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When the Prime Minister was exercising his judgment on the matter, presumably he must have asked basic questions about the value of the export. Even if he did not do so, there were plenty of experts around at the time who were saying that the deal was grotesquely overpriced. All the warning signs of impropriety were there: a vastly inflated price, an unsuitable product and unorthodox financing. Does the Secretary of State accept that the Government made inadequate investigations into the propriety of the deal? Speaking in his capacity as the Government’s anti-corruption Minister, does he accept that the
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situation represents a real failure and abdication of responsibility by the Government and the Prime Minister?

Norman Lamb: Will the hon. Gentleman give way?

Mr. Mitchell: No.

A recent IMF report says that its staff should have been “more firm in opposing” the radar deal. Will the Secretary of State express similar regret on behalf of the Government? The people in the Government of Tanzania who pushed through the deal must bear the chief responsibility for wasting their impoverished country’s money. However, those people were aided and abetted by the British Prime Minister. As the Secretary of State knows, a partnership for development imposes both rights and responsibilities. If one pledges to be the champion of good government, one has a responsibility to act when one sees instances of bad governance.

Norman Lamb: Will the hon. Gentleman give way?

Mr. Mitchell: In a moment.

The former Foreign Secretary, the late and much respected Robin Cook, opposed the deal. In his memoirs, he describes how he supported the right hon. Member for Birmingham, Ladywood. He wrote:

He described how the Prime Minister was apparently very exercised with the right hon. Lady. He pointed out to the Prime Minister:

The Prime Minister apparently responded:

Norman Lamb: Will the hon. Gentleman give way?

Mr. Mitchell: I give way to the very persistent hon. Gentleman.

Norman Lamb: I am grateful to the hon. Gentleman for finally giving way.

As the hon. Gentleman tries to understand how this scandalous deal came to occur and why the export licence was granted, does he share my concern about the apparently excessively close relationship between BAE Systems and the Prime Minister—and perhaps other members of the Government? Does he share my worry about the role of Barclays bank in financing the deal? We have never got to the bottom of why on earth it granted a concessional loan.

Mr. Mitchell: I hope that the hon. Gentleman will be able to make a speech because he has done an immense amount of work on the matter. I hope that he will forgive me if I focus specifically on the way in which the Government reached their conclusions, and especially on the role of the Prime Minister.

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Like the Secretary of State, I celebrate the recent progress that has been made in Tanzania. I recognise the contribution that British support has made to that progress. However, that is not an excuse for this squalid episode. The Secretary of State is an honourable and decent man whom we respect. As he knows, Conservative Members support the principle of the international arms trade treaty to which the amendment refers. He is fair and open-minded. I was delighted that he said during last Wednesday’s International Development questions that he was considering our proposal for an independent aid watchdog to provide impartial scrutiny of the effectiveness of British aid at reducing poverty. He and I share a commitment to tackling the scourge of corruption in the developing world. He recently starred in a DVD about corruption, produced by the Department for International Development, called “Crimes of the Establishment”. At the time of the affair, he was the Parliamentary Under-Secretary of State for International Development, so perhaps he will tell the House whether, at the time, he sided with the Prime Minister or his departmental boss, the Secretary of State for International Development. I do not doubt that he will feel uncomfortable tonight in having to justify to the House the Government’s decision to authorise that squalid deal.

We used this Opposition day to raise the subject because there are important wider questions at issue, including questions about policy coherence across Whitehall, and the strength of DFID’s voice in battles with other Departments. The affair certainly raises questions about the Government’s respect for the Bretton Woods institutions, and it challenges the Prime Minister’s rhetoric on Africa and development. Just months before approving the deal, the Prime Minister said that Africa was

Events such as those under discussion threaten to undermine public support for development and aid. They make the Government’s promise of an ethical foreign policy seem like hot air.

Bill Wiggin (Leominster) (Con): My hon. Friend is making inquiries and posing questions, but is the House to believe that this is merely the tip of a rather murky iceberg, and that we should be looking for evidence of other, similar deals?

Mr. Mitchell: My hon. Friend may well be a conspiracy theorist, but tonight I want to make my case about the Tanzanian deal, pure and simple.

Andrew George (St. Ives) (LD): Further to the previous intervention, the hon. Member for Sutton Coldfield (Mr. Mitchell) said a moment ago that the deal raises wider questions. It raises the issue of parallels, and in order to benchmark the Tanzanian deal, surely he has to draw a parallel with the Saudi Arabian deal, which I think is—

Mr. Deputy Speaker: Order. I am not sure whether the hon. Gentleman was in the Chamber when I made my remarks on that topic—

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Andrew George: I was.

