Strategic Export Controls

HC Deb 14 December 2000 vol 359 cc1-42WH

[Relevant documents:Third Report from the Defence Committee, Second Report from the Foreign Affairs Committee, Third Report from the International Development Committee, and Fourth Report from the Trade and Industry Committee, Session 1999–2000, on Annual Reports for 1997 and 1998 on Strategic Export Controls, HC 225, the Government's response thereto, Cm 4799, the Eleventh, Seventh, Seventh and Eleventh Reports respectively from those Committees, of Session 1999–2000, on Strategic Export Controls: Further Report and Parliamentary Prior Scrutiny, HC 467, and the Government's response thereto, Cm 4872.]

Motion made, and Question proposed>, That the sitting be now adjourned.—[Mrs. McGuire.]

2.30 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

It is a pleasure and privilege to introduce the reports of the four Select Committees on strategic export controls which, for ease of reference, I shall refer to collectively as the Quadripartite Committee. In parliamentary terms, it is unique that four Select Committees should have reported jointly on a subject, and it was an amazing experience. To achieve such an outcome required unanimity within all four Committees. I hope that I do not over-egg the pudding when I say that, given the diversity of opinion within the Committees, it is a minor parliamentary miracle that such a result has been achieved. I hope that that unanimity gives our recommendations extra authority and weight. I must sincerely thank my colleagues, the members of the Quadripartite Committee, for the amazing tolerance that they showed in order to achieve complete agreement. In addition, I particularly thank our Clerk, Mr. Natzler. I say "our Clerk", but we borrowed him from the Select Committee on Trade and Industry. The work that he carried out for us was over and above his usual duties, and I am grateful for his fantastic assistance.

The fact that the Quadripartite Committee scrutinised strategic export controls has been of some help to the Government. Without it, Ministers could have been dragged to all four Committees at various times to deal with certain aspects. I am sure that this afternoon's debate on the reports will inevitably concentrate on the critical aspects of export controls policy and its implementation. The Quadripartite Committee stated repeatedly that it recognises the significant steps that the Government have taken towards transparency in arms licensing. Much has been done to establish clearly defined criteria in a European code of conduct that will become one of the most important achievements of this Parliament.

We must bear in mind especially the publication of the strategic export controls reports, which contain information that has not been seen hitherto. No such reports have been published even in other apparently transparent systems. Although we shall concentrate on some critical aspects of the Government's licensing policy and implementation, I am sure that I speak on behalf of all four Committees when I acknowledge the openness that has been created by the introduction of the annual reports. We have sought to improve them. Some of our early recommendations dealt with their content and presentation in an endeavour to make them rather less opaque and more consumer friendly. The Government support several of our suggestions, and I urge my hon. Friend the Minister of State to continue to refine and improve the way in which the information is presented, so that it can be easily understood.

The aim of the Quadripartite Committee was to scrutinise the annual reports and to measure how the implementation of arms licensing in individual countries or in general matched the Government's declared objectives. We approached our work by sampling various sources. We considered the annual report and decided that some of the licences listed and granted were contentious, and that we needed to take a more detailed look at some countries. We then called in the licences and requested further detailed information on some of them. Through that process, we collected a considerable amount of commercially confidential information, which was given ungrudgingly by the Department of Trade and Industry and the Foreign and Commonwealth Office, and I am grateful to officials in both Departments for the assistance given. We showed that the Quadripartite Committee can deal with commercially sensitive information in a proper and sensible manner, and express concern about that information in a way that does not infringe or breach those confidentialities. That point will become important when we come to discuss the nature of the Government's objection to our notion of prior scrutiny.

The Committee decided to review all refusals. We invited companies that had appealed to write and tell the Committee the nature of their appeal. In that respect, I draw attention to paragraphs 57 and 58 of our conclusion about the appeals procedure. We are still receiving considerably bitter observations from companies about aspects of that appeals procedure. I hope that in that regard our work gives the lie to the notion that the Quadripartite Committee is somehow hostile to the industry. We took a considered view, and we are certainly not hostile to an industry that employs more than 300,000 people and produces jobs and skills. However, we have sought to ensure, in agreement with the Government's own objective, a responsible arms trade for the United Kingdom. I challenge those who criticised our approach as one-sided to look at our report; they will find several instances in which we have raised and pressed the industry case when we felt that that was legitimate and proper.

The Quadripartite Committee undertook a series of case studies, based on countries about which there was a measure of concern regarding the way in which the policy had been implemented and licences granted. I will not go through them all because hon. Members will, no doubt, select those that are of particular interest to themselves. I will discuss in some detail the case of Zimbabwe, but it should be remembered that the report also refers to Pakistan, China and Indonesia.

The report accepts the difficulties and dilemmas that arise when the situation within a country or region changes rapidly, the resulting problems and tensions for contractual obligations and the need to amend or change policy. We examined the Zimbabwe case in considerable detail and found that there had been some muddle and confusion in the handling of that case from August 1998 onwards. Our overall concern was that the case studies revealed that arms licence decisions for Zimbabwe and Indonesia did not yet reveal evidence of joined-up government. There was evidence that Whitehall baronial interests had sometimes fought each other to an unhappy compromise—something with which I became familiar in my ancient ministerial days.

We expressed two concerns about Zimbabwe. From our assessments and analyses of the licences and the unfolding of Government policy, we found that there had been an unannounced change of policy after August 1998. We had no quarrel with the idea that policy had to be changed, but that change had not been announced. Therefore, I was surprised and astonished that the Government's response to our observation was a curious denial that there had been any change of policy. That surprises me and it ought to surprise my hon. Friend the Minister, because in his evidence to us in May last year, he told us, very openly, that there was a very clear change of policy between August 1998 and February 2000. Yet for some curious reason, the Government's observations almost deny that such change took place.

In Committee, we fastened on an interesting and significant point, and I will address the matter despite its technicality because there are lessons to be learned. We thought that it was an error of judgment to continue to allow military list open individual export licences to be granted after August 1998, instead of using the individual export licence arrangement, under which each licence would have been scrutinised individually. I do not find the Government's observations on our criticism of that error of judgment to be a convincing response. The Government say that open export licences generally covered equipment which the Government was satisfied would not be used…in the DRC. Of the seven…three were to named end-users. But from our investigations it appears that those licences were for the Government of Zimbabwe, who were the end user. I hope that my hon. Friend the Minister will confirm that. Indeed, two of the open licences granted were for military vehicles and for Hawk spare parts.

As in the case of Indonesia, there is a lesson to be learned. The kind of scrutiny to which we subjected the Government's processing and policy evolution in Zimbabwe justifies our Committee and the nature of that scrutiny.

Mr. Andrew Rowe (Faversham and Mid-Kent)

Does the hon. Gentleman agree that one of our problems in Committee, which indeed, the Government must have in the administration of their business, is that the end use of a particular instrument can be either benign or malign? I would that imagine people would prefer to go into a war with a high-quality sporting rifle than with some of the equipment that is issued to them by their armed forces.

Mr. Rowlands

That may be true. Perhaps that point is not as forceful in Zimbabwe's case, where it is clear that what were granted under open military licences were spares to Hawk aircraft, which have a particular, unambiguous, purpose. Therefore, although the hon. Gentleman has a point, it was not relevant to the case in Zimbabwe that I mentioned with respect to the two licence references.

Although I have been critical of the Government's response, in the case of Pakistan and China we welcome it. We must have greater clarification of what the European Union bases its policy on with regard to arms sales to China. We welcome the Government's commitment to seek to do that.

It is also welcome that the Government, having refused licences to Pakistan, have decided to report those denials to their European partners under the European Union code of conduct. That was a specific recommendation that we made and we appreciate that the Government have followed it up. In that context, when my hon. Friend the Minister replies, will he tell us whether there is any evidence that any of our European Union partners have sold or are planning to sell or issue licences for equipment and material of the kind that we have been denying? Has there been overriding of the denial by any of our European partners? Will he bring us up to speed on those issues?

I appreciate the Government's reply to the point that we made forcefully—that the European Union code of conduct should be part and parcel of the acquis communautaire and that every applicant country should be expected to be part of, belong to and observe the letter and spirit of the EU code of conduct. That will be one of the most significant evolutions of the EU code of conduct. Indeed, I hope that the accession states will apply such a code of conduct in the period leading to accession. Several of the applicant countries to the EU are significant arms suppliers, and the application of the EU code of conduct to all applicant countries is a significant development of the idea of the code.

The Committee also raised several central issues of policy, including brokering, trafficking, licence production and Government-to-Government sales. I welcome the statement made in September by my right hon. Friend the Secretary of State for Trade and Industry that he and the Government plan in forthcoming legislation to go "significantly further" than the White Paper proposals on the issues of brokering, trafficking and licence production. It is a most important step forward that makes us all the more impatient to see the legislation. All our reports contain strongly worded recommendations and criticism of the absence of legislation following the Scott report during this Parliament.

As a result of the effort that we put in when in opposition on the issue of the Scott report, we have a legislative debt of honour to redeem the Scott recommendations in the form of legislation. We accept that such legislation will now be expanded to meet those vital other areas relating to brokering and trafficking.

I press my hon. Friend the Minister. Our impatience is combined with a great eagerness to get on with the job of scrutinising a draft Bill. When will we be able to see that draft Bill? Will we see it, as I hope, in January, so that we can have a constructive spring examining and scrutinising the draft Bill? I have heard informally from the Chairman of the Select Committee on Trade and Industry that that Committee does not want to conduct any such scrutiny, and that it would welcome the Quadripartite Committee examining such a draft Bill. I hope that I can persuade my colleagues to do so, as it would complement the work that we have done. We need a draft Bill. We hope and believe that we can legislate in this Session and redeem that legislative debt of honour. We are ready, willing, eager and able to undertake the work that is necessary to achieve that.

We are also ready, willing, eager and able to undertake another assignment relating to another recommendation that we made—the unanimous recommendation of the four Select Committees, involving members of all parties, that we should undertake prior scrutiny of licences. I was therefore saddened to read the Government's rejection of the proposal in the nine paragraphs that conclude the Government's observation.

As I said, the recommendation was made by all four Committees unanimously; there was little serious opposition to the suggestion that we should undertake such prior scrutiny. As the recommendation was neither quoted nor covered in the Government's reply, I remind the House why we thought prior scrutiny justifiable in that area as opposed to other forms of decisions taken by the Government. Paragraph 80 states: In our view, the authority to export arms is of a different degree of sensitivity to other types of Ministerial casework. There can be few decisions of greater potential impact on the conduct of foreign relations, and on the lives of many people overseas, than decisions as to whether to permit weapons made in this country to be put into the hands of overseas governments and their forces. The nation as a whole feels an exceptional degree of engagement with such decisions. There is understandable anger when it is found that British-made weapons have been used to oppress or terrorise people, or to endanger the lives of our service men and women or civilians. We agreed that powerful statement of why we thought such ministerial casework is of a different order and should be subject to prior scrutiny. In the nine paragraphs rejecting our proposal, the Government have not responded to that fundamental point in paragraph 80.

The Government's reply to our proposal for prior scrutiny comprises a range of practical objections. The first is the legal argument at the top of page 11, which states: Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic, in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in accordance with the powers conferred by Parliament. I must correct the first sentence, because nowhere in our report do we suggest that we should be involved in the making of Government decisions. We explicitly argued for the opposite in a powerful paragraph that makes it clear that our recommendation for prior scrutiny would not remove the Government's right and responsibility to make the decision. We do not recommend that we should be involved in making decisions.

Secondly, an inference may be drawn that it would be illegal if the Secretary of State heeded the advice of a parliamentary Committee, and perhaps my hon. Friend will explain how. The Import, Export and Customs Powers (Defence) Act 1939 gives the Secretary of State notoriously wide powers to act and does not limit him in taking advice from a parliamentary Committee. It is difficult to understand how that Act could be invoked to exclude parliamentary advice. Is it seriously being suggested that a British or European court would take seriously an assertion that the Secretary of State had acted unreasonably on the basis that he had taken account of the views of a parliamentary Committee? That is an absurd notion. The legal point at the top of page 11 does not wear well and is not a justifiable objection.

