Lords Sitting of 7 February 2002

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Blackburn): The LORD CHANCELLOR on the Woolsack.

Secondary Schools
Baroness Walmsley Baroness Walmsley asked Her Majesty's Government:
Whether they have yet established a timetable for the next secondary school curriculum and staffing survey.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, in December my honourable friend the Minister for School Standards gave an undertaking in another place that the survey would be conducted shortly. Preparations for the survey are in hand and my department hopes that data collection will take place later this year.
Baroness Walmsley: My Lords, I thank the Minister for her Answer. She will not be surprised to learn that although I have great respect for her, I am unhappy with her Answer. Is she aware that my honourable friend the Member for Harrogate and Knaresborough in another place and myself in your Lordships' House have been asking the Government about this very overdue survey since February last year? Does she accept that Ofsted has confirmed that this is the only official way of finding out not just how many teachers are in our schools, or how many vacancies there are, but how many teachers are teaching subjects for which they are not qualified? Every time we ask the question we are told that there are preparations and considerations. If the Government intend to carry out the survey, may we please have a timetable? If the Government do not intend to carry out the survey, will the Minister please say so? We shall then know that the Government refuse to use the only system that is in place for finding out the information.
Baroness Ashton of Upholland: My Lords, I say without hesitation that the Government intend to conduct the survey. The reasons for delaying the survey are entirely bureaucratic and administrative. For example, we must ensure that the right people are in place to conduct the survey. We are now in a position to be able to do that. The purpose of the survey is to look at a sample of about 500 secondary schools. The survey will not measure teacher numbers or vacancies. Figures on such matters come from the form 618G survey of all LEAs in England which is conducted annually.
Lord Jenkin of Roding: My Lords, as part of the Question is about the syllabus, perhaps I can draw the
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Minister's attention to the Nuffield report on Science and Society entitled Beyond 2000, which was presented to the Select Committee of this House on Science and Society. The report, which we commended, acknowledged that when science became a compulsory subject up to the age of 16, the syllabus, particularly at secondary school level, remained almost the same. It is now widely regarded as inappropriate for teaching scientific literacy. When the Minister receives the results of the survey, will she ensure that those results are taken serious note of? I declare an interest as president of the Association for Science Education.
Baroness Ashton of Upholland: My Lords, I pay tribute to the noble Lord for his work in the area of science. He knows that I am the Minister with responsibility for Science Year and I have had the privilege of discussing this matter with him, We shall take serious note of the survey. It will be an important document. I shall ensure that we deliberate on it and that we are in dialogue with the noble Lord on the issues raised.
Baroness Williams of Crosby: My Lords, does the Minister accept that one reason why my noble friend Lady Walmsley pressed the issue of the survey is that during the Report stage of the Education Bill in another place yesterday honourable Members were able to debate less than half of a major Bill that shortly will come to this Chamber? If the Government are to be held properly accountable for one of the major public services, does the Minister recognise that adequate information has to be made available to this House so that it can discharge the duty that the other place is no longer able to carry out?
Baroness Ashton of Upholland: My Lords, I expect that there will be full debate and deliberation on the Education Bill when it reaches your Lordship's House. I very much look forward to that. Of course, we need to provide information. We shall attempt to do so in a way that noble Lords will find useful. This morning I took part in a discussion on ensuring that noble Lords have adequate information before we embark on our deliberations.
Baroness Blatch: My Lords, it is quite wrong that one has to rely on this House to scrutinise Bills properly. In any changes that may be made to procedures I hope that that will be remedied. Form 6—it used to be form 7—does not include information about the number of supply teachers or the number of teachers who teach subjects for which they are not qualified. In the Minister's answer to the first supplementary question she said that the survey does not cover those issues. Who in the DfES will be able to tell the House at some stage how many supply teachers are being used at any one time and how many teachers are teaching subjects for which they do not have a qualification?
Baroness Ashton of Upholland: My Lords, the survey will cover the latter point raised by the noble Baroness,

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which concerns appropriate qualifications for teachers. Noble Lords have raised that as an important issue. I echo that feeling. On supply teachers, I shall come back to the noble Baroness with specific details on that. But she should have no illusion about the fact that we take this matter very seriously. As to scrutiny, we shall have an opportunity to discuss the scrutiny carried out in another place when we debate the Bill in this House. I look forward to that as well.
Lord Geddes: My Lords, in the Minister's initial reply to the noble Baroness, Lady Walmsley, she used that ubiquitous word "shortly". Please will she define what "shortly" means?
Baroness Ashton of Upholland: My Lords, it means "soon".
Lord Rotherwick: My Lords, the survey is to take place soon, shortly or whenever. There must be a timetable for the survey. Can the Minister tell the House when it is due to be completed?
Baroness Ashton of Upholland: My Lords, I always give noble Lords as much information as I have. I anticipate that we shall have the results in the early part of next year. By "early" I mean within the first half of next year. The survey will take a while to complete. That is not because we are being slow, but it is a survey that will require great care and attention. It is a priority and it will be carried out properly.
Baroness Walmsley: My Lords, while we await the survey, can the Minister tell the House how many children will be taught subjects by teachers who are not qualified to teach those subjects?
Baroness Ashton of Upholland: My Lords, as the noble Baroness will be aware, the previous survey showed that 82 per cent of staff held an overall qualification. It is worth saying that we carefully monitor the vacancy rates that we know about in teacher training and within individual schools, so we are under no illusions about some of the issues and some of the subjects where there are shortages. That is why we have brought in a raft of measures to encourage our most able graduates to enter those areas of teaching. This is not a subject to which the Government give anything other than the highest priority.
Lord Pilkington of Oxenford: My Lords, my knowledge of the English language is limited, but a year hardly seems to mean "shortly", particularly when a major Education Bill is going through the House. The Minister should encourage her department—not the most efficient in Whitehall—to do things a little more quickly.
Baroness Ashton of Upholland: My Lords, I always encourage the department to do things as quickly as possible. There is a difference between when the survey
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will begin and when it will end. My comments about "shortly" or "soon" concern when the survey will begin. It is a detailed survey that is required to be undertaken by people of high calibre. Those people are in place and the survey will begin soon. I look forward to discussing the results with your Lordships.

Nuclear Weapons
3.8 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
What actions they are taking to reduce the danger of nuclear war.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, since the end of the Cold War, the day-to-day danger of nuclear exchange has much diminished and nuclear weapons arsenals have been greatly reduced but we are not complacent. Dangers remain, for instance, in tensions caused by regional conflicts. We are working to address those through diplomacy, international conflict prevention activity and by work to prevent the proliferation of nuclear weapons. All of those approaches are designed to contribute towards creating the circumstances in which our ultimate goal of global nuclear disarmament can be achieved.
Lord Jenkins of Putney: My Lords, I am glad that the Government are not complacent. I am sure that the House generally will share that view. It may also share the view that some further action to demonstrate that lack of complacency would not be unwelcome.
I recall an interview that I had with Mr Attlee in the demobilisation period in 1947. He said that the view that I expressed, which was that nuclear weapons had to be got rid of, had been shared at an even "higher level"—as he put it, pulling my leg. The higher level concerned was the supremo himself, Lord Mountbatten. It was his view that we must get rid of this damn thing quickly or the damn thing will get rid of us. We have been spared that, although it has sometimes been a close-run thing. But we must not be complacent. I suggest that the Government should be called on to demonstrate that lack of complacency more fully than they have done hitherto.
Baroness Symons of Vernham Dean: My Lords, I certainly shall not in any way attempt to challenge my noble friend's extraordinary expertise which goes back over many years on this very important issue. Perhaps I may suggest that I write to him with a full list of all the measures that the Government have taken since May 1997 to further the cause of nuclear disarmament and non-proliferation. It is a long list with well over 10 items. Perhaps if I do that, and place it in the Library of your Lordships' House, it will give my noble friend the information that he needs.
I should also like to point out to my noble friend that we are very much looking forward to the nuclear nonproliferation treaty preparatory conference which is

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due to take place in April this year. At that conference we shall again return to some of the issues in which I know my noble friend is interested, including of course pressing very hard for negotiations on a fissile material cut-off treaty. I believe that that lies very much at the heart of taking this issue forward.
Lord Howell of Guildford: My Lords, is the Minister aware that we on this side of the House rather welcome the sudden change of view by the Foreign and Commonwealth Secretary on the matter of antiballistic missiles and his apparent recognition now that the abrogation or bypassing of the ABM treaty would actually assist in non-proliferation, assist and accelerate the task of nuclear disarmament and reducing nuclear weapons, and is of no threat to Russia whatever? That is what he said yesterday. Will the Minister endorse that welcome change of view? Will she reject strongly the views that we have heard in both your Lordships' House and another place in the past that somehow this move would lead to a new arms race and bring Russia raging into the nuclear battle again? In fact, it would do the opposite, would it not?
Baroness Symons of Vernham Dean: My Lords, I think that I had better send the noble Lord a copy of the speech. I am sure that he has read it. I certainly have done so. It does not say quite what the press says that it says. I have never heard my right honourable friend, or indeed any member of the Government, suggest that the plans put forward by the American Administration would lead to a new arms race. I assure the noble Lord that what may have changed is the spin put on by the press of what my right honourable friend said, but his position has not changed.
Lord Wallace of Saltaire: My Lords, can the Minister say how much influence the British Government have over these bilateral conversations or negotiations between the United States and Russia about the abrogation and replacement of the ABM treaty? If the British Government do have any influence, could we bring that influence to bear on the American Government to suggest that they should accept Russian proposals that those nuclear weapons removed should be destroyed and not simply stored?
Baroness Symons of Vernham Dean: My Lords, these are essentially discussions between the United States and Russia. It is a treaty between those two parties. But naturally we are interested in ensuring that they have peaceful and useful discussions. I do think that the US posture review has taken this position forward. The START I treaty allows both sides to have in the region of 6,000 deployable warheads. The American proposals would reduce the deployable operational warheads to between 1,700 and 2,200. We await the Russian response to that. Another key part of their discussions will be the arrangements that can
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be made between those two countries on transparency and verification. We very much encourage them to stick at those discussions.
Lord Renton: My Lords, has the Prime Minister's attempt to persuade the Governments of India and Pakistan not to use nuclear weapons against each other been successful?
Baroness Symons of Vernham Dean: My Lords, happily we have not seen the use of these appalling weapons between those two countries. But recent tensions speak for themselves. Tensions between India and Pakistan make progress on a non-proliferation agenda all the more important, not just for the safety of south Asia but for the whole world. So the noble Lord, Lord Renton, is right; it is enormously important that we continue to press both countries to engage as soon as possible in dialogue on nuclear confidence-building measures. It is also very important that we encourage both countries to sign up to the non-proliferation treaty. We want to see them signed up as non-nuclear weapons states. That is an enormously important aspect of what we are encouraging them to do.
Lord Corbett of Castle Vale: My Lords, can my noble friend say what pressure Her Majesty's Government are bringing to bear on the Government of Iran to abandon their development of nuclear weapons and other weapons of mass destruction?
Baroness Symons of Vernham Dean: My Lords, we encourage all countries which hold weapons of mass destruction—whether chemical, biological or nuclear—to abandon them. I make no distinction here. We are of course very concerned by the rumours concerning Iran's possible development of nuclear weapons. But I come back to the point that I made to my noble friend Lord Jenkins of Putney, that one of the crucial issues in this matter is to move towards a treaty on fissile material. It is self-evident that, in order to develop nuclear weapons, countries must be able to get hold of fissile material. The control of that fissile material through a treaty which has been deadlocked is a very important issue for us to take forward in the discussions which we hope to pursue in April.

Energy Review
3.16 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
When the energy review by the Policy and Innovation Unit of the Cabinet Office will be published.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I am pleased to inform your Lordships that the

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Performance and Innovation Unit's energy review will be published shortly—next week. Copies will be made available in the Printed Paper Office.
Lord Ezra: My Lords, I thank the noble Lord for that definition of "soon", which has improved on the previous definition that we received. Is he aware—I am sure that he is—that there have been many leaks, some of them contradictory, about what is alleged to be contained in this report? Therefore, is that not all the more reason for it to be published as soon as possible? Secondly, as this will be a report to and not from government, what will be the procedure for considering it that will follow? How long will it take before the Government reach a decision on the important policy issues that must be taken in the energy sector?
Lord Williams of Mostyn: My Lords, the noble Lord speaks of leaks. I always deprecate them—particularly other people's. As the noble Lord knows—because he was good enough to make an extremely helpful submission—this is a report, as he says, to government. An issue of such importance which talks about energy provision over the next 50 years plainly needs to be reflected on. Of course I undertake to pass on to the usual channels the noble Lord's desire that it should be subject to parliamentary debate and scrutiny as soon as reasonably possible.
Lord Jenkin of Roding: My Lords, it has been rumoured that this review will be accompanied by a government consultation document. Will it or will a consultation document follow later? Secondly, if there is to be a consultation document—given the long-term nature of the issues that are to be discussed in the PIU report—will the Government ensure that the consultation period is long enough so that people really can express their views; and that the Government have time to take account of those views and not publish them two days after the end of consultation?
Lord Williams of Mostyn: My Lords, I shall certainly take on board the useful suggestion that there should be full consultation. However, if the consultation is lengthy, the difficulty is that at least three-quarters of your Lordships will complain that it has gone on for too long. This process with the PIU has been very full and open. Virtually every submission 400 in all—has already been published on the website. I do not believe it could be said that the Government are not genuinely interested in having all informed views; and also uninformed views.
Lord Saatchi: My Lords, is the noble and learned Lord the Leader of the House aware that some people are not quite sure what tasks the Policy and Innovation Unit and the other units in No. 10 Downing Street actually perform? One of the things that the PIU definitely does is to take a lot of taxis; indeed, £35,000-worth of taxis in the latest financial
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year. Would the noble and learned Lord consider asking the Prime Minister's staff in No. 10 whether they would think of following the advice of the Government's own vehicle certification agency, which says that the best way to reduce CO2 emissions is to get on a bike?
Lord Williams of Mostyn: My Lords, the noble Lord, Lord Tebbit, is not present in the Chamber, so I cannot really answer the last point. In his previous occupation, I am sure that taxis were wholly unknown to the noble Lord.

MMR Vaccine
3.20 p.m.
Lord Skelmersdale asked Her Majesty's Government:
Whether parents should be entitled to an alternative to MMR (measles mumps rubella) vaccination.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the advice from the Government's expert committees and from many other countries around the world is that MMR is the vaccine of choice to protect children from measles, mumps and rubella. Alternative immunisation courses do not provide the same protection, and there is no evidence to show that they are even as safe as MMR.
Lord Skelmersdale: My Lords, I am grateful to the Minister for that response. I most certainly agree with him. However, many parents have been wrongly convinced by the media that MMR vaccines are not safe. Now that we are told that single vaccines are no longer available, can the Minister say how the Government will prevent an outbreak of these horrible diseases?
Lord Hunt of Kings Heath: My Lords, I should, first, pay tribute to the noble Lord for the role that he played towards the development and the introduction of MMR when serving in my department in the 1980s. I can tell the House that the figures are quite striking. There were 85,642 notifications of measles in 1988, whereas the figure for 1999 was 2,438. I believe that those figures show that the introduction of the MMR vaccination was one of the most outstanding public health measures taken by this country for many years.
The noble Lord is absolutely right to emphasise that the key issue here is how to ensure that parents do decide to take their children to surgeries to have MMR vaccines. The Government have a health promotion programme. Many information packs have been made available to general practitioners and other health professionals. In addition, information is available on the Department of Health's website and through the NHS Direct health helpline. But, clearly, more needs to be done. I repeat: the evidence that has been most

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carefully considered by the relevant expert committees reinforces the point that the MMR vaccine is tried and tested, and that it is the safest way to protect children. We must redouble our efforts to get that message across to the community as a whole.
Lord Walton of Detchant: My Lords, does the Minister agree that informed medical opinion across the world is satisfied that the risks of MMR inoculation are minuscule and, indeed, as many people are now advocating, that they are significantly less than those of multiple inoculations? Does he also agree that there has been some misinformed opinion in the public press suggesting that the inoculation of boys against rubella is unnecessary? Rubella is a very mild disorder, but it is very infectious. Boys so infected could easily pass the disease on to their sisters or mothers with the consequent risks of producing foetal malformations due to rubella contracted during pregnancy.
Lord Hunt of Kings Heath: My Lords, I very much agree with the noble Lord. Again, I should emphasise that the figures in relation to rubella are equally striking. The notifications in 1989 were 24,570, but that figure decreased to 1,653 in the year 2000. Not only has the MMR vaccination been considered by the relevant advisory committees in this country; many of the medical and health bodies in this country have also endorsed its use. It is used widely throughout the world. I am convinced that getting the message across to the public with the support of all the organisations suggested by the noble Lord will be effective in increasing the immunisation rates, which have fallen to a lowish level. We must do everything we can to increase them.
Lord Rea: My Lords, I speak as a one-time epidemiologist. Does my noble friend agree with me that the methodology of the study that linked autism and bowel disease to the MMR vaccination was deeply flawed, depending, as it did. on 12 self-selected cases only without adequate controls?
Lord Hunt of Kings Heath: My Lords, the various reports recently reviewed in the media have either been studied carefully by the Government's advisory committees and experts, or, in the case of a report published earlier this week, will be considered. Studies show that expert researches using the most sensitive molecular tests have been unable to find the measles virus in the bowel tissues of patients with bowel disease, which is one of the issues that has been raised. Aside from this, the key fact for parents is that studies looking directly at whether MMR causes either inflammatory bowel disease or autism have found no link.
Earl Howe: My Lords, is the Minister aware that the Official Opposition have repeatedly stated their full support for the MMR vaccine? However, should we not address the situation as we find it rather than as we would like it to be? As outbreaks of measles are now
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occurring, can the Minister tell the House what is the Government's message to those parents who, for their own reasons, have chosen to refuse MMR vaccinations for their children?
Lord Hunt of Kings Heath: My Lords, I must say that I find the noble Earl's comment about the Official Opposition's support for MMR to be surprising. That was not the impression that I gained from the statement made by Dr Fox yesterday. I take my hat off to the Opposition for the work that they carried out in the 1980s to introduce the MMR vaccine. As I said earlier, the noble Lord, Lord Skelmersdale, played a very important role in that introduction, which had a dramatic effect in reducing the incidence of these diseases in this country. The emphasis here must be on raising public confidence in MMR. We are committed to that end. I believe that the statements made today by the Chief Medical Officer and other medical organisations in this country will start the process. However, we need to do more; and we shall.
Baroness Northover: My Lords, is the Minister aware of how pleased I am to hear the House speak with one voice on this matter, unlike the exchanges yesterday in the other place? Does the noble Lord accept that some parents are confused and worried about whether the risk of having the triple vaccine is greater than the risk of not having it? Therefore, what does the noble Lord plan to do in the short term to bring the weight of the evidence to public attention, and will he draw parallels with the whooping cough outbreak in the 1980s? As for the longer term, does the Minister recognise that it is only by having transparency and openness in public health matters post-BSE, and those scandals, that he will maintain public confidence in the advice given on public health affairs?
Lord Hunt of Kings Heath: Yes, my Lords; I very much agree with the noble Baroness. As I mentioned earlier, information is made available to parents through the Department of Health's website and NHS Direct, as well as being available in local GP surgeries. Clearly, we cannot be complacent in the matter. We must redouble our efforts. In the past two days the Government have signalled their determination to do so.
The issue regarding whooping cough is apposite. Many noble Lords will recall the concerns raised in the 1970s and 1980s about the whooping cough vaccine, which were later shown to be unfounded. However, as a result of those concerns, parents were offered a choice of vaccines with, or without, the whooping cough component. Over 50 per cent of parents at that time opted for the vaccine without the whooping cough component. Many of their children caught the disease, thousands were admitted to hospital and more than 100 died. That must be a lesson to us all in relation to the current situation. We must not repeat that experience.
Baroness Hayman: My Lords, is there not a responsibility not only on the Government to be open

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and transparent but also on the media to end a culture of reporting science that has gone beyond an appropriate and legitimate challenge to orthodoxy to the point of elevating the maverick view and denigrating world-wide evidence and authoritative views? On the issue of individual choice, is it not the responsibility of government in the conext of a public health measure such as vaccination to consider not only the choice offered to individual parents who want to have a less effective measure for their children, but the effect on the children of other people who do not make the same choice and who have babies too young—the babies are, therefore, at risk—and children such as those with leukaemia who cannot be vaccinated?
Lord Hunt of Kings Heath: My Lords, I could not agree more with my noble friend. The campaigns in some newspapers for a single vaccine are highly irresponsible. The policy of having a single vaccine in place of MMR is untested. Single vaccines used in place of MMR increase the risk of a child getting the disease. The doctor who proposed it, Dr Wakefield, has also said that the interval between those jabs should be at least a year. In the case of single vaccines to cover mumps, rubella and measles, that would mean six jabs over a period of six years.
Anyone who has raised children will know that if we had that situation instead of two MMR jabs, the risk of children not completing the course would be great. During that period, people will not have the protection that MMR gives. It is abundantly clear that we should support MMR and do everything we can to get that information through to parents.

Business
Lord Carter: My Lords, immediately after the business statement and the First Reading of the Education Bill, my noble friend Lord Rooker will, with the leave of the House, repeat a Statement that is being made in another place on the nationality, asylum and immigration White Paper.
At a convenient moment after 7 p.m. my noble and learned friend Lord Falconer of Thoroton will, with the leave of the House, repeat a Statement that is being made in another place on London Underground and the modernisation.
Lord Elton: My Lords, we are accustomed to having Statements delayed by unforeseen events, but it appears that the events that delay this Statement are foreseen. Can the noble Lord tell the House what those circumstances are?
Lord Carter: My Lords, discussions are going on, and a further report is required. That means that the Statement cannot be made in the House of Commons before 7 p.m.

Education Bill
Brought from the Commons; read a first time, and to be printed.

Nationality, Immigration and Asylum White Paper
3.33 p.m.
The Minister of State, Home Office (Lord Rooker: My Lords, with the leave of the House, I shall now repeat a Statement being made by my right honourable friend the Home Secretary in another place. The Statement is as follows:
"With permission, I wish to make a Statement on nationality, immigration and asylum.
"Last October, I informed the House of the new strategic direction for this crucial area. Today, I am publishing a White Paper to be followed by legislation in this Session. Significant progress has already been made: the first induction centre was opened on 22nd January in Dover; registration cards were launched last week and are now being issued to new asylum seekers; we have launched the highly skilled migrant programme; new border security controls are in place, following my announcement of 19th September; and, as of last week, asylum seekers are no longer being held in prison.
"I can also confirm today that vouchers will be replaced by cash by the autumn, together with action against fraud and the development of a more robust, faster and efficient system.
"The White Paper takes forward our agenda by offering a holistic and comprehensive approach to nationality, managed migration and asylum. That recognises the interrelationship of each element in the system. No longer will we treat asylum seekers in isolation or fail to recognise that there must be alternative routes to entry into this country.
"Our policies must command trust, confidence and respect from the wider community. The British people demand coherence in policy and efficiency in administration.
"Our starting-point has been the development of a sense of belonging and community. Confidence in our identity and citizenship allows us to welcome those who come to the UK as refugees or legal migrants more readily.
"To give meaning and value to the acquisition of British nationality, I am confirming today that we will introduce a number of key reforms. There will be a new light-touch arrangement to ensure that those who take on nationality have the language skills and basic knowledge of our society needed to contribute fully. There will be ceremonies at which the confirmation of citizenship can be celebrated. We will modernise the oath of allegiance, to provide new wording to make clear the fundamental rights and duties of citizenship. It will be a citizenship pledge.
"The White Paper also sets out the routes by which men and women can work legitimately in this country. In today's global economy, that is crucial to our competitiveness and prosperity. My new proposals include the following: the development of

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routes for seasonal or short-term casual working; consultation on reform to the working holidaymakers scheme to make it less restrictive; and enabling students graduating in the UK to switch into the work permit scheme.
"The White Paper sets out the end-to-end revisions to the asylum system. The new process will track and support asylum seekers from induction, through reporting and accommodation, to removal or integration.
"Work has started on the new trial accommodation centres, which will be mandatory for those designated asylum seekers who are claiming public support. The centres will offer education, healthcare and legal and interpreting services. Opportunities for volunteering and other purposeful activities will also be available, as will appropriate language support. In the case of those refused asylum, secure removal centres will enable us to protect the integrity of the system through early removal.
"Without an agreed and legitimate route for asylum seekers to enter this country, it has been inevitable that men and women desperate to seek refuge would put their lives at risk. That is why I am announcing today that we will set up the new gateway for those seeking to settle in Britain. It will be operated under the auspices of the United Nations High Commissioner for Refugees. Legitimate refugees who come via the gateway will no longer have to attempt hazardous journeys across the Channel. That would be a major step in regularising legitimate entry alongside our managed economic migration programme. In addition, to secure a robust foundation on which we can build, I intend to undertake a full, comprehensive audit of existing asylum claimants. Long-standing cases will receive urgent attention.
"The 'White Paper also sets out substantial changes to the whole asylum appeals process. Far too many appeals and judicial reviews are designed to delay and frustrate removal. I am therefore announcing today that we will simplify the one-stop appeals process; set closure dates for appeal hearings to stop multiple adjournments; and make the immigration appeal tribunal a superior court of record. In addition, we will increase the capacity of the adjudication system by 50 per cent, to a total of 6,000 cases a month, during this year. We will expand the number of removal places to 4,000.
"I can also confirm that I intend to close Campsfield House. That outdated centre is no longer appropriate in the 21st century. The detention places will be transferred to the new high standard removal centres.
"My reforms will protect fundamental rights, stop abuse of the system and enable the more effective administration and processing of claims. Those working in the Immigration and Nationality Directorate will be able to do their job more effectively, and I expect both greater productivity and efficiency.
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"Let us be in no doubt. We need to reduce the pull factor by clamping down on both clandestine entry and illegal working. The Proceeds of Crime Bill will ensure that we can seize the assets of criminals involved in smuggling and trafficking people. In addition, the maximum penalty for those facilitating illegal entry will be raised to 14 years.
"I can also confirm that we will legislate to tackle trafficking for the purposes of sexual exploitation. This will be a stepping stone to more wide-ranging legislation dealing with sexual exploitation. In addition, we will introduce tougher border controls and step up action, together with our European and international partners.
"A high level steering group of business and trade union leaders is being established to take forward proposals to tackle illegal working; and as I announced on Tuesday, we intend to launch a consultation on entitlement cards to be published in the spring or early summer.
"Alongside those practices we will act against the worrying practice of fraudulent marriages. We will increase the probationary period from one to two years; we will consult on a new 'non-switching' provision to prevent people applying to remain in the United Kingdom on the basis of marriage after entering through a different category; we will encourage communities with a culture of arranged marriages to look to those already resident in the United Kingdom.
"Finally, I know that the rules on family visitor visas have been a cause of great concern to Members of this House. I have an open mind on how best to improve the system, not least for those seeking urgent entry on occasions such as bereavement. The Government would therefore welcome ideas on how best to provide guarantees or bonds. That might be undertaken not simply by individuals or families, but by the provision of a community bond. I recognise that we have to get this right and I am therefore encouraging positive suggestions on how best to proceed.
"Our future social cohesion, economic prosperity and integrity, depend on how well we rise to the global challenge of mass migration, communication and flight from persecution. We have a history of trade and migration that has brought us wealth and prosperity over the centuries. Nevertheless, building trust and confidence to secure the support of the British people is essential.
"By doing this we can create a country that is open to skills and enterprise, but not to exploitation. This is a Britain with a balanced approach to nationality and immigration; a country of which we can all be proud".
My Lords, that concludes the Statement.
3.41 p.m.
Lord Dixon-Smith: My Lords, the House is grateful to the Minister for repeating a Statement made by his right honourable friend in another place shortly after noon today. I thank the Minister also for the early

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arrival of a copy of the White Paper and the speedy arrival of an early copy of the Statement. They were particularly helpful. My first reaction on hearing that there was to be a Statement on this subject today was to regret that I had not paid sufficient attention to the contents of newspapers over the past two or three days, owing to some concentration on the police Bill. I am grateful that the Minister's help makes my task much easier.
In this matter we should be clear that we all have the same ambition; that is, to create a situation in regard to immigration and asylum where we can all have confidence that the integrity of the British community and citizenship is not under pressure. Regrettably, for the past few years that has not been the situation.
We welcome the proposals to explain British citizenship to migrants and to introduce some language teaching and teaching of the constitution, so that when we adopt these people into our country and they become citizens they know rather more about our ways. The ceremony of adoption will be much better than the arrival of a brown envelope in the post. That is a wholly welcome proposal.
Perhaps I can turn from the common ground to ask a number of questions. We have all had trouble with the Dublin convention of 1991, which governs the European Community's practice with regard to immigration and asylum. Can the Minister, when he responds, give us a little more information on what progress is being made in the negotiations with other members of the Community to try to re-establish that convention on a more practical footing in this modern world? It has changed considerably since the agreement was made a decade ago.
Also, can the Minister explain exactly what the "gateway" is to be that will operate under the auspices of the United Nations High Commission for Refugees? Is it expected to pick up all asylum seekers? I doubt it. Is it a virtual system which will operate through our diplomatic missions across the world? Is it something that we are hoping to establish on this side of the Channel, in which case we shall be shutting the stable door after the horse has entered? Or are we expecting to be able to establish something on the other side of the Channel, in which case we shall need good co-operation from the French? It will be interesting to hear exactly how the gateway is expected to work.
Another welcome announcement in the Statement was the consultation on entitlement cards. It will be interesting to know whether that will be consultation on a pilot scheme that is to operate with asylum seekers or whether it is aimed in the longer term at the possibility of it becoming a national scheme. That matter has exercised Members of this House on both sides for some considerable time. It will be useful to hear more about it in the Minister's response.
We welcome the moves to accommodate asylum seekers in a better and more controlled way. If law and language facilities are available as well, that will be all to the good. But what is not in this paper is the problem
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of illegal immigrants. We do not know how much illegal immigration takes place. We do not know how many illegal immigrants live in our community. Will the systems outlined by the Minister do anything to bring those numbers under control? We all have our thoughts on what the position is but none of us knows for sure.
Finally, we know that there is to be a Bill on this issue this Session. Will that Bill arrive in Parliament in the summer and in this House in the autumn? If so, we shall have a lot of work to do in a hurry. Or is the Bill in preparation and likely to arrive somewhat sooner? Those are relatively small questions but the answers will be enormously helpful to myself, my colleagues and the whole House.
3.48 p.m.
Lord Dholakia: My Lords, we on these Benches welcome the new holistic approach to the matters of immigration, asylum, nationality and citizenship. Too often in the past we have found that those issues have been used as political footballs rather than a constructive approach being taken. The Statement contains proposals which are, to an extent, a mixed bag. However, we shall approach them constructively. I am delighted that a trace of liberalism now seems to be filtering through the Conservative Party on this issue.
The Government are introducing a number of major concessions. We welcome the highly skilled migrant programme. But I warn the Government that, though generally it is a good idea, the proposal may lead to a dangerous brain drain from the countries which desperately require some of those people. We should be aware of that.
We also welcome the proposal that asylum seekers will no longer be held in prisons. Vouchers have now been replaced. Only a few days ago I put a question to the Minister asking whether there was a legal way in which an asylum seeker could enter this country. He gave me a very blunt answer—"No". I am delighted to see that he has given the matter some considerable thought and that there is now a gateway being created under the aegis of UNHCR. It is to be hoped that this will be a legal way in which persecuted people can claim their rightful place in a civilised society.
If we wish to command trust, confidence and respect from people in the wider community, it is right that they should be listened to. I trust that there will be ample consultation with them. I say this because in the past 10 years immigration/asylum legislation has been introduced on four separate occasions. At every stage we warned the Government about vouchers and prisons and about almost every issue that the Government are now discarding. If only they had listened to us during the late nights when we were dealing with the Committee stage of the Immigration and Asylum Bill.
There are a number of issues on which we need further information. What proportion of asylum seekers will be housed in the new accommodation

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centres and how many will be housed under the current dispersal arrangements? What importance is attached to overhauling the dispersal system?
I understand that there is a proposal in the document which refers to educating the children of asylum seekers in accommodation centres. This would not be right if education provisions are available in local schools. I hope the Minister can assure the House that we will put right our dispersal system before we do anything which may affect the education of these young people.
There is also the issue of improving the decision-making process. What plans do the Government have in this respect? It is a shame that it was only on a recount that we suddenly found there was a much larger backlog of asylum-seeking applications than first envisaged by the Home Office.
Can the levels of detention be kept in line with European averages? What hail safeguards will there be? The Government introduced statutory bail hearings under the 1999 Act, but they now give the impression that such hearings may be abolished. Will judicial review continue to be available? What about the resources required to deal with the backlog?
We welcome the new legitimate routes, but it would be helpful if the Minister could indicate the numbers the Government envisage will make use of them.
As to citizenship, it is right that there should be an oath of allegiance. But it should be a two-way process. The Government should establish very clearly the rights and duties of those who seek citizenship, but, equally, such people should be protected.
More importantly, we welcome the ways and means whereby people can communicate much more than they have been able to in the past. But will the resources be available? Would it not be better to look for solutions from within community structures? There are examples of supplementary education being provided by communities, and this could assist in the task.
Two proposals cause us concern. I hope that the Home Office will not act as a marriage bureau. It states that it will not allow the switching arrangement whereby people in this country seek a change of status by getting married here. It is not the Government's job to determine who is or is not rightly married. That would create a tremendous amount of problems within the community. Equally, there is evidence that people seek their partners from within their communities. Again, it is not for the Government to put this kind of diktat on minorities in this country.
3.54 p.m.
Lord Rooker: My Lords, I am grateful for the broad welcome that the noble Lords, Lord Dixon-Smith and Lord Dholakia, have given to the White Paper. I shall do my best to respond to some of their detailed points.
I cannot give an update of where we are on the Dublin convention negotiations. It is a matter for the EU and we need to establish a more cohesive system which is accepted across Europe. The intention, in
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theory, was a good idea—but it did not quite work out in practice and therefore we need to have further negotiations.
As to the gateway and the work of the UNHCR, the numbers entering under this scheme will be very modest to start with. I do not want to give the House the impression that we are talking about thousands of people. We envisage perhaps 500 in the first year, a number similar to those accepted by other EU member states. For example, last year the Netherlands settled 500, Denmark 500 and Sweden 1,800. The United States, of course, settled considerably more and Australia settled 8,000. We envisage a modest start.
The scheme will not affect the situation at Sangatte. That is an issue between ourselves and the French. The modest numbers we are talking about will not affect Sangatte. The system is designed to provide a gateway, which does not exist at present, for people in the trouble spots of the world where the UNHCR is involved.
The noble Lord, Lord Dixon-Smith, referred to the consultation on entitlement cards. I should make it absolutely clear that this has nothing to do with asylum seekers. The new asylum application registration card is, from last week, being issued to all new asylum seekers. All those currently inside the system will certainly have their cards by the autumn. That has nothing to do with the entitlement card; it is specific and wholly exclusive to asylum seekers. The three paragraphs in the White Paper which refer to the entitlement card are for general information.
A consultation paper will be published in the spring/ early summer. I cannot say how extensive it will be, but it will be extensive enough to say, "This is a bad idea. Do not touch it", or, "There are ways of doing it". In other words, it will not say, "Here is a scheme. What do you think about it?", or, "Here are two schemes. Which one do you want?". It will also say, "No scheme at all".
We need to put these paragraphs into the White Paper now because it will enable our officials to talk openly with industry. We cannot do this surreptitiously behind closed doors and then bounce out a consultation paper. That would not allow us to have proper discussions with industry. The use of technology is crucial in an exercise such as this. Therefore it will be spring or summer before such a paper is produced. I am sure that it will be extensively debated.
The noble Lord, Lord Dixon-Smith, asked about accommodation centres. At the moment, we have a plan to trial four centres. In fact we have only got a plan to trial four because that is all the money we have received from the Treasury to deal with the scheme. It is important because it will be a new system and we want to see how it works, if it works.
The four centres will have a total accommodation capacity of 3,000. If we use the spaces twice a year, we can put through only 6,000 people. That is less than 10 per cent of the inflow of new asylum seekers. We would

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expect to have an initial decision and the result of an appeal within six months, enabling us to use each space twice a year. That will make for a faster process.
There is reference in the White Paper to more work being carried out on border controls. New technology equipment is now in place at the borders. We are able to use some equipment in France. We have excellent co-operation from our French partners, both in juxtaposed controls and with the British staff—both immigration and others—on the other side of the tunnel.
As to the timing of the Bill, all I can say is that it is under preparation. That is not to say that we are preparing it in advance of the consultation on the White Paper. There is an excellent list at pages 106 and 107 of the White Paper where the issues for which we need to legislate and those for which we do not are separated out. That will be useful for Members of this House and the other place. It will enable them to see that the White Paper goes beyond matters for which we need to legislate. The Bill will be modest. Our hope is to introduce it in the other place by early April. It may not come to this House before the Summer Recess but will be dealt with in the spill-over period. I keep telling people that this House sits longer hours and has shorter recesses. After this year, they will certainly believe me. That is the rough timing that we have in mind. I cannot pre-empt the timing, but the work is going on.
There is a consultation period in relation to the White Paper; namely, up to 21st or 22nd March. The time is short, it is true, but our intention is to legislate this Session and not to give the constant excuse that parliamentary time is not available.
I am grateful for the comments of the noble Lord, Lord Dholakia. He said that White Paper is a mixed bag. It is. It is tough and tender. We make no apology for that. The title of the paper is Secure Borders, Safe Haven—indicating that we are not going to be "ripped off", but that this country is a safe haven, not "fortress Britain". That is the balance that we are seeking to strike.
The highly skilled migration programme started as recently as 28th January. Therefore, I have no idea how many people have applied. It is not our intention to raid the third world of skills. My colleagues in government would be up in arms had the programme been so designed. Only time will tell whether we have got the balance right in setting the requirements for people to join in. We shall know this time next year whether the programme has been a success, or whether it has been neutral in its effect.
We are genuinely open to consultation. This morning, I met almost a dozen NGOs and an issue was raised regarding ministers of religion—a point not mentioned in the White Paper. In reply to a particular question which I shall not repeat, I said: "Yes, take the opportunity of the consultation to raise that aspect if you wish". So nothing is excluded.
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I mentioned the percentage of asylum seekers in accommodation centres. To begin with, it would be less than 10 per cent. If the system works—if we are satisfied that it works and can demonstrate as much—our intention would be to run it for those who need support. It would be run under the national asylum support system and there would be more than four centres—possibly a dozen or 16—subject to the approximate size of each centre, the average housing about 750 people.
It is not our intention that people remain in a centre for more than six months. In other circumstances I could not defend that. If there are families there with children, we want them to receive education, but we are not talking about the long term. The best place for children to be educated is in mainstream schools. They would not be in the accommodation centres for more than six months. Therefore, after that time they would be in the dispersal system, subject to the decisions made, and the children would enter mainstream schools. We are in discussion with the Department for Education and Skills. There are also legal obligations concerning children, including the stipulation that such children should not be treated differently. That aspect is important.
The current backlog of claims is just over 40,000, which is considerably down. We carried out a manual count, as I announced to the House in September. It meant that we started 18 months ago with a bigger backlog than we had thought—probably close to 200,000.
Turning to bail safeguards, I was asked about these when I met the NGOs. We shall not proceed with Part 3 in total. There are two sections—the section numbers escape me; I believe they are 51 and 53—that we shall retain. The presumption always was that bail would be automatic. We are not preventing anyone applying for bail. That is not the intention. There will be an increase in removal capacity. By definition, if we are going to run the system, we need extensive removal capacity. It will increase from the current figure of 1,500 to 2,800 when the new centres currently in preparation come fully on stream—I refer to the five centres, including Campsfield. That capacity of 2,800 will be increased to 4,000. Campsfield will close some time next year. It is very small, even claustrophobic compared to Yarlswood and the other new centres. We can easily assimilate the Campsfield capacity in the new capacity. No one will be denied an application for bail. The position has changed since the 1999 Act.
The independent appeal tribunal will be converted to a superior court of record. Clearly, there can be appeals beyond that on points of law. But in respect of judicial review, we are seeking to remove delays from the system. Presently, there are in-built delays across the whole system. We want people to put in a good, robust, comprehensive claim for asylum, have it considered fairly and dealt with quickly; and if there is a need for an appeal, to have that dealt with as quickly as possible—and not to allow, at each step, more and more appeals with new information, exploited by the legal industry, to the disadvantage of asylum seekers.

