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Nigel Griffiths: Each future case will be considered according to the available criteria and the prevailing circumstances. Ministers will take decisions on such cases and justify them.

Several hon. Members rose

Nigel Griffiths: Such decisions are published in the annual report—another innovation that the Bill will establish as a permanent and necessary requirement.

Ann Clwyd: My hon. Friend is offering to look retrospectively at licensing, but such a facility already exists. Our point is that it is no good having a retrospective look; we want prior scrutiny of contentious arms licences.

Nigel Griffiths: My hon. Friend argues for prior parliamentary scrutiny, but she has not convinced me that a workable system exists; indeed, since I last came to the Dispatch Box my view was reinforced during a visit to Washington. The Chairman of the Trade and Industry Committee was critical of the prior scrutiny regimes in Sweden and in Washington, and I fully understand those criticisms.

Ms Julia Drown (South Swindon): The Minister said that the Lords amendment could be inconsistent with the European code of conduct on arms. Can he give an example of such an inconsistency, because it is not obvious?

Nigel Griffiths: I mean no disrespect to my hon. Friend or to the House, but I am reluctant to pluck hypothetical examples from the air. Our legal advice is clear: if the amendment were accepted, the new duty would take precedence over the EU code of conduct on arms exports. For the UK to take an approach to licensing decisions that differs from that taken in the rest of the EU would be highly damaging to the establishment not just of a concerted, EU approach to licensing arms, but to an international approach that ensures that we are controlling as best we possibly can the export of arms and related technology. We must also recognise that, if unamended, the amendments would have other effects.

John McDonnell: Is my hon. Friend saying that the Lords amendment is unacceptable because it conflicts with prior commitments given at a European level, and that European agreements that we have entered into prevent us from taking sustainability into account in considering individual licence applications? If so, the

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entire debate on sustainable development being taken into account—in whatever form—under this legislation has been completely futile.

Nigel Griffiths: No, I was not saying that. I was saying that the amendments could mean that we had criteria different from those that operate under the EU code of conduct, and that is what we are trying to avoid. I did not go into specifics because I did not want to pick up on a hypothetical case.

Hugh Bayley (City of York): If the Minister wants to convince me that we should modify Lords amendment No. 17, he will need to convince me that the way in which the Government will determine whether sustainable development would be undermined or compromised by an arms export is rigorously defined. Do the Government intend to set out defined criteria in the public domain against which they will decide whether a particular arms export would compromise sustainable development? In other words, the Government need to go further than simply saying in general terms that they will exercise their judgment.

For instance, will the Government examine, as a test of sustainability, whether a particular export offers value for money or entails "productive expenditure"—to use a phrase from the rules of the Export Credits Guarantee Department—for a developing country? Those of us who have considered the Tanzanian case would say that it would not be termed a sustainable export if measured against value-for-money criteria or against—

Mr. Deputy Speaker: Order. The hon. Gentleman has made his point.

Nigel Griffiths: The clearest way to answer my hon. Friend is by reference to the annual report, to which I referred hon. Members earlier. Criterion No. 8 in the report makes clear the need for the compatibility of the arms exports with the technical and economic capacity of the recipient country, taking into account the desirability that states should achieve their legitimate needs of security and defence with the least diversion into armaments of human and economic resources. Subsequent paragraphs spell out clearly the approach that Ministers take—and under the Bill must take—when carrying out that assessment. That is the important point that we need to make about the amendments.

Hugh Bayley: Will the Government publish a list of criteria that they will use in deciding whether sustainability is compromised? A set of such criteria is used in relation to export credits guarantees. Will the Government provide a similar list in relation to arms exports?

Nigel Griffiths: The report makes the position clear, and I am sure that my hon. Friend will read it. There is a list of factors that are taken into account, including information from sources such as the United Nations Development Programme, the World Bank, the International Monetary Fund, and reports from the Organisation for Economic Co-operation and Development. Whether the proposed export would seriously undermine the economy or hamper the sustainable development of the recipient country will also be taken into account. I am sure that the House will

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accept that the answer will vary from country to country, depending on the level of development and the size of purchase proposed when the granting of a licence is considered.

The report also makes the other criteria clear and gives a clear description of what is taken into account and, by its absence, what is not. I am not sure that we would want anyone to add anything that is not already in the report. However, if my hon. Friend has a suggestion to add, the House will listen with interest.

5 pm

Gregory Barker (Bexhill and Battle): I, for one, believe that sustainable development should be at the heart of all Government policy making. Nevertheless, is the Minister aware that numerous small arms manufacturers such as Manroy Engineering Ltd. in my constituency, which employs 40 people, will welcome the fact that he rejects prior parliamentary scrutiny? In rejecting the Liberal Democrat amendments, was any assessment made on the likely impact on job losses that would arise, given that, in certain cases, many small firms must already wait up to a year for the issue of a licence?

Nigel Griffiths: No one has raised the implication for jobs with me; I have read no briefings about it and have not discussed it with ministerial colleagues or anyone else. I am concerned that the Bill provides for the proper scrutiny of licences and an effective regime to avoid the pitfalls that are highlighted by Lord Scott and others. I am afraid that I cannot answer the hon. Gentleman's question, although I recognise that he is voicing the concerns of his constituents and the defence manufacturer associations.