The practical objections that follow include the suggestion that suppliers might be encouraged to intervene, that premature publicity might damage commercial opportunities and that debate might damage bilateral relations. The vast majority of licences are uncontentious and the few that would be subject to stage 2 notification would be contentious, so they would be debated publicly at some time, or should be. I do not accept the Government's argument that the national interest would be damaged if a small core group of licences eventually became public.

If the Government's objection is that stage 2 notification might become public and prejudice a commercial sale or cause premature damage, my colleagues and I on the four Committees are prepared to sit down with Ministers and officials to try to overcome their objections. Our proposal is not the complete and utter last article, and we can amend it to meet apparent or practical objections behind the Government's rejection. If delay is the problem—although the Government's reply overstates that issue—we can deal with it. If it is a question of how stage 2 notification is handled, we can find a way to accommodate those worries.

Are the Government's objections based on practical problems of that nature, or are they summed up by the sweeping last sentence on page 11? That has nothing to do with delays or premature publicity; it is a simple, traditional statement of the Government's approach. It states: The Government's view remains that there is no role for advance scrutiny of individual casework decisions, which are quintessentially matters for ministerial decision in accordance with delegated powers conferred by Parliament. Will my hon. Friend the Minister tell us whether, if we manage to find a way of removing, in one way or another, the practical objections that are raised in the earlier paragraphs on page 11, he will still rest his case on the traditional constitutional concept that such matters are quintessentially for ministerial decision?

That would be an especially sad thing for a new Labour Minister to say, for two reasons. First, the report repeatedly states that the Committee is not in the business of making decisions—that is the responsibility of Ministers. Secondly, irrespective of whether prior scrutiny offends that traditional, hoary constitutional concept, surely the Government have a radical, modernising approach to constitutional matters and to openness and transparency. In this case, the Government could and should take a small but radical step forward in the genuine modernisation of the House, which would lead to a better form of scrutiny—not merely to making life more comfortable for us all, which has been the main achievement of modernisation so far.

I hope that my hon. Friend will think again about the basic constitutional structure that is outlined at the bottom of page 11. We on the Committee were—to borrow a word from the Government—quintessentially British in the way in which we approached this reform. Our proposal may be conceptually radical, but it is utterly pragmatic and cautious in terms of implementation. We believe that it is necessary to address a huge and practical problem that still applies to the current licence system—that, although considerable progress has been made in terms of openness and annual reporting, the difficulties that periodically arise with regard to parliamentary and public scrutiny of contentious arms licences have still not been resolved.

I hope that it is not presumptuous of me to conclude by quoting from a letter that I wrote to Major General Sharman, director general of the Defence Manufacturers Association, addressing a fundamental matter of public and parliamentary concern. It states: Your memorandum makes no reference to the unsatisfactory way current licence decisions are made. The current arrangements have left Parliament and public frequently depending upon partial leaks and slanted briefing and sometimes distorted media reporting. In many cases, that is how we have found out about contentious, difficult and sometimes unpopular arms licence decisions. My letter continues: I should have thought that the Industry and Parliament have a common cause and interest in ensuring a scrutiny system conducted on the basis of the facts of a case rather than the retrospective recriminations that occur in Parliament and the press when controversial sales are made in secret which have not been subject to any parliamentary scrutiny. I hate to say it, but that can still happen under the new arrangements. My letter concludes: In some cases it leads to sudden reversal of decisions and abrupt alteration in licensing policy which, surely, has not necessarily served the industry's interests or enhanced the nation's reputation as a reliable supplier. Our proposals would mean that all decisions would command greater respect and authority having been subjected to the sensible and pragmatic scrutiny procedures we have recommended. It is a pleasure and privilege to introduce, support and recommend our reports to the House.

3 pm

Sir John Stanley (Tonbridge and Mailing)

It is a pleasure to follow the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who was an exemplary Chairman of the Quadripartite Committee. He has followed his excellent chairmanship of that unique conjunction of Select Committees with a masterful speech, which, in a quintessentially British way, demolished the Government's response on the prior scrutiny issue. He highlighted the key issues, and I shall devote my remarks to those fundamental matters, which the Quadripartite Committee has put before the Government.

I have analysed the Government's response, and their objections clearly fall into two different categories. First, they raise procedural objections. As the hon. Gentleman pointed out, those objections relate to whether there is material delay, and whether information should remain confidential or be put in the public domain, and, if so, at what point that should occur. Given sufficient good will, those issues could be resolved by further discussions between the Quadripartite Committee and the Departments concerned.

The Government's second category of objections concerns matters of substance—the legal and constitutional issues that were mentioned earlier in the debate. The hon. Gentleman referred to the top of page 11, which states: Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic, in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in accordance with the powers conferred by Parliament. I read that with a wry smile, recognising it as the age old legal doubt gambit. It is familiar to those who have served in government and attempted a particular policy course to which their officials are opposed. The inevitable submission, which lists all the policy objections, arrives in the ministerial box. Invariably, the last objection is, "Anyway Minister, there is legal doubt whether you could do it at all." The legal doubt gambit is played extensively under this Administration—just as it was under previous Administrations. It is played in Whitehall and between Whitehall and Select Committees, and, lo and behold, it is being played here.

The Quadripartite Committee anticipated that the Government might object to our proposals by playing the legal doubt gambit. I stress to the Minister that we not only anticipated it, but that we met that line of objection head on. It is there in black and white; but given the way in which it is featured in the Government's response, I slightly regret that it was not printed in bold type. The first sentence of paragraph 88 is worth recording in full. It states: We fully understand and accept that, even with a system of prior parliamentary scrutiny in place, responsibility for strategic export decisions will continue to lie wholly with the Government, who will be accountable to Parliament for those decisions. The Quadripartite Committee could not have been clearer. Nothing that we propose encroaches on, dilutes or seeks to intervene in the responsibility of Ministers exercising their proper legal powers and having full control over the export licensing process. That being so—it is stated in the clearest possible terms in the report—I hope that the Minister will accept that the playing of the legal doubt gambit was wholly misplaced, and that no legal issues are raised by our proposal.

The second issue is constitutional. The final sentence of the Government's response on parliamentary scrutiny, to which the hon. Member for Merthyr Tydfil and Rhymney rightly drew attention, must also be considered with extreme care. It states: The Government's view remains that there is no role for advanced scrutiny of individual case work decisions, which are quintessentially matters for ministerial decision in accordance with delegated powers conferred by Parliament. The constitutional implications of that sentence are unacceptable. The Government are saying that, if Parliament has conferred the legal power on Ministers to take decisions on particular matters, Parliament will have forfeited the right of prior scrutiny of decisions taken under the relevant statutory powers. That is unacceptable. Parliament's function is to scrutinise the ministerial decision-making process at all times. Indeed, Parliament does so before, during and after decisions are taken. Every Member of Parliament is aware that it is the normal course of events for Select Committees regularly to scrutinise ministerial decisions and the policies that lead to them.

For example, the Select Committee on Foreign Affairs has just concluded a process of prior scrutiny—it lasted for more than a year—leading up to the ministerial decisions taken at the intergovernmental conference last weekend. No one suggested that we were acting improperly or that we were not fully entitled to carry out prior scrutiny of ministerial policy or decision taking prior to the Nice summit. To suggest that, because Parliament has given Ministers the power to take decisions, it is debarred from exercising the right of prior scrutiny is constitutionally unacceptable. That final sentence is grievously misplaced.

I wish now to look forward. The debate has all the makings of a rerun of the debate on whether there should be parliamentary scrutiny of the intelligence services. That debate commenced in the 1970s under the then Labour Government, and it continued under the subsequent Conservative Government. I remember the arguments that were used by successive Governments over those 20 years. They have a familiar ring. They were that national security would be imperilled; that Back-Bench Members of Parliament were insufficiently experienced and, indeed, insufficiently trustworthy to be allowed to be involved in issues of national security and intelligence; that the precedents set by the establishment of similar committees in other Parliaments, for example in the United States, should be ignored because of the allegedly different circumstances in those countries; and that in any event the matter was one for Government, in which Parliament had no right to be concerned.

Eventually the previous Conservative Government executed a more or less complete U-turn, and to their credit established the Intelligence and Security Committee—even if perhaps not in what we might now regard as the optimal form. Interestingly, since the Committee was set up, national security has not collapsed. Back-Bench Members of Parliament have shown themselves to be responsible and trustworthy in executing their responsibilities on the Committee. Furthermore, after 20 years in which Ministers maintained that a parliamentary Committee on intelligence would be unacceptable, the Foreign Affairs Committee, and possibly other Select Committees that have representatives in this Chamber, receive ministerial communications about one issue or another, telling them, "Yes, that would be quite suitable for consideration by the Intelligence and Security Committee, and we hope that it will go ahead."

I predict with confidence that we shall go down the same track with respect to what we are considering today. If the Government believe that their response this afternoon, and this afternoon's debate, will close the book on the issue of prior scrutiny, they are sorely mistaken. The report has been produced by not one but four departmental Select Committees. It has been produced not by one political party alone, but with the support of all three nationally based political parties in the House. We are all aware that it commands widespread support among Back-Bench Members of Parliament. The issue will not go away. It will return in the next Parliament and, if necessary, in subsequent Parliaments, until, sooner or later, a future Government of unknown political complexion will agree to the establishment of prior scrutiny.

Perhaps I may have the temerity to offer some advice to the Minister of State. He no doubt has in front of him a well-crafted speech, prepared by his officials, which endeavours to defend the indefensible, which the Government's response to the Quadripartite Committee on prior scrutiny indeed is. My advice is that he should think again. I advise him to ditch the speech and to make an alternative speech, telling us that the Government accept in principle that Parliament has a legitimate, necessary and desirable role in the prior scrutiny of arms exports; that the Government have genuine grounds for concern about aspects of the detail of our proposals; that they wish to engage in further constructive dialogue with the Quadripartite Committee, with a view to reaching a satisfactory accommodation on those points; and that, having done so, they will introduce a prior scrutiny system at the earliest opportunity. I invite the Minister to make that speech at the conclusion of the debate. It might not be the best action that he could take for his future job security, but it would—I say this in all sincerity and seriousness—command almost unanimous support on the Back Benches on both sides of the House and beyond.

3.15 pm

Ann Clwyd (Cynon Valley)

I pay tribute to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) for chairing the initially fractious Quadripartite Committee with great skill and diplomacy, as I would have expected. We started by treading on eggshells as we were unsure how different Committee members would react to different suggestions, but my hon. Friend managed, through the force of his chairmanship, to effect an extraordinary consensus. At times, we held our breath, because we were unsure whether someone would break ranks and pursue a different course from that which most of us initially hoped would be followed. This is my hon. Friend's last Parliament, and he can be proud of managing to bring us all together to achieve a consensual report. He is my next-door neighbour in constituency terms, and we have always had a good working relationship.

The Minister of State, Foreign and Commonwealth Affairs, my hon. Friend the Member for Neath (Mr. Hain), is also a neighbour, and if he were sitting on the Back Benches today, he would fully agree with the Committee's proposals. I agree with the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) that my hon. Friend the Minister should throw away his speech, although he should retain any nuggets that we would support. He has always had a clear view on the issues under discussion. We read interesting press reports that Departments are not united on some aspects of the policy and that some would support prior scrutiny. I shall not speculate on which Departments are for or against it. I suspect that my hon. Friend the Minister might be in a difficult situation if I asked him that question directly, and I am sure that he would not answer.