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The noble Lord, Lord Dholakia, asked about the oath as it currently is, or the "pledge" as it will be known. It is set out in draft on page 111 of the White Paper. I freely admit that we have modelled it on the current Canadian oath. We have not invented anything new.
People who seek citizenship—British nationality—already swear an oath. The amount of ignorance outside is unbelievable. That already happens. But where does it take place? It takes place in a solicitor's back office. A form is filled in, it is sent off to Croydon, and the certificate comes back from Croydon. That is no way to become a British citizen. It almost sullies the process. We are seeking to have a pledge, using modern language, as can be seen from the draft. We seek to have that take place in a ceremony at a register office, possibly with members of the person's family, or with others who are seeking citizenship at the same time. The point of taking the pledge is the point at which the person will become a British citizen. The words are, "from this moment on". That language is not normally associated with this country. That is why we have looked at examples in Commonwealth countries. At present, an oath is taken in a solicitor's office, but the person is still not a British citizen. He or she still has to wait for the brown envelope to come back from Croydon. We want the process to mean something.
We also want the process to indicate that people are becoming part of the UK family—maintaining their own integrity, individuality and cultural identity, but having a basic knowledge of the language, a basic knowledge of the society and the ethics of the society that they are seeking to join. There is no compulsion to apply for nationality; that part is voluntary. The part that is not voluntary is having a knowledge of the English language. That is already included in the rules, but attention is not paid to it and it is not policed. Therefore, we want to create a process of which we can be proud, as can those who seek to join us in citizenship.
The question of resources is always difficult. There has been a massive increase in resources over the past couple of years. For example, we have doubled the number of staff in the Immigration and Nationality Directorate, there has been extra training and more decisions are being taken. We are seeking extra resources in regard to some of these issues in the spending review for which negotiations will take place shortly.
We need the extra resources for what may seem a minor point, but it is one to which I and my noble friend Lord Janner will pay particular attention. I refer to the issue of war criminals. I do not mean those from the last war but in the future. The issue remains. We cannot afford to be in the position of having modern war criminals ending up in this country who have lied in order to come here, and whose citizenship rights we can do nothing to remove. The amount of resources is modest, but we need to obtain them.
Finally, the noble Lord, Lord Dholakia, said that the Home Office should not be offering marriage guidance. No, it does not. As a government, we do not
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seek to tell people whom they should marry. But we do have the right to say where they should live. That is the difference. If marriage is used for the purpose of coming into the country and is not genuine—although all such marriages appear "genuine" because the ceremony is genuine—the amount of switching in the first three months in terms of visitors is phenomenal. We are not talking about a few hundred. It is literally tens of thousands. Then there is the issue of the probationary period. It is currently a year. We intend to change that to two years. It is less likely that a bogus marriage could survive for that long. That is not say that people are in bondage. Noble Lords laugh, but the point is important. The ceremony is genuine, but if the marriage is bogus it will not last for two years. Therefore, we can take the appropriate action. We also want the domestic violence concession to be more widely known in cases of hostage-taking or domestic violence. That is a serious issue.
Given that people will often talk only about the measures that they do not like, I should also point out that we are proposing a relaxation for people who have been well established in long-term relationships by removing the need for a probationary period in such cases.
4.10 p.m.
Lord Clinton-Davis: My Lords, will my noble friend give an assurance that the welfare of children of asylum seekers should be paramount? This is a matter of fundamental importance to the Refugee Council, which I had the honour of chairing some years ago. Secondly, will my noble friend think again about the important issue of bail safeguards? How many people are affected by it? Does the department have sufficient experience of the people who are applying for bail in this regard?
Lord Rooker: My Lords, the welfare of the children is paramount. If their parents took the same view rather than sending them here as unaccompanied asylum seekers, we would not have such a large number of them arriving. They go straight to the welfare services and are not covered by the Home Office catchment. This is a serious issue that involves many hundreds of children. Their welfare is paramount. We are very concerned with their health, with ensuring that they are not exploited and with t heir education and their future.
I am afraid that I am not carrying figures on bail safeguards. That part of the 1999 Act has not been introduced. We do not have the experience. It assumed automatic bail. We are increasing the detention and removal capacity. People are still free to apply for bail. One of my constituency cases—I can still call it that—-who has been in detention a long time applied successfully for bail last week. The system is working, but we do not think that the plan of automatic bail envisaged in the 1999 Act is justified. We shall remove that part of the Act, except for the two sections referred to in the White Paper.
Lord Quirk: My Lords, given that the mother-child relationship is primary in the transmission of language

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and culture, will any requirement to show competence in English extend also to dependants and families accompanying applicants for immigration?
Lord Rooker: My Lords, the noble Lord gives me an opportunity to put that issue to rest, I hope. The English language requirements have nothing to do with asylum seekers. People with genuine grounds for fleeing, such as a well-founded fear of persecution and torture, could arrive in this country not knowing a word of English other than "help" and be successfully accepted as refugees under the 1951 convention. Once they have received help, succour and sustenance, their main requirement may be to get back and help to knock out the tyrants who caused them to flee their country in the first place.
The language issue is relevant only to those seeking nationality and UK citizenship. Not every asylum seeker wants British nationality. Not every person coming to this country for work, for a holiday or under the work permit scheme wants nationality. For some people, seeking UK citizenship may involve giving up their own citizenship—although we would not force that because we are a dual nationality country. That is a big step. The requirement would apply to the main applicant and to spouses. There is a limit to what can be done with children. The requirement relates only to those seeking citizenship. The rules for citizenship cover residence and other issues. We are not talking about people who claim asylum being covered by that proposal.
Lord Renton: My Lords, although many of the questions that have been put to the Minister so far have dealt with asylum and asylum seekers, the White Paper also deals with nationality and immigration and mentions that we shall have legislation later this Session. In formulating that legislation, will the Government bear in mind that in the past 50 years we have already admitted several million people from various parts of the world and that as a result some of our urban areas now have a different ethnic composition from that which they used to have? Will they also bear in mind that we have problems of education, housing and employment? Unless we are rather careful, a great increase in immigration will increase those problems still further.
Having said that, I greatly welcome the oath of allegiance, to which the noble Lord referred, on page 111 of the White Paper. There are other potential factors that are in the national interest. However, in preparing the legislation, in the interests of the people already in this country, whatever their ethnic origins, the Government must ensure that we do not have large numbers of people still coming here.
Lord Rooker: My Lords, there is a balance to be struck. It is clear from how the chapters are set out. People are coming here anyway. One of the chapters deals with illegal working. That does not necessarily mean only people who are in the country illegally, although there is a correlation. We are seeking to open
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up legitimate, up-front, in-your-face employment routes to this country, particularly in certain areas in which we are short of people. One of the annexes to the White Paper sets out the massive shortages that we have in some of our industries. They are worried about a clampdown on illegal working because we may close down an industry by mistake. If we can have up-front, managed migration for economic reasons on a range of issues that are set out in the White Paper and then clamp down on the traffickers in humans by tightening up on the border controls, we can achieve a balance so that fewer people are encouraged or feel that they are forced into the hands of the traffickers in order to buy a ticket to come to the UK to work illegally, if that is what they were intending to do. The one may balance the other. I cannot prove that, but our intention is to adopt such a balanced approach.
The noble Lord was complimentary about the words of the pledge. There is nothing new about that. Those who seek citizenship today—other than those who have it by birth—already have to take an oath. We are not introducing an oath; we are modernising the oath and introducing a ceremony and the language requirements.
Lord Dubs: My Lords, I welcome the decision to close Campsfield House. Will my noble friend say a little more about the gateway idea, which seems interesting and imaginative on the face of it? My noble friend more or less suggested that it may be an experiment at one location. If it works at the first location, is the intention to extend the idea of gateways to further locations? Will they be in Europe and in other countries? Can he give an assurance that people there will be given the same rights of appeal as they would have within the UK?
Lord Rooker: My Lords, I cannot answer those questions on the gateway. My noble friend must not assume from what I said earlier that we are talking about one location. We may be, but we do not know yet. We are in discussion with the UNHCR on that. I said that to start with the programme would be extremely modest. I think that I gave a figure of about 500 a year. That is extremely modest. I do not know the way that applications will be made. We shall choose the people in those situations. We will be accused of cherry picking but I believe that we are entitled to make the choice. I cannot say about normal rights of appeal because we will offer places in conjunction, on a quota system. I am not sure that appeal rights would be justified.
I welcome the noble Lord's comment about Campsfield House, which does not meet the required standards. It is by far the smallest of the five removal centres, so we can easily absorb its capacity at the centres coming on stream and those we plan to build this year.
Lord Greaves: My Lords, the White Paper contains bad and good. I sometimes think that your Lordships' Chamber and the outside world are very different places. From the media today, one might conclude

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that this was a draconian set of new controls over immigration and, by extension, over ethnic minorities in this country. The publicity that the White Paper has received so far has done nothing but harm to community relations in respect of the impression given over the blame for riots and asylum problems.
I declare an interest as my wife is an ESOL teacher. What provision are the Government making for the considerable extension to ESOL classes that will be necessary if the proposal for English tests is adopted? Do the Government know the current length of the waiting list and the extent of the extra resources that will be put into ESOL?
Lord Rooker: My Lords, the plan is to provide English language classes through the further education system. We have some 450 excellent colleges providing services to millions of our fellow citizens. We are having discussions with the Department for Education. No one is denying that provision will have to be resourced. As we are imposing a requirement in respect of the English language, it is incumbent on the Government to provide the appropriate facilities and resources.
The noble Lord's opening remarks were just the kind that can inflame the situation. He is generating his own headlines. Nothing in the White Paper justifies his comments about the impression created outside. The opposite is true. If one wants to cherry pick to make a point, that is fine—but that is not the purpose of the White Paper.
Lord Janner of Braunstone: My Lords, does my noble friend agree that it has taken 30 years or more for my noble friend Lady Golding and the noble Lords, Lord Campbell of Croy and Lord Hunt of Wirral, and my noble friend the Minister to achieve the war crimes section of the White Paper? It has scarcely been mentioned but as a former war crimes investigator, I welcome those proposals. It is important to do what we can to stop Britain being regarded as the world's ultimate haven for war criminals. That was so in the past, with the result that thousands of Nazi war criminals—some in the Waffen SS—were admitted to this country. Few of them have been prosecuted. Today, people are coming here from all parts of the world without the sort of checks that the White Paper suggests will be imposed. Can my noble friend say, in light of that good news, how long he expects it will be before legislation on the lines of the White Paper is brought before the House and put into force?
Lord Rooker: My Lords, when I joined the Home Office, I had resigned nominally as honorary vice-president of the all-party war crimes group but I did not stop working. I do not claim any credit. The work on war criminals was continuing. There had been discussions and meetings between the former ministerial team and the all-party group. The issue needed picking up and dusting down but I assure my
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noble friend that the measures implied by the section on war crimes will be in the legislation being introduced in April.
Lord Alton of Liverpool: My Lords, in declaring an interest as director of the Foundation for Citizenship at Liverpool John Moores University, I strongly welcome the provisions in Chapter 2 concerning the teaching of citizenship. Can the Minister say more about how that teaching will be discharged and by whom? I welcome also the proposal in Annex B for an affirmation or oath of loyalty. The words used there are simple and clear and place proper emphasis on the teaching of duties and responsibilities. I welcome the Minister's comments about common shared values being celebrated in a proper ceremony.
As to Chapter 5, will the Minister give a firm commitment today to incorporating in whatever legislation is eventually laid before the House the definition of people trafficking from the Trafficking Protocol to the United Nations Convention on Transnational Organised Crime? Does the Minister agree that that would help to persuade countries where people trafficking routes have their origins of the international obligation to tackle trafficking and to assist the Government's proper objective of stamping it out?
Lord Rooker: My Lords, the White Paper is very much a strategy document and foreshadows several consultation papers on various issues. I do not know how many but probably half a dozen. We are not being prescriptive but genuinely want to consult. Our intention is to make use of our excellent further education colleges. One will not pop along to the Home Office for citizenship classes because it is not competent to deliver that quality of education. 'The further education system will be brought on stream and resourced.
I do not carry around the definition for which the noble Lord asked—and it is easy to locate. I assure the noble Lord that the definition of people trafficking, as opposed to that of smuggling, will be delineated in the legislation. That needs to be done because we shall be upping the sentences for anyone involved in people trafficking. We expect the courts to take a robust line, which is why we shall increase the maximum sentences.
Lord Brooke of Sutton Mandeville: My Lords, I counted a score of individual announcements in the Statement that I am delighted to welcome unreservedly. There has been disproportionate asylum-seeker pressure on individual local communities and their authorities. Does anything in the Statement promise alleviation in that regard?

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Pursuant to one of the questions put by the noble Lord, Lord Dholakia, will students from the third world automatically get transferred to the work permit scheme? Finally, does the Minister detect any recovery of self-confidence and morale in the Immigration Service? That is potentially a key factor in the success of the policies.
Lord Rooker: My Lords, the dispersal arrangements will continue. We are not abandoning dispersal away from London and the South East, although it is true that we have some special rules for young people. We plan to pilot four accommodation centres. Noble Lords will have seen the list of eight potential sites. Others will be added before a decision is made. Those sites are away from London and the South East. We do not want a return to the days when those areas were under pressure, so dispersal will continue. If, in due course, the system comprises exclusively accommodation centres, they will be away from areas that caused problems in the past. We want to even up the pressure on authorities, not place a greater burden on those with a disproportionate share at present.
I am not sure that student transfers to the work permit scheme will be automatic. The present discretionary policy allows individuals who cease to be students to opt into work. That has not been an upfront policy, so we do not know the scale of applications. We will get a better idea of the situation by including the policy in the immigration rules and making it known more publicly that we will operate that policy. As it will be possible to opt into work permit-type arrangements, that option probably will not be open to all comers. The decision will depend on various factors. Although the arrangements are not necessarily directed at students from the third world, neither are those students ruled out.
As for morale in the Immigration Service, I visit immigration ports of entry as often as I can. A couple of weeks ago, I spent five hours at one port of entry on a Friday, and five hours at another on a Saturday—at Gatwick and at Heathrow. The staff are high-quality people. Although many of them have joined only recently, because of the extra resources, they truly enjoy their work. They are also always telling me how to do things better. We have very good people, and we are doing what we can to ensure that their terms and conditions are good. We want to ensure that they are not overwhelmed because we have failed to provide resources for one part of the system so that it is a misery for them to come to work each day. We want it to be a joy to work each day.
We have done much dispersal within our own system in the immigration and nationality directorate to Liverpool and to Leeds. We are ensuring that staff have the type of conditions, such as the provision of crèches, that are available to people in the South East. We are working to ensure that conditions are good.

Export Control Bill
4.31 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Sainsbury of Turville.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Elton) in the Chair.]
Clause 1 [Export Controls]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 1:
Page 1, line 2, after "order" insert ", after consultation with the relevant industrial organisations,"
The noble Baroness said: I shall speak to Amendment No. 1 and my noble friend Lady Anelay will speak to Amendment No. 2 which is grouped with it.
In introducing this same amendment to the Committee of the other place, my honourable friend the Member for Aldershot described it as "very important". That view was clearly shared by the Committee, where no fewer than nine Members took part and for which the report covers 10 columns of the Official Report. Perhaps it was just the excitement of being the first debate in Committee on the Bill's detail. Having spent a large part of the Christmas Recess and the weeks since working on the Bill, any excitement that I may have felt has long since been subdued. However, I do agree about the importance of this deceptively short amendment.
The fact is that the Bill's core is not in the body of the Bill itself but in the secondary legislation. I make no apology for reminding your Lordships that we still do not know for certain what the contents of that secondary legislation will be. We have now had the advantage, which Members of the other place did not have at the Bill's early stages, of seeing what the Government call the "dummy orders"—a new phenomenon that I have not come across before, but which is somehow different from a draft order. However, dummy or draft, there is something out there for consultation with what the Government believe to be "interested parties".
Assuming, as I am prepared to do always, that the consultation is not a piece of window dressing, we cannot be sure whether the dummy orders will be identical to their final form. But that is not the end of the matter. As the subsection that we are considering—the very first subsection of the first clause of the Bill—makes clear, the Secretary of State will have a continuous power to make fresh orders that can add to or detract from the type of goods governed by the legislation. He is also seeking power to amend from time to time the schedule which contains the nub of the Bill by describing the purposes for which control orders can be made.
At the moment, the Government are not offering to make all these orders, which drastically alter the powers we are about to give them, subject to the affirmative resolution procedure, although that is something that we hope we will be able to alter later in Committee. On Second Reading in the other place, the Government made considerable play of the extent of the consultation that they had undertaken since publication of the White Paper and the draft Bill early in 2001. The Government are now consulting widely about the dummy orders.
Are we to assume that the Government's philosophy is that the moment Parliament has agreed to this Bill and the first batch of dummy orders, a line will be firmly drawn under the consultation process? Is it the Government's intention that the Secretary of State will then be free to make such further orders as he wishes without seeking the opinions of the defence industry, and subject only to such cursory parliamentary scrutiny as the parliamentary process allows for secondary legislation?
I have to point out that by accepting this amendment the Government will not be seriously circumscribing their powers. As my honourable friend told the Committee of the other place, what they would be doing is to consult those affected before they exercise the sweeping powers that they are taking, and advertising to industry and commerce that they desire partnership with them.
To answer a question that was asked in the other place, and before it is asked here, I should tell your Lorclships that my noble friend Lady Anelay is dealing with the matter of cultural objects. I should also mention that if, as I hope, the amendment is accepted, identical amendments will be needed to Clauses 2(1), 4(I) and 5(1). However, those can be dealt with as part of the tidying up process at a later stage. I beg to move.
Baroness Anelay of St Johns: As has been headlined by my noble friend Lady Miller, I shall speak to my Amendment No. 2 which has been grouped with her Amendment No. 1. It is a somewhat unusual procedure, hut it is unusual legislation. In another place, the matter of controls over cultural objects received scant regard, but we hope to redress that deficit in this House. The Bill is unusual also in that wide controls over the export of cultural objects would come within the Bill's remit. It feels as though culture is being piggybacked in a rather uncomfortable way on a Bill that, so far as the outside world is concerned, is mostly about military exports of a very serious nature.
As my noble friend said, last year, the Government conducted consultation when they issued their White Paper. However, although the Government sent the White Paper to an extensive list of cultural organisations, there was a lack of understanding among those organisations about the fact that their part in export controls was within the Bill's remit.
The purpose of Amendment No. 2 is to require the Government to consult the relevant cultural organisations before they impose export controls by means of an order. One would expect that export
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controls would usually be exercised in pursuance of the purposes of paragraphs 1, 2 or 8 of the schedule as currently drafted. Although I appreciate that amendments tabled this week by the Minister would substantially rewrite the schedule, at the moment, I have to deal with the schedule as currently drafted.
My noble friend Lady Miller raised an important issue in moving her amendment: there should he consultation with the relevant organisations before an order is laid before the House. It is important that there should be such a requirement in the Bill.
Clause 1 does of course cover far more than control of the export of military goods; it provides powers for the Secretary of State for Culture, Media and Sport to control the export of cultural objects. Those objects could be anything from paintings to sculptures to textiles or perhaps historic weaponry. I say perhaps because, like my noble friend, I appreciate that this enabling Bill leaves so much to the imagination.
On 18th October 2001, the Minister's honourable friend in another place, Mr Griffiths, said:
"Our commitment is to have full public consultation on draft secondary legislation, which will provide everyone wii h an interest the opportunity to consider and comment on new controls introduced under the Bill".—[Official Report, Commons Standing Committee B, 18/10/01; col. 139.]
If that is a government commitment, why not include it in the Bill? Moreover, referring to Mr Griffiths's words, what are the "new controls" that will affect the cultural export market? I found the Minister's use of the word "new" worrying in this particular context.
The language in the Explanatory Notes also rang some alarm bells. Paragraph 9 states that the DTI will use the powers of the Bill,
"to consolidate existing secondary legislation"—
that is fine—but paragraph 10 states,
"the DCMS will establish controls",
as if that is something new. I understand from the DCMS—I thank the members of the Bill team to whom I have spoken who have always assisted me as far as they can and with courtesy—that the intension is to embody in the Bill those controls which are currently the status quo. The problem is that it is difficult for the interested observer to know what the status quo is. Therefore, Amendment No. 2 and other amendments that I have tabled seek to give the Government an opportunity to explain how the export control system works now with regard to the export of objects of cultural interest and how it will work in the future.
Last March the then Minister responsible for the arts, Mr Howarth, made the point that Britain has the second largest art market in the world, valued at around £4.5 billion in 1999, of which the antiquities market alone generated £15 million. Can the Minister give us more up-to-date figures? If not, does he agree in any event that our art market is vibrant, makes a significant contribution to the UK economy and,

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therefore, should be consulted before orders are laid which could, if we are not careful, impose damaging controls on its legitimate operation?
Lord Razzall: I make a straightforward point. It is not for me to determine whether or not the Government wish to extend the consultation on the secondary legislation. However, if they are minded to do so, it is important to recognise that it is not just relevant industrial organisations which are interested in the Bill. The attendance in the Chamber today and the contents of all our mailbags indicate considerable interest among all kinds of people, ranging from the Archbishop of Canterbury through to the relevant NGOs, let alone the other 63 bishops, in both the primary legislation and any secondary legislation that flows from it. Therefore, if the Government are minded to accept the noble Baroness's amendment, I trust that the consultation will not be limited to relevant industrial organisations. I do not wish to be contentious vis-à-vis the other opposition party in this Chamber but I believe that all its amendments tend to consider matters primarily from the point of view of the armaments industry without recognising necessarily that other interests are concerned about the Bill and are represented in the Chamber.
Lord Judd: Before the Minister replies I pick up the point made by the noble Lord, Lord Razzall. At the beginning of our proceedings I should make very plain that I am closely involved in the work of Saferworld as honorary senior fellow. I was involved with that body professionally until recently. That should be known to the Committee because obviously that work considerably informs the contributions which I hope to make to the discussion.
Following what the noble Lord, Lord Razzall, said, I do not follow the logic of the amendment. It seems to me that if there is to be consultation it should be recognised not just that there are many NGOs in this country and other bodies, Churches and so on, which may have a view, but also that there are organisations and NGOs with considerable knowledge of the situation in the country concerned whose insight and in-depth knowledge may be indispensable at that juncture. The effect of these amendments is exclusive rather than inclusive and that is unfortunate.
However, I also accept from what the noble Lord, Lord Razzall, said that if one were really to open up the discussion to everyone who could conceivably have an interest, it might be a difficult situation for the Government to handle. I imagine that that may well be the thrust of their case.
4.45 p.m.
Lord Brooke of Sutton Mandeville: I support my noble friend Lady Anelay on Amendment No. 2. I declare an immediate unremunerated interest as the president of the British Antique Dealers' Association and also the British Art Market Federation. It is in that context that I want to say a few words. The British Art Market Federation is composed of about 15 different
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individual parts of the art market which were brought together at the invitation of the previous government in 1996 so that the art market could speak with a single voice. The art market has been under threat. My noble friend mentioned the size of that market. I refer to measures emanating from the European Union in Brussels and the co-operation and quality of consultation that have existed between the art market and the Government during the past five years since the federation was created. The good intentions of the Government impressed the trade and influenced its efforts to fight on the Government's behalf. Therefore, I strongly reinforce what has been said. I hope that that spirit can be maintained as regards the measures proposed in the Bill.
Lord Phillips of Sudbury: I support Amendment No. 2. I believe that there is a black hole in the schedule to the Bill. Where one is dealing with control orders in respect of arms there is a long table to guide the Minister in bringing forward an order under one of the first three clauses of the Bill. However, as regards objects of cultural interest, there is absolutely no guidance at all. I endorse the remarks of the proposer of the amendment. It seems entirely reasonable that an important part of our economy should have some clear purpose in the real meaning of that word incorporated onto the face of the Bill.
Lord Sainsbury of Turville: I wish to speak to Amendments Nos. 1 and 2 together. I say right at the start that the export of cultural objects is a matter of great importance to us. If it does not, in the course of the debate, receive as much attention as the export of military equipment, that is not because we do not think that it is important but simply because it does not produce quite so much interest and excitement when considering the Bill. I am happy to say right at the beginning that we think that a vibrant market in such items is extremely important. That does not appear in great detail in the schedule because there is not a great area of debate—clearly, there can be some debate—as regards what comprises a cultural object, whereas, as the Committee knows, there is considerable debate as regards what objects comprise military equipment.
As regards the two amendments—
Lord Phillips of Sudbury: I am most grateful to the Minister for giving way. The issue is not the definition of a cultural object so much as the purpose for which a prohibition can be imposed under the Bill.
Lord Sainsbury of Turville: This has been an area of some confusion. The schedule defines goods which can be exported. It is unfortunate that it was originally entitled "Purposes". That led to much debate. The noble Lord will see that we have tabled amendments to amend the wording to that of goods to be controlled.
Lord Renfrew of Kaimsthorn: I do not want to prolong the debate. However, does the Minister recall that for many years one of the reasons that successive governments gave for not introducing the 1970

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UNESCO convention relating to the illicit traffic in cultural goods was the difficulty in defining precisely what cultural goods would be included under the UNESCO convention? I believe that that was resolved only when the European Community regulation dealing with a similar issue was introduced. Does not the Minister feel that he is rather over-simplifying what may be quite a complex matter?
Lord Sainsbury of Turville: I do not think that I can comment on the excuses previous governments have given for not introducing legislation or conventions. So far as I am aware, there has not been a great debate on the matter with regard to the Bill we are discussing. I say to the noble Baroness that there are no new controls for cultural objects contemplated. The dummy draft order prepared by the DCMS reflects simply the current controls under the Export of Goods (Control) Order 1992. There are no new issues so far as that is concerned.
I turn to the effect of the amendments. They would impose a requirement on the Government to carry out consultations with relevant industrial or cultural organisations before making export control orders under Clause 1. The Government believe that the amendments are unnecessary. I hesitate to use the word "unnecessary" as I know that the noble Baroness does not like that term. However, we feel that they are unnecessary and also have some unfortunate consequences.
As noble Lords will know, we plan a full public consultation in the spring on the intended controls to be set out in the draft orders to be made on implementation of the Bill's powers. We see this process as one that can helpfully inform all interested organisations about the new controls and also enable us to learn more about the concerns that they may have. This will follow extensive consultation that has already taken place on the draft Bill and before that on the White Paper on Strategic Export Controls, with each of those consultations eliciting responses from a number of organisations, including industrial and cultural ones. For example, the Department for Culture, Media and Sport has consulted the Advisory Council on the Export of Works of Art which represents a wide range of views from the arts and antiquities trade as well as museums and galleries, and which is the body normally consulted by the DCMS on matters relating to export controls on cultural objects.
In addition to formal public consultations, the Government have also held meetings with various interested organisations to explain our thinking about the new controls. I take the point that it is not simply a question of consultation with industrial organisations. The NGOs have a great interest in and knowledge of this subject as will become clear in this debate. They need to be, and I hope have been, consulted properly.
The amendments could have some unfortunate consequences. Export controls may need to be implemented without delay to meet our obligations to international bodies. A requirement to consult every time an amendment order was made would prevent our implementing such obligations quickly.
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In addition, as drafted the amendments would require consultations with industrial organisations about controls related to objects of cultural interest and consultations with cultural organisations in relation to strategic exports, which would not be appropriate. It is not a substantive point; we could correct it in the drafting. However, the speed of implementation is an important issue. For those reasons I invite the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: I thank the Minister for his response which I shall read carefully. However, before withdrawing the amendment, perhaps I may make one comment on behalf of my noble friend. I was interested in the Minister's comment that the issue of culture does not raise the same excitement. The subject was not mentioned in another place. I pay tribute to my noble friend for alerting the House to this important issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 3:
Page 1, line 3, at end insert ", subject to the provisions of paragraph 8 of the Schedule"
The noble Baroness said: In moving the amendment, I shall speak also to Amendment No. 82, grouped with it.
The purpose of the amendment is to put on the face of the Bill the provisions of the schedule which appear in the dummy cultural order published by the Government. My intention is to pose a fundamental question. How do and how should I he Government reach a judgment about which cultural items should or should not be granted an export licence? What processes of evaluation do the Government follow in making that decision? The dummy order states that all objects are prohibited from being exported unless they are licensed by the Secretary of State unless they fall into the categories listed in the schedule to the dummy order. It becomes somewhat tortuous.
Amendment No. 82 simply puts the categories listed in the dummy order on the face of the Bill. It is a probing amendment to elicit information from the Government.
In response to Amendment No. 2 the Minister said that no new issues are intended to be raised within the remit of the schedule to the dummy order. My question relates not only to the content of the schedule but also asks the Government why they have continued with the existing rules. I understand that they arise from the Export of Goods (Control) Order 1992. It has been around for a while. Why are we at that stage? Did the Government consider adopting different definitions?
Have the Government considered adding to subsections (2) and (3) the category of "child"; or is a child's property covered in some other way? Would "child" fall within category four on the basis that a

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child's property is that of his or her parents? I am not a lawyer, as is the noble Lord, Lord Phillips of Sudbury. I ask that question simply for information.
The Government have stated that they will consult on the dummy order when it becomes a draft statutory instrument. The Minister's responses today are therefore important because they will inform that consultation process. Can the Minister confirm today that the format currently in the dummy order will not be affected by the government Amendment No. 81 to paragraph 8 of the schedule, tabled this week by the Government. The Government's new amendment removes the reference in paragraph 8 to secondary legislation. What is the significance of that? I beg to move.
Lord Renfrew of Kaimsthorn: The noble Baroness's amendment is, I think, regarded as a probing amendment. I am a little uncertain; I hope that the Minister will be able to explain the position to me. Such provisions as we see here do not offer the protection which currently exists for national treasures of recent production. I refer to paintings, drawings or manuscripts produced in the past 50 years. I understand that under the Waverley criteria the reviewing committee on works of art would be able to recommend to the Secretary of State that a temporary ban be imposed on the export of such works.
Let us imagine that the working drawings by Antony Gormley, our distinguished contemporary artist, of The Angel of the North had been sold and it was suggested that they might be exported. It would be a matter of concern. The reviewing committee might well wish to recommend that the Secretary of State impose a temporary ban. I have the impression that such an issue has not been contemplated here. I should like the Minister's assurance that the current provisions restricting the immediate import of national treasures of recent production could apply equally to exports. The scientific manuscripts of Crick and Watson would fall within this category.
I understand that they can currently be protected but I have the impression that there is a risk that that might not continue. I should like the Minister's assurance that I am in error on that point.
Lord Hylton: When replying, perhaps the Minister will say something about stolen and looted cultural goods. We all know that the major auction houses and the more reputable and bona fide dealers do their level best to prevent stolen and looted items being traded. That is obviously the right place to stop such trade if possible. Nevertheless, in recent years there have been a number of court cases where the provenance and origin of sometimes valuable items have been called into question. If the preliminary trade safeguards fail, could there be circumstances in which the Government would prohibit the export of such items?
5 p.m.
Lord Davies of Oldham: In responding to the amendment moved by the noble Baroness, I am in
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danger of repeating a little of what my noble friend has already said in reply to Amendment No. 1, which was moved a few moments ago. The noble Baroness, Lady Miller, will have already gathered that we can clarify one point, which is that from time to time we shall be referring to a dummy draft order to cover both concepts that she suggested might be a divisive issue for the Government. "Dummy draft order" is a phrase that we shall use about the Government's intentions on the orders referred to in the Bill.
The Government believe that Amendment No. 3 is unnecessary because the enabling power under Clause 1(1) applies to cultural objects as it does to the export of strategic goods. The Government have published a dummy draft order covering export controls for cultural objects. It is not intended, as my noble friend said a few moments ago, to change substantially the existing export control regime for cultural objects and the dummy draft order largely reflects the provisions contained in the Export of Goods (Control) Order 1992. The noble Lord, Lord Renfrew, suggested that that order might not be the be-all and end-all of resolving such issues.
Of course, we recognise that there are aspects of that legislation that require further consideration. For example, the current definition of cultural objects in the order does not include fossils. To date the Government have been unable to find a definition of fossils that is acceptable to those with an interest in palaeontology matters. Work continues on finding a suitable definition, but until that work is completed, it will be difficult for us to make progress.
However, the term "objects of cultural interest" in the Bill was drafted in sufficiently wide terms to include objects of historical or scientific interest, so that when an acceptable definition of fossils does eventually emerge, they can be brought within the order-making powers of the Bill and can be utilised to amend the current definition of cultural objects in the dummy draft order. The Government do not consider that the Bill is an appropriate vehicle for defining cultural objects. Such detail should be set out in an order under the Bill.
An unfortunate consequence of Amendment No. 3 is that it introduces an ambiguity as to how the controls under the Bill are to operate and whether they cover strategic goods. The key point is that the Bill will provide the powers necessary to control the export of objects of cultural interest and strategic goods. Those powers will be exercised by means of separate orders under subsection (I), subject to parliamentary approval as provided for in Clause 12(5). At the very least it would be confusing to link the separate orders made under Clause 1(1) for the two distinct categories in the Bill. The considerations that apply to the making of orders on objects of cultural interest are self-evidently different from those that apply to the making of orders on strategic goods, and it is sensible to keep them distinct.
The effect of Amendment No. 82, to which the noble Baroness, Lady Anelay, spoke, is to define the cultural objects that will be subject to export controls and those

