THURSDAY 21 MARCH 2002
Mr Roger Berry, in the Chair
Memorandum submitted by the Foreign and Commonwealth Office; Department of Trade and Industry; Ministry of Defence and Department for International Development
Examination of Witnesses
RT HON JACK STRAW, Member of the House, Secretary of State for Foreign and Commonwealth Affairs, MR WILLIAM EHRMAN, Director, International Security, and MR TIM DOWSE, Head of Non-Proliferation Department, examined.
Chairman: Foreign Secretary, welcome to your first visit to the Quadripartite Committee. Welcome also to members of the public. It is good to see some interest in these matters. The purpose obviously is to take evidence on the Annual Report for 2000 but also on developments since then. Thank you for the written response to the questions that we asked earlier in the year. Towards the end, we will be raising some questions on Parliament's scrutiny. First, let us start with some specific issues arising from the report.
(Mr Straw) Mr Chairman, may I say, by way of a preliminary, that I am delighted to be here. I might have said that it is a joy, as ever, but that might be misinterpreted. Secondly, may I introduce the officials with me: William Ehrman, who is Director, International Security, and Tim Dowse, who is Head of the Non-Proliferation Department at the Foreign and Commonwealth Office. To Mr O'Neill, may I say that some of the detail of this I will need to take in the private session, for reasons which will become clear once we go into private session.
(Mr Straw) That is exactly what I am going to do. My aim is to be as forthcoming as I possibly can in public session but by definition some of the reasons for going into private session I can only explain privately, otherwise we are going to be in a circular situation. To deal with what I would like to say in public, the criteria which we have are a consolidation of national criteria and also of EU criteria as well. The EU criteria, although they are criteria which are common to all the European Union countries, are obviously dependent upon national application and therefore it must logically follow that there could be cases, whether in respect of China or anywhere else, where one country in good faith and on similar evidence would come to a different judgment from another country applying the same criteria. I would also say that since some of these issues involve extremely fine questions of judgment, if you took a random group of this Committee and said, "Make a decision" and another random group and said to them, "Make a decision"on exactly the same facts and data, you could end up with two different sets of decisions. That is what we are dealing with here.
(Mr Straw) I do not think it is either. I think that all the European Union countries are committed to the EU Code and they are also committed to their own systems. It happens that, in terms of parliamentary scrutiny, we are much more advanced, I think, than any other European Union country, with the possible exception of Sweden. The Swedish system can be dealt with later. I have suggested, I think, that there are many disadvantages from the point of view of parliamentarians about the Swedish system and many advantages for ministers to be held accountable. That is part of that. I think it just follows from different interpretations of the same rules and of course arms embargoes and export controls run straight into issues of defence and foreign policy, which Member States of the EU guard jealously as within their own national competence and share not as a Community competence but share under what is known pillar two of the European Union. I also have to say that even if there were a complete harmonisation of Community law, as it were, as long as these were decisions not taken by a single institution but in different States under a Directive, then there would be differences of interpretation. What we try to do is to share information, particularly between ourselves, so that there is, over time, a more consistent application of the criteria.
(Mr Straw) I do not think it is. I can go into more detail about this when I come to give evidence in private, but I have been struck, in the time that I have been dealing with these applications - and I have to say within the British Government they are dealt with extremely carefully - by the care and seriousness which, from my perspective, I believe is shown by other European Member States. I obviously have no brief from each of those but that is my view. So far as national interests are concerned, yes, as Mr Anderson will be aware, in our criteria as laid out by Peter Hain in his written answer on 26 October, he said, actually quoting Robin Cook from 1997: "The Government are committed to the maintenance of a strong defence industry as part of our industrial base as well as of our defence effort, and recognise that defence exports can contribute to international stability by strengthening collective defence relationships; but believe that arms transfers must be managed responsibly." Then at the end he goes on to mention other factors which are under the operative provision of the EU Code of Conduct, which specifies that Member States, where appropriate, take into account the effect of proposed exports for economic, social, commercial and industrial interests, that these factors will not affect the application of the Code. They list those factors but it also makes clear elsewhere in the criteria that an export licence will not be issued if the arguments for doing so are outweighed by the need to comply with the UK's international obligations and commitments. My concern is that they could be used for internal repression or international questions by risk to regional stability or other considerations. You have the background which is that we have a big defence industry and we have national defence interests but you also have these criteria, some of which are taken into account and some of which override that.
(Mr Straw) I agree with that.