Over the years in this place, I have probably asked thousands of questions on arms, and I have received inadequate answers about disproportionate costs and so on, which ensured that the truth was concealed. I have also asked many questions about arms sent to Iraq, as I am sure many of my hon. Friends have, so we know the extent to which those arms were cloaked in secrecy. Scott makes that clear, and I am one of those mentioned in his report who received misleading answers to questions. At the time, I heard a Minister boast that it was quite a good thing to mislead Members of Parliament and for us not to have the whole truth. Our Committee would disagree profoundly with that view.

The Government have taken a welcome step in publishing the annual report on arms exports, but that allows only for enhanced retrospective scrutiny of licensing decisions. If, as the Queen's Speech stated, new legislation will significantly improve the transparency of export controls, it must provide for a system of prior parliamentary scrutiny of export licence applications. That the Government's response to the Committee's report rules that out causes Labour Members and members of the Quadripartite Committee great anxiety.

Members of the Quadripartite Cttee visited Sweden and the United States and compared the models in those countries with what we thought the model for this country should be. We thought that the United States system was better than the Swedish system. There are similarities and differences, but the licensing system in those countries seems to exist without damage to the defence industry or to bilateral relations. The Minister must justify his claims in response to our report, because if the system can continue in other countries without damage, there is no reason why it should not be adopted in this country, too.

Mr. Rowe

Does the hon. Lady agree that, in the cases that are most likely to require prior scrutiny where political conditions are likely to change quickly, Ministers would have some comfort if the applications were subject to prior scrutiny by the House?

Ann Clwyd

I entirely agree with the hon. Gentleman; that would be precisely the situation. It would give Ministers considerable relief if they knew that the prior scrutiny system had given its blessing to particular arms exports.

The Government exported rather a lot to Iraq, in the face of all the information available about the political and human rights situation there. I do not believe that if Members of Parliament had had the opportunity to say yes or no to those exports they would have agreed to the licences. Iraq still owes us £600 million in export credits guarantees.

I asked many questions about Indonesia, because it was obvious to those of us who followed the human rights situation there that, at some point, the arms would be used in human rights abuses. The campaigning organisations which monitored on the ground what was going on in Indonesia found British-supplied water cannons being used against students on the streets of Jakarta. To talk about end-use agreement is utterly stupid. Everyone knows that, as the Minister's late former colleague, Derek Fatchett, once admitted, once arms have gone to a country No formal mechanisms exist at present for systematically monitoring the use that has been made of British defence equipment once it has been exported.—[Official Report, 3 June 1998; Vol. 313, c. 240.] That statement was made in a written answer to a question about monitoring by the Foreign Office of the end use of British-made armoured vehicles in Indonesia and East Timor. As the Indonesian case illustrated only too well, with no formal mechanisms in place for monitoring end use, the Government cannot guarantee that United Kingdom arms exports will not be used to abuse human rights or to fuel regional conflict.

I do not say that prior scrutiny would be right on every occasion, but, as the United States Congress found, when suggestions were made that there should be export licences for Indonesia, requests for those contentious export licences never went beyond the prior scrutiny committee, which knew full well that members of Congress would object. Unlike ourselves, who have agreed, with the rest of the EU, to continue arms exports to Indonesia, as of last month—the last time that I heard about it—the United States Congress still has an embargo on such exports.

Indonesia's conflict continues and our arms are being used in Aceh, West Papua and perhaps other parts of the country. It is extremely embarrassing to many Government Members that many people have recently been killed in West Papua as a result of a crackdown by the Indonesian authorities. Can anyone put their hands on their heart and say that no British-made arms are being used in the conflict? The answer must be no.

Hawk aircraft were exported to Indonesia under licences granted by the previous Government, but the present Government decided to continue to export them, together with spare parts. As a member of the Select Committee, I know that we never got to the bottom of that business. I made one of the first criticisms of the new ethical foreign policy of 1997 when my right hon. Friend the Foreign Secretary, after making speeches on human rights in the Foreign and Commonwealth Office and elsewhere, said that it was impossible not to export arms to Indonesia because of pre-existing contracts and promises. The legal evidence was conflicting, so we asked to see it. Evidence from outside Parliament suggested that it would have been possible to stop the exports. Despite our requests, we never saw the legal evidence. My right hon. Friend's position was inaccurate; the exports could have been stopped at the time.

In East Timor last year, just before the referendum, Hawk aircraft were used to intimidate people living there. They flew over East Timor just as they flew over Papua. It is not good enough for the Government to say that they are sorry and will not do it again. Once the potential for conflict, intimidation and killing has been exported, we must bear the responsibility for it.

I must apologise for not being able to hear the winding-up speeches. I have to meet some of my Cynon Valley constituents, who are going to No. 10 for tea. We must keep such an important date. I agree with my hon. Friends that this issue will not go away. The majority of, if not all, Members of Parliament agree with prior scrutiny. Will my hon. Friend the Minister explain why a system based on prior scrutiny would compromise political and commercial confidentiality in the UK when it does not do so in Sweden and the United States?

3.28 pm

Mr. David Chidgey (Eastleigh)

I am pleased to follow the hon. Member for Cynon Valley (Ann Clwyd). I agree with her views on prior scrutiny and end-use certificates. Only a few weeks ago, when the Foreign Affairs Committee pressed the Foreign Secretary on the Government's record on human rights in China, he replied—and it is on the record—that he did not govern China. On the same principle, arms exported to countries with a poor human rights record on the basis of end-use certificates cannot be controlled either. That is obvious: the hon. Member for Cynon Valley is right.

On prior scrutiny, I agree once again with the hon. Lady and with the right hon. Member for Tonbridge and Malling (Sir J. Stanley). The issue will not go away, and it is clear that the Government are not responding to the desperate need to modernise our legislation on arms and strategic export control. A draft Bill was announced in the Queen's Speech. I am disappointed that it is a draft Bill because it is unlikely that it will be dealt with fully in this Parliament. Our arms control legislation is 50 years old and has not had any substantial changes in that time. It is obsolete and pitifully inadequate. The Government do not understand that, when the Bill is introduced, the House will insist on a full debate on the basis of the effectiveness and necessity of prior scrutiny by Parliament. The matter will not go away.

I should like to refer to some specific parts of the Government's response to the Quadripartite Committee's report. I know that many hon. Members wish to speak so I shall turn quickly to licensed production overseas, human rights and police equipment and a little about Pakistan. The Minister will be aware of my previous interest in that country I should like to talk about the manufacture and export of instruments of torture, which is illegal under current UK law. Clearly that is a key concern.

I should like to draw the Minister's attention to our debates in the Foreign Affairs Committee earlier this year when, thanks to the valuable work of non-governmental organisations, and Amnesty International in particular, I exposed a loophole in existing British legislation. I should like to place on record my thanks to them. The case involved the manufacture of what were described as oversize handcuffs sold by a company called Hyatt-Thompson, operating out of New Jersey in America. However, they were sold not as handcuffs, but as leg irons. That was made possible simply by adding a longer length of chain to the cuffs.

It is important to note that Hyatt-Thompson had previously been owned by Hyatts of Birmingham in the United Kingdom, which proudly declared in its literature that it had been an established purveyor of restraining implements since the slave trade. I drew the Minister's attention to the allegation that the oversized handcuffs, together with the accessory to make them into leg irons, were being made in and exported from the UK. The Minister accepted that there was a loophole in the legislation, although there was no evidence that it was being exploited. It is a year since that was debated. Can he confirm that the loophole has been closed and that the opportunity to export instruments of torture no longer exists?

The second case in this regard is the manufacture and export of electric shock batons. It is illegal to make those instruments in the UK and to export them but, as the law stands, it is not illegal for a British-owned company based overseas to manufacture there. Hon. Members are familiar with the renowned case of the British-owned company Heckler and Koch, which licensed a local manufacturer in Turkey to produce hundreds of thousands of combat assault rifles, some of which were exported to Indonesia. United Kingdom companies can get round arms export and end-use controls by manufacturing offshore. I hope that when the draft Bill eventually arrives, it will include measures to control those activities.

There is a deeper issue here. What if a British-owned firm manufactures offshore equipment that it is illegal to make in, let alone to export from the UK? There is a case in question; Smith & Wesson, which most of the men in the Chamber will remember from schoolboy comics, is a famous company in the arms industry. It is now British owned, but its factories are in the USA and electric shock batons are among the range of products that it manufactures and sells—perfectly legally in the United States. They are popular with police agencies in the southern states of America, particularly Texas, which might tell us something. As we know, the USA has far stronger export licensing controls, of which prior scrutiny is one, than the United Kingdom. It already has effective legislative scrutiny for its arms export industry. However, when the export of electric shock batons and similar instruments to countries with an unacceptable human rights record was queried by the federal authorities, Smith & Wesson was able to claim that, as a British company, it was outside the strictures of American controls. The question for the Minister is whether the new Bill will deal with the mechanisms by which manufacturers can get round the laws of this land, even though they are British companies.

At the other end of the scale is the Pakistan affair, if I may put it that way, where the actions of Government agencies caused the closure of Royce Industrial Ovens in Boyatt Wood in Eastleigh, with a consequent loss of jobs. That case was pertinent to my constituents and me. Royce undertook legitimate business but fell foul of the Government in what amounted to an embargo—the Minister will disagree with that description—on exports to Pakistan. Last year, Royce won an order from Pakistan for the supply of component parts for simple plate-heating furnaces. The contract was worth more than £250,000, which is a large order for a small firm. It applied for an export licence in October 1999, with a shipment date of 1 February 2000. In December, the company was informed by the Department of Trade and Industry that the application was with the Foreign Office and would be processed in one or two weeks. As time went by, it made numerous calls to the DTI and each time was told that the matter was still with the Foreign Office but would be chased up. After Royce contacted me, I wrote to the Secretary of State in mid-March—already two weeks after the shipment date.

The Minister for Competition and Consumer Affairs replied to me a month later, in mid-April, and said: Where the ECO does need to circulate an application for an export licence… the aim is to provide the applicant with a substantive response within 20 working days. That letter was written six months after the original application for an export licence. By late May, seven months after the application, Royce told me that its daily inquiries to the DTI were met with one lame excuse after another. Royce's clients eventually refused to extend the letter of credit, leaving it with no option but to cancel the contract, incur the associated financial penalties and close its operation.

It cannot be right for the Export Control Organisation to act in such a dilatory manner. When a Minister has told me that a 20-day clearance procedure is the norm, why is my constituent still waiting for an answer seven months later? Why could not my constituents have been told when they made their application that it was abnormal? Why could they not have been made aware of the likelihood of their application's success or failure, instead of being strung along month after month?

The Government's arguments in response to the Quadripartite Committee and their failure to accept that prior parliamentary scrutiny is and should be the norm are unacceptable. The Committee visited Sweden and the United States of America, the two countries that operate prior scrutiny through their legislative systems. How can the United States, which is one of the largest and most aggressive arms exporters in the world, continue to be so successful in its arms sales if its regime of prior scrutiny causes problems? It is specious to argue that it does. If it is so successful with that sort of control, how can prior scrutiny be such a hindrance to the United Kingdom defence industry?

I would like the Minister to respond to three specific examples: the closure of legal loopholes concerning the manufacture of prohibited instruments of torture; the offshore manufacture of those instruments by certain companies; and the dilatory action and lack of sensitivity or understanding of the ECO in its issuing of legitimate export licenses. I look forward to the Minister's response.

3.40 pm

Mr. Roger Berry (Kingswood)

It is a pleasure to serve on the Quadripartite Committee. That may not be the most elegant title, but we undertake important work. I join my colleagues in paying tribute to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) for the effective way in which he chairs the Committee.

Today's debate relates to strategic export controls. The Committee and the Government have often referred to the issue of transparency and, with regard to that, we should perhaps refer to arms export controls rather than strategic export controls. I may be the only person who was in any doubt about the meaning of that term; perhaps those whom we represent know that we are discussing the control of the arms trade. However, a bit of transparency might be a good idea.

