Westminster Hall Sitting of 27 March 2003

Preamble
[SIR ALAN HASELHURST in the Chair]

Older People
2.30 pm
Mr. Deputy Speaker: Before we begin this second session of questions in Westminster Hall, I shall make a short statement about the procedure that I intend to follow.
As happens in the House, I will call each Member with a question in turn, and that Member should rise and respond, "Question No. 1," and so on. I will then call a Minister to answer. However, this session is different from questions in the House in that four Ministers from three Departments are present. The House has decided that questions in Westminster Hall should relate to an overall "cross-cutting" theme, which on this occasion is older people.
After the Minister's initial answer, I will call the Member in whose name the question was tabled to ask a supplementary question. One of the other Ministers present may want to answer that supplementary question instead of or in addition to the Minister who gave the original answer. I will then call other Members to ask supplementary questions—including, on some questions, Opposition Front Benchers. I may also call a Member to ask a second supplementary question, if I deem it appropriate.
However, Members should remember that this is a question and answer session rather than a series of mini-debates. There is therefore a premium on brevity in both questions and answers, and I expect there to be a large measure of precision. I hope to achieve a free-flowing exchange to allow us to make good progress through the Order Paper in the hour allotted to questions.
If Divisions take place in the House there is injury time: if there is one Division, we will reconvene within 15 minutes of adjourning, and if there are two successive Divisions, we will reconvene within 25 minutes.
This is still a fairly novel procedure, and I ask for the co-operation of all hon. Members to continue to make it a useful addition to our procedures for holding the Government to account. It is inevitably still experimental. As was the case with the first such session in January, I do not intend any precedents to be set by my rulings, and I will be happy to receive privately any suggestions from colleagues for modifications.
I remind hon. Members that sittings in Westminster Hall are governed by the same conventions on behaviour and mode of address as the main Chamber.

Oral Answers to Questions
The Government were asked—
Oral Answers to Questions

  Community Pharmacy Services
  Ms Joan Walley: If the Government will make a statement on the likely impact of the recommendations of the Office of Fair Trading report on pharmacy services in the UK on older people's access to pharmacy services. [104433]
  Malcolm Bruce: What assessment the Government have made of the impact of the Office of Fair Trading report on community pharmacies on older people. [104452]
  The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): We announced yesterday that we will make proposals in response to the Office of Fair Trading report before the summer recess—[HON. MEMBERS: "Oh?"]—and we will publish a progress report at the end of June. We will look at the implications that the report has for access and choice by older people in relation to improved local pharmacy services.
  Ms Walley: I thank the Minister for that reply. In a way, I am sorry that only three Departments are represented here today. If we were really going to get responses that do justice to the issues raised in the Office of Fair Trading report, all Departments of Government would need to be present, including the Department of Trade and Industry. [HON. MEMBERS: "Hear, hear!"]
  I am concerned about pharmacy services for older people. In Stoke-on-Trent and north Staffordshire, many elderly people rely on having easily accessible pharmacies that are in the high street or near doctors' surgeries. When the Minister responds, he must do what I understand the Scottish Executive and Welsh Assembly have already done: he must reject the Office of Fair Trading proposals outright. I ask him to consult with his colleagues to ensure that the Governments' response puts the health needs of elderly people first and ensures that pharmacies can continue as at present.
  Mr. Lammy: I assure my hon. Friend that we in the Department of Health have been consulting not only across Government but with all the representative bodies of pharmacy, the supermarkets, patient groups, consumer groups and others. She is right that community pharmacies play a vital role in our communities. They certainly support older people, not only because older people visit the pharmacies, but because the pharmacies provide delivery services and other things. That is why the Minister, Patricia Hewitt—[HON. MEMBERS: "Who?"]—the Secretary of State for Trade and Industry said in the House last week that the Government do not think that simple deregulation was the answer, and that it is important to consider the role of community pharmacies in examining wider national health service policy objectives.
  Malcolm Bruce: I am a little disappointed by the Minister's response. Last week's press reports of what