(Mr Straw) At the moment we do not have case law because this does not come within Community competence; in other words, it could not end up at the European Court of Justice. It is a matter which is embedded in Member States' national interests but if you mean by "case law", is there a sharing of experiences, is there a desire certainly by foreign ministers of the European Union, and I think by others, to ensure that, since we have a single code and EU criteria that should be applied consistently, the answer to that is "yes". I would just say this to you, Mr Anderson, as a fellow member of a similar profession, the legal profession, that you can apply criteria, however detailed, consistently and yet two sets of people may arrive at the margin at different judgments, and sometimes these are very fine.
(Mr Straw) I think we are pretty good. In a sense, one of the things we need is a greater degree of information about this.
(Mr Dowse) I think from the experience that we have, and you are absolutely right, we have now had the operation of the EU Code of Conduct for several years, it is true we are building up experience. One way you can judge whether the system is working is by the number of consultations that take place. Under the rules of the Code of Conduct, when any Member State issues an export licence for a transaction essentially identical to one that has previously been denied by another Member State, it will first consult the Member State that issued the denial. Although, as a result of that consultation, we are not obliged then to follow the denial, the process of consultation in itself obliges Member States to look that much more carefully at their export procedures, and it is not something that is done lightly to undercut a denial. The fact is that there have been relatively few cases year by year where these consultations have had to take place. It has happened in a relatively small number of cases. So I think that is one piece of evidence that in fact the guidelines, the criteria, are being applied pretty consistently across the EU.
(Mr Straw) In a mathematical sense of proving a negative, it is almost always impossible to prove a negative. Do we take care to check, so far as we are able, on the end use of this equipment? Yes. It is precisely because we do take care that this example has come to light. It came to light because of very rigorous checking by our defence attaché and his staff in the Occupied Territories. I think it is a testament to their work on behalf of the Government and also, if I may say so, on behalf of Parliament, that they have managed to pin down the connection. What they discovered is that these were Puma armoured personnel carriers which had been deployed in the Occupied Territories in September of last year. There were sightings in November and December of last year and a Nachpadon APC observed first in the Occupied Territories on 29 January 2002. These vehicles have chassis which were essentially cannibalised from Centurion tanks which were exported to Israel between 1958 and 1970. They do not look like Centurion tanks at all. It requires a high degree of skill to appreciate that a chassis from a Centurion tank could form the basis of these Puma and Nachpadon APCs. It is as a result of observation by the defence attaché and his staff going into the Occupied Territories, I may say at some degree of personal risk, that they were able to identify this and set out the other circumstances. As you will see, I decided that Parliament should be informed on the day on which I was informed.
(Mr Straw) No, it was not just a lucky observation. Part of the job of defence attachés is to do this. We may come on to the general principles of end-use monitoring. Obviously how far it is possible physically to control the end use if you have a government which is determined to break undertakings depends on the size and nature of the equipment. It is easily transferable; it is difficult. In this case actually I suggest that it was pretty difficult to identify but it was identified. If it is equivalent to whole tanks as exported or whole aircraft or artillery pieces as exported, it is relatively straightforward. We are not dealing here with a perfect system but we are dealing here with a system which I think the Committee will accept is considerably better than the system which existed three or four years ago.
(Mr Straw) Certainly not being followed.
(Mr Straw) We have to find out. We have to await the response of the Government of Israel before we make judgments about whether the undertaking was given in bad faith. It could have been given in good faith but we are checking. We want proper recognition that the Centurion tanks had been cannibalised in this way. However, whatever judgment we come on to as to that, the simple fact of the matter is that the undertakings which were given by the Government of Israel on 29 November 2000 that, as you say, none of the UK-originated equipment has been used by the IDA in the Occupied Territories, turns out not to be the case and I take that extremely seriously, which is why we are pursuing it with the Government of Israel, as well as why I laid the letter before Parliament in the form of the answer which Ben Bradshaw gave to George Galloway on the day that I first had this drawn to my attention.
(Mr Straw) I think, as long as you have a system of licensing, which I strongly support, we should all be concerned about circumstances in which, either inadvertently or advertently, the undertakings which governments give about end use could be broken. I think, on the whole, experience shows they are not and that where material is sold under clear undertakings, governments do not break those undertakings because it is not in their interests to do so. Over time, that would put them beyond the pale of the international community. But within the availability of resources, which is a crucial issue, and what is practical, of course we should strive for means by which we improve the overall regime. I do not argue with that.