This is an important issue because the United Kingdom is the world's second largest arms exporter—we export about 25 per cent. of global arms exports, earning £7 billion of export revenue each year. That activity raises two important issues. First, what should be our policy towards arms exports? Secondly, when the Government have a clear policy, what control regimes should operate to ensure that that policy is implemented? As a member of the Quadripartite Committee, I strongly endorse the Committee's comments on both those issues, and I congratulate my hon. Friend the Member for Merthyr Tydfil and Rhymney on the way in which we secured agreement on certain recommendations.

In fairness, I should also congratulate the Government. Although I want to maintain the cross-party support for the reports—which I know will continue anyway—I must say that we could not have had this debate four years ago.

Mr. Chidgey

Three years.

Mr. Berry

Three years ago, within three months of the general election, we were at least given new criteria for arms exports. There was a policy of not granting a licence if there was a clearly identifiable risk that arms exports might be used for internal oppression or external aggression—a policy that did not exist before. Although I take the point made by the hon. Member for Eastleigh (Mr. Chidgey) in respect of legal loopholes, action was taken to ban weapons of torture. The Landmines Act 1998 was passed, and a White Paper was drafted on arms export controls—neither of which existed previously. There have been three annual reports on arms export controls and, as a direct result of the United Kingdom presidency, a European Union code of conduct—neither of which we have ever had before.

We also, for better or worse, have a Quadripartite Committee—I think that it is very much for the better, and am sure that all right hon. and hon. Members will agree. The benefits of that Committee are that we can ask searching questions of the Minister and his colleagues and take advice from a variety of organisations with a serious and long-standing interest in the issue of arms exports. Amnesty International, Saferworld and other organisations have been able to put their views in public, in perhaps a more visible way, because of the Quadripartite Committee. That is no mean achievement. I believe, therefore, that our position today is fundamentally different from that of four or five years ago, and I welcome that progress.

Mr. David Drew (Stroud)

Does my hon. Friend accept that one other important factor is that the arms trade is now alerted to the fact that arms control will be coming—perhaps more slowly than some of us would want—and the industry has had to clean up its act and become much more transparent in its own right?

Mr. Berry

That is an important point. One of the benefits of such debates is that they raise people's awareness of issues that the Government may address more forcefully in future. Arms export control issues are now far higher on the public policy agenda than they have ever been. I know from my work on the Quadripartite Committee and on the Trade and Industry Committee that that high profile has had an effect on the behaviour of certain companies. Having rightly and genuinely sung the Government's praises, I shall now explain why I am disappointed that, despite the fact that the Scott report was published almost five years ago, we have still not modernised the legislation on the control of arms exports. We desperately need new legislation. It is unfortunate that there is to be a delay, but I hope that it will at least give the Government an opportunity to take on board some of the issues raised in the reports and those referred to by right hon. and hon. Members this afternoon. I should be grateful if my hon. Friend the Minister would confirm that the delay means that certain issues can be considered further before new legislation comes into force.

I draw the Chamber's attention to early-day motion 391 from our previous Session. I shall not bore hon. Members by reading it out, but I tabled a motion on 14 February this year, the eve of the fourth anniversary of the publication of the Scott report. It acknowledged the progress that the Government had made, but it called on them specifically to introduce comprehensive and effective legislation to strengthen the control on strategic exports in the next parliamentary Session. Unfortunately, that is not to happen, but the early-day motion was signed by 199 right hon. and hon. Members. Of the 1,400 early-day motions that were tabled in the previous Session, only a handful had more signatures attached to them than early-day motion 391. As the right hon. Member for Tonbridge and Malling (Sir J. Stanley) said, that shows the extent of support in the House for reform.

My second disappointment concerns the Government's response to our Committee's recommendations on prior scrutiny. My hon. Friend the Member for Merthyr Tydfil and Rhymney and the right hon. Member for Tonbridge and Malling have already touched on such matters, but I, too, find the Government's legal argument unconvincing. It is absurd for anyone to suggest that the Secretary of State would be acting unreasonably if he took into account the views of a Committee. I agree with my colleagues that that does not seem sensible.

I refer now to the other arguments against prior parliamentary scrutiny. If such scrutiny must cause undue delays, damage the defence industry and harm bilateral relations, why do the United States Government not feel that it is an issue? The United States is the largest arms exporter in the world. Under whichever presidency, it is mindful of its defence industry and bilateral relations, and of operating efficiently. If it is not a problem for the USA or Sweden, I do not understand why it should be a problem for us. I hope that in due course the Government will clarify why they believe that the United Kingdom is a special case.

The Queen's Speech promised a draft Bill to improve the transparency of export controls and to establish their purpose. I welcomed the statement by the Secretary of State for Foreign and Commonwealth Affairs on Monday when he assured the House that the problem of brokering and trafficking would be covered in the draft Bill. The Government have stated in their response that their proposals will go significantly further than those in the 1998 White Paper. I warmly welcome that. It is unacceptable that a United Kingdom company that brokers a deal to purchase arms in a second country and then export them to a third country does not have to apply for an arms export licence because the materials do not touch UK soil. That is patently absurd.

I have to obtain a licence to drive a car, to be married and to watch television. I have to obtain a licence to run a raffle, to sell alcohol and if I want to go fishing. However, if I want to buy arms from any person, company or regime under the sun and sell them on to any person, company or regime under the sun, however unscrupulous they may be, I do not need a licence or need to notify the authorities that I am engaged in that activity. That does not make sense, as the Government have acknowledged, and I look forward to seeing the detailed proposals in the draft Bill.

In the meantime, will my hon. Friend the Minister confirm that the Government will introduce a licensing system for arms brokers, that controls will apply to the trafficking and brokering of light weapons and small arms, that those engaged in brokering will be required to apply for a licence for each individual transaction and, finally, that controls will extend to British arms brokers operating on foreign soil? Only if the answers to those questions are yes can we be confident that we are beginning to tackle the problem of trafficking and brokering.

Ms Oona King (Bethnal Green and Bow)

Does my hon. Friend agree—I apologise to my hon. Friend the Minister for raising a matter that I have raised previously in this Chamber—that, as Amnesty International has said, if we are capable of tracking British beef from the producer to the end point, we should be able to do that with arms?

Mr. Berry

My hon. Friend is absolutely right. The United Kingdom has acquired great expertise in tracking beef from producer to consumer, but we do not seem to have mastered the skills required to track the export and transfer of arms. My hon. Friend raised an interesting point, which was so good that I intended to make it myself.

On licence production, there is more than one way of getting around existing arms controls. A child of five could do it. One way is through brokering and another is through licence production. Arms can be produced not in the United Kingdom but by a subsidiary company in a second country which then exports them to a third country. It is pretty easy and there is nothing sophisticated about it. It is not rocket science, which is why companies do it. Reference has been made to a wholly British-owned company that manufactured machine guns in a second country, which ended up in Indonesia during the East Timor crisis.

I hope that the Minister will tell us what plans the Government have to introduce controls on licence production of arms overseas. The White Paper was disappointing in that regard and I hope that my hon. Friend can be more encouraging this afternoon. Licence production is a second, obvious way of getting round the current arms export controls regime.

My final point concerns end-use monitoring. The Scott report showed how easy it was to get round arms export controls by exporting through a third country. Last year, as my hon. Friend the Member for Cynon Valley (Ann Clwyd) said, the Indonesian authorities assured the Government that Hawks would not be used in East Timor. Subsequently, of course, the chief of its armed forces admitted that they were used. End-use monitoring is crucial in determining where arms are eventually to be used. What plans do the Government have to strengthen controls on the end use of arms exported from the UK? I know that they are more diligent nowadays, but I should like to be assured that they are taking the matter far more seriously.

The Government can be proud of the action that they have taken so far, but further legislation is an important and necessary next step. To coin a phrase, "A lot done, a lot more to do."

3.56 pm

Mr. Harry Cohen (Leyton and Wanstead)

I add my praise to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) for his splendid—indeed, nothing short of magnificent—chairmanship of the Quadripartite Committee. He seems to have achieved the impossible in bringing together those four Committees, which are diverse in their nature and membership. The result is a truly impressive and historic report, of which he can be proud.

Action to ensure far better control of arms sales is long overdue. During the past decade, 8 million people have been killed in wars in Africa alone, and some of the arms that killed them were shipped and/or brokered from this country. As my hon. Friend the Member for Kingswood (Mr. Berry) eloquently pointed out, there are often no regulation and licensing arrangements whatsoever. Many shipments are sent illegally in breach of United Kingdom, European Union or United Nations embargoes. In the previous Session, I introduced a ten-minute Bill that would make it illegal for any UK citizen or company to do that, whether in the UK or from abroad. Organisations such as Amnesty International and Oxfam have made powerful representations, mainly in relation to the Queen's Speech, calling for urgently needed new legislation to embrace licensing control, brokering, end-user monitoring and greater transparency arrangements.

The Quadripartite Committee rightly praised the Government for introducing the UK code of conduct—which has been extended to the EU code of conduct—and for pushing forward the Wassenaar agreement. However, that work must continue to secure a coordinated policy with the United States and, eventually, with central and eastern Europe and China. That will ensure a proper standard for arms sales and transfers across the globe.

As a recent Radio 4 programme revealed, some arms brokers say when they are caught, "If we don't sell, others will." If they had their way, there would be a free-for-all. It blows apart any public policy not to fuel wars, and will end up fuelling the killings that I referred to earlier. All our international development money and effort will go down the drain. The converse to that argument is true: if we fail to control arms, other countries will not do so either, and we shall not be in a position to demand that they do. If we fail to implement the system of accountability for arms sales that the Quadripartite Committee has argued for, we cannot demand it of other countries. We must press on down that route.

Let us re-examine the basics. The basis for the arms trade is the United Nations charter, which states that countries have the right to self-defence, and I accept that. However, the charter should be modified, so that it does not justify the supply of arms to a serial abuser of human rights—or, indeed, a serial abuser of United Nations resolutions. I draw the Minister's attention to that point, which should be a key issue in the future reform of the United Nations.

The essence of export controls is that a country takes a decision that it does not want another country or group to have access to weapons or torture equipment that could be useful to its military, paramilitary or police forces. Such decisions are subject to certain criteria, which must be applied when there are conflicting indicators of whether to agree to the trade. In July 1997, the Government published those criteria for the first time, an action that I applauded at the time, and still regard as a significant milestone on the road to greater openness.

The annual report on strategic export controls is another of the Government's valuable innovations. Nevertheless, we need less ambiguity in that report and greater transparency in the overall process, and that is why I strongly support the Quadripartite Committee's proposal for prior parliamentary scrutiny. The Committee put the case for that extremely well, and I am dismayed that the Government kicked it into touch. Prior parliamentary scrutiny is appropriate under both the Import, Export and Customs Powers (Defence) Act 1939 and whatever new legislation is to replace it. Prior scrutiny is irrefutable under the current legislation. The flaws in the 1939 Act have been repeatedly explained, not least by Lord Scott in his famous report.

The Government's view is that Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic, in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in accordance with the powers conferred by Parliament. The current powers were conferred by Parliament, but after only 12 minutes' debate in the days leading up to world war two. The 1939 Act has many faults, the most important of which are its poorly defined, sweeping emergency powers. Such measures are appropriate for a national emergency such as world war two, but they are too vague for a peaceful, civilised society.

The Government also state that there is no role for advance scrutiny of individual casework decisions, which are quintessentially matters for ministerial decision in accordance with delegated powers conferred by Parliament. I wonder whether the Government's reluctance to accept the Committee's prior scrutiny proposal stems from a fear that it could be the thin end of the wedge, and that Parliament would keep demanding prior scrutiny of other casework issues. I do not think that that would happen. Life in Parliament is already busy enough, without adding further burdens. However, arms exports are a special case. Once arms have been exported, they are out of our control. They have a shelf life longer than that of most Governments. That is why decisions must be right at the outset. There is no review and there are no amendments. There are weapons still in service around the world—such as armoured cars in Indonesia—that were exported from this country in the 1960s. The British public become very angry if arms that are sold by Britain are used to abuse human rights or, indeed, are used against Britain's own armed forces in a subsequent war.

