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That raises some important Select Committee issues. Members of the Quadripartite Committee can see, in
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strictest confidence and restricted circumstances, end-user certificates for all arms applications, however sensitive. There has been no breach of that security. We were told, however, that we could not see the cost-benefit analysis on which the decision to grant the licence was based, and that the code of practice on Government information does not apply to Select Committees. We cannot understand that, and I will continue to pursue that matter.

The issue goes beyond the specific decision to how Committees can scrutinise such decisions. The Quadripartite Committee has previously raised the issue of prior scrutiny of decisions—scrutinising decisions before they are formally made. We were told that we could not do that and that it would not be right, as the Executive must make the final decision. Of course the Executive must make the final decision, but the entire media were engaged in that debate: it was no great secret that the right hon. Member for Birmingham, Ladywood (Clare Short) had a different view from that of the Government. Everyone was discussing the issue, but the Quadripartite Committee, which was set up by the House to scrutinise arms exports, was not allowed prior scrutiny, which might have been helpful in ensuring that a sensible decision was made.

Having said that, the Committee concluded—this is my final quotation, but it is important for the record—that,

That is not a distinction that many Members have made this evening. The Committee continued:

I think I heard that earlier this evening, so somebody has been reading this carefully—

Although I think that that was the wrong decision, I must inform the House that not only all Labour Members, but all Liberal Democrat and Conservative Members on the Quadripartite Committee unanimously signed up to that statement that the decision was a “judgement call”, and that it was reached after “careful and prolonged consideration”.

Clare Short: It seems to me—and this is very much an issue for the Secretary of State as well—that if the contract did not breach criterion 8, criterion 8 is not worth having. There is no question but that the decision damaged the development of Tanzania, and if the provision can be read in a way that allows such a decision through, it needs rewriting. Does the hon. Gentleman agree?

Roger Berry: I believe that the matter needs to be revisited seriously, and I want to deal with that now.

The Government’s amendment to the Opposition motion refers to developing a “methodology” for dealing with criterion 8 issues. I would be grateful if my hon. Friend the Minister were to comment further on
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that in his reply. I am aware of the user guide and that the UK Government have again played a leading role in the European Union on the issue. I have read the user guide, which provides some helpful ideas about how to apply criterion 8, but I would not go as far as to call it a “methodology”. When we review the export control Acts and continue to debate criterion 8, I hope that further time can be given to that issue. If there is a methodology, and I have missed it, I would be grateful if my right hon. Friend the Secretary of State ensured that we see a copy at some stage.

The right hon. Member for Birmingham, Ladywood asked how many times criterion 8 has been used to reject an export licence application by the UK. The answer is once, as my right hon. Friend the Secretary of State said. That raises an interesting question: why, since 2003, have the French Government refused 42 applications on criterion 8 grounds, while we have refused one?

Before speculation becomes rife in the Chamber, let us consider that important question. When a licence is refused, a denial notification must be circulated among the other European Union member states. Given that if France refuses a licence a denial notification must be circulated among the other EU members, the Government presumably know on what grounds it has refused licences on 42 occasions applying criterion 8 grounds. I should be grateful if they could tell us that at some stage, and also tell us why the United Kingdom has refused only on one occasion.

I have referred to the user guide which currently provides best practice for the interpretation of criterion 8. In fairness, it should be said that that was initiated by the United Kingdom presidency. Does the United Kingdom follow the best practice in that user guide, and what difference has it made? Why does the guide state that the guidelines

I believe that criterion 8 is at the heart of the matter. This evening Members have tried to roll together newspaper information about alleged bribery and corruption, criterion 8, Tanzania and all sorts of stuff, but there are distinct issues, and the issue of criterion 8 is fundamental.

Mr. Heath: Will the hon. Gentleman give way?

Roger Berry: Yes, I will.

Mr. Heath: I support what the hon. Gentleman has said about prior scrutiny. I understand that it still applies in Sweden and is no impediment to Swedish arms sales, and I therefore see no reason why the hon. Gentleman’s Committee should not have prior scrutiny rights.

The hon. Gentleman will now have time to make the rest of his speech.

Roger Berry: Time? Ah, I see. [Hon. Members: “You now have two minutes.”] Forgive me, Mr. Deputy Speaker: I am very slow.

When the Quadripartite Committee has discussed prior scrutiny, we have not considered it to be our job
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to look at every licence application. What we have said is that when uniquely sensitive issues, particularly issues such as this, are in the public domain and there is public debate, it would be helpful if a joint Select Committee set up by the House to investigate were allowed to engage in such examination.

