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If what I have outlined was not bad enough, the amount of the commission should have set alarm bells ringing in Downing street. The Export Credits Guarantee Department is supposedly suspicious of any deal in which the commission is more than 5 or 10 per cent. In the case we are discussing, it was 29 per cent.a $12 million commission, which could have been used in Tanzania to buy health care for 1 million people.
The Serious Fraud Office and the Ministry of Defence are currently investigating the matter. They have confirmed that there may have been corruption and criminal activity. Will the Minister confirm that the Government will be fully co-operative and provide adequate resources?
All the senior figures in the affair are complicit. The Prime Minister and the former Foreign Secretary argued that Tanzanian sovereignty must be an overriding consideration in the deal. Is Zimbabwean, North Korean or Iranian sovereignty an overriding consideration for arms export licences from the United Kingdom? Of course not.
export credits for poor, highly indebted countries will only support productive expenditure.
In the context of the White Paper, such deals make the UK Government the target of criticism and allegations of hypocrisy, especially when we lecture others on the importance of good governance, accountability and transparency while appearing not only to be complicit but to facilitate a distinctly dubious arms transaction.
We are considering a sad episode for British governmental processes that has damaged our reputation for probity and propriety. It has exacerbated poverty when it need not have done so. It threatens to undermine the support for the international development agenda from British taxpayers and raises questions about the strength of the Department for International Development in relation to other Departments. The blame for that must lie with the Prime Minister.
The Minister for Science and Innovation (Malcolm Wicks): The debate has been useful at times and interesting throughout. The hon. Member for Boston and Skegness (Mark Simmonds) said that the contribution from his Front-Bench spokesman was intelligent. Obviously, the contribution from ours was very intelligent. Several hon. Members made interesting contributions, including my hon. Friend the Member for Kingswood (Roger Berry), the right hon. Member for Hitchin and Harpenden (Mr. Lilley), my hon. Friend the Member for Tamworth (Mr. Jenkins), the right hon. Member for Birmingham, Ladywood (Clare Short), and the hon. Members for Shrewsbury and Atcham (Daniel Kawczynski) and for North Norfolk (Norman Lamb). I shall not detail their contributions, but I hope to pick up many of the points that were made.
The subject of the debate was the Governments decision on the export of a radar system to Tanzania. I welcome the opportunity to close the debate for the Government by focusing on the decision, the context, subsequent developments and looking ahead.
The episode started in 1992, when our high commissioner in Tanzania alerted the then Government to the requirement for a new air traffic control system, and the Defence Export Services Organisation notified BAE Systems of the prospect. The Governments decision to issue export licences in December 2001 for an air traffic control system for Tanzania was taken after careful and lengthy consideration of the applicationand clearly some controversyagainst the Governments consolidated EU and national arms export licensing criteria. As my right hon. Friend the Secretary of State for International Development explained, the Government take their responsibility on arms export licensing, including in relation to sustainable development, most seriously. In assessing all applications, we draw on the expertise of several Departments to ensure stringent assessment against the licensing criteria. They ensure that the risks that concern us all, including internal repression, internal or regional conflict, the need to support sustainable development and the risk of diversion to undesirable end users, are rigorously assessed on every occasion.
The Government carried out just such an analysis when they considered the licences for the air traffic control system for Tanzania. We also discussed the issue thoroughly among Departments, and concluded that the licence should be approved. Although there were some concerns about the system and its suitability, ultimately they were matters for the Government of Tanzania to resolve. It was not our place to dictate to the Government of Tanzania which system they thought that they needed. Equally, if the export was not clearly in breach of any of the EU criteria, it would not have been right for us to withhold a licence with a view to blocking the proposed export.
One of the interesting features to come out of this debate is the balance that we need to strike between the criteria that should determine the Governments action and the independence of a sovereign nation. I should like to cite the remarks of Tanzanias Foreign Minister Kikwetenow its Presidentin 2002:
We are not a department of the World Bankwe are a country and its a bit insulting to suggest that we need to wait for
the World Bank to prescribe whats best for us...The responsibility for Tanzania is in the hands of Tanzanians.
Norman Lamb: The Minister mentioned earlier the question of the suitability of the system. Reference has also been made to the final report of the International Civil Aviation Organisation, and I am sure that he is about to get to that subject. Will he, however, make a commitment in the public interest to ensure that that report is published?