(Mr Straw) Yes. In the world in which we live you are not going to be able to end up with a situation - perhaps you could do but it would be extremely expensive and I am not sure it would achieve more than we currently achieve or are able to achieve - where you have a system of end-use monitors. Of course we are going to examine very carefully the full details of what happened in this case, certainly. I will also make sure that the Committee is fully informed about that, and it may well be that you will want to return to this at a further session.
(Mr Straw) Since 2000? It has varied from month to month, day to day. I think it was in the middle of 1999 that Kargil took place, so it was very serous at that time. There were then some negotiations between India and Pakistan in the east and it has been going up and down like that. In the last three months, it became serous after the terrorist attack on the State Assembly in Srinagar on 1 October and a lot of diplomatic and other efforts were put in to try and reduce the tensions, including action which was taken by President Musharraf to ban a number of Pakistani-based terrorist organisations which were almost certainly behind that attack. Then, as we know, on 13 December there was the attack on the National Parliament, the Union Parliament, in Delhi and tensions then rose. Overall, again if you are asking me about averages, given the fact of Kargil and what happened in 1999, it is probably on average about the same, although day by day it changes.
(Mr Straw) I would not say that. It is a serious situation and it is one obviously we take account of in determining whether licences should be issued. I am well versed in trying to make judgments in respect of Criterion Four. It is one of the crucial things I know every member of the Committee has on board but sometimes others may not: by definition, arms are materials designed to be used in an aggressive manner because these are instruments of violence, but this is about whether the export would be used aggressively against another country or to assert by force a territorial claim. Then we have to go through a balancing judgment against the other criteria, including, for example, the criteria in respect of international obligations. That then runs into things like obligations under United Nations Security Council Resolution 1373.
(Mr Straw) Yes, I do. Unless we make a decision that we are going to pull out of defence industries, then what we have to do, it seems to me, is to make judgments on a case-by-case basis in the round against these criteria but against the fact that, if the criteria are met in a sense that the export appears to be one that is not caught by the criteria, then it is an export of defence material which ought to be made. I do not believe that the licences whose issue I have been a party to have contributed to a breach of Criterion Four because otherwise I would not have made the judgments there. I agree there have been some licences which I have refused in respect of both Pakistan and India where, amongst other criteria I think have been potentially in breach, Criterion Four has been one of them.
(Mr Straw) I will do my best to help you, Mr Baldry. First of all, I am not going to comment on the possible sale of Hawk jets because there has been no contract. Yes, it is certainly true that I and other Ministers have made representations to the Indian Government about that particular sale, but that is a separate issue from whether, if we were presented with a particular application for a licence, we would approve it against these criteria. That would depend on the circumstances at the time. Who knows whether or not the contract is entered into or otherwise? So far as India, however, is concerned, India's overall defence spending is as a proportion of their GDP, and when I looked into it - and I have to say I have doubled checked this - that is surprisingly low, given what is a large number of people involved in their defence services. When you go around Indian cities, you see large garrisons. Notwithstanding that, that is partly because India is a huge country of over one billion people. Their defence spending looks like being somewhere between 2.5 and 3 per cent of their GDP, which is, roughly speaking, the same proportion as for many countries in Europe. On the issue of sustainable development, you will be aware that one of the criterion is that of sustainable development, but it is whether the proposed export would seriously undermine the economy or seriously hamper sustainable development of the recipient country. As with any other criteria, those have to be weighed in the round against aspects of the criteria which were set out two years ago.
(Mr Straw) I am sorry, I am not going to go down that route. As I say, that is based on a hypothesis, first of all, that the contract would be awarded to a British contractor; and, secondly, having been awarded, that the British Government would then license it. Whether we license it, if it is awarded, depends on the circumstances at the time but of course, may I say that we would look at all these matters very carefully and report to the Committee.
(Mr Straw) Thank you very much for the notice. Funnily enough, I thought that might be the case. Indeed, I do not think you would be doing your job if it were not.
(Mr Straw) Mr Dowse has just whispered into my deaf ear, but I managed to catch it, nonetheless, that quite a lot of these refusals are for dual use, which by definition are bound to involve questioning not just about the goods themselves but also about their use. That is where it becomes rather more argumentative, although I think the system works very well. At any one time, the number of refusals as a proportion of the total number of applications does vary according to local circumstances specifically. It may be, Mr Lansley, that over a period there are certain lessons to be drawn about how the criteria are applied or drafted from a high number of refusals or the need better to brief potential exporters. I accept that. This whole thing is an iterative process. It is also a new process and, as I say, it is a remarkable improvement, I think, on what was there before just a few years ago. There is a degree of transparency. So we are saying this in an iterative area where we are developing systems and tyring to improve them all the time.