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  was said by the Secretary of State for Trade and Industry gave the impression that the Government have rejected the OFT recommendations, yet he is now telling us that the Government have not finally decided and that it will be several months until the Government's position is clear.
  Does the Minister accept that the issue is causing a great deal of anxiety and uncertainty, especially among older people who are the prime users of local chemists? They want to know that they will not find that their chemist has closed and the service has been moved to a supermarket out of town. They want a developing NHS pharmacy, rather than a free-for-all whereby pharmacies can open and close, leaving people confused and without the guidance and advice that they expect to be able to obtain locally.
  Mr.Lammy: In fact, the pharmacy world in the form of the Pharmaceutical Services Negotiating Committee, which represents community pharmacists, said yesterday:
  "We welcome the Government's initial response to the OFT report and their view that any final decision must balance improved quality and access without diminishing the crucial role that pharmacies play."
  Pharmacists themselves are happy with what we said yesterday. They understand that we have a clear vision, which we set out for the pharmacy community in our "Pharmacy in the Future" document two years ago. At that time, we also addressed issues of contracts, reimbursement and generics. It must be right that when considering issues of competition, we examine wider NHS objectives and work with colleagues to find the right answer.
  Mr. Peter Pike: Is it not a factor in considering the wider role that pharmacies have been trying to develop, in line with Government policy, the approach of providing a wider primary care service to people in the community? Does the Minister accept that the large number of petitions and letters that all MPs have received shows that there are strong feelings on this issue throughout the country? We have all received representations from Asda and others, but they are concerned only about profit, not about the poor or elderly people who find it difficult to get to superstores.
  Mr. Lammy: My hon. Friend makes a strong point. For me, going through the Lobby in the past few weeks has been like running the gauntlet. Our community pharmacists and many other people, old and young, have petitioned us and written to us with their observations on the report. It is right that we carefully consider those representations. The subject of pharmacy has taken the lion's share of my diary in the past month, and I know that colleagues in the Department of Trade and Industry have also been closely examining the issue.
  My hon. Friend is right that community pharmacies play a central role in our national service frameworks. I have just issued a framework document on diabetes. Pharmacies play a key role in diabetes care, and diabetes affects older people disproportionately. Pharmacies have a clear role to play in a range of health care issues
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  across the NHS, which is why we must consider the OFT report not only in relation to competition in the market, but in relation to wider NHS policy.
  Mr. Anthony Steen: Is the Minister aware that the simple transfer of responsibility for repeat prescriptions alone could save general practitioners up to 2.74 million hours each year? I told him that during a Westminster Hall debate some weeks ago. In addition, £380 million could be saved if a quarter of patients visited their pharmacist rather than their doctor for minor ailments. In the light of the assurances given last week in the House by the Secretary of State for Trade and Industry that the Government do not believe that wholesale deregulation of the pharmaceutical industry is a good idea and that pharmacists are willing to modernise, what is delaying the Government's getting on with it?
  Mr. Lammy: I said that there are ongoing discussions about pharmacists' contracts and the way in which they are reimbursed in respect of generic medicines. The hon. Gentleman is right to point to the benefits connected with repeat prescribing; there are also benefits for pharmacists in prescribing and medicines management. We must consider the matter across the piece, alongside the opening up of the market to more competition. We will reach a conclusion by the summer recess.
  Jean Corston: May I impress on my hon. Friend how important it is that the Office of Fair Trading report is well and truly rejected? I hope that the Government will make an announcement sooner than he said they would. I ask him to remember not only that older people are generally more dependent on pharmacy services, but that if people have ever driven a car, they have generally stopped doing so by the time that they are elderly and they cannot get to a supermarket with their prescriptions. A market is not appropriate in some sectors of the community, and that is certainly the case with pharmacists. They are not just shopkeepers, but health professionals in our community.
  Mr. Lammy: I endorse my hon. Friend's comment that pharmacists are not just shopkeepers. They are professionals who want to play a greater role within the NHS. We set out that vision for pharmacists in the "Pharmacy in the Future" document, and we want to support them in that process. Pharmacists are in many communities day in, day out. I am sure that none of us as Members of Parliament have received criticisms of them because of the vital service that they provide. We want to support pharmacists. That is what we said yesterday and what my right hon. Friend the Secretary of State for Trade and Industry said last week when answering questions to her Department. We will make progress at the right pace. I remind my hon. Friend that both the National Pharmaceutical Association and the PSNC support us in that process.

  Pensioner Poverty
  Mr. David Chidgey: If the Government will make a statement on the level of pensioner poverty. [104448]
  The Minister for Pensions(Mr. Ian McCartney): The Government are committed to tackling pensioner