In conclusion—

Mr. Deputy Speaker: Order. I shall have to suggest to the hon. Gentleman that he conclude his speech now. There was a slight glitch with the clocks, and despite the device employed by the hon. Member for Somerton and Frome (Mr. Heath), he is working according to my time and has clearly used his full entitlement.

8.43 pm

Mr. Peter Lilley (Hitchin and Harpenden) (Con): I begin by declaring an interest. I shall shortly go to Tanzania as chairman of the globalisation and global poverty group to discuss development issues, including issues such as this, with Government officials and others, and to address the Democratic Union of Africa.

Tanzania is one of the poorest countries in the world. I had the privilege of living there when I worked for the east African common market some years ago, and I know it to be a beautiful country with a warm people—but a people living under a cloud of poverty, disease and hunger that few of us in the House can imagine. We should remember, however, that it is in that context that we are discussing this issue.

The House often discusses waste and misuse of money that occurs in this country, but that waste and misuse dents, at most, our prosperity. Waste and embezzlement of money in a country like Tanzania is a matter of life and death. It means diseases untreated, education forgone, and children going to bed hungry at night.

That is why the accusations that have been made are so important, including those that the right hon. Member for Birmingham, Ladywood (Clare Short) made outside the House and which we look forward to hearing today. I pay tribute to her because she does not speak now with the benefit of hindsight, as is the case for some of us, but she had the courage and foresight to speak out about her concerns at the time, and to make them known publicly.

I also have enormous respect for the right hon. Lady’s successor, the current Secretary of State for International Development. He is a man of sea-green sincerity and absolute dedication to the cause of alleviating poverty. Today he responded with great candour, and coped with the embarrassing task of defending decisions for which he was not responsible, which he knows to be indefensible, and with which he undoubtedly disagreed at the time. I do not blame him for seeking what refuge he could find behind the investigation by the Serious Fraud Office. However, that will not stop us debating the issue today, because we are asking not about that SFO investigation, but about the Government’s failure to investigate sufficiently, or act effectively upon, what they knew previously.

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An even flimsier defence is just to say, as the Government amendment does, that the decision was made after “due consideration” and

The issue is not whether it was discussed, but what conclusions were reached and why. Why did the Cabinet disregard the advice of the International Civil Aviation Organisation, ignore the concerns of the then Secretary of State, and push through licence approval before the World Bank had put its well-known criticisms into a recommendation that would have been difficult to reject?

We know that Ministers did not conclude that this was a good deal for Tanzania. The ICAO had already advised that

At no stage has any Minister suggested otherwise. They have fallen back on what might be called the Pontius Pilate defence: “We knew it was a bad deal, and we suspected it was a dodgy deal, but we washed our hands of it and left it to the Tanzanians to decide”—the “sovereign decision” argument to which the hon. Member for Kingswood (Roger Berry) referred—“It’s just too bad if the Tanzanians are being ripped off and the poor lose out as a result.”

I am certainly not accusing the Secretary of State of taking that position. He would be the last person to argue that we should turn a blind eye to bad governance and waste of resources. His recent White Paper is entitled not “Let’s hope governance will work for the poor”, but “Eliminating World Poverty: making governance work for the poor”—making it work for the poor, not for the big man in Africa or big business abroad. The White Paper is robust about aid being made conditional on good governance. It says:

In 2001, Britain had just given Tanzania £35 million of direct budget support for poverty reduction, yet when Tanzania decided to spend £28 million on a contract that the ICAO said was primarily military, not adequate and too expensive, the Government simply washed their hands. Governments face a difficult dilemma if the only way in which they can react to waste and suspicions of corruption is by cutting off further aid intended to help reduce poverty, but on this occasion we could have prevented this dubious contract by refusing or at least delaying a licence, without cutting off future aid.

The Secretary of State’s White Paper goes on to say that donor Governments

and that

Yet instead of enforcing the combined European Union and national code of conduct on military exports, the Government simply glossed over it, or gave it the most liberal interpretation possible.

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The Government say that they had no evidence of corruption when the licence was given. We now know, of course, that 30 per cent. of the contract value was paid into a Swiss bank account, but the Government do not want us to talk about that now that we have some evidence. However, we do have the right to know whether Ministers asked themselves the obvious question at the time: why were the Tanzanians pressing ahead with a contract for something that they did not need and could have got cheaper elsewhere, and for which they had arranged some highly questionable finance—all against the advice of the ICAO, the World Bank, the International Monetary Fund and others? We know that the former Secretary of State asked herself that question, and that she reached the only conceivable answer: that someone had been offered big kick-backs. The deal stank—it reeked of corruption—but the Prime Minister persuaded other Ministers to hold their noses and let it through.

