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Hugh Bayley: We have had a fairly full debate, and I will try not to detain the House. I will simply say that I welcome the Bill. How different this is from what happened when the Conservatives were in power. I also welcome the Government's decision to make specific

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reference in the Bill to sustainable development. From time to time, during the short time that I spent on the Front Bench, I had to dream up reasons why the Government might, on reflection, change their position. One good reason for the Government deciding, when the Bill was in another place, to agree that sustainable development should appear in the Bill, was that when they first published the Bill and brought it to this House, the International Development Act 2002 was not on the statute book. For the first time, we now have a statutory definition of sustainable development. It would be rather curious if, a few months after agreeing on such a definition, we refused to apply it in relation to a further piece of legislation.

I strongly welcome Lord Sainsbury's statement in the other place that criterion 8, the "sustainable development" criterion, would be reviewed. I do not want to repeat the arguments that other Members on both sides of the House have advanced so cogently about the need to use the sustainable development tests relating to applications for export credit guarantees—for instance, the "productive expenditure" test, to give just one example in connection with arms sales.

I should mention, however, that another of the export credit guarantee tests concerns whether an export would be compatible with debt sustainability. That test should certainly apply to arms sales; omitting it would lead to the unjoined-up-government nonsense whereby one Department—the Department for International Development—can commit millions of pounds of Government money to writing off a developing country's debt, only for another Department to make a decision that creates a similar amount of debt.

Not just the working but the wording of criterion 8 needs to be reviewed. In particular, the Government should devise and publish a series of specific sustainability tests and apply them rigorously when considering whether the "sustainable development" criterion is being applied. I ask the Minister to comment on that when he replies. Indeed, I should like him to reflect on the points raised by my hon. Friends the Members for Clydebank and Milngavie (Tony Worthington), for Glasgow, Maryhill (Ann McKechin) and for Kingswood (Mr. Berry), as well as those I have raised. If he wants the House to go along with the Government's amendment, I hope he will be able to reassure us by saying that they intend to publish that series of tests allowing them to determine the question of sustainability.

Norman Lamb: Several Members have described the Government's approach as incomprehensible, and have said that they are confused by the debate. I suspect that we should not be confused in any way. We all know, surely, that a battle is in progress at the heart of Government between those who want to pursue the concept of sustainable development and make it a binding test in all contexts of Government policy, and those in Government who are more interested in sustaining the British arms industry. That is what has happened with the Tanzanian scandal, and it is what is happening in the Bill. At present those in the Cabinet who want to sustain the British arms industry, even at the expense of sustainable development, are winning the argument.

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6.15 pm

It is important for those of us who believe that sustainable development must be at the core of all Government thinking to keep challenging the Government. Their approach, and their amendment, will render any effective test of sustainable development meaningless. What they are doing represents spin without substance. It will look good on paper, but the Government will be able to evade the test whenever they need to. Moreover, it means that we will sustain this inconsistent approach across Government.

As my hon. Friend the Member for Richmond Park (Dr. Tonge) pointed out, the International Development Act 2002 now has at its heart a requirement that the spending of development assistance must meet the test of sustainable development and the alleviation of poverty. Many Labour Members have mentioned the approach of the ECGD. The work of that department must also meet the test of sustainable development—but when the Bill has been passed, if the Government have their way, they will ultimately be able to ignore sustainable development when granting export licences.

Export licence applications are currently considered in terms of the consolidated criteria. Many references have been made to criterion 8, and to the fact that it is under review and will be reformed. We know, however, that when the Government are in a corner they will ignore that criterion. We know it from the example of the Tanzanian air traffic control system. We know that what really drove the decision to grant a licence was the issue of jobs and the interests of the British arms manufacturer BAE Systems.

I want the Minister to answer a specific question. When the Department of Trade and Industry granted the export licence in December, did it know of the role of Barclays bank? Did it know that Barclays had apparently subsidised the deal? As my hon. Friend the Member for Twickenham (Dr. Cable) observed, here we have a commercial bank suddenly, in a fit of generosity, subsidising a totally inappropriate arms deal with a heavily indebted country. It is unbelievable. The Secretary of State for International Development has already alluded to corruption. Did the Secretary of State for Trade and Industry know the details when she reached her decision back in December?