(Mr Straw) There is other background which I can give you in private session about this. To pick up Rachel Squire's question, because self-evidently there is potential for conflict between India and Pakistan, and there has been a significant degree of tension between the two countries which at any one time has varied from significant to high and back to significant, we have to look very carefully at the applications. So I do not think it is intrinsically a surprise that there is a high proportion of these countries. Indeed, I think it would be odd if that were not the case.
(Mr Straw) The answer to that is that the criteria are the criteria. They are laid down and provided by Ministers but they have been put before Parliament and under the new Bill there will be a more formal process for their approval, and so we have to apply them. That, as it were, is that. If you are judging what is going to happen if you do something, then obviously you have to take account of the likely possibilities. One of the likely possibilities, if country X does not make a supply, is that country Y could. That cannot be a decisive factor in this because on that basis, since you could always argue that there is always a country which is going to apply the criteria less stringently than you or apply no criteria, you end up effectively watering down the criteria altogether and you are saying that it is the country whose behaviour is the worst which should dictate the standard for everybody else. By definition, you cannot do that. This is a common problem in all areas of international operation, but within the more reasonable parameters than perhaps the ones I have described, those possibilities are bound to be taken into account in judging regional stability.
(Mr Straw) We make our judgments, and this underlines the point that I made earlier, without going into that detail. I am not familiar, without looking at my file, with the exports or non-exports to Taiwan. That underlines the point I make, which is that, if you have criteria, you have to apply them. However, there is a background which you need to take into account.
Sir John Stanley
(Mr Straw) The answer, Sir John, is "probably", and it is something we need to look at. May I make a point about this, that once 1373 was, as it were, international law, I took the initiative myself to say that we should review inside the Department whether the consolidated criteria were consistent with the obligation in international law imposed on us and every other member of the United Nations by 1373. I was not certain that they were. I think this was triggered in my mind by one particular case that came before me in the subsequent weeks. What I concluded, in the end, was that the criteria themselves did not need amendment, for reasons which I set out. I think they are pretty robust. As I say in the third paragraph of my answer: I believe there is no need to amend the consolidated criteria for us to comply fully with the terms of the UNSCR 1373, but I then set out why I thought, nonetheless, although I was not amending the criteria, I should draw to the House's attention and to the public attention that this was an additional factor which we had to take account, although as it happens I thought the drafting of the criteria was robust enough for the two to fit together. On the EU point, I will come back to the Committee and let Mr Berry, if I may, have a letter about this. It is a point which I have not raised with the EU and I should have done.
(Mr Straw) In view of what you have said, I will look at the EU Code. I hear what you said, Sir John. I will give it a thorough look and report to the Committee about it. Can I ask Mr Dowse if he has other points to add?
(Mr Dowse) I can just add one or two points. First of all, so far as the EU Code is concerned, certainly there is a number of references to the need to guard against diversion of weaponry to terrorism and issues of that sort. As far specifically as weapons of mass destruction are concerned, all members of the EU are members of a number of multilateral export control regimes. The Australians are already dealing with chemical and biological material; the missile technology control regime; and the nuclear suppliers group. All these international export control regimes have, since September 11th, been undergoing a process of looking at their control lists, looking at their aims and objectives, amending where necessary these lists and aims and objectives, with a particular focus on the need to guard against terrorism. They have tended up till now to be focussed on states and the proliferation and seeking of weapons of mass destruction. They are now looking as well at the issue of non-state actors, such as terrorist groups. In that sense, the EU, as members of all these regimes, is very actively engaged in this.
(Mr Straw) I do not think, if I may say so with respect, warmer or kinder interpretations, as it were, because they were not quite so much on our side, is what is called for. What we have to have is a consistent application of these criteria and the EU Code. Where a country itself has changed is own approach, then for sure the decisions which are likely to follow in respect of export licences to that country are themselves going to be changed. They may not be changed from yes to no but if the circumstances change, then obviously their consideration will change. The best example of all to give is Afghanistan itself, which moved from being a pariah in respect of which no arms exports were licensed by the UK, or most other members of the civilised world, to a country where we are actively supporting the interim authority.
(Mr Straw) I cannot recall having received any application for a licence for them. I was not saying that, but they are awash with small arms, certainly.