The passage that I quoted about matters that were "quintessentially…for ministerial decision" is an argument for the retention of Executive power, which the Government want to defend. At paragraph C1.64 of the Scott report, it is argued that the continued use of the Import, Export and Customs Powers (Defence) Act 1939 is a reprehensible abuse of executive power by successive administrations. I agree with the Committee that prior parliamentary scrutiny is an antidote to reprehensible abuse of executive power in this important context.

A new factor must be taken into account—the European convention on human rights. The Human Rights Act 1998 came into force in October and states that Government interference with private property must be fair and accountable. Sir Richard Scott stated in his report, at paragraph C1.120, that the 1939 Act could be incompatible with the European convention, and offered the opinion that it is by no means clear that a challenge in the European Court of Human Rights would be unsuccessful. Now that it is possible to challenge the law in British courts, a perilous situation could arise for the Government. I am not a lawyer, but I would argue that prior scrutiny would allow the Government to argue in the courts, against any such challenge, that licence applications were being dealt with fairly and accountably. Parliamentary involvement would support that case.

The Quadripartite Committee has made a powerful and impressive case for prior parliamentary scrutiny. The Government's response is narrow and perhaps stems from fear of such an important change. I hope that the Minister of State, and indeed the Government, will not remain tied to the policies that they have announced. I hope that they will think again about the issue, recognise the importance of the recommendation that has been made, and accept it.

4.8 pm

Dr. Phyllis Starkey (Milton Keynes, South-West)

I intend to follow the pattern of almost every speech that has been made this afternoon, and welcome what the Government have done so far to provide greater transparency in strategic export controls. It was a big step to introduce annual reports on strategic export controls. The setting up of the Quadripartite Committee was an excellent decision. I also appreciate the way in which my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) acted as Chairman of that difficult and potentially unwieldy Committee. He made sure that effective and important reports were produced.

Arms sales are a sensitive issue. Certainly, my constituents write to me about it. It is important that decisions on arms sales should be transparent. The public do not merely want to know what arms are sold, and where. They want to understand the reasons for the judgment that the Government make. I therefore strongly support the Committee's recommendation that arms export licences should be the subject of prior parliamentary scrutiny, and I object to the Government's rejection of that recommendation.

Several hon. Members argued against some of the reasons that the Government gave for that rejection. I am not convinced by the argument on delay. An additional 10 days would not be particularly significant. Although the Government said that the target is 20 days, in an answer to me about arms to Israel, which was recorded in Hansard on 16 November, they stated that, of 27 outstanding applications for open individual export licences relating to exports to Israel, 14 had been outstanding for more than six months. An additional 10 days of Committee deliberation would not make much difference.

The suggestion that prior scrutiny would result in breaches of confidentiality that might make the United Kingdom less competitive is insulting. It implies that Members of Parliament are less trustworthy than Ministers. There is no evidence of that. Whenever Members of Parliament are given confidential information, they are quite as trustworthy as Ministers. If Members manage to get hold of information that others have tried to withhold from them, they may feel that they have not been treated properly and that they would therefore be justified in passing on that information. Members of Parliament should be trusted when they are taken into someone's confidence. If they cannot be trusted, they ought not to be Members of Parliament. As for competitiveness, it clearly is not a problem for the United States or Sweden. The US is at least as competitive in this matter as we are, if not more so, yet it has prior scrutiny.

The objection that I found particularly irritating was the notion that detailed debate about the merits of exporting particular goods to particular destinations might damage bilateral relations. Debate will be needed only if we have real and legitimate concerns. If such a debate had occurred, and if it were decided that the sale should go ahead, a proper ventilation of the arguments would have allowed unsubstantiated allegations to be refuted. The proper ventilation of the arguments would give greater legitimacy to such sales and could not possibly damage bilateral relations. Indeed, it might strengthen them. In any case, as the House is aware, Members of Parliament have plenty of opportunity to ventilate their concerns about particular regimes, and most foreign Governments, even those who are autocratic, understand the difference between the strong personal views expressed by a Member of Parliament about a particular regime and Government policy. The reasons put forward by the Government are wholly unconvincing.

There is one reason why prior scrutiny could be positively advantageous to the Government. The most difficult cases, and those for which the Government have been most criticised, are often those when Members of Parliament and the public have effectively applied a measure of hindsight. Examples of that, which would have happened before prior parliamentary scrutiny existed, include arms sales to Argentina and Iraq. With the particular exception of my hon. Friend the Member for Cynon Valley (Ann Clwyd), most Members of Parliament who subsequently criticised those arms sales did not criticise them when the sales were made, and Argentina attacked the Falklands, and thereby us.

Prior scrutiny would allow Parliament to judge the advisability of arms sales against criteria and in real time, as do the Government, and we would not have to rely on hindsight. That would provide a level playing field between Parliament and the Government, and both could consider the changing circumstances as they happen. It will be no surprise that I again use the example of the sale of British arms to Israel. That is an example of circumstances changing quickly; and the judgments that are being made now are different from those that were made in the past. It is right that there should be prior scrutiny, that Parliament, through the Committee or whatever system is set up, should judge those sales in real time, as do the Government.

I add my voice to those of other hon. Members in asking the Government to reconsider the issue of prior scrutiny. I accept that there may be practical difficulties with the suggestions of the Quadripartite Committee, but that is no reason for the Government to reject them out of hand. I urge the Government to explore, with the Committee, ways of introducing prior scrutiny that could reduce potential problems foreseen by the Government but provide proper and effective parliamentary oversight.

I return to the issue of arms sales to Israel to highlight the unsatisfactory nature of the system by which Members of Parliament try to exercise scrutiny to discover the Government's policy and what happens to the arms that have been sold—I use arms as shorthand for components and military equipment. Of the arms that have been sold to Israel, components for combat helicopters have raised particular anxieties. Combat helicopter gun ships have been used by the Israelis against civilian targets and the Israeli defence force made it explicit that those attacks were in retaliation for earlier attacks on Israelis. Such retaliatory attacks break the fourth Geneva convention.

The British Government have repeatedly stated in evidence given by the Foreign Secretary to the Select Committee on Foreign Affairs and in written answers to my questions that there is no evidence that equipment licensed by this Government for export to Israel has been used against civilians in the occupied territories.

The Government have sought assurances from senior Israeli military people and from the Israeli Government that no equipment or components licensed for export have been used against civilians in the occupied territories or in southern Lebanon. However, it is clear that the Government have had no such assurances from the Israelis, nor have the British Government any evidence to show that British-made arms and components have not been used against civilians in the occupied territories or in southern Lebanon. That shows the lack of substance of the Government's claims that they can prevent the misuse or diversion of arms once they have been exported. Indeed, it is apparent that the Government are not aware whether misuse or diversion is occurring, despite the presence in the occupied territories of our diplomats, those of other European Union member states and, I imagine, of a defence attaché in Tel Aviv. The Government cannot assure the British people that British arms and components are not being used, as we speak, to kill and injure Palestinian civilians.

The Minister said last month in a written answer that the Government had not approved any licences for permanent export of CS gas to the Israeli Government because of concern about the use of the gas against Palestinians and Israeli Arabs. I welcome the fact that he also said that he had refused those applications, but I should be grateful if he would explain how that statement is consistent with the 1998 Government report on strategic arms exports, which details CS grenades, presumably containing CS gas, among standard individual export licences issued. That does not seem consistent.

For 22 years, until earlier this year, Israel was in illegal occupation of a large tract of southern Lebanon. For all that time, Britain, and most other countries, supported the United Nations resolution condemning that illegal occupation and calling upon Israel to withdraw. Yet, throughout that period, the British Government apparently sold arms to Israel without any end-use restrictions. The Minister's response of 23 November stated: No such geographical restrictions have been placed on export licences to Israel. [Official Report, 23 November 2000; Vol. 339, c. 273W.] That is extraordinary. The Government's stated policy is that we do not sell arms for external aggression or internal repression. Yet apparently, over the years, we have sold arms to an Israeli Government whose external aggression towards Lebanon and continued occupation of southern Lebanon we condemned, without placing any end-use restrictions to prevent their use in Lebanon. I should be grateful if the Government would explain that omission. I should be quite interested to know why the Quadripartite Committee never thought of asking about it either.

The continued deaths of, and injuries to, Palestinians in the West Bank and Gaza have dropped out of the press. They have now reached nearly 300 deaths and more than 7,000 injuries. The excessive violence of the Israeli forces is the main contributing factor in the huge and disproportionate death rate. I note that there are significant numbers of applications for standard individual export licences and open individual export licences outstanding for arms to Israel. I urge the Government to halt all arms sales to Israel forthwith. That is made particularly important because the Israeli Government are apparently failing to give any assurances that they will not use British arms against civilians and therefore our only redress to prevent British arms from being used against civilians is simply not to sell any arms to Israel.

4.21 pm

Mr. Tony Worthington (Clydebank and Milngavie)

I was not a full member of the Quadripartite Committee but was drafted in on occasion and, like everyone else, I came to admire the way that the Committee conducted its business in quite complicated territories. What I have to say is along similar lines to other hon. Members: there are only one or two key issues here. The first is prior scrutiny. It is interesting that the Government say on page 11 of the response that they are committed to transparency, yet pages 10 and 11 contain some of the murkiest paragraphs I have ever seen.

Anyone who wants to set a civil service training exercise on how to get up MPs' noses should look at pages 10 and 11 of the response. That is what everyone has been looking at. There is a sense of being insulted by the response. As the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) said earlier, the unconvincing legal gambit has been thrown in that Government integrity would be threatened by the involvement of parliamentary advice. Those are not serious arguments.

The Committee went to Sweden and America—although I did not go—to look at other systems to produce evidence to back its argument that it could be done. What was the Government's response? The insulting fact is that they said they would ignore the fact that the Committee had gathered evidence in Sweden and America that prior scrutiny works. They would not even take it on board, as they are far away places, which are not worth knowing about. They came out with statements such as The Government stands by its conclusion…that such scrutiny would not be right. Someone's turf is being threatened. We are here because we believe that the present system has not worked. Arms sales to Indonesia have been damaging to the interests of this country and to the people of Indonesia. The revelations in the Scott report were damaging to the interests of this country. Someone was making bad decisions. We need to find a better mechanism for dealing with that. It is always better if contentious decisions on such contentious matters as arms sales are backed by parliamentarians.

We must ask the Government to go back to that and look at what remain murky waters to try to find greater clarity. It beggars belief that we are turning it down on the grounds that it would do significant damage to the competitiveness of United Kingdom exports and have a materially adverse impact on the efficiency of the export licensing system. Are we seriously suggesting that the United States would voluntarily damage its arms export industry by prior scrutiny? Of course it would not. There must be a way of integrating prior scrutiny into the process so as not to damage our legitimate arms industry, while giving British decisions on the matter more credibility.

One cannot conduct business with everlasting delays. However, the Committee's evidence states: If Congress does not notify the administration of any objections or queries within 30 days, the proposed sale is automatically authorised. Therefore, the onus is on Congress or Parliament; if there is an objection, it is up to the congressman, parliamentarian or member of a committee to deal with that objection quickly so that commercial interests are not damaged. We should go back to the Government with that point, because the quality of their response on pages 10 and 11—around paragraph 24—is simply not good enough.

Mr. Cohen

I can just add that prior parliamentary scrutiny does not mean that Parliament makes the decisions; it is merely involved in the decision. Paragraph 88 of the Quadripartite Committee report states that responsibility for decisions will continue to lie wholly with the Government.

