As skin diseases go, athlete’s foot is almost ineradicable. This does not make
it the less important to keep the fungus at bay. The same can be said of
corruption in the arms industry. It may not be beaten but we should never
entirely surrender to it. Somewhere between anger and fatalism an uneasy
accommodation must be made. Whether Tony Blair’s Government has struck that
balance well seems to me to depend heavily on what happened in the years
2001 and 2002, when new Labour’s anticorruption legislation was drafted and
came into force.
Anger alone about the latest allegations of high-level corruption in arms
sales to Saudi Arabia is pointless. Cynicism alone is pernicious. No one
individual, or handful of individuals, can be blamed for these ills. This
Government did not invent corruption in the arms trade worldwide. It found
it when it came to office. It is at least as important to ask why as to
discover what has happened in this particular case.
Selling devices to kill and maim people is unlike selling washing machines.
The supplier is embarrassed about what is being supplied. The purchaser is
sensitive about what is being bought. Customers include most of the world’s
nastier governments. Purchases may be for some of the world’s nastiest
purposes. Always on hand are ready-made arguments for secrecy, almost
impossible to rebut. “National interest”, defined as sloppily as you please,
can usually be prayed in aid. The remark that if we don’t do it then
somebody else (usually the French) will remains infuriatingly true.
All the same, the latest story reeks of impropriety. I am not going to wade
into the ins and outs of the allegations now in the news about the
al-Yamamah deal, BAE Systems, alleged backhanders and alleged British
government connivance. This is a field, in the first instance, for spooks
and specialists, industry insiders and undisclosed sources. But as an
outsider let me remind readers that for the past ten years a reliable
indicator of a rotten deed has often been a sudden and unannounced shift in
Mr Blair’s reasoning. Remember Iraq? It wasn’t about regime change, he said.
And then it was, he said.
Last time I heard the Prime Minister talking about the al-Yamamah deal and the
suspension of the Serious Fraud Office inquiry, I am sure his argument was
about national security and damage to intelligence cooperation. Today I pick
up the papers to discover Mr Blair talking instead about the loss “of
thousands and thousands of jobs”. Presumably his intelligence stuff was made
up and cannot be substantiated, and he has reached his argument of last
resort. “Like a rotten mackerel in the moonlight,” as one US congressman
once said of another, “he shines and stinks.”
Anyway Mr Blair will be gone soon. And anyway he was unlikely to be the author
of this unsavoury mess. He inherited a world in which we all knew – I
certainly did as a Tory backbencher – that the arms trade operated in a
moral twilight. For what it’s worth, my sense of the rules – so far as there
were rules – was as follows. I don’t recommend it: I simply describe it as
it appeared to me.
If concealed backhanders or kickbacks were demanded from British companies by
individuals in foreign governments or businesses, it was for the company
concerned, and its staff, to take the decision whether to play along; and
different companies (and individuals within them) would have made (and been
free to make) different moral judgments.
If ministers were dealing with these companies and knew this was happening,
they should take care not to involve themselves, and so far as possible turn
a blind eye. If the company was in receipt of public subsidy, then ministers
were in tricky borderline territory. If the suggestion could easily be made
that public money was being paid into accounts used for backhanders, then
this was probably the wrong side of the border. Taxpayer-funded export
credit guarantees were a particular problem here. If ministers or their
civil servants themselves did anything to expedite bribes, they were well
out of order.
If what the domestic press might consider a kickback but others might call a
consultancy fee was involved, then it was important this was declared and on
the books.
Such may be thought a fair stab at the rules of engagement, prenew Labour. But
the 2002 legislation, much trumpeted at the time, changed these rules
importantly. The change was as much political as legal. The implicit promise
was that ministers and civil servants were now on the warpath to stamp out
corruption wherever they encountered it. HMG became proactive rather than
reactive. From 2002 onwards the public became entitled to assume that any
minister of the Crown, or civil servant, or law officer, who got wind of the
improper payment of individuals abroad was duty-bound to investigate, step
in and, if possible, stop the arrangement.