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  poverty. Since 1997, our strategy has been to target help on the poorest pensioners. Our priority has always been to focus help on those who need it. That is why we introduced the minimum income guarantee, from which 2 million people are benefiting . The take-up campaign has put an average of £20 a week extra in the pockets of 149,000 people, who would not otherwise have received the money.
  We are going a step further and are introducing pension credit. It will reward savings, not penalise them. It will be easy to apply for and it will remove the indignity of the intrusive and bureaucratic weekly means test. As a consequence of that change, those eligible for pension credit will receive an average extra income of £400 a year. At last, the savings of those who are just above the minimum income guarantee level are being recognised. The latest HBAI—households below average income—figures show that 400,000 fewer pensioners are living in relatively low income households than were when we came to power.
  Mr. Chidgey: I thank the Minister for his reply, but he will recall that the National Audit Office report, "Tackling Pensioner Poverty", which came out last November, highlighted the fact that between one quarter and one third of pensioners failed to claim the minimum income guarantee to which they were entitled. Today's report issued by the Department for Work and Pensions states that the take-up rate is little changed. How can he justify means-testing more than half of all pensioners for the new pension credit scheme in October when he has not tackled the disastrous take-up shortfall that is blighting the Government's efforts through their benefits schemes? [Interruption.]
  Mr. Deputy Speaker: Order. I suggest that the Minister defers his reply until after the Division. If there is one Division, we will return in 15 minutes. If there is another, we shall return in 25 minutes.
  2.43 pm
  Sitting suspended for Divisions in the House.
  3.8 pm
  On resuming—
  Mr. Deputy Speaker: Provided that there are no further interruptions from Divisions, we should be able to continue this questions session until 3.55. Again, I appeal for short questions and answers—we did not get off to a very good start. The Minister for Pensions will now reply.
  Mr. McCartney: Thank you, Mr. Deputy Speaker. I am not sure whether you have a squint in your eye or whether you were looking at me when you said that we had not got off to good start.
  It seems such a long time since the hon. Member for Eastleigh (Mr. Chidgey) and I last spoke. I am glad that he asked me about the National Audit Office report that was published on 26 March. It boldly stated that the Government had made good progress but that they should build on it. That is absolutely right—we have made fantastic progress. With the introduction of the
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  pension credit and the other changes that we have made since 1997, there has been a massive £8.6 billion increase in income across the board for Britain's pensioners. That is no mean achievement and I will not apologise for that significant shift in income towards the poorest pensioners in Britain.
  David Taylor: The Government have done a lot to help the aged. Help the Aged recently brought out a report that called on the Government to match their bold commitment to ending child poverty by 2020 with a similar pledge on older people. Does the Minister think that the recommendations that Help the Aged made in the report in relation to benefit take-up, disability and winter deaths are affordable, realistic and achievable, and are the Government aiming to deliver on them? If they were to do so, the country would not collapse and the economy would not crumble, and millions of pensioners' lives would be immeasurably enriched.
  Mr. McCartney: I thank my hon. Friend for that question. We think of that organisation as one of our major stakeholders and we work closely with it. We have established a national group of major stakeholder organisations including Help the Aged and Age Concern. I meet regularly with that group, the purpose of which is twofold: first, it engages the stakeholders in long-term strategy and service provision for older people; and, secondly, it involves them in policy development on tackling pensioner poverty.
  It is interesting that, despite some differences of opinion in the margins, pensioners' organisations overwhelmingly welcome and work with the Government on the introduction of pension credit. They work with us consistently at both national and international level to deal with pensioner poverty. We have just established a new Pension Service—we are, I think, the first Government in Europe to do so. It is a unique service that will transform the basis of the civil service. Rather than being people who represent Whitehall, we are training civil servants who have a commitment and aptitude. We want advocates for older people to be within the system.
  The creation of a national network of local service providers will mean that we will, in the next few years, on a year-by-year basis, challenge and tackle pensioner poverty and make improvements in services. I welcome Help the Aged's involvement in working towards those objectives and targets.
  Mr. Paul Burstow: The Minister talks of progress, but figures published by the Department today show that pensioners are missing out on £1.8 billion in benefits. Up to 270,000 people are missing out on housing benefit, 670,000 on minimum income guarantee, and as many as 1.43 million on council tax benefits. The take-up rates for both the minimum income guarantee and housing benefit have increased by a massive 1 per cent. at a time when record council tax increases are hitting the poorest pensioners across the country, and take-up rates for council tax benefits are falling. What action will the Minister take to ensure that our poorest pensioners do not fall even deeper into poverty as a result?
  Mr. McCartney: God help any pensioner living under a Liberal council—[HON. MEMBERS: "Hear, hear!"] I