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that are excepted from such controls. We believe that the amendment is unnecessary. I have already said that the Government do not intend to make a substantial change to the export control regime applicable to cultural objects. The Bill provides the enabling power in Clauses 1 and 6 for the order setting out the licensing regime for cultural objects. The dummy draft order largely reflects the provisions contained in the Export of Goods (Control) Order 1992. The amendment to which the noble Baroness spoke is contained in the current 1992 order and in the dummy order. The order is the appropriate place for defining the detail of the cultural objects that will be subject to the export controls.
I am grateful to the noble Baroness for raising these issues. I pay tribute to the fact that culture is on our agenda. Not for the first time, it may be thought, that aspersions have been cast on the other place, but I am sure that it is because of the exigencies of time rather than interest in the subject on the part of my honourable friends at the other end of the Corridor. The Bill has given us the opportunity to explain the general application of export controls for cultural objects, and I hope that the noble Baroness will withdraw the amendment.
Baroness Anelay of St Johns: I thank Members of the Committee who have taken part in this short debate on the matter of how cultural objects are defined. I thank my noble friend Lord Renfrew, in particular, for raising the issue of what happens to cultural objects that are of less than 50 years' creation as it has elicited from the Government a careful explanation that the dummy order that we currently see will not necessarily be the order that the Cully grown baby will suck when the consultation paper is produced. We are reminded of the dangers of passing enabling legislation when we have been unable to get to grips with the full detail of what the Government are trying to achieve, even when we may fully agree with the Government's objectives with regard to cultural objects.
I was particularly intrigued by the Minister's description of the difficulty in defining fossils. Quietly, as ever, my noble friend, my Whip, Lord Luke, came to the Government's aid. His suggestion is quite easy in that it is anything over 50 years old. I thank him very much; I have now become a fossil. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 4:
Page 1, line 6, at end insert "and may mean the prohibition or regulation of their loan to a person, company or institution located outside the United Kingdom"
The noble Baroness said: The purpose of the amendment is to examine the meaning of the word "export" within the operation of the Bill with regard to cultural objects. It is a probing amendment to ask the Government how the Bill will cover the situation when a person or an institution such as a museum decides to lend an article to a person overseas or to an overseas
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museum. Will the Government's policy on the granting of export licences vary according to whether the loan is made by either an individual or a museum? Or, is the policy approach the same regardless of who the lender may be? Will their policy about granting an export licence in such a circumstance be different if the loan is on a short-term or a long-term basis? Does the Department for Culture, Media and Sport operate a definition of short term and long term?
Will the decision-making process of the DCMS be influenced by the fact that the loan involves a payment to the person or body lending the item? Does the question of access to the cultural object in its new place have relevance? For example, will the exhibition of the item be open to the public in general or only to invited guests?
Two examples come to mind. The first is with regard to the Royal Armouries. I note that a Written Answer on this subject from the noble Baroness, Lady Blackstone, to the noble Lord, Lord Freyberg, has been published today. I tabled Questions for Written Answer in December, following a newspaper report that the Royal Armouries would be asking the Government's permission to make a long-term loan of a number of items to an institution in America. It was said in the press that the loan would be made in exchange for payment and that it would, in effect, mean the permanent removal of the objects from this country. It is a potentially controversial issue that could have widespread ramifications throughout the museums world.
The wording of my Question was also prompted by the Written Answer made by the noble Baroness, Lady Blackstone, to the noble Lord, Lord Freyberg, on 4th December when she said that she had been consulted about the Royal Armouries plans for the long-term loan of items from the Royal Armouries under Section 21 of the National Heritage Act 1983 in exchange for payments. It was the Government's use of the word "payments" that may have led to the difficulty. The noble Baroness went on to say that the amount of money that the Royal Armouries would receive in respect of the loan had yet to be determined.
Subsequently I had a meeting with the Master of the Royal Armouries, Mr Guy Wilson, and I am now aware that the RA believes that the wording of the Government's Written Answer may, however unintentionally—I accept that it may be completely unintentional—have given a misleading picture of the financial arrangements that are intended to underpin any loan that may take place to the Owsley Brown Frazier Historical Arms Museum in Louisville, Kentucky.
As the Minister will be aware, the proposal is to create a Royal Armouries exhibition platform within a new museum dedicated to fostering greater understanding of the subject of arms and armour. The belief is that success in that project will help to fulfil a key aspect of that museum's mission statement, which is, "to promote in the United Kingdom and world-wide the knowledge and appreciation of arms and armour.
It also wishes to take forward the call for the internationalisation of museums.
As I understand it—I return to the moot point of payments—the Royal Armouries would not receive payments in the commonly understood meaning of the word; in other words, that would not involve hire, rent or profit. It says that the exhibition will be funded on a strict cost-recovery basis under the terms of its existing loan policy. I understand that that reflects the current export licence arrangements operated by the Government, which limit loans to three years.
In addition to that, I am told, an agreement is being drafted that would enable the Royal Armouries to develop a membership and retail business based in Kentucky. It says that it is anticipated that that will increase self-reliance and lead to the improvement of the services that the Royal Armouries currently provides in the UK. Can the Minister say whether that is indeed his understanding of the proposal? Does that kind of arrangement still fall within the remit of the Bill?
My second example is, of course, that of the Elgin Marbles. I have already said to the Minister that I could not resist raising that issue today. The Minister will be aware that there is a coalition of Members in another place who want the Elgin Marbles to be sent to Greece for the period of the Olympic Games. Indeed, on Tuesday of this week, the Minister's honourable friend in another place, Mr Edward O'Hara, introduced a Bill that raises the whole profile of the Elgin Marbles yet again. It also raises questions about the powers of trustees in the care and control of their exhibits.
Could the powers conferred on the Government by the Export Control Bill be used to allow that loan to be made or pressure to be put on the British Museum by the Government to make the loan? Will the Government today give an assurance that they will not put such pressure on the British Museum and that they will not agree to the loan of the Elgin Marbles to Greece if it were legally possible for that loan to be made?
The robust stance taken by Dr Robert Anderson, the director of the British Museum, is most welcome. Members of the Committee will have seen his article in The Times on Tuesday, 15th January. He wrote:
"The first responsibility of the museum is … to keep the objects safe for present and future generations".
He pointed out that in this particular case there is a legal limit on the powers of trustees. They cannot dispose of the items and they cannot lend them where there is no guarantee of those objects being returned.
The British Museum has been robust. Can the Government be equally robust? Have they received a request from the Greek Government for the loan of the Elgin Marbles during the Olympics? If not, will they undertake to reject it out of hand if such a request is made? Do they agree with me that the trustees of cultural institutions are normally in the best position to determine whether items held under their guardianship should or should not be exported, and
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that the Government should not interfere in that process unless it is clear that important issues of national interest are raised? I beg to move.
Lord Phillips of Sudbury: The amendment is specifically drafted to cover cultural goods but the point that it raises covers all goods, including arms. When the Minister replies, would he be so kind as to tell the House whether the word "exportation" in subsection (2), which would be altered by the amendment, means the same as the word "removal" in subsection (6)? I hope that it does. If it does not, I suspect that we may need to consider the amendment much more carefully. I hope that he will tell the Committee that exportation means "removal on any terms", whether that involves loan, licence, free use or whatever else. If it does not mean that, the ways round arms control restrictions will be very wide. There are tricks that those who are determined to play them can get up to; they include not selling goods but giving them on free loan or through another arrangement. That is as relevant to arms as to cultural objects.
5.15 p.m.
Lord Brooke of Sutton Mandeville: I rise to add a curious historical footnote to the speech of my noble friend Lady Anelay. I attended the EU cultural council when it was introducing the directive about legitimate and illegitimate exports of works of art from one EU country to another. It so happened—I believe that I was the only person who noticed this—that the threshold for that legislation was set at such a level that the Elgin Marbles were precisely on its cusp and would not have been affected by the provisions. I acknowledge that there has been massive inflation between 1816 and the 1990s, but it was a very curious coincidence that that should have been so. I have to say that I did not have the moral courage to tell Melina Mercouri, who was at that stage the Greek cultural Minister, of the nature of the coincidence.
Lord Davies of Oldham: I believe in dealing with easy matters first. The easy matter is to tell the noble Lord, Lord Phillips of Sudbury, that exportation means "removal from this country". I hope that that assures him. I say that because I am briefed to respond as accurately and effectively as I can on matters cultural, and I noticed that he brought in the issue of the exportation of arms. My noble friend Lord Bach largely deals with that, and I find myself somewhat ill-equipped to address that point. I assure him that the question that he raised is answered in the terms that I have given.
The Government wish the noble Baroness, Lady Anelay, to withdraw the amendment, although we value the opportunity it gives us to address some of the key issues—the cultural dimensions—of the Bill. The effect of the amendment would be to introduce a further prohibition or regulation to the export control powers in Clause 1 in respect of the loan of goods covered by the Bill to a person, company or institution outside the United Kingdom. The Government believe that the amendment is unnecessary because the power

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to prohibit and regulate exports in Clause 1 certainly includes the power to provide for temporary export licences where, for example, cultural objects are loaned either by museums or private individuals to go on exhibition in foreign countries.
As is currently the case, the Government will issue a number of open licences without the need to obtain an individual export licence from the Department for Culture, Media and Sport. The two types of open licence currently in operation are the open general export licence, or OGEL, and the open individual export licence, or OIEL. The OGEL permits the export for up to three months of some common temporary exports and the re-export of some common temporary imports. An OIEL that is granted to a named individual, company or institution permits the temporary export of specified objects (for up to one year or, in some cases, two years) that are owned by them or in their care. In cases that are not covered by those two categories, an individual may apply for a temporary export for the loan of an item abroad. Such a licence is normally granted on condition that the object be returned by a specified date.
We are accordingly in a position to assure the noble Baroness that the order-making powers do extend to the loan of cultural objects. That is why the amendment is unnecessary.
The noble Baroness took the opportunity to raise two specific areas of considerable national interest. I believe that we all delight in the fact that the Royal Armouries has shown the enterprise to become involved in possible development in the United States with regard to its exhibits. I shall try to deal with the specific points raised by the noble Baroness in relation to the Royal Armouries in the order in which she raised them.
The Government's policy on the granting of an export licence does not vary according to whether the loan is made by an individual or by a museum. The granting of a licence is not based on whether the loan is short-term or long-term, and the DCMS does not define the length of term during which an object may be loaned. In the case of loans made by the national museums, that is a matter for the trustees of those institutions. The granting of an export licence is not in any way influenced by whether the loan involves a payment to the body which lends the item. Access is one factor that will be taken into account by the trustees in making their decision on a potential loan.
The noble Baroness referred to the answer given by my noble friend Lady Blackstone to the noble Lord, Lord Freyburg, just before Christmas. I seek to emphasise that the answer was not misleading. The Royal Armouries have informed the Government that the Owsley Brown Frazier Historical Arms Museum is prepared to fund both the capital and operating costs of the project in perpetuity. Therefore, the loan will take place on the basis that the full capital and operating costs of the project will be paid for by the Frazier Arms Museum. The Armouries aim to use the presence of such a loan in the United States to generate fund-raising revenue, at no expense to the taxpayer,
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through sponsorship, membership programmes and retailing. Therefore, the only relevance to this Bill is the granting of a temporary export licence for the loan.
The noble Baroness also referred to the Elgin Marbles. I see in my briefing notes that in brackets they are also referred to as the "Parthenon Sculptures". I shall refer to them as that. In the case of the British Museum, the trustees are similarly bound by their governing legislation—that is, the British Museum Act 1963. That legislation prohibits any de-accessioning of items within their collection, except in very restricted circumstances. But it does permit the lending of objects within the collection for public exhibition, subject to their condition and having regard, inter alia, to any risks to which the items are likely to be exposed. It is for the trustees of the British Museum to decide whether the Parthenon Sculptures, or Elgin Marbles, are offered on loan anywhere else. It is not a matter for the Government. This is certainly a decision that will be taken by trustees, and I can assure the noble Baroness that there is no question of pressure being applied.
Lord Burnham: Before the noble Lord sits down, does he realise that there was an anomaly in what he said? He referred to the funding of the armoury in perpetuity by the Americans but, on the other hand, he stated that the loan was for a specified and limited period, which is what is contained in the Bill.
Lord Davies of Oldham: I understand that the concept of "in perpetuity" signifies that the period of the loan is the period during which the Americans will be responsible for paying the costs. That is the perpetuity.
Baroness Anelay of St Johns: I thank my noble friend Lord Burnham for his late intervention. I shall want to consider that matter a little more carefully. I was certainly under the impression that a three-year licence commonly applied in cases such as that pertaining to the Royal Armouries. The matter of -in perpetuity" raises another issue which I shall need to consider further between now and Report.
I was grateful to the noble Lord, Lord Phillips of Sudbury, for obtaining from the Government the very clear explanation that removal on any terms is the rule that governs whether or not the Government impose export controls. I believe that that is a reassurance to us all.
I was also grateful to the Minister for clearly putting on the record today in response to my amendment the matter of open licences and how the two categories of those licences will operate. I am of course aware that there were references to that matter in the consultation document. But it was most helpful to have the issue explained so clearly today. The Minister also explained the processes that are followed in respect of decision-making in relation to loans.
I am grateful, too, for the Government's clarification of their position in relation to the Royal Armouries and, indeed, the Elgin Marbles. I am relieved to hear the Government state so clearly that it is a matter for the trustees alone to make that decision.

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My noble friend Lord Brooke raised an interesting historical footnote with regard to the Elgin Marbles. I hope that we now have politicians who are as discreet in their comments as he has been and that consequently the Elgin Marbles will remain in this country "in perpetuity", which I believe is the right phrase to use today. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 5:
Page 1, line 17, at end insert "and whether or not they form the whole or part of an object of cultural interest".
The noble Baroness said: Again, this is a probing amendment and, on this occasion, it is to ask the Government whether they consider that vehicles, vessels and aircraft of an historical nature could fall within this category. I put down this amendment long before the Government's drastic redrafting of the schedule by the amendments which they tabled this week.
Quite simply, the question is: are those objects covered by this clause or are they covered only by the order-making power in paragraph 8 of the schedule as currently drafted? I am aware that the chassis of a De Lorean car—or perhaps parts of Concorde—could be considered to be an item of cultural interest now or in the future. Do they fall within this category or do they come under some other type of heading? Would they be governed by the rules in the dummy cultural order or not?
If not, that would of course bring cultural historical objects which are less than 50 years old within export control. That would address some of the issues raised earlier by my noble friend Lord Renfrew. Certainly the impression that I get from the amendments tabled by the Government this week is that they intend that items under 50 years old should be covered. From the Minister's earlier answer, I anticipate that we should be able to obtain that reassurance. I beg to move.
Lord Renfrew of Kaimsthorn: I rise to support the amendment moved by my noble friend. In doing so, I want to expand a little on the general issue of the powers of the Secretary of State to impose export controls in relation to the removal from the United Kingdom of objects of cultural interest, or cultural goods, including archaeological materials.
I also want to ask the noble Lord some questions about the existing working of the current system in that regard. It is well known that for many years the Reviewing Committee on the Export of Works of Art has worked consistently and successfully to retain in the United Kingdom, with the application of the Waverley criteria, works of art of outstanding national importance.
However, as I pointed out in the debate in this House on the reviewing committee's last annual report, members of that committee have not turned their minds to another issue which might be considered
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part of the wider remit; namely, the prevention of the export from this country of cultural goods originating in other European Community states and covered by the legislation in such states protecting national treasures, despite the obligation to do so under United Kingdom law in accordance with the relevant EC regulation. That regulation appeared at that time under the signature of my noble friend, now Lord Waldegrave. I want to ask the noble Lord whether since 1992 the Secretary of State has ever refused an export licence on such grounds as he might be expected to do under Article 2 of that regulation.
I admit that I should perhaps have chosen a different amendment under which to ask this question as I recognise that my query refers not only to vehicles and vessels. I hope that the noble Lord will be able to answer my question, even though I now realise that the matter would have been better raised under Amendment No. 2. I hope that the House and the noble Lord will forgive me on that point.
In general, these are matters that have been discussed by the Illicit Trade Advisory Panel, set up by the former Minister with responsibility for the arts under the chairmanship of Professor Norman Palmer. I am a member of that panel. The Government have made real progress on those issues by announcing their intention of ratifying the 1970 UNESCO convention and of stating their intention to introduce a new criminal offence of,
"dishonestly to import, deal in or be in possession of any cultural object, knowing or believing that the object was stolen, or illegally excavated … contrary to local law".—[Official Report, 25/1/02; col. WA 222.]
But in the context of the Bill, of existing legislation since 1939 and specifically of the amendment that we are discussing, surely it must follow that such illicit cultural objects would be refused an export licence if such a licence were sought.
Even more worrying are cultural objects originating within the United Kingdom that are the subject of illicit trade. That relates to a comment that was made from the Cross Benches. Must the safeguarding provisions apply only to objects entering this country from overseas? Should not Britain's own heritage also be protected?
The Minister with responsibility for the arts, the noble Baroness, Lady Blackstone, announced on 22nd January that she had placed a temporary ban on the export of a pair of late Bronze Age gold hair rings, stated by the reviewing committee,
"to be of outstanding significance … for the understanding of the technical artistry of the insular Late Bronze Age gold-workers".
But the announcement and the press release make no mention of the disquieting circumstance that the "find spot" of those gold rings is not known, and in particular that so far as has been established they have never been reported to a coroner as falling, at the time of their discovery, within the earlier legislation relating to treasure trove, subsequently amended by the Treasure Act 1996. How could an export permit properly be granted at all to cultural objects which, in contravention of the law—a law that has been in operation for several centuries—have not been

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reported to the proper authorities as a find of treasure or, more exactly, if found before 1996, as a find that a coroner's inquest might adjudge to be treasure? To fail to do so was and is a criminal offence.
It may apparently be the case that those objects were later publicly sold in one of Britain's auction houses, but surely public sale does not in itself give legal title to the purchaser when the possessor was not in fact the legal owner of the goods. Surely we should apply to treasures from the soil of Britain the same protective safeguards which, under the EC regulation, we apply to treasures from other EC countries. Can the noble Lord explain how, even after a temporary ban, the Secretary of State could possibly award an export licence for national treasures whose discovery had, contrary to law, been concealed by the finder and whose ownership had not been openly determined by a coroner's inquest?
In supporting the amendment I seek an assurance from the noble Lord. which I hope he may well be minded to give, that the working of the export licensing system will indeed urgently be reviewed in order to prevent or at least to diminish the continuing export of illicit antiquities from this country. I ask for his assurance also that those antiquities that are protected by our own very modest United Kingdom antiquities legislation will be properly protected within the framework re-defined by the Export Control Bill and that the Secretary of State will no longer receive or indeed heed advice to grant an export licence, whether or not following a temporary ban, for antiquities that have, beyond reasonable doubt, been purloined and concealed following their discovery, in contravention of United Kingdom law.
5.30 p.m.
Lord Davies of Oldham: The Government believe that Amendment No. 5 is unnecessary because, quite apart from the fact that it is somewhat difficult to think of an example where a vehicle, vessel or aircraft forms part of a cultural object, where a vehicle, vessel or aircraft meets the definition of a "cultural object" set out in the dummy draft order it will be subject to export controls under the Bill. A First World War tank or a Gypsy Moth plane in working order, for example, would be covered by the export controls, not only because they meet the definition of cultural objects in the dummy draft order, but they may also be subject to controls in respect of strategic goods.
If an application for a licence for such an object were made to the Department for Culture, Media and Sport and such an object were thought to be capable of having a relevant consequence in relation to the activities listed in the table referred to in the schedule, the DCMS would inform the DTI and the DTI would consider whether a licence were required in respect of an export for strategic goods.
We believe that rather than having the effect of clarifying subsection (6), the amendment could introduce an ambiguity into the Bill that is undesirable. There is no need to add the proposed wording for the avoidance of doubt because subsection (6) is quite clear.
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I recognise that other issues have been brought into the discussion on this amendment. I shall do my best to respond to the noble Lord and if he Finds my replies somewhat inadequate I am sure that we shall be able to engage in correspondence with him, or I shall ensure that the Minister or the Secretary of State does so. As the noble Lord is a member of the Illicit Trade Advisory Panel, he will be aware of the panel's recommendation in its report of December 2000 that a new criminal offence of dealing in illicit cultural property should be defined. The Secretary of State has accepted that proposal and is actively seeking an opportunity to include such an offence within future legislation.
The new criminal offence that we would seek to cover in legislation is,
"to the extent it is not covered by existing criminal law, it be a criminal offence dishonestly to import, deal in or be in possession of any cultural object, knowing or believing that the object was stolen, or illegally excavated, or removed from any monument or wreck contrary to local law-.—[Official Report, 25/1/02; col. WA 222.]
The noble Lord will also be aware that, on the basis of any refusal of an export licence by the Secretary of State, the Government have adopted into UK law the EU Council directive 93/7 on the return of cultural objects unlawfully removed from the territory of a member state. The practice is to examine routinely all applications for export licences to determine whether an item has legally left the country of origin. Therefore, the basis for a successful application would be an ability to ensure that such objects in no way fell into the category of having been illegally removed.
Therefore, I suggest to the noble Lord and to the noble Baroness that, in this respect, we have had the advantage of clarifying some of the issues relating to the Bill. We are absolutely sure that the Bill, as it stands, is quite clear on those issues with regard to cultural artefacts and their protection under the Bill. I hope that I have explained the way in which the system will work in order to assuage any doubts that the noble Baroness may have.
Baroness Anelay of St Johns: I thank my noble friend Lord Renfrew for introducing a more wide-ranging aspect to the amendment and for making a vital point. I pay tribute to his professional expertise and the expertise that he has exercised as a member of the Palmer committee, if I can so refer to it. I am grateful to the Minister for putting his explanation so clearly on the record. I shall consider it carefully before Report stage to see whether I need to elicit further information on Report.
I am grateful to the Minister for referring to objects that could be considered as cultural objects that will be covered by the Bill only Wit is thought that the relevant consequences definition applies to them and they fall within that category. One of the underlying questions that I have been trying to sort out in my mind is what parts of the Bill are specially designed to catch only cultural objects—if we can define a cultural object—as opposed to which parts of the Bill relate to all other

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matters, such as military objects, and which may, by design or default, trap within those definitions cultural objects that would sit uncomfortably within them.
We are getting to a helpful stage. The Government are making it clear which genuine cultural objects, which will not be adapted for military use, would not fall within those export controls that we on this side of the House feel should not be applied to them. So we are moving to a very helpful outcome on the matter. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause I agreed to.
Clause 2 [Transfer controls]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 6:
Page 2, line 16, at end insert"; or
( ) by a United Kingdom person onto internet, intranet or extranet, or similar information sharing equipment, whereby the technology may be downloaded outside the United Kingdom."
The noble Baroness said: In moving Amendment No. 6, I shall speak also to Amendments Nos. 8 and 10. The amendments affect Clause 2 which relates to the transfer of technology which Members of the Committee agree is an essential ingredient in the control of exports of arms and similar materials. The group of amendments seeks to make practical and necessary improvements to Clause 2 as at present drafted.
I deal first with Amendment No. 6. Clause 2(2) defines the geographic means of transferring technology. It gives four methods. Subsection 2(a) is from within to outside the United Kingdom; Subsection 2(b) is from outside to outside; Subsection 2(c) is between persons in the UK; and 2(d) is from outside to inside. But this list leaves one glaring omission. It overlooks the greatest advance in methods of communication since the invention of the radio; what is loosely called "the Internet".
I am sure that I do not have to remind your Lordships of instances where information about making terrorist weapons, including low tech "dirty" atomic bombs, have been posted on the Internet by malicious persons in pursuit of a variety of agendas. Information may be posted on web sites and the author may claim that he is not communicating it to anyone.
In any case, it is impossible, or, at the very least difficult, to say whether anyone who picks it up is inside or outside the United Kingdom, so under which subsection would a prosecution be framed? Although there is a means of determining the number of "hits" on a site, it would be extremely difficult for Customs and Excise to prove that anyone actually picked it up at all.
Why should we make it difficult for the enforcement authorities to prove whether anyone has received the transfer of technology? It should be the act of placing the information in a medium where it can be picked up by anyone, anywhere in the world which should be the offence.
The "intranet" is the communication of data on web sites within one internal network, such as the PVND system that many of us use within this building. "Extranet" is the means of assessing that internal network by authorised persons from outside the building, which we are also supposed to be able to do; but, only with enormous difficulty in my own case.
Possibly, and the Minister may tell us, Internet, intranet and extranet may all be caught by one or other of the present four paragraphs. However, the essential ingredient of subsection (2) is that it relates to transfer from a person to another person. The amendment covers the transfer of technology in a totally disembodied way from one computer to another.
Subsection (6) refers to a transfer "by any means". That, too, may be seen to cover electronic transfer or even mental telepathy. In other words, even if the problem is covered, the amendment, by specifically spelling out electronic transfer, closes a possible loophole for ingenious lawyers to attempt to exploit. It is belt and braces, if I may put it that way.
I turn to Amendment No. 8 which modifies the restriction on the transfer of technology within a company or group. At the moment the wording of the clause not only prevents the transfer of technology between connected companies—between, say, a United Kingdom company and its overseas subsidiary—but also even under subsection (2)(c) between one UK company and its United Kingdom subsidiary. No less important is the transfer of information between, say, two research establishments, two universities engaged on the same project or even two companies engaged on a joint manufacturing project, any of which may be called a group.
Without some modification of the shotgun effect of this clause, a whole swathe of ordinary activities will require licensing, with consequential cost, delay and possible loss of business. For a Government who claim to be intent on the removal of red tape, I found the arguments which were advanced against this amendment in the other place unconvincing. I trust that the Government, having had three months to consider the matter, might consider accepting the amendment.
Finally, I come to Amendment No. 10. It is a probing amendment which I may have to pursue at a later stage, obviously depending on the answer that the Minister is able to give. Like my honourable friend the Member for Salisbury, I really do not understand the extent of this subsection. Stripping out the intermediate words, subsection (6) reads,
"'technology' means information … capable of use in connection with … an activity of any other kind whatsoever".
My honourable friend suggested, rather picturesquely, that it could include pencil sharpeners, garlic presses and cricket bats. I should not have thought of those
examples, but there they are. The Parliamentary Under-Secretary of State dismissed his fears by saying,
"I assure the hon. Member … that controls may be imposed on classes of technology only when their export or transfer from the UK could threaten one or more of the consequences in the schedule".—[Official Report, Commons Standing Committee B, 16/10/01; col. 92.]
The Minister said that the need for this exceedingly wide clause was to cover new and, as yet, uninvented technologies. The clause is therefore intended to give the Government yet another blank cheque, covering unforeseen events and uninvented technologies. My honourable friend withdrew his amendment before the Committee of the other place, saying that he had a feeling that it would re-emerge before your Lordships. He was right. Cricket bats may indeed have a dual use, one of which could be as a weapon. But I am not in the business of speculating precisely what technologies may be caught by this exceedingly wide clause.
What we do not want to see is a provision which means whatever the Government, or, more likely an official in the enforcement authority, decides that it means. If the Government's intention is to ensure that the industrial or commercial activities or any other activity are not defined by the word "whatsoever", and if the Government mean activities which may be within the ambit of paragraphs 2, 3, or 4(2) of the table, then why do they not specifically say so and give up this sweeping piece of drafting? I was tempted to propose that amendment myself. However, I thought that I would give the Government a real opportunity to convince me that I was wrong.
If the Minister is going to invite me to withdraw the amendment, I trust that he will undertake to produce some serious and more specific re-drafting before the next stage. I beg to move.
Lord Burnham: I rise to support my noble friend, and in particular what she said about Amendment No. 8; although I would say to her that I believe that the matter of cricket bats falls more under the cultural part rather than the defence part of the Bill.
This legislation takes little or no account of the globalisation of the defence industry and of the increasingly multi-national character of defence companies. As my noble friend said, the provisions of the Bill do not recognise the commercial realities of the defence industry. Many such companies have research and development sections and manufacturing units in different countries. It would severely handicap the United Kingdom's defence industry if international companies such as BAe Systems were forced to apply for export licences every time they wanted to transfer data between facilities in different countries. The Government must consider the possibility, which the amendment would provide, of granting global licences valid for enl ire projects, or some way to ensure that the new regulations do not adversely affect UK competitiveness.
5.45 p.m.
Lord Judd: Further to that observation, there is another dimension to the amendment that requires consideration. With the internationalisation of the
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defence industry, the increasing use of licensed production overseas means that companies or groups could include subsidiary organisations in countries with weak export control systems. If the Bill does not regulate the transfer of technology between defence companies and their subsidiaries, those companies with an interest in subverting the controls could do so simply by setting up sister companies in the United Kingdom, exporting blueprints for assembly in such countries, and subsequently exporting with minimal controls.
We are obviously not discussing more responsible industry in the defence sphere, but in legislation we must deal with those who are less responsible—they are the whole problem—and the damage that they can do. From that standpoint, I hope that my noble friend the Minister will feel able to stand firm.
Lord Renfrew of Kaimsthorn: I should like to ask one question relating to the amendment and the use of the word "technology". It is not clear that it explicitly refers to biological materials. Would an animal—for instance a modified animal, the result of genetic engineering—come under the heading of "technology"? That is not a trivial point: it would apply equally to biological warfare. It would apply to germ material, and so on. I should like the Minister's assurance that living things—for instance. a cloned sheep, which might be of enormous commercial or other significance—and biological materials are fully covered under the terminology of "technology".
Lord Sainsbury of Turville: May I deal with Amendments Nos. 6, 8 and 10 together? All three relate to the Government's ability to control transfers of technology under Clause 2. While understanding the concern that there should be no loopholes in the new transfer controls, and indeed that they should not unduly burden industry, the Government do not believe that the amendments would improve the Bill. Each amendment raises particular issues and I shall address them in turn.
Amendment No. 6 would specifically provide that the Government had the power to impose controls on the publishing of technology on websites. The amendment is unnecessary as the Bill as drafted already provides such a power where there is reason to believe that technology may be transferred abroad. Clause 2 defines a "transfer" as,
"a transfer by any means (or combination of means)".
That encompasses uploading material on to a website from where it could be accessed by others.
Clause 2(2)(a) provides that the Secretary of State may impose controls on transfers from within the UK to outside the UK. That would allow control of transfers to an Internet site outside the UK. Clause 2(2)(d) provides that controls may be imposed on transfers entirely within the UK where there is reason to believe that the technology may be used outside the United Kingdom. That would apply in the case of transfers to Internet sites based in the UK but accessible from outside the UK. Hence, transfers to websites or other electronic media cart be controlled under the Bill as drafted.
The new controls to be introduced under the Bill on electronic transfers of military technology will extend to transfers to and from intranet sites and in certain cases on the Internet. However, as is the case for our current controls on tangible transfers of military technology, any technology in the public domain will be excluded from that control. Clause 2 is included in the Bill specifically to cover the whole question of electronic transfer of technology, which is one of the great weaknesses of the current legislation. It was drafted to deal with the issue of electronic communication. Clearly, in today's world, the current situation in which only manuals or physical representations of technology are covered is inappropriate.
Amendment No. 8 is intended to ensure that transfers of technology within one company or group cannot be subject to control. The Government believe that having the power to control transfers of technology within one company is essential for the effective operation of our export control regime. I entirely agree with the point made by my noble friend Lord Judd. If transfers within one company were to be excluded from control, an unscrupulous exporter or individual wishing to transfer sensitive technology could do so simply by setting up a company with offices overseas in a place with different and perhaps less stringent export controls than those of the UK. I am sure that the Committee will agree that such a situation would amount to an unacceptable loophole in our controls.
However, I am aware that there are concerns that controls on intangible technology transfers may be burdensome. I assure the Committee that that is why the Government intend to continue to make extensive use of open licensing, where appropriate, to avoid unnecessary burdens on business and government resources. For example, companies will be able to apply for open individual licences to cover intracompany transfers of technology or joint ventures with international partners.
I now turn to Amendment No. 10. First, technology as defined here is only that which falls under the categories in the schedule—essentially, military equipment or something with one of the relevant consequences. Unless one suggests that garlic crushers or cricket bats could be weapons of mass destruction or lead to regional instability, they would not be included in the definition. The definition would cover biological material if it had one of those relevant consequences—for example, if it could be used as a weapon of mass destruction, which is of course a very present issue.
Amendment No. 10 would remove paragraph (b) of Clause 2(6). The removal of that paragraph would limit the type of technology that could be controlled under the Bill to information capable of use in connection with the development, production or use of any goods or software. Any other type of information, no matter how serious its potential for misuse in the wrong hands, would be excluded from control. It is
clear that in a Bill such as this, which is an enabling Bill that we hope will have a long life, it would be wrong to take such a position.
While I understand the concern that the new controls on technology transfers should not unduly burden industry, the amendment would restrict the Government's capacity to control the transfer of sensitive technology or information that might be used to cause real harm in the hands of the wrong end-user. It must be borne in mind that what ultimately determines whether a particular kind of technology or piece of information should be subject to control is not the form that it takes, but whether it is subject to control as a consequence of an EC or other international obligation or whether it could be used to threaten one or more of the consequences set out in the schedule.
In that respect, it is important to appreciate that sensitive technology or information need not necessarily be associated with particular goods or software, let alone goods or software that are already subject to control, and therefore may not always be covered by the definition of "technology" given in paragraph (a) of clause 2(6). It might, for instance, support experimental work carried out prior to the actual development of goods or software—for example, in relation to new applications of cryptography—or relate simply to information connected with a particular activity that did not necessarily involve goods or software.
I remind the Committee that most of our controls on technology derive from EC law or from international control regimes such as the Wassenaar arrangement and the Nuclear Suppliers Group. The lists of items controlled under EC regulation and the various international control regimes are regularly updated, as new types of technology emerge that are judged to pose a risk in the wrong hands. It is of vital importance that the UK should be immediately able to update our list of items subject to control, where that is required under our EC or international obligations.
Paragraph (b) is needed because none of us can be confident that the relatively conventional definitions of technology given in paragraph (a) of Clause 2(6) will continue to be sufficient to allow the Government to control every kind of technology that we may be required by international obligation to control or whose transfer could lead to one of the relevant consequences set out in the schedule. We must have legislation that will stand the test of time and not be rendered quickly out of date by the emergence of new technological methods and processes that do not relate clearly to particular items of equipment or software. In particular, we cannot be in a position in which new primary legislation must be passed in the UK to enable us to follow our EU and international partners in imposing new controls on technology, simply because the items to be controlled are not covered, or not fully covered, by the definition given in paragraph (a) of Clause 2(6).
It is important to remember, however, that paragraph (b) does not give the Government an open-ended power to control all kinds of technology. Controls can be imposed only on military goods and technology, on other goods or technology that are controlled as a result of our EC and other international obligations and on classes of technology or goods whose transfer or export from the UK could threaten one or more of the damaging consequences set out in the schedule. In view of the reasons and arguments that I have given, I invite the noble Baroness, Lady Miller, to withdraw the amendment.
6 p.m.
Lord Burnham: On the assumption that my noble friend will withdraw the amendment—she may not—will the Minister, before Report, consider some definition of the difference between the kind of dodgy company mentioned by the noble Lord, Lord Judd and BAe Systems? As it stands, those two extremes are being treated in the same manner. That is not reasonable.
Lord Sainsbury of Turville: We are talking about the legislation, which covers the action that the Secretary of State cart take. When it comes to open licences for individual companies, the reputation of the company is the sort of factor that would be taken into account in deciding whether open licences would be given. That would distinguish between different companies; it need not be taken account of in the legislation. We must have the power to stop technology moving within a company, which would drive a hole in the Bill.
Baroness Miller of Hendon: I thank the Minister for his comprehensive answer to the amendments. As far as concerns Amendment No. 6, I shall read the record carefully, but it seems that it has been covered as I would have wanted. I shall make sure of that, as the Minister would expect me to.
With regard to Amendment No. 8, I was pleased to hear the Government say that they did not want to put extra burdens on business and suggest open licensing, where appropriate. Again, I shall look at that response carefully. With regard to Amendment No. 10, I did not, of course, mention garlic presses, bats or whatever. They could never be considered weapons of mass destruction. Under the circumstances, the Minister's answer to Amendment No. 10 is probably good.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 7:
Page 2, line 18, at end insert—
"( ) For the avoidance of doubt, the uses to which technology may be put may include its display as part of, or as the whole of, an object of cultural interest."
The noble Baroness said: With the leave of the Committee, I shall also speak to Amendments Nos. 9 and 11.
This is a typical probing amendment. One must table amendments that are exactly the opposite of what one hopes to achieve in order simply to elicit a debate. I listened with interest to what the Minister just said about the amendment moved by my noble friend Lady Miller of Hendon. He has already gone a long way to reassure me that the fears that prompted the amendments are unfounded. However, there are certain issues relating to cultural matters that I must discuss today.
In order to close the loophole that the Minister pointed out earlier with regard to electronic communication, the Government have set out a definition not only of transfer controls, but of technology. I tabled the amendments simply to ask the Government whether they anticipated that cultural objects could ever fall within the scope of Clause 2 and, if so, in what way. I hope, of course, that the Minister will assure me that they could not fall within Clause 2.
The Minister has already said that the Bill gives the Government no open-ended power to control technology. He made that point clearly and gave examples of limitations. In a helpful response to the intervention of my noble friend Lord Burnham, the Minister said that there was a second stage at which the Secretary of State, in deciding whether an export licence—or which kind of licence—would be issued, would take into account the reputation and the standing of the person applying for the export licence.
It would seem strange, in normal circumstances, to wonder whether cultural objects could fall within the remit of Clause 2, but it can be argued that not only can technology today produce an object of cultural interest, it can be integral to it. Cultural objects today often reflect our obsession with technology. One need think only of some of the recent Turner exhibits and some of the exhibits at Tate Modern to understand that. The problem is that some of the components of those exhibits are, in themselves, so sophisticated in driving computer software and hardware that they would be, in some cases, capable of adaptation for military use. It is just a question of what level of military use.
That occurred to me as a result of a visit that I made last summer while on a family holiday in the Cheshire area to the Hack Green museum. It is a very small museum that advertises itself as a secret nuclear bunker, which is rather a contradiction in teens. It was until relatively recently, of course, an establishment that would have been used as a regional seat of government in the event of nuclear war. The exhibits demonstrate the uses to which radar was and is put, and there are parts—not necessarily all working parts, although some are—of technical equipment on display. Some exhibits are from as long ago as the Second World War—they even pre-date me—and some more recent, from the Blue Streak era. If such items were sold or loaned overseas, would they fall foul of Clause 2, rather than another part of the Bill'? I hope that the Minister will say no.
Does the Minister have any news of the next stage of development reached by Culture Online? Did the Department of Trade and Industry and the
Department for Culture, Media and Sport take that into account when drafting the Bill? I have in mind, of course, Clause 26(1)(a)(i)—as one always does—of the Culture and Recreation Bill which was to be used, just a year ago this month, to establish Culture Online. That clause states that Culture Online shall achieve its objectives by creating and developing, or promoting the creation and development of material in electronic form (including material which is itself of cultural interest) to the general public.
So, in that Bill, the Government recognised that electronic material could be of cultural interest. They are aware that it could be available on the Internet. I seek a reassurance from the Minister that Clause 2 is not drafted so widely that something as innocent—I hope—as Culture Online is intended to be, could fall foul of it. I beg to move.
Lord Renfrew of Kaimsthorn: I rise to support my noble friend and to ask the Minister for clarification. I am back on the issue of objects of cultural interest but I am thinking of the history of technology and the sort of materials exhibited in the Science Museum.
It is not clear to me that under existing provisions objects of technological interest which are of relatively recent date are adequately protected. It may be the case, for instance, that an Enigma machine would be; I am not certain about that. But that would now be more than 50 years old. We wish to protect the export of many other objects of technical interest. I am thinking more in the cultural sense than of technology transfer. I am not talking about technology as a new process. My noble friend's amendment deals with objects as well as with processes.
I have with me the categories of cultural objects in the annex to the EC regulations to which reference has been made on which the provisions operating under UK law are based. I do not find any provisions relating clearly to the history of technology. It is not clear how some important developments are protected, for instance, in the field of biochemistry; satellite indications, if we were well developed in the field of satellite work in this country; synthetic textiles where clearly we were and are; or early radio carbon dating apparatus. How are those currently protected?
I am talking in the historical sense. But technology as recent as less than 50 years ago can be of significance. Those are matters which should be protected against automatic and unthinking export as other art work would be. I shall be grateful for advice from the Minister on that issue.
Lord Davies of Oldham: As the noble Baroness indicated, these are probing amendments. I recognise her point on the difficulty of tabling amendments which achieve potentially the exact opposite of the thinking behind them. However, she seems in these amendments to have displayed the absolute antithesis of the Nazi, Goebbels, who, every time he heard the word "culture", would reach for his gun. It seems to me that whenever we consider weapons of mass destruction the noble Baroness searches for culture.
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My noble friend has already indicated the objective behind this clause, which is to ensure that we comply with European Union Joint Action of 2000 concerning the control of support which might be provided for programmes creating weapons of mass destruction.
We do not see the way in which technology is used in the context of this clause applying to cultural objects. I recognise the point made by the noble Lord. But technology has a history and we all learn from history. Everything that is utilised today derives from breakthroughs in the past. But he too will recognise that we are able to draw a clear distinction between scientific instruments and illustrations of scientific history of cultural advantage, which we want to ensure belong to the world-wide knowledge of science, and our capacity under this clause to restrict the transfer of technologies which would bring in the possibility of other, potentially hostile, societies developing weapons of mass destruction.
I can assure the noble Baroness that the clause seeks, as my noble friend indicated, to control the technology which, by electronic means or military technology, could assist the development of weapons of war. I can assure the noble Baroness that nothing in the framework of this clause impacts upon the cultural dimension she outlined.
Baroness Anelay of St Johns: I am grateful to the noble Lord for those assurances. I know in the political world it is difficult for politicians to say, "Never". But his final words are perhaps the closest to "never" we will get. For that I am grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
[Amendments Nos. 8 to 11 not moved.]
Clause 2 agreed to.
Clause 3 [Technical assistance controls]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 12:
Page 2, line 35, at end insert "or foreign military assistance or assistance with any serious criminal activity anywhere"
The noble Baroness said: In moving Amendment No. 12, I shall speak also to Amendments Nos. 59 and 57, which are consequential amendments, and finally to Amendment No. 14.
Clause 3 deals with the export of technical assistance of any description. That is one of the problems with which the Bill is intended to deal. However, two other problems arise with which we should all be concerned. The first is that of giving foreign military assistance, which I defined in Amendment No. 59 from what appears in Clause 10. It does not relate to personal services as a mercenary in some foreign army. That is already governed by the Foreign Enlistment Act under which, I understand, no prosecution has ever taken place despite, for example, the large number of Britons who went to fight in the Spanish Civil War and the large numbers who fought as mercenaries in the Congo and other African
conflicts. Incidentally, that Act may have been infringed by the misguided British subjects who went off to Afghanistan to fight for the Taliban.
If it is wrong and prohibited, as we all agree, to supply technical assistance in the form of plans and drawings of weapons, aircraft and missiles, computer software and so forth, then it is no less important to prohibit the supply to what we have termed "rogue states" or to rebels against a lawful government in the form of training, supplying personnel, finance and intelligence, procuring equipment and military medical services.
The definition of "foreign military assistance" is fully and comprehensively set out in Amendment No. 59. "Equipment" may already be covered by other provisions in the Bill, but I included it for the sake of completeness. Included in the definition of "foreign military assistance" contained in Amendment No. 59 is a reference to "armed conflict". That is defined in Amendment No. 57. So the phrase is defined in the Bill before it is actually used. I apologise to the Committee for putting the cart before the horse in this way, but that is due to the alphabet since "a" for "armed conflict" comes before "f" for "foreign military assistance".
There is an additional phrase in Amendment No. 12 on which I have not yet touched. I want the Secretary of State to have the power to ban technical assistance for any serious criminal activity anywhere. I have not defined "serious criminal activity" as I am confident that any Secretary of State, prosecutor or judge would be able to recognise it when they saw it. It is anomalous that the Secretary of State will have power to impose technical assistance controls on material to be exported to foreign states but is unable to inhibit the sharing of technology between criminal gangs who now operate across borders and between continents.
Offhand I can suggest that the technology might include recipes for new addictive drugs, methods of conducting computer crime and the manufacture of weapons for use by criminals and terrorists. Doubtless there are many other fields of criminal activity that benefit from the sharing of information between criminals, but even if I could think of any I should not like to be giving ideas to the criminal fraternity. As far as I know, there is no specific statutory provision which deals with that problem. If I am wrong, I am very happy to be corrected.
We do not want to have to rely on the common law crime of conspiracy, especially as conspiracy to commit an offence abroad may not be a crime in Britain. Adding this provision to the Bill will give the Government an extra weapon in the war against international crime and terrorism.
It is well within the purposes of the Bill as defined in the schedule, which, I remind the Committee, includes obligations to the EU, or under any other international obligation, and to protect friendly states and stability in any country. Clearly, international crime has a destabilising effect, wherever it conducts its activities.
Finally, I turn to Amendment No. 14. Clause 3(7) provides extra-territorial jurisdiction over activities covered by the Bill. Given the nature of the Bill and the wrongs it seeks to prevent, I do not believe that there can be any objection to that, except in one respect, which the amendment intends to rectify.
Subsection (7) permits the Secretary of State to impose controls on acts done outside the United Kingdom—which, as I said, is fair enough—under the direction of someone who is, or is acting under the control of, what is called a "United Kingdom person", which is very clearly defined in the Bill. But it applies to the activities of any person—or, as the Bill states. "a person"—without restriction, which means that the Government are seeking jurisdiction over foreigners who have no physical connection with the United Kingdom except that a UK person is giving them instructions. For example, an American subject living and working in the United States, who has never- set foot in the United Kingdom but who is working either for a British company or even an American company with a British manager, will find himself caught by the provisions of the subsection.
I should like to remind the Committee of the outrage felt at the so-called Helms-Burton Act passed by the United States Senate, which tried to impose sanctions on United Kingdom trade with Cuba. Certainly we should not seek to impose our laws, however righteous, on foreigners or persons doing acts totally outside our territorial jurisdiction.
I am sure that the Government did not intend any such piece of imperialism. I trust that they will accept this constructive amendment. I beg to move.
Lord Razzall: I have a great deal of sympathy with the intentions behind the noble Baroness's amendment. However, do we really want to add to this quite complex piece of primary and secondary legislation by attempting to deal with the very wide issues raised by the question of mercenaries? The amendment goes further in its implications than was contemplated under the Bill, on which there has been significant and extensive consultation.
Looking back into political history, I believe that in 2000 the then Foreign Secretary, Robin Cook, promised a Green Paper on mercenary activities which would, presumably, lead to legislation. We have not yet seen that Green Paper, but would not that be a better way of dealing with the noble Baroness's concerns? If the Government were to produce that Green Paper, we could then have an orderly discussion and consultation on what legislation should flow from it. But such legislation should be kept out of this Bill.
Lord Judd: I have a certain amount of sympathy with the case made, with her usual reasonableness, by the noble Baroness, Lady Miller. I always find her reasonableness attractive, but when she speaks with real feeling about an issue it is particularly effective.
This crucially important issue needs to he urgently addressed, but I agree with the noble Lord, Lord Razzall, that it is a large and complex area which