We in this country talk a lot about governance. We lecture the Governments of developing countries, telling them that they must investigate, be transparent and hold Ministers to account, but the sad truth is that on this occasion, the suspicions fell on a British company. It was British Ministers who turned a blind eye; it was the British Government who rushed a decision through before the World Bank could publish its report; it was the British Government who ignored their own code of conduct. The words “mote” and “beam” spring to mind.

Last year, I met one of the bravest men in Africa: John Githongo, the former anti-corruption tsar in Kenya, who tenaciously exposed massive corruption in the face of threats to his life and family. He said that Britain could still exert considerable moral influence—that anything that we did to highlight corruption and abuse would mobilise and strengthen the forces within African countries trying to clean up their systems. The sad truth is that this whole sorry episode will make it more difficult for the Secretary of State to exert that moral influence. I suspect that he would agree with me, were he in a position to do so.

Although tomorrow’s headlines will be captured by “cash for honours”, I believe that the episode that we are discussing today will leave a darker stain on this Government’s reputation. They put the well-being of poor people second to the interests of big business, undermined Britain’s influence for good and set a damaging precedent for the future. The stain can be erased only if this House is prepared to do what we demand of others—may I respectfully suggest that it do so through its Select Committee on International Development?—and render the dealings of Government thoroughly transparent and hold Ministers, above all the Prime Minister, to account. It will be to the credit neither of this House nor this country if we let the matter rest as it stands.

8.53 pm

Mr. Brian Jenkins (Tamworth) (Lab): I sense that we are short of time, and given that many Members want to speak, I shall curtail my remarks. I shall avoid party political point scoring, try to avoid discussing the issue under investigation, and try not to upset my right hon. Friend the Secretary of State, if possible.

As has been said tonight, the system cost £28 million, and many Members felt that the money
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could have been better spent. That is undoubtedly so; however, I do not come to this debate with clean hands. If I had wanted a job in which I could keep my hands clean, I would have worked in a laundry. We are working in politics, and on occasion, we must do things for the greater good. Such an attitude is sometimes lacking in this Chamber; instead, Members occasionally hawk their consciences around this place.

A military system was not needed. We can say from this vantage point that a civil system could have been used, and provided at a lower price. However, and as the Secretary of State told us, we are dealing with an independent sovereign country. We might, and should, try to influence its decisions, and to do that we sometimes have to get a bit close—perhaps close enough to influence the take-up of the second phase.

In looking into this situation, I dug out some information on the needs of Tanzania, which is surrounded by eight neighbours. The figures that we have been given tonight for the air force conflict with those that I received this afternoon. Tanzania has 29 combat aircraft, one transport squadron, two training squadrons, two helicopter squadrons, four air bases and 124 airports, 11 of which are paved. It has 750,000 visitors a year, and the number is growing. Imports are growing, as are exports. So the country may have felt that to stay in front in Africa it needed a system that would provide some status.

One fact that I discovered struck me as a little odd: all the sailors, pilots and officers in Tanzania’s forces are trained in China. The Chinese influence is growing. Was any consideration given to the possibility that if we did not provide the system, someone else would?

Clare Short: At the same time, there was an offer by the European Investment Bank to provide a modern civilian air traffic control system for all the east African countries, which would have helped tourism for all of them, at a massively lower price. An alternative was on offer.

Mr. Jenkins: We must then ask why the country did not take that alternative offer —[ Laughter. ] No, I am not going down that route.

Tanzania’s growth rate is 5.6 per cent. The decision to grant the licence was made after much discussion. It was not the place of this Government to say what the Government of Tanzania should do. After this episode, our Government strengthened their procedures further, because they admit that they got it wrong. Although aid was withheld for a short period it was resumed, and progress by Tanzania confirms the wisdom of that decision.

We would all prefer that the money spent on the military were spent on improving the welfare of the people instead, but every country has the right to self-defence. I would not, in any circumstances, welcome or accept a licence for combat aircraft or tanks for a country in Tanzania’s situation, but it had the right to decide that it needed a radar system—irrespective of the type of radar system. Let us divorce the need for the radar system from the type of radar system and concentrate on that point after the inquiry has taken place. When the inquiry has finished, we may have more evidence to discuss that point.

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