Arms Sales

HL Deb 05 June 1991 vol 529 cc650-82

3.4 p.m.

Lord Cledwyn of Penrhos rose to call attention to the sale of arms, especially to the developing world; and to move for Papers.

The noble Lord said: My Lords, after the carnage of the First World War, the League of Nations produced a report blaming the war on rampant arms merchandising. The League of Nations called for the control of arms sales and for disarmament. At the same time in the United States the Government held an inquiry which produced a report and which led to legislation to control the arms trade. That occurred over 70 years ago. We know what dreadful things have happened in the intervening years. The monstrous crimes of Hitler, Stalin and of lesser, if equally evil, despots are scars on the face of history.

Today we seem to have reached another watershed. The end of the Cold War and of the Gulf war seem to give mankind a breathing space to contemplate the prospects of peace and how it may be achieved. The unfettered sale of arms is one aspect of the huge problem facing the world at this time.

Incidentally, the end of the Cold War is paradoxically a factor in the operation of the arms market. As East and West reduce military purchases, the manufacturers on both sides are faced with excess capacity. They do not go home to read the New Testament and to thank the Lord for the blessings of disarmament. They look for new overseas customers, and they are not always fussy who they are.

If President Bush is to succeed in his objective, there must be full co-operation between the major arms producers. It has been reported that the Soviet Union, because disarmament is resulting in a surplus of arms, is busily negotiating the sale of weaponry to Iran and Syria. The paradox here is that while we are negotiating arms reductions in Europe with some success, more arms will be sold in the Middle East making things even more dangerous and difficult there.

The other development is that Middle East countries, realising the superiority in sophisticated weapons of the coalition forces in the Gulf war, are now desperate to obtain this type of sophisticated armament themselves. I hope the Minister will let us know whether there is any validity in those reports. One point needs to be made; namely, that every state has the right and the duty to make adequate provision for its own defence and in a broader context to contribute with allies to regional defence.

For over 40 years NATO has ensured the maintenance of peace and stability in Europe. This country, under successive governments, has from the start played a significant role in NATO. There is no doubt that the steadfastness of NATO is at least partly responsible for the historic changes which have taken place in Eastern Europe. We know that the role of NATO is being reviewed at this present time and that radical changes to the alliance armies in Germany have been agreed. We read that national armies are to be converted into mobile multi-national units and that Britain's contribution to the new order will be two divisions. There is some expectation that our defence budget will be reduced as a result, but I note that the US Defense Secretary, Mr. Dick Cheney, warned a few days ago that the cost of making the changes will be high. I hope the noble Earl will comment on that. These changes and their implications need to be discussed separately in the forthcoming defence debate. However, they have a close bearing on the production of armaments for sale.

I am sure that we all welcomed President Bush's speech last week when he proposed that the world's five leading arms suppliers should meet soon to discuss new guidelines for controlling the sales of conventional weapons, weapons of mass destruction and related technologies. His proposal referred to the Middle East alone, but the Motion covers a wider area. The President's proposals are clearly of the first importance and we shall appreciate the Minister's reactions to them.

We assume that the Prime Minister will support the proposals because he has also indicated his concern. Mr. Major has suggested a United Nations register of arms sales. This, he argues, would focus attention upon the dangers of allowing great volumes of arms reaching what he calls "unsafe hands". I believe that we should support the Prime Minister while realising that there is a limit to what the United Nations can do and that a register would be only a first step. Mr. Major is in fact saying that during the 1980s too many armaments were sold to a pair of the unsafest hands in the world, namely to Saddam Hussein.

The United Nations, however, managed to co-operate on a major issue of principle during the Gulf war. If there is to be meaningful arms control, there must be a firm accord among the world's main arms suppliers. Who are the world's main arms suppliers? They are the five permanent members of the United Nations Security Council, namely the Russians, the Americans, the French, the Chinese and this country. Let us mark this well. Between them those five countries sold 87 per cent. of the weapons bought by developing countries in the late 1980s. But surely there is a possibility now that those five countries—and we are one of them—having acted together over the Gulf war can now consider the causes of that war and the mistakes which contributed to it. It is said that China is now the biggest third world supplier, and every possible step must be taken to limit China's activities.

Civilised countries allow or turn a blind eye to the sale of arms for short-term economic advantages. In many cases their intelligence about those who purchase the arms and their intentions is appalling. How otherwise do freedom loving democracies allow arms to fall into the hands of Saddam Hussein and other megalomaniacs? It is encouraging that Japan has recently decided that its overseas aid programme will depend on the military budgets of the recipient countries. That seems to me to be a sensible decision and one which we should consider carefully and perhaps follow.

But while the emphasis of President Bush's proposals is not unnaturally on the Middle East, we must, as the Motion indicates, think of the third world as well. Let us look at some of the figures. First, in 1989 this country exported nearly £2.5 billion worth of military equipment, while new orders to the value of £2 billion were signed. I have already referred to China but I want the House to note that over three-quarters of our arms exports went to the third world in 1989. Poor countries buy these arms while their unhappy people suffer famine and disease. In a speech made last year, Mr. James Grant, the Director of UNICEF, said this: The Governments of the developing world as a whole now devote half of their total annual expenditure to the maintenance of the military and the servicing of debt … or more than $400 a year for each family in the developing world".

That state of affairs can only be described as diabolical.

I concede that it is also complex and difficult. I am glad to be able to say that there are aspects of Her Majesty's Government's policies which must be commended. We compare very well with other countries. We have and will, I know, co-operate in disarmament talks. Furthermore, Britain's record on chemical weapons is among the best, if not the best, in the world. Ministers have made statements indicating that Britain will not sell weaponry to South Africa or to countries with records of repression or abuse of human rights.

However, I regret to say that there are also flaws and loopholes. For example, I for one am far from satisfied with the explanations given in this House about the sale of arms to Indonesia, which continues to engage in a repressive war in East Timor. There is no monitoring of the use of the arms once they are there. Although we are told that they will not be used against the unfortunate inhabitants of East Timor, I repeat that there is no monitoring.

There is also concern about the arms contract between British Aerospace and the Chilean army's ordnance factory negotiated by General Pinochet, who is not renowned for his liberal views. The British propulsion units sold to Chile will be used in rockets with a capacity to deliver cluster bombs. Can the noble Earl give an assurance that that weapon will not be sold by Chile to other countries, especially Iraq, which was Chile's largest customer for cluster bombs? Is there a safeguard against that kind of transfer in the contract which was signed by General Pinochet when he visited this country?

That leads to another point which must be made in this de Date, namely that arms sales are shrouded in secrecy. Successive governments have declined to give details of arms export contracts. One can think of some reasons why information should be withheld, but I doubt whether they are valid in present circumstances. We also know that the Government can restrict arms exports through the export licensing procedure and the Export of Goods (Control) Order, but up to now governments have refused to disclose the criteria they apply when granting licences to export.

We also know about the operation of the Defence Export Services Organisation, whose function is to: assist British Defence Industries to promote and sell their goods abroad".

DESO comes under the Ministry of Defence but works closely with the DTI and the Export Credits Guarantee Department and is also in close touch with the noble Earl's department, the Foreign and Commonwealth Office. That is broadly the machinery which both promotes and controls the sale of arms from this country and I shall be grateful if the noble Earl Will confirm that.

Is he satisfied that that machinery is adequate to perform its task, namely to prevent arms getting into the wrong hands? Is he satisfied that the Government are aware of all the activities of private arms dealers here in London and are able to ensure that they act within the law? I believe that the public should be given the fullest possible information and that the reasons for secrecy should be made plain.

I understand that the Conference of National Armaments Directors is to be held shortly. That should be an interesting meeting. Can the noble Earl tell us whether the Government will be represented and what message they will have for the directors?

I must refer to the comprehensive test ban treaty and the New York conference last January at which 94 of the 117 countries represented voted in favour of negotiating such a treaty. In our exchanges during Question Time on Monday we welcomed the decision of the French Government to sign the Nuclear Non-Proliferation Treaty and the noble Earl was good enough to say that he would deal with the matter at some length in today's debate. We look forward to hearing what he has to say on the subject.

I have tried to touch upon the main issues which arise from the Motion. I hope that all political parties in this country can agree on a practical policy which would include an international register of arms sales, a ban on sales to countries which would use them for repression or aggression and aid programmes which would be conditional upon a limitation of military budgets. We have only to look at the terrible developing tragedy in Ethiopia today to realise how relevant those elementary conditions are. I hope that that message has also gone home to the Soviet Union, which supplied arms to a wicked, cruel and incompetent dictator who has, thank God, been driven from his country.

At the outbreak of the First World War a cartoon was published showing a little child sitting forlorn under a lowering sky. The caption was: I think I hear a child crying".

Today, in this enlightened age, it is not one child we see on television every day crying—in Ethiopia, in Iraq, in Liberia, in the Sudan and in many other places; it is countless thousands of children who are crying, suffering and dying. The words of President Eisenhower, a soldier who knew what arms were about, should be heeded today. He said: Every gun that is made, every warship launched, rocket fired represents, in the final analysis, a theft from those who hunger and are not fed, who are cold and are not clothed".