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probably deserves attention in specific legislation. However, I look to my noble friend the Minister for an assurance that the Green Paper, to which the noble Lord, Lord Razzall, referred, will be published without further delay. We can then move on to convincing legislation as expeditiously as possible.
Lord Hylton: I congratulate the noble Baroness, Lady Miller, on her ingenuity in producing definitions of both "armed conflict" and "foreign military assistance". As far as I know, the South African Parliament is the only one in the world which has legislation already on its statute book concerning the activities of mercenaries.
It is possible to take many different views of such activities. Some will see them simply and solely as deriving profit from other people's conflicts. On the other hand, a case can sometimes be made out for protecting valuable assets, such as oil and diamonds, from falling into illegal and undesirable hands.
There is a good deal to be said in different directions, but meanwhile—and recognising the point of view of those who said that it would be premature to legislate on this issue now—I hope that the Government will take the amendments seriously and reflect on them deeply.
Lord Burnham: I support the noble Lords, Lord Razzall and Lord Judd, in their request for the publication of the Green Paper, which was originally promised by the Government in November 2000. Earlier today, your Lordships were involved in a discussion about "soon" and "shortly". It would be helpful if we could find out whether the Green Paper will be published "soon" or only "shortly".
The noble Lord, Lord Razzall, suggested that we are widening the subject by bringing in the question of mercenaries. I do not think it can be avoided. In another place, my honourable friends attempted to find a system whereby private military companies could be regulated and renegade mercenary activity banned. Properly licensed private military companies conduct operations when armed forces are unable to do so and their work can be very valuable.
The Government refused to accept the amendments in another place. Initially, Nigel Griffiths, the Parliamentary Under-Secretary for Trade and Industry, stated that he did not believe such change was necessary. When pressed, he conceded that control of mercenary activity was necessary but that the Export Control Bill was not the appropriate piece of legislation in which to lay down such controls. He urged my honourable friends to see what the Green Paper proposes, but as the Green Paper has not been published we are going round in circles.
The Government have recognised for some years that there is a problem with the regulation of mercenary activity directed from the UK, but they
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have done nothing about it. In 1998, the Minister of State at the Foreign and Commonwealth Office, Tony Lloyd, stated:
"We have no plans at present to sign and ratify the International Convention against Recruitment, Use, Financing and Training of Mercenaries. We have doubts concerning its legal enforceability in the United Kingdom. We are looking at options for national domestic regulation of military companies".—[Official Report. Commons, 15/6/98; col. 16W.]
With what we have seen of the recruitment of mercenaries for the Taliban and other renegade movements, it is essential that we get some kind of regulation of these activities. This Bill seems a very appropriate place to do so.
Lord Brooke of Sutton Mandeville: I wholly understand the motivation of my noble friend on the Front Bench in bringing forward these amendments. Sympathy for them has been expressed in different parts of the House, but I, too, share misgivings as to whether they are sensible or appropriate in this Bill.
I have no Scottish blood but I am conscious that, down history, before the role of Engineer to the Empire became available to Scotsmen, serving in the armies of foreign potentates was an absolutely regular employment. In the 17th century, the then Haig of Bemersyde—an ancestor of the World War I commander—served as a mercenary in the army of Gustavus Adolphus.
In the 18th century, David Ogilvy, the advertising man who spent most of his life outside Scotland, told the story of Jamie Keith—who was in the pay of Frederick the Great and was given the responsibility of defending Prague against the Turks. The siege went badly for the defending army, but there was a day's armistice for the burial of the dead. Jamie Keith felt that out of all courtesy he should have a word with the Turkish commander. He approached him, in a somewhat bedraggled condition. The Turkish commander was sitting on a great black horse, he had a great black beard, was wearing a great black fur hat and a great black coat trimmed with fur, with a great black belt and great black boots. Only when Jamie Keith was within earshot of this remarkable figure did there emerge from the great black beard, in a Scottish accent, the words, "Have you had any news from Inverurie lately, Jamie?". So the tradition is a long one, and we might get into difficulties in terms of the wide-ranging series of possibilities that the wording provides were we to add it to every other matter dealt with in the Bill.
When the noble Lord, Lord Davies, responded to Amendment No. 5, he challenged my noble friends on the Front Bench on the subject of whether they could think of a cultural object which could be part of a cultural object, or a vehicle, or a vessel. My mind went back to the face that launched a thousand ships. An effective export policy that could have prevented not only the launch of a thousand ships but also a war that went on for several decades would have been very much to the good. That is an example of just how wide-ranging one can become when one extends the Bill further. Therefore, I join with those who believe that the matter might sensibly be dealt with elsewhere.

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However, I want to hang all those remarks on a separate hook—I do not believe that we shall have a clause stand part debate—and ask the Minister to remind us what a "United Kingdom person" is. The term appears both in the wording of the Bill and in my noble friend's amendments.
6.30 p.m.
Lord Sainsbury of Turville: In responding, perhaps I may speak also to Amendments Nos. 14, 57 and 59.
The first part of this group of amendments seeks to introduce two new elements into the Bill. The first concerns "foreign military assistance", which is defined in Amendment No. 59. The second concerns,
"assistance with any serious criminal activity anywhere",
which is not defined, but is clearly very broad indeed. These amendments relate to the power to control the provision of technical assistance in Clause 3, and I welcome the opportunity to explain why the scope of that clause is as it is. Also in this group is Amendment No 14, concerning the applicability of controls to technical assistance provided overseas, and I shall address that point shortly.
First, perhaps I may address the amendments on foreign military assistance. The first point I should make is that Clause 3 is already wide-ranging. It allows the Government to impose controls on technical services which are broadly defined in subsection (2) as:
"services which are provided or used, or which are capable of being used. in connection with the development, production or use of any [controlled] goods or technology".
The broad power to control technical assistance is therefore based on goods and technology that may be subjected to export and transfer controls. Clause 3 will enable the Government to implement the EU joint action on technical assistance for weapons of mass destruction and related missile programmes. It will also enable us to implement controls on technical assistance where that is required by the terms of international embargoes and to provide an appropriate penalty for related offences.
The power in Clause 3 is already a wide-ranging one but one that is clearly set within the context of an export control regime. The objective of the Bill is to provide a framework for controls on exports and related activities. That is why the application of' controls to technical assistance relates directly to the types of goods and technology to which export controls apply. Certainly, some aspects of the activities defined in the related amendment— Amendment No. 59—would fall within the scope of Clause 3, such as training in the use, for example, of military equipment. In addition, the powers on the transfer of technology under Clause 2 and on trade controls under Clause 4 would also be applicable to some aspects of the proposed amendment, such as on the procurement of equipment—mentioned under Amendment No. 59.
However, the amendment before us seeks to introduce a considerably broader power into the Bill, and to extend it far beyond export controls. Here, I take what may be the last opportunity in this debate to agree with the noble Lords, Lord Razzall and Lord
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Judd, that this takes us into entirely new ground which is not appropriate for this Bill. If we consider the definition of "foreign military assistance", it includes such matters as personnel, financial support and medical services. That takes us well outside the matters normally subject to control as part of the export control regime.
But the amendment goes even further than that. It includes,
"assistance with any serious criminal activity anywhere".
Although "serious criminal activity" is not defined, it would include a vast array of activities that fall well outside the framework of export controls. If the. Bill were to apply to serious criminal activity anywhere, it would become a general law and order measure. But as I have explained, the Bill before the Committee is an export control Bill. It would be wholly inappropriate to try to transform it into a general measure intended to control serious criminal activity anywhere in the world.
The question of regulating private military companies or "mercenary" activity, which is presumably one of the reasons behind the amendment, is a complex one. The issue will he addressed in a consultation paper being drafted by the Foreign Office which I understand is in its final stage of preparation. We have had a consistent policy for a long time on this matter and it will he announced shortly. We are not deviating from that policy tonight. My right honourable friend the Foreign Secretary will inform Parliament shortly about the date of publication of the consultation paper. It would not be appropriate to use the Export Control Bill to tackle an issue for which it was never intended, and which is in any case being taken forward separately in the proposed consultation paper.
I now turn to Amendment No. 14. The effect of the amendment would be to create a loophole in the proposed new powers on the provision of technical assistance overseas. The amendment seeks to limit the Government's power over overseas acts of technical assistance to acts carried out only by United Kingdom persons. This amendment would make it possible for unscrupulous UK companies, or individuals wishing to profit from certain proscribed acts of technical assistance overseas, to evade controls introduced under the power by arranging for a foreign national to carry out the actual act on their behalf.
I should emphasise that the extra-territorial power provided by Clause 3(7) governs only the actions of UK persons. It does not allow controls to be introduced on non-UK persons for acts of technical assistance carried out overseas, but only on any UK person who either carries out such acts himself or who directs such acts to be carried out by others.
However, the proposed amendment would significantly undermine the effectiveness of the new control that we intend to introduce under Clause 3. I remind the Committee that the intended purpose of the new control, as set out in the dummy draft orders published last October, is to prevent the provision of any technical assistance overseas which the provider

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knows, or has been informed by government, might assist a weapons of mass destruction programme or a related missile programme. This control will implement a European Union joint action agreed in June 2000, which commits all member states to enacting controls on the provision of technical assistance relating to weapons of mass destruction and missiles capable of their delivery.
Clause 3(7) has been framed to prevent the possibility arising that a UK person could knowingly provide such technical assistance through a foreign national abroad and yet remain free from prosecution. It must be emphasised that the controls which the Government have announced their intention to introduce under Clause 3 will be essentially prohibitive and will cover activities in which no business is likely to have a legitimate involvement, except in the most exceptional of circumstances.
The overriding consideration in devising the controls must therefore be to ensure that they cannot be avoided. That is why the Government believe that the power in Clause 3 must allow us to control activity that is organised or authorised by a UK person where that person does not himself carry out the act. Not to do so would, as I have said, give unscrupulous individuals a ready and obvious means of providing and profiting from such assistance with impunity, so long as they took care to arrange for a foreign national to carry out the work on their behalf.
In answer to the question about the definition of a "United Kingdom person", I believe that that is adequately defined in Clause 10, which says:
"'United Kingdom person' means a United Kingdom national, a Scottish partnership or a body incorporated under the law of any part of the United Kingdom".
For those reasons I invite the noble Baroness to withdraw her amendment.
Baroness Miller of Hendon: I thank all noble Lords who have given me unqualified or qualified support. That was very helpful. I thank my noble friend Lord Brooke for his very good history lesson, which was amusing and instructive. I also thank the Minister for his comprehensive answer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn. [Amendments Nos. 13 and 14 not moved.]
Clause 3 agreed to.
Clause 4 [Trade controls]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 15:
Page 3, line 23, leave out "in relation to goods" and insert "and technological assistance controls in relation to goods and technical assistance"
The noble Baroness said: I shall speak also to Amendments Nos. 16 and 17. Amendment No. 15 is a probing amendment intended to clear up an anomaly, or what I imagine is an inadvertent omission from the Bill.
Clause 3 deals with technical assistance and technical assistance controls, which are defined in subsection (2). However, the definitions are set out in two long sentences of 28 and 29 words respectively and the definition of "technical assistance" is rather unspecific.
Clause 4(2) sets out the definition of "trade controls" in clear and concise terms. Amendment No. 17 would carry that method of definition over to the definition of "technical assistance".
Having two different methods of defining two very similar activities could cause confusion, give rise to inconsistencies in administration and enforcement and hence provide a fertile field for evasion and a feast for lawyers. Amendments Nos. 15 and 16 are merely paving amendments to facilitate the principal one.
I acknowledge that if the Government accept the amendments, further consequential amendments to Clause 3 will be required. We can deal with those at a later stage if necessary.
I trust that the Government will accept this as a constructive amendment to clarify the Bill, not alter it. I beg to move.
Lord Sainsbury of Turville: My Lords. the amendments would provide the Secretary of State with the power to impose controls on acquisition, disposal and movement of technical services and with the power to control activities facilitating or connected with the acquisition, disposal, transfer or supply of those technical services.
I am grateful to the noble Baroness for raising this matter. It is very important that the issues should be covered. However, Clause 3 already allows the provision of technical assistance between overseas countries to be controlled. Circumstances in which technical assistance was acquired, disposed, moved, transferred or supplied between third countries overseas would include a UK national based abroad providing technical assistance in a different country overseas or a UK national in the UK or overseas arranging for another person to provide technical assistance in a third country. All those cases are covered by Clause 3(1) and (5) through which the Secretary of State can control the provision of technical assistance outside the UK or the making of arrangements under which another person provides technical assistance outside the UK. The amendments are therefore unnecessary. The issues are covered in Clause 3 and there is no need for them to be covered again in Clause 4, which deals with the different issue of trade controls. I therefore invite the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: I understand exactly what the Minister is saying. I was simply trying to point out that the definition of "trade controls" is much clearer than the definition of "technical assistance". I would have thought that the Minister might be pleased to agree to one of the amendments, which would not in any way alter the Bill but simply

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make it easier to understand. He has time to think about that. In the meantime, I beg leave to withclraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 and 17 not moved.]
6.45 p.m.
Lord Razzall Lord Razzall moved Amendment No. 18:
Page 4, line l3, leave out "may" and insert "shall"
The noble Lord said: The fact that this is a one-word amendment of a somewhat Delphic, and possibly even serpentine, nature does not mean that we believe that the point that it raises is unimportant, as the Minister will be aware. I suspect that this is the first of several occasions on which we shall not at present find accommodation with the Government on the Bill.
We welcome the clause, which is primarily aimed at the activities of arms brokers. The point of the amendment is to deal with the extent to which the extra-territorial activity of arms brokers should be regulated.
On Second Reading I referred your Lordships to the classic text book on the subject, which is John Le Carrè's novel The Night Manager, dealing with the activities of Mr Richard Roper. His activities show why we believe that the Government's provision does not go far enough.
The Government made clear in another place and in our discussions with the Minister before Committee stage that they intend to apply the provisions extra-territorially in three cases with regard to armaments: first when a transaction involves a transfer to an embargoed destination; secondly, in the case of a transfer of equipment used in torture; and, thirdly. in the case of long-range missiles. I understand that the Government propose that the extra-territorial nature of the prohibitions should extend only to those three categories.
My party believes that that does not go far enough. We base our argument on a number of factors, the first of which relates to six criteria we understand have often been laid down by the Home Office on whether it is appropriate for regulations and laws to apply extra-territorially. The first is that the offence is serious. One has only to look at the activities of Mr Richard Roper to realise how serious such offences can be. The second is that the witnesses and evidence are likely to be available in UK territory. That is probably a more difficult one in this case. The third is that there is general international consensus that conduct is reprehensible. The fourth is that the vulnerability of the victim makes it particularly important to be able to tackle the issue. The fifth is that creating the offence extra-territorially seems to be in the interests of the standing and reputation of the UK in the international community. The final criterion is that there is a danger that the offences concerned would not be justiciable.
It seems to us and to a number of the NGOs that have been involved in the discussions that at least five of those six criteria would apply to arms brokering transactions that go beyond the three categories that
the Minister will say the Government propose to deal with. Other noble Lords will want to come in on this issue.
The Government's major objection to taking the issue further is that it would result in the possibility of UK citizens who happen to live abroad committing an offence even though their actions were permissible under the laws of the country in which they were living. The Government's major argument is that persons might not be aware that particular activity requires an export licence in the United Kingdom—and in certain cases, they might have obtained a licence had they applied in the UK.
Under UK law, illegal arms broking carries a sentence of up to 10 years in prison. I find it difficult to believe that a UK citizen who is an arms broker living in Australia would not be aware of the seriousness of the offence in the UK and that it attracts up to 10 years' imprisonment. It is perfectly reasonable for the Government to expect people who want to retain the rights attaching to UK citizenship to understand and respect British traditions and laws —- together with the principles on which UK society conducts its affairs. I urge the Government to think again and to extend territoriality.
Lord Judd: Earlier today, we heard in a Statement from the Home Office about citizenship that the Government will in future require people seeking British citizenship to take an oath of allegiance. At a time when we are taking such a step, it seems odd to suggest that it may not be necessary to require allegiance to something central to British commitment and law by persons who happen to be abroad. The noble Lord, Lord Razzall, referred to the Home Office criteria. It would not be at all difficult for a businessman to operate in a country where there was no UN embargo and, in that context, to supply weapons to terrorist organisations. I can think of specific examples but I am not sure that it is helpful to name countries. We can all think of countries where that is true.
Noble Lords in all parts of the Committee believe that it is imperative to stem the flow of weapons to terrorists. Some of us feel that the Bill provides a good opportunity for tightening up the arrangements. How can that be done if the Government do not have fall extra-territorial controls? I should like to hear my noble friend the Minister agree that extra-territorial controls would serve as a deterrent and prevent us just driving an illegitimate trade overseas.
There are sceptics, if not cynics, who are anxious to say that there is a lot of rhetoric in the campaign against terrorism but not much muscle. The Bill is potentially part of the muscle but it seems that it is not being applied.
The Prime Minister has just embarked upon his important mission in Africa, demonstrating our commitment to that continent. During my time as director of one of Britain's great humanitarian agencies, Oxfam, I became deeply perturbed that whereas we wanted to get on with long-term

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development, 70 per cent of our work on the African continent was dealing with the consequences of conflict. If we really want to demonstrate our commitment to Africa, there can be few higher priorities than taking every possible step to demonstrate our determination to prevent the flow of arms—sponsored and facilitated by the merchants of death—that is aggravating the continuing disease of conflict on the African continent. I ask my noble friend the Minister to take seriously the way in which Amendment No. 18 has been moved.
Lord Joffe: The amendment must be considered in the context of the draft secondary legislation currently available in the form of dummy orders, and of the Government's general election manifesto, in which they undertook to control the activities of arms brokers and traffickers wherever they are located.
That might have been the intention but the proposed legislation falls far short. If an arms broker who is a UK citizen negotiates a deal in the United Kingdom for the export of arms to warring factions in Nigeria, he will need a licence. The proposed legislation obligingly provides the option that if that individual crosses the Channel and negotiates the deal, he will no longer require a licence or be doing anything unlawful under UK legislation.
Mr Nigel Griffiths, the Parliamentary Secretary, pointed out in the other place that arms dealers are often resourceful, cunning and deceitful people—so they are hardly likely to ignore the option that I have described. They will negotiate outside the UK and—except with deals relating to embargoed countries, instruments of torture or long-range missiles—they will not be transgressing the law. This is clearly flawed legislation that fails to achieve its objectives. The loophole is so obvious and wide that it undermines much of what the Bill seeks to achieve. In The Times yesterday, Simon Jenkins wrote—although this may be going a bit far—that the Bill is so weak as to make it an offshore arms dealer's charter.
I agree with the noble Lord, Lord Razzall, on the reasoning behind the creation of the loophole. Unless I misunderstood the noble Lord, Lord Bach, when he spoke on Second Reading, the concern is that some UK arms brokers may not be aware, while transacting deals overseas, of the need to apply for a licence and could unwittingly break the law. Ignorance of the law is no excuse in British law. Moreover, the skilful ways in which many arms brokers manipulate jurisdictional and regulatory frameworks suggests that they pay very close attention to any laws that apply to them. While I would not for a moment suggest that arms brokers carrying on their business lawfully should not be fairly treated, it seems to me that in deciding what legislation is necessary to achieve the objectives, government should weigh up the potential harm to the innocent victims of trafficking if there are no controls against the potential harm to arms brokers if there are controls.
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In other words, I suggest that it is necessary to weigh up the potential loss of life and the destruction of livelihoods among the innocent victims of brokers' arms against the possible harm to UK brokers operating overseas who may be unaware of the law. We should also remember that those innocent victims are usually powerless civilians and all too often women and children. However one looks at it, there can be no question but that all brokering deals by UK citizens, wherever based, must be licensed and judged on a case by case basis against the same consolidated criteria used to judge applications for direct exports from the UK.
The Government are to be admired for their manifesto commitment to control the activities of arms brokers wherever they are located. They are to be admired also for being instrumental in creating the European Union code of conduct on arms exports and for bringing forward the Export Control Bill. It is also very encouraging to all of us concerned about Africa that the Prime Minister is there at this very moment, visiting and exploring ways in which the UK can contribute to solving the problems that Africa faces. Against that background, the brokering loophole really does need to be closed; otherwise, as the noble Lord, Lord Judd, suggested, many people will conclude that the Government's rhetoric is not matched by their action.
Finally, I should like to draw attention to one of the Bill's provisions on brokering that may be easily misinterpreted. Long-range missiles are one of only three categories for which controls on overseas brokering are being imposed. Presumably, that category or purpose has been included largely to protect the developed countries rather than the developing ones; I say largely because there are exceptions. However, those controls contrast with the absence of controls on small arms which have already contributed to the death of literally millions of innocent civilians in Africa. I should be grateful if the Minister can explain why controlling the brokering of long-range missiles is more important than controlling the brokering of small arms. I support the amendment.
7 p.m.
The Lord Bishop of Manchester: We on these Benches support the amendment. Reference was made to the most reverend Primate the Archbishop of Canterbury. He is sorry that he cannot be here this evening. I am sorry that he cannot be here this evening. In a moment, your Lordships may be sorry that he cannot be here this evening. However, there are other things that need to be done.
The Bill represents a step forward in approving legislation that is ethically responsible, transparent, publicly accountable and consistent with regard to exports in general and arms transfer in particular. That thinking has been part of the thinking of the General Synod since as long ago as November 1994 when we first debated the subject. However, we need to go further in encouraging what has often been called,
"a moral presumption generally against arms sales unless the case for a particular transfer can be made out".

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As my noble friend the Bishop of Lichfield reminded us six years ago in a similar debate in this House,
"arms are not like other goods. Of course they are designed to defend but they are also designed to kill, threaten and injure".—[Official Report, 26/2/96; col. 1256.]
There is growing evidence that significant quantities of arms are entering the world's worst affected conflict and human rights crisis zones. They have been transferred so often by arms brokers. In the past, UK brokers have been free to arrange the delivery of weapons from countries outside the UK into conflict zones with impunity. Brokers have often taken advantage of the large number of cheap surplus weapons available in central and eastern Europe and the former Soviet Union—coupled with the existence of weak export controls—to supply arms to groups and governments who violate human rights without needing to apply for an export licence. Evidence shows that some British dealers and freight companies have taken advantage of those opportunities and have participated in significant transfer of arms from third countries into war zones. I shall not name the countries, but your Lordships are aware of war zones in Africa where that has occurred.
Clause 4 gives the Government powers to introduce controls on the trade in controlled goods. Subsection (8) of the clause gives the Government the power to extend those controls extra-territorially to cover the activities of UK passport holders when they operate outside the UK. However, as currently worded, the provision does not oblige the Government to do so; hence, the noble Lord, Lord Razzall, has tabled Amendment No. 18.
It is encouraging that the Bill seeks to deal with the problems of arms brokering; that is good news. Under the new legislation, as I understand it, anyone in the UK who brokers the transfer of arms from one overseas destination to another will require a licence for their activities. However, it seems that the Government do not intend to control the activities of arms brokers and traffickers wherever they are located. That seems to be a gap in the Bill. If I understand the Bill correctly, brokering conventional weapons to non-embargoed destinations will require a licence only when part of the deal takes place in the UK. Extra-territorial controls on brokering will be imposed on deals involving transfers to embargoed destinations, transfers of equipment used in torture and long-range missiles.
The purpose of Amendment No. 18 is therefore to ensure that when secondary legislation is introduced the Government extend the licensing regime to cover all off-shore brokering deals. If the legislation does not have that full extra-territorial reach, British citizens can evade the controls by simply stepping outside the country to conduct their arms brokering deals. As we know, the German controls suffer from that weakness. It has long been said that the German system,
"catches the good guys and the bad guys have moved to Cyprus".
It has also been said that,
"A child of five could work out an easy way to avoid the restrictions. You hop on the Eurostar and shake hands in Lille".
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By contrast, US legislation controls brokering activity by US persons operating overseas, and US officials believe that that has a significant deterrent effect.
As we all know, there are precedents for the exercise of extra-territorial jurisdiction, such as the Misuse of Drugs Act 1971, the Chemical Weapons Act 1996. the Sex Offenders Act 1997 and the Landmines Act 1998. The Government also consider offences of corruption committed abroad by UK nationals serious enough to warrant extra-territorial jurisdiction. Therefore, using the Home Office's own criteria—reference has already been made to them, so I need not do so again—-a very strong case can be made out in favour of full extraterritorial application of the proposed UK arms brokering regulation. That needs to be done.
As we understand from the Minister's reply to the debate on Second Reading, and as the noble Lord, Lord Razzall, has made clear, it seems that extraterritorial jurisdiction will apply only to trafficking and brokering to embargoed countries and in relation to torture equipment and long-range missiles. I ask your Lordships whether that is good enough. What about the fact that so many brokering deals involve conventional weapons that go to non-embargoed destinations? Surely those should be regarded as serious offences. As we have heard, the victims of brokered arms are often very vulnerable groups in society. I myself have seen people in parts of Africa who have been the victims of landmines, and I have seen them sitting in wheelchairs with no legs. Thai: is how the arms trade operates when it is not properly regulated.
Who can doubt that transferring machine guns and helicopters—which are not torture equipment or long-range missiles—to Al'Qaeda supporters in Pakistan and the Philippines should be prevented? Surely it must be. However, limiting extra-territorial controls only to embargoed destinations would not do that. The only way of doing it is to regulate all arms deals brokered by the UK. The aim is not to prohibit legitimate trade but to stop the illegitimate deals and introduce a general regulatory system.
I believe that I have said enough to show that at the end of the day it is not a question of whether or not we support the defence industry; of course we support the defence industry. The real challenge in front of us is not whether we support the defence industry but whether we are willing to see controls extra-territorially applied to regulate the activities of those who seek to avoid scrutiny and are not open to transparent scrutiny. The challenge is to devise a system in which we support the defence industry but do not support those who want to act illegitimately in the destruction of some of the most vulnerable people in the world. As the previous speaker said, if we do not achieve that tonight, we duck the challenge.
Lord Rea: The noble Lord, Lord Joffe. and the right reverend Prelate have eloquently said everything that I wanted to say. However, I ask my noble friend whether the Government intend only to apply extraterritorial controls on arms brokering to embargoed countries and to the three categories of weapons that

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he mentioned. Having listened to two noble Lords who have just spoken, will he seriously reconsider expanding the range of weapons which are to be covered by the controls?
Baroness Miller of Hendon: I shall be brief. The noble Lord, Lord Razzall, explained clearly and carefully why he thought there was a need for this amendment. I believe that Members of the Committee around the Chamber have all supported it in one way or another. Given that the Government stated in their previous manifesto their intention of prohibiting illegal brokering, will the noble Lord explain one simple thing to me? When the Government drafted this Bill, why did they think that in subsection (8) of Clause 4 the word "may" was sufficient? Why did they not include the word "shall"?
Lord Phillips of Sudbury: Some people scoff at the Government's policy of moral foreign commitments and policies. I do not think that we on these Benches do and I do not think that any speaker tonight is apt to do that. Rather, the mood of the Committee as expressed in this mini-debate is clearly that the Government should stick to their guns and practise what they preach. If I may say so, the lead given by—
Lord Razzall Lord Razzall: Not in this debate.
Lord Phillips of Sudbury: I beg your pardon. If I may say so, the lead given by the Chancellor of the Exchequer as regards relief of debt in the third world is precisely the kind of initiative that we should like to see paralleled by an amendment to this part of the Bill. Of course, it will be said that this will shackle our arms industry in a way that may give advantage to its competitors. That, indeed, may be the case, although I suspect that that will be far, far less the case than some may think. It would be interesting to hear the Minister say what view the Government take of that argument.
I go further and say that there are occasions when one ought to sacrifice something in the way of trade to higher issues. This country has a very particular history in relation to the developing world and, in particular, to the continent of Africa. We have heard from two noble Lords who probably know better than anyone in the country—I refer to the noble Lords, Lord Joffe and Lord Judd—the devastation that is wreaked in Africa in particular but also in many other places by the appalling trafficking in arms. Although little of that may be traced back to us, we should by every means possible prevent it. I do not see, therefore, why the Government are reluctant to apply their own criteria—not two of their six criteria, but six of their six criteria—to this very particular form of trade.
7.15 p.m.
Lord Judd: I hope that I may add one word to what the noble Lord has just said. If there is a price tag attached to this, against that price tag is not only the
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ethical and humanitarian arguments, but the cost over and over again to Britain and the international community of dealing with the consequences.
Lord Hylton: I support the amendment. I just hope that it is strong enough and goes into sufficient detail to achieve the purposes which every single Member of the Committee who has spoken on it wants to achieve. I raised this matter at Second Reading, both as regards brokering in general and where it takes place, but although I had given notice I received no reply whatever. As regards extra-territorial jurisdiction, the deterrent effect of such jurisdiction does not lie in the number of cases that may be brought but rather in the knowledge that where the evidence is available there will certainly be prosecution.
Lord Brooke of Sutton Mandeville: I apologise to the Minister and to the Committee because when we were discussing Amendment No. 14 I did not look up the definition in the Bill of a 'United Kingdom person', which the Minister helpfully read out. As I have a supplementary question flowing from that, I shall read it out again. Subsection (1) of Clause 10 states:
"'United Kingdom person' means a United Kingdom national, a Scottish partnership or a body incorporated under the law of any part of the United Kingdom".
There is also a supplementary definition of a United Kingdom national. I have a reason for asking the question. Although I did not ask it when we discussed Clause 3, this amendment happily gives me the opportunity to ask it under Clause 4. Like many others in the kingdom, I have periodically in the course of the past three or four months read about the sheikhs who are supposed in some way or other to have links with the Al'Qaeda network to which the noble Lord, Lord Judd, referred a moment ago. If that particular category of person does not fall under the definition that has been read out, do the offences which we discussed in Clauses 3 and 4 apply to a non-United Kingdom person resident in the United Kingdom if he is the person who is controlling the person abroad? If that does not apply under this legislation, is there separate terrorism legislation under which it applies? If I misunderstand the category and the definition, I shall be delighted to be enlightened and I shall sleep more soundly tonight.
Lord Sainsbury of Turville: I shall deal with that point first. I shall get advice, but as I understand it, the point is being made that if, for example, a sheikh operates in London controlling someone in some foreign country to commit some act, the matter would turn on whether any part of that act takes place in the United Kingdom. I cannot see that the legislation could conceivably cover the case of a non-United Kingdom person directing someone who is not a United Kingdom person outside the United Kingdom, unless the instructions or the activities take place in the UK. So if that was not the case, the sheikh operating in Saudi Arabia would be caught if he gave some instructions to a person. I hope I have understood the

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question that was asked. However, if the action takes place in the UK, it is caught by the measure which covers brokering within the United Kingdom.
I turn to the main points that have been raised on the amendment. The amendment proposed would impose a legal requirement that any trade controls introduced by the Secretary of State must apply to all acts conducted outside the UK by United Kingdom persons. No exceptions could be made to allow certain trade controls to be territorial in scope. I should make it clear that Clause 4 will allow the Government to impose trade controls extra-territorially. As we made clear, we intend to use that power to introduce controls that apply extra-territorially on trafficking and brokering to any embargoed destinations and on trafficking arid brokering in torture equipment and long-range missiles to any destinations.
I say to the noble Lord, Lord Joffe, that the reasons for choosing these products is entirely to do with the question of the criteria that you apply to extraterritoriality, one of which is that there is general consensus that these actions are generally deplored. In the case of torture equipment, long-range missiles and sending goods to embargoed destinations, it is reasonable to assume that anyone would be aware that those were the kind of actions which were prohibited. However, as will be clear to everyone, the areas which are covered by the Bill are extremely wide as regards the categories of goods that can be controlled.
For example, we are also talking about machine tools which could be used to make weapons of mass destruction or other goods which fall under the category of relevant consequences. We are covering a wide range of goods. It may not be obvious to people that those goods will be covered by the licensing system. We have focused, I believe rightly, on areas which everyone understands need to be controlled.
We do not believe it right for any and every control introduced under Clause 4 to have to apply extra-territorially, as the amendment seeks to provide. I would observe in passing that such a provision would sit uncomfortably within the structure of an enabling Bill. But, more importantly, our view is that it will not always be appropriate to apply controls extra-territorially. The Government intend to introduce controls on trafficking and brokering of equipment on the UK's military list to any destination. For a number of reasons, we do not believe that it would be appropriate to apply those controls to the activities of UK citizens where these are carried out wholly abroad.
As I am sure noble Lords will be aware, it has been the policy of successive British governments to apply extra-territorial jurisdiction only for the most serious internationally condemned offences. We believe that that does apply to trafficking and brokering to embargoed destinations, in torture equipment or in long-range missiles. Here the individual should be fully aware that what they are doing is likely to be illegal unless special permission has been granted in exceptional circumstances. However, the vast majority of trade in military equipment to non-embargoed destinations will consist of legitimate transactions or activities.
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These controls cover a wide range of goods. Most of those goods are not goods which are generally condemned when applying Home Office criteria. To apply extra-territorial controls to such an activity would therefore risk criminalising the involvement of UK nationals settled overseas in a legitimate export of defence or other equipment from their countries of residence. For example, a UK citizen of long-term residence in Switzerland—it could be Australia, Germany or France—could be employed by a local company involved in export of spare parts for military equipment. Even if those exports were carried out in accordance with the local law, and even if the transactions in question would have been granted a licence by the UK had one been applied for. that UK citizen would become a criminal if he did not know that he needed a licence from the UK Government.
A further point is that enforcement of extraterritorial controls is particularly difficult, as the US Government find. Our enforcement effort should be targeted on the activities of greatest concern. In all of this, we need to be mindful of having controls that are proportionate, effective and credible.
Nevertheless, under the new controls on trade in military equipment we shall be able to prosecute offences that take place outside the UK where any part—I stress "any part"—of a particular trafficking and brokering offence was carried out in the UK, even if it were a phone call, fax or e-mail sent from here.
I share the views of the noble Lord, Lord Judd, about the situation in Africa. There is no doubt that many problems arise from what he calls the disease of conflict. Economic growth in those circumstances is almost impossible. But there is no point in introducing impractical controls. The US has found it impractical to have such controls. I hasten to add that that has nothing whatever to do with protecting our defence industry. It is not relevant to that. Almost certainly it is not involved. It is to do with the practicality of trying to control actions which are not recognised by everyone as prohibited.
Finally, we believe—it is the more positive way to approach the issue—that combating unscrupulous arms dealers and illicit arms trafficking effectively requires international co-operation and we have therefore supported steps to achieve this. The Government will continue to press for international embargoes to be imposed on countries, in regions of conflict. That is the best way to stop the supply of arms to those regions. We have supported the recently adopted European Union statement of principles on controlling arms brokering. And we take every opportunity to encourage the growing international consensus on the need for controls in this area. For example, both the UN Firearms Protocol adopted in May last year and the conclusions of the UN conference on Illicit Trade in Small Arms and Light Weapons in all its Aspects in July have recognised the need to enhance international co-operation in preventing, combating and eradicating illicit brokering.

