HC 847 International Development CommitteeLetter from the Chairman, BAE Systems to the Chairman of the International Development Committee

Thank you for your letter dated 20 July, which followed the evidence session of the International Development Committee the day before.

You asked for an update, before the return of the House on 5 September, on BAE Systems’ further consideration of the DFID proposal to top up the education capitation grant of the Government of Tanzania. Perhaps I can explain what we have done in the intervening period.

First, I wrote to the Secretary of State for International Development on 20 July, agreeing to make the payment of £29.5 million fully in support of his proposal, and proposing that we should adopt the suggestion made by one of the members of the Committee that the payment should be made to DFID. We made clear that we were ready to make the payment immediately on receipt of the necessary banking details.

The Secretary of State responded, making clear that his preference was that the payment should be made direct to the Government of Tanzania.

On receipt of that letter, we wrote to the Director of the Serious Fraud Office, seeking his approval to the making of the payment direct to the Tanzanian Government, as well as his confirmation that the payment would end the company’s obligations under the Settlement Agreement reached between the two organisations in February 2010, and endorsed by the Court last December. Mr Alderman has indicated his agreement to both.

I have now written again to the Secretary of State, indicating our readiness to remit a Banker’s Draft payable to the Government of Tanzania. We are ready to do that as soon as DFID indicate their agreement.

In taking this action, we are mindful of the Committee’s unequivocal support for the scheme proposed by the Government of Tanzania and developed with DFID. We have also taken full account of the clear view expressed by the Committee, including your own personal comments, that the company should have no role in the operation or oversight of the scheme proposed by DFID.

As we agreed with the Committee, we do not have experience or expertise in the administration of international aid. We are content to leave to DFID the task of implementing the scheme with the Government of Tanzania, and of ensuring that its operation is properly monitored and transparent. I have no doubt that the Committee would want to ensure in due course that the scheme achieves its objectives.

I hope you will agree that BAE Systems has responded quickly following the evidence session, and that the Committee will feel able to support the company’s position in drawing this matter to a speedy conclusion

19 August 2011

Prepared 29th November 2011