It is in that spirit that I urge the Government to take action. I beg to move for Papers.

3.20 p.m.

Lord Trefgarne

My Lords, I must start by declaring an interest because I am at present employed by a company which is involved in the defence contracting business, although not in the manufacture of lethal weapons. I hope that your Lordships will agree that my qualifications go a little wider than that because I was for three years the Minister for Defence Procurement and during that time presided over the defence export services organisation to which the noble Lord, Lord Cledwyn, so effectively referred. For a period after that I was a Minister in the Department of Trade responsible for export licensing policy, so I believe that I have some modest contribution to make this afternoon.

I happen to think that, unless my noble friend intends to announce some radical departure from policy this evening, the policy of Her Majesty's Government in this matter is right and proper. It is not our policy to export arms willy-nilly to whomsoever it may be who wants them. The export licensing procedure is strict and onerous and I can assure your Lordships that almost every application of importance—certainly every application of importance as regards arms—is referred to Ministers collectively for a decision. In my experience Ministers often refuse applications even when officials might advise something to the contrary. I therefore believe that we have an effective control upon our arms export business.

Having said that, it is right and proper that, following the recent conflict in the Middle East, a further reappraisal should be made of our policy. The recent contribution of President Bush, to which the noble Lord, Lord Cledwyn, also referred, has been an effective contribution to that discussion. The President has called in particular for new and further controls upon weapons of mass destruction. Nuclear weapons —one of the three categories which I believe the President had in mind, the three categories being nuclear weapons, biological weapons and chemical weapons—are governed by the Non-Proliferation Treaty, which has been largely successful over the years. We hear that our French friends—one of the few major countries not a signatory to the treaty—are considering whether they could not sign it, and that would be very welcome. Equally, I should like to see Pakistan and India sign that treaty. Apparently, they each say that they will sign it if the other signs it. Perhaps there is some role within the Commonwealth, for example, to try to obtain the signature of both those countries.

Biological weapons are governed by a convention dating, if my memory serves me right, from the mid-1970s. They are comparatively difficult to manufacture—not as difficult as nuclear weapons, but certainly more difficult than chemical weapons. There is a broadly effective convention which governs their use, but I have no doubt that there is scope for improvement and I am wholly in support of the current negotiations and discussions in Geneva and elsewhere to achieve that end.

However, the real danger lies in chemical weapons, which are easy to manufacture. Furthermore, the convention which governs the control and use of chemical weapons dates back to 1925. As your Lordships can perhaps well imagine, that convention is now wholly out of date and almost wholly useless. I hope that the discussions in which the United Kingdom has played such an important part can be taken forward with regard to the chemical weapons convention and brought to a successful conclusion. The key element of such a convention will be enforcement. There have been some useful developments in that regard. As I have said, it is difficult to detect the manufacture of chemical weapons, but some of the proposals made by Her Majesty's Government may contribute to a solution to that problem. I have in mind, for example, the Challenge inspection regime, which is one of the features of the proposals that we made a year or so ago.

More recently, my right honourable friend the Prime Minister has, as the noble Lord, Lord Cledwyn, said, indicated his intention to raise the matter at the forthcoming Group of Seven meeting which is to take place here in London in July. One of the key elements of my right honourable friend's ideas—I believe that they are no more than ideas, but they are very welcome ideas at the present time—is a register of major arms sales. I have no difficulty in principle with such a register, but it will be difficult to operate successfully and effectively. I hope that my noble friends and my right honourable friends are considering carefully how that can be achieved. It would be unfortunate if such a register was brought into being but was not effective and only those who wanted to use it did use it, thus deterring or discouraging those who were less honourably inclined.

More recently still, my right honourable friend the Chancellor of the Exchequer has talked about restricting credits for the sale of defence equipment to overseas countries. That idea raises more difficult issues to which I can perhaps return in a moment.

The essential fabric of the matter rests upon Article 51 of the United Nations charter, which confers upon every signatory to that charter the right of self-defence. That means the right to acquire the means of defending oneself, the right to acquire the necessary weapons and the right to seek help if that is necessary. That article operated effectively in recent times when Kuwait found itself invaded and called upon other nations to help it. On the other side of the Kuwaiti border lies Saudi Arabia and who can doubt that, had it not taken the necessary steps to arm itself to a large extent, it too would have been invaded by Saddam Hussein once he had reached the southern border of Kuwait?

I referred to Article 51 and the important rights that it confers upon UN signatories. There is therefore a difficulty with the proposal of my right honourable friend the Chancellor of the Exchequer about restricting credits. I believe that credits should be granted or not granted on commercial considerations. The question of whether a sale should take place should be decided on the necessary political considerations or, for example, a consideration of the human rights record of the country concerned. The question of whether or not we provide credit for such transactions is a separate one. I do not propose that we should provide credit willy-nilly for those deals, but we should be willing to consider credit applications on the same basis as we do for any other transaction.

I come now to my closing thoughts. It appears that a more rigorous regime one way or another is likely to be agreed in the not too distant future. As a matter of principle, I have no difficulty with that, but it must be a watertight regime which is observed by everyone and not just by those who seek to observe it. When such regimes and embargoes have been applied in the past, they have not been very successful. There has been a mandatory embargo upon South Africa, for example, for a great many years, but the South African armed forces are among the most powerful—indeed, they probably are the most powerful —in the whole of the African continent. So far as many countries are concerned, Iraq has not for some time been provided with lethal weapons —in the case of this country that policy goes back at least 10 years. Yet, as we have seen, Iraq built up the huge, obscene arsenal which was used to such ill effect recently.

Therefore, we must not restrain the legitimate right of responsible nations to make provision for their own defence. That is a right which we take for ourselves, a right which we have defended for others and a right which forms a necessary, if disagreeable, part of the fabric of world order.

3.30 p.m.

Lord Mayhew

My Lords, in his admirable introduction to the debate the noble Lord, Lord Cledwyn, made the interesting point that the League of Nations attributed to the arms trade the outbreak of the First World War. That must have been one of the reasons why many people between the wars opposed the arms trade simply in principle and would have nothing to do with it. I believe that many people were influenced by a great book written at that time called Merchants of Death by the future Nobel Prize winner Philip Noel-Baker.

Today it must be recorded that few if any governments oppose the arms trade in principle. Vast masses of arms are sold with the condonation, encouragement or direct execution of governments. This Government, like other Western governments, positively approve the sale of arms to our NATO allies and to innumerable other countries which we regard as friendly and non-aggressive. It was a Labour government which established the Defence Exports Sales Department for the purpose of easing the way of the British arms industry with foreign governments. Similar attitudes are held by many other governments in the world.

As we know, that often results in unexpected and disastrous consequences. The noble Lord, Lord Cledwyn, referred to the horrors of the arms trade with Iraq before the Gulf war. But before that time Western arms poured into Iran for defence against the Soviet Union. In the event they were used by Iran against Iraq. Then arms poured into Iraq for use against Iran: instead, they were used to invade Kuwait. American arms have poured into Israel for defence against Arab governments: they have been used for the invasion of Lebanon and for the consolidation of Israel's occupation of Arab lands. It is no wonder that public pressure has been growing for some regulation of the international arms trade.

But it has to be noted that pressures are also growing on the other side—pressure from importing countries to buy the arms and pressure from the world's arms industries to sell. As the noble Lord, Lord Cledwyn, pointed out, the end of the Cold War has meant cutbacks and unemployment in the arms industries worldwide. In Britain we think of BAe, Vickers and Rolls-Royce. There is an urgent need for diversification. The Government could help more and I believe that the European Community could also play a c art. The most severe cutbacks are in the Soviet Union. That no doubt explains the desperate drive worldwide of the Soviet Union, without ideological consideration, to sell arms to the world.

In addition, we have the second rank of arms exporting countries: China, Brazil, Argentina and others. They are all desperate for hard currency. All are producing increasingly sophisticated weapons and all are completely uninhibited about whom they sell them to. In April a Soviet official said: Unilaterally stopping our sales will not change the situation. The ensuing vacuum will just be filled by other suppliers". That has been the argument of arms salesmen throughout the centuries but there is truth in it. Quite recently the United States resumed export credits for its arms sales to Europe and the Middle East. This year alone the British Government are subsidising three British arms industry fairs in the Middle East where there is a huge demand now for what are called "combat-tested" weapons. We have them too: the Sea Skuas and the Hunt minesweepers. The Americans have the Patriot. The demand and the desire to supply is fierce.

So while the need for controlling the arms trade is probably clearer than ever, so is the difficulty—I would say the impossibility—of doing so satisfactorily. The best that we can do is to consider whether we can at least limit to some degree the harm done by the arms trade in particular countries, in particular weapons and in particular regions. That seems to be the thinking behind President Bush's proposals to control the arms trade in the Middle East.

Any proposals which might at least limit the degree of destruction which the Israelis and Arabs can inflict on each other—the degree of destruction which one Arab country can inflict on another Arab country—must be welcome. Moreover, it seems sensible to do as President Bush suggested and start by placing the responsibility on the five permanent members of the Security Council who between them are by far the biggest source of arms sales in the world.