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  would not shout too soon—Conservatives are just as bad. I do not want to sound churlish and I would rather that they were not churlish.
  The hon. Gentleman talks about giving pensioners access to housing benefit and council tax benefit, but it is the changes in pension credit that will ensure that a million extra pensioner households get access to income streams that were not there before. The Liberal Democrats have in the past few weeks come out in opposition to the scheme, and have said that they would scrap pension credit and, with it, access to housing benefit and other benefits. His party cannot have it both ways.
  There is massive new investment. I hope for political consensus on that. We should target poverty not on the basis of people's age, but on the basis of their income. What lies behind the hon. Gentleman's question is the fact that he wants to redistribute the Government's resources on pensions and housing benefit and make other changes in favour of those aged 75 or more. That would mean that those on low incomes aged 60 to 75 would lose out completely. I cannot for the life of me understand why the Liberal Democrats think that it would be an effective strategy for tackling or preventing poverty to say, "If you're poor at 60, don't come to us. Wait until you're 75, if you can."
  We wholeheartedly reject the strategy that the hon. Gentleman wants to deploy. Our strategy means significant increases in income year after year and access to benefits that would not have been there but for the changes that we made.
  Mr. Deputy Speaker: Order. The Minister might like to know that I am looking at him now.
  Mr. Jim Cousins: I congratulate the Government on introducing the savings top-up for pensioners in October. I also congratulate them on the changes in council tax benefit that will be introduced in April. They have not had much publicity, but because of the changes in the savings rules, many people will be able to get council tax benefit for the first time.
  The problems of take-up are greatest among women who live on their own. I urge the Minister to consider how women pensioners who live on their own could come to understand these good new Government schemes. Such women are often quite isolated, living in difficult circumstances after the death of their partner, with poor survivor benefits through private pension schemes. They are difficult to reach and I urge the Minister to address their problems.
  Mr. McCartney: My hon. Friend makes a fair point. That was the purpose of establishing the Pension Service at both national and local level. We are currently doing a great deal of work with older people's organisations on our strategic approach to improve take-up. I will write to my hon. Friend about that and I will place a copy of the letter in the Library.
  If we are to target poverty, we must find ways to get to those who are voiceless and powerless in the system. The overwhelming majority of older people who are
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  poor are women; the biggest beneficiaries of minimum income guarantee and pension credit are women; the biggest beneficiaries of second state pension will be women. The Government understand that it is crucial to tackle the inequalities in the current system that affect women; we must find effective ways to deal with them. My hon. Friend is correct—we are in the same ballpark. I will write to him with further details.
  Mr. Julian Brazier: Will the Minister confirm that his Department's HBAI document, which was published earlier this month, shows that the number of pensioners earning less than two fifths of the national average workers' income has risen by 100,000 since the Government took office? Will he confirm that today one pensioner in five lives below the level of that supposed safety net, largely because of the non-take-up of means-tested benefits? Will he further confirm that the proportion of pensioners who are eligible for this increasingly complex set of means-tested benefits is almost three in five? Finally, will he tell us what he means by the local delivery of benefits when we are losing post offices throughout the country and, indeed, pharmacies and other essential services?
  Mr. McCartney: That was three questions in one. I will take them in reverse order.
  It is a bit rich that the Conservatives, who wanted to privatise the Post Office and close virtually every post office now complain about a multi-billion pound investment in post office services. I have no doubt that we can deal with that during another of the questions.
  The HBAI figures show that the incomes of 400,000 of the poorest pensioners have greatly improved because of the measures introduced by the Labour Government. There is, however, much more to do. That is why we are introducing pension credit. I ask the hon. Gentleman, when will the Conservatives get off the fence and tell us whether they will abolish or support it?

  Community Pharmacy Services
  Mr. Edward Davey: What proportion of prescriptions dispensed by community pharmacists in the past 12 months were for people of state pensionable age. [104449]
  Dr Jenny Tonge: What proportion of prescriptions dispensed by community pharmacists are for people of state pensionable age. [104456]
  The Parliamentary Under-Secretary of State for Health(Mr. David Lammy): In the 12-month period from September 2002, 56 per cent. of prescriptions were dispensed by community pharmacists and appliance contractors to people aged 60 and over.
  Mr. Davey: That figure underlines how important community pharmacists and pharmacies are to older people. I have spoken to many pharmacists in Kingston and Surbiton who tell me that most of their customers are pensioners and that such people rely heavily on their community pharmacist. Will the Minister go further than he has done and tell the House that he will seek a much earlier rejection of the OFT proposals? Does he

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  not realise that the sword of Damocles is hanging over community pharmacies and that it will continue to do so until the Government resolve the issue?
  Mr. Lammy: If the sword of Damocles was hanging over community pharmacies, their representative bodies would be unlikely to support the Government. They are supporting the Government because we have been working with them for some time. We have been working with them on their contracts and the way in which they are reimbursed, and on the Office of Fair Trading report. [Interruption.] It is not a question of backing down, it is a question of supporting the NHS and community pharmacies that seek to do more. We will do that according to the timetable outlined yesterday.
  Dr. Tonge: I am struggling to say something new, but older people form a high proportion of those cared for by the primary care trust in my constituency and that of my hon. Friend the Member for Twickenham (Dr. Cable)—we share that primary care trust.
  Community pharmacists are the friends of older people. They know them well because they know cf2their patients. Community pharmacists are also the friends of doctors, as I well know: a pharmacist once corrected me when I was very tired and made an error on a prescription. Doctors rely on pharmacists to check and ensure that they are doing the right thing—
  Mr. Deputy Speaker: Order. If the hon. Lady has not got much to say, I would prefer a question rather than a speech.
  Dr. Tonge: I am sorry, Mr. Deputy Speaker. Will the Minister ensure that, for the sake of our people, community pharmacists, who are the first access point for the NHS, are there always?
  Mr. Lammy: I will ensure that community pharmacists remain for the sake of our people. The hon. Lady is right: community pharmacists on the high street, at the bottom of the road, in rural areas and in towns, know the patients' family history. They come to know people over time and provide a valuable service. That is why there has been concern throughout the House about the OFT report, and why representations have been made throughout the country. We are considering those representations carefully. In "Pharmacy in the Future" we set out a vision for pharmacists that they support.
  The OFT report considers only 20 per cent. of the pharmacy business. The other 80 per cent. is NHS business. That is why we need to consider the matter carefully in the context of the needs of the NHS. We must support community pharmacists and I assure the hon. Lady that we are seeking to do that.

