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Export Licences

Volume 687: debated on Wednesday 6 December 2006

asked Her Majesty’s Government:

Whether, in light of the ongoing Serious Fraud Office investigation, they have reassessed their view of the granting of an export licence for the sale of an air traffic control system from BAE to the Government of Tanzania.

My Lords, it would not be appropriate for me to comment on the Serious Fraud Office investigation, but I can say that the Government have not reassessed their granting of the export licences in this case as the licences have now expired.

The Government’s decision to issue export licences for an air traffic control system for Tanzania was taken after careful consideration, on a case-by-case basis, of each licence 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.

Noble Lords may know that I was an associate fellow of the Royal United Services Institute for Defence and Security Studies. I resigned that fellowship on taking up my ministerial post.

My Lords, I thank the Minister for that Answer. Although it was before his time, he obviously has been well briefed on the controversy that arose when this export licence was granted. He will of course have been informed that a lot of the opposition to the granting of the licence was led by Clare Short when she was the relevant Cabinet Minister. Does he not agree that, in the light of what has happened since, her judgment on that, and indeed on many other things, was entirely correct?

My Lords, the noble Lord, Lord Razzall, should know that the Cabinet is bound by collective responsibility and that any decision of the Cabinet binds all its members, so I do not really agree with his point. The fact is that the Government took the decision to issue the licences after careful and detailed assessment against the consolidated criteria. That was the decision of the Government, and that is what the Cabinet signed up to.

My Lords, how long has the Serious Fraud Office investigation been going on? In the light of the significance of all this to an important British company, is it not vital that it be concluded as quickly as possible?

My Lords, I cannot, for legal reasons, reply in detail to noble Baroness, Lady Wilcox, but I will say that the Government's decision to issue export licences for an air traffic control system for Tanzania, as in the case of all export licence decisions, was taken after careful consideration. Those criteria included whether the proposed export would seriously undermine the sustainable development of the importing country. I understand that an investigation is going on, but at the time of the licensing decision the Government had no evidence that there was anything untoward about it.

My Lords, I declare an interest as an adviser to Transparency International in its studies into prevention of corruption in the official arms trade. Do Her Majesty's Government plan to use their considerable leverage with the UK defence industry, they being its major customer and also the granter of export licences, so that they can put in place greater anti-corruption safeguards? If there are such plans, what are they?

My Lords, I can inform the House that the Government are committed to working with all our international partners and the business community to ensure that there is effective action both here and abroad to tackle corruption. That is underlined by the UK's ratification of the OECD convention on combating the bribery of foreign public officials and the Anti-terrorism, Crime and Security Act 2001.

Further to the point made by the noble Lord, Lord Garden, I should mention that the DTI processes about 10,000 applications for export licences each year. In doing so, it takes advice from the Foreign Office, the Ministry of Defence, the Department for International Development and Customs and Excise. That takes into account issues such as national security, regional stability and human rights. In each case, the Government always ensure that any relevant UK, EU or UN embargoes are taken into account.

My Lords, from the opposition Front Bench, the noble Baroness, Lady Wilcox, mentioned the inquiry. I remind the House of my declared interest in this matter. Another SFO inquiry, not the one into this Tanzania case, has been in existence since the first part of 2004, so it is about to celebrate its third birthday. Does my noble friend agree that it is not acceptable that any inquiry should continue without decision endlessly? Does he understand that if the present position continues noble Lords on all sides of this House fear that many thousands of British skilled workers could lose their jobs for ever, that important contracts, defence and civil, could be lost, costing this country billions of pounds, and that the United Kingdom could become a laughing stock with our international competitors?

My Lords, my noble friend Lord Bach has a great deal of experience in the defence field and I always listen carefully to his contributions. I can assure him that my department is aware of the concern on all sides.

The UK has a vibrant defence industry—one of the strongest and most open in the world. It produces excellent equipment and secures thousands of highly skilled British jobs.

My Lords, does the Deputy Leader of the House not agree that Questions and Answers should be short and not read?

My Lords, apart from noticing that I seem to have been promoted, I do not think there is anything I can say.

My Lords, does my noble friend agree that all UK businesses, including the defence industry, have said that if corruption can be eradicated, they will have the level playing field that will enable them to be really competitive?

My Lords, is the Minister aware, however, that that level playing field will never arise, and that many countries—I will not mention names—are committed to continuing the present process, which involves “corruption”—to use the word that has been used? The question before the Government and Parliament is: are we going to say that we will play the same dirty game that everyone else plays, or are we going to go it alone, or relatively alone, in being clean? That is the issue. To talk of some international agreement is nonsense, because either it will not be reached or, if it is reached, it will not be honoured.

My Lords, a number of countries have their own legislation to cover these matters, as we do. There is, of course, the European Union’s code of conduct for arms exports; so there are many moves internationally to co-ordinate an approach to this matter. That should be welcomed.