It will be difficult. It will be difficult for China to accept the principle of the Bush proposals. It shows no sign whatever of doing so now—quite the contrary. Even if we assume agreement between the five, big difficulties remain. There is the problem of implementation. If the new organisation is to have meaning at all, it must be able to restrict sales to a certain country or countries. But how is that to be implemented? The Bush proposals are silent on the matter. Yet when the Soviet Union refused to sell its SS.23 missiles to Syria, Syria obtained them from North Korea, which had them from China. It is difficult to imagine the Soviet Union or any of the other arms exporting countries continuing to co-operate in an arms control arrangement when that kind of leakage goes on. Yet, studying President Bush's proposals, it is difficult to see how such leakage can be prevented in the world as it is.

There is a second question that one has to ask about the Bush proposals. Can they make progress without progress also towards a settlement of the Arab-Israeli dispute? Quite apart from its nuclear monopoly, Israel is still the dominant military power in the Middle East. That is why it can reject United Nations resolutions—indeed, reject any United Nations involvement at all in the peace process—and maintain its occupation of Arab lands.

The Bush proposals do not deal with the balance of power in the Middle East and at first sight seem to freeze the existing balance. While it is possible to imagine certain Arab countries co-operating in the initial stages, it is hard to see them continuing to co-operate if no progress is made toward a political settlement. Controlling the arms trade in the Middle East is no substitute for settling the disputes which are driving those countries to arm against each other.

There are other initiatives besides the Bush initiative for controlling the arms trade. In the days of the Cold War COCOM was surprisingly effective in restricting the export of advanced military and dual-purpose technology to the communist world. I ask the noble Earl whether it could not now be reorganised to include the Soviet Union and be redirected to prevent that technology from reaching a much wider range of countries.

Most unstable and potentially aggressive countries have plenty of tanks and guns but they do not have the high technology. One of our major aims must be to ensure that they do not obtain it. Perhaps COCOM could be reorganised with that in mind.

Another approach is concerted economic pressure by the G7 countries, the World Bank and the IMF. The Government should warmly support the practice of granting development aid in inverse proportion to the recipient countries' arms purchases. This form of economic imperialism, which I hope that the noble Earl will say he supports, is wholly acceptable and admirable.

So too is the banning of credits. I disagree with the noble Lord, Lord Trefgarne. I believe that concerted banning of credits for arms purchases would be well worthwhile. I hope that the Minister will reassure us that the Government have no inhibitions about those ideas and will work with other major countries to bring them about.

Perhaps I may ask the Minister how the Government assess the work of the Missile Technology Control Group. What is its membership now? Are the Government proposing to develop it? What have been its achievements?

Finally, my noble friends and I have been heartened that the Prime Minister, and—since the speech of the noble Lord, Lord Cledwyn, today—the Labour Party have taken up an idea that we have been plugging for many years; namely, that we should have a public, official, worldwide register of arms sales. We believe that it could best be done under the United Nations auspices. Since much of the arms trade is secret, it would be difficult to compile. However, one hopes it would highlight countries which were building up arms capacity in excess of their needs for defence. It would certainly have highlighted Iraq a few years ago. The problem of restricting sales to such countries would be formidable but not necessarily hopeless. There are pressures that can be used. Such registration would be useful to focus public and diplomatic attention on such countries.

To sum up, control of the arms trade is fiendishly difficult and complex. But the Government must not be discouraged from doing whatever is possible to limit the dangers, scandals and waste that the arms trade creates.

3.43 p.m.

The Lord Bishop of Manchester

My Lords, we are all deeply grateful to the noble Lord, Lord Cledwyn, for giving us the opportunity to debate this vital and urgent matter and for the way in which he introduced the debate. His speech was full of compassion and realism. I am also grateful to the two previous speakers. It was good to hear the noble Lord, Lord Trefgarne, with his background of direct experience on the issue of arms exports from this country; and the noble Lord, Lord Mayhew, with his pessimistic but realistic approach to those issues. I attended today to learn about this urgent and difficult matter, and I believe that we are all doing so.

We have been deeply moved by the appalling pictures from Africa currently on our television screens of the starvation in Ethiopia, Somalia and the Sudan which affects millions of our fellow men, women and children on this planet. But it is good that those pictures are at last appearing, even though we can hardly bear to view them. The hard truth is that they were driven off our screens by the tragic events of the Gulf war. That was why a minority of us were opposed to that military activity in response to the invasion of Kuwait. We knew that all the attention of the world's media would be concentrated on the Gulf and that the millions who face starvation in Africa would be forgotten. I believe that many far from the scene of the Gulf operation were, in effect, sentenced to death at that time by what took place.

Whether or not we like it, the media is enormously important in alerting us to situations of starvation and famine. Those pictures are made even more offensive when one sees tanks and modern aircraft on the same screens in countries where famine occurs. I am bound to agree with the noble Lord, Lord Cledwyn, that although there was a deep desire at the time of the Gulf war that it should produce a safer world, that is not what has happened. The effect of the remarkable victory of the coalition forces, armed by the very latest and most sophisticated technological weapons, has meant that many countries desire to obtain whatever quantity they can as quickly as possible. Those countries are in situations of tension in which wars may result.

The pictures of the arming of these third world countries are a real discouragement to people in this country to give to voluntary agencies. Recently we were in Christian Aid Week. An issue raised on doorsteps to those collecting for Christian Aid was, "What is the good of giving to organisations such as yours which are doing work there when we see those countries purchasing large quantities of expensive arms?" We are bound to take that view seriously as a disincentive to giving; though one hopes that people will overcome that particular hummock and will continue to give generously, in the face of desperate need, to bodies such as Christian Aid, CAFOD, Oxfam and Save the Children.

Those countries are inevitably blamed for spending large sums on arms—sums far beyond what many of us regard as legitimate for needs of self defence—yet we know quite honestly that we have played a major part in arming such countries. I am not entirely convinced by the arguments of the noble Lord, Lord Trefgarne, that the control has been as rigorous as has been represented to us today. After all, if I am not mistaken, our defence industries place this country third in the world league in regard to the proportion of gross national product which is spent on defence.

That does not mean defence only for our own purposes. As we well know, defence industries in western countries are largely dependent on what they can earn through exports in order to survive and flourish. A great deal has therefore depended on arms exports, which have been actively encouraged by successive British governments.

Nor have we been entirely successful in limiting the sale of arms to regimes under dictatorial governments who have deplorable records and who have engaged in gross abuses of human rights. Chile is one such example.

Unless one takes a consistently pacifist position, one recognises the need and right of countries to self-defence along the lines of the United Nations Charter. But surely there must be limits; and we must observe those limits much more rigorously. What has happened in recent years has produced devastating results in third world countries because the arms have been supplied so generously. That was partly as a result of the competition arising from the Cold War. The ending of the Cold War presents a new opportunity. Various bodies in this country are trying to encourage public opinion to consider that realistically. Many noble Lords will have heard of the 50 per cent. campaign which calls on the British Government to work towards the reduction of arms by 50 per cent. so that the peace dividend gained can be used for more constructive processes both at home and overseas.

Sadly, some arms are necessary in our imperfect world. Those who have spoken have recognised that. However, the trade must surely be regulated as much as possible. When listening to the noble Lord, Lord Mayhew. I was conscious that he knows what he is talking a lout. He struck a very pessimistic note about the possibilities of regulation of the arms trade. I believe that that is right. We must be pessimistic up to a point but, after all, if one is to hit the heights, one must aim for the stars, so to speak. Our target must be high in regard to arms limitation. Therefore, when the Minister winds up the debate I hope that he will speak positive words to us about the policies of Her Majesty's Government in regard to arms limitation. For example, through the Security Council it should be possible to take action actively to reduce the enormous figures which go towards trade in arms and the transfer of technology or dual technology which may be used for military purposes.

Also, it should be possible to work within the European Community for an arms register, which would be much more effective than anything we have seen to date, and to achieve further restrictions. It is good to hear that that proposal has the clear support of the noble Lord, Lord Trefgarne.

I shall not become involved in the discussion about the limitation of credits, but I tend to agree that the limitation of credits must take its part in limiting arms in that way. Further, would it be possible to have published in advance all applications for arms exports? One difficulty about the whole operation is that there are so many people who wish to conduct such business in absolute secrecy. Secrecy is the enemy of effective arms control. If matters can he brought out more into the open, we should stand a much better chance of being more effective on this urgent issue.

If in Britain we manage to achieve an effective reduction in arms exports and, indeed, in the amount of arms which we need ourselves—and there is every sign that the present Government are taking that seriously—then we are faced with major problems of diversification. What do workers in British arms industries do when their jobs begin to disappear? We are already seeing that in our part of the world. Therefore, many people are now calling for a defence diversification agency. We need something much more active, positive and interventionist on such an urgent matter which affects so many people in our community.

Is it true that defence absorbs an estimated one-quarter to one-third of British scientists and engineers working in those industries? That is an enormous figure. Is it true that at least one-quarter of research and development funds go to defence and defence-related industries? Somehow those skills must be transferred into more positive and fruitful avenues for human welfare both at home and abroad, especially abroad. There is something really obscene —and I use that word advisedly—when one looks at how the coalition forces—the international community—responded to the challenge of the Gulf and yet one sees what is happening as regards the present threat of famine in Africa and how pathetically inadequate the response has been. I know that it can be asked how it is possible to work in those countries when there are conditions of lawlessness and civil war making it extraordinarily difficult to transport the food to where it is needed. However, I cannot believe that that work could not be carried out more effectively.