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This is the way to tackle the problem, not to introduce controls which are impractical to implement. For these reasons, I believe that it would be counterproductive to require that all trade controls introduced under the Bill apply extra-territorially. I invite the noble Lord to withdraw the amendment.
Lord Rea: Can my noble friend clarify one point? With regard to exports to embargoed countries, do the extra-territorial controls involve all the goods specified in the new schedule or do they apply only to torture equipment, missiles and weapons of mass destruction?
Lord Sainsbury of Turville: With regard to embargoed countries, we are talking about the UK's military list which is a particularly defined list. If I am incorrect, I shall come back to the noble Lord.
Lord Razzall: I feel sympathy, as I am sure do other noble Lords, for the Minister. The noble Lord presents a Bill to the House with which we all agree. However, he has been subjected to extensive criticism that this clause does not go far enough.
The noble Lord could have presented the Bill to the House with Clause 4 as originally drafted and then produced the secondary legislation after the event. However, he has indicated to the House in advance what he intends to do and the criticisms relate to the secondary legislation limited to the categories of armaments, embargoed countries, torture equipment and ballistic missiles.
Members of this House—the Minister will understand if I describe the arguments as coming from the forces of good in this House; I do not refer only to the right reverend Prelate—believe that those three categories of restriction are not satisfactory. We strongly ask the noble Lord to consider between now and Report stage whether the fertile brains of his civil servants can produce wider proposals which will meet the genuine concerns of the Committee. Perhaps the Minister will reflect on the remarks of the right reverend Prelate relating to the German experience of dissatisfaction with the current position. Why are we not prepared to follow the experience of the United States on this issue? The restrictions that we ask the Minister to introduce would apply if this were the United States. Why will the United Kingdom not have the same controls as the United States?
I am sure the Minister will undertake again to consider the matter before Report stage. On that basis, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter: I think that it will be convenient to break now for about an hour. I suggest that during the hour we deal with the Statement on the London Underground, and that as soon as we return we deal with the construction orders. I am told that they will be brief. We can then continue with the Bill. I beg to
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move that the House do now resume. In moving the Motion, I suggest that we do not return before 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Tax Credits Bill
Brought from the Commons; read a first time, and to be printed.

London Underground
7.30 p.m.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, with permission, I should like to repeat a Statement made in another place. The Statement is as follows:
"Mr Speaker, with your permission I should like to make a Statement on the future of London Underground. Earlier today the board of London Regional Transport announced that it was 'minded to proceed' with its plans for the modernisation of the Tube. In coming to its conclusion, the board has undertaken a thorough evaluation of the bids to assess whether they are likely to provide value for money. It is confident that they will do so and that the proposed contracts will provide an appropriate basis for the future maintenance and renewal of London Underground's infrastructure.
"The board of London Regional Transport will now consult the Mayor of London and Transport for London under the terms of the Greater London Authority Act 1999. The final decision on whether to proceed will be taken in the light of that consultation.
"Last autumn, I announced that I intended to take independent advice from Ernst & Young on the evaluation process that London Underground and London Regional Transport had followed and on the robustness of their conclusions. Ernst & Young began its work in October and has kept in close contact with London Underground during the evaluation of the final bids.
"Ernst & Young has reached the following conclusion: overall the methodology adopted for assessing the value for money by London Underground has been robust and appropriate; and London Underground's recommendation that the PPP proposals deliver value for money is a subjective one which is supported by its analysis. Copies of its report were placed in the Vote Office at 2.45 p.m. when I answered a Written Question on this issue.
"I have always made it clear that my approach to the modernisation of London Underground would be based on three principles. There must be no privatisation. Safety must not be compromised and the contracts must offer value for money.

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"First, there must be no privatisation. Under these proposals there will be no privatisation or part-privatisation. London Underground remains in the public sector and will have control of all operations. It will run the trains, work the signals, control the track and operate the stations. The public sector will be in charge of the safe operation of a single unified network. London Underground will set the strategic priorities for investment and monitor the performance of the private sector contractors who build and maintain the infrastructure.
"Where the contracts differ from current arrangements involving the private sector is principally in their scope, duration, and in the allocation of responsibility for integrating the various packages of work necessary to upgrade the Tube and modernise it properly.
"These are long-term arrangements that envisage a real partnership between London Underground and the private sector, which will work together to deliver sustained improvements. This partnership should enable substantial efficiencies to be realised and locked into the long-term process of Tube modernisation. In particular, it should prevent the problems of the past, when infrastructure improvements, notably of course the Jubilee Line extension, have all too often come in over budget and later than originally planned.
"The private sector is committed, under contract, to deliver specific improvements. London Underground will be empowered to monitor the contracts closely and enforce them rigorously. If the private sector companies fail to perform, they will be penalised. If that sanction fails, they could lose their contracts. And if the private sector does not do the work properly or puts safety at risk, London Underground will be able to step in and do the necessary work itself at the private sector's expense.
"Secondly, safety will not be compromised. The Health and Safety Executive is currently considering changes to London Underground's railway safety case to reflect the bidders' proposals for maintaining and upgrading the network. Only if those are accepted will the modernisation plans be allowed to proceed. If they do proceed, the infrastructure controller, London Underground—in the public sector—will retain clear statutory responsibility for safety across the entire network. The private sector infrastructure companies will have a contractual safety case with London Underground. They will have to perform to standards every bit as demanding as those required by London Underground's own statutory safety case. It will be for the Health and Safety Executive to accept the safety case. This is not a matter to be decided by politicians. It is far better to leave it to the independent experts.
"The third test is value for money. I have always said that the Tube modernisation plans should not proceed unless they were likely to provide appropriate value for money. In preparing its final
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assessment of the proposed Tube modernisation contracts, London Underground has conducted a full evaluation of value for money. As the National Audit Office has said, value for money is not a simple pass-fail test. London Underground has carried out a thorough evaluation of bids incorporating both a financial assessment against a public sector comparator and wider factors that cannot be quantified in purely financial terms.
"Essentially, the public sector comparator measures the cost of providing the same modernisation of Tube infrastructure under current arrangements. It also takes account of two possible funding scenarios: annual grant and bond finance. Honourable Members will be aware that in December 2000 the National Audit Office reported on the public sector comparator that London Underground proposed to use and made various recommendations. These have been taken into account in the construction of the comparator used for this final evaluation of the bids.
"London Uderground's evaluation demonstrates that the Tube modernisation contracts are likely to deliver good value for money over the 30-year term of the contracts. Even when tested on a much more demanding seven-and-ahalf-year basis, the value for money of the PPP remains favourable. And the bids look good not just against a public sector option funded in the conventional way through annual grant, but also one funded by bonds, which was, of course, the Mayor's preferred approach.
"On the basis of the advice that we have now received, the Government believe that the Tube modernisation proposals represent the best way forward. In headline terms London Underground will receive investment on an unprecedented scale. Now that the actual bids have been evaluated, I am able to report that we would expect to see investment of some £16 billion over the next 15 years. That figure includes nearly £8.5 billion to he spent on trains and signalling, nearly £4 billion on track, and more than £3.5 billion on stations. By any standards that represents a step change in the amount of money spent on the Underground to make it a system fit for the 21st century.
"The benefits of proceeding with the Tube modernisation contracts would be considerable. Over the first 15 years of the contract London Underground will save £2 billion compared to traditional public funding. On any measure, that represents a significant saving to the public sector. What is more, the contracts will mean faster and more reliable Tube journeys than the alternatives. London Underground says that these could be worth as much as a further £2 billion to its passengers.
"Such savings can only be achieved through harnessing the private and the public sector together, which is why this partnership is such an important feature of the Government's reform of the delivery of public services. Over the first 15 years

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of the contracts, £4 billion of the money going into improvements to the Tube will come from private finance. Put simply, if that money were not forthcoming, it would need to be found within the public sector, which would mean less money to spend on other priorities such as health, education and other parts of the transport system.
"There is a clear choice. On the one hand, we can move ahead with proposals that will see the Tube transformed, with real year-on-year improvements beginning immediately the contracts are signed. We think that that is the right way forward—subject, of course, to the outcome of the consultation process and to the board of London Regional Transport taking a final decision to proceed with the contracts.
"Alternatively, we can look forward to more delay while different plans are prepared and a new procurement exercise put in place. That would condemn Londoners to several more years of the status quo, with a creaking infrastructure that is unable to deliver the efficient and modern Underground system that the travelling public rightly deserves.
"Our modernisation plans for the Tube will unlock £16 billion of investment over the next 15 years, which is the equivalent of £5,000 for every household in London. There will be no privatisation. The publicly owned London Underground will remain in control, and safety will be paramount, which is why the final say on safety will rest with the Health and Safety Executive. These proposals form the basis of creating a Tube fit for the 21st century and I commend them to the House".
My Lords, that concludes the Statement.
7.40 p.m.
Viscount Astor: My Lords, I thank the noble and learned Lord for repeating the Statement. My first question is: why are we having a Statement at this hour? It is rather extraordinary to have one so late in the day. Is it because the Government have not been able to make up their mind until the very last moment about what they are going to do?
I notice that yesterday the Institute of Actuaries said that government officials had threatened to stop Andrew Smith, the Chief Secretary to the Treasury, from speaking at a conference because a press release that the institute was about to release was critical of some private finance initiatives associated with the Tube scheme. I await the Minister's comments on that. As usual, he will no doubt be robust in his defence of his Secretary of State; it is probable that the more robust he is, the more we shall wonder about the case he is putting forward.
One has to ask: why do the Government like the PPP? The first reason is that it does not show up as public spending. The Treasury likes it because it is off balance sheet. What rate of return do the Government believe is reasonable for the private sector partners who come into the scheme? What is that on a per
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annum basis and over the 30-year life of the contract? How much will they get out of it? Does the Minister agree that in the end the taxpayer has to pay? How can the Government claim that there will be significant savings when we know that there will not be a dramatic increase in capacity on the Underground? Will fares have to increase?
The PPP may introduce finance but it does not give greater choice to London Underground about how that money is spent. In effect, the PPP saddles the Underground with a new bureaucracy. The Government need to explain what incentives there are to improve services and make savings that can be reinvested for the benefit of the travelling public.
How much have the department and the Treasury spent so far on assessing the PPP contracts? Some very large sums have been quoted in the newspapers. I know that the noble and learned Lord does not always believe what he reads in the newspapers but we should be interested to hear his views.
The all-party Transport Select Committee criticised almost every aspect of the Government's plans. It did so in relation to safety, fares, disruption and value for money. Three million people travel on the Tube every day but we have now been told that the Health and Safety Executive has been given only one month to decide whether safety plans are adequate.
On fares, the original plans assumed that surplus fares would pay for a significant slice of investment and maintenance for the system. We now know that, in relation to the Tube, revenue has been declining since 1998.
The all-party transport committee concluded that,
"the PPP will lead to significant and expensive disputes over the contracts".
It added:
"We recommend that the Government does not approve the PPP deal".
It is extraordinary that that should be the unanimous view of the committee.
Under the plan, there will be no new rolling stock for several years. I believe the figures are seven years for the Victoria line and perhaps 10 years for the rest. What about increased capacity? How will overcrowding be managed? Can the Minister say in what month—or even in what year—the first new carriage will enter the system after the contracts have been signed? He said in the Statement that as soon as a contract is signed there will be immediate improvements. What will they be?
The Government have given Ken Livingstone 15 days for consultation. They may live to regret that, but I am not sure whether they should give him a much longer or a much shorter period; however, that is their problem.
I return to the contracts. What are the risks of the PPP to the private sector? Is it correct that in the contracts the risk is capped? How do the Government square that with the rate of return that they will get? Will the rate of return be higher than that which could

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be gained on the bond market, for example? If the contracts do not work, what will be the process for renegotiation?
I note that the Ernst & Young report states:
"The contract structure is unique, inevitably meaning that it has not been proven in a commercial environment. London Underground has sought to test significant parts of the structure through shadow running over recent years. Whilst this exercise is unprecedented and provides some assurance over the contract, it remains unproven".
This proposal is a massive leap in the dark and I doubt whether it will work. It will be expensive. If there are savings, it is clear that no one will be able to validate what they are until perhaps the last five years of the 30-year contract. In the first seven to 10 years, there will be no real difference.
The approach is going to fail unless it can pass four crucial tests. The Minister will have to assure us in this regard. Can he guarantee that there will be more trains running on the Tube network and that there will be less overcrowding? Can he guarantee that there will be a more reliable service? Can he guarantee improvements in safety for both passengers and staff? Finally, can the Government guarantee that passengers will no longer be left stranded at stations because of strikes?
7.46 p.m.
Baroness Hamwee: My Lords, I, too, thank the Minister for repeating the Statement. I must declare an interest as a member of the London Assembly. One might describe that role as being the Mayor's watchdog. I am certainly not uncritically supportive of his position. However, my criticisms of the proposals announced today—no surprise, but we have finally got them—are not a long way from those of the Mayor's.
Is the arrangement truly to be described as a partnership? Is it truly the best way of putting money in? And is it truly what in footballing parlance one might call a "result" for London? London is not just its residents; it is, among other things, the powerhouse of the British economy. The economy in London depends on London being able to operate, and it is hugely dependent on its Tube network.
I wonder whether the Ernst & Young conclusion really amounts to unequivocal advice with which the Government can be comfortable in going forward. I have had the report for only a very short time but noble Lords will notice—I know that one cannot use visual aids—the number of yellow flags that I have already placed in it. I shall try to resist quoting all the parts I have marked.
On shadow running, to which the noble Viscount referred, the report states:
"Whilst this exercise is unprecedented and provides some assurance over the contract, it remains unproven".
It also says,
"there is a risk that value for money could be eroded".
There are a good many references to the public sector comparator. It is surprisingly—I use that word in view
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of the Minister's dismissal of this—supportive of bonds by way of financing. The report states that,
"the source of public sector funding should not be a determinant of value for money. We consider that a stable funding option … is a relevant comparator … a Transport for London bond issue could be one source of such stable funding".
What further information, if any, about the public sector comparator will be published? It is not clear whether what is contained in the report amounts to the information about the public sector comparator that we were promised when the GLA Act was passed.
The context for the decision is, of course, devolution. It is remarkable how little central government and the Mayor have worked together. I cannot help feeling that personalities have played a part in that.
I have one immediate point for the Minister. The Mayor, I am told, understood that he would have an extra five days—that seems not very long in the context of this saga—to consider the contract that he has not yet seen. He put his team on standby. They are available from now on to work overnight and through the weekend. In fact, the documents will not be available until 9 o'clock on Monday. Is this really partnership with London's government? How long will the consultation process last and whom are the Government consulting?
More importantly, not only has the contract been unavailable until now, but no financial information has been available. This is the time of year when the different spheres of government consider their budgets. The Greater London Authority's budget is no exception. At the GLA we shall have to take decisions with regard to the budget as early as next week. There is no information available and none has been provided to us despite requests about what dowry, if I may express it in that term, will be passed over by central Government to meet London Underground's liabilities. I imagine that there will be many such liabilities and that many will be substantial, and that is allied with its current deficit on the fare box. The noble Viscount mentioned that the fare box is reducing; it is actually now in deficit. Therefore, what guarantee is there that Tube fares can be maintained at current levels?
Given the possible scenario of an insufficient dowry, can the Minister assure Londoners that they will not face the risk of a huge rise in council tax to meet such a deficit or risk losing other improvements to London's transport which are the responsibility of Transport for London?
The context is also that of scrutiny—a role which central government are keen for local government: to employ. However, given the highly critical report of the transport Select Committee, it seems to me that central Government will not take their own medicine. It is not only that criticism which is significant but the fact that the Government have given themselves no time to consider it.
Transport for London is the public part of the partnership. As I understand it, it will remain dependent on government grant. The Minister spoke

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of unlocking £16 billion. Is it not the case that only £4 billion will be unlocked through this arrangement because £12 billion will come from central Government? What assurances do the public have that that £12 billion will be available in accordance with the timetable? I am not accusing the Government of not providing it, but it is certainly not clear to me where that fits into the contractual scheme of things. If there is no commitment that anyone can enforce, one simply has to rely on government good will.
There are so many questions that one wants to ask and I must be mindful of not being tedious or exceeding my welcome, as it were. But perhaps I may point to the finance market's testing clause. That indicates that if the Infraco companies fail to come up with the cash at the seven-and-a-half year point, Transport for London will have to pick up the tab, with London council tax payers again being at risk of facing big rises.
Can the Minister explain what scope there will be under the PPP for Transport for London to determine the priorities for modernising the Underground? Will it be able, for example, to give priority to modernising track and signalling rather than stations? Perhaps more broadly, can the Minister give the House a target date by which he expects us to be able to describe the Tube as a "modern" service?
Over the past few days and weeks, we have heard much from the Government about public services. With regard to the Underground, they have spent four years saying, "We must do something and we must do it now". Indeed, we have heard the £16 billion figure mentioned for quite some time.
I would welcome a result for London, but I do not believe that this will be one. I consider this to be closer to a betrayal. Time has been wasted during which travelling in London is at best uncomfortable and at worst a nightmare. I do not believe that there is light at the end of the tunnel as a result of this Statement—not even, some might say, the light of an advancing train. This is a tale of delay which exceeds that of which even those who are accustomed to relying on transport operators have experience.
1 return to my first point. Can this really be a good, effective partnership? Does it not give scope for the participants to squabble, to blame each other and to give the term "partners" a new and appalling meaning?
7.55 p.m.
Lord Falconer of Thoroton: My Lords, the first question asked by the noble Viscount, Lord Astor, was: why are we having the Statement at this late hour? It is certainly not because of any indecision. I believe that the noble Viscount should ask the business managers on his side in another place why the Statement is occurring at 7 p.m.
Secondly, why do we like the PPP? Because, following thorough consideration of the matter, over a 15 year-period it involves levering £16 billion into modernisation of the Tube: £12 billion from the public
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sector and £4 billion from the private sector, to pick up the figures given by the noble Baroness, Lady Hamwee.
Thirdly, what return will the private sector receive? As the three PPP contracts with which we are dealing will vary within each of the three contracts, the amount that each of the three PPP contractors will receive will reasonably reflect the risk that they are taking.
The fourth question asked by the noble Viscount, Lord Astor, was: is it not creating a new bureaucracy? No; it is creating a situation in which London Underground will continue to run and control the Tube. It provides a means of bringing in investment in order to deliver modernisation of the Tube.
How much has the DTLR or Treasury spent on evaluating the proposal? Central Government have spent approximately £0.5 million in relation to consultants' fees. Obviously London Underground has spent considerably more than that. When will there be increased capacity? Over the period of the PPP, capacity will be increased substantially: for example, by 22 per cent on the Jubilee Line; 15 per cent on the Victoria Line; and 17 per cent on the Metropolitan and Circle Lines. That process of increased capacity will take place within the next 10 years.
In answer to the question concerning early improvements, on the Jubilee Line southbound track will be replaced in the first year of the PPP in order to remove speed restrictions between Kingsbury and Wembley Park stations. Track work will be carried out on the Piccadilly Line so that speed restrictions can be lifted between Heathrow and Acton Town. Modernisation will begin at Parsons Green, Aldgate East and Notting Hill stations. Work will begin in October this year on replacing lifts at Elephant & Castle. Work will also be carried out to replace lifts at West Brompton. Work on additional train crew facilities will start at Plaistow on the Hammersmith & City and District Lines and at Earls Court. All 150 stations and all trains on the sub-surface network will be deeply cleaned in the first year of the PPP. And, as soon as the financial conclusions have been reached, Metronet will begin work immediately on the Victoria Line.
Therefore, both in the 10-year period and in the first-year period significant improvement to the Tube will take place. But let us make no mistake. This is a long-term process that requires long-term and sustained investment to make up for the previous shortage of investment that occurred over many years.
The noble Viscount, Lord Astor, ended his questions by asking whether we can guarantee that there will be more trains, more reliability and more safety. The proposal involves bringing in significant numbers of new trains; over 336 new trains by 2014 and an additional 42 trains by 2019. Can we deliver more reliability? Yes, the purpose of the scheme is to improve the reliability of the Tube. Can we improve safety? As has been made clear again and again, safety is a priority and it is subject to the views of the Health and Safety Executive.

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The noble Baroness, Lady Hamwee, referred the House to the number of yellow flags in her copy of the Ernst & Young report, but happily did not read every extract, for which I express my profound gratitude. She asked what further information will be made available on the public sector comparator. London Underground, as the noble Baroness knows, has produced a detailed document setting out a full analysis of the public sector comparator. In due course, the National Audit Office will publish its own assessment. That office has made it clear that it does not want to publish one now because it felt that to secure its objectivity, it should not involve itself in the process of making the decision.
The noble Baroness also raised questions about how long the Mayor will have to consider the terms of the contract. He will have a reasonable time in which to do that, but let us not forget that this process and the evaluation have been taking place for some time. While a reasonable time must be given for consultation and consideration, I believe that most Londoners are keen that a decision is made and that the process of modernising the Tube gets under way.
The noble Baroness, Lady Hamwee, also sought an undertaking that the council tax will not be increased. As she well knows, the council tax is a matter for the London boroughs. The precept is a matter for the Mayor and the GLA. They must make their decisions in relation to that. She asked for confirmation of the figures of £12 billion of public sector money and £4 billion of private sector money over 15 years. I have already given an answer to that.
One can continue to ask specific and detailed questions and I am aware that I have not answered all the questions posed by the noble Baroness, Lady Hamwee. The proposals have been evaluated closely by London Underground. The reasoning and the approach have been considered by Ernst & Young. Subject to consultation, decisions have been made so that the process of modernising the Tube can begin.
8.2 p.m.
Lord Faulkner of Worcester: My Lords, does my noble and learned friend agree that it cannot be stated too often that the PPP that he has announced for the London Underground bears no relation whatever to what happened with Railtrack? Control of the Tube will stay in public hands. Its operations, which include running the trains, staffing the stations and operating the signals, will be kept together and the responsibility for safety will remain with London Underground, subject to the approval of the Health and Safety Executive.
In relation to safety, has my noble and learned friend seen the comments of the Mayor of London which appear to have become even more intemperate as each day of this week has passed? Has he also seen the comment in the Evening Standard of Monday that stated that Mayor Livingstone has warned that there could be mass deaths on the Tube if the Government press ahead with the public private partnership
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proposals for the system. Does my noble and learned friend agree that that is scaremongering and the politics of the playground?
Lord Falconer of Thoroton: My Lords, on the first point, I thoroughly agree with the noble Lord's analysis of the profound difference between these proposals and the privatisation of Railtrack. Railtrack involved privatisation and the separation of track and train. In the Railtrack model separate groups were appointed; in this model London Underground remains in control of the whole process of the Tube.
As my right honourable friend made clear in another place, safety is a matter that cannot he left to the politicians. The Health and Safety Executive will form conclusions about the safety of the proposal, as it intends to do. I have not read the comment of the Mayor about the matter, but we have confidence that the Health and Safety Executive will form an unbiased and an objective view on safety. It is right that it should be left to that body.
Lord Ezra: My Lords, will the Minister indicate whether, in the period of nearly five years during which the PPP has been discussed, the level of funding made available to London Underground has been adequate? Does he recall that before the last election the Deputy Prime Minister mentioned a figure of £775 million per annum being made available, but that, in practice, it appears that much less has been made available? Will that not add to the backlog from which the PPP will start? Has that been taken into account in the PPP proposals?
Lord Falconer of Thoroton: My Lords, I cannot give the noble Lord a precise figure at the moment, but I shall put it in writing to him. As regards the figure being adequate, it is perfectly obvious that substantial investment is required in the Tube. These three PPP contracts take that into account.
Lord Brooke of Sutton Mandeville: My Lords, grateful as I am for any conclusive or even contingent decision by the Government, I have one general question and one particular question to put to the Minister. My first question follows on that asked by the noble Lord, Lord Ezra. Why has it taken four and two-thirds years of theological discussion by this Government to reach this point? During that time Londoners—I declare an interest as a Londoner myself—have watched the service deteriorate steadily and the capital's productivity has been seriously eroded in the process.
My particular question relates to the Minister engagingly using the words in the Statement "work the signals". In recent years signalling on the Underground has been a nightmare. I speak as a commuter and as someone who has talked to Underground management. Will these new arrangements lead to the abandonment by the Underground of the unique signalling specifications that we have set up in this country, as the lack of orders ineluctably cause international signalling companies

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to close their British subsidiaries—subsidiaries that were set up to be UK specific—and instead will they lead to accepting international specifications, which will mean ordering more cheaply and, perhaps even more importantly, more swiftly off the peg? I ask that latter, small question because it sounds as though the Government are about to embark on another and larger UK-specific experiment.
Lord Falconer of Thoroton: My Lords, perhaps I may write to the noble Lord about the signalling point, because I am not in a position to deal with it. On the question of why it has taken so long, we had to evaluate all the options in relation to the Tube, which took some time. Thereafter, once it had been decided to go down this path, a necessary consequence was that there had to be complicated negotiations. Once those negotiations reached a close, there had to be an evaluation of the safety case and of the value-formoney case. The matter was not speeded up by the fact that the Mayor of London opposed the proposals and, ultimately, took the Government to court in the middle of last year, which inevitably delayed the process further.
Lord Oakeshott of Seagrove Bay: My Lords, when the Government can borrow money for 30 years at 5 per cent fixed, or 2 per cent nominal, how on earth can this PPP represent value for money to the taxpayers? Why does the Minister believe that some of the most profitable companies quoted on the Stock Exchange are drooling over the prospect of these contracts? Does the Minister not understand that their shareholders would sack the PPP bidders' boards tomorrow unless they were building in projected rates of return of at least double or treble those on government bonds?
Lord Falconer of Thoroton: My Lords, the assessment made by London Underground of the comparison with the public sector comparator considers all of the issues, including the return on the cost of borrowing, and forms the view clearly that it is better value-for-money to go with the PPP than to take the public sector comparator. Ernst & Young has made an analysis of the approach taken by London Underground and it too has concluded that the approach taken by London Underground is appropriate to consider where the risk should lie. That company considers that substantial gains will be made in terms of management and performance if the PPP goes ahead.
Lord Elder: My Lords, does my noble and learned friend agree that it is quite remarkable that the two Opposition parties seem to be so nervous about the introduction of public sector finance and involvement in this project? Is it not more remarkable, given that the bulk of the finance and all the administration will remain in the public sector and that the private sector's involvement, while significant, is relatively small? Does he further agree with me that the advantage of that private sector involvement is that, perhaps for the
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first time, we will be able to drive the situation in which the delivery on time and to cost of public sector investment will be met?
Lord Falconer of Thoroton: My Lords. London Underground remains in the public sector. That is made clear. The risk of delivering the improvements in the infrastructure falls to the private sector under the PPP. That is the merit of the system.
Baroness Sharp of Guildford: My Lords, may I press the Minister further about what rate of return he would expect for the private sector operators?. His reply was that it, "reasonably reflects the risk that they are taking". At what level will this be? So far as I can see, very little risk is actually being passed on. In so far as there is a shortfall of revenue, it is passed on to Transport for London. Again, as my noble friend Lady Hamwee explained, in the case of the financing, if the infra-cos fail to come up with the financing within two months after the seven and-a-half-year period—the break in the middle—then it is for London to find the financing for it.
Lord Falconer of Thoroton: My Lords, the break is delivery so far as concerns the contract. They must deliver particular standards of modernisation and improvement. If they do not, not only do they risk not making a return on the contract but they also risk being fined. There is the risk. It is a commercial risk.
Lord Tope: My Lords, I must first declare an interest too as a Member of the London Assembly and indeed of its budget committee that is this week and next week scrutinising Transport for London's budget. The Minister, I am sure unintentionally, forgot to answer one of the very important questions from my noble friend Lady Hamwee who chairs the GLA's budget committee. She asked about what she referred to as the "dowry". Can the Minister confirm that when London Underground eventually passes to TfL that it will be passed over with a dowry, with a sufficient sum to meet all its liabilities?
Lord Falconer of Thoroton: My Lords, in the light of the conclusion now in relation to the PPP negotiations, of course the position is that final decisions in relation to all of that can now be made.
Lord Tope: My Lords, can we have a translation?
Lord Falconer of Thoroton: My Lords, obviously I cannot give a specific figure in relation to the dowry, nor am I in a position to give assurances in relation to particular arrangements. Obviously, now that the PPP contracts are near to finalisation, the position is that all of those financial details can be worked out, but on the basis that the Government stand firmly behind the PPP contracts as the way forward for the Tube.
The Duke of Montrose: My Lords, is the noble and learned Lord saying that he is not willing to tell us what

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the rate of return is? If he does not have knowledge of what the rate would be, can he tell us when it will be made available?
Lord Falconer of Thoroton: My Lords, I think that I have made it clear that there will be different rates of return in relation to each of the three PPP contracts. It will not be possible just to give a headline figure in relation to that. The rates of return will have been taken into account in the value-for-money comparison.
Lord Oakeshott of Seagrove Bay: My Lords, if the Minister is not able to give us one headline figure, perhaps he could give us the three figures.
Lord Falconer of Thoroton: My Lords, I think that I have made it clear that it would not be possible just to take a headline figure for each one, but that it has been taken into account.
Lord Roper: My Lords, perhaps I can pursue this point with the Minister. Can he give us some indication of the range within which these figures will fall?
Lord Falconer of Thoroton: My Lords, I shall not be drawn on giving bits and pieces in relation to the detailed value-for-money evaluation.
Lord Roper: My Lords, I think that it would be for the convenience of the House if we were to follow the procedure which was suggested by the Captain of the Gentlemen-at-Arms before we started the Statement, which was if we completed the Statement in less 1 han an hour, we would adjourn for pleasure until that hour had elapsed: we would then resume and take the two orders.
Lord Filkin: My Lords, I am deeply grateful for the advice. I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.15 to 8.30 p.m.]

