Margareta Pagano: Cameron shoots himself in the UK-armed foot

What a surreal week it has been. It began with those pictures of David Cameron striding through Cairo's Tahrir Square flanked by businessmen from his 36-strong caravan with whom he toured the Gulf to promote British trade.

With him were at least eight defence contractors from UK firms such as BAE and Thales who were on their way to the giant arms bazaar, Idex, being held in Abu Dhabi.

The Prime Minister moved on to Kuwait but his defence minister, Gerald Howarth, went with the arms dealers to the defence expo. On sale were examples of the UK's finest weaponry – CS gas shotgun cartridges, sniper rifles, bomb-making parts as well as the big stuff such as BAE's lethal howitzer. But while in Kuwait, Cameron was caught on the hop when asked by a reporter why the UK was still selling arms to the emirate, prompting him to snap: "I simply don't understand how you can't understand how democracies have a right to defend themselves," adding that anyone not holding that view was at "odds with reality".

Well, the reality caught up with him when TV footage coming out of Libya showed Colonel Gaddafi's security men crushing protests in Tripoli using British-made armoured personnel carriers. The manufacturer has been identified as Leicestershire-based NMS International, which has sold 10 of the vehicles to Libya. One director claimed the vehicles are "big armoured buses" used to carry up to 42 police officers, and not designed for hostility. It also emerged that NMS has been training Libyan police. The UK has now sold military bits worth £30m to the country, taking the total to about £100m since ex-PM Tony Blair brought Gaddafi back in from the cold.

Apart from the sickening knowledge that UK-made equipment is being used by Gaddafi to slaughter his own people, the fact that we started selling again to this ruthless tyrant shows the hypocrisy of the rules which guide our defence exports.

By all accounts, the criteria – applied by the Business Department and Strategic Export Controls – are strict. There are 22 categories of arms. Exports are only granted to countries if they fit certain criteria; that they respect human rights, that equipment is not knowingly used to repress internal dissent and so forth.

By following these guidelines, the Government claims it's following a "responsible" policy. But is it? Deciding who are the goodies and baddies at any one time requires a level of moral relativism that hardly ever works out in the end. This is partly because those judgements are clouded by prejudice. If these criteria had been applied to President Mubarak's regime over the past 30 years, we would never have sold him a single gas canister. However, governments – of whatever hue – have allowed sales because they took the view that the fear of fundamentalism was greater than what Mubarak was doing to his own people. If we really applied these principles of human rights, would we be selling to Saudi Arabia or Algeria today? We are, and it runs into millions and millions.

There's another problem – all governments are deeply embedded with their arms industries. They support them with this sort of trip, with generous R&D grants, export credit guarantees and by allowing former MPs and civil servants to move into the industry with unhealthy ease. As the Campaign Against Arms Trade lobby group argues, the relationship is so symbiotic that, de facto, the taxpayer supports it at the expense of other industries.

Making and selling arms is big business. Worth about £7.5bn in exports, the industry employs around 300,000 people – many of them highly talented engineers and technicians; it's a cash-up-front business, high-margin and counter-cyclical. But actually this is tiny, representing only about 1.5 per cent of all exports. Imagine if the resources which the Government put behind it where given to alternative technologies, those which could help wean us off the oil and gas that make us so dependent on the Gulf?

But the Government is addicted to defence, besotted even. Peter Luff, minister for defence equipment, said recently that: "There is a sense that in the past we were rather embarrassed about exporting defence products. There is no such embarrassment in this government." Obviously not. But there should be. David Cameron should be deeply embarrassed to have found himself in the Gulf helping peddle military equipment while British-made vehicles were cruising the streets of Tripoli; it's his biggest mistake so far.

While the Prime Minister made a brave call when admitting that Western governments had not always backed the right horse in the Middle East, he now needs to be even more courageous and only let the UK sell to countries that prove they are democracies and respect human rights. It's also time to take the cloak and dagger antics out of the arms industry. We need a serious and full public debate in Parliament, and on the street, about which countries we plan to sell arms to in the future. The public should have a vote on who sells to whom; I can't believe anyone other than politicians would have agreed to sell arms again to Gaddafi as it was evident that, like a leopard, he had never changed his spots.

As Gilles Kepel, French scholar on Arab affairs at the Sciences Po in Paris, said so well last week when commenting on the West's policy towards the Middle East: "There's a lot of halal chicken coming home to roost."

Women on boards take work seriously, control risk – and get better results

When Nicola Horlick speaks out on issues it's usually worth taking note as she always has something interesting to say. And, as the City's one-time Superwoman, you would imagine that she'd be all for women getting to the boardroom on merit rather than by introducing fixed quotas.

Not at all. Horlick, like me, has been persuaded that quotas are the best way to get companies to encourage more women into senior positions.

But Lord Davies of Abersoch, whose Women on Boards review came out last week, is confident that the threat of quotas is enough to get companies putting their house in order.

Listening to the responses to his quota threat, you would have thought he was threatening prison. Not only was there an awful lot of nonsense talked about how quotas demean women but there were also a lot of inaccuracies, particularly about the effect of quotas in countries like Norway where the impact has been hugely positive. I suspect some of those who took to the microphones and spoke the loudest were the sort of women who don't help other women – or men for that matter.

But one of the best questions of the week came from a male colleague who demanded to know why all the clamour and whether women are any better, or just different, in the way they work.

Here's a synthesis of evidence to the Davies report and other research projects. Female directors take their work more seriously, they ask awkward questions in a non-aggressive way, are good listeners and they are likely to pay more attention to managing and controlling risk. Companies which have at least one female director are 20 per cent less likely to go bust. Those with a third or more women on the board are up to 5 per cent more profitable, return on equity is higher and the more gender-diverse companies show share price growth 17 per cent higher than average companies.

Who's for quotas now?

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