It worries me when I hear government Ministers saying, as Mr. Alan Clark, Defence Secretary said, that the policy which the arms industries adopt is purely a matter for the commercial judgment of' the companies concerned. That is not good enough in the kind of world into which we have now moved. Something much more positive and interventionist is required which will be backed by public opinion in Britain.

Finally, I point to the danger of a double standard when we talk about arms. From time to time one hears talk in this country which gives the impression that it is all right for civilised countries such as this country to have control of nuclear arms but that it is not all right for other people. That is not an argument which will be accepted internationally. If we are calling for arms limitation and arms control and nonproliferation, we must be aware that that applies to us just as it does to other people.

One tragedy of the Gulf war was that although we are deeply grateful for the small number of casualties among the coalition forces, including our own, which resulted from that war, it was fought with extreme violence and there were a large number of casualties, particularly in Iraq. That should make us very cautious of any argument that highly advanced sophisticated arms are all right in the hands of Western countries but not in the hands of others. Arms limitation and control must go right across the board.

3.55 p.m.

Lord Kennet

My Lords, I join with those who have congratulated my noble friend the Leader of the Opposition on his choice of topic for today's debate and also on the way in which he introduced it. He set out all the considerations which should affect our thoughts, and he did not waste time dealing with peripheral matters which should not.

After the Second World War my first paid civilian job was to represent the Foreign Office on something called the Arms Working Party of the Exports Committee. That was an interdepartmental committee in Whitehall which had to decide which proposed arms sales to which countries should be permitted and which should not. At that time as far as I can remember there was only one real veto—Spain. There was no veto on exporting arms to Germany in 1947. There was no need for one because Germany was not there: not in a condition to buy any. There was no veto on exporting arms to the Soviet Union, first, because they did not want any—they had more than they wanted—and, secondly, because we were not then at loggerheads with the Soviet Union. Therefore, it was more or less a wide open field. With good consciences we thought we should let anybody export arms anywhere outside Europe because we were not threatened by attack from outside Europe.

In practice, the main problem which we had—and it is still with us—was the export of used weaponry. Of course in 1947 that was 95 per cent. of it. Many Arab countries were extremely interested, as they are still today. At that time they exported quite a lot in the diplomatic bag.

It is a truism of export control policy that we sell arms only to nice people—that is, to the Prime Minister's "safe hands" —namely, to people we think are nice. Others whom we do not think are nice, may think other people are nice and, therefore, it is all right to export arms to them. When one reaches the end of the line among the recipient third world countries, some of whom are thought nice by our country and others of whom are thought nice by other countries whom we do not think are nice, a vicious circle of fear is created. All arms imports are desired because of fear of the arms of a neighbouring country. It is a lucrative and dangerous trade for humanity.

Let us consider how large the trade is. It is said to be the largest in the world. The noble Lord, Lord Cledwyn, gave the standard figures, which are almost unimaginable. Let us consider the range of arms concerned: from the apparently not unvirtuous weapon systems like ground to air missiles and even a Polaris submarine, which is purely and obviously a deterrent, through to the abominable, like nerve gases. They range from weapons which are legal in normal circumstances, such as a pistol, to the unlawful, such as anti-ballistic missiles which break the ABM treaty, to the fatuous, such as the brilliant pebbles which are now being developed. I know that we are talking about arms exports, but the day may come when the export of brilliant pebbles will seem lucrative and desirable in some circles. Beyond that, there are many weapon development programmes which are so secret and so stupid that they never see the light of day at all until it is too late and it suddenly emerges that they have been there all the time and they do the harm that they can.

The arms trade involves not only astronomical amounts of money but astronomical amounts of employment, engineering and research. Indeed, it involves a substantial uptake and distortion of the economies of the countries which engage in it either as exporters or importers.

The impulse behind the trade is almost as overpowering as its scale. Consider the scale of the United States overseas trade deficit and our own growing overseas trade deficit: it is a trade in which it is extremely tempting to engage. All we see are our own citizens better clothed and better fed because they have engaged in the trade (except where television can rectify the balance). Even the ECGD is allowed full play as if weapons were a normal product which should be freely traded between countries.

I should like to diverge for a moment into the economics of the arms industry. It is a matter little discussed. I am not referring to whether it is going well but to the economic nature of weapons production. Many products of an industrial country are useless; that is to say, they do neither good nor harm, they serve no purpose. It may be some do a little harm and some give a little pleasure, and we can all think of examples, but they come out neutral.

A wise economy, national or international, normally concentrates on producing useful goods which will create a clear and positive balance of well-being and contentment among people: goods which will produce more goods and, above all, goods which will produce capital goods. There is only one kind of industrial production created for the purpose of not being used and which while being stored and not used consumes a vast amount of wealth. If ever by mistake it has to be used, it creates death, disease and destruction. It is arms; nothing else is like it. A weapon once built is a minus, whether or not it is used. If it is used it can become a tragic minus on a world scale.

I share most of the pessimism of the noble Lord, Lord Mayhew, but pessimism does not absolve us from action. It is obvious that what is needed is a world agreement. I agree with those who have said that it is obvious that the first step towards that is the Prime Minister's register. It is an excellent idea; it has been around for a long time and we hope it can be put together.

The role of regional agreements is difficult to assess. On the one hand, it is common sense that if one wants world agreement and it is difficult to achieve, one should try a regional agreement first because it would be easier. But if a regional agreement can be reached in the Middle East or any other part of the world, it will only sublimate the fears of the individual countries in the region upwards and translate what might otherwise be Egyptian, Israeli or Iraqi fears into Middle Eastern fears. The Middle East is then a bloc for this purpose, facing the rest of the world and afraid of it. It will be particularly afraid of the West—the United States, us and France—and the Soviet Union, should that country ever again become a dynamic power. Therefore the impulse to have an arms trade and to take part in political deals which will permit it will operate at a higher level of aggregation.

We should consider how far we have to go to reach even a regional arrangement in the Middle East. Every time there is a war one's mind turns to a regional disarmament agreement or a regional arms trade agreement. Within six months or so that peters out. We have just experienced quite a showy war. I hope that the effort to reach agreement will continue a bit longer this time. It may, even if it is not related to a global UN plan.

In the meantime we must face the fact that we and other countries are back to normal in our arms exports to the Middle East. The United States exported F15s to Israel within a few weeks of the ceasefire. It is now exporting a big package to the United Arab Emirates. We have just heard how other Middle Eastern countries are soliciting arms from the Soviet Union; I am sure they will obtain them. American action has not made that less likely, and so we continue.

Every week which goes by after the end of the Gulf war before an arms trade agreement or disarmament agreement is signed makes it harder to obtain those necessary agreements. The result of the last two wars in which we have fought—the Falklands and the Gulf —may mean that we shall avoid the idiocies that we in Britain committed before both of them in selling arms to countries which would then use them to kill our own servicemen. I shall never forget the picture of the British destroyer sailing out of the mouth of Portsmouth Harbour for delivery to Argentina accompanied by bands, flags and salutes, which then found a certain use in the Falklands war.

Should only regional agreements be achieved, it will be something. If this debate helps to prevent this country ever again selling weapons to sources which will use them to kill our own forces, it will be something. But that is only the smallest part of the smaller part of what needs to be achieved.

I apologise to later speakers in the debate for the fact that I have to leave for an unavoidable meeting quite soon.

4.7 p.m.

Lord Glenarthur

My Lords, the noble Lord, Lord Cledwyn, made a powerful and convincing opening speech, as one would expect. It is easy to be purist and to form the view—as I suspect, from what he said, the noble Lord, Lord Kennet, has—that all arms sales, let alone to developing countries, are wrong; that somehow trade in defence equipment is immoral and that countries should not have the temptation to use arms placed in their way when funds for them could be more suirably used for the benefit of their peoples in much the same way as the noble Lord, Lord Cledwyn, described.

I do not believe that we can sensibly afford ourselves the luxury of such a beguilingly attractive attitude. Putting to one side for a moment the perceived needs of those countries which purchase arms, I should like to consider the value of our defence industry to the United Kingdom. Here I too must declare an interest as an adviser to a major defence equipment supplier, although it is a subject which I, like my noble friend Lord Trefgarne, touched on as a Minister.

The plain fact is that the United Kingdom aerospace and defence industry is a military, political, economic and industrial asset of enormous value to the nation. From a military point of view it represents sound value for money, taking account of a whole spectrum of national interests. Perhaps it can best be described as ensuring the wisest expenditure of funds in the national interest—the last three words being the most important.

Technological resilience and the ability to innovate —so crucial in times of conflict as we recently saw —depend on the possession and development of skills which can only be retained by being a design authority with the ability to integrate the many systems involved.