As other Members have said, the really troubling aspect of the Government's approach today is that a decision such as that reached in the case of the Tanzanian scandal will be just as possible after the Bill has been passed. Consideration is a very weak test. It will be perfectly possible for the Government to demonstrate that they have considered sustainable development before rejecting it. No legal challenge will be possible, given such a pathetically weak test. The Government will be able to go on sustaining the arms industry, as they seem willing to do at present.

I want to say something about the interplay between the granting of an export licence and the preliminary clearance given by the Ministry of Defence. Again, sustainable development effectively goes out of the window. The MOD, bizarrely, has an opportunity to give preliminary clearance to an arms export that will later have to be considered by an entirely separate Department, the Department of Trade and Industry. Back in August 1997—just after the then Foreign Secretary had referred to a foreign policy with an ethical dimension—it gave preliminary clearance to an arms sale to Tanzania.

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Before the export licence was granted last December, BAE Systems entered into a binding contract with Tanzania, with the support of Barclays bank. The equipment was largely built, and $15 million had already been paid. All that happened before the application for an export licence was made. No one can tell me that when the application was considered in December, sustainable development played any part in the decision that was reached—and that will still be so in similar cases after the Bill has been passed.

In promoting the Government amendment, the Minister seemed to make great play of the alleged loophole—the fact that if the Lords amendment remained in place, the provision would be inconsistent with the European consolidated criteria—but in answer to an intervention he seemed, as I understood him, to make it clear that we would not be in breach of any legal obligation to Europe. If the Lords amendment were agreed, we would have a system that better protected the interests of sustainable development, and that is what the Government are seeking to throw out. They should be ashamed.

Roger Casale (Wimbledon): This seems the right moment in our proceedings to put on the record my support for the Government's decision to put sustainable development back in the Bill. That was the right decision. It cannot have been an easy decision, not least because they had previously removed it. It opens the Government to potential criticism and attack on their overall approach, so it was a courageous decision, too.

I am delighted that sustainable development is back in the Bill. The reason why the Government appeared to be reluctant to put it back has come out in the debate; I use the word "appeared" because I do not believe that they were truly reluctant. There was no lack of commitment to sustainable development. Indeed, how could anyone, let alone a Labour Government committed to tackling poverty at home and abroad, be against that admirable goal?

It is all too clear that there is a conflict—many hon. Members have referred to it—in the day-to-day business of Government, and in the pressures from different Departments, such as the Department of Trade and Industry, the Ministry of Defence, the Treasury and the Department for International Development. Those elements clearly came to a head in the Tanzanian air traffic control issue. We saw a lot of rather sanctimonious nonsense in the press about that at times.

Unrealistic expectations were voiced about how the Government should have acted. The Government were in a difficult position, because they had to try to square the circle and bring together the legitimate needs of different sectors represented by different Government Departments. What we need is not an approach to international development or trade issues that privileges one particular Department—whether that be the Department for International Development, the Department of Trade and Industry or the Ministry of Defence—but a coherent overall approach, a coherent strategy on making decisions about matters such as the Tanzanian air traffic control issue, which takes all the relevant considerations into account.

At the heart of that strategy must be the concept of sustainable development. Not only do we need a concept of sustainable development in the Bill, but it should be

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defined in the same way for each Department, so that it can act as a golden thread that joins the work of different Departments.

At the same time, we must recognise that sustainable development definitions are subject to change. Twenty years ago, we had the Brundtland definition of sustainable development, which emphasised reconciling social and economic development with the environment. Today there is a much stronger emphasis on tackling poverty and building democracy in developing countries as a way of ensuring that development in those countries is sustained over time. We must recognise that we cannot simply open the Oxford English dictionary and find a definition of "sustainable development". It is a contested concept. The notion of sustainable development that we are anchoring in the Bill today will be subject to change over time.

For that reason it is important to understand that in the application of that concept to practical everyday politics there needs to be a certain degree of flexibility and adaptability. None the less, I am delighted that the concept is back in the Bill, because the whole aspiration and thrust of the Bill is to change dramatically the approach to the control of export licences, which was long overdue, and to put it on a completely new footing with new principles at its core. I hope that the concept of sustainable development is robust enough to link the work of different Departments. I wish the Government luck, every success, and, I hope, support from reasonable-minded people who will not use that concept as a rod to beat the Government over the head with in years to come.

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