  Age Discrimination
  Simon Hughes: If the Government will make a statement on the progress they have made in tackling age discrimination in employment. [104450]
  The Minister for Lifelong Learning and Higher Education (Margaret Hodge): We are encouraging
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  employers to adopt non-ageist employment practices through our age positive campaign, which raises employers' awareness of the business benefits of an age-diverse workforce and encourages a flexible approach to retirement to open up choice and the opportunity for individuals to stay in work longer. Between 1999 and 2001 the number of companies referring to age in recruitment fell from 27 per cent. to 13 per cent. and the number of companies having a policy against employing older workers dropped from 14 per cent. to 7 per cent.
  Simon Hughes: The Minister knows that that is not a very encouraging answer, because just before Labour came to power in 1997, her right hon. Friend the Member for Makerfield (Mr. McCartney), now Minister for Pensions, said that the Labour Government would introduce legislation against age discrimination at the earliest opportunity. In the six years since, there have been 18 attempts to introduce such legislation—all blocked by Labour. Will the Minister tell us whether Britain will have to wait until the last minute of the last hour before we are required under European law to implement age discrimination legislation in 2006? What would she say to a relative of mine who reached retirement age in December, asked to stay on and was able and willing to do so, but, like many in that position, was told by the employer, "I'm sorry, but you have to go."?
  Margaret Hodge: The Labour Government chose to sign up to article 13 of the treaty of Amsterdam, which will ensure that measures against discrimination on the grounds of age are incorporated into UK legislation. We did so freely and played an extremely active role in ensuring that that article came into being. If such legislation is to work in practice and have an impact on people's lives, it should be developed through consensus among all parties. Working with employers to ensure that we have a framework that is acceptable to everyone is an important part of the process. In my view, legislation simply provides the underpinning framework. What is required in this as in all other aspects of discrimination is a transformation of culture. All parties working together is a much better way of achieving that than simply attempting to confront the issue through legislation.
  Ms Candy Atherton: I am pleased that the Government are to produce their own legislation, although I, too, would prefer that to happen as quickly as possible. Tackling the issue of goods and services is absolutely critical. If an employer wants to take on an older worker but cannot obtain insurance for that person, the older worker will not be employed. It is critical that we have the same legislation in respect of age as we do in respect of race.
  Margaret Hodge: I understand my hon. Friend's point. I am sure that she appreciates that we must ensure that we have a framework in place that is acceptable and that employers will implement according to the spirit, as well as to the letter, of the law. Making the necessary adjustments to enable older people to participate in the workplace will be part of the culture change that we will seek to achieve in the years prior to 2006, when the legislation will finally come into place.
  Mr. Nigel Waterson: Does the Minister agree that we must address cases such as that of my

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  constituent, Jill Lambard-Brown, who has just been sacked by Liberal Democrat-controlled Eastbourne borough council for no other reason than that she happened to turn 65? The central issue is that, miraculously and in one fell swoop, when people turn 65 they lose all their employment rights.
  Margaret Hodge: That is precisely why we freely joined with our colleagues across the European Union to sign up to the directive based on article 13 and to bring that into the framework. It is interesting to hear that the Liberal Democrats are not doing what they urge others to do.
  Miss Anne Begg: The Government's pensions Green Paper acknowledges that there is a savings gap. Essentially, the longer people can work, the more they can save into a pension fund and the better their pension will be when they retire. It is important that people are allowed to work and remain in the workplace as long as they possibly can. Far too many employers are still using age as an excuse to offer people early retirement—thereby putting a strain on occupational pension schemes—or not to consider employing people once they have turned 55. Will the Minister engage with employers to ensure that they end age discrimination and that people are allowed to work, pay into pension schemes and make better provision for their old age?
  Margaret Hodge: I completely agree that the longer people work, the more they can save and the likelier they are to have a higher standard of living during retirement. I draw the attention of my hon. Friend and other hon. Members to the fact that this is a difficult area of policy, because discrimination on the grounds of age is important in relation to younger people as well as older people. We need to ensure that when we have a framework that enables older people to stay on at work for longer and prevents them from having to retire on the grounds of age, younger people have an equal opportunity to progress into jobs and move up the ladder, so that they, too, can fulfil their potential and contribute to the economy and society.
  The Minister for Pensions(Mr. Ian McCartney): May I advise my hon. Friend the Member for Aberdeen, South (Miss Begg) that the Government have introduced the new deal 50-plus programme, which is specifically designed to get older workers who have been discriminated against or forced out for economic or structural reasons back into the workplace? The programme is having a significant impact on turning around the long-term decline in labour market activity by older workers, especially older men. We have now changed that trend. There is an upward trend in terms of proactively keeping older workers in the work force. Linking the new deal 50-plus programme with our age positive campaign, employers are now giving significant support to proposed legislation on age discrimination and, in the run-up to that, to work with other employers to get them to end their bad practices. That will have a significant impact by 2006.

