§ Mr. Robin Cook
The Government are currently considering the recommendations of the Inter-Departmental Committee on Trafficking in Arms. We will announce our conclusions during this Session and will have particular regard to the legal loophole that permitted a UK company to broker the supply of small arms to Hutu extremists.
The proposals for an EU code of conduct, which we have tabled jointly with France, deal with the export of arms produced domestically and therefore do not deal directly with the brokering of arms that are produced by a third country. I am pleased to tell the House that our proposed code of conduct has been well received throughout Europe and will ensure that all member states apply the same tough standards against the supply of small arms to countries that might use them to repress freedom.
§ Mr. Berry
I thank my right hon. Friend for his answer. Does he share the concerns of many people who responded to the Department of Trade and Industry consultation on the Scott report—which is two years old on Sunday—that UK export controls do not cover brokering and licensing arrangements? Will he confirm that some European countries have introduced controls that cover brokering: Germany, Netherlands and soon Belgium? Will he give further consideration to the inclusion of such controls in the UK's proposals for an EU code of conduct on arms exports?
§ Mr. Cook
I would be very reluctant at this stage to go back to square one on the code of conduct. We have achieved agreement with the other major arms exporter in Europe—France. Those proposals have been circulated to all EU partners and have been overwhelmingly well received by them. I would therefore be reluctant to introduce new matter into the proposals, but I assure my hon. Friend that we are vigorously examining how we might respond nationally to the issue that he highlights. In the meantime, as he reminds me that we are approaching the second anniversary of the Scott report, may I say that we are determined to avoid the previous regime's experience in supplying export cover for arms and other equipment to the tune of £800 million, which is still unpaid by Saddam Hussein and has become a charge on the taxpayer.
§ Mr. Cohen
Will my right hon. Friend take action to stop licensed production becoming a major loophole in 127 the European Union code of conduct on arms sales? Has he seen reports that the Nottingham-based company, Heckler and Koch, won a technology transfer contract to produce the latest assault rifles in Turkey, and similar rifles then found their way to Iran and the Sudan under the licensed production procedures? Is it not essential that licensed production is covered by an arms control export system that applies to both the United Kingdom and the European Union?
§ Mr. Cook
My hon. Friend raises a serious issue, but in practical terms it is extremely complex and difficult to control the transfer of technology in the same way that we can license the physical export of weapons. Where licensed production takes place, we try to encourage an arrangement by which we have control over future exports and their end use.
§ Mr. Streeter
I notice that the right hon. Gentleman did not answer the point about France. If, for example, under the code of conduct, a British company is refused a licence to supply a certain order for arms and a notice to that effect is circulated to all European partners as proposed by the code, what is to prevent the Government of another member state from interpreting the code of conduct in a different way and permitting a company in that member state to meet the order? Is not that precisely what happens in the real world, and what do the Government intend to do about it?
§ Mr. Cook
The hon. Gentleman rightly describes exactly what happened throughout the past 18 years under the previous Government, who made no attempt to establish a binding code of conduct. The code of conduct provides that any country contemplating taking up an order that another member state has refused must first notify that member state and then enter into dialogue with it. I assure the hon. Gentleman that, if any country proposed to take up a contract that we had denied, we would pursue the matter through all 14 member states.