Mr. Worthington

I thank my hon. Friend for that point.

Let us put the matter in the wider context of the importance, in this and many other fields, of collective international action. My hon. Friend the Member for Bethnal Green and Bow (Ms King), who is a fellow member of the International Development Committee, is present. One of the events that has stuck in my mind from this Parliament is when Ambassador Fowler, who was responsible for sanctions against Angola, gave evidence to that Committee. When somebody raised the issue of small arms entering Angola, the ambassador said that he could not stop 50-tonne tanks getting into Angola, let alone small arms. We assumed that the weapons in that case were coming from the Ukraine.

How will we tackle the problems of conflict, especially in the poorest countries, unless we start taking action towards arms control? It is good that the European Union code of conduct exists, and some of the recent international activity for getting action on debt has been impressive. The European Union's proposals to allow everything but arms for the least developed countries to enter the European Union are also impressive. My hon. Friend the Minister's action on diamonds, which involves international activity to stop the use of diamonds in buying the arms that fuel conflict, is important, too. There must be collective activity to gain control of the arms trade, and our contribution must be what the Quadripartite Committee recommends. If our own arms activity remains in murky waters, we will not make our contribution to the international framework.

My final point relates to how we deal with the shameful and embarrassing situation in which we find that British arms are being used somewhere without our knowledge. I would like my hon. Friend the Minister to deal with that. How do we police that? What happens if we find that British arms have turned up where we would not want them to be used? My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) referred to Israel and Palestine. In those situations, is there any mechanism whereby it is the duty of the British Government to find out the route by which the arms arrived and which dealers were involved? That is one of the points on which I would like a response.

4.30 pm

Mr. Mark Oaten (Winchester)

As one of those not involved in any of the Committees that have worked on the report, I join others in congratulating the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) on the work that has taken place. The tone of the debate shows that some impressive and knowledgeable individuals have worked on the reports, and I am pleased that they have seen the light of day. They shed light on some dark corners of the arms trade. I am also pleased that the report has managed to tweak out of the Government their early thinking on where they see future arms export controls going. I also mention organisations such as Oxfam and Amnesty International, which beyond, during and since Scott have added so much in terms of the pressure that they have put on Ministers in this and the previous Government to keep this agenda alive. I have been able to draw on some of the comments that they have made in relation to the Committee's report, and some invaluable work has been done in those areas.

Like others, I am disappointed that the Queen's Speech has not sped up the process. It is a pity that we have only a draft Bill and that nothing will be set in place before the next general election. Nevertheless, it would be churlish of me not to acknowledge that we now live in a very different climate from that which we had under the previous Government. This Government have introduced measures that the Liberal Democrats welcome, and we are only disappointed that the pace has not been faster. We recognise that, by putting a marker down with the draft Bill, the Government are setting out their intentions. When we see the contents of the draft Bill, we will make detailed observations, but I wanted to use this opportunity to make some initial observations on what we perceive to be the Government's thinking, based on their responses to the Committee's report. Like others, I am concerned about the Government's apparent rejection of the concept of prior scrutiny.

Some of the Government's arguments have already been mentioned by hon. Members. I sympathise with the argument that it will delay the process: business men in my constituency have been involved in installing water purification systems. Their frustration that the system takes so long, and their experience of going through all the processes, is very real. Nobody wants to put in place a system that has long delays and becomes clogged up, and that will not help British business men to export. It seems, having read extracts from the Committee's report that we are, after all, talking about a small minority of cases having to go through the process. I hope that the Minister will acknowledge that we are talking not about the whole range but about a few cases that would require a delay of only 10 days.

Sir John Stanley

The hon. Gentleman is absolutely right to highlight the fact that the Quadripartite Committee's proposals in terms of the numbers of arms export licences that might be the subject of prior scrutiny and where delay might occur are a minute fraction of the total number of applications to the Government. As he was not a member of the Quadripartite Committee, perhaps he is not aware that the delay that is a consequence of the procedure that we are recommending is measured in days. In contrast, the representations that we have received from the arms export industry throughout the whole process and, indeed, throughout this Parliament tell us that the real delays that are occurring are measured in weeks, if not months, as a result of delays inside Whitehall.

Mr. Oaten

I am grateful for that intervention because it makes the point better than I could have done. We could conclude from that that, if proper practice were in place and we had a prior scrutiny system, and made it clear that it would be merely a number that had to go through the process, that would offer an opportunity to examine the entire system and speed up applications that clearly involved no sensitive defence concerns. Having listened to some of the remarks of the right hon. Member for Tonbridge and Mailing (Sir J. Stanley), I understand that there are clearly anxieties that some ordinary, straightforward applications are being held up in the system.

The Government's second anxiety relates to competition—that the proposal would impact on competition. Again, I am unclear about the Government's arguments in this case. I apologise if I have not read the proposal in detail, but the suggestion does not seem to be to issue a big public notice that sends a signal to competitors from other countries that they can suddenly bid for contracts when that is the first that they have heard about the matter. Surely the scrutiny will be private, and it will not become commercially sensitive and allow our competitors to make use of it. I should welcome a comment from the Minister about whether he acknowledges that it would be a private process that could not be used by competitors. After all, as other hon. Members have argued, we trust the work of MI6, MI5 and GCHQ to an Intelligence and Security Committee. What could be more sensitive than allowing that Committee to meet every week? Surely if we have established that principle, the same can be done for our arms exports. The point has been made time and again that, if it is good enough for Sweden and the United States, it must be a good enough and proper for this system in this country.

Whichever speech the Minister will read—;the one that was pre-prepared or the one that I hope that he is writing at the moment—he should reconsider the issue of pre-scrutiny. The most compelling argument seems to be a basic human one. The proposal would also provide Ministers with a get-out-of jail free card. What better protection has a future Minister appearing before a future Scott inquiry than to be able to say, "But hang on a second, the Scrutiny Committee looked at it"? If I were ever—it is of course highly unlikely, being a member of my party—in the Minister's shoes, I certainly would want that to have that reassurance behind me.

I welcome the Government's introduction of annual reports, but they are weak. As hon. Members have said, we need a system that monitors the end use and movement of goods from the time at which the export licence is issued to the point of delivery. The information that appears on licences is meaningless. I was amused to read the entry for the Channel islands. Looking at some of the goods that have been going there—air rifles, pistols, small arms ammunition and stun grenades—anyone would think that the Channel islands were about to declare war on someone. However, the reality is that much of the equipment was in fact intended for museums there. That shows the nonsense of the misinformation or lack of information that can at, at a light-hearted level, give a misleading idea about something that is harmless, but that, at its worst, is covering up matters that need to be dealt with.

I understand that the Government's response is that the data provided by … Customs and Excise was obtained from an administrative system which was not designed for the specific purpose of collecting information about defence exports. Apart from sounding like text from a "Yes, Minister" sketch, surely the point is that, if the system is not designed to collect information in that way at the moment, it is not beyond the wit of man to change the system so that such information can be provided.

Liberal Democrats are encouraged by the DTI's background note on the draft export control Bill, which contains some encouraging signs that measures to control the activities of arms brokers and traffickers will go further than the White Paper. I believe that everyone would agree that adequate legislation on the matter is long overdue.

I was alarmed to read about some real-life examples of just how easy it is for brokers to obtain fraudulent order requests on official headed paper from a third country's ministry of defence. As my researcher said when writing this speech, "It can be the equivalent of simply picking up some of your House of Commons headed paper, Mark, and being able to use and misuse that." We are talking not about 16-year-olds using fake ID to buy alcohol but about lethal weapons, which, when in the wrong hands, are used to commit serious human rights violations. Surely, to overcome that, control should begin with the introduction of standardised international end-use certificates that can be traced to the point of issue, carry legal obligations relating to the equipments' use and include compliance to international human rights law.

My hon. Friend the Member for Eastleigh referred to brokers who traffic in weapons on foreign soil. I hope that the Minister will respond to the issue of extra-territorial jurisdiction. A principle has been established in that extra-territorial powers were granted in the Chemical Weapons Act 1996.

We have come a long way on from the Scott report, and that is welcome. The Government are genuinely committed to dealing with arms control, but the progress and the improved atmosphere that have resulted could be set back considerably if they do not rethink their initial cautious response. They should take on board the comments made by hon. Members from all parties and the excellent work done by the Committee.

4.40 pm

Mrs. Cheryl Gillan (Chesham and Amersham)

After our extensive debate, I have little to add. It would probably be better for me—but certainly not for the Minister—if I did not make a speech but allowed him the luxury of the rest of the time in which to respond. However, I shall have to disappoint some hon. Members by continuing, because there are points that I wish to make.

I add my congratulations to the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowland) on the way in which he has steered the Quadripartite Committee through an extremely complex and delicate matter, arriving at two substantial reports that make an unprecedented contribution to the debate. I also congratulate the other hon. Members who have spoken today—those who are here and those who have had to leave. It goes against my grain to say it, but all speeches have been excellent and worthy of this Chamber, in which, unfortunately and much to my disgust, we occasionally reach consensus.

However, I am disappointed that we are debating the matter in this Chamber. When the Committee recommended that the subject be debated on a substantive motion, it could not have imagined that it would be relegated to this Chamber and run at a time parallel to a debate on the Floor of the House. A report that was drafted by four Select Committees—Defence, Trade and Industry, International Development, and Foreign Affairs—warrants a debate on the main Floor of the House.

It is important to remember what we are discussing here: the rules and regulations that surround the operation of the defence and aerospace industries, which are perhaps our most successful industries. They employ some 400,000 people in this country—that is not to be sneezed at. Anything that affects our manufacturing industry should be discussed at length. The Library has calculated that some 206,000 jobs have been lost in manufacturing since this Government came into office. No matter what deliberations we make or conclusions we draw, we must ensure that whatever actions we take enhance the reputation of our industries and move them forward without damaging them.

A lot of work has gone into the report and members of each of the four Select Committees have spoken in today's debate. I am sad that the Defence Committee is on a trip to Moscow, but I was pleased that the hon. Member for Leyton and Wanstead (Mr. Cohen) had forgone that trip to enlighten us on his views. I pay tribute to the former Member for Romsey and Waterside, Michael Colvin, who sat on the Select Committee on Defence. Our deliberations are the poorer for his absence. When I read the papers on the report, I encountered his examination of witnesses.

The Government have made some effort to move forward on the European code of conduct. There will always be concern when a UK business is unable—for whatever reason—to fulfil a contract. There is always a willing competitor poised to take advantage of British companies' difficulties. Establishing a level playing field—in Europe, for starters—is both logical and desirable, but the efforts made so far have produced unspectacular results. Will the Minister tell us what progress has been made on the European front? Will he expand on the Government's response in Cm 4799 and explain how events have developed since July? What have been the outcomes of discussions held with European countries?

European co-operation poses significant problems. In the latest response, Cm 4872, the Minister outlined the difficulties of dealing with national embargoes in terms of denial notifications. He said that when a member state is trying to encourage restraint towards a specific country, relying solely on the information exchange and consultation mechanism of the Code is unlikely to achieve the desired pressure on other Member States to restrict their defence exports. That was thrown into stark reality today with the arrival of some information about Indonesia that came across my desk. There is a report on the BBC's monitoring line on military equipment to Indonesia. Defence Minister Mahfud said that a French firm offered arms in exchange for a maritime exploration licence. Will the Minister comment on that? How is he going to encourage a common playing field among European Union states?

In the response, the Minister outlines a possible solution by means of the mechanism index discussions. That is patently failing and his solution does not engender confidence. I hope that he will think again and make some better proposals for carrying our European partners with us.

We have discussed prior scrutiny to distraction this afternoon. I have been pleased to hear how hon. Members have provided the Minister with an opportunity to go back on his recent response, which has obviously caused considerable anger. For the first time, the Government have been faced with a series of powerful recommendations from a cross-party group of influential Members. Speech after speech reflected disappointment.

