Straw backs Short in cash row

Jack Straw, the foreign secretary, gave his backing last night to his cabinet colleague Clare Short's decision to withhold £10m of development aid to Tanzania in the wake of the row about the government decision to let BAE Systems sell Tanzania a £28m military air traffic control system.

He told the all-party Commons strategic export control committee that she had the authority as international development secretary to withhold taxpayers' money, even though the cabinet had approved a licence for BAE Systems.

He told MPs: "The decisions are based on different criteria: one is based on spending taxpayers' money on an aid programme, the other is a permissive: allowing a company to export equipment which the Tanzania government wants to buy."

Despite describing the government as indivisible, he made it clear that he wholeheartedly backed his colleagues who overruled Clare Short's objections to granting the export licence.

"I had personally looked at the application for three months, and the decision was the right one."

Questioned by Tony Worthington, Labour MP for Clydebank, he admitted that none of the ministers knew at the cabinet committee meeting on December 21 that BAE Systems had manufactured much of the equipment before it got the licence.

"I did not know, and nor did I need to know, because whether it was being manufactured or not is nothing to do with the decision."

He admitted that the government has not refused a single export licence solely on grounds relating to sustainable development - the fact that the order would wreck spending on health or education or ruin the economy.