Industrial Training Levy (Construction Board) Order 2002
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft order laid before the House on 17th January be approved [17th Report from the Joint Committee].
The noble Lord said: My Lords, on behalf of my noble friend Lady Ashton, I beg to move that the draft Industrial Training Levy (Construction Board) Order 2002 be approved. I shall also speak to the draft Industrial Training Levy (Engineering Construction Board) Order 2002. The proposals before the House seek authority for the Construction Industry Training Board and the Engineering Construction Industry Training Board to impose a levy on employers in the industries they cover.
Industrial training boards, or ITBs, as we all know them, are non-departmental public bodies set up under the Industrial Training Act 1982. Their role is to ensure that the quantity and quality of training are adequate to meet the needs of the industries for which they are established. They provide a wide range of services, including setting occupational standards and developing vocational qualifications, delivering modern apprenticeships and paying direct grants to employers who carry out training to approved standards.
The Act contains provision for a levy on employers to finance an ITB's activities and to share the cost of training more evenly between companies in an industry. It is for the employer members of a board to make proposals for the rate of levy for the industry it covers and for the Secretary of State to make an order giving effect to the proposals.
The orders before your Lordships give effect to proposals submitted by the CITB and the ECITB for their 2002 levy. Each of them involves the imposition of a levy in excess of 1 per cent of payroll on some classes of employer. The Industrial Training Act 1982 requires such orders to be approved by affirmative resolution of both Houses.
In each case, the levies are based on employers' payrolls and their use of sub-contract labour. For both boards the proposals involve levy rates in excess of 0.2 per cent with no exemption other than for small firms. In such cases, a levy order can be made only if the proposals have the support of organisations representing the majority of those employers who pay most of the levy. It has been established through consultation with the main employer organisations in each industry that the proposals have that support.
The Act requires ITBs to exclude small firms from the levy and each of the proposals does that. In setting the level at which the exemption takes effect, the boards have tried to strike a balance between helping small firms to grow and giving them unfair commercial advantage. However, both boards are committed to supporting the training efforts of small firms, whether or not they pay levy. All companies need a skilled, competent workforce if they are to be competitive and small firms in those sectors are encouraged to take advantage of the services offered by the boards and to provide opportunities for trainees and apprentices.
In the construction industry, a higher levy rate is imposed on employers' use of sub-contract labour than on their direct workforce. That is because, according to the industry, the vast majority of training is carried out by employers with a directly employed labour force. Employers who opt to use labour-only subcontractors tend to have a transitory arrangement with those subcontractors and are not normally involved in their training.
In the order before your Lordships, the CITB proposes that both its levy rates should stay the same as those approved by the House last year: that is, 0.5 per cent of payroll for direct employees and 1.5 per cent of net expenditure on sub-contract labour.
Employers whose combined payroll and net expenditure on sub-contract labour is less than £61,000 will not have to pay the levy.
In the engineering construction industry, head offices and engineering construction sites are levied at different rates to reflect the fact that head offices, where workforces are far more stable, are able to plan and manage most of their training needs themselves. In the second order before your Lordships, the ECITB proposes that both its levy rates should stay the same as those approved by the House last year; that is, 0.18 per cent of the total of payroll and net expenditure on sub-contract labour for head offices—head offices whose combined payroll and net expenditure on subcontract labour is £1 million or less will not have to pay the levy—and 1.5 per cent of the total of payroll and net expenditure on sub-contract labour for engineering construction sites. Sites whose combined payroll and net expenditure on sub-contract labour is £75,000 or less will not have to pay the levy.
The proposals are expected to raise between £90 million and £94 million for the CITB and about £10 million for the ECITB. Your Lordships will know from our annual debates that the CITB and the ECITB exist because of wide support from employers and employer interest groups in those sectors. There is a firm belief that without them there would be a serious deterioration of training in these cyclical, peripatetic and project-based industries and their skill needs simply would not be met. I know that each board is committed to ensuring that employers in their industries receive a high quality service and I take this opportunity to thank them and their staff for their continued hard work.
The draft orders will enable the two boards to carry out their vital training responsibilities in 2002, and I believe that it is right that the House should agree to approve them. I commend the order to the House.
Moved, That the draft order laid before the House on 17th January be approved [17th Report from the Joint Committee].—(Lord Davies of Oldham.)
Baroness Miller of Hendon: My Lords, I thank the Minister for introducing and explaining so well the two orders before the House. The Government Whips' Office told me that the orders were uncontroversial. Indeed, I believe that they are and we support them.
In essence, there are two industrial training boards, set up under the Industrial Act 1982, which, as we have heard, cover the construction engineering and the construction sectors. The boards provide a wide range of services and training initiatives, most of which could probably not be provided by individual employers alone. Thus, the 1982 Act provides for a levy on employers to fund training more evenly between companies. The ITB must propose the rate of the levy for the industry and the Secretary of State must make the order to give effect to it.
As I said, we support the orders but I should like to record one note of caution for the Minister. Employers whose combined payroll and net expenditure on subcontract labour is £61,000—as I thought, although the
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noble Lord has just said that it is £75,000 this year—will be exempt from the levy. However, even if the employees were only on the national minimum wage—which is unlikely in the engineering industry—that would represent only businesses employing seven or fewer people.
If this Government are serious about helping small businesses, it is important to consider the burden on them when agreeing the levy. Nevertheless, we think that the orders are good and we support them.
Baroness Sharp of Guildford: My Lords, I echo the words of the noble Baroness, Lady Miller of Hendon, in saying that we on these Benches feel that the levies are an entirely good thing. The principle of imposing a levy to finance training across the board for an industry was originally introduced in the 1960s and applied to many industries. It now applies only to the construction industry—in the two aspects before us, the construction industry itself and the engineering construction board.
Besides saying that we are happy with the orders—I remember that we agreed them last year—I have one question for the Minister. I believe that in their manifesto last summer the Government said that they were committed to extending the principle of the training levy to other sectors which voluntarily wished to introduce it. Do the Government have any plans to move further on that?
Lord Puttnam: My Lords, it is not for me to delay the House any more than is necessary. I welcome these excellent orders, but it is worth mentioning that this is the 20th year that the orders have, to all intents and purposes, gone through on the nod. They ought to be considered in the context of an excellent debate in another place earlier this week on the overall decline of industrial manufacturing.
I welcome many of the Government's proposals on the consolidation of industrial training projects, but I have some questions. I have wanted to ask those questions for four years, and this seems to be as good an opportunity as any. How valuable do the two industrial sectors—in fact, as the noble Baroness, Lady Sharp of Guildford, said, it is a single sector—believe the levy has been to the sustainability of their industry during the past 20 years? Secondly, does either sector believe that the non-statutory provision made for other sectors offers the likelihood of a sustainable workforce in their own? I suspect that they do not. Thirdly, if the provision made by the statutory instruments is fundamental to the health of the sectors, why has it not yet been extended to others who are equally dependent on skills?
I refer again to what the noble Baroness said. There is, and always has been, a tacit commitment by the Government to extend the orders. I do not quite understand why there should be such reluctance to take that forward.
Lord Davies of Oldham: My Lords, I am grateful for the contributions to the debate. As the noble Baroness, Lady Sharp of Guildford, said, we have been here

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before. In fact, I was at the Dispatch Box for this debate last year, and I remember that the questions were as informed last year as they were this year. This year, of course, I emphasise the fact that the levy rates are not changing. There was a change last year, which occasioned a little more debate.
I shall deal as precisely as I can with the questions that were raised. In response to the noble Baroness, I would say that the £75,000 was a cut-off point fox one hoard, and the £61,000 was for the Construction Industry Training Board. The other figure was for the Engineering Industry Training Board. That is why there are two figures for the definition, as it were, of firms whose activities are at such a low level that it would not be appropriate to place the levy on them.
Baroness Sharp of Guildford: My Lords, the Minister referred to the Engineering Industry Training Board. I must correct him. There used to be an Engineering Industry Training Board levy, but there is no longer. This is the Engineering Construction Industry Training Board.
Lord Davies of Oldham: My Lords, I stand corrected. I am talking about the Engineering Construction Industry Training Board. I emphasise that the cut-off point is different for the two industries, on the basis of the figures that I identified.
Of course, we reach the levy position and the cut-off point on the basis of proposals from the boards, after consultation with the industries for which they have responsibility. We have had no representations about the figure or about the use of the absolute cut-off point. so we can safely accept that they have the broad support of the industries affected.
The noble Baroness, Lady Sharp of Guildford, and my noble friend Lord Puttnam asked about the future.
I shall be as helpful as I can. As the noble Baroness said, we said in our manifesto that if both sides of industry in a sector agree, we will help to set up a statutory framework for training for that industry. I must report that, as yet, the only sector to express a positive interest in developing a statutory framework is the print industry. Discussions are going on for that industry. The House will recognise that, as far as concerns training arrangements, it is important to work with the grain of the industries involved. That is why we have expressed ourselves in those terms.
In response to my noble friend Lord Puttnam, I must say that I would like the debate to be broad enough for us to engage in a thorough analysis of the training needs of the nation and how we can respond to them. However, there is other business before the House tonight, in which several noble Lords present have an interest, so I shall not go on too long. I respect what my noble friend said about the importance of recognising that the training boards play a limited part in the overall training needs related to the two industries.
My noble friend will know that the Government have, of course, invested a great deal in training strategy, particularly the development of the Learning
824
and Skills Council, and we are considering the question of sector skills development. That will involve a great deal of intermeshing between these boards, between employers and the development of the local dimensions of the Learning and Skills Council. There is a great deal of work going on to ensure that the objectives—which, I know, my noble friend shares with the Government—are realised. We should not underestimate the fact that, as a nation, we have not invested as much in training as we would have wished. That shows itself in every conceivable statistic of measurement against our major industrial rivals. There is no doubt that it is an important priority for the Government. The only thing that I would say to my noble friend is that it would be remiss of me to dwell for the many minutes that I would like on the broader issues of training. I must restrict myself to the orders.
On the basis that I have answered the questions that were put this evening, I can commend the orders to the House.
On Question, Motion agreed to.

Industrial Training Levy (Engineering Construction Board) Order 2002
Lord Davies of Oldham: My Lords, I beg to move.
Moved, That the draft order laid before the House on 17th January be approved [17th Report from the Joint Committee].—(Lord Davies of Oldham.)
On Question, Motion agreed to.

Export Control Bill
8.46 p.m.
House again in Committee.
Clause 4 agreed to.
Lord Redesdale Lord Redesdale moved Amendment No. 19:
After Clause 4, insert the following new clause—
"CONTROL OF LICENSED PRODUCTION OF GOODS OVERSEAS
(1) The Secretary of State may by order make provision for, or in connection with, the imposition of controls regulating the licensed production of controlled goods overseas.
(2) In this section "licensed production" mean, production under commercial licence from a United Kingdom person, United Kingdom company or company based in the United Kingdom of that entity's proprietary controlled goods or technology.
(3) An order under this section may make provision in connection with any controls that may be imposed by a directly applicable Community provision on licensed production agreements.
(4) Controls shall be imposed under this section on acts done outside the United Kingdom, but only if they are done by a person who is, or is acting under the control of, a United Kingdom person, United Kingdom company, or company based in the United Kingdom."
The noble Lord said: The gist of the amendment is to introduce controls on licensing overseas production. We have tabled the amendment because there is a trend among companies to diversify the areas
in which they manufacture overseas. If we are supplying markets overseas, there is competition over deals, and there is a trend to build factories in the recipient countries.
There are risks in producing overseas. Countries in which the equipment is manufactured require weapons that we would not sell directly to them. The equipment could be exported to regimes to which we would not license direct sales.
During the consultation process on the Export Control Bill, the Government acknowledged the need to address the potential dangers of licensed production. In evidence to the Quadripartite Select Committee, the then Secretary of State for Trade and Industry, Stephen Byers, stated that licensed production is,
"one of those areas where I think experience shows us that we could be in a potentially embarrassing position for the United Kingdom, as a country that cares about these issues, not to have an effective regime on licensed production in place. We need to use this as an opportunity to do precisely that".
That recognition has not been reflected in the Bill. In the draft Bill consultation document, two possible options for how such controls might be structured were advanced. There was also a commitment to push for reference to licensed production overseas to be included in the EU code of conduct on arms exports.
The proposals in the draft consultation put the burden of regulation on UK companies, requiring them either to require specific end-use undertakings from the overseas producer or to insert a clause in their contracts providing for restrictions on re-export. In both cases, companies would be required only to prevent re-export to destinations subject to international embargoes.
Only one of the Government's proposed options would have required the adoption of additional powers in the primary legislation. However, the Government have decided against giving themselves power in this area, stating that:
"The Government has decided, in light of the results of the consultation, not to introduce specific powers on licensed production overseas".
The purpose of this amendment is to put those powers back. The fact that the Government proposed extra controls on licensed production overseas in the consultation document and proposed new EU measures suggests that additional steps are necessary. Furthermore, it is difficult to see how the Bill's existing clause on international transfers addresses the particular characteristics of licensed production—say, how to apply controls on equipment produced under licence, not just the transfer of technology by intangible means.
Maintaining control over licensed production overseas is clearly more difficult than controlling direct sales. Yet if the Government feel it is right to exert full control over direct exports, they should do the same with licensed production overseas. I beg to move.
Lord Sainsbury of Turville Lord Sainsbury of Turville: Amendment No. 19 seeks to include on the face of the Bill specific
provisions governing licensed production arrangements. The Government do not believe that this issue needs to be addressed in new primary legislation, nor do we consider that the addition of this clause would in practice add meaningfully to our efforts to prevent the supply of arms to conflict zones and other sensitive areas.
It is important to recognise, first, that the Government are already able to exert a significant degree of control over the supply lines on which licensed production arrangements typically depend; and, secondly, that the new powers in the Bill will significantly strengthen and widen that existing control. That is because licensed production usually requires an initial and often continuing supply of component parts and design or production technology to the overseas producer by the company licensing the manufacture of its products.
Where the product to be manufactured under commercial licence has a potential military use, an export licence will in most cases be required before the equipment and technology necessary for the establishment and operation of the licensed production facility can be supplied. We have made clear that an export licence will not be granted where there is a clear risk that the finished products of the licensed production arrangement could be used for internal repression, or international aggression, or where they could be diverted to an unacceptable end-user.
It is clear that licensed production does not take place unless there is some transfer of technology or knowledge, and the way we can control that is by licensing the technology and knowledge, which is greatly strengthened in this Bill. At present, however, the Government are able to control transfers overseas of design and production military technology to licensed production facilities only where the transfer takes place in a physical form; for example, on a piece of paper or on a computer disk. The new power in the Bill will add an important new pillar to our existing control regime on licensed production by allowing us to control electronic transfers of sensitive military technology to such facilities as well. The Bill will also enable us to control trafficking and brokering in the component parts often required for the production of arms overseas.
Additionally, the Government are committed to making more explicit in the UK export licensing process our existing commitment to taking account of whether any proposed export of military equipment or transfer of technology is destined for use in a licensed production facility. The UK also recently made a formal approach to the EU presidency and obtained agreement that there should be discussion of the issue of licensed production overseas among member states, with a view to seeking EU-wide agreement to adding explicit reference to licensed production in the EU Code of Conduct on arms exports.
There is therefore no doubt that the UK already takes and will continue to take seriously the issue of licensed production. Moreover, the new powers in the
Bill will augment the capacity we already have to control the supply lines on which licensed production depends.
Reference was made to the Secretary of State for Trade and Industry, Stephen Byers, when he appeared before the Quadripartite Committee in April 2001. My right honourable friend was right to say that the Bill will allow us to put into place a more effective regime on licensed production. The new powers the Bill provides to control electronic transfers of technology will be particularly useful in strengthening and widening our existing capacity to control the supply of design and production technology to overseas licensed production facilities. In view of that, I invite the noble Lord to withdraw his amendment.
Lord Redesdale: I thank the Minister for his reply and am grateful for the Government's move to widen the concept of licensed production overseas to an EUwide context. However, I feel that an opportunity has been lost in not including it in the Bill. I realise that this is an area which has been covered in another place. It may well be an area to which we return at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Redesdale Lord Redesdale moved Amendment No. 20:
After Clause 4, insert the following new clause
"END-USE MONITORING CONTROLS
(1) The Secretary of State may by order require that, for any activities in relation to which controls are capable of being imposed by an order under section 1, 2, 3 or 4, provision shall be made for follow-up monitoring of the use made of the goods exported, the technology transferred, the technical assistance provided or the goods traded.
(2) In this section "follow-up monitoring" means the undertaking of activities designed to verify that the use to which the goods, technology or technical assistance are put, and the identity of the end-users of the goods, technology or technical assistance, are consistent with the obligations stipulated in the relevant licence or end-use documentation.
(3) In subsection (2) "activities" may include, but not be limited to, physical inspection of the designated goods or technology within the territory of the state, or the jurisdiction of the end-user stipulated in the relevant licence or end-use documentation."
The noble Lord said: The purpose of Amendment No. 20 is to introduce end-user certificates and monitoring controls. This is an area which has also been discussed at length in another place and is something which we feel strongly should be introduced into the Bill.
At the moment it is a great weakness with any movement of arms that they can be used in other countries and misdirected. We hope that this amendment will fill a gap in ensuring that weapons go to the destination stated in the export order. I beg to move.
The Lord Bishop of Manchester: I support Amendment No. 20, which seeks to introduce a clear system in the Bill for end-use certification and monitoring.
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Over the past five or 10 years we have witnessed a number of incidents where arms of UK origin have been diverted for purposes or to destinations contrary to the Government's intentions. While the Government say that they are now taking greater consideration of the possibility of arms being diverted to undesirable users or usages and have already put in place a number of procedures—I am aware of that and they are welcome—we do not yet have a comprehensive system of end-use monitoring. We need to make it more comprehensive than it is at the moment. We must back up the present controls to give a signal not only to the people who might abuse the system, but also internationally, that we are taking end-use seriously.
I heard the Government's argument about this in the other place and also in this Chamber; that is, that we already have an adequate end-use monitoring process. But that is largely based on stringent risk assessment at an early stage of the licensing, rather than putting resources into a system of end-use monitoring. That seems to happen before rather than afterwards. While I accept that risk assessment on licensing is very important, we also need some kind of monitoring of our export regime.
One example which will be well known to Members of the Committee concerns the UK-made Hawk jets in East Timor and the Democratic Republic of the Congo. As I understand the history. repeated assurances were given by the United Kingdom Government over the years that the United Kingdom-supplied equipment would not be used in East Timor. The Chief of the Indonesian Armed Forces admitted on 15th July 1999 that a British-made Hawk jet was flying over East Timor as part of a programme of intimidation against the people of East Timor, who were then striving peacefully for independence. Despite the continued evidence of violation of human rights in East Timor, the United Kingdom Government—I am a United Kingdom citizen so I am guilty too—argued that we were contractually obliged to maintain supplies of such military equipment.
Such concerns about end-use and contractual obligation arose more recently with the UK transfer of spare parts for military aircraft to Zimbabwe in January 2000, despite reports that Zimbabwe was using those very same jets in a conflict in the neighbouring DRC, then subject to a European Union arms embargo. Following a public and parliamentary outcry and a worsening human rights situation in Zimbabwe, in this case the licences were eventually suspended in May 2000. But it took a lot to get them suspended and we had to go through all that agony and horror in order for it to happen.
Such misuse of UK arms and equipment results in human rights violations against some of the poorest people in the world. We need a system of end monitoring and a process to halt further UK supplies in order to ensure that further misuses do not continue. An end-use monitoring system would help the Government by providing them with information in future about pre-delivery licensing and assessment,

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making them more effective at preventing further diversion and misuse. The two systems would complement each other.
I have heard the Government argue that it is almost impossible to put in place such systems and we have heard today about the so-called failings of the system in the United States. However, the failings there should not mean that we do not attempt to introduce a system in principle. We could learn from America's mistakes, tighten up the system and do rather better.
The US system is not entirely a failure. The Blue Lantern system is working to catch cases of diversion and misuse. More than 4,000 checks have been made since the programme's inception, with 360 initiated during 1999. Of those, typically 5 to 10 per cent result in unfavourable results, which may lead to denials or revocations of licences, the imposition of sanctions or the prosecution of suspected law violators. State Department officials in the United States believe that the Blue Lantern programme has had some effect. It may not be perfect, but it does have a deterrent effect on would-be diversion.
Rather than saying that the United States system is not perfect, let us accept the principle of monitoring and an end-use system and see whether we can learn from its mistakes and do rather better.
It is also said that the Government should not be the monitoring system: we should rely on NGOs and the media. There were many comments earlier, from both sides of the House, about the media getting their stories right. It is therefore a bit rich for the Government to argue that we should rely on the media for information. NGOs are more reliable, but I still argue that it is a responsibility of the Government and not the NGOs.
It would be good to engage NGOs because they have vast experience throughout the world. I do not need to list them all; they are well represented here tonight. However, it should be on the face of the Bill that it is a government responsibility. There is no guarantee that a future government would stay in partnership with NGOs, even if this Government said that they would be very glad to do so.
I support the amendment. I hope that we will get a comprehensive, end-of-use monitoring system instituted. If we do not get it right first time, let us work at it and make it better.
9 p.m.
Lord Judd: The right reverend Prelate referred to East Timor, but there are other examples. I suggest to my noble friend the Minister that the Government's own annual report on strategic exports for 2000 gives a good deal of ground for concern. Let me be specific.
Listed in regard to Hong Kong are 24 small arms, a range of pistols, rifles and revolvers, including 15 submachine guns; a range of crowd control equipment, including ammunition; and CS hand-grenades and tear gas. But Hong Kong is now part of mainland China, which is under a European Union arms embargo.
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Listed for Jordan are 102 small arms, including 53 sub-machine guns and 42 assault rifles; components for combat aircraft and large calibre artillery ammunition. But Jordan was named as a conduit for arms to Iraq in the Scott report.
For Paraguay there was listed 100 sub-machine guns plus components and technology. Paraguay has been named as a major transhipment route of all small arms to the illicit market in Brazil. Singapore is listed for 3,342 sub-machine guns, 744 rifles, 301 semiautomatic pistols, two sniper rifles, small arms, ammunition, components for combat aircraft and armoured personnel carriers. In the Bemarc case, British naval cannon which was sold to Singapore ended up in Iran.
Against this background, I hope that my noble friend will be able reply to two specific questions. First, what specific plans do the Government have to check whether in the instances I have mentioned the arms remained with the end-user? Secondly, does he agree that enshrining powers to monitor end use in law would strengthen the Government's ability to ensure that the weapons they are exporting are not being diverted or used in contravention of our national interest? The Export Control Bill could surely be undermined if there is no muscular mechanism to ensure that the arms we sell are with the correct end user and being used for the prescribed end use.
The Earl of Sandwich: I wish to speak to Amendment No. 49 in this important group of amendments. I make no apology for delaying the Committee. This is one of the crucial stages of the Bill.
The Government believe that they already have the power to revoke licences, but in practice any decisions are open to challenge from exporters on the grounds of their contractual obligations and the perceived need for Britain to maintain its reputation.
It is the view of many in NGOs, who have taken legal advice on the matter, that by including a revocation clause the Government would be given the necessary power in primary legislation and, in the event of any breach of a stated obligation, so reduce the likelihood of a legal challenge. In legal language, an individual's "legitimate expectations" can be overridden only by the statutory duties of the public body or by some overriding policy interest.
On end-use monitoring, the Government have decided to introduce stronger controls and to carry out risk assessment at the time of licensing. That is welcome. However, Ministers know that it is inadequate. I believe that the Minister in this House will take the issue seriously and take it away.
Mr Derek Fatchett, the former Foreign and Commonwealth Office Minister, who is highly respected, admitted in 1999 that no systematic monitoring takes place once defence equipment has been exported.

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On 30th January last year, the then Foreign Secretary. Robin Cook, said to the Quadripartite Select Committee:
"I have to be candid with the Committee and say, having licensed equipment there is a limit to the extent to which we can then subsequently, when it has left our shores, verify where it is".
Perhaps I may quote from Saferworld's latest briefing, which is backed up by the United Nations Association:
"Without a system of end use monitoring and a process to halt further UK supplies, misuses will continue to occur and the recipients continue to receive more arms and equipment enabling them to commit further human rights violations".
Here I want briefly to mention the case of Israel. I have given the Minister notice of this. I know that Israel is a country to which the Government will apply the strictest controls in any export licensing. Defence exports to Israel are worth about £12.5 million a year, which is a tiny amount in the context of the arms trade and indeed of Israel's own arms industry. The UK has not sold significant equipment such as tanks or aircraft since 1997, although it has sold components for combat helicopters and related technology, small arms and ammunition. I am glad to say that in the year 2000 one application to export CS gas to Israel was turned down. According to a Written Answer given on 3rd July last year to Dr Phyllis Starkey, 84 standard individual export licences were issued covering the export of goods on the military list to Israel between January and May last year.
This is a country which is not only illegally occupying Palestinian territories but is using considerable force of weaponry to enforce the occupation. Apparently, it also uses civilian equipment for house demolition and road building which can in themselves be a form of internal repression.
The position of Her Majesty's Government has been made very clear, both through the Foreign Office and through the DTI. And yet, as I said at Second Reading, the latest annual report on strategic export controls includes equipment licensed for export which has a potentially offensive use to Israel. We are still exporting weapons and equipment without specific limitations or end-use conditions.
I do not doubt the Government's good intentions. I appreciate that they have stated more than once that they will not issue licences where there is a clear risk that the equipment might be used for internal repression. I have also read the Government's response last July to the Select Committee (Cm. 5141) which re-states that position with regard to civilians in South Lebanon.
But the point is that a great deal can happen after exports. This is where the amendments proposed by the noble Lord, Lord Redesdale, are intended to be helpful. In due course, possibly on Report, we shall examine the consequences of such amendments for the Government, which should not be exaggerated.
I am slightly concerned, like the right reverend Prelate, to hear the Government's plea of limited resources and the possible need to involve NGOs in the
832
monitoring process. That would be absurd However, at this stage I merely ask the Government to reconsider their present position.
Lord Phillips of Sudbury: Amendment No. 21. standing in my name and that of my noble friend Lord Redesdale, is in this grouping. I can speak briefly to it, because a great deal of the ground is common to the other two amendments in the grouping and has already been covered. The power to revoke any licence granted under the first four clauses of the Bill is a crucial one.
I understand that the dummy order contains a revocation provision. The amendment would place on the face of the Bill an explicit right for the Government to revoke if, subsequent to the granting of a licence, there is any development which will bring into play the consequences set out in the schedule; namely, adverse consequences as a result of the export of arms or dealing in arms.
The points are simple. The Quadripartite Select Committee recognised the Government's dilemma in granting such licences; namely, the dilemma between the needs of the exporters on the one hand and the needs of arms control on the other.
It is also fair to say that the legal position in relation to licences can become quite tricky. The UK Working Group on Arms, which has done a huge amount of work in relation to the Bill and which has helped many of us in understanding some of the finer points, has taken advice from Matrix Chambers, which has given an opinion to the effect that it would be safer and better for the licence conditions to be set out on the face of the Bill in terms of a power for the Governtnent to impose the conditions set out in Amendment No. 21.
If there is any doubt about someone being able to wriggle out of those conditions because they are imposed not by dint of a power in Clause 6 but as a unilateral imposition by government in their licensing role, any amendment which prevents litigation around that point and enforces the Government's discretion in this regard must surely be to the good. Therefore, the amendment should be considered on those simple grounds.
Lord Haskel: When my noble friend the Minister considers the points made by the noble Earl, Lord Sandwich, I hope that he will bear in mind that, although some may consider the use of arms against the Palestinians to be warfare, others consider it to be a means of dealing with terrorism. The noble Earl said that Israel was using arms for certain purposes, but most people believe that those arms are clearly being used to deal with terrorism.
9.15 p.m.
Baroness Miller of Hendon: I accept that the amendments are somewhat tricky to interpret, as the noble Lord, Lord Phillips, said. I shall be most interested to hear what the Minister has to say about Amendments Nos. 20 and 21. I was pleased to hear

833
what the noble Lord, Lord Haskel, had to say about Amendment No. 49, because had he not said it, I would have done so equally forcefully.
Lord Rea: It has been suggested that one of the Government's positions on the follow-up of end-use certificates is that it would waste very limited UK government resources. To quote Nigel Griffiths, the Minister in another place:
"it could send people off on wild goose chases and divert our officers from monitoring properly what is happening".
Such follow-up of arms sales would be a proper role for military attaches in our embassies overseas. One of the roles of military attaches has been to promote arms exports from Britain to the countries in which they are stationed. It seems logical that they should follow up what happens to those arms after they reach the countries concerned.
It would be wrong to say that every arms export must be monitored. Those countries where arms transfers are in most danger of diversion or misuse should be prioritised. If we do not have a military attaché in those countries, there is a good case for appointing one.
Lord Sainsbury of Turville: The amendments would insert two new clauses about the related issues of end-use monitoring and licence revocation, together with a proposed addition to Clause 6 about licence revocation. The position on both issues is clear. The amendments are not necessary for the simple reason that the Government already have the power to revoke licences and to carry out end-use monitoring and they will continue to have that power under the Bill. I shall expand on those two points.
Under the Import, Export and Customs Powers (Defence) Act 1939 and secondary legislation made under it, the Secretary of State has the power to revoke any form of licence, whether open or individual. Article 7(1) of the Export of Goods (Control) Order 1994 refers to the power of revocation. Such revocation might take place when there is clear evidence that an undertaking given by the end-user is likely to be broken, or when the situation in the recipient country has changed significantly after a licence is issued. Revocation might also apply if new information comes to light after a licence has been issued that would have led to the refusal of the application.
We exercise that power. I refer noble Lords to our annual reports. For example, the annual report for 2000 shows that 16 licences were revoked in that year. The appropriate reference can be found on page 15.
Under the Bill, the Government will retain the power to revoke licences. Again, specific provisions will be set out in secondary legislation. The dummy draft orders made available to Parliament last October contained revocation provisions. The dummy draft order on export of goods, transfer of technology and provision of technical assistance—all issues mentioned in the amendment—provides for the revocation of
834
licences in Article 10(5) on page 10. The dummy draft order on trade in controlled goods provides for revocation under Article 5(2) on page 4. The example that we have provided of a dummy draft order giving effect to an embargo includes revocation in Article 4(2) on page 2. The circumstances in which revocation will be considered are the same under the Bill as under existing legislation. All the matters to which the amendments relate are already fully accommodated within the dummy draft orders on the basis of the power contained under the Bill.
We do not need a specific legal provision to allow end-use monitoring of defence exports. Officials already systematically consider whether our overseas posts should make checks on the final customers of controlled goods. That is done as an integral part of the licence application process. Officials will also consider whether follow-up monitoring of certain exports is required. The procedures already in place makes use of best practice in risk assessments. They include standing instructions to posts overseas to be alert to and report on any misuse or diversion of UK-origin defence equipment. Any information from overseas is fed back into the licensing process for use in assessing new licence applications.
We take into account all reliable sources of information about end users—including external organisations, other governments, international bodies and non-governmental organisations. We will be able to continue conducting follow-up monitoring of end-use under the Bill.
We have no evidence that equipment or components manufactured in the UK and licensed for export were used by Israeli forces against civilians in the occupied territories during the recent violence. If any such evidence came to light, we would of course consider it carefully. I reiterate that we are not aware of any such evidence.
None of the three amendments is required because we have the necessary powers and use them in revoking licences. In light of that explanation, I invite the noble Lord to withdraw his amendment.
Lord Judd: Before the Minister sits down, I am totally convinced of his personal commitment and have no doubt that we are concerned about the same humanitarian issues. But in this particular context, does my noble friend agree that his answer sounded complacent? For a number of years, a deafening chorus of NGOs—and I was part of it—complained about the misuse of arms in East Timor. The time it took for that to be recognised requires some justification. That occurred under a previous administration but none of us is scoring party points tonight. There is a need to take Amendment No. 20 seriously. The issue needs to be addressed. We have to show more rigour and muscle.
Lord Sainsbury of Turville: We do share a common view but the Government have all the legislative powers that they need. If there is an issue, it is to do with implementation—which will not be changed by any legislation. There may be a debate about whether

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any particular administration implemented the measure properly but nothing will change by giving the present Government the power to undertake end-use monitoring.
The Earl of Sandwich: Among the reasons for revocation listed by the Minister was information coming to light over time—which must imply a form of monitoring. We know there is monitoring but it is riot systematised. The amendment only asks the Government to look once more—as the noble Lord, Lord Judd, splendidly said—at the present position. The Minister has simply restated the position of some time ago. Discussion among officials before the next stage would be helpful.
Lord Redesdale: I shall look closely again at the draft dummy order. The issue causes great concern. As the right reverend Prelate correctly pointed out, it would have been easy to check whether Hawks were being used in East Timor for military purposes. A monitoring system mounted on the wings could have clearly shown whether the aircraft had been used in East Timor to repress human rights. That case would have been covered by this amendment.
I do not wish to score party points, but there is a difference between intention and action. The 1997 Labour manifesto contained a commitment to strengthen,
"the end-use of defence exports to prevent diversion to third countries and to ensure that exported equipment is used only on the conditions under which the export licence has been granted".
The Government may now feel that they have sufficient powers, but they did not believe so in 1997. I hope that the Minister will be able to look again at the issue. We certainly intend to raise it again at the next Stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Control powers: supplementary]: [Amendment No. 21 not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 22:
Page 4, line 42, at end insert "for a period of three years after the granting of a licence"
The noble Baroness said: Clause 6 states that an order may introduce rules that make the keeping of records compulsory by those to whom export licences are granted. I have tabled this probing amendment simply to ask the Government to put on the record the reasons why the dummy orders are inconsistent in the length of time laid down for keeping such records.
The Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order and the Trade in Controlled Goods (Control) Order state that the records shall be kept for three years. Both those orders deal with military exports. However, the Export of Objects of Cultural Interest (Control) Order requires that records be kept for four years.
On 16th October 2001, in another place, my honourable friend Mr Robert Key asked the Minister—at col. 127 of the Official Report—-to explain that discrepancy. It does seem odd that the world of art exports should be subject to greater bureaucracy than the world of arms exports. The Minister could not offer an answer on that occasion. but he offered to write to my honourable friend. I am simply repeating the question, hoping that, after some months, the Government are now able to offer a stunningly simple and persuasive answer. I beg to move.
Lord Redesdale: I am grateful for that explanation. I was concerned that the amendment requires records to be kept for only three years whereas Financial records must be kept for a good deal longer. I should be grateful if the Minister could tell us why the Bill should require that records be kept for a mere three years rather than, say, six years.
Lord Sainsbury of Turville: I shall deal first with the amendment and then with the tricky question of three years versus four years. The amendment seeks to ensure that orders under the legislation can require that records be kept for only three years. I shall explain why the Government do not think that that restriction is appropriate.
A number of our export controls derive from our membership of international organisations, in particular the European Community. Those organisations may require exporters to keep records for certain lengths of time. Amendment No. 22 could prevent the Government from fulfilling our European Community obligations and our international commitments, or could prevent the Government from responding to any changes required of the UK. For example, the EC regulation governing exports of dual-use items requires records to be kept for at least three years from the end of the calendar year in which the authorised act—the export or technology transfer— took place. That requirement is therefore reflected in the dummy draft orders that we published last October to indicate how the Government intend to use the powers in the Bill.
Under the proposed amendment the Government would be unable to include this provision and hence unable to require UK companies to comply with the EC regulation. Moreover, the amendment would also prevent the Government from implementing any longer record-keeping requirements which might be proposed by the EC or other international organisations in future. Any failure to provide for the enforcement of directly applicable provisions of Community law can, of course, lead to infraction proceedings being taken by the Commission in the European Court of Justice.
Why are the record-keeping requirements in the dummy draft orders different for cultural and strategic exports? On 19th October my right noble friend Lady Blackstone wrote to the chairman of the Standing Committee in the other place regarding the point raised by the honourable Member for Salisbury,