We have debated the response in detail and it clearly amounts to an outright rejection of the recommendations of four Select Committees of this House. Those Committees deserve rather more than the nine paragraphs laid out before us today. Hon. Members are dissatisfied; they rightly want a more detailed response. Let us examine two detailed aspects of the response to recommendations 22, 23 and 24. The Government concluded that those recommendations could not be made to work without causing significant damage to the competitiveness of UK exports and without having a materially adverse impact on the efficiency and effectiveness of the export licensing process. We do not wish to damage the effectiveness or efficiency of the export licensing process—and I am sure that no hon. Member who subscribes to the report wishes to do so. However, I would like to know how the Minister evaluated the potential damage to competitiveness and how the proposals will effect the efficiency and effectiveness of the licensing process. Anything less than the detail and advice given to the Minister would be insulting to the Committee.

The Minister's response in the next paragraph is also inadequate. In casting doubt on the prior scrutiny proposals, the Minister responded: Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic, in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in accordance with the powers conferred by Parliament. Doubt in whose mind? How could the Government allay the fears of anybody who doubted whether the matter had taken place properly, in accordance with the powers conferred by Parliament? The Minister's response did not move at all towards the Committee's requests.

The Chairman of the Quadripartite Committee generously offered the Minister an opportunity to explore the possibilities of accepting its proposals. Without going into the merits of the proposals, I hope that the Minister accepts that offer unreservedly. If he does, it is not another get-out clause. It is something upon which the Minister must put a date. It is no good his accepting the generous offer of the hon. Member for Merthyr Tydfil and Rhymney and then letting it disappear into a vacuum by allowing it to run into next year and perhaps the year after. If he accepts that offer, he must put a date on it and not allow a vague promise to be carried into the future.

The Government talk up a storm on the matter but they fail to deliver. The level of disappointment across parties is high and the opportunity for the Minister is great. I therefore await his response with eager anticipation

4.52 pm

The Minister of State, Foreign and Commonwealth Affairs (Mr. Peter Hain)

This has been a high-quality debate—at times uncomfortably high quality from the point of view of the Minister replying—with effective and well-informed contributions from all hon. Members. I pay tribute to the members of the four Committees that come together as the Quadripartite Committee. This is an example of a joined-up Committee, departmentally and politically, which has presented impressive arguments to the Government. No one can be left in any doubt about the commitment and knowledge that they have brought to the subject of strategic exports.

I, too, pay tribute to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). He deserves to be congratulated on chairing a Committee that has given the Government so much trouble, but that has produced a detailed and expert analysis and forced people to undertake much cross-departmental soul searching. That is important because these are vital matters that we need to get right. It will be a great tribute to his long career as a parliamentarian and former Minister if the momentum that he has brought to bear on the subject is carried through—as it will be when we return to the matter in subsequent legislation and reform.

I agree with the hon. Member for Winchester (Mr. Oaten) about the important role that non-governmental organisations such as Amnesty International, Oxfam and Saferworld have played in the debate. We consult such organisations regularly. Since 1 May 1997, the Foreign Office and other Government Departments have pursued an open-door policy towards their representations, which we value and seek to take on board—if not always managing to satisfy them completely.

I apologise for the delay in the publication of the Government's response to the Quadripartite Committee's report. I am aware that the time taken was well in excess of the customary two months. I am sorry about that, but the issues raised were complex.

I congratulate the hon. Member for Chesham and Amersham (Mrs. Gillan) on her ingenuity in managing to repeat the point that she always makes about wanting such debates to take place on the Floor of the House. I have heard her make it every time that she has appeared opposite me in such debates. She also managed to bring in the favourite subject of those on the Tory Front Bench: the European Union. I did not hear her say what she thought about the Committee's proposals for prior scrutiny. The Government would take heed if she were saying that the Conservatives backed the recommendations for prior parliamentary scrutiny. We want to know, as we would consider that seriously in responding to the debate. I notice that she has not risen to the bait and given any policy at all on behalf of the Opposition, so I shall not be churlish by developing the point further. The Committee works on an all-party basis and I want to respond in the serious fashion in which the arguments were advanced, which was without rancour, but firmly and expertly. Nevertheless, it would be nice to have an answer to the question.

The Committee presented us with some challenging ideas. Export controls are a classic example of joined-up, cross-cutting government at work. In responding, we needed to ensure that all the Departments with an interest in the issue had been thoroughly consulted, and that all the Committee's ideas had been properly thought through. That was the reason for the regrettable delay.

It is three and a half years since the Government embarked on fulfilling their aid policy pledges for a responsible arms trade. Since then, our record of achievement is considerable, as hon. Members have acknowledged. We have made our export controls more effective, accountable and transparent than those of almost any other country, and set new standards for others to emulate. I am grateful for the generous acknowledgement of that by the Committee Chairman, my hon. Friend the Member for Merthyr Tydfil and Rhymney. I also thank him for his praise for our officials, some of whom are present. They have worked diligently on the matter.

In a sense, it is precisely because we have opened ourselves up to parliamentary scrutiny, albeit retrospectively, that we have invited what could be regarded as trouble for ourselves. I do not regard it as such; I regard it as a challenge to good decision making. My hon. Friend the Member for Kingswood (Mr. Berry) pointed out that the debate could not have taken place without the reforms that we introduced. I do not see them as set in concrete. I see them as part of an evolving process in which we all learn to do better and to take on board points made by hon. Members in the debate and by, among others, the Committee in its important report. We will seek to improve constantly.

Our achievements bear naming again. We have established new national criteria that deny export licences when there is a clear risk of equipment being used for internal repression or external aggression. We have banned the export of torture equipment and outlawed the export of anti-personnel mines as a step towards a complete ban.

It was during our presidency of the European Union that the EU code of conduct on arms exports was agreed. We have now consolidated the criteria in the code with our national criteria. We have consistently encouraged other countries to follow our lead in adopting stricter and more transparent arms export policies. The EU is now negotiating a joint declaration with the United States of America that will mark a further extension of the principles of the code, which is a result of a British initiative. That is relevant to a point that was made by the hon. Member for Chesham and Amersham.

We have made our commitment to tackling small arms proliferation clear. We are playing a major role in the process leading to the United Nations conference on small arms next year. We are also in the lead in taking practical steps to reduce the number of small arms in areas of conflict. We are the most active of all UN Security Council members in targeting sanctions busters, who fly arms into Angola, Sierra Leone and other countries, in defiance of UN resolutions.

Mr. Berry

Will the Minister assure us that, if there is evidence that UK individuals or companies are involved in sanctions busting, the authorities will quickly take firm action?

Mr. Hain

I can give my hon. Friend an absolute assurance that, if any British citizens or British companies are involved in sanctions busting, we will come down on them like a ton of bricks. We have been energetic—I have been personally involved—in naming and shaming sanctions busters, who have been of Russian origin, such as Victor Bout, or from South Africa. if the UN reports on Angola and Sierra Leone—which are expected in the next few days—name any British citizens, we will certainly take action.

As announced in last week's Queen's Speech, we are building on our achievements with a commitment to publishing a draft export control Bill to modernise the basis on which we control strategic exports. I agree with my hon. Friend the Member for Merthyr Tydfil and Rhymney that we need to redeem a debt of honour in the current Parliament and, I hope, in the next one as well. The Bill will put our controls on a modern statutory footing and replace current legislation, which dates back to 1939. It will give Parliament the right to scrutinise secondary legislation on export controls and will, for the first time, specify the purposes of export controls in legislation.

As my right hon. Friend the Secretary of State for Trade and Industry announced in October, the Bill will bring arms trafficking and brokering—including in small arms—within the scope of the law. It will also make it illegal to use electronic communication to evade export controls. I reassure my hon. Friend the Member for Kingswood that the proposals in the draft Bill will be tougher and more radical than those in the White Paper. That is part of the on-going debate, in which the Committee has played an important role.

Mr. Cohen

Will that Bill include a registration system for all brokers based in London and UK brokers operating abroad?

Mr. Hain

I do not want to go into great detail about the Bill's contents. Hon. Members must bear with me and wait for its publication. My hon. Friend's important argument has been made and is being given serious consideration.

Public consultation on the draft Bill will be an essential part of ensuring that we get all the details right before it is introduced in Parliament. The Bill will represent a significant step in updating our export controls, and I look forward to hearing hon. Members' views on the draft when it is published.

In response to the point that was made by my hon. Friend the Member for Merthyr Tydfil and Rhymney—the Chairman of the Quadripartite Committee—I will discuss with business managers the role that the Committee can play in pre-legislative scrutiny. It is important that it has an input. I reassure my hon. Friend the Member for Kingswood that I will ensure that, in the final crafting of the Bill—which has yet to go to parliamentary counsel—we take account of the issues raised in today's debate and the force and expertise with which arguments were advanced. I have stressed our commitment to transparency and accountability.

Mr. Rowlands

A slight shiver went down my spine at the notion that the Bill has not yet gone before parliamentary counsel. What is the time scale for the draft? When will it be published—January, March? It is an unspoken secret that we do not expect this to be a long Session, so it is incumbent on the Government to publish the draft Bill as quickly as possible.

Mr. Hain

I recognise the force of that argument. We shall publish the draft Bill as soon as possible, but parliamentary counsel have had their hands full with quill pens and Bills. We must get the Bill right, but we want to publish it as early as possible next year and we shall involve the Committee in its scrutiny.

Mrs. Gillan

It is simply not good enough to say some time early next year. The Government have found parliamentary time for a Bill on fox hunting, but they do not consider the matter that is before us to be important enough to introduce a Bill that has a chance of being enacted before the general election. The public will judge for themselves.

Mr. Hain

I do not want to get into a barney with the hon. Lady about the Government's programme. Is she seriously suggesting that the drafting of the Hunting Bill can be compared with the complexities of the matter that is before us? We must get the draft Bill right because of the business interest to which she referred, among other reasons. Next year is only a couple of weeks away and we shall publish it as soon as possible. The passion and power of the arguments advanced this afternoon will have a considerable influence on the timing.

On transparency and accountability, we have published three annual reports on strategic exports, each providing progressive improvement in transparency and giving an unprecedented level of detail on the export licences that we have agreed. We welcome the Quadripartite Committee's scrutiny of the reports. We sought the co-operation and partnership of the Committee and others in Parliament and elsewhere, including interested non-governmental organisations, which helped to improve our policy and procedures. Everyone should take credit for that.

Parliament has an important role to play in monitoring the Executive's role in export controls. We have not challenged that, but sought to embrace it.

Mr. Oaten

Does the Minister acknowledge that the information currently given in annual reports is inadequate and that it would be more helpful if end user information were listed? At the moment, they do not mean much to those who read them.

Mr. Hain

I look forward to a detailed submission from the Liberal Democrats. We shall give it detailed and serious consideration when we receive it.

As we said in our response to the Committee, we plan to build on the transparency by offering the Committee confidential briefings on the general considerations underlying our export licensing policy. That will include issues such as small arms, on which work is in progress and policy is still evolving. The Committee will have an opportunity to provide input at that formative stage, which represents an important step forward.

I know from the Committee's report and the reactions of hon. Members today that that is not the quintessentially British outcome originally proposed by the Committee. However, prior parliamentary scrutiny would be a departure from the long-standing practice of ministerial accountability to Parliament for individual decisions.

Hon. Members have readily conceded that we have taken strides in increasing the transparency of our policy on export licensing and publishing detailed information on individual decisions. We welcome scrutiny and are committed to publishing the information necessary to make that scrutiny more effective. We have offered the Committee confidential briefings on general policy considerations, which will give it the opportunity to have an input during the formation of policy on how we judge each licence that is put to us. It is a form of prior scrutiny and we shall be able to build on the detailed and confidential information that we already give to the Committee on individual decisions. Our system is one of the most transparent and accountable in the world and that will make it more so. We can develop the system to try to achieve the objectives set by the Committee.