  Digital Hearing Aids
  Angela Watkinson: What action the Government are taking to ensure that digital hearing aids are available to older people who are hard of hearing. [104451]
  The Minister of State, Department of Health(Jacqui Smith): On 7 February, my right hon. Friend the Secretary of State for Health announced an investment of £94 million to support the modernisation of hearing aid services. That will ensure the provision of digital hearing aids on the NHS throughout England by April 2005. Roll-out plans include boosting NHS capacity and improving access for patients by extending public-private partnerships, which will increase access to NHS digital hearing aids on the high street.
  Angela Watkinson: What would the Minister say to my elderly constituents who were eagerly awaiting the introduction of digital hearing aids only to have their hopes dashed when they found that funding was available only for new patients and that elderly patients who already had hearing aids were not eligible at this stage? What hope can she extend to them? Arguably they are the people who, with their failing hearing, need such aids the most.
  Jacqui Smith: The programme is progressive and it is important that we introduce it in a way that benefits as many people as possible. In such areas as the hon. Lady's—one of the 67 sites that are currently offering digital hearing aids or have been given the training and equipment to start offering them from next April—we have made it clear that people new to hearing aids must be the first to have the benefit of digital, but that people who need their hearing re-assessed or feel that their hearing needs have changed radically can also benefit from digital hearing aids. It will take some time to ensure that the training and equipment are in place, but whereas three years ago no one was getting digital hearing aids on the NHS, we have now issued more than 72,000. We shall ensure by April 2005 that that is an opportunity open to everyone.
  David Taylor: I declare an interest in that I am over 55 and have hearing loss due to chronic tinnitus. There are constituents in Leicestershire, especially North-West Leicestershire, who are very grateful for the steady roll-out of digital hearing aids, which have transformed their lives. However, has my hon. Friend reviewed the patchy provision of audiology clinics and how long many elderly people have to wait to have their need for hearing aids measured more specifically than is currently possible? Finally, please, please will my hon. Friend the Minister look again at public-private partnerships? I sense a disaster in the making there.
  Jacqui Smith: My hon. Friend makes an important point. As we make available on the NHS something that has never been available on it before, we see an increase in demand for hearing aids, including from people who had previously had analogue hearing aids but put them into the cupboard because they had realised that they were not suitable for them. That brings to audiology departments the challenge of ensuring that they can

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  carry out the whole function of fitting digital hearing aids as quickly as possible. It is precisely because of that that we are taking action to recruit more audiologists. The NHS Modernisation Agency is working with audiology departments to ensure that we have in place the programmes and the efficiency that will enable us to get that service delivered as quickly as possible.
  Perhaps I can reassure my hon. Friend about public-private partnerships. We have carried out two pilots, in Leeds and Shrewsbury. The Institute of Hearing Research has evaluated the pilots and found that the outcomes for the 400 people who went through the process were extremely promising. I know my hon. Friend's concerns about the public-private partnerships, but I think that we can use those means to extend people's opportunity to have a digital hearing aid on the NHS as quickly as possible—an opportunity that never existed before.
  Mr. Desmond Swayne: Will the Minister acknowledge that the real logjam is in gaining access to an audiologist? That could be greatly relieved if licensed hearing aid dispensers in the private sector could access the NHS contract for digital hearing aids. When will that happen?
  Jacqui Smith: The real logjam was caused, first, by technology and, secondly, by the willingness of the current Government to invest more than £120 million to ensure that older people could access digital hearing aids on the NHS. The hon. Gentleman must recognise that. His party proposes 20 per cent. cuts, presumably in resources and the staff who are providing NHS hearing aids for older people. It is the policy of the Conservative party to give patients a passport out of the NHS, but it is Labour's policy to ensure that people get on the NHS what they would have to buy under a Conservative Government.
  Mr. Tim Boswell: Does the Minister appreciate that a characteristic problem of many older people is a subtle but progressive loss of hearing intensity, and that they therefore form a significant part of the national population of some 8 million people who are hearing impaired? Given that, does she accept as a matter of principle that there should be absolutely no discrimination against prescribing digital hearing aids to older people and that any older person who is suitable for such a prescription will be entitled to receive one in due course?
  Jacqui Smith:I strongly agree with the hon. Gentleman. I do not know whether he has a particular problem that he wishes to identify, but it is precisely because some 50 per cent. of the over-60s experience some hearing loss that the investment that we are putting into modernising hearing aid services will be so significant to older people. We must ensure that the right processes and suitable equipment and staff are in place to assess people's hearing and to provide that service. I assure the hon. Gentleman that the primary beneficiaries of the policy will be older people, who too often in the past have been discriminated against in the NHS.
  I am very pleased that today we have published a report that covers the two years since the introduction of the national service framework for older people, at the
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  centre of which we put tackling age discrimination. The report shows that significant progress has been made. I am sure that the hon. Gentleman will take the opportunity to read it during the suspension that I suspect is about to start.
  3.37 pm
  Sitting suspended for a Division in the House.
  3.50 pm
  On resuming—
  Mr. Deputy Speaker: We now have until 10 minutes past 4 for the remainder of this question session.