(Mr Straw) Since I rather anticipated, Mr Worthington, that there might be a question about it, and I am happy to take further questions afterwards, I have a short statement which I thought might be helpful to the Committee. Do not take too much notice of the first sentence. It is not Government policy to discuss licensing details with the Committee before they have been published in our Annual Reports nor to comment on individual cases. However, given the level of interest in the supply of air traffic control equipment to Tanzania and the fact that information is already in the public domain - put there other than by the British Government - I should like to make a statement on this case. I can confirm that in December 2001 Her Majesty's Government approved two licence application for the export of air traffic control equipment to Tanzania. These export licence applications were carefully considered against the consolidated EU and national export criteria. This included careful consideration of whether the proposed export could seriously undermine Tanzania's economy or seriously hamper Tanzania's sustainable development contrary to Criterion Eight of the consolidated criteria. The Government's decision to approve the export licences stands. However, this in itself does not oblige Tanzania to continue with the purchase and the final decision must be for them. I would just like to underline two points here. First of all, it is well known to members of the Committee but I think some members of the public outside might be forgiven for thinking otherwise: this is not directly about British Government aid; it is about whether we approve or not a licence for the sale of an air traffic control system, which in itself is a private transaction, or would be a private transaction, between the Government of Tanzania and the contractor, who happens to a British contractor. That is the first point. The second point is: as with all export licences for arms, military equipment or dual-use equipment, which is what we are talking about here, this is permissive. It requires nobody to do anything, but if they want to do it, then they have permission. I will continue with the remainder of this statement. We have good bilateral relations with Tanzania. As one of their major development partners, we remain committed to working with the government to promote growth and to reduce poverty. Our bilateral development assistance programme stands at around £65 million a year. This goes towards strengthening economic and political governments, to improving public services, including health and education, and in helping to provide key infrastructure, such as water and roads in rural areas.
(Mr Straw) It is not for me to make that judgment in this particular case. What we had to do, Mr Worthington, was to make a judgment on the basis of our law and our criteria and that alone for these purposes. There are other decisions which are made elsewhere within government about this, but this is a discrete function. I might also add that amongst the other factors we were able to take into account when a decision was made about this just before Christmas, as I recall, was the fact that the HIPIC completion point had been reached for Tanzania on 27 November of last year. It had been reached and the IMF had given it at that point, knowing about this particular proposition. As to value for money, part of that is set out in the arguments which the Government of Tanzania made. That is a matter for them, not for me. There are other matters, Mr Berry, which I am happy to go into in detail but it would have to be in private session. I will try and answer other questions.
(Mr Straw) Again, in terms of the detail, I would need to go into the detail when we go into private session, but in terms of the overall context in which we made our decision, we had a huge amount of information before us when we came to make the decision and that obviously included the decisions which had been made by international organisations. As for the IMF in respect of the HIPIC completion point and so far as the examination by the International Civil Aviation Authority, we were aware that from their point of view there was this further examination that would take place. That was another hurdle, a separate hurdle, that Tanzania for their own purposes would require to pass. As I have said, what we had to do was to make a judgment on the basis of these criteria.
(Mr Straw) Yes. There is a series of different hurdles here.
(Mr Straw) I can go into more detail about this in the private session. Our job is not to stand in the shoes of the Government of Tanzania. They have their own debates about what system is likely to give them the best value for money, their own debates about the suitability of this system as opposed to other systems. That, as I discovered in the course of about three months whilst I was personally seeing all the papers on this, is a matter of considerable argument. That is a matter for them. The question before us was: would this application meet the criteria, including specifically Criterion Eight? We made a judgment in respect of that. I believe the judgment was right at the time; I believe it is right now.
(Mr Straw) Tim Dowse will explain the 680 procedure.
(Mr Dowse) On the 680 procedure, that is essential an MOD approval which gives an exporter approval to market a system. It is made very clear when an F680 is issued that approval to market does not - absolutely and underlined - mean that a licence will necessarily be forthcoming. It has to make that very clear because, of course, for many defence exports the marketing process and the seeking of a contract can take years, and indeed with the Tanzanian case it took many years to move from the beginning of the marketing until contract. Circumstances can change in that time. It is entirely possible that an approval to market may not, when the time for contract comes, result in approval of a licence. So it does not carry that implication.
(Mr Straw) Mr Worthington, if you are asking me if I knew whether or not this was part-manufactured and did I take that into account, the answer to both questions is "no". I have no idea whether this equipment had been part-manufactured and I do not want to know because it is not remotely a relevant criterion. If a manufacturer, as it were, takes a risk through an F680, or in any other way, about getting a licence, that cannot possibly be a relevant consideration for the Committee. We have to look at the application and then make a decision on the basis of the criteria.