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addressing the difference between the DTI and DCMS dummy draft orders in respect of the lengths of time which exporters will be required to keep records of any goods exported under the authority of a general licence. She agreed that it would be sensible for both departments to have the same requirement. Therefore, she was content that any orders made by her department should specify three years for the keeping of records. So now we have what is dear to all civil servants and others-complete consistency across the legislation. Having explained why we think that it is wrong to put a precise time limit in the Bill, I hope that the noble Baroness will withdraw her amendment.
9.30 p.m.
Baroness Anelay of St Johns: The Minister managed to be precise, simple and persuasive in one fell swoop. I am most grateful to him for putting on the record the explanation provided by the noble Baroness, Lady Blackstone, and for stating that there is now unanimity across the orders. I agree with the Minister that a rigid time limit should not be put on the face of the Bill. I mentioned it merely as a vehicle to obtain an explanation from the Minister. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 23:
Page 5, line 3, at end insert ", but such disclosure shall not be permitted except insofar as is necessary in order to monitor or enforce compliance with the order or any licence granted under it, and shall only be permitted on condition that the recipient shall treat such material as confidential"
The noble Baroness said: It is clearly necessary that information may be properly demanded to be kept or provided for the purposes of what I may loosely call the operation of this Bill. The relevant paragraphs are (c) to (f) of subsection (I) of Clause 6. However, paragraph (0 implies that any information contained in the records that are required to be kept under paragraph (c), or provided under paragraphs (d) and (e), may be disclosed to what the paragraphs call persons".
The amendment requires that information obtained under the powers of the Bill shall be used only for the purposes of monitoring or enforcing compliance with the Bill and that the recipient shall treat the material as confidential. The reason for this requirement is to comply with the Human Rights Act which seems for some reason to have been overlooked by the draftsman in this particular case.
Perhaps the Committee will recall the Guinness case, and in particular the conviction of Ernest Saunders who was required to give evidence to the inspectors conducting an inquiry under, I believe, the Companies Act. The information that he was compelled to give was then used against him in his subsequent prosecution in breach of his rights against self-incrimination.
This amendment is intended to ensure that records and information will, as I said, be used for the purposes of this Bill and nothing else. There should be no disclosure to potential competitors; no disclosure to other governments or NGOs and no disclosure to other government departments. Here I have in mind the fact that this Bill will largely be administered by Customs and Excise. It would be wrong for information obtained for the purpose of the administration and enforcement of this Bill to be passed on to the VAT department of Customs and Excise. It is correct that any order under this subsection, including the provisions of paragraph (f), is subject to parliamentary scrutiny. However, bearing in mind how limited such scrutiny is, it is essential that the parameters of the disclosure should be defined within limitations laid down in the primary legislation. I beg to move.
Lord Sainsbury of Turville: This amendment seeks to place conditions on the Secretary of State's power to disclose information obtained through an order under the Bill. The Government require the power to obtain and share information connected to export licensing issues for two reasons. By virtue of its membership of a number of international organisations, the UK is committed to disclosing certain information to these bodies. Specifically, under the UN arms register and the Wassenaar arrangement, we are required to provide details of the numbers of certain categories of military or dual-use goods exported each year. The Government also wish to have the power to exchange information within Government, for example with HM Customs and Excise, for the regulation and enforcement of export controls and investigation or prosecution of offences.
The amendment proposed would restrict the uses for which the Government could share information to monitoring and compliance and require any such information sharing to be in confidence. The result would be to prevent the Government from meeting their international reporting obligations. In view of these arguments, I invite the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: I hear clearly the Minister's response. I shall withdraw the amendment. However, rather than simply stating that the power is left to the discretion of the Secretary of State, the provision should add specifically, "because of international agreement" or whatever it may be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 24:
Page 5, line 9, at end insert—
"( ) It shall be a defence to any charge under subsection (1)(g) of an offence described wholly or partially by reference to the uses to which any goods, technology or technical assistance may be put that the person charged did not know and could not reasonably have been expected to know that there was a risk that the goods, technology or technical assistance in question would be put to such uses."
The noble Baroness said: This simple amendment is self-explanatory. It provides a defence for someone who innocently supplies goods, technology or technical assistance in breach of a control order.
Members of the Committee will recall the notorious Matrix Churchill case where tubes were supplied ostensibly for an oil pipeline when it transpired that they were intended for the purposes of a so-called super gun. While providing a defence, this clause imposes an onus of proof on the defendant which I expect will be extremely difficult to discharge. There can be no grounds for creating an absolute offence in circumstances where a person, possibly even a subcontractor, may be relying entirely in good faith on information supplied by his customer. I beg to move.
Lord Phillips of Sudbury: I am inclined to support the amendment. The Minister may tell us that the wording undermines the effectiveness of the licensing procedure. However, with regard to a criminal offence which might bear a sentence of imprisonment of up to 10 years, and where that criminality can be imposed by secondary legislation, it must be right in principle that there should be some intent.
Lord Sainsbury of Turville: The amendment seeks to provide a defence against charges of committing an offence in relation to an end-use type of control. In such cases the amendment seeks to provide a defence that the supplier did not know, and could not reasonably be expected to know, about the uses to which the item of assistance would be put. This is essentially a defence based on the level of reasonable knowledge about intended end-uses. The amendment is not required and is inappropriate.
Clause 6 of the Bill illustrates the supplementary powers necessary in relation to the order-making powers. It is for the orders themselves rather than the Bill to spell out both offences and any necessary defences. It would not be appropriate, therefore, nor indeed possible, to provide in the Bill for a defence in respect of offences to be created in secondary legislation but which of course are not created until that secondary legislation has been made.
However, perhaps I can reassure the noble Baroness and the noble Lord that appropriate defences would, of course, be available in respect of offences to be introduced in secondary legislation. We have already made available to Parliament dummy draft orders under the Bill which illustrate how we propose to use the powers in the Bill. The dummy draft orders and existing secondary legislation contain provisions about offences and penalties. It may be helpful to refer to that now.
Taking an example from existing controls, the Dual-Use Items (Export Control) Regulations 2000, which deal with enforcement and offences related to Community legislation, specify that offences arise only where the person concerned has been informed by Government, is aware or suspects that an item is or may be intended for use in connection with weapons of
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mass destruction. In the case of "suspicion" the regulations further make clear that the person should make,
"all reasonable enquiries as to their proposed use"
that is, dual-use items
"and is satisfied that they will not be so used".
That language is reproduced in Article 4(4) of the dummy draft order on export of goods, transfer of technology and provision of technical assistance. Similar principles would apply in relation to new controls. In addition, general provisions on indictable offences and penalties are set out in Article 15 of that same dummy draft order, which states:
"Any person knowingly concerned in the transfer of software or technology, or in the attempted transfer of software or technology, with intent to evade any prohibiton or restriction shall be guilty of an offence".
That makes it clear that knowledge and intent are required for an offence to be committed. I hope that it is therefore clear that the objective of the proposed amendment will be dealt with in secondary legislation. But for the reasons that I have mentioned, we cannot properly include in primary legislation a defence that relates to offences not created by that primary legislation.
I hope that the noble Baroness and the noble Lord will be reassured by what I have said and that the amendment will be withdrawn.
Baroness Miller of Hendon: I shall withdraw the amendment with the leave of the Committee, but II am not happy with the explanation. Although I understand what the Minister is saying—I shall read his remarks carefully—I nevertheless feel that it is not appropriate that such matters should be dealt with by secondary legislation. The matter should be clearly spelt out. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury moved Amendment No. 25:
Page 5, line 10, leave out "may"
The noble Lord said: In moving this amendment, I shall speak to Amendments Nos. 26 to 30, which refer to Clause 6, which, as Members of the Committee will recollect, gives the Government the power to make supplementary provisions with regard to licences granted under the first clauses of the Bill. Subsection (2) of Clause 6, to which the amendments relate, states that "an order may" provide yet further arrangements.
The purport of the six amendments is to require an order made under Clause 6(1) to apply to the Crown, leaving discretion with regard to the other provisions of Clause 6(2). We believe that the orders that may be promulgated under Clause 6 should apply to the Crown, not as a matter of discretion but compulsorily. There is no reason to exempt the Crown from the position of every other citizen whether corporate or individual.
It is notable that the Scott report recommended that the list of international organisations arid Crown agencies exempted from export controls should be
abolished. It is also the case that the Quadripartite Select Committee in its report of May last year recommended that,
"consideration is given to the desirability of ending the blanket exemption from controls of Government and its agencies as exporters of licensable goods and technology".
That is the consideration that we are giving the matter tonight. It is clear that the Select Committee was biased in favour of the amendments that are before this Committee. The Government are a major dealer in weaponry and defence equipment both to and from other governments. The amendments would ensure that the provisions that are to be applied under Clause 6 and the earlier clauses will apply to government as well. I beg to move.
Lord Judd: I hope that my noble friend the Minister will take seriously the amendment moved by the noble Lord, Lord Phillips. I imagine that my noble friend will argue that there is no need to control most of those exports because they involve providing essential equipment to our Armed Forces in connection with important international defence commitments such as peacekeeping. No one underestimates the significance of that. Does the Minister accept that that is only one aspect of the government transfers issue and that there are also a number of other aspects? They include, for example, the sales of Challenger tanks to Jordan and the largest-ever deal, the Al Yamamah deal, which was, after all, a government deal. I find it difficult to believe that in view of the logic of the Government's position, they do not feel that such arrangements should be open to the same scrutiny as any other arrangements.
9.45 p.m.
Lord Sainsbury of Turville: The reason why these provisions are included has perhaps been misunderstood. As I explain the situation, it should become clear that the problem that has been raised is rather different from the intention that lies behind the provisions.
Clause 6 sets out the various provisions that may be specified in orders that are made under the Bill. The amendments would provide that the matters that are specified in the orders should apply to the Crown. The substantive amendment appears to propose the replacement of "may" in line 10 with "shall". I shall focus on that amendment in responding. The other amendments are consequential on it.
The position is that controls on the export of most classes of goods fall within Community competence under the common commercial policy of the Treaty of Rome. As a limited exception to that, member states have the power to impose controls in respect of exports and transfers on defence items. Member states also have, in exceptional circumstances, the ability to impose controls for other significant reasons, such as public security. At the moment, our Community obligations are given effect under the European Communities Act 1972. By enabling the Crown to be bound in respect of EU obligations, Clause 6(2)(a)
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reflects existing powers and, as the main dummy draft order illustrates, will allow us to consolidate current export control legislation made under both the 1939 Act and the European Communities Act. That consolidation is a step which we believe will be helpful to business. That is, if you like, the "technical" reason for Clause 6(2)(a).
The Government's own exports tend to be those items of essential equipment that are used by our Armed Forces or in connection with important international collaborative defence projects. There will also be items that are exported for use for international development purposes, such as equipment used for mine clearance. It must be for the government of the day to carry out their various operations in pursuance of announced policy efficiently and effectively. Clearly, it makes no sense for the Government to be required to licence their own exports for those defence and other essential purposes. To impose such a requirement would create unnecessary bureaucracy and in some cases could hamper our ability to respond quickly. At the same time, the Government make information available in the annual reports, which gives Parliament the opportunity to scrutinise export decisions.
In view of that explanation and the fact that the matter relates to our treaty obligations, I invite the noble Lord to withdraw the amendment.
Lord Phillips of Sudbury: I am grateful to the Minister for that response. I shall deal with the only easy point first; that is, that the effectiveness of parliamentary scrutiny on these matters ex post facto is, I have to say, nigh on nil.
On the Minister's argument as a whole, I shall need to read his response carefully. He will perhaps accept that his answer was worthy of an advanced seminar in international law. I am not going to tread where others would not go, except to say—perhaps Members of the Committee will find this totally superfluous—that the nature of legislation these days is illustrated rather well by this provision. I make no criticism of the Minister or what he said, but the passage of legislation such as this is somewhat difficult when the issues are so contorted. I hope that he will allow me to come back to him at the Bill's next stage if I am dissatisfied. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 26 to 30 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 31:
Page 5, line 19. after second -different" insert "cases and different".
The noble Lord said: This amendment consists of a technical drafting change, which I hope Members of the Committee will agree raises no new issues of policy. At present, Clause 6(2)(e) illustrates that orders made under Clauses 1 to 4—that is, orders imposing export, technology transfer, technical assistance or trade controls—may make different provision for different
circumstances. For example, orders could set different restrictions on exports to embargoed and non-embargoed destinations.
The proposed amendment makes clear that control orders can also make different provision for different cases. An example of such a scenario would be to make an exception to an order imposing an arms embargo in order to allow equipment to be supplied to peacekeeping forces or to allow vintage arms or aircraft to be exported to museums. Clearly, that is a subject dear to some people's hearts. In view of that explanation, I hope that Members of the Committee will agree that the amendment is necessary and that they will feel able to support it.
On Question, amendment agreed to.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 32:
Page 5, line 19, at end insert
"(3) No such order shall exclude the right of an applicant for a licence to apply to the High Court in appropriate cases for a judicial review of any refusal to grant such a licence or the imposition of any condition or conditions in such licence notwithstanding any other rights of appeal that may exist under this Act or any order made hereunder.".
The noble Baroness said: This amendment is intended to deal with an omission from the Bill. The licensing procedure that will be employed will undoubtedly include some right of applicants to appeal against a refusal of a licence or the terms that it contains. Such appeal will be internally within the department but will be dealt with by an official who is higher up the ladder than the person who dealt with it in the first instance.
I do not believe that that can simply be the end of the matter. An aggrieved applicant must have the right of appeal to the courts as a last resort in appropriate circumstances. An application for a judicial review cannot be launched lightly. In recent years, since this process has become more frequent, although it is still very uncommon, it is circumscribed by stringent rules of the court. The making of such an order is even rarer because of the strict criteria which the courts apply before granting one.
If only on the grounds of the substantial costs involved, it is impossible that the amendment would unleash a flurry of litigation. That is especially the case as only a small number of licences are refused—probably because applicants have more sense than to make hopeless applications in the first place.
The Bill, if enacted, would give the Secretary of State very wide powers to make orders and amend them in areas of which Parliament is still not fully informed because at present a fundamental part of the legislation, in the form of dummy orders, is still out for consultation.
The right to apply for a judicial review is well established in law. But we do not have a written constitution binding on the Government. The amendment seeks to ensure that the wide powers given to the Secretary of State to rule by statutory order will not be used by him to deprive anyone of a right which
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every citizen should have automatically; namely, the right of recourse to the courts to protect him against the unwarranted actions of a very powerful government. By accepting the amendment, the Government would make it clear that there will be no erosion of the rights of citizens in the cases covered by the Bill. I beg to move.
Lord Sainsbury of Turville: The amendment seeks to include in the Bill a provision relating to the right to apply for judicial review to the High Court where a decision is made not to grant a licence or where any conditions have been imposed on a licence.
In this case, I do not believe that the amendment would add anything to the Bill because it is not required. The key point concerning the amendment is that it would include in the Bill a provision that is unnecessary. Although now codified in Section 31 of the Supreme Court Act 1981, judicial review is a common law remedy. It may be used by those with a "sufficient interest" to challenge the exercise or non-exercise of powers by a public body, which includes the Secretary of State, on grounds of illegality, irrationality or procedural impropriety.
Unless specifically disapplied by statute—the Bill does not include any such provision—a claim may be brought by judicial review against any decision by the Secretary of State either to grant or not to grant a licence or to impose conditions upon the award of a licence.
Indeed it may reassure the Committee to know that to include in the Bill, or indeed an order made under it, a provision that ousted a person's right to apply for judicial review in relation to decisions taken by the Secretary of State under this Bill would be likely to breach the Human Rights Act and human rights convention. This underlines the point that there is no need for this amendment to protect the right to judicial review in relation to the exercise of powers under this Bill.
However, judicial review is not an appeal or a rehearing of the substantive decision taken by the Secretary of State. A full review of the substantive decision may be undertaken by the DTI on application. That is an important point because, as the noble Baroness may know, judicial review is an extensive burden for someone to take on. A review undertaken by the DTI on application is a mechanism open to all applicants, whose licence has been refused, revoked or suspended. It includes the ability for the applicant to seek a personal hearing and to be legally represented. The appeal would be determined by a senior person who was not involved with the original application and decision. This system exists now and will continue to exist. Subsequent to the appeal. if still dissatisfied, the aggrieved person would be able to make a claim for judicial review.

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Because the right of judicial review already exists, and is unaffected by the order-making powers in the Bill, it is unnecessary to include such a provision in the Bill. I would, therefore, invite the noble Baroness and the noble Lord to withdraw their amendment.
Baroness Miller of Hendon: I shall read carefully what the noble Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 33:
Page 5, line 19, at end insert
"(4) An order under any of the preceding provisions of this Act shall (unless there shall be in force a general order applying the requirements set out in subsection (3)) make provision

(a) for a prescribed form of application in which descriptive details of the goods or technology in question, their value and the identity and address of the proposed consignee, and if known, both the potential uses and the actual uses by the consignee are set out;

(b) for the time after receipt of an application in which further information can be sought by the licensing authority to supplement the information contained in the application;

(c) prescribing a time (which may be varied between different types of applications or between different types of goods and technology) after the receipt of the application and any further information when an application shall be deemed to have been granted unless refused;

(d) for written reasons for refusal of any application to be given to the applicant, provided that if the refusal is for security reasons that fact should be stated, and details of either sort of reason shall contain sufficient information to enable the applicant, if so advised, to challenge the reasons on appeal; and

(e) prescribing an appeals procedure, either by way of a hearing or by written representations or both, and for reasons for the dismissal of any appeal, subject to security considerations, to be made known to the exporter in writing.

(5) In any case where a licence is deemed to have been granted pursuant to subsection (4)(c), the Secretary of State shall provide the applicant on request with a written document confirming that the export of the goods or technology is authorised."
The noble Baroness said: It is no exaggeration for me to say that Amendment No. 33 is of fundamental importance to the Bill. However, I can explain it simply and briefly. It is fundamental because it goes to the heart of the reasons for the introduction of the Bill.
Your Lordships will recall, as has been mentioned several times in this House and in the other place, that the need for the Bill follows the findings of the Scott report. That report made a number of specific recommendations that were expected by all parties. It specifically recommended certain procedural steps and matters to be included in any export licence. When I first read the Bill, I was surprised that nowhere are those recommendations carried into effect.
The amendment simply sets out those recommendations and requires them to be incorporated in any order made under the clause. That would be achieved in one of two ways, either by
setting out those requirements in detail in each order that is made, or by the Secretary of State making what is called a general order that sets out the requirements which are then incorporated by reference in each specific order that is made.
I invite your Lordships to look at the six Scott recommendations that are set out in the amendment. The first is that there should be a standard form of licence application. That would mean that there would be no question of delay on the grounds of inadequate details being supplied.
Secondly, there should be a fixed time for the authorities to require additional information. In other words, this provision is to concentrate the minds of those dealing with the application.
Thirdly, unless there is a refusal of the licence, one should fix a time after which an application will be deemed to have been granted. That too is designed to prevent lengthy delays, the result of which is lost business either because an order is cancelled or because a potential customer goes elsewhere, because he knows that his order is likely to be delayed excessively. There is urgent need for an obligation on the government departments involved to proceed expeditiously. We have already heard of the failure of the DTI to achieve its targets for the issue of licences by almost 50 per cent. The Defence Manufacturers Association tell me that it is aware of cases where export licences have been approved by both the Ministry of Defence and the Foreign and Commonwealth Office and returned to the DTI for final processing where further delays have then occurred. There has been one instance in which this further delay of two weeks cost the exporter concerned the business, as the customer cancelled the contract in frustration at the delay.
The DMA also reports another case in which the exporter knows that the MoD and the FCO gave their advice in favour of approval last September, but the licence is still awaited. Apart from a standard time after which a licence shall be deemed to be granted, as I propose in subsection (3) of the amendment, I believe that a specific time should be set in the regulations for the DTI to issue a licence after it has received a positive recommendation from its advisory departments.
Fourthly, an explanation should be given for any refusal of a licence unless of course there is a security reason for not giving one. In either case, as the amendment explains, this is to enable the unsuccessful applicant to appeal should he wish to do so.
The fifth recommendation is that the Secretary of State shall prescribe an appeals procedure.
Lastly, where a licence is deemed to be granted because of an absence of response from the department, the Secretary of State shall grant written proof that the applicant is free to export the goods in question.
In simple terms, the amendment is really a test for the Government. Either they accept the Scott recommendations, as they say they do, or they want to reserve the right to depart from them. If they accept the
recommendations then they will also accept this amendment which carries those recommendations into law, as I believe they deserve to be. I beg to move.
10 p.m.
Lord Judith: I find the noble Baroness, Lady Miller, as wonderfully seductive as ever in her argument, but there is only one point in her argument on which I agree with her on this amendment; that is, that it goes to the heart of the Bill. In saying that, we should think back to what the right reverend Prelate was saying earlier in our deliberations.
In the past I have been a member of the defence ministerial team. All of us surely see defence in the modern context as preserving peace and security. The evidence which has accumulated in recent decades has demonstrated repeatedly that arms are very dangerous and disruptive to peace and security.
I do not believe that we will get our export policy on arms right until we get a change of mindset which says that here should be a presumption that one does not export arms unless there is a very good reason for exporting them that makes sense in terms of a commitment to international peace and security; hence the need for the other points that we have been discussing on previous amendments. Therefore, in great affection I would suggest to the noble Baroness that she has the matter around exactly the wrong way; that there should in fact be a system of deemed refusal. Of course very often it is the most complicated, the most risky and the most intriguing deals that take the longest for the Government to evaluate and to reach a final conclusion on.
I suggest—I am sure that she does not intend it—that the noble Baroness is putting pressure on the Government to gallop into decisions which might be very ill-advised.
Lord Sainsbury of Turville: The amendment seeks to acid a number of detailed matters to the Bill. In particular, it requires orders to make provision for a prescribed form of licence application; a time within which any additional information must be sought by the licensing authority; a time after which a licence would be deemed to have been granted unless refused; written reasons for the refusal of a licence application which should be sufficient to enable the applicant to make an appeal; and prescribing an appeals procedure. Proposed subsections (4)(c) and (5) would, in effect, require the Secretary of State to issue a licence by default if a decision has not been made within a prescribed timescale. These various provisions concern procedures, or, in the case of licensing by default, a fundamentally different approach to export licensing.
The Government set out their views about what are essentially procedural matters in the White Paper on Strategic Export Controls, published in 1998. I shall return shortly to the substantive arguments against the approach represented by these amendments. A more general point that I should make is that the
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Government consider that such detailed matters do not need to be set out in primary legislation and that, therefore, this amendment is unnecessary.
As noble Lords may be aware, the matters covered by the Bill have already been the subject of a long and detailed process of consultation. Many of the issues raised by this amendment have already been consulted upon and considered carefully by the Government, with our conclusions about them included in last year's further consultation on the draft Bill.
The Government's 1998 White Paper on Strategic Export Controls, which paved the way for the Bill currently before the Committee, addressed the issue of procedures in detail. It stated:
"The Government considers that there could be merit in setting out the basic elements of the licensing process in primary legislation but not the detailed procedures. The latter are. in the Government's view, best included either in secondary legislation, or in guidance material as at present, or a mixture of the two".
We consider that Clause 6 as it stands does indeed provide the basic power to deal with the necessary procedural matters. The Government consider that the issues included in the amendment are detailed procedures. Therefore, we would reiterate the point made in the White Paper that such details do not belong in primary legislation.
I shall now comment on the substance of what the amendment is seeking to do. The White Paper also dealt with the question of licensing by default, giving written reasons for refusing export licences and appeals—all matters covered in the amendment. Here again, the Government would reiterate the views expressed in the White Paper. On the question of licensing by default, the White Paper stated:
"The Government has considered this issue carefully and has concluded that licensing by default should not be adopted as it would introduce a risk of licences being granted that were contrary to the UK's international obligations or the Government's own policy".
That remains our position. A further point is that the previous Conservative government, in responding to the inquiry of the noble and learned Lord, Lord Scott, commented on the question of prescribing time limits, as proposed in subsection (4)(c) of this amendment, as follows:
"Prescribed time limits for the consideration of licence applications could be particularly difficult given the complexity of the issues raised by some applications and would, in practice, be likely to result in an increase in refusals in borderline cases".
We agree that an increase in the number of refusals in borderline cases is the only responsible approach where time limits apply. That does not seem to be a desirable outcome, particularly from industry's perspective.
On giving written reasons for refusing a licence application, the White Paper also explained that we already give such reasons that are as full as possible. However, in some cases a broad explanation only can be given for reasons of national security, as acknowledged in subsection (4)(d) of the amendment.
As to appeals, the Government have said that they intend to set out procedures in secondary legislation. Appeals procedures were in fact included in the

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dummy draft orders made available to Parliament last October. In particular, Article 14 of the dummy draft order on the Export of Goods, Transfer of Technology and Provision of Technical Assistance, and Article 8 of that on Trade in Controlled Goods, dealt with appeals.
Subsection (4)(a) and (b) of the amendment underlines the general point that I have made about it not being appropriate to include powers to prescribe detailed matters in the Bill. Prescribing the form of the application is essentially an administrative matter, but for EU-derived controls is also a matter of compliance with the EU form of application. Applications will remain relatively unchanged over time, but may need to be updated occasionally. It seems unnecessary to specify such a power in the Bill. The time allowed to seek further information from licence applicants is also essentially an administrative matter and one that will vary in individual cases, depending on the complexity of the proposed export or transfer. Because of the nature of the export control process with regard to strategic items applications, the further information supplied has to be circulated to all other interested departments. There must, therefore, be no constraints on the Government's ability to require information about a proposed export or transfer. The Government aim to deal with all applications expeditiously, but sometime delays can occur, especially if a number of requests need to be made and the applicant is slow to respond.
As far as concerns the performance of the Department of Trade and Industry, we are working hard to reduce processing times for licence applications. In 2000, 57 per cent of standard individual export licence applications were processed within the target. So far, the figure for 2001 is 60 per cent. Of course, unfortunately, a small proportion of cases raise especially difficult issues, and they may take longer to process. All long-standing cases are regularly reviewed by officials to ensure that they are progressed. It is not right—as the noble Baroness, Lady Miller of Hendon, would have it—that we should in such cases allow people to have the export licence by default. Equally, I am not certain that I agree with the noble Lord, Lord Judd, that they should be turned down by default. They are difficult decisions, and the most important thing is that they are properly considered. That may take more time than is ideal, but the important thing is that such important decisions are given proper scrutiny.
The Bill contains all the powers necessary to modernise our existing export control regime. It would be a mistake to encumber it with a multiplicity of specific procedural duties and deal with matters that are best left either to the existing order-making powers in the Bill or to guidance. I therefore urge the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: I shall withdraw the amendment this evening, but I cannot promise the Minister that I will not bring it back. It would convince me not to bring it back if the Minister were to consider some of the points that I raised and if he were to come
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up with an amendment that would satisfy me just a little more. I do not agree with the noble Lord, Lord Judd. Although it was flattering to be told by him that I was seductive, clearly I was not seductive enough, or he would not have said that he disagreed with absolutely everything that I said except for one point about the title.
The important point that I was making to the Minister and to the noble Lord, Lord Judd, was that I, too, do not want to see arms sent to all the wrong places and that I, too, believe in licences and controls. That is why we support the Bill; there is no question about that. We think that it is excellent. However, I differ a little from the noble Lord, Lord Judd, and am on the side of the Minister, in that I think that a balance must be struck. There is no question but that we rely a lot on our defence industry. It is important that suppliers who are doing the job properly and correctly should be able to get on with their business.
I was making the point that the advisory bodies to the Department of Trade and Industry—for example, the Ministry of Defence and the Foreign Office—will, in many cases, go through things carefully with a fine-tooth comb and come to the conclusion that the licences ought to be granted. The matter then goes back to the Department of Trade and Industry, which is where the delay comes in. As a result, our companies lose the business, but the arms are still exported; it is just that they are exported by another company, probably not in this country. That is a pity. We must strike a balance. I felt that my amendment would do that, because it followed the recommendations of the noble and learned Lord, Lord Scott of Foscote.
Having said that, I am sure that the officials in the DTI could examine the process and see which parts they could help to expedite, where it was necessary and safe to do so. In that case, I beg leave to withdraw the amendment although I hope that the matter will be discussed later, perhaps in a different form.
10.15 p.m.
Lord Judd: Before the noble Baroness resumes her seat, I must obviously be a little more careful with my language. I wanted to ask her whether I could tempt her to go a little further. However, the noble Baroness seemed to indicate that she agreed with me that there should be a presumption in the interests of peace and international security that arms were not exported unless there was a good reason for exporting them. If she can confirm that that is the position of the Opposition, it will he immensely encouraging.
Baroness Miller of Hendon: The position of the Opposition is that, if there was a reason for the arms not to be stopped, they should be allowed to be exported. I hope that the noble Lord will accept that. I am clarifying what I believe the position to be. We have no objection to the licences, to the control, and all the other matters that are appropriate and that also take into consideration the concerns of the right reverend Prelate; that is, they should not go all over without consideration. Having said that, when it is

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appropriate, export should not be held up by one department when another department has gone through the procedure carefully.
Amendment. by leave, withdrawn.
Lord Rediesdale Lord Rediesdale moved Amendment No. 34:
Page 5, line 19, at end insert—
"( ) The Secretary of State shall ensure that adequate financial provision is made for the granting and regulation of export licences for objects of cultural interest."
The noble Lord said: We on these Benches finally reach an amendment of our own on cultural interests. This is a probing amendment directed at the Department for Culture, Media and Sport. It seeks to test whether adequate provision has been made for the DCMS to undertake the requirements placed on it by the Bill.
I say that because, as has already been pointed out in earlier amendments, Britain has an extremely large art market and one of the biggest antiquities markets in the world[. However, the DCMS has a small team to deal with licensing. I hope that the Minister can give an indication of how that team is to be expanded; otherwise, the issuing of licensing on time which affects other areas of the Bill—the export of arms—might affect the export of cultural items for loans to exhibitions, galleries or even for sale.
The other aspect that particularly concerns me is that of policing the market place. Objects of cultural interest. especially archaeological items, can be procured illicitly and traded through on-line market places. A number of such sites exist and what is worrying about them is that objects that one assumes have a British context are put on the web for sale in dollars without at the moment any need for an export control licence. I believe that under the provisions of the Bill it will be the role of the DCMS not only to police this market, but also to make those who are putting items up for sale aware of their obligations under the Bill. I beg to move.
Baroness Anelay of St Johns: I am delighted to welcome the noble Lord, Lord Redesdale, into the cultural fold. He has of course raised an extremely serious issue in relation to the availability of staff and funding to make the system work effectively. I join him in inviting the Minister to give an explanation of how there will be sufficient establishment to make the controls within the Bill have real teeth where they need to bite. The noble Lord, Lord Redesdale, is right to point out some of the worries in relation to illicit items being offered for sale on the net, and obviously that will be an expanding market in the technological future.
In addition, perhaps I may ask the Minister a related question. When I looked at Amendment No. 34 I felt it raised more than the issues to which he addressed himself. It also raises the issue of what happens if and when the reviewing committee on art recommends to the Government that an export licence shall be delayed until a time when perhaps money can be found to "rescue it for the nation", to use common parlance.
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That is the reality of what happens if the Waverley system kicks in effectively. It means that the Heritage Lottery Fund or other funds are approached to see whether money can be obtained. So, however active the officials may be in trying to police the system and ensure that illegal activity does not take place, the difficulty is that where legal exports are taking place, it may well be that there is not enough money to save those potentially legal exports for the national system.
Those who have read the reviewing committee's reports over the past few years will be as concerned as I am to note that it believes there is not enough funding in the system to save existing treasures. At page 2 of the 1999–2000 report it was suggested to the committee that the Secretary of State's expert advisers have been so demotivated by the relatively small number of important Waverley items that have been saved for the nation mainly as a result of lack of funds—that they were not even bothering to refer items to the review committee in the hope that they could be saved.
Indeed, in the previous year's report for 1998–99, at page 8 paragraph 7, the committee stated that,
"it appeared to the Advisory Council this year that there had been little progress since the Committee's Report of 1997–98, in which the efficacy of a system that was not able to retain in the country a greater number of deferred items was questioned. The then Committee's remark continued therefore to have resonance".
The issue of funding goes rather wider than that raised by the noble Lord, Lord Redesdale, in. his explanation of the amendment. I hope that the Minister will be able to address the points I have made.
Lord Davies of Oldham: I am not surprised that the noble Baroness, Lady Anelay, welcomed the Liberal Democrats to the debate. It gave her the opportunity to raise a much wider perspective than the one countenanced in the amendment of the noble Lord, Lord Redesdale. However, I shall do my best to answer her.
I shall be slightly negative at first—I shall ask the noble Lord to withdraw his amendment in due course—but, before I sit down, I shall he reasonably positive about certain aspects of the issues he raised and I shall say a word or two about the issues raised by the noble Baroness.
The purpose of Clause 6(2) is to make further provision in respect of the order-making power of the Bill. The amendment makes reference to the financial provision to be provided by the Secretary of State, but not to how the order-making powers themselves might be exercised. There is no connection between the noble Lord's requirement and how the power might he operated. We fear that this would introduce an ambiguity into Clause 6(2)—which has a specific purpose in regard to the Bill—and that would he undesirable.
The noble Lord will recognise that we appreciate the thrust of certain aspects of the amendment—namely, it is necessary that there should be sufficient resources available to police certain aspects of the Bill. It should be noted that two years ago the Minister for the Arts at the Department for Culture, Media and Sport established an advisory panel on illicit trade. We

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referred to its functions earlier when the noble Lord, Lord Renfrew, was in his place. He, of course, is a member of that panel.
The Minister welcomed the recommendations of the panel made to him in December 2000 for regulation of the export licensing system. As a result, additional staff have been appointed to the cultural property unit of the Department for Culture, Media and Sport. So additional resources have been provided for this necessary work.
The Government are well aware of the need for adequate financial provision for the DTI's export control.
Lord Redesdale: I thank the Minister for giving way. Additional staff have been provided, but, from an answer given at Second Reading, I believe that the additional staff number two. In the department's eyes, is that realistic in view of the workload that will be imposed by the Bill?
Lord Davies of Oldham: The staff were appointed in response to the needs of the review committee, the Panel on Elicit Trade, to which I referred. The staff derive their work from ensuring that they fulfil the obligations generated by the work of that panel.
The noble Lord is right. This is not just a matter for the Department for Culture, Media and Sport. It is also a question of the work of the DTI's Export Control Organisation. The Government are well aware of the fact that the Bill will require adequate provision to ensure that its provisions are carried through.
The Export Control Organisation has benefited from increased manpower and resources over the past few years. The Government will continue to ensure that it is adequately resourced to meet its responsibilities, including what we all recognise are the new responsibilities under the Bill.
That does not allow me to go quite so far as the noble Baroness would want. She opened up the issue of necessary resources to ensure that the cultural treasures of this country are sufficiently sustained. First, we all recognise that that is a plea for a "bottomless pit-, if ever one were heard of, in terms of provision. I think that the noble Baroness will generously recognise that the funding and purchase of cultural goods deferred as a result of the review committee is not a matter for the Secretary of State but for those wanting to carry out the purchase.
Therefore, in all honesty, I do not think that that particular contribution—valued as ever, and proof of the Opposition's determination to ensure that the Government fulfil their remit with regard to the arts—relates directly to the provisions in the Bill. I give way to the noble Baroness.
Baroness Anelay of St Johns: I appreciate that the Minister is trying to be accurate in referring to the sources of funding available for saving works of art. Does he agree that the level of funding available to the
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Heritage Lottery Fund is indeed reliant to some extent on the share of the lottery pot available to it? That share is determined by government policy in relation, for example, to the New Opportunities Fund.
Lord Davies of Oldham: Most good things in this country are a matter of government policies, as the noble Baroness will recognise.
Of course I recognise the Government's responsibility in this area. I merely suggest that this is not the burden of the amendment, nor indeed this dimension of the Bill. In fairness to the mover of the amendment, it is only right to point out that, valuable though the noble Baroness's contribution to our cultural well-being always is, it is not strictly relevant to the amendment.
Lord Redesdale: This is a probing amendment. Finding a slot in the Bill in which to place it was difficult enough. I realise that in its present form it is flawed. I welcome the positive response by the noble Lord, but it is a matter that will need to be reviewed on a regular basis, considering the workload that could be envisaged in such a growing field. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Clause 6, as amended, agreed to.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 35:
After Clause 6, insert the following new clause—
"TEMPORARY EXPORT LICENCES
(1) Any order which is made under section I shall include provision for the activity to be authorised by a temporary export licence.
(2) A "temporary export licence" is one which authorises goods to leave the United Kingdom on a short-term temporary basis for the purposes of exhibition or demonstration during which time the goods remain under the control of the UK exporter.
(3) Any application for a temporary export licence shall be granted within 20 working days from the lodging of the application (or such extended time as the applicant may agree) and if it shall not be so granted, unless it is refused it shall be deemed to have been granted and the provisions of section 6(5) shall apply."
The noble Baroness said: The amendment is intended to correct a serious problem faced by the defence industry. As was mentioned at Second Reading, major delays are being incurred in the granting of export licences. Only 57 per cent are dealt with within the agreed target date. However, the situation is even more serious when it comes to granting the licences for exports governed by the present legislation for the purposes of taking part in exhibitions or of demonstrating defence material and technical material to potential customers. Timing in such matters is critical. Delay can prevent the applicant from participating in a trade show or demonstrating a particular piece of equipment to a potential customer before a competitor can jump in and get the business.
Very simply, the amendment defines a temporary export licence and then stipulates that it must be granted or refused within 20 working days, which is the
target time for normal licences. If it is not granted or refused within that time, it is deemed to have been granted and the applicant is entitled to receive the necessary paperwork.
The amendment is essential for the benefit of an important export trade, which has repercussions not merely on an order that may be lost, but also on the decisions of other governments, which may follow the lead of one customer. I also remind your Lordships that the issue has repercussions on the unit price of similar equipment purchased by our forces. I beg to move.
10.30 p.m.
Lord Sainsbury of Turville: The amendment would add a new clause requiring orders under Clause 1 specifically to provide for authorisation under a temporary export licence to cover short-term, temporary exports for exhibition or demonstration overseas. Such temporary export licences would be deemed to have been granted if they had not been refused within 20 days of application, unless the period was extended by agreement with the applicant.
As I explained on Amendment No. 33, the Government consider that detailed procedural matters do not need to be set out in primary legislation. More importantly, the amendment would be wrong in principle. It would have similar consequences to part of Amendment No. 33, in that it would require the granting of a temporary licence after a specified period—in this case 20 days. Such licensing by default would result in the Government turning down applications in borderline cases. I therefore refer to the points that I made on Amendment No. 33.
The published dummy draft orders relating to the Bill include broad provisions for the Secretary of State to grant export licences, which would allow the granting of temporary licences. It is the Government's practice to grant temporary licences in appropriate circumstances, including to cover exports for exhibitions and demonstration. The annual report on strategic export controls, in reporting on licensing decisions, indicates where temporary licences have been issued. The Government have no plans to stop issuing temporary licences. I therefore urge the noble Baroness to withdraw the amendment.
Baroness Miller of Hendon: The Minister said that the amendment would be wrong in principle. That makes me realise that he is not going to suggest that the provision might go into the regulations instead. I understand that temporary licences are granted from time to time to meet certain needs. The fact is that licences are supposed to be granted within 20 days. It is important for the DTI to realise that time is essential for a temporary licence. As 20 days is the specified time, there ought to be a mechanism to ensure that 20 days will be sufficient for temporary licences for exhibitions and the other purposes that I mentioned. There is no point in having a target of 20 days if it cannot be met even for temporary licences for specific purposes. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Annual reports]:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 36:
Page 6, line 8, at end insert "ending 31st December"
The noble Baroness said: I shall speak also to Amendments Nos. 39 and 40. These are probing amendments about two issues. First, will the new format for annual reports have a constructive result? If so, how? I ask that in a positive frame of mind. I expect there to be an advantage to Parliament in the change of format for the report. Secondly, what are the implications of the provisions for the Reviewing Committee on the Export of Works of Art?
Clause 9 requires the Secretary of State to publish an annual report on controls of objects of cultural interest. On Second Reading, the Minister said:
"That report will cover cases considered by the Reviewing Committee on the Export of Works of Art which are currently presented by the Secretary of State for Culture, Media and Sport in a separate annual report to Parliament".—[Official Report, 8/1/ 2002; col. 464.1
Will the Secretary of State make a Statement to the House and be subject to questions when the report is presented or will that document merely be laid. before the House? What else will be in the report? Will it be a report by the Secretary of State in addition to the annual report of the reviewing committee or will the annual report to Parliament merely serve as a substitute for the report of the reviewing committee that is currently published? Will the report be available free of charge to the public on the department's website?
In the other place on 8th November, the Parliamentary Secretary gave outline information on the publication of reports, saying that the Government will ensure that the annual report on strategic exports will be available free of charge from the Foreign and Commonwealth Office website. He did not make the same commitment with regard to the art report. Why not? Was that an oversight?
As a result of the plans to bring forward the annual report, what will be the role and remit of the Advisory Council on the Export of Works of Art after the Bill is enacted? I am aware that the department is currently undertaking a quinquennial review of the reviewing committee's work, for completion by 30th June. Will that review be published or will it be an internal document—as is often the case with quinquennial reviews?
Amendment No. 36 inserts in the Bill that the annual report would cover the period 1st January to 31st December to provide consistency in the presentation of reports—a bit of a straitjacket, to make sure that we receive them. Amendment No. 39 requires the report to be published three months after the end of the report year at the latest. It would he better if the report were published earlier. At present, the Government simply say that the report will be published as soon as practicable. That seems sloppy and could encourage delay.
The reviewing committee's latest report should cover the period to the end of last June. I am intrigued that it appears not to have been published. It may be that the Library and I have committed an oversight. The department's website—which has never published the report but has always mentioned it in the past and presented extracts—makes no reference. We were told that the report would be published by the end of January at the latest. When might that report appear?
Amendment No. 40 would encourage the Secretary of State to produce the report in proper time. The amendment requires the Secretary of State to give an explanation in person to Parliament if the report is published late—or, in ministerial terms, very late. I beg to move.
Baroness Miller of Hendon: Clause 9 provides for the Secretary of State to make an annual report to Parliament on the workings of the Act. Subsection (I)(a) refers to the export of objects of cultural interest, whereas Clause 9(1)(b) refers to
"other matters relating to the operation of this Act".
I find that funny. I am curious as to why those two aspects are separate, rather than covered by a simple requirement to report on all orders under subsection (1). Is it significant that items of cultural interest come first and defence equipment second? Given the Bill's purposes following the Scott report, that seems the wrong way round. If the Minister cannot deal with the point right away, I should be happy for him to write to me between now and the next stage.
On the substance of the amendment, however, I have to point out that the clause is not specific about what the report must say. I remember when I was in a business partnership with a multinational American company which demanded that I send it a monthly report on the operation that I was running. My first succinct report read, "Everything is going OK". That was factually correct and fully comprehensive, but the lack of detail did not please that company in the least. Nevertheless, it never again asked me to submit such a report. So there is something to be said for such an approach.
This amendment requires the Secretary of State to report on a matter that is of vital interest to exporters of defence equipment and technology. It would also be an indicator of the department's speed and performance in handling licence applications. As your Lordships are aware from earlier debates on the Bill, the DTI's performance has fallen woefully below the targets, to the detriment of exporters, both in the delays in their being able to accept orders and in losing business altogether to overseas competitors. Being required to place their performance on the record in their report will, I am sure, concentrate the minds of those charged with the responsibility for dealing with applications for export licences.
Paragraph (b) of the amendment stipulates that no details of temporary export licences shall be included, which is a separate issue from that raised in paragraph (a). The provision is included at the specific request of
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the defence industry as disclosure of such matters could disclose commercially sensitive material to competitors by telling them who is exhibiting or demonstrating what to whom and where.
I have often been accused by Ministers opposite of proposing amendments that are too prescriptive. In this case, I plead guilty to being prescriptive—but not too prescriptive. The public and exporters are entitled to know how well the department is doing, and, armed with the facts, Members of both Houses must be able to call the Secretary of State to account. Perhaps Ministers will bear in mind that if they do not accept the statutory obligation that the provision calls for, they will have to answer in a different way, at Question Time.
I hope that the Minister will either accept this constructive amendment as it is drafted or say that the Government can do much better and will table their own amendment on Report.
Lord Phillips of Sudbury: My noble friend Lord Redesdale and I tabled Amendments Nos. 48 and 41 which are in this group. My noble friend, however, has had to hurry off to the bedside of his very expectant spouse. I think that that demonstrates the relevance of the report having to be laid within nine months. I am also afraid that our two amendments make a rather wimpish pair compared with the much more rigorous and vigorous amendments tabled by the noble Baroness, Baroness Anelay of St Johns, which provide for a three-month period. Amendment No. 37, too, is a good deal more brisk than our foppish amendments. I shall therefore retreat behind those of the Official Opposition.
Lord Judd: Before my noble friend the Minister replies, may I assure him that many of us are very satisfied with the current situation and would regard any retreat from covering temporary licences as a blow to transparency? Of course temporary licences should be covered; they may be temporary, but they are real and should be subject to scrutiny. More importantly, temporary licences give an indication of trends, enabling the discussion on whether the trend is right or wrong to be opened up considerably. They are therefore very important to the cause of transparency. I hope that my noble friend the Minister will not be swayed by this amendment.
Lord Sainsbury of Turville: These grouped amendments seek to clarify and make statutory provision for the content and timing of publication of the annual reports on cultural and strategic exports. The annual reports on strategic export controls each cover a calendar year, and we intend to continue this practice under the Bill. However, the Government do not feel that it is necessary or appropriate to specify in primary legislation that reports should be published in respect of each calendar year.
As for the speed of publication of the annual reports, the Government are committed to publishing the annual report on strategic exports as soon as possible after the year to which it refers. The 1999 and

