Rt Hon Lord Lilley

    Date of Proceeding: 30.01.2007
    Reference: 456 c178-80
    Member: Lilley, Peter
    Title: Sale of Radar System (Tanzania)
    Description: I begin by declaring an interest. I shall shortly go to Tanzania as chairman of the globalisation and global poverty group to discuss development issues, including issues such as this, with Government officials and others, and to address the Democratic Union of Africa.

    Tanzania is one of the poorest countries in the world. I had the privilege of living there when I worked for the east African common market some years ago, and I know it to be a beautiful country with a warm people-but a people living under a cloud of poverty, disease and hunger that few of us in the House can imagine. We should remember, however, that it is in that context that we are discussing this issue.

    The House often discusses waste and misuse of money that occurs in this country, but that waste and misuse dents, at most, our prosperity. Waste and embezzlement of money in a country like Tanzania is a matter of life and death. It means diseases untreated, education forgone, and children going to bed hungry at night.

    That is why the accusations that have been made are so important, including those that the right hon. Member for Birmingham, Ladywood (Clare Short) made outside the House and which we look forward to hearing today. I pay tribute to her because she does not speak now with the benefit of hindsight, as is the case for some of us, but she had the courage and foresight to speak out about her concerns at the time, and to make them known publicly.

    I also have enormous respect for the right hon. Lady’s successor, the current Secretary of State for International Development. He is a man of sea-green sincerity and absolute dedication to the cause of alleviating poverty. Today he responded with great candour, and coped with the embarrassing task of defending decisions for which he was not responsible, which he knows to be indefensible, and with which he undoubtedly disagreed at the time. I do not blame him for seeking what refuge he could find behind the investigation by the Serious Fraud Office. However, that will not stop us debating the issue today, because we are asking not about that SFO investigation, but about the Government’s failure to investigate sufficiently, or act effectively upon, what they knew previously.

    An even flimsier defence is just to say, as the Government amendment does, that the decision was made after “due consideration” and””full discussion at Cabinet level”.”

    The issue is not whether it was discussed, but what conclusions were reached and why. Why did the Cabinet disregard the advice of the International Civil Aviation Organisation, ignore the concerns of the then Secretary of State, and push through licence approval before the World Bank had put its well-known criticisms into a recommendation that would have been difficult to reject?

    We know that Ministers did not conclude that this was a good deal for Tanzania. The ICAO had already advised that””The system, as contracted, is primarily a military system…If it is to be used primarily for civil air traffic control purposes, the proposed system is not adequate and is too expensive.””

    At no stage has any Minister suggested otherwise. They have fallen back on what might be called the Pontius Pilate defence: “We knew it was a bad deal, and we suspected it was a dodgy deal, but we washed our hands of it and left it to the Tanzanians to decide”-the “sovereign decision” argument to which the hon. Member for Kingswood (Roger Berry) referred-“It’s just too bad if the Tanzanians are being ripped off and the poor lose out as a result.”

    I am certainly not accusing the Secretary of State of taking that position. He would be the last person to argue that we should turn a blind eye to bad governance and waste of resources. His recent White Paper is entitled not “Let’s hope governance will work for the poor”, but “Eliminating World Poverty: making governance work for the poor”-making it work for the poor, not for the big man in Africa or big business abroad. The White Paper is robust about aid being made conditional on good governance. It says:””The UK Government has a responsibility to make sure that UK aid money is used for the purpose for which it is intended. We take this very seriously.””

    In 2001, Britain had just given Tanzania £35 million of direct budget support for poverty reduction, yet when Tanzania decided to spend £28 million on a contract that the ICAO said was primarily military, not adequate and too expensive, the Government simply washed their hands. Governments face a difficult dilemma if the only way in which they can react to waste and suspicions of corruption is by cutting off further aid intended to help reduce poverty, but on this occasion we could have prevented this dubious contract by refusing or at least delaying a licence, without cutting off future aid.

    The Secretary of State’s White Paper goes on to say that donor Governments””need to be able to stop unscrupulous individuals or companies profiting from…paying bribes” ,”

    and that””where domestic capacity is weak, international codes of practice can encourage companies to work legitimately”.”

    Yet instead of enforcing the combined European Union and national code of conduct on military exports, the Government simply glossed over it, or gave it the most liberal interpretation possible.

    The Government say that they had no evidence of corruption when the licence was given. We now know, of course, that 30 per cent. of the contract value was paid into a Swiss bank account, but the Government do not want us to talk about that now that we have some evidence. However, we do have the right to know whether Ministers asked themselves the obvious question at the time: why were the Tanzanians pressing ahead with a contract for something that they did not need and could have got cheaper elsewhere, and for which they had arranged some highly questionable finance-all against the advice of the ICAO, the World Bank, the International Monetary Fund and others? We know that the former Secretary of State asked herself that question, and that she reached the only conceivable answer: that someone had been offered big kick-backs. The deal stank-it reeked of corruption-but the Prime Minister persuaded other Ministers to hold their noses and let it through.

    We in this country talk a lot about governance. We lecture the Governments of developing countries, telling them that they must investigate, be transparent and hold Ministers to account, but the sad truth is that on this occasion, the suspicions fell on a British company. It was British Ministers who turned a blind eye; it was the British Government who rushed a decision through before the World Bank could publish its report; it was the British Government who ignored their own code of conduct. The words “mote” and “beam” spring to mind.

    Last year, I met one of the bravest men in Africa: John Githongo, the former anti-corruption tsar in Kenya, who tenaciously exposed massive corruption in the face of threats to his life and family. He said that Britain could still exert considerable moral influence-that anything that we did to highlight corruption and abuse would mobilise and strengthen the forces within African countries trying to clean up their systems. The sad truth is that this whole sorry episode will make it more difficult for the Secretary of State to exert that moral influence. I suspect that he would agree with me, were he in a position to do so.

    Although tomorrow’s headlines will be captured by “cash for honours”, I believe that the episode that we are discussing today will leave a darker stain on this Government’s reputation. They put the well-being of poor people second to the interests of big business, undermined Britain’s influence for good and set a damaging precedent for the future. The stain can be erased only if this House is prepared to do what we demand of others-may I respectfully suggest that it do so through its Select Committee on International Development?-and render the dealings of Government thoroughly transparent and hold Ministers, above all the Prime Minister, to account. It will be to the credit neither of this House nor this country if we let the matter rest as it stands.