As to the political aspects, it would be a mistake to ignore the role of defence equipment sales as an instrument in the execution of foreign policy and in the exercise of influence. We shall no doubt discuss more fully in the defence debate next week the development of Europe's defence policies. But we should be unwise to ignore the possibility that factors and events affecting the United Kingdom defence industry now will influence the eventual defence industrial balance in Europe and hence the position of the United Kingdom in that balance. Perhaps even more important is this might not a weakening in the United Kingdom's lead companies be perceived in the United States as a weakening of the United Kingdom's national position? Might not that impinge on the special relationship which has stood the test of time so well?

Economic and industrial aspects are similarly important. If there were to be a move to procure off-the-shelf foreign equipment for use by this country, that surely could be expected to have a damaging effect on the national GDP, to degrade the balance of payments, to weaken sterling and ultimately to make the purchase of equipment even less affordable. Add to that the loss of export sales and the situation is made worse.

In his speech, the noble Lord, Lord Kennet, touched on employment in the industry. As regards those in this country whose jobs are dependent on defence spending, at a rough figure they number about 1.5 million. That is not a figure to be lightly diminished. It is already diminishing because of the changes that we have seen over the past 18 months or so.

As regards the industrial side, we must recognise the advantage of a sound defence industrial base and one which, among other things, can relieve the need for high stockpiling and additional manning which would otherwise arise and can provide momentum in technological advance through carefully focused research and development expenditure. That is the framework within which our defence industry exists and must compete.

With that in mind, I turn specifically to the noble Lord's Motion. There are a number of key points which any critical approach, such as that which the noble Lord has advocated, should consider. The first is that, despite encouraging trends, for example, in Africa, where long-standing dictatorships have been overthrown—the right reverend Prelate the Bishop of Manchester will have seen on television that those dictatorships were largely equipped with Soviet equipment—the vacuum might be filled from elsewhere. China has been mentioned. It is a major exporter of low-priced defence equipment. Do we want to see its role increased? What of some other players on the world's arms stage which have high technologies at their disposal? I am speaking of Israel and South Africa, to which my noble friend Lord Trefgarne referred. There is also Brazil. How could their exploitation of export markets be controlled? What of the newly industrialised countries which in many cases are developing their own defence industries through technology transfer from the West? I have in mind Singapore, Taiwan and Korea. There is hardly any poverty monopoly there. Are those countries to be prohibited from developing their conventional arms capabilities for self-defence needs?

What of the several third world countries whose military capabilities represent threats to other countries? As my noble friend Lord Trefgarne pointed out, their capacity could perhaps be a force for all kinds of difficulties when it comes to trying to prevent the future expansion of their military strength. Nearer to home one has to consider France, which is a country which is not slow to push for opportunities to supply high-tech weapons. Is it realistic to imagine France becoming more of a world policeman as regards the world's arms sales? Looking at an even greater competitive element so far as the United Kingdom is concerned, do we really see the United States abandoning its foreign military sales scheme, let alone its foreign military finance programme when they are such valuable tools for American foreign policy?

We must be realistic. I have mentioned the United States and France in particular, and they are our allies. They are actively and aggressively pursuing advanced technology defence sales to the Middle East and elsewhere. Both those countries base their policies to a large extent on business. Both their governments have a dialogue with their defence industries. We perhaps go a little the other way and are seen to put policy before business. As I am sure my noble friend Lord Caithness will describe and—it is something to which I, like my noble friend Lord Trefgarne, can most certainly testify—the United Kingdom's current arms export control mechanisms, enforced by the defence export services organisations, with the Foreign Office and the Department of Trade and Industry playing their role, are a rigorous, thorough and effective means of arms export control by Her Majesty's Government. Any unilateral increase by Her Majesty's Government in arms export control in the United Kingdom would further undermine opportunities about which others have fewer scruples. Worse than that, I believe that that unilateral increase would undermine further the United Kingdom's defence industrial base.

In closing, I say to my noble friend Lord Caithness that, if the national defence equation, both military, political, economic and industrial, is to make best use of the budget and resources available, then it is essential for the defence industry—a highly sophisticated industry at that —to be more fully involved by Her Majesty's Government in the process of analysing the implications of the current international strategic trends and arms export policy. Any reluctance to consult and pool ideas only increases the opportunities for our competitors and does nothing to diminish the understandable theme which underlies the noble Lord's Motion.

4.17 p.m.

Lord Jenkins of Putney

My Lords, I join in the tributes which have been paid to my noble friend Lord Cledwyn for introducing this subject and for the manner in which he did so. I hope that he will be encouraged to try to make it a habit of this House to periodically discuss aspects of the arms trade. It is important that we should do so. I trust that it may become a regular part of our proceedings. The point made by the noble Lord, Lord Mayhew, concerning the decline in public estimation of the arms trade is worth pursuing. He pointed out that at one time before government became involved with it, the private entrepreneur was not a particularly respectable figure if he was engaged in the arms trade. As the noble Lord pointed out, he was called a merchant of death. That was a phrase not confined to Lord Noel-Baker in the remarkable book which he wrote under that title.

The arms trade was regarded as somewhat disreputable. When the spread of arms was carried on throughout the world on a private basis it was thought of as something which decent people did not do. The merchant of death had to be given a tremendous build up by George Bernard Shaw in Man and Superman in order to make the arms dealer a respectable figure so that he could talk on equal terms with ordinary people. The decline which has taken place is that respectable people—we have two of them opposite us at the moment—defend and accept their participation in the arms trade without any sense of guilt at all. Therefore they too are merchants of death at one remove perhaps. It has become a habit.

How has this decline in international morality occurred? The arms trade is not alone. For example, in international law, there has been a decline over what is and what is not permissible in time of war. At one time it was laid down clearly that one should not attack and destroy civilians. Indeed, I recall a booklet, widely distributed among Her Majesty's services at the beginning of the war, which told us what we should do and what we should not do. In pursuance of those instructions it was customary for bombers, when the exact military target could not be found, to bring back their bombs and drop them in the sea to get rid of them. Sometimes they could not get rid of them and the aircraft, with the bombs aboard, blew up. That was the extent to which we regarded civilian life as sacrosanct. But it did not last. We finished up with blockade bombing and the decline into what happened at Dresden. I know people who took part in that procedure who thought that it was a crime.

The decline continued with Hiroshima. We are now full of weapons of mass destruction. As my noble friend Lord Cledwyn said, their spread has been brought about chiefly by the five permanent members of the United Nations. They are the merchants of death. They are supplying these arms throughout the world. I wonder if it has occurred to the noble Lord who mentioned the Iran-Iraq war that that war could not halve taken place on the scale that it did if both sides had not been fully armed by one or other—or sometimes more than one—of the permanent members of the Security Council. If that war had not taken place, the Iraqi arms build-up would not have occurred. And without that build-up, the Gulf war itself could not have occurred. In other words, the arms build-up was in itself part of the cause of the Gulf war. It could be argued that the arms build-up was the most important cause of the Gulf war and that the war would not have taken place but for the arms which had been showered upon the Middle East. We start, therefore, from a rather poor base.

As to our own attitude in the matter, it seems that an improvement has taken place. However, what was trumpeted as a prime ministerial initiative was apparently no more than jumping on a passing bandwagon carrying the stars and stripes. It is nice to know that Mr. Major has pacific thoughts. Such gentle musings were certainly foreign to his predecessor. However, to be effective, such thoughts must be followed by action. We need exemplary action. For example, why not lift the veil on arms sales? A couple of days ago, in reply to my Question asking what action the United Nations was taking in respect of a register of arms sales as proposed by the Prime Minister, the noble Earl, Lord Caithness, who is to answer today's debate, said in a Written Reply: A UN Expert Group has been studying ways to improve transparency in the international transfer of conventional arms, including the establishment of a sales register"—[Official Report, 4/6/90; col. WA 35.] I am glad that the Prime Minister supported it. But let us be clear. It was not his idea. He was supporting something which was already under way, and I am glad that he was. However, how does one improve transparency? One would think that something is either transparent or opaque. But that is not actually so. I do not take offence at the description of improving transparency. In the arms trade things are very opaque indeed. It can be argued that if something becomes more transparent and one can see what is going on—and this is what we are moving towards —then it is possible that we might gradually begin to re-establish a proper attitude to the arms trade which we have lost. It was lost particularly during the Second World War and as a consequence of that war. That is the first step, and as other noble Lords have said, it is a painful and difficult process.

As my noble friend Lord Cledwyn pointed out, when the military chief, General Pinochet, visited this country recently he was told a great deal about our arms trade position which is concealed from this House. I do not know of any reason why General Pinochet should know things which are not known to your Lordships. It is high time that we pulled out the arms trade from the secrecy which it enjoys. The people who are carrying it out know what is going on. The people who do not know what is going on are the legislators and the public. The legislators and the public ought to have at least as square a deal as the arms traders themselves.

We should realise the importance of the arms trade —who is exporting to whom and, even more important, who is re-exporting to whom. It is noteworthy that my noble friend expressed hope that arms exported to Chile would not finish up again in Iraq. However, they have finished up in Iraq in the past and I do not know what hope we have that they will not do so again. It is therefore quite important that the whole of this process should be exposed to the public gaze. I welcome the debate in the hope that it may perhaps lend support to a process which I believe is beginning to gain international support.