We may discover over the next few weeks whether that promise was breached in
the al-Yamamah case, and whether that is the reason the Prime Minister was
persuaded to stop the SFO inquiry. If it was, then the Government is in
great difficulty.
There may be some parallels here with the cash-for-honours affair and the
legislation on party financing in 2000. Both the 2000 and the 2002 Acts
involve the striking of a note of high moral principle through the enactment
of laws prohibiting a particular evil. But in both cases the particular evil
was reflective of a deep-rooted and long-standing culture whose existence
most privately acknowledged but few really wanted to tackle. The enactment
of the legislation was not accompanied by any sustained determination to
alter that culture. Soon, principle collided with practice. This serves
politicians right.
But having enjoyed the Schadenfreude, how about trying to tackle the
arms-trade culture? How have we got into this mess with Saudi Arabia? It is
our desperation to find buyers for an unwanted fighter plane against which I
have been inveighing on this page for nearly a decade: the Eurofighter (or
“Typhoon” as it is now known, the British arms industry having, after the
Tornado, concluded that one seven-letter disaster beginning with T was not
enough).
The Government has become involved because it has poured so much taxpayers’
money into the doomed project. Why? Because of a policy, long-adopted by
successive governments, of sustaining a strong domestic defence industry.
This has been achieved through massive declared subsidy and the even greater
undeclared subsidy of forcing our armed forces to buy uncompetitive
products. The consequence has been an unnaturally close relationship between
the Government and a single supplier, BAE, which has now anyway become
heavily dependent on the Pentagon for its sales.
Thus (as any free-market Tory ought to have cautioned, but the Conservative
Party never did) we have both wasted taxpayers’ money and ended up dependent
on foreigners: dangerously dependent, in this case, on a single foreign
power. We would have done better to have shopped around abroad more widely
for our arms, in the first place.
Why are any former ministers, let alone former defence ministers, allowed to
serve on the boards of the Ministry of Defence’s suppliers? Why are former
civil servants allowed to advise or work for such companies? These are some
of the questions that should be asked if we are to tackle the endemic
culture of the arms trade – or our part in it – beyond the occasional
newsworthy scandal.
If such a scandal has taken place, then by all means let us have the head of a
minister or law officer on a stick. But be sure that in years to come there
will be other scandals, other heads and other sticks. Believe it or not, I
actually feel a trace of sympathy for ministers accused of doing Britain’s
dirty work for us this week. It is not work ministers should be asked to do.
Get the
sharpest political comment on at Comment Central
Dear Matthew
Some while ago you posed the question about whether Brussels sprouts could be tinned. You had probably forgotten all about this important issue (I certainly had), but just to let you know that I suddenly spotted a tin of the said vegetables in a Monoprix supermarket in a suburb of Paris and it all came back to me. Buying them didn't really appeal to me, but now you know that they can indeed be tinned. Another mystery solved.
Alison Gibbs, Oegstgeest,
You have mentioned retired ministers and civil servants - what about retired military personnel?
Chris, Sutton Coldfield,
I lost respect for Michael Portillo when I heard him say (last week to Andrew Neil) that we should take a grownup attitude to the 'arms for Saudi-Arabia' issue. We are told that we should think in terms of 'commissions and consultancy fees' rather than corruption.
The difference between fees and corruption is that the former are openly declared and the latter are kept secret. Senior politicians and law officers spend a lot of time confusing this simple fact.
Robert, London,
WHOS JOB IS IT TO SELL ARMS THEN MATTHEW,
someones got to do it , we have some of the worlds finest
engineers building these arms and they don't work for nothing someones got to sell them wars have been around or a long time and due to MP,S THINKING DONT SEEM TO BE GOING AWAY . SO THE ARMS STAY.
george william taylor, HULL, UK
One facet of the arms trade that is very often overlooked is that in supplying any sophisticated weaponry to a foreign country the purchaser becomes beholden to the supplier for spares, maintainance and updates. This very often gives the seller considerable leverage in the use they're put to. In the light of this perhaps it's a shame that we and the US did not sell a great deal more arms to Iraq than the minuscule amount in fact dispatched. Tanks & helicopters function very poorly when vital spare parts are unavailable
pete j, london,
On top of all that Matthew describes, what he fails to mention is the massive subsidy provided to the British arms industry through the Defence Exports Service Organisation (DESO), a department of the MoD employing 500 civil servants specifically and exclusively to help the arms industry sell its products abroad. If, as he correctly says, this is an industry where "the supplier is embarrassed about what is being supplied", why have successive governments (DESO goes back to the Wilson era) been so keen to be suppliers? What is so special about the arms industry that it justifies aid of a nature other industries cannot dream about?