The issue of whether the Government of Tanzania needed a military air traffic control systemand whether it was, to coin a phrase, fit for purposehas been a big feature of this debate. The criteria required us to assess whether the export was compatible with the technical and economic capacity of the recipient country. Beyond that, I repeat that it was for the Government of Tanzania to assess whether the system was appropriate for their needs, and whether to purchase it. The fact that the UK Government issued the licences did not oblige the Government of Tanzania to proceed with the purchase.
On the hon. Gentlemans question about the publication of the report, the two parties involved in this matter are the Government of Tanzania, whose sovereign status we should respect, and the World Bank. His question should be directed to them, not to the UK Government.
Why did we authorise this export to Tanzania, one of the worlds poorest countries? Was the system too expensive? We have discussed these questions during the debate, and they were specifically considered in the assessment against the consolidated criteria, particularly criterion 8. In assessing the application, the Government were required to consider whether the export would
seriously undermine the economy or seriously hamper the sustainable development of the recipient country.
Mr. Lilley: Will the Minister tell us whether any level of excess pricing for this deal would have led to its falling foul of criterion 8? Or could any multiple of the alternative available system have been proposed and, in the view of the British Government, still not have undermined the economy of Tanzania?
Malcolm Wicks: I do not think that it is a question of the price as such; that is a commercial judgment. It is a question whether the arrangement would seriously undermine. In that sense, of course, price is important, and there would be prices that seriously undermine.
Norman Lamb: I want to ask the Minister a question, just before he leaves the subject of the consolidated criteria. If the criteria effectively allow the granting of an export licence in circumstances in which a deal is clearly shrouded in improprietyor alleged improprietyand in which the system involved is declared by the International Civil Aviation Organisation to be effectively not fit for purpose, does the Minister agree that the consolidated criteria must, therefore, be reformed?
Malcolm Wicks: I was coming to that point, but let me say, not least in answer to the question from my hon. Friend the Chairman of the Quadripartite Committee about methodology, that we have a clear methodology for applying criterion 8. It is EU-based and is summarised, I am advised, in the Export Control Organisations 2005 annual report, commencing on page 83, and accessible via the DTI website. That is EU guidance based on UK guidance developed in the light of the Tanzanian case.
Obviously, there were some points arising from the Tanzanian case, which we have subsequently addressed. The need was highlighted for clearer procedures within Whitehall for assessing applications when criterion 8 came into play. We have therefore agreed guidance for officials when they consider the impact of a proposed arms export on the recipient country. That guidance has been incorporated into the EU criteria. Moreover, the principle that sustainable development must be taken into account in licensing decisions was enshrined in the Export Control Act 2002. DFID continues to play an active part in the licensing process, and in all discussions on the arms trade.
I want to remind Members that UK export controls are among the most robust in the world, and to underline the Government's record on transparency in export licensing. In 1997, we announced, for the first time, detailed criteria for assessing applications, which reflected our commitment to managing arms transfers responsibly, especially so as to avoid their use for internal repression and international aggression. Prior to that, there were no published criteria. Those criteria have been incorporated into the EU code of conduct, which now applies to all member states. Therefore, we have led on the issue.
At one stage, the right hon. Member for Birmingham, Ladywood said that the DTI always fights for arms deals, or words to that effect. If that is true, my Department is failing. In 2005, 129 licence applications were refused and many others were withdrawn when the stringency of the criteria were understood. I am advised that we actually have the highest refusal rate of any EU country. It is easy to throw around insults, but I am here to defend my Departments stewardship of this important policy.
We also publish comprehensive details of our policy and decision making in our quarterly and annual reports, and we are of course scrutinised carefully by
the Quadripartite Committee. Not least because of the issues raised, we will initiate a review later this year of the controls introduced, in 2004, under the Export Control Act 2002. That is timed to commence three years after the new export control legislation was implemented, in accordance with Cabinet Office better regulation guidelines. There will be full public consultation, and the review is timely.
The Government also have a proud record on attacking corruption. We have ratified the UN convention against corruption, and put new legislation in place to allow us to do so. We have also established a new internal corruption group staffed by City of London and Metropolitan police officers. Our commitment to a new international arms trade treaty, as highlighted by my right hon. Friend the Secretary of State, is also relevant.
We will learn lessons from any situation of this kind, and the review will be the right time to consider those. We have had a lively debate, but I recognise that differences remain between the Government and the Opposition on this matter. The main differences are obvious. A Labour Government introduced a clear export control regime; the Conservative Government had no such clarity. A Labour Government have taken a series of decisive steps to combat corruption; the Conservatives let corruption fester during their Administration.
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