We in the Labour Party have said that we will refuse to sell arms to any country for internal repression or external aggression. That is our policy. How will we know? Policies change. Governments are overthrown, as we have discovered painfully in our own experience in the immediate past. One cannot civilise the arms trade. One can sell ploughshares rather than sell swords. But if one sells swords one does not know who they will be used against, by whom, and whether they will be used internally or externally. I do not have much belief in the idea of qualifying the arms trade. One has to expose it and reduce it.

That is the purpose of what we are saying in this debate. Although there are Members of your Lordships' House who may not go the whole way with me in saying that the arms trade is ipso facto evil, many will say, "Yes, at any rate we ought to know what is going on". That is the tenor of our debate.

4.27 p.m.

Lord Beaumont of Whitley

My Lords, reforms in international relations tend, certainly in modern times, to come immediately after wars. It took the First World War to bring together the League of Nations. It took the Second World War to bring together the United Nations, which was on the whole an improvement on the League of Nations. Those of us who looked for an improvement on the United Nations or for some way in which it could be made more effective were rather pessimistic about the kind of war that might be needed before that could happen. In a way we can say that we have been lucky. We have been given a chance to make some reforms in the international affairs of the world at the expense of what, for all its terror and for all its carnage, must in the history of mankind be called a rather small war. We now have that opportunity and it is right that we should take advantage of it. We are indeed grateful to the noble Lord, Lord Cledwyn, for having instigated this debate.

All countries need armaments for the same reason that all countries need armies and all countries have armies. As it is said, every country has an army, either its own or somebody else's. But we all have too many arms because we all overestimate the amount we need. We all fail to realise that you need fewer armaments to defend yourself than you need to attack somebody and that therefore we do not need to match, weapon for weapon, the people we think may threaten us. So we all have too many arms, particularly the third world. I say the third world particularly because if we are to talk about arms control, we ourselves must set an example and we must not fall into the temptation of thinking that we are nice and that other people are nasty and therefore that we can trust ourselves to behave well.

It is the under-developed world that is the crying example of overexpenditure on arms when these countries need the money for other things like food, and we are among those who supply the arms to them. I understand that the countries which make up the third world and which among them get something like £60 billion in aid a year spend £200 billion a year on armaments. With the famines that are going on in the world and with the ecological deterioration in various parts of the world, that is a sickening figure.

It is not so much a problem of the merchants of death. As has been said, "merchants of death" is a phrase which has gone out of circulation largely because countries have themselves undertaken to become the merchants of death. Andrew Undershaft in Shaw's Major Barbara delivered the armourer's creed, which your Lordships will remember was: I will take an order from a good man as cheerfully as from a bad man". The reverse does not need to be underlined, and unless we put controls on those who sell arms and unless we make a framework in which they can trade responsibly, we are not entitled to believe that the capitalist system will stand back and not sell arms where it can and where it feels that it will get a reasonable profit.

There is one especial reason why I have intervened in this debate today. It is to make a point which I do not think has been made so far. Your Lordships may not think it is a very important point because it is slightly oblique to the question. But I suggest that in the framework which we ask other countries and ourselves to observe in the control of arms there might be a presupposition that we sell only to democracies. That is not to say that democracies do not make war or that they are ipso facto good; but if you are selling to countries which are under the control of their own people, you can in the long run expect rather more responsible behaviour than you can expect from those countries which have been hijacked by dictators or in some other way have become the tools of a small elite or of some other form of government which is not democratic.

If we ask that this respect for democracy should become part of our framework we are moving on to a different plane in terms of international affairs. Some of your Lordships will remember the days when the Council of Europe, which by its organisation is a council made up of democratic countries, expelled Greece from its membership because Greece at that time was under the control of the colonels. If I remember rightly, that was done at the instigation of the Benelux countries, which conducted a campaign for that expulsion. It was a most healthy development, and it was a wonderful moment, as any of your Lordships who were with me at the Council of Europe at the time will remember, when Greece could be readmitted to the council because democracy had been once again restored to that country.

If we were in our military or wider alliances to introduce a respect for democracy as a criterion of the countries whom we trust and with whom we are prepared to deal in this morally difficult and challenging trade we would be taking a step further. I think it would be wrong to give up arms ourselves. The conduct of world affairs does not demand that of individual countries, for the time being anyway; and it would be wrong, if we defend ourselves, to refuse to provide arms for other people who may need them, but this has to be strictly and carefully controlled. An ethical framework has to be set up, and I suggest that a respect for democratic regimes might well be part of that framework.

4.38 p.m.

Lord Hatch of Lusby

My Lords, it would seem that there is only one basic difference in the speeches so far, and it has been highlighted by the noble Lord, Lord Glenarthur (who I am sorry is not in his place at the moment) and to a lesser extent by the noble Lord, Lord Trefgarne, and those who have spoken on this side. That difference is as to whether the arms trade should be considered simply as a normal part of commercial activity or whether it is a special trade that needs particular control and intervention. I hope that the noble Earl who is to wind up will let us know where the Government stand on this issue.

I would take up the argument which was made in particular by the noble Lord, Lord Glenarthur, and to a lesser extent, as I say, by the noble Lord, Lord Trefgarne, that if we accept that the arms trade is simply a branch of our general commercial activity, inevitably we get the consequences which we see today and which we have been seeing for years past—Ethiopia, Sudan, Somalia, Liberia and Ruanda. Third world countries, which we all accept cannot afford that level of armaments, are frequently seduced into buying armaments by a whole range of commercial activities of which I am sure noble Lords are aware. In addition, there is the atavistic desire of certain regimes to arm themselves to the teeth. One then has not only war but also the devastation that leads to famine and to death.

It is true that in the countries that I have mentioned the casus belli on each occasion has been internal. However, that is not always the case as regards wars in the third world. Today Mozambique is suffering desperately and has become perhaps the most poverty-stricken country in Africa. It is exporting its poverty through refugees to places such as Malawi. It was the intervention of the South Africans in Mozambique—an intervention that still continues—which led to that form of civil war and of interventionist war. It was the South Africans who first invaded Angola. The Americans supported Savimbi and his movement and have done so ever since. Outside intervention at least exacerbated the internal tensions and led to war, increasing famine and widespread death.

Thirdly in this category I raise an example that was mentioned by my noble friend Lord Cledwyn; it is the case of Indonesia and East Timor. I hope that in winding up the noble Earl will tell the House openly and frankly where the British Government stand on that conflict: Since 1975 the United Nations has condemned the aggression of Indonesia against East Timor. That aggression continues. We know that Indonesians have obtained arms and defence equipment from western countries. Where do the British Government stand, not in going through the Portuguese but in the supply of arms and defence equipment to Indonesia while Indonesia maintains its aggression against East Timor, which has already led to the deaths of more than 100,000 people?

I wish to remind the House of the quotation with which my noble friend Lord Cledwyn ended his powerful speech. It was a quotation from a speech made by President Eisenhower at the end of his tenure of office in 1953. My noble friend quoted President Eisenhower as pointing out that the manufacture and use of arms was a theft from those who were hungry, cold and destitute. If it was a theft my answer to the noble Lord, Lord Glenarthur, is that this is not simply ordinary commercial activity. It is an activity which is a theft from the life-giving goods which could be provided in place of the armaments. It is a theft which causes the death of millions of people and causes the suffering of many more millions.

I extend the speech made by President Eisenhower and I believe that if he were alive today he would do so too. The armaments trade is not merely a theft which is causing famine, hunger, disease and poverty; today it is a theft from the life-support systems on which the future of our planet depends. In particular, it is a theft from the opportunity of the third world to develop its economic systems in such a way as to maintain life without at the same time helping us to destroy the planet.

Surely by now we understand that famine, disease, soil degradation, and all the threats that we have outlined as existing within the environment today, are not bounded by national frontiers. Therefore, the threat that is present today in the development of the third world is a threat to the whole world. The famines that today are being suffered in the third world are equally a threat to life throughout the world. Surely those global effects have become apparent.

Perhaps noble Lords have seen the recent United Nations human development report prepared under the auspices of the United Nations development programme whose director is William Draper III. The report was written by a remarkable Pakistani former Finance Minister, Dr. Mahbub ul-Haq. The report deals with matters that are specifically relevant to today's debate. It shows what can be done with a reduction in the armaments programme in the developing and the developed world. I agree with the noble Lord, Lord Mayhew, who outlined the difficulties of obtaining international control and regulation of the armaments industry. I know that is difficult, but let us look at what could happen if we could overcome those difficulties.

The report is based on human development and not on the old-fashioned economic development; that is, development in basic literacy, health care, land ownership and income distribution. I have extracted the following figures as being relevant to the debate. The report states that a 3 per cent. cut in the industrial countries' military budget would provide 25 billion dollars per year. If there were also a freezing of military spending in the developing countries a further 10 billion dollars would be added to that. That is the dividend for investment in the future of the 500 million people in the world who today live below the poverty line. It must be remembered that in 10 years there will be another 1,000 million more mouths to feed. That dividend could be used to allow, to enable and to stimulate the developing countries to develop without increasing the degradation of our environment.