  Care Homes
  Miss Anne McIntosh: How many care home places were available on 1 January (a) 2002 and (b) 2003; and if the Government will make a statement.[104453]
  The Minister of State, Department of Health(Jacqui Smith): The latest data available for 2001 show that there were some 528,000 places in care homes for residential or nursing care in England. In addition to the £300 million building capacity grant in 2001–02 and 2002–03, we are providing record levels of funding for social services. Funding will increase by an average of 6 per cent. in real terms each year for the next three years. Councils can use those resources to stabilise the care home sector and to expand the range of services for older people, including home care and extra care housing.
  Miss McIntosh: That is the answer to a question, but not to the question I asked. Since 1997, 60,000 care home places have been lost and there has been a decrease of almost 100,000 in the number of households receiving domiciliary care packages. Does the Minister accept that her Government is to blame, at least in so far as the Care Standards Act 2000 introduced prescriptive standards that led to that large fall in the number of care home places?
  Jacqui Smith: As the Select Committee on Health said, 60,000 is a somewhat spurious figure. The latest figures in the Department suggest that between March 2000 and March 2001 there was a decrease of 11,200, and that between 1997 and 2001 43,000 households received intensive home care packages—the equivalent of a care home place. During the past year, there has been an increase in the number of older people receiving support to live in their own home. That is a result of additional investment, but we need to do more to ensure that older people have a choice of care home places, support in their own homes, equipment necessary to enable them to live independently, and extra care housing. My right hon. Friend the Secretary of State announced £1 billion investment over the next three years precisely to develop such services.
  Mr. David Drew: My hon. Friend is right to concentrate on choice. Does she accept that we should prioritise that in April, with the onset of supporting

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  people, which is a very good initiative that allows people's homes to be adapted? People often have to return to hospital because their accommodation is totally unsuitable.
  Another aspect of the problem is that we are disaggregating funding, which makes the position of those who are not in receipt of benefit and are living in sheltered accommodation more stark. Does my hon. Friend accept that it is necessary to look at that, because we must encourage people to live in the accommodation most suitable for them, which for older people is often sheltered accommodation?
  Jacqui Smith: I strongly agree that there is greater opportunity for older people. They are able to live in new-style extra care housing or remain in their own home with the contribution of better community equipment services and better adaptations for disabled people. For the first time, the Department of Health is contributing to home improvement agencies to ensure that the necessary changes to older people's homes to enable them to leave hospital and return to their own homes are properly funded. I also agree with my hon. Friend that this is a time of transition as we move to supporting people. We must be careful to ensure that the whole range of support services and benefits are in place to allow older people to have what they want: more independence and more choice.
  Chris Grayling: Will the Minister please address the concerns of both care home owners and care home residents and their families in my constituency? They say that the current system of contributions to nursing care by the NHS is shambolic. Payments are received months after the period that they cover and have to be administered by care home owners, who end up paying money back to families. The result is chaos for everybody involved. Will she re-examine the system?
  Jacqui Smith: Certainly, it is unsatisfactory if care home owners are paid late by primary care trusts. If the hon. Gentleman wants to tell me in what specific areas that is happening I shall pursue the matter. We are currently evaluating the free nursing care scheme, and in many areas we are finding that the NHS is being brought, often for the first time, into a much closer relationship with nursing homes. That helps to develop better joint working, better training and a better approach to services, for example, continence services. Although I am willing to tackle problems, in addition to the financial benefits to many older people, there are other significant benefits from bringing the NHS into a closer relationship with nursing homes.
  Mr. Simon Burns: Will the Minister please come out of her fantasy world and answer specific questions? Has she read the Health Committee's report? I am a member of that Committee. Does she accept that she is being disingenuous in her choice of figures? If she has read the report, she will know from the special work commissioned that just under 65,000 places were lost between 1997 and last
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  year. That figure includes the loss of local authority places, which she steadfastly refuses to include in her answer.
  Jacqui Smith: First, I have read the report. Secondly, the figure that I used in my last answer included local authority places. The hon. Gentleman has a basic difficulty: I have never argued that there has not been a reduction in capacity in care home places. There has been a small reduction since 1997. According to Laing and Buisson independent consultants, the national occupancy rate for care homes is only about 90 per cent. There are capacity problems in some parts of the country, and we have to ask ourselves how we can address them. Care home owners tell me that they want local authorities to be able to pay fees at levels that reflect the quality of care homes. The hon. Gentleman can nod, but until he is willing to support our extra investment in local authorities to enable them, where it is necessary, to raise fees to safeguard capacity, ranting is cheap. He needs to enter the real world and to recognise that the investment, which he is unwilling to support, is necessary to make a difference for older people.
  Mr. Burns: If the Minister had read the Health Committee's report properly, she would know that the specific work commissioned on numbers makes it clear that if one includes local authority losses with the private sector, the result is almost in line with the Laing and Buisson figure of just under 65,000 beds lost. The sooner she accepts that, the sooner she will have a greater understanding of the problem in the long-term care sector. In certain parts of the country, people cannot find beds for their parents in their immediate vicinity.
  Jacqui Smith: The difference between the hon. Gentleman and me is that I recognise that there is a problem and, unlike him, I am willing to put the Government's money into solving the problem by ensuring that local government has the necessary resources to safeguard capacity in the care home sector. Opposition Members often fail to recognise that although care homes are important, they are not the be all and end all for older people. We need to ensure that the 43,000 increase in the number of older people who can live in their own home, which is a result of the increase in intensive home care packages, continues to grow in the coming years. We must continue to develop opportunities for extra care housing and must ensure that additional community equipment is in place to allow older people a genuine choice. That is what we are committed to. Both reform and investment are required. I will not take the hon. Gentleman's crocodile tears seriously until he is willing to vote the investment to make a difference for older people.
  Mr. Paul Burstow: Does the Minister not accept that the issue is not only safeguarding capacity, but adding capacity? The 90 per cent. figure that she quoted is, as she rightly says, a national figure, but care homes are not a national service. We do not put older people on buses going from one part of the country to another to find spare places for them. Will she tell us what the Government are doing