Mr. Deputy Speaker: Well, then he will have heard what I said.

Mr. Mitchell: The hon. Member for St. Ives (Andrew George) will forgive me if I say no more on that point.

It is no good the Government simultaneously negotiating debt relief, paid for by hard-working taxpayers, and allowing the Governments of poor countries irresponsibly to saddle their citizens with further illegitimate debt.

Pete Wishart (Perth and North Perthshire) (SNP): Will the hon. Gentleman give way?

Mr. Mitchell: I will, for one last time.

Pete Wishart: I am grateful to the hon. Gentleman for giving way once again. Is not the truly worrying and really reprehensible part of the whole sorry story the role of questionable third-party individuals and the payments into Swiss bank accounts?

Mr. Mitchell: The hon. Gentleman will know that that matter is currently before the Serious Fraud Office, which will no doubt report in due course.

It is profoundly unattractive to see the Government careering around the world signing high-minded anti- corruption declarations in international forums, while sanctioning questionable deals back in No. 10. We Opposition Members say that the deal was bad for Tanzania. It undermines public confidence in international development and should never have been agreed by the Prime Minister. Tonight, we look to the Secretary of State to assure the House and the international development community that such events should not, and will not, take place again.

7.43 pm

The Secretary of State for International Development (Hilary Benn): I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

I welcome this opportunity to respond to the speech of the hon. Member for Sutton Coldfield (Mr. Mitchell), because the decision taken by the Tanzanian Government some eight years ago to buy an air traffic control radar system, the UK Government’s decision to grant an export licence for it, and the basis for those decisions, raise important issues that the House will wish to explore, and we shall do so tonight.

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I shall begin by setting out some of the history. In 1999, the Government of Tanzania signed a contract with BAE Systems for a combined civilian and military-use radar system. The following year, BAE applied for two export licences for the system. In February 2001, a World Bank report was released, which concluded that the system offered poor value for money and was unsuitable for Tanzania’s needs. The World Bank subsequently asked the International Civil Aviation Organisation for a more detailed report. In November 2001, that ICAO report raised concerns about the project and recommended a further report. At the same time, Tanzania reached completion point under the heavily indebted poor countries initiative, and received $3 billion of debt relief, in a package from the World Bank and the International Monetary Fund. In December 2001, the export licence was approved by the Department of Trade and Industry—I shall come back to that point later.

In February 2002, the UK decided to withhold £10 million in budget support from Tanzania because of concerns about the purchase. In May, the second ICAO report raised further concerns about value for money and the balance between civilian and military use.

Norman Lamb: On that final report by the ICAO, there were many requests for it to be published at the time, but the Tanzanian Government refused. The British Government had sight of it, but as far as I am aware, it has never been published. Its conclusions were described to me by an official at the World Bank as a bombshell. Will the right hon. Gentleman do everything in his power to make sure that the report is now published?

Hilary Benn: I concur with what the hon. Gentleman says; as far as I am aware, the report has not been published, and the Government of Tanzania expressed their view, at the time, about whether it should be published or not. I am telling the House about what the report said. Its import was extremely clear, and I have just referred, in summary, to what it had to say.

In July 2002, the then Secretary of State for International Development, the right hon. Member for Birmingham, Ladywood (Clare Short), met President Mkapa, who outlined the steps taken by the Government of Tanzania to improve financial management, and at that point it was decided to continue to provide budget support. The sale went ahead and the system was installed. It continues to operate today, although the Government of Tanzania subsequently decided not to proceed with the purchase of the second phase of the system.

Mr. Ellwood: I know that I am referring to events that did not happen on his watch, but is the Secretary of State aware of the size of the Tanzanian air force? There are nine aeroplanes—six MiG-1s and three MiG-17s—and 10 Bell Huey helicopters. What on earth were the Government doing, giving export orders to Tanzania and selling it a civil/military-operation air traffic control system that it did not need, and that was four times too expensive, and four times larger than was required?

Hilary Benn: I bow to the hon. Gentleman’s expert knowledge of the Tanzanian air force and its
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equipment, but I want to correct him on one point: the sale of the air traffic control system was made by BAE Systems. The Government’s job was to take a decision on the licence—

Mr. Ellwood: The export licence.