Bill Linton, London,
Matthew dismisses in three lines the only relevant argument. "If we don't do it, the French will." Throughout the Middle East you have to do business the traditional way. Our Royal Family get funded by the taxpayer. Further East they get a cut of all trade. You don't pay, you don't get the contract and thousands of our workers lose their jobs.
Is that the option Matthew would have advised, if his constituents' jobs were on the line?
I doubt if the French, or the American rivals would have dared to take the moral high ground and lose the contract, if we had been so squeamish about Arabian customs.
N.R.MacNicol, Oakham, UK
"If what the domestic press might consider a kickback but others might call a consultancy fee was involved, then it was important this was declared and on the books."
Nice excuse and good twiddling of words! It appears that the difference between kickback/corruption and consultancy fees is the mode of dress: whether it is a three-piece suit or not.
If a product, especially military related one, is dud, then certainly kickbacks/consultancy fees are required. On the positive side, please sell more such ones to Saudi Arabia and Pakistan. It keeps everyone happy!
It is better, if UK, US and others apply the same yardsticks everywhere. Please don't give an opportunity to those, who are used to lectures from UK, US and others to mention: double standards!
I fully agree with Matthew Paris that ministers and important civil servants should be barred from the boards of the Ministry of Defence’s suppliers.
Regards,
Krishna R. Kumar, Udupi, India
In the sixties we used to fly side by side with the USAF in Germany. We,in Canberras,used to marvel at the F4 Phantoms superiority to anything we had.
It was quite obvious at that time that the tragic end to TSR2 should have been the British aircraft Industries military swansong . The US was too big,too rich and too damn good at making superb military aircraft in all roles.
Instead we have staggered on when we could have spent half the money on aircraft superior to anything we have built.
But we have to have our own defense industry?
Why, we already have decided we do not need our own food production and seem hell bent on cutting our services to the bone.
Just another area where the British have been manifestly let down by their politicians.I
it is hard to see anything the governments of the past fifty years have done which has really aided British economic, educational or culteral progress.
Minnie Ovens, Los Angeles, CA, USA
I generally agree with Matthew Parris but in this case I don't. The British armed forces could certainly buy excellent equipment from overseas cheaper than from UK manufacturers but could you really have the Royal Air Force dependant upon parts from Russia (MiG, Sukhoi & Antonov etc produce just as good aircraft as the UK or the US) or Japan (they build better warships in half the time as we do in the UK) or how about French Battle tanks?. In spite of cost there are some things you just cannot do and the Typhoon is not that bad a plane as MP would have you believe, it's actually pretty good, as are British Submarines & tanks. True, there are some things that should be procured from abroad, the Navy's new Aircraft Carrier for instance, why not buy a couple of US 'Nimitz' class, ready designed, tried & tested and available in four years instead of eight and at a 30% cost saving & we know that the aircraft the RAF want will fit in & on them - & we could buy more! - makes sense to me..
David Harrison, Grantham, Lincs
I don't believe that any serving MP should be allowed to accept money from anyone other than the taxpayer.
All the while these people are berating foreign politicians for corruption.
Andrew Munn, Bangkok, Thailand
I think the pragmatic view was taken here if we don't sell it to them the French will, I can get re elected by saving jobs.
The only thought that runs through a politicians head after being elected is when to start his campaign to get re elected. They have to wait a bit while they fill in all the travel claims and allowances advances so as not to appear retarded. they can then pontificate to their hearts desire and do what the whip tells them. They take an oath when they get to the house then spend the rest of their time there making excuses about other MP's who fall below standards of what decent folk would call honourable.