(Mr Straw) That is not the case. I am sorry, it is simply not the case. Whatever side of the argument you may be on, let us be clear about this, that neither I nor any other Minister is going to get involved in a process which is a charade, and neither was I. There was no question in the consideration that was given to this but that we sought to apply the criteria. Mr Worthington, I am not going to be party to a set of circumstances of licensing where an additional criterion not made available to Parliament is introduced, namely that the company has already spent some money and they would like to sell them, because that is not the criterion and it would wreck the whole system.
(Mr Straw) I will, with notice; I am very happy to do that. I gather the answer is that there has not been. Mr Worthington, that does not mean that the criteria are not criteria that are worth having, not remotely.
(Mr Straw) We are indivisible in government.
(Mr Straw) I have no idea and it is not a relevant criterion, with respect. I have not the faintest idea.
(Mr Straw) As you understand, ECGD is not directly the responsibility of our office. I will seek information on that and write to the Committee.
(Mr Straw) I have flown in a DC10 over Africa. Yes, I have, on a number of occasions.
(Mr Straw) I think so. The very first occasion was when I went with Mr O'Neill to Ghana via Lagos and with Kate Hoey, who promptly fell down an empty hole.
Chairman: Are you sure this should not be in confidential session!
(Mr Straw) Mr Howarth, thank you and I note what you say. I was made aware yesterday of the letter that you sent and, indeed, what you have said in this letter. It was plain to me that this matter is now very fully on your record and therefore I should do my best to speak about it in this session. However, if I may make this clear, the question per se of what it feels like to fly over Africa in a civilian airline is again not a relevant criterion. What we have sought to do is simply to apply the criteria and come to the best judgments that we can.
Donald Anderson: Secretary of State, you seemed a little surprised that Mr Baldry having teed up the ball so well in respect of this did not actually strike the ball.
Tony Baldry: I got the answer that I wanted.
(Mr Straw) There is neither an issue of approval or disapproval, it is working within the framework of the rule of law and of policy and different criteria apply. This is why I made the point I did a few minutes ago when I drew to the public's attention, as well as the Committee's attention, that there is no issue directly of the British taxpayers' money being involved in this contract and so the question is do we license others to make the export or not? Impalpably, Mr Anderson, quite different criteria apply where British taxpayers' money is at stake. If it is we who are buying the equipment or paying for it directly or, as it happens in respect of any country who are recipients of aid where we are providing aid, it is entirely right and proper and also has to be lawful that the relevant Secretary of State has to apply to himself or herself the criteria which operate in that case. That is what Clare is doing here, as any other Secretary of State for International Development would do. I am sure I will think of examples when I get out of this room, Mr Berry, but I can think of plenty of examples from my time certainly as Home Secretary where I would make a decision on one set of criteria in Government which was different from decisions which were also right which had to be made on a quite separate set of criteria elsewhere.
(Mr Straw) That is a judgment that I cannot make.
(Mr Straw) I do not think we do. It is perfectly possible, for the reasons I explained right at the beginning, that, on our best judgment, we may come to a decision to approve a licence and other EU partners may come to the opposite decision. I say again some of these are very, very finely balanced judgments indeed. There is no part of our consideration to go into what is called undercutting but, as I say, that is possible. On some of the detail about European Union practice, other European Union countries, with respect I need to deal with that in a closed session.
(Mr Straw) Yes.
(Mr Straw) I think there is a balance there, as there usually is in Government decisions. In the longer term I do not happen to think that the two are in conflict. At any one moment these two objectives of trying to create a safer world through an effective international and bilateral system of arms control and the other side having a profitable and viable defence industry at any one moment of course can be in conflict because I am always conscious of the fact that where I refuse a decision that is going to have consequences for the turnover, profitability and the employment of the individual firm at the time. It is in the long term, and even in the relatively short term interests of this country we should make the international community as safe as possible. It is not that you can ever avoid conflict using military weapons, we are not a country which has a pacifist policy as far as international relations are concerned. We recognise the importance of having strong viable defence forces because such is the nature of the world - as we have seen in Afghanistan - that they have sometimes to be used and used effectively. The more we can control the flow of arms and the more we can deal with states which are in turn supporting rogue states and terrorists by their own sale and supply of arms the better it will be for the overall international environment. Then we can come back to the issue of prosperity because what we know for certain is that where countries are riddled by conflict then they quickly slip into poverty and if anybody wants a better example of that they only have to look to Africa, Central and Southern Africa. If one looks, for example, at the trade other than of minerals from countries in Central Africa, it is tiny and it is tiny because of conflicts which have been caused there.
