Ministers cannot be trusted to interpret the rules of an ethical trade in arms

Britain's policy on arms sales is a mess. Expectations raised by the promise of a more "ethical" foreign policy in 1997 have long since been dashed. But they were replaced, among those well disposed towards the Labour Government, by an understanding that it was committed to a kind of moderate, pragmatic decency.

Even that assessment now turns out to be too generous. It should have been obvious that the fuss over the supply of British head-up display (HUD) units for American F-16 aircraft destined for Israel earlier this month was only the harbinger of other ethical dilemmas.

We should accept, of course, that there is no easy position. Britain could take an absolutist view – that it is simply wrong to sell weapons – and ban its citizens and companies from taking part in the arms trade altogether. However, even such purity would not be proof against difficult questions. Would it be wrong, then, to make arms for our own defence, or to buy them from other countries?

The Independent, on the other hand, has always been firmly committed not just to Britain's right to self-defence, but to that right for any other country, including Israel. This newspaper believes in the principle of the just war, and thinks that it was right, for example, to use force to defend the Kosovo Albanians against ethnic cleansing. We support Nato and therefore – some real anxieties about human rights in Turkey aside – the right of British arms companies to supply Nato countries.

The argument, therefore, is as it has always been – where to draw the line. It seemed that the outrage over the incoming Labour government's refusal to revoke the sale of Hawk trainer jets to the collapsing Indonesian dictatorship did at least help to clarify matters. In fact, the line is still formally where it has been for a long time – which is that the British Government will not license the sale of weapons that could be used for external aggression or for internal repression.

Unfortunately, it is a formula that seems almost infinitely flexible in practice. Whether Israel is engaged in external aggression or internal repression depends on one's view of the national status of the West Bank, but there should be no doubt that its actions are wrong and should not be supported by Britain. This month, however, the Foreign Secretary and the Prime Minister cobbled together what might be known as the HUD exclusion clause – "except where blocking sales of fancy electronics that form a small percentage of the value of the finished article would damage BAE Systems' relations with the US military".

Similar exemptions no doubt apply to the sales, direct to Israel, of components for combat helicopters, which we reported on Saturday. Other lawyerly get-out clauses apply to arms sales to India and Pakistan, which continued even while the Foreign Office was advising British nationals to leave the subcontinent because of the threat of war. More loopholes will no doubt come to light this week, with the opening of the great arms bazaar known as the Farnborough air show.

From a Foreign Secretary who acknowledges the extreme importance of the "greatest certainty" in knowing what we can sell to whom, this is verging on the dishonest. The guidelines on arms sales are right in principle, but they are useless if they can be reinterpreted at will to suit commercial interests. The rules need to be policed by an independent body. Only then can we be sure that, in a conflict between ethics and commerce, morality has a fair chance of winning out.