Hilary Benn: Yes, the export licence. I shall come to that point in a moment. Secondly, the hon. Gentleman has to acknowledge that the decision to purchase the air traffic control system was made by the Government of Tanzania.

Daniel Kawczynski: The question that the hon. Member for North Norfolk (Norman Lamb) posed is important, and with all respect to the Secretary of State, I do not think that he answered it. Will he ensure that the World Bank report is published, so that the House can see it?

Hilary Benn: As I said to the hon. Member for North Norfolk (Norman Lamb)—and I think that he was referring to the ICAO report, not the World Bank report, as the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) says—my understanding is that the Government of Tanzania did not agree the publication of the ICAO report, and we should respect the view that they took on the subject at the time.

Mr. Kevan Jones: Does my right hon. Friend agree that the use of the radar system was not just military, as was implied earlier, but civilian, too? Today, the Tanzanian Government receive revenue from the use of the system.

Hilary Benn: My understanding is that that is the case—the Government of Tanzania receive revenue from the system, and certainly the system was a dual-use piece of equipment.

Mr. Ellwood rose—

Hilary Benn: If I may, I shall just make a little progress, and then I shall happily give way again.

Finally, following allegations of corruption, the Serious Fraud Office, as the House is aware, initiated an investigation, which is still under way. The sale has been debated in the House; it has been examined by the Quadripartite Committee; it has been covered extensively in the media; and it was referred to in books by the late Robin Cook and by the right hon. Member for Birmingham, Ladywood. I want to address directly the concerns that have been expressed, which relate to three issues. First, how effectively was the export licensing process applied in this particular case, and how effective a process is it in general? Secondly, I want to deal with allegations of corruption and, thirdly, the impact that all of this has had on development in Tanzania.

Norman Lamb: The Secretary of State has rightly identified the key issues, but will he confirm whether he shared the concerns of many other people? I am not sure whether he was a junior Minister in the Department at the time, but did he share concerns about the grant of the export licence? It was abhorrent to most people that it was granted.

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Hilary Benn: History is recorded by the participants, and there was a debate in the Government—it will not shock the House to learn that that was the case. As for the Department’s view, the right hon. Member for Birmingham, Ladywood was Secretary of State at the time, and I was a loyal and supportive Under-Secretary when the Government made a decision about the licence. There was then a collective decision, which it was—and is—the duty of all members of the Government to support. The hon. Gentleman understands that extremely well. I want to deal with the licensing process, because the key issue is the application of criterion 8 on sustainable development.

Mr. Andrew Mitchell: The right hon. Gentleman has very nearly answered the question, reinforced by the hon. Member for North Norfolk (Norman Lamb), of which side he took in the debate. Will he confirm that he was against the granting of the consents at the time?

Hilary Benn: First, I have made my view clear and, secondly, I do not propose to give a blow-by-blow account, even for the hon. Member for Sutton Coldfield (Mr. Mitchell), for whom I have the greatest respect, of the discussions that take place in all Governments, at all times, about all decisions that are reached. He knows that, and I know that.

May I tell the hon. Gentleman that his strictures—I listened carefully to what he had to say—sit uncomfortably with the Conservatives’ record when they were in government? It would not be right to hold this debate without acknowledging that fact. How did his party apply criterion 8? The answer is that there was no criterion 8, because the previous Government did not have any published UK criteria for assessing licensing decisions, which is why one of the first acts of the Labour Government after their election in 1997 was to introduce those criteria. The right hon. Member for Birmingham, Ladywood introduced the International Development Act 2002 to protect our aid budget from costs such as the scandalous spending on the Pergau dam. A little humility on the hon. Gentleman’s part is therefore required.

Clare Short (Birmingham, Ladywood) (Ind Lab): I am grateful to my right hon. Friend for giving way. Has a licence ever been refused because it breached criterion 8? In my view, that licence did so absolutely, but I understand that there has been some tidying-up in the Department. Has a licence ever been refused, because it breached criterion 8?

Hilary Benn: One licence was refused on the grounds of criterion 8, in direct answer to the right hon. Lady’s question.

Pete Wishart: What is the Secretary of State’s view of the so-called middlemen—Mr. Vithlani and Mr. Somaiya—who are rumoured to have paid up to $12 million into a Swiss bank account as part of the deal?

Hilary Benn: I, too, read the report in The Guardian, and those matters are the subject of investigation by the SFO. For reasons that the hon. Gentleman will understand, I do not propose to comment on them, as it would not be appropriate to do so.

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