(Mr Straw) Support for?
(Mr Straw) It is hard to generalise.
(Mr Straw) When I visit any other country on a bilateral visit, indeed in many cases when I am in international fora as well, I ask for a briefing on any representations which I can properly make on behalf of British companies and British exporters. That by no means just includes defence and related suppliers but any other British company. I do my best to represent the interests of British exporters and British business, obviously within the framework of international law at the same time. Mr Howarth, you asked me how far my representations are appreciated, I think much depends on who I am talking to whether they are convinced.
(Mr Straw) It is one factor is the answer and it varies from country to country. The nature of any industrial commercial relationship is one factor in the relationship but there are countries around the world, particularly in Africa, where our trade is relatively small but our relationship is a very strong one. I give you perhaps the example of Uganda where I speak from recollection, we are currently providing about £45 million of aid to Uganda. It has been a very successful programme which Clare Short has developed over the past five years there and one of the consequences, for example, is there is now the universal primary indication because of the kind of leadership we are providing there. At the same time when I visited Uganda I noted that our trade with Uganda at £37 million is less than the aid we provide to them. I do not draw any conclusion about that but I would accept this is a country which has been through the most terrible deprivations in the past and that we are right to support it through aid. We have a pretty close relationship with President Museveni and his colleagues there. Over time as the aid trails off we will look forward to a time when Uganda, along with other African countries, becomes a lot more prosperous and with a bit of luck in time there will then be a natural demand for British goods.
(Mr Straw) Yes.
(Mr Straw) Yes, I do. The answer that Peter Hain gave on 26th October 2000 which picked up in this particular respect what Robin Cook said on 28th July 1997 sets out very clearly the context in which we would take account of the importance of the British defence industry and it is important but not to the point where the importance of the British defence industry could be allowed to override key considerations like countries which are in breach of their human rights obligations or engaged in internal repression or where they are a risk to regional stability. If you are asking me outwith these consolidated criteria could we have as efficient armed forces as we have without a pretty significant and successful defence industry sector, and could that defence industry sector be as successful as it is without exports, the answer to both those questions is no, I am aware of that. Those two considerations cannot ever justify a breach of these consolidated criteria.
(Mr Straw) Provided they are within the criteria and not outwith the criteria, yes, of course we should, as we should in every other field.
(Mr Straw) May I ask Mr Ehrman to answer this. I am happy, obviously, to take supplementaries.
(Mr Ehrman) Thank you. The discussions with the United States on this issue are continuing. They are continuing constructively and amicably. The issues still to be finalised and discussed are some of the technical points relating to the compatibility of our export licensing regulations with the proposal of the United States to allow unclassified equipment to come to this country. So we are still in negotiations with them but the negotiations at the moment are going well.
John Barrett: If I could then turn to sustainable development. If excessive spending on arms is not to adversely affect health, education and social services of our country, is it not the case that we need a definition of sustainable development? Does the Government have, or intend to develop, a workable definition of sustainable development, and clear benchmarks, setting out what exports would be likely to hamper a country's sustainable development, against which licence applications can be assessed? This may or may not bring us back to the Tanzania air traffic control system.
(Mr Straw) As I say, we are in relatively new territory here with the principles of sustainable development. There are two parallel things in train. One is that the Cabinet Office is undertaking an exercise with relevant Government departments in assessing the nature of criteria. It is not possible to say in advance that goods to X exported to country Y are going to breach any of the criteria including Criterion 8. You will be aware that the criteria themselves, which are what we have to follow, say that they will not be applied mechanistically but on a case by case basis using judgment and common sense they would have to be. Sustainable development is an important criteria. It is also one which by definition is more likely to be the subject of some difficult judgments because it is a very wide idea. It is wider than some of these other criteria, that is in its nature. That is one set of developments which are short term. Secondly, as I think you will be aware, in the Export and Control Bill, as amended, the Secretary of State if this Bill goes through, as I think it will do, is required by Clause 7(4) that the guidance required by subsection 3 must include guidance about the consideration, if any, to be given when exercising such powers to issues relating to sustainable development than to issues relating to any possible consequences of the activity being controlled that are mentioned in paragraph 3 in the Schedule. So there will be more detailed guidance there as well.