Mr. Llwyd: The Minister referred to the criteria in the annual report. What effect, in reality, did the World Bank report on the Tanzania contract have?

Nigel Griffiths: I am afraid that I did not catch the hon. Gentleman's question.

Mr. Llwyd: What effect did the report by the World Bank, which was heavily against the export of the air traffic control system to Tanzania, have on the decision to export?

Nigel Griffiths: I am not going into detail about the considerations that were made; I am simply justifying the Government's position on the amendments and the effect of the Bill. What the hon. Gentleman refers to is a matter for the Government of Tanzania.

I disagree with Lords amendment No. 1 because I am keen to avoid a costly mechanism that would oblige us to consider every issue in every case, whether it was relevant or not. At best, that could lead to confusion about taking particular licensing decisions, which could slow down the export licensing process and make it impossible for the United Kingdom to give effect to future international obligations according to their terms.

I do not believe that any of this is necessary. If it is the wish of the House that a future Government should not be able to choose to ignore issues such as sustainable development and human rights, the Government share that wish. That is why I want to assure the House once again that Government amendment (a) to Lords amendment

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No. 17 would not allow future Governments to ignore these important issues. The Government published a list of criteria in October 2000, setting out their position in detail. I hope that that helps answer the concerns expressed by my hon. Friend the Member for City of York (Hugh Bayley).

In conclusion, I urge the House to achieve our common goal and avoid the unnecessary and damaging effects of Lords amendment No. 1. I urge the House to support amendment (a) to Lords amendment No. 17 and amendments Nos. 18 and 19.

Mr. Robert Key (Salisbury): This is an extraordinarily important debate. I am conscious of the fact that we have only three hours in which to debate all the business this afternoon; I will therefore be brief, as we have many concerns to raise on the next group of amendments on academic freedom.

Let me say first what an extraordinarily successful exercise has been carried out by a large number of organisations and by the Quadripartite Committee, whose contribution has been extremely important in informing the judgment of the House. The Select Committee on International Development has also taken a very proactive role. I am very grateful for all that and for the briefing. Everyone who has spoken today—and most Labour Members present have already spoken—has expressed opinions that reflect the passionate concern of many thousands of people who care deeply about the state of millions of the most vulnerable people in the world.

As the right reverend prelate, the Lord Bishop of Manchester said in another place:

The House may recall that during Third Reading, I said:

On that occasion, the Minister stubbornly, and quite inexplicably, refused to give a rational explanation. He could have done so, but he failed to and that misjudgment had consequences: the official Opposition voted in favour of the amendment, when we might have abstained; and, in the other place, the Under-Secretary of State caused months of trouble for the Government, ending in their defeat on the issue on 18 April. Today, we are considering the Government's attempt to reverse that defeat.

I pay tribute to my noble Friend Baroness Miller of Hendon and other noble Friends for their persistence in harrying the Government. The quality of the argument in another place is often said to reflect favourably the time available for debate. It is certainly true that if Ministers fail to win the arguments, they may fail to win the votes—something that regrettably rarely happens in this place.

Since the Bill left us last November, several things have happened. First, as a direct result of the pressure on the Government, I was told in answer to a parliamentary question that the Cabinet Office was working with

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to address—

The Minister pointed out that the Government would be discussing procedures on how criterion 8—on sustainable development—of the consolidated criteria could

That is an extremely important point and I wish that the Minister had dwelt on it during report and Third Reading.

Criterion 8 of the consolidated European Union and British codes sets out exactly how the process will be governed. It states:

That says much more than either the Lords amendment or any of the other amendments proposed so far.

As the Government said in another place that it was "absolutely mandatory"—I think those were the words of the Under-Secretary, Lord Sainsbury—for them to consider sustainable development where it was relevant to the export concerned, their reconsideration of how criterion 8 can most effectively be applied is a step forward. We welcome that.

We, too, have gone back to the beginning—to assess how the Bill and this debate measure up to the recommendations of the Scott report. In dealing with the question of the processing of export licensing applications, Lord Scott said that they should be processed

We should not ignore the consequences of changing the wording of the Bill. We have been advised that it would have the effect—as the Minister has confirmed—of requiring the Government to consider sustainable development and every other issue covered by the table to the schedule whenever they exercise their licensing powers under the Bill. So the Government would have to consider every export covered by the schedule even if the implication is that that is clearly irrelevant to individual licence applications or categories of exports. The practical effect would be that all licence applications would have to be systematically assessed against all the consolidated criteria. That would be bound to cause substantial delay, to the detriment of the legitimate interests of the exporters and their employees, but would the delay be significant and what would be the impact on public finances?

It is has been assessed that, if the amendment stands, the number of export licences processed by the Department for International Development will increase from about 600 a year to 15,000. The Department currently employs 1.5 people to process existing applications, so there would be a 2,500 per cent. increase in the Department's work load in that respect. That would clearly have substantial work force implications, which

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would be amplified right across Whitehall. Only the Government can decide if that is acceptable and, furthermore, whether the Chancellor will pay.

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