In a recent report to the World Bank, Robert McNamara specifically recommended that development aid should now be tied to cuts in the recipients' military budgets. As my noble friend Lord Cledwyn pointed out, the Japanese have already done so. McNamara is recommending that it should be done internationally. In his concluding speech, I ask the noble Earl to say whether the British Government agree on that method of cutting down the wasteful expenditure and provision of arms to developing countries which has brought so much misery, death and threat to the future of our race.

4.50 p.m.

Lord Rea

My Lords, we have recently discussed the problems of the developing world in a number of debates in this House. The apparently intractable problem of the indebtedness of the South to the North has always played a major part in the discussions. To oversimplify, the debt is not being repaid because too high a proportion of the overseas earnings of many countries is taken up with merely servicing—that is, paying the interest on—the debt. That means that they do not have enough left to pay for essential imports such as oil, machinery, transport, fertilisers, and so on, unless the debt is increased or rescheduled.

Unfortunately, many governments in the South, either covertly or overtly ruled by the military, regard the purchase of arms as the highest priority, even though each purchase subtracts from the development of that country. That point was fully developed by my noble friend Lord Hatch and also by President Eisenhower in the speech which was quoted by my noble friend Lord Cledwyn. The world development movement suggests that at least 25 per cent. of total third world debt is due to loans contracted to buy arms. In addition, a considerable proportion of the armaments of developing countries was supplied as aid by the United States, the USSR or China to those whom they regarded as their friends, or were trying to woo.

An especially cruel effect of that form of aid occurs when it is given, usually illicitly, to illegal organisations functioning in or on the borders of countries whose governments the arms-supplying powers wish to destabilise. Recent examples include the support by South Africa for Renamo in Mozambique described by my noble friend Lord Hatch, which has wrecked the economy and the infrastructure of Mozambique. There is also the support of the United States and South Africa for Dr. Jonas Savimbi in Angola, of which I hope we shall see an end. However, we shall have to keep our fingers crossed while waiting to discover whether that agreement will be honoured. There are also the support by the United States for the Contras in Nicaragua and the Chinese support for the Khmer Rouge in Cambodia.

As an aside, I do not expect that there are many other noble Lords who can recall feeling safer while being overflown by a Soviet-built helicopter gunship as I was when I visited the town of Esteli in Northern Nicaragua in 1986. American armed Contra rebels had fairly recently made a destructive incursion into that part of the country. The helicopters were keeping the Contras at bay.

But it is not the economic burden of military expenditure alone which slows down development. More serious is the damage done by the conflicts which occur, as many noble Lords have pointed out, when the weapons are used. Indeed, not only are many people killed as a direct or indirect result of such conflict, but the agriculture and infrastructure in general—for example, roads, bridges, schools, health services and water supplies—is wrecked. We have all seen how conflict and famine are linked in the Horn of Africa and how they hamper relief efforts. My noble friend Lady Ewart-Biggs will describe their effects in the next debate.

However, even if we all agree that the end effects of the arms trade are evil, the problems of curtailing and eliminating it are immense. I do not think I need to go into that aspect of the matter because it has been very well described by other speakers and especially by the noble Lord, Lord Mayhew. All the major powers devote a sizeable part of their economies to arms production the export of "defence" products is a very useful source of foreign exchange. Even Vaclav Havel, whom I quoted in a debate about three months ago as declaring that Czechoslovakia was going to phase out arms sales, has had to succumb to economic necessity. At least two deals involving arms have recently been made with Iran in exchange for oil, and with the United States, and I gather that further plans are afoot.

It is very tempting for governments to keep arms industries alive, not only for their own defence but also to prevent unemployment, to maintain exports and, I suggest—as, indeed, other noble Lords have done—to exert influence in the world. In fact, in the United Kingdom the defence industry as such employs directly only 150,000 workers, which is 0.6 per cent. of the total UK workforce. However, although I dispute his figure of 1.5 million, I agree with the noble Lord, Lord Glenarthur, that a far greater proportion of the workforce is indirectly concerned in the defence industry.

I believe that the people in the defence industry are an especially highly skilled group with a much higher proportion of scientists and engineers engaged in research and development than is the case in any other industry. Many governments of nations which export arms give special assistance to exporters, as noble Lords have pointed out. The United Kingdom is no exception. The Defence Sales Organisation which was the predecessor to DESO (the Defence Export Services Organisation) was set up by the Labour Government in 1966, as was pointed out. This is a cross-party problem. Denis Healey, who was then the Minister of Defence, said: While the Government attach the greatest importance to arms control, we must also take what practical steps we can to ensure that this country does not fail to secure its rightful share of this valuable commercial market". The argument that if we do not sell arms to various virtuous or doubtful regimes around the world someone else will, is unanswerable. Of course Britain is not supposed to sell arms to the real villains. For example, Tim Renton, when he was a Foreign Office Minister, said in 1986: We do not supply arms to countries against which there is a mandatory arms embargo or where we believe the items are likely to be used to violate human rights and to attack British forces". Would that he had been able to enforce that logical, sensible and moral idea! However, as we have heard today in many speeches, that has not been the case, although I believe it is true that the United Kingdom has a better record in this respect than many countries. But it is not easy to ensure, as my noble friend Lord Jenkins said, that arms will not be used for internal repression. As has been pointed out, we sell British naval and military equipment to Indonesia, despite the fact that in 1965 the present regime killed about 500,000 of its own people and between 1975 and 1985 killed or starved something in the region of 100,000 to 200,000 people in East Timor. We do not know the exact number because no one has been able to calculate it.

Ideally, of course, as many speakers have said, international agreements to register and control the arms trade should be made and enforced. A certain amount of progress has been achieved at the United Nations. In 1989 a resolution was passed overwhelmingly in the General Assembly expressing the conviction that, arms transfers in all their aspects deserve serious consideration by the international community". A study group looking at, all aspects of international arms transfers", is supposed to report to the United Nations General Assembly later this year. I am sure that the Minister will give us a progress report on that. However, it is much easier to vote for an idealistic principle than to work out an effective notification and control system. I am sure that he will tell us that the United Kingdom supports such measures and is working towards their implementation. Will he also consider the possibility that Britain should take a lead and set an example, unilaterally at first, if need be, to tighten up on military exports over a period of five to 10 years, let us say? In particular loans to pay for such trade should be phased out, as should export guarantees and direct loans to purchasing countries.

The defence industry is already having to contract and diversify, as has been pointed out, because of East/West détente. Today we have heard the further steps that the Options for Change policy will involve. It is not enough to expect the defence industry itself to diversify and contract. A defence diversification agency, as the right reverend Prelate pointed out, should be set up to assist in the process of retraining, retooling and finding markets for new products. A detailed plan of how that could be done was drawn up recently by my union (MSF) which the Government would be well advised to study and almost certainly have. A Labour Government will work along these lines so that the highly skilled workers in the defence industry can make products which will help to develop rather than to destroy the people of the third world.

5.1 p.m.

The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness)

My Lords, I am grateful to the noble Lord, Lord Cledwyn of Penrhos, the Leader of the Opposition, for giving us the opportunity to debate this almost perennial but none the less important issue. As he reminded us, it is a subject to which governments have given attention for years and one to which this Government have always attached great importance. It is an issue which has attracted international attention again recently and I am grateful to all noble Lords who have taken part.

Many noble Lords on the Benches opposite, like the noble Lord, Lord Jenkins of Putney, seem to have sympathy with the argument that there should be no arms sales whatever. My noble friend Lord Glenarthur called that a "beguilingly attractive attitude." The answer to that argument has been clear for years. It was well stated by the noble Lord, Lord Cledwyn of Penrhos, and by my noble friend Lord Trefgarne. The United Nations Charter states that all countries have a right to defend themselves. That right is meaningless unless it is accompanied by the right to acquire the means to assure their own defence. Not all countries are arms manufacturers. In fact, the members of the permanent five at the UN—the United States, the Soviet Union, France, China and Britain —account for some 85 per cent. of global arms sales; but therein lies the hope for the future upon which I shall comment in due course.

The Government do not share the view of those who believe that the arms trade is immoral in itself. Our policy is to encourage the export of arms to meet the legitimate defence needs of friendly countries, but we do not export indiscriminately. On the contrary, all proposed arms exports are considered on a case-by-case basis and are subject to stringent licensing procedures. I say to the noble Lord, Lord Cledwyn of Penrhos, and to my noble friend Lord Glenarthur that we have every confidence in the operation of our export licensing procedures. They involve close consultation with the MoD, the DTI and the FCO to ensure that any proposed sale meets the strict security, strategic, political and human rights criteria that we apply.

I have no doubt that all your Lordships will agree that weapons of mass destruction, nuclear, chemical and biological weapons, and the ballistic missiles which can deliver them, are our first priority for effective control. We believe that the way forward is to work to strengthen existing non-proliferation regimes, not to attempt to re-invent the wheel by developing new international mechanisms.

To that end the Government are working for further accessions to the Nuclear Non-Proliferation Treaty. In that context, I warmly welcome the decision in principle of the French Government, announced on Monday, to sign the treaty. That will add enormously to its weight. We now look to other states—in particular China—to follow suit. My noble friend Lord Trefgarne mentioned India and Pakistan. We hope they will sign in the near future.