(Mr Straw) What I would say - to use the word again - is we are involved in an iterative system where we are building up experience, and that is the crucial thing here. There has been a lot more experience about classic defence military criteria. There are some possible export licence applications which do not require more than a milliseconds' consideration because it is perfectly obvious that if we have an order for arms to a known and notable rogue state the answer to that is no and that is the end of it or where it is a military only piece of material, which has only one application, not dual use, and where it is clear beyond any peradventure that it would be used for internal repression far exceeding any need for maintenance in a proper sense of law and order within human rights bounds. Those are straight forward cases, as it were. At the other end, not least because it is a new area and it is an intrinsically wider definition, there is the issue of sustainable development and what we have to do is to carry on building on the experience that we have had.
(Mr Straw) Yes.
(Mr Straw) I talk about case by case basis because that is the basis on which we are required to work. It says these will not be applied mechanistically but on a case by case basis using judgment and common sense but that is no different from any other system of this kind where you try and lay down rules in advance. You have a system for making judgments on individual decisions and then you have a system for retrospective scrutiny. If I can give you an example in which I have been involved, both in my previous job and in this job, which is a discrete area where there is a lot of experience. If you take the issue of interception warrants, there are criteria laid down by Parliament in Acts of Parliament. You have to deal with each case on a case by case basis but matching the individual cases before you against the criteria laid down by Parliament and, as it happens, very detailed codes of guidance as well. Then behind that, when the Secretary of State has made his or her decision, there is a system of retrospective scrutiny which although it takes place in private, because it has to, is nonetheless very thorough, in this case it is undertaken by a senior retired Court of Appeal judge, so that is the way it works. I do not see, in terms of process, any other way of achieving the end that we all desire which is that we have a good and straight forward system of export controls. I do think as what is a relatively new system beds down and experience is built up then the system can become more predictable because the areas of real discretion will become less.
(Mr Straw) Mr Worthington, that begs a lot of questions. My view is that what we have to do, so far as export controls are concerned, is apply the criteria and apply the criteria in as fair and appropriate way as we can.
Chairman: Can we move on to prior parliamentary scrutiny and Sir John Stanley.
Sir John Stanley
(Mr Straw) I suppose I had better say, in terms of now being asked about the state of mind of myself and my colleagues, that is also a state of mind the Government is indivisible to.
(Mr Straw) Did I hear Mr Anderson say why?
(Mr Straw) If I may just be allowed to talk about my own state of mind. I do not have a closed mind about this at all. I think there are considerations which I say, with respect, I think need to be taken into account very carefully by Members of Parliament about prior scrutiny because it is not a one way street. I think if there were prior scrutiny you could end up with a situation, as they have in Sweden, which I see recommends itself to some people, where the parliamentarians who are involved in the prior scrutiny, as I understand it, have to take what amount to Trappist vows of silence and are not able to take part in any parliamentary debates which follow. I am looking very carefully at the proposals which are being made by Lord Campbell-Savours in the House of Lords for a system which would have a Committee which is similar to the Intelligence and Security Committee in terms of its appointment and responsibility, but it is different from the Intelligence and Security Committee because the ISC does not do any prior scrutiny work with respect to the intelligence agencies, and neither in my judgment could it or would it be appropriate. It could but it would not be appropriate for it. Sir John, I am a Member of Parliament as well as a Member of the Government. As I tell my electors in Blackburn as frequently as I can I only have the job in Government as a result of having a job from them in Parliament and so although, of course, here I am on one side of the table and you are on another, I do not happen to think that I should dispose of my responsibilities or my concern as a Member of Parliament to ensure that Ministers are held properly to account because of one thing. I can be absolutely certain, as I look at my future as well as my past career, that when that finally comes to an end, whenever it does, I will have been a Member of Parliament seeking to hold executives to account for longer than I have been a member of an executive. I think both jobs are important. I think we have to try and work through to get the best system that we can which leads to efficient, consistent decision making in Government and proper parliamentary scrutiny. May I just say this last point. I have looked carefully at other systems so far as information is available. I think the system that we have established over the past five years in the United Kingdom is far and away the most transparent system in the whole of the European Union by a long shot, and that includes Sweden. It is different from the one in the United States but the United States only involves prior scrutiny by Congress on a rather variable basis but what is not variable is a very high threshold in terms of the value of the contracts. At the moment we are world leaders in terms of parliamentary scrutiny for export licences. That does not mean for a moment that we should not try to improve the system but it does help to put our system into perspective.
Sir John Stanley
(Mr Straw) It absolutely does. I speak on behalf of them. As I say this is an indivisible government.
(Mr Straw) Yes, I will.
Chairman: Unless there are any other questions, there is a private session that we need to go into. Publicly can I say, Secretary of State, thank you very much indeed. Can I say to the public can I ask you to leave as quickly as possible so we can move to private session.