the issue quite seriously.

Of course, the Department of Trade and Industry has been the organisation in the UK that has taken up the issues, and it has produced copious documents—which spoiled my weekend. It was good that the Norwich City football game was off, because I had more time to read the documents. They are indeed copious: there are pie charts, histograms, graphs and so on. I would not want to argue with them but gosh, they are very interesting. That shows that the DTI takes the issue seriously, which means that the Government take it seriously, too. I see the Hansard reporters looking at me assiduously. They do not have to worry. They will not have to publish the whole thing—it is quite a serious tome.

What is innovation from the point of view of this country, and across the world? Ambassadors and others talk about it, and the term falls from people’s lips quite easily. Very simplistically, it is defined as the ability to translate serious ideas into products and ways of doing things that will benefit the people whom we serve, and people across the world. There are ways of
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measuring innovation, to which I shall come. There is great argument about how we measure innovation and whether companies and individuals understand what innovation is all about. What I am trying to say, which others will take up in specific terms, is that one size does not fit all. Innovation is not something that people are born with; it is something that they learn, accrue and can develop through their activity in this country and in other parts of the world.

There are people who I think are bona fide innovators—people who always want to change things and do things better, make products and develop things. There are people who are entrepreneurs, who want to change things and see the way forward. I do not think that people are born that way; I think that they accrue it from the world that they live in and interact with. Much research goes on with regard to the successful exploitation of new ideas. Innovation gets things done and it makes things. In this world, I have always been brought up to think that if we do not innovate, we die. That was the phrase for years and years—innovate or die. It probably emanated from US culture, which is gung-ho in many ways, but successful in many other ways, too. We have learned lessons from that.

The differences that we can make in the world—innovation is part of this—are either small, incremental things or large paradigm differences. There are Nobel prize-winning ideas, which make amazing changes, and there are the little things that individuals do in their lives that make things different, not just for them but for the people with whom they interact. Innovation is very important because UK plc depends on it, as has been acknowledged by the DTI and the Government as a whole. We need to survive in what is now, sometimes, a vicious, competitive global environment, which is growing. We hope that it will not be that way and that there will be more interaction, but things are not often put forward in that way or in that language.

Innovation includes many things. In business, it includes products and services, but it includes many other things, too. Nothing can be more important than climate change, as we know, and the new technologies and how we develop them and encourage an environment in which they are developed in order to change the world for everyone’s benefit.

The situation is the same in the health service, and I shall talk more about that later. A report that has just been published by the National Endowment for Science, Technology and the Arts shows that innovation takes place without us even knowing that it is taking place. It is not planned; it just happens because some people are naturally like that. They find new ways of doing things.

I came to this debate having spent a day in the bath—well, an hour or so in the bath—thinking about what innovation meant. I remember simple, daft things such as pipetting things with your mouth. Sometimes you got a slurry of acid in your mouth, and suddenly I thought, “There must be another way to do this”—to suck fluids up into a pipette.

Dr. Brian Iddon (Bolton, South-East) (Lab) indicated assent.

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