Mr. Rowlands

I am sorry to interrupt my hon. Friend and I appreciate the way in which he is responding.

Page 11 of the report refers to a host of practical problems concerning delays and methods of handling the issues. If we can deal with those problems and accommodate the Government's concerns about a prior scrutiny process, will the Minister still regard the view expressed in the last sentence on page 11—that such matters are quintessentially matters for ministerial decision— as the fundamental objection to our proposals?

Mr. Hain

As I signalled before, we are open to serious arguments and to good ideas. If such ideas are consistent with joined-up government, are absolutely watertight and convincing and deal with the problems involved in possible delays in the processing of prior export applications—of which we receive some 12,000 a year—

Mr. Chidgey

Will the Minister give way?

Mr. Hain

May I finish? I should like to reply to all the points that hon. Members have raised before I am given any more.

We must deal with the problems involved in speedy decision making—the hon. Member for Eastleigh (Mr. Chidgey) mentioned a case, to which I shall return if I have time, in which a speedy decision was not made. Problems also arise in respect of the overseas purchase of defence equipment and the disclosure of intended orders before contracts are signed. I am not seeking to' impugn hon. Members' honour on the matter, but there are procedural issues that could act as a disincentive to buying British, thus putting British exports and jobs at risk. We need a more detailed set of proposals to which we can respond.

We have looked to the practices of others for guidance. Our system of annual reports on strategic export controls, coupled with parliamentary evidence sessions, is acknowledged by leading NGOs as one of the most transparent in the world. My hon. Friend the Member for Cynon Valley (Ann Clwyd) said that other countries have prior scrutiny and my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) said that we have ignored practice in the United States and Sweden. We have not. To my knowledge, no country provides for prior scrutiny by the legislature in anything like the form that the Committee suggests. No direct comparison can be drawn between its proposals and the very limited models that are used in the United States and Sweden, where the matter is effectively hived off to an independent body.

The right hon. Member for Tonbridge and Malling (Sir J. Stanley) implied that we were closing the book on the matter. We are not. We shall examine the text of his remarks closely to see what more can be done. This is not necessarily the last word. Let us bed in, develop and build on the confidential briefing procedures. I assure my hon. Friend the Member for Leyton and Wanstead (Mr. Cohen) that we are not kicking them into touch, but simply trying to move forward sensibly.

Sir John Stanley

As the Minister said that the book remains open, will he reply to the fundamental question that was just put to him by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands)? Are the Government willing to engage with the Quadripartite Committee by looking at the details of the procedures to try to produce a satisfactory resolution between the Committee and the Government? With good will on both sides, we believe that that can be achieved. Does the extremely bald final sentence of the Government's reply, when they say that The Government's view remains that there is no role— that is, no parliamentary role— for advance scrutiny of individual casework decisions, mean that, even if we can achieve a satisfactory resolution of the procedural points, the Government will still put a total block on the proposal as a matter of principle, or can the Minister assure us that they will then consider prior scrutiny with an open mind?

Mr. Hain

I have tried to be as helpful as I can to the right hon. Gentleman and to other right hon. and hon. Members in signalling that, having laid out our policy, which has been severely criticised, we shall examine very seriously any further proposals, representations or deliberations that emerge from the Committee. In parallel to that, I suggest that the way to move forward in practical terms is to build on the confidential briefings to see whether we can develop the necessary confidence. We can then take the debate and dialogue forward in the light of any more detailed recommendations that the Committee may make.

I am confident that the high degree of retrospective scrutiny that we already provide, coupled with the even greater openness represented by the confidential briefings that we now offer, provides a form of parliamentary scrutiny that is second to none. I do not underestimate, and I invite the Committee not to underestimate, its power, which is exerted prior to the making of decisions.

I and my ministerial colleagues in other Departments make decisions in the full awareness that what happens will be laid out in the Committee's report, and that members of this Committee and other Committees will study it in great detail. Let it not be imagined that we just tick items off regardless of the consequences. We operate effectively under a form of prior parliamentary scrutiny because we bear it in mind that we will be subject to close attention as a result of the publication of our decisions.

I am sure that the right hon. Member for Tonbridge and Malling had my best interests at heart in inviting me to tear up my speech. As for my hon. Friend the Member for Cynon Valley, she is such a good friend that I am grateful that she did not put directly to me the questions that she raised—although she is free to do so in the Tea Room later. As to her points about Indonesia, I stress that only 17 individual export licences were issued in 1999. From September 1999 to January this year there was an EU embargo against Indonesia. During the rest of 1999, very few licences were issued. The majority were for components. There were no main equipment sales. We have consistently refused applications for military small arms.

That matter brings me to the points raised by my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey). I respect her approach to scrutiny of these matters, especially in the light of the difficult conflict that is under way in Israel and the occupied territories. However, I have yet to be shown that an export licence that has been agreed by the present Government has resulted in arms being used in contravention of our criteria that it should not be possible for them to be used for external aggression or internal repression. Perhaps there is an exception to that, in the case of the seven licences in respect of spares for the Hawks in the Democratic Republic of Congo, but we have gone over that ground in detail. If anyone comes up with evidence relating to Indonesia, Israel or anywhere else, we will act appropriately and learn from the experience, but that has not happened, which is significant.

We stopped the export of CS gas that could be used by the Israeli defence force or in the occupied territories. Since the troubles have set in with such apparent permanence in the past few weeks, we have scrutinised each licence application carefully to see whether it conforms with our strict criteria.

Dr. Starkey

I welcome what my hon. Friend has told us, but wonder whether he accepts that members of the public find it unacceptable that the Government are unable to say whether weapons that have been sold to the Israelis are used in the occupied territories against civilians. It appears that the British Government are relying for evidence on a helpful journalist picking up a bit of equipment and are making no effort to find out whether our weapons are used.

Mr. Hain

I sympathise with my hon. Friend's point of view, but no one, journalist or otherwise, has been able to show that a single piece of equipment or arms licensed by the Government has been used there. I am not saying that British arms do not get used there because, as everyone has conceded, the previous Conservative Government had a much looser arms export policy. It is possible that some arms that were exported prior to 1 May 1997 are being used on the streets of Jerusalem and elsewhere, but none that we have licensed. The recent troubles have certainly made our scrutiny of licences much more rigid and close, and we now display much more caution.

We are not aware of any of our EU partners having undercut our licence denials for Pakistan. We would be concerned if that were so, and we would be interested to receive details of any such undercuts.

In negotiations with EU applicant countries on the common foreign and security policy chapter, the European Union took into account those countries' compliance with their international obligations and their commitments on arms exports, including respect for the principles and criteria of the EU code of conduct. We shall continue to monitor developments closely as the applicant countries progress towards accession. One of the problems is that the worst offenders, Bulgaria, Ukraine and Moldova, are supplying small arms—especially to Africa.

The hon. Member for Eastleigh asked about the loophole in our controls that he identified earlier this year. We closed the loophole on leg irons in July when I announced in answer to a parliamentary question that we were bringing in controls on oversized individual bracelet cuffs that could hypothetically be used as components for leg irons to be assembled abroad. I stress that we had no firm evidence that companies were exploiting that loophole, but the hon. Gentleman was nevertheless right to press us on the matter.

The hon. Gentleman raised the issue of British companies manufacturing torture equipment abroad. The export control Bill will enable us to ban any British involvement in the trafficking of torture equipment. I am not aware of the details of the case that he mentioned. I shall look into the matter and write to him. However, shortly after the coup in Pakistan and following the Kargil incident, we were obviously looking carefully at arms exports to Pakistan. I am sorry if that company got caught in the cross-fire, but the hon. Gentleman would not have wanted us to treat the matter in a dilatory or over-hasty fashion and to have made the wrong decision.

I could respond to a number of other points, Mr. Sayeed, but I shall first allow my hon. Friend the Member for Merthyr Tydfil and Rhymney to reply to the debate. If there is time, however, I shall respond to any further questions.

Mr. Jonathan Sayeed (in the Chair)

Do I have the leave of the Committee to call the hon. Member for Merthyr Tydfil and Rhymney?

5.23 pm

Mr. Rowlands

I think that it is time for me to leave the House, because the notion that the Member of Parliament for Merthyr Tydfil and Rhymney is a consensual politician does not bear analysis. Keir Hardy, Aneurin Bevan and Michael Foot are my predecessors in representing that constituency. However, I was rather nicely embarrassed by the kindness of my colleagues.

I was struck by the powerful combination of reason and passionate conviction that was evident in every speech. The reason for that was the subject of the debate. I do not apologise for repeating the fundamental point to which the Minister alluded, but which was not dealt with in the Government's response. I speak of the case that the four Committees made for the specific and rather special nature of the issues that we are dealing with. I repeat that, as we said in paragraph 18, a different degree of sensitivity applies to the authority to export arms from that applying to other types of ministerial casework. There can be few decisions of greater potential impact on the conduct of foreign relations and on the lives of many people overseas than the decision to commit weapons made in this country to foreign Governments and their forces. It is the nature of the decision. It is not just the policy, important though policy guidance is, but the implementation of the casework that flows from it that is of concern.

There has been a combination of passion and reason from hon. Members on both sides of the Chamber to reinforce our case. We have not been making the Government's life comfortable; it has not been comfortable for them this afternoon. If we had had a vote, apart from the Whip and the Minister, it would have been nem con in favour of the Committee's recommendation on prior scrutiny. I trust that we would carry the hon. Member for Chesham and Amersham (Mrs. Gillan) with us. The right hon. Member for Tonbridge and Malling (Sir J. Stanley) will perhaps exercise an appropriate influence on her.

The right hon. Member for Tonbridge and Malling made a telling comparison with the way in which, over decades, the executives of all parties were dragged screaming to accept an intelligence committee of some kind. We do not want that to happen in the case of prior scrutiny. The Government's track record since 1987—the work that we have acknowledged, the publication of annual reports and so on—and the way in which the four Committees have operated in the past 18 months to two years show that we are ready to undertake that task. We do not need any more training on the issue. We have shown that we can do it. We have handled confidential material. It has not been breached. We have managed to convey its essence in a public fashion that has not led to commercial confidentiality being broken. In other words, we have proved our apprenticeship in that regard.

We have proposed an incremental step forward in scrutiny. It is incremental as opposed to some giant constitutional leap. The Minister ought to be slightly worried: when Tonbridge and Merthyr Tydfil agree, something is stirring in the land. It is a powerful combination. I hope that he will accept our proposal and that he will convey to his fellow Ministers the sense that has come out of the debate and our straightforward offer. I hope that I do not presume on our conclusions when we meet immediately after Christmas, but we may want to meet departmental officials urgently and promptly, if that is the most convenient way to address the practical issues that have been raised in the Government's response. We believe that we can accommodate them and meet all those points.

Mr. Hain

May I give my hon. Friend the assurance that I will write to all other Departments? I will obviously draw the attention of my right hon. Friend the Secretary of State to this debate and to my hon. Friend's remarks.

Mr. Rowlands

I thank my hon. Friend. I am sure that we will make the offer properly and formally as soon as we have an opportunity to meet and that we will address the issues that have been raised. Tremendous progress that has been made. Almost every hon. Member who has spoken today has acknowledged the significant steps that have been taken—increased transparency and openness, annual reports and other Government initiatives. It is still a sad truth, however, that, on some of the most contentious and difficult decisions on arms sales, we may still rely on partial leaks. There may be the odd whistle blower or some kind of selective briefing, perhaps even from a Minister who is not getting his way with another Minister. There is a much more sensible and authoritative way of finding out about controversial arms sales and that is the prior scrutiny that we propose. I hope that the debate will be useful to my hon. Friend when he goes back to his fellow Ministers to argue that the future radical, pragmatic, sensible way forward is the one proposed by our Committee.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past five o'clock.