Power effects people in different ways and weak people will always fall for the guile of the rich and powerful because if they don't they are removed and God forbid having made the Gravy Train you slip off
Tim Walton, Bangkok,
The idea that somehow we could not be allied to Saudi Arabia unless we supplied them with our surplus arms is foolish. If we did not, there are indeed plenty who would. No the heart of the matter is money, huge amounts of it and of course jobs and jobs equate to political influence.
Blair is right to be coy on this matter, not about the jobs but the slush handed out to keep them.
Mark W, Singapore, Singapore
I was under the impression that there were clear guideline rules for former politicians and civil servants, just as there are for former naval and military officers, on the issue of working for a defence contractor. Is this yet another touch of sleaze in our game of politics that allows former defence ministers and those who might have had some connection with defence issues to serve on the board of defence companies? Plus ca change!
Ken, Suffolk, England
The biggest export markets for our defence hardware are countries where bribes are expected by people with close connections to the ruling family or government. We have a choice. We either pay the bribes and get the business, measured in the billions of pounds; or we refuse to pay and don't get the business.
The British government's mistake was to pretend that it could keep this export business while not paying the bribes. When the pretence was exposed, they decided that they would, after all, prefer to pay the bribes and keep the business.
Every principle has a price. When the price is only in the millions, we cannot be bought; when it is in the billions, we can. The 2002 Act might as well have a clause that exempts crimes where the benefit to UK plc is sufficiently large.
James Kennett, Worcester, UK
More than politicians and apparatchiks should be excluded from employment - anywhere, not just on the Boards, and including as consultants - of armament suppliers. Senior military officers enjoy lucrative retirements therein, and must be - and have been, in my personal experience - influenced by the implied promise of this; they too should be banned.
Beyond this, corruption can't be avoided but can be minimised, easily moreover. Publish prices, and sell arms like corn flakes at them - malign buyers will obtain the accursed things anyhow - but this way competition will hold down the amount the sellers receive and can use for bribery.
Noel Falconer, COUIZA, France
I fail to understand why Mr Parris didn't make it clear that the terms and conditions of the al-Yamanah were agreed to by the then Prime Minister Mrs Margaret Thatcher. (Unfortunately I cannot remember if he was an MP at the time.) It is also acccepted that an incoming government does not change contracts entered into by the outgoing one. Maybe it was because then he would have had to finish the piece " I actually feel a trace of sympathy for Mr Blairs ministers accused of doing Mrs Thatchers dirty work for her this week"
AMJ, Tredegar, Gwent
What a non-entity this article turned out to be. Big bold headline about suggesting some sticky unpleasent relationship between Minister for Defence and arms supplierts and then......... crap, a meandering account of the arms business with a littel bit of spooks thrown in and not much else, a rather strange comparrison to the industry with athlets's foot .... i can only assume the writer has either no story or is to afraid of being sued.
Why should a minister who serves his country not take a post as a director of a company that is involved in an industry he obviously has knowledge of? Why do we expect our politicians to be mayrtars to their past? Why in the defence industry painted as evil? were the manufactures of Spitfires and Wellington bombers cast this way or is it only when they sell to 'other ' countrys that they become a target?
steve , Sunshine Coast, australia
Lazy, whining, and abysmally ignorant swine who don't pay attention to who they elect to office will also moan about the arms business...
juandos, overland, USA/mo
I am entirely cynical about this arms business and the British government in general. With the background of my copyright revenues any suggestion of morality becomes a joke. I have always presumed it is a matter of the greedy keeping a jealous eye on the greedy, and I can’t see any other more effective ‘system’ in the present climate. If there has been a scandal, I am definitely inclined to assume that it has materialised for a political purpose of the moment, and that the reason why it has ‘shelved’ is because the politics have altered and it is no longer relevant to continue. In the meantime, the same old scoundrels sail as close to the wind as they can in their ‘system’. There is this basic anomaly that if, as I believe, the Muslims aren’t allowed to take interest on money, how come the Saudis have no moral problems with large bribes?
Henry Percy, London, UK