Export Control Bill

HL Deb 07 February 2002 vol 631 cc758-806

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 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 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, 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 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 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.

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 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 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 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 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 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 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 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 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, 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.

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 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 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 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.

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 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 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 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 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.

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 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 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 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.

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 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 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 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 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 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 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.

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". 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". 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 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: 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 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 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.

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.

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 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.