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2000 annual reports were published on 21st July 2000 and 20th July 2001 respectively, well within the nine month target proposed by the noble Lord, Lord Redesdale, and the noble Lord, Lord Phillips. In this case pregnancy was somewhat shorter. However, the annual reports came to 350 pages—that is the size of a small baby. Therefore, those who produced the reports did well to do so within the time that they did. The 1999 and 2000 annual reports each weighed in at around 350 pages, the bulk of which consisted of tables showing types and numbers of licences granted. That was a reasonable performance.
Following introduction of the new controls on trafficking and brokering and technical assistance. yet more information will need to be collected and processed. With such a large and complex body of data there is always the possibility that problems occur in compiling it, or that anomalies are found that need to be resolved before publication. A legal obligation to publish a report within a certain time limit could risk forcing the Government to publish misleading or incomplete data. That would not be helpful to those, like the Quadripartite Committee, who may wish to scrutinise the reports.
Nevertheless, the Bill will require the Government to publish the annual reports as soon as practicable. That means that the Government cannot deliberately delay the publication of either annual report. Moreover, I can assure the Committee that the Government already endeavour to publish the annual report as soon as possible after the end of the year to which it refers.
Amendment No. 37 in the names of the noble Baroness, Lady Miller, and the noble Lord, Lord Rotherwick, seeks to require the Government to publish information in the annual report relating to the time taken to process licence applications and to prohibit the Government from including in the annual report any details of temporary export licences.
The annual report on strategic export controls already incorporates details of the Export Control Organisation's performance in processing licence applications. This data includes the percentage of applications processed within the target time of 20 working days as well as a breakdown of the performance of the main government departments involved in the export licensing process. The Government have noted the suggestion through this proposed amendment that this section of the report could be more detailed. Although we do not feel that it is appropriate for the detailed content of the annual report to be set out in primary legislation, we shall be looking at whether the section of the annual report on licensing performance could be made more extensive.
The amendment also proposes that temporary export licences be excluded from the annual report. The Government are proud of the fact that the annual reports have become progressively more informative over the past few years. To exclude temporary licences from those detailed in the report would be to take a step backwards from the increasing transparency and accountability to which we are committed. We believe
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it is important that export licensing policy and practice should be open to retrospective scrutiny, including in the area of issuing temporary export licences. As I say, to exclude temporary licences would be to take a step backwards. There is already in the annual reports all the information people need to hold the Government to account.
The noble Baroness, Lady Anelay, raised a number of extremely important points on the cultural report. I am afraid that I cannot answer those at the moment but I shall write to her in detail. In view of the assurances and arguments I have given, I hope that the amendment will be withdrawn.
10.45 p.m.
Baroness Anelay of St Johns: I am grateful for that careful reply. I appreciate the Minister's difficulty. Although in this Chamber all Ministers are expected to answer for all departments, such virtuosity cannot be expected on every single occasion. I am grateful for the Minister's offer to write to me with the details of the operation of the reporting system with regard to the cultural report. It would be interesting to know about the procedure under which Parliament will be able to hold Ministers to account and whether it is a matter of the relevant Secretary of State making a statement to the Chamber or whether it is simply a matter of a document being laid. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 37 to 41 not moved.]
Clause 9 agreed to.
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 42:
After Clause 9, insert the following new clause—
"PARLIAMENTARY SELECT COMMITTEE
As part of the licence application process required by an order under section I, 2. 3 or 4, the Secretary of State may take advice from a Parliamentary Select Committee."
The noble Lord said: The amendment stands also in the name of the right reverend Prelate the Bishop of Manchester. It deals with an important and sensitive issue; namely, whether a system of prior scrutiny of some of the more sensitive and important licences should be part of the licensing process. We understand that it is a highly contentious matter. It has been trailed by the reports of the Quadripartite Committee. It had meetings with the then Foreign Secretary, Robin Cook. The Government have responded to its first report. It issued a further report in July last year to which there has not been a government response.
The reason that the supporters of the amendment believe it important that the Government consider it favourably is because the licensing of arms is of the greatest public and often international importance. It has led us into deep waters in recent years. Far from prior scrutiny by a parliamentary committee obfuscating, obstructing or delaying the licensing process, we believe that the measure would be a valuable addition to the scrutiny process. It is vital to
bear in mind that Amendment No. 42 gives a discretion for the Secretary of State only to take advice from the parliamentary Select Committee.
Amendments Nos. 56 and 83 are grouped with Amendment No. 42. The noble Lord, Lord Campbell-Savours, has put in place detailed provisions as to how the measure might work as regards the constitution of the relevant committee, its powers and so on.
On this side of the Chamber, we believe that to give the Secretary of State the power to take advice from a parliamentary Select Committee in cases he or she considers appropriate—they will be cases of great importance and/or sensitivity—will he of great benefit to all concerned. At Second Reading, the noble and learned Lord, Lord Scott, expressed the fear that the measure could legally encumber the process and cause embarrassment. That fear is avoided by the fact that the committee consulted by the Secretary of State would merely give advice. There is no constitutional problem if the measure is confined to giving advice.
There is concern about the balance of power between Parliament and the executive. It is traditional for Parliament always to scrutinise the activities of the executive in retrospect. However, I believe—the right reverend Prelate will speak for himself—that this is one case where public interest will be well served if the Secretary of State has that right. Sweden has a prior scrutinising system. America has one. The objections voiced by the Government are that the provision could affect the competitiveness of British industry, the efficiency and effectiveness of the process, could breach confidentiality and so on. Those objections can be dealt with perfectly satisfactorily. We hope that the Government will look with approbation upon the amendment.
Lord Campbell-Savours: I rise to speak to Amendments Nos. 56 and 83. I apologise for detaining the Committee, but this is an extremely important matter that has been debated at great length in the other place. Outside lobbies are very interested in these amendments, as are many colleagues in the other place.
The arguments have been well rehearsed. Indeed, the noble Lord, Lord Phillips of Sudbury, has done so again this evening. They were convincingly put in the quadripartite reports of July 2000 and March 2001 and were unanimously carried by that committee, which was made up of four Select Committees of the House of Commons. There was almost universal support within those Select Committees themselves. An Early-Day Motion has been tabled in the other place today that has been supported by a cross-party alliance, including a number of former defence Ministers. It is strange that once defence Ministers leave the department, they suddenly become converts to the principle of prior scrutiny. I hope that my noble friend the Minister will have that in mind when replying to my amendments.
My intention is to cast new light on the issue of prior scrutiny and, in particular, the framework for a new scrutiny committee. I am proposing a practical and
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innovative solution, based on the operations of the Intelligence and Security Committee, whose operations would not be binding on the Government. The model framework in my amendment is set out in Section 10 of the Intelligence Services Act 1994. I have lifted the section out of that Act and have amended it to meet the new role of the proposed defence exports scrutiny committee.
Why did I select that structure? I did so primarily because of industrial and government concerns over issues of confidentiality. The truth is that business does not trust the politicians. This structure will give business a framework for a committee that it can trust. It will also deal with the issue of delay, to which my noble friend the Minister referred previously, as have Ministers in the other place.
It is interesting that concerns over confidentiality dominated the arguments within the security services in the 1970s and 1980s prior to the introduction of the Intelligence Services Act 1994. The then Prime Minister, John Major, established a structure that would reassure everyone in the community, which has been very successful. The services have been reassured and Ministers have been able to pray in aid its work in both Houses. On one occasion, that structure was commissioned by a Prime Minster to carry out a report into the Mitrokhin allegations. It carried out a full inquiry and the Committee enjoyed the confidence of both Houses of Parliament.
I shall say a few words about the structure. The committee is not a Select Committee, but a committee of parliamentarians, which is appointed by the Prime Minister. Every member has to sign the Official Secrets Act and it meets in conditions of total secrecy. The ISC structure comprises one Peer and eight Members of the House of Commons. It is always chaired by a politician of distinction and its members are all Privy Counsellors, apart from one, Michael Mates, who, in my view, should be on the Privy Council. The committee meets in Whitehall, not in Parliament, and has access to the whole intelligence community. Its powers are determined by law and it reports to the Prime Minister when necessary. Its role is to comment on matters set out in the 1994 Act. It has no executive power. Its decisions bind no one. Its reports are scrutinised by those who are being scrutinised; that is, the intelligence community. It never leaks. If it did, it would collapse.
What is wrong with setting up such a structure to oversee Britain's defence exports? My proposal is to establish a defence exports scrutiny committee, which we may refer to as DESC for the purposes of this debate. Its remit would be to monitor and report on defence export licence applications and policy wherever necessary. Its modus operandi would be given by a code introduced by the Prime Minister under paragraph 2(5) of the schedule in Amendment No. 83.
The code would deal with the procedures to be followed by the committee both prior to and post notification. It would define applications, which would be exempt from scrutiny. That involves the whole argument about NATO. It would deal with the

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treatment of classified information and it would obviously meet OSA requirements. It would deal with the arrangements for appointing a chairman and the special responsibilities of the chair in order to avoid delay—the very delays that were referred to by the noble Baroness, Lady Miller, who moved some particularly interesting amendments on that matter.
The code would deal with the whole question of a Secretary of State override in special circumstances, such as the potential cancellation of contracts. That issue was raised by the noble Baroness, Lady Miller. The code would deal with conflicts of interest and other matters. It might well reflect many of the ideas that were proposed by the Quadripartite Committee in its second report of 2001.
I place on record my appreciation of the work on the code that is being done by Saferworld and in particular by Vanessa Haines, who has been doing considerable work in that area. I asked Saferworld to help me, and it has been extremely helpful. I have given only recommendations for the code.
I turn to the Government's response. They have given a number of responses to the whole idea of prior scrutiny in the first and second reports of the Quadripartite Committee. The most considered response can be found in the second report; that is. the document entitled, Strategic Export Controls: Annual Report for 1999 and Parliamentary Prior Scrutiny. I shall pick out the key sentences of the Government's response. They said that the arrangement,
"could not be made to work in practice".
That is the Government's position. My response is to point out that in the structure that I have proposed, the arrangement would work effectively because it provides for a limited form of accountability. The machinery of decision-taking would not be compromised by open debate because the committee would meet in secrecy.
I turn to another of the Government's responses. They said that,
"it would be wrong for Ministers to be required to consult Parliament before taking decisions in individual cases".
However, they would be consulting not Parliament but a committee of parliamentarians, which is not a committee of Parliament. It is not a Select Committee; it is not protected by parliamentary privilege; it is subject not to parliamentary resolutions but only to primary and secondary legislation. It cannot report directly to Parliament—all reports go through the Prime Minister for sidelining—and it would not have the rights of a Select Committee and Ministers or civil servants could not be held in contempt in relation to the giving of evidence. What further protection could there be for the executive in such conditions?
In their response, the Government said that the committee's involvement would, "compromise confidentiality" and,
"give rise to legal difficulties".
I shall come to that point later. They also said that,
"the public disclosure of any information before a contract is signed could he prejudicial".
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However, that would not occur because all relevant matters take place under the conditions prescribed by the Official Secrets Act. They state that,
"overseas Governments can have legitimate requirements for nondisclosure of their military procurement programmes. for example on grounds of national security, which they would wish to see respected".
A safeguard in that area is built into Schedule 2 under paragraph 4(c). That is why that phrase is included; it is to deal with that specific matter. The Government say:
"Open debate of the merits of a particular proposed export, as the Committee believes it might wish to encourage in some instances, could quite simply result in UK exporter losing the business".
That could not happen because, once again, I stress, the debates are not taking place in public; they are taking place in private inside the DESC.
The Government say that,
"in cases where the Committee's advice to the Government arose from a disagreement over policy, the Secretary of State would be unable to act on that advice without exposing the Government to an increased risk of judicial review on grounds of inconsistency and unlawful sub-delegation".
My response is that, if the committee's position is unknown, clearly any disagreement with the Government is unknown. Therefore, there can be no basis for a legal challenge. The Government say that,
"the committee would be acting on the basis of less information than that available to the Government".
Again, my response is that, if the OSA, is in operation, it is impossible to estimate the extent of knowledge available to members of the committee.
The Government say:
"The introduction of the Committee into the decision making process would increase the uncertainties for exporters and could leave those decisions more open to legal challenge. It is also difficult to see how such a system could be introduced without the Committee taking a shared responsibility, and becoming accountable for the role it would play in export licensing decisions. That would, in turn, make its retrospective scrutiny less effective".
Obviously no legal challenge is possible without access to the deliberations of the committee. That access is denied, again, because it meets conditions of official secrecy. Without public knowledge of the committee's advice on an application, shared responsibility simply cannot arise.
The Government say that,
"prior parliamentary scrutiny would introduce further delays into the licensing process".
We have heard a great deal about delays this evening. I understand that the position is that, when the Quadripartite Committee considered these matters, it said, "We shall deal with these matters concurrently with the Government". Therefore, again, I cannot see what the problem is.
Then the Government refer to the fact that,
"the 10 days proposed by the Committee represents the very minimum additional delay, and that in practice the delay would often be a great deal longer".
Again, I refer to the speeches of the noble Baroness, Lady Miller. Today, we have heard about the reason for delays. I cannot understand how the intrusion of

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this committee structure or framework into the consideration of Ministers—in the event that they would wish to have the considerations of such a committee in mind—would delay matters any more than has already been alluded to by the noble Baroness, Lady Miller. The delay is likely only in cases which would be controversial and which, therefore, by implication, would take longer for the department to handle.
Finally, the Government say:
"The Government would need to devote significant extra resources to implement the much increased level of liaison with the Committee that would be needed by the system of prior scrutiny proposed by the Committee".
The proposals for fast-tracking, which I would include in a code and which would be introduced by the Prime Minister, would, in my view, deal with that problem. I believe that if one fast-tracks, clearly one does not have to devote as much resource to the committee as Ministers may have in mind at present.
I also understand that there has been some argument about unlawful delegation. I understand that Matrix Chambers has responded that it may be better to deal with advice—that is, advice from the committee—in primary or secondary legislation. In the case of my framework, because it is not a committee of Parliament, I do not believe that even the Matrix Chambers representation is relevant. The question of advice is covered adequately under paragraph (5) of the new clause proposed in Amendment No. 56, which states:
"The Committee shall make an annual report on the discharge of their functions to the Prime Minister and may at any time report to him on any matter relating to the discharge of those functions".
That is a direct take from the 1994 Act as it applied to the intelligence community. We know that that structure can work.
I am also told that one of the final, core positions of the Government is the principle that governments must govern and parliaments must check. My response is that, before decisions are taken, consideration by the executive of the views of the legislature is not unprecedented. That happens all the time.
The other day I visited the tea room to talk to some of my old friends in order to acquire some examples of that. Within about half an hour I had been given a series of examples of Select Committees making recommendations to Ministers prior to Ministers taking decisions. I shall lay one or two of those on the record.
The Select Committee on Transport carried out two inquiries into the privatisation of NATS which preceded decisions by Ministers. On the restructuring of the TA, the Defence Select Committee took a view and made its recommendation to Ministers. On rail privatisation, the Transport Select Committee, under the chairmanship of Robert Adley, met for 185 hours on one issue and then Ministers took decisions. They may not have taken the decision that I wanted them to
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take, but they fully considered the recommendations of the Select Committee. I was in the House of Commons when a Statement was made to Parliament.
Another inquiry carried out by the Transport Select Committee considered the United Kingdom/US negotiations relating to the Bermuda agreement on transatlantic airline traffic. The Home Affairs Select Committee inquired into ID cards. That was immediately prior to Michael Howard's decision on smart cards, an idea that he turned down in the 1992/ 97 Parliament. The Public Administration Select Committee is currently inquiring into reform of the House of Lords prior to a decision being taken by the Government. We are told by the Lord Chancellor that that committee's recommendation will be taken into account in whatever decisions are taken by the Government.
The Agriculture Select Committee has inquired into the quarantine of animals. Some say that that was an inquiry that was born in the department with responsibility for agriculture and that the committee was asked to carry out that inquiry by Ministers. In that case Ministers turned down the recommendations of the committee, but they were implemented by the previous government.
Of course, prior to the decision that was announced today in the House of Commons, there was an inquiry into the PPP for London Transport. The one that may be of most interest to the Minister, because it deals with an individual decision, was the Daresbury Syncotron facility inquiry that was carried out, if I remember rightly, by the Science and Technology Select Committee in the other place. That committee made its recommendation to the Government and the Government took it into account.
I believe that often Ministers ask committees to carry out inquiries prior to taking decisions so that they have help in their deliberations. I place those examples on the record because we are being told that governments must govern and that parliaments hold governments to account. Already in this country a system is in operation whereby committee recommendations are being considered by government before government take their final decisions.
I believe that we have a powerful case on prior scrutiny. It has been widely put. I believe that the structure that I am proposing will deal with that. It is a structure based on trust. As relationships develop behind closed doors, away from public debate, between departmental officials, Ministers and members of committees that operate in these conditions, all sorts of information flows. I believe that in those conditions there will be a more sensitive appreciation of the concerns of elected Members of Parliament and Members of this House in the decisions that are finally taken by Ministers.
I ask my noble friend tonight not to knock it all on the head. I ask him in winding-up the debate to tell us that over the next five or six weeks prior to the Report

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stage that he at least will consider these arguments and perhaps have them in mind when we table amendments again, if necessary, on Report.
Lord Rea: I rise to support the amendment. One of the very few aspects of prior scrutiny that my noble friend did not mention is the fact that, as was mentioned by the noble Lord, Lord Phillips, prior scrutiny takes place in the United States and Sweden without seeming to damage the export potential of either country, particularly the USA.
The Government have rejected this as a supporting argument on the grounds that the systems employed in those countries would not be useful in the UK context. But members of the Quadripartite Select Committee actually noted during the debates on the Bill in the other place that the systems employed in those countries did have certain weaknesses which should not be imported wholesale. The committee considered those weaknesses and the peculiarities of the UK system when drafting its proposals. They have been outlined extremely skilfully and in some detail by my noble friend Lord Campbell-Savours. I commend strongly all three proposed amendments. They are workable. They should be considered by my noble friend.
In closing, I should say that my noble friend has been quite modest. He did not declare that he has been a member of the Intelligence and Security Committee of another place. He says that there is absolutely no question of any breach of security. As confidence grows between the intelligence and security services and the committee, more and more and more sensitive information will be discussed without any harm being done to our security services.
The Lord Bishop of Manchester: It is very late at night. It would be helpful if one of the three who tabled the amendment went on the record. I cannot compete with the noble Lord, Lord Redesdale, who has gone off for his own child to be born. I am waiting for a grandchild to be born which should have been born yesterday. It looks as if it has missed today and it will be tomorrow. But there it is.
'The basic assumption about all this is the Scott report's criticism regarding the lack of accountability and transparency in legislation. Those two issues are at the heart of it and are the two issues that govern my desire to support the amendment. We have heard a structure—a way forward—ably outlined. I do not have a better way forward.
To say that we have an accounts system at the moment—we rehearsed the issue earlier—is transparency post hoc and not prior scrutiny. I think that the Government might be glad of the kind of scrutiny that has been suggested and proposed. 'We might have avoid the kind of situation that we had over the sale of the air traffic control system to Tanzania if we had had some prior scrutiny of the situation. One can say that America or Sweden are not typical. That is all right, but let us buy into the principle again and work out some kind of proposal as
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has been suggested tonight over the next month or so that meets the concerns that the Government quite rightly have about secrecy, confidentiality and so on.
We need to make some provision for prior scrutiny that allows the public, the NGOs and the people beyond Britain to feel that we are consistent in our application of the UK criteria for arms export; that we are following the EU code and the proposals contained in the Bill. I hope that the Government will not be too coy but will buy into the principle and think creatively about how it might be worked out.
The Earl of Sandwich: I should like to express regret that the noble Baroness, Lady Warnock, could not remain with us because of the late hour. She would have been able to offer much wisdom on the subject.
We are most fortunate to have the noble Lord, Lord Campbell-Savours, with us in Committee. He had a special position in the other place, and I know that he has already earned a special place in the Chamber this evening. The noble Lord made a very powerful case, on which I shall not elaborate. However, when we are talking about delay, I should like to stress that we must remember, for example, the components of the Hawk aircraft that we allowed the Zimbabweans to have at a time when they were fighting in the Congo—not necessarily with that aircraft, but as has been universally recognised, it was not something that we should have done. The committee was not able to follow it up, but it could have clone something about it if it had been established at the time of the application.
Lord Judd: I must confess that I a:m among those former defence Ministers, albeit, in those days, a junior member of the team, who has seen the light. We have seen the light because of our experiences when in office. It is very significant that former defence Ministers are putting their names to an Early Day Motion in the other place. I, too, should like to put on record my deep respect for my noble friend Lord Campbell-Savours—we are neighbours in Cumbria—for his longstanding and salutary work in this whole area over many years. He spoke powerfully this evening.
I should also like to draw attention to the strength of argument put forward by the noble Lord, Lord Phillips, this evening. It would be possible to rehearse many of the arguments, but I believe that they have been more than fully covered. I have two questions for my noble friend the Minister that I hope he will address in his response. First, it seems extraordinary that the Government could view the operations of a committee modelled on the Intelligence and Security Committee as being in danger of breaching commercial confidentiality. If the Government really believe that a committee modelled on such an excellent committee with all its records so far could endanger commercial confidentiality, they must tell us why. That view certainly raises some pretty profound questions about the other committee that is already carrying out its work. The Government must be consistent and open about their argument in this respect.

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Secondly, given the number of precedents for the Government consulting a committee or agency in the exercise of its functions, and the repeated emphasis that a defence export scrutiny committee would have a purely advisory role, can my noble friend clarify whether the Government foresee a constitutional barrier to the establishment of such a committee? I have certainly had sight of legal advice which says that there is no constitutional barrier. If there is such a barrier, the Government must specify exactly what it is.
Finally, we are not discussing this matter in a vacuum, or in an academic kind of way. In recent decades a number of very disturbing incidents have taken place that have come to light only after the persistent lobbying and outcry and, indeed, the courage of many people who have insisted that they should be taken seriously. That is no way to approach an issue of this kind, where we are all agreed that the irresponsible exporting of arms can have profound dislocating effects on international security and peace, as well as on the well-being of people. The need to approach the matter with a sound and convincing arrangement of the kind outlined by my noble friend Lord Campbell-Savours is really overwhelming. Therefore, as has already been argued, I hope that my noble friend will feel able to say this evening that he has listened—it is always good when a Minister can say that he has done so—that he will take the point seriously, and that he will take it away and return on Report with a convincing position.
Lord Sainsbury of Turville: The amendments would add new clauses to the Bill that would provide for the Secretary of State to take advice from a parliamentary Select Committee or a committee of parliamentarians in the licensing process. As we have heard, it is intended to provide for the prior parliamentary scrutiny of individual licence applications, a subject that has been raised by the Quadripartite Committee in the other place, and to which the Government have responded in the past. The amendments would, of course, extend prior scrutiny to licensing decisions made under the other powers in the Bill.
The question of prior scrutiny has already been considered at some length by the Government, in response to the recommendations made by the Quadripartite Committee. The Government's position on the issue was set out in their response of July last year, in which we stated that there was an important principle involved about the respective roles of government and Parliament. That can be best expressed by quoting from the Government's response:
"The Committee has reiterated that a system of prior scrutiny 'would not mean that a Committee would share responsibility or take decisions'. However, the Government strongly believes that bringing the Committee into the export licensing process, regardless of the formal status of the Committee's recommendations to Ministers, would in practice be bound to blur this responsibility. The Government therefore remains of the view that, as a matter of principle, it would be wrong for Ministers to be required to consult Parliament before taking decisions in individual cases".
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That remains the Government's view.
The noble and learned Lord, Lord Scott of Foscote, set out the issue with remarkable clarity in his speech at Second Reading. I hope noble Lords will bear with me if I quote his views on the subject in full, as he explains the position admirably. He stated that:
"Speaking personally, I am against prior scrutiny and am in favour of the Government's refusal to agree to its incorporation into the export licensing regime".—[Official Report; 8/1/02; col. 484.]
Lord Campbell-Savours: Can I take my noble friend back to the words about sharing responsibility? That response from Government came in the context of the recommendation that a Select Committee of Parliament deal with such matters. I am not proposing that. That proposition must now be revisited. They are not sharing a decision with part of the legislature.
Lord Sainsbury of Turville: I find it hard to understand the distinction that a committee of parliamentarians—that is what it is—is not, in some sense, representative of Parliament's views and that, if it takes part in the decision-making process, it is not, in some way, sharing in that process.
Lord Campbell-Savours: I am sorry to come back to my noble friend, but that discussion has taken place repeatedly in proceedings in the Intelligence Services Committee. The ISC draws a gross distinction, as has the Prime Minister in correspondence with me over the years, between a committee comprising parliamentarians and a parliamentary Select Committee. There is a clear distinction that is often referred to during evidence given by the chiefs of the security services.
My noble friend may not be able to understand that, but it is well rehearsed in other Government departments. He has given a reason as to why he may want to consult further. If that distinction exists, that answer does not stand.
Lord Sainsbury of Turville: I still find it difficult to see that a committee of parliamentarians taking part in decisions is not, in some way, taking part and sharing responsibility. I can only return to the quotation from the noble and learned Lord, Lord Scott of Foscote—
11.30 p.m.
Lord Judd: I am grateful to the Minister for giving way. He keeps saying, "taking part in the decision". The point that is being made by Members of the Committee this evening is that in a whole realm of instances the Government take advice before they reach decisions. What on earth suggests that if we have a Parliament worth having, it is not possible to have a group of distinguished parliamentarians who can give advice? They are not saying what should be done; they are simply giving advice which is taken into account.
I do not want to delay the Committee, but as I have the floor perhaps I might point out, just to take a random example, that Section 124 of the

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Environmental Protection Act 1990 requires the Secretary of State to,
"appoint a committee to provide him with advice [interalia] on the exercise of powers to grant licences … releasing or marketing genetically modified organisms".
Why, if people outside Parliament can be appointed to such a committee, should there not be a committee of parliamentarians? Nobody is suggesting that they represent Parliament, but they are a wise group of parliamentarians whose advice is sought and taken into account. The Government then decide whether or not they want to take the advice.
Lord Campbell-Savours: Before my noble friend replies perhaps I can refer him to the case of the noble Lord, Lord Birt, and the railway system. He is an adviser to government and a Member of this House. I refer to the noble Lord, Lord Haskins, who wrote the report on agriculture for government. He is a Member of this place and he is also advising government. I ask my noble friend to see this point in that context and not in terms of a committee of the legislature giving advice or making recommendations
Lord Sainsbury of Turville: I would find this argument more convincing if the game had not already been given away by the noble Lord, Lord Phillips, who said that this would merely be giving advice and would have no constitutional implications. He promptly followed that by saying that many people were concerned about the balance of power between the legislature and the executive. He suggested that this would be a good way of dealing with that situation. I took that to be the implication. It was therefore quite clear that he saw this as having a constitutional implication. If the balance between the legislature and the executive is not a question of constitutional importance, I do not know what it is.
Lord Phillips of Sudbury: I am grateful to the Minister for giving way. As he quoted me, perhaps I can say that it is true that I talked in terms of a balance of power. I make no apology for that and it does not in any way go counter to the substance of the issue, which is whether or not the committee concerned gives advice or is a co-decision-maker with the Secretary of State. It is not the latter. Were it the latter, the Minister would have a constitutional point.
When talking about the balance of power, as has already been stated by several Members of the Committee, there are many instances where prior scrutiny, prior advice, is given to the executive in order to aid and abet it in reaching a decision. When I talk of the balance of power, it is more in the general sense of that phrase, indicating a concern on the part of the public that there is insufficient relationship between the executive and Parliament at all stages. But I emphasise that this would be an advisory and not a decisive exercise.
Lord Sainsbury of Turville: I am always concerned to find myself debating these issues with both distinguished parliamentarians and distinguished lawyers. I am only fortified in my views by the fact of what the noble and learned Lord, Lord Scott, said, who obviously has some understanding of these constitutional issues and particularly how they apply in this specific case. Perhaps I can quote his reasoning, which seems to be totally pertinent to this point. He said,
"It seems to me that the function of Parliament, whether of this House or another place, is to hold the executive, the government, accountable for the decisions that they take. Export licensing is essentially an executive function. Parliament has a constitutional obligation to hold government to account for their executive decisions and should not become complicit in them by prior scrutiny, which one supposes would disqualify whichever House had conducted the prior scrutiny from conducting a proper accountability exercise. For those reasons I believe that the prior scrutiny proposal was correctly rejecter.—[Official Report, 8/1/ 02; col. 484.]
In summary, it is for the Government as the executive to take executive decisions and to answer for them later to Parliament as the legislature. The scrutiny of government licensing decisions can and should take place retrospectively rather than before a decision is made. This is where the annual reports on strategic exports play a vital role. The Government believe that their annual reports have greatly improved the transparency and accountability of decisions on export licensing.
Such decisions are made in the full knowledge that they will be subject to public scrutiny, including scrutiny by the Quadripartite Select Committee, and Ministers will, quite rightly, be held accountable for them.
My noble friend Lord Campbell-Savours, in an extremely interesting and carefully constructed amendment, has proposed a system to scrutinise licence applications and the licensing process which would provide for a degree of confidentiality in relation to the committee's activities, but it does not deal with this constitutional issue.
The Government also believe that a system of prior scrutiny could not be made to work without having a materially adverse impact on the efficiency and effectiveness of the export licensing process and without causing significant damage to the competitiveness of UK exports.
In spite of all the discussion about it being in parallel, I know of no case where another body added to the decision-making process—which almost certainly in this case could not start its consideration until it had received all the evidence from the different government departments—would not substantially add to the already complicated process of obtaining government agreement on these key issues.

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The Government see Parliament's role in this area as being one of scrutinising decisions after they have been taken and having the opportunity to input into policy. We do not believe that it would be right for Parliament to take part in or advise on the decision-making process itself.
I have listened carefully to the arguments which have been made.
Lord Campbell-Savours: Before my noble friend sits down, perhaps I may place on record to him that his whole brief has been written on the basis that I am talking about a parliamentary committee. I am not talking about that. On that basis, I ask him to revisit the argument during the coming weeks.
Lord Sainsbury of Turville: As I said, we take this matter very seriously. I shall look carefully to see whether the arguments I have advanced are altered by the point made by my noble friend. I have listened very carefully. The government view has been stated very clearly, but I shall take it away and consider whether it has been altered.
Lord Judd: Before my noble friend the Minister sits down, my noble friend Lord Campbell-Savours has put the point extremely clearly. He is not alone in his conviction that we are not talking about a parliamentary committee. It is as clear as this Chamber to me that that is the case. We are not talking about a parliamentary committee.
In his response, my noble friend referred to the observation of the noble and learned Lord, Lord Scott, that it is Parliament's job to hold the executive to account. He seemed to imply, therefore, that what was being proposed would undermine Parliament's job in holding the Government to account. Can my noble friend the Minister illustrate how this will in any way undermine Parliament's ability to hold the Government to account?
The advisory group will give its opinion; its views will be accepted or rejected or whatever; and Parliament will then look at the decision and say whether it is a good decision or a bad decision. I do not see any logic in the case put forward by my noble friend the Minister
Lord Sainsbury of Turville: This is a case where there is impeccable logic. I am very happy to be associated in this view with the noble and learned Lord, Lord Scott. We are obviously alone in sharing this view, but it seems to me quite clear that if a parliamentary committee, or a committee which involves parliamentarians, is involved in the decision-making process it makes it more difficult for Parliament subsequently to hold the executive liable.
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I have listened to the arguments and I will take them away. We take this matter very seriously but, in view of what I have said, I invite the noble Lord to withdraw the amendment.
Lord Phillips of Sudbury: We are grateful to the Minister for dealing with these amendments as he has and for being so good natured about the large number of interventions. It has made for a useful airing of the important issues involved.
In his response, he did not touch on the efficacy of prior scrutiny in political terms. Everyone has tried to urge upon him that this would be good for the Government, good for Parliament, good in terms of public opinion and good in terms of the quality of the outcome. He did not touch on any of that. It is a pity that the debate was dominated by the legal and constitutional issue.
The Minister said that he will consider these matters carefully. Perhaps I may suggest that he takes formal advice from Treasury counsel, or from another appropriate source, on the legal and constitutional issues. My belief is that the statement of the noble and learned Lord, Lord Scott—on which the Minister quite reasonably relied—was not an ex cathedra legal statement as regards the constitutional consequences of what is proposed, but the noble and learned Lord's political view as to the best way forward. We could ask the noble and learned Lord, Lord Scott. what he meant. But when he said that Parliament should not become complicit in executive decisions by prior scrutiny, I believe that the word "should" related to politics and not to law.
We need to get to the bottom of the legal issue. If the Government are right about that, frankly, we must withdraw from the field. If the Government are wrong, and several distinguished barristers have said clearly that because this is an advisory decision there is no constitutional or legal impediment. I respectfully disagree with the noble Lord, Lord Campbell-Savours, on this issue. I do not believe that his distinction between a Select Committee and a committee of parliamentarians is the crucial issue. It is the advisory as opposed to the decisive quality of the matter that is at the core of the debate.
If the Government find that they are not right in their constitutional and legal position, I very much hope that they will have regard to the fact that no one in this House is grinding any political axe. We have a great many people with huge experience in the fields about which we are talking. The view of those who have spoken has been unanimous.

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Again, we are grateful for the Minister's response. We hope that the matter can be returned to on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Davies of Oldham: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at eighteen minutes before midnight.