We are also looking closely at the possibilities for strengthening the safeguards system of the International Atomic Energy Agency and continuing to strengthen international export controls, including those on dual-use equipment, capable of being used for both peaceful and military purposes.

The noble Lord, Lord Mayhew, asked us not to transfer higher technology which can be used in armaments. I have no doubt that your Lordships would support the export of a laser for medical research. But let us not forget that the same machine in the wrong hands could be used for military purposes.

The Government wish to see chemical and biological weapons eradicated from the face of the globe. We are pressing for greater standardisation of controls among members of the Australia Group over chemical weapon precursor chemicals, biological weapon related organisms and related dual purpose equipment. That group should be expanded to cover a wider range of countries, including, we hope, eventually the Soviet Union. We have been working hard to secure the early conclusion of a comprehensive, global and, as my noble friend Lord Trefgarne stressed, effectively verifiable chemical weapons convention. We shall use the opportunity presented by the forthcoming Review Conference of the Biological Weapons Convention to press for improvements in that regime too. But again there are difficulties. There would be unanimity in the House that we should export weed killer or pesticide to a developing country for agricultural purposes. Not a voice would be raised against the sale of taps. There would he positive enthusiasm for education material in the scientific field. But, put all three together and one could have the elements of a chemical weapon. Thus it is clear that it is not just the sale of arms but the verification of the use of such equipment that needs agreement.

Progress must be made too in the strengthening of the Missile Technology Control Regime. The drive to expand membership started in London in 1989 and has been successful in that membership has risen from the initial seven to 16. Our aim is to include all members of the EC, NATO and the European Space Agency. I agree with the noble Lord, Lord Mayhew, that we need also to include the Soviet Union and China, the two major exporters of ballistic missiles. Iraq's use of ballistic missiles against Saudi Arabia and Israel and their indiscriminate destructive results gives added point to our efforts.

However necessary it is to take action on those weapons of mass destruction we must not forget Iraq's over-run of Kuwait with tanks, artillery, planes and helicopters. Restraint in the international arms trade must be extended to conventional arms as well. Saddam Hussein bought his weapons from East and West, from developed and developing countries alike. Even though since the early 1980s we refused to export any defence equipment which, in our view, could significantly enhance the capability of either Iran or Iraq to prolong or exacerbate their conflict, Saddam Hussein found little difficulty in amassing an arsenal of weapons on a grossly unjustified scale. Other examples around the world are easy to find. To name but one, the purchase by the military government in Burma of a billion dollars worth of weapons from China which they can ill afford can hardly be justified on grounds of urgent defensive need. It is yet another example of mis-government imposed on the long-suffering Burmese people. We will have no part of it. We will sell no weapons to Burma. We are taking an initiative within Europe and hope our example will be followed by all our partners in the European Community.

The noble Lord, Lord Rea, gave examples of other countries. I agree with the noble Lord, Lord Hatch of Lusby, that there are many other examples of a disproportionately high percentage of a country's GDP being spent on arms. How many developing countries in Africa and elsewhere receive substantial aid because of poverty and deprivation yet spend their scarce resources on acquiring weapons in ever greater quantities? The former regimes in Ethiopia and Somalia were classic cases.

The right reverend Prelate the Bishop of Manchester reminded the House that he had always been against the actions we took against Iraq because the Horn of Africa would not be on the front pages of the media, as indeed it was not. Nevertheless, the right reverend Prelate will know that the Horn did not leave the front pages of the Government's concern, which I venture to suggest is rather more important than the front pages of the media. During the Gulf crisis my right honourable friend the Minister of State announced a further £30 million of aid from the United Kingdom.

The examples that we have already quoted should give others pause for thought. Of course we cannot expect states to ignore their security and defence needs, but we believe that excessive military expenditure is not a proper use of resources.

At this stage I wish to answer two points that the noble Lord, Lord Cledwyn of Penrhos, put to me. With regard to Chile, I can confirm that the contract between BAe and the Chilean Government for the sale of rocket engines that can carry cluster bombs included a clause specifying that the resale to third parties would require the consent of Her Majesty's Government.

I turn now to Indonesia. Our sales to Indonesia in recent years have involved equipment such as trainer aircraft and anti-aircraft missiles. I am sure that the noble Lord would agree that there are no grounds for saying these could be considered suitable for internal repression. On the subject of Indonesia and in particular East Timor, the noble Lord, Lord Hatch of Lusby, sought to widen the debate. I have dealt with the points that he raised in a recent oral Question.

We need international co-operation to prevent a repetition of our experience with Iraq. An important element in our approach is to achieve greater transparency in the arms trade. This meets a concern of the right reverend Prelate the Bishop of Manchester. The international community needs a mechanism to enable it to monitor the build-up of arms in any one country and, if necessary, to react. It is in this context that on 8th April my right honourable friend the Prime Minister proposed the establishment of a universal register of arms sales to be supervised by the United Nations. That initiative—for that is what it was, contrary to what the noble Lord, Lord Jenkins of Putney, sought in vain to persuade the House—was immediately endorsed by our partners in the European Community.

We have since pursued the initiative in discussions with other members of the Security Council and with the UN Secretariat, which has formed an expert group that will publish its report shortly. That is why I mentioned earlier that there is hope, because 85 per cent. of global arms sales are accounted for by the five permanent members of the Security Council, notwithstanding the useful overview of the attitude of various countries given by my noble friend Lord Glenarthur.

After the welcome improvement in co-operation between the permanent five in the past year and the excellent news of the further progress made in talks this weekend between the Soviet Union and America with regard to CFE and other matters, this is the grouping best suited for making progress. In addition, I confirm that we expect these issues, including the initiative of my right honourable friend the Prime Minister, to be high on the agenda at the forthcoming economic summit in London and later that they will be taken forward constructively at the forthcoming General Assembly.

I am sure your Lordships will agree that it is very much in the interests of developing countries that the proliferation of weapons of mass destruction should be checked and that new regional arms races in conventional weapons should be avoided. In order to avoid just such another build-up in the Middle East, President Bush announced on 29th May an initiative calling for discussion between the five leading arms exporting countries, which, as we all know, happen to be the permanent members of the Security Council. It was aimed at reaching a consensus on mutual restraint in arms transfers to the Middle East. We have warmly welcomed President Bush's announcement and stand ready to join in these talks. On Monday President Mitterrand also showed himself ready to take them forward. We hope the debate can rapidly be expanded to include other major arms exporting countries.

What is encouraging is that, particularly in the West, there is a growing momentum to seize this nettle. We must extend that to all countries. Other institutions can help us in our task. That is why we look to the World Bank and the IMF to take into account levels of military expenditure when assessing economic reform programmes in developing countries. Governments should back them up and indeed alter their policies too. We have done just that in our wish to promote good government.

I can assure your Lordships today that the Government already take military expenditure into account, along with other good government criteria such as sound economic and social policies, human rights, democracy, accountability and administrative competence, when determining our aid policy towards individual countries. I believe that the noble Lord, Lord Beaumont of Whitley, will welcome what I have said. As opposed to our following the Japanese, as the noble Lord, Lord Cledwyn, wished, we welcome the recent Japanese decision to follow the lead that we have set in this area. We hope that others will follow suit.

Turning to two specific points that were raised in the course of the debate this afternoon, the noble Lord, Lord Cledwyn of Penrhos, asked about a meeting of directors of arms procurement. These are annual events. The next one is to be held in October. I can reassure the noble Lord that we shall attend, as we have done in the past.

My noble friend Lord Glenarthur raised an important point. I can assure him that there is a close dialogue among the relevant government departments, including the defence export sales organisation and our defence industries. There will be no question of failing to involve the industry as the various initiatives now on the table are developed. On an issue of such importance government and business must work hand in hand.

This important issue that we have been discussing is one to which we shall undoubtedly return. Clearly it is an issue on which Britain cannot act alone. I took careful note of what all your Lordships said and I also noted that there was still a wide disparity and discrepancy in views on the Benches opposite, which remain as strong as ever.

To be truly effective any regime of restraint in arms transfers must be universal. If Iraq's invasion of Kuwait proves to be the stimulus for a new international determination to co-operate in this sphere, at least some good may result from that tragic conflict.

The Lord Bishop of Manchester

My Lords, before the noble Earl sits down, I may have missed it but did he respond to the calls for a defence diversification agency? It would ensure good thinking and action over moving defence productivity to other fields.

The Earl of Caithness

No, my Lords. I did not because the matter will be covered in a debate to be held in your Lordships' House in the near future by somebody from another department who may be better qualified than I to answer the question.

Lord Cledwyn of Penrhos

My Lords, we have had a valuable debate on a subject of the first importance. I am grateful to the right reverend Prelate and to noble Lords in all parts of the House for the contributions they have made, with their vast knowledge of the complexities of the subject. We are grateful to the noble Earl for his summary of government policy on all these great issues. It is clear from what he said and from what we know that there are to be several meetings over the next few months— one will be called by President Bush— as well as other talks. These will be reported to the House and I have no doubt that we shall have exchanges on Statements and other debates. Therefore, I shall not tire the House with a further speech but beg leave to withdrawn the Motion.

Motion for Papers, by leave, withdrawn.