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  not only to safeguard capacity, but to add to it and specifically to deal with the chronic shortage of care for people with dementia, for whom the loss of places has become critical?
  Jacqui Smith: The hon. Gentleman makes a point that I dealt with in my previous response. Care home capacity is not spread equally across the country. That is why, along with the additional investment, we must allow local authorities to make the right decisions about the balance of placements in their areas. He is also right that we have a particular challenge in providing for mentally ill elderly people. The additional investment going to local authorities has enabled a third of them to increase fees by more than 10 per cent., often for such specialised provision. That is an important way in which we ensure that we safeguard such provision. My right hon. Friend the Minister for Pensions made it clear last summer that the number of supported residents in residential care homes has increased over the past year. Our planning assumption is that local authorities will have the resources to increase the number of care home places that they commission from the independent sector over the next three years.

  Post Office Card Accounts
  Sue Doughty: What arrangements have the Government made to promote the take-up of Post Office card accounts among people of pensionable age.[104454]
  The Minister for Pensions(Mr. Ian McCartney): The move to direct payment provides a more secure and efficient method of payment that will make life easier for people. It will also help to prevent crime and fraud. More and more people are already choosing to be paid in this way, and of every 10 new pensioners six do so without prompting. People have more choice: they can use a range of bank or building society accounts at their post office as well as the new Post Office card account. They will not have to carry large amounts of cash, and they will have more choice and flexibility about how much they withdraw and where they withdraw it. They will be able to choose the account that best suits their needs. We will write directly to all pensioners affected by the change, sending them the information that they need to decide which account option is best for them.
  Huge numbers are involved, which means phasing in any changes over two years. People do not need to do anything until we have contacted them. In the meantime, we have set up a dedicated helpline so that people can phone if they have questions about the change. The number is 0800 107 2000—just in case someone was going to ask. We are also running an information campaign to support mailings to customers; it will explain the change and the choices that people have. It will include press, radio and television advertising. Press advertising started on 24 March.
  Sue Doughty: I thank the Minister for his answer, but I am concerned that people are getting the information late and that it takes time for older people to fill in forms to get the changes made. How does he expect to deal with claimants who do not want a bank account or who cannot run a bank account? They will have real difficulty filling in forms to withdraw cash using the Post Office
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  card account, but they still want to go to their local post office and withdraw cash—that is the service that they expect to receive.
  Mr. McCartney: I thank the hon. Lady for her question and for the manner in which she put it. All of us are acutely aware of the need to be sensitive when introducing change, particularly if that change affects older people. We must ensure that changes are made in co-operation with older people's organisations. The change must also be beneficial to the older people that it affects.
  Some 90 per cent. of all pensioners currently have access to a bank or building society account. If we did nothing over 10 years, post offices up and down the country, including those in the hon. Lady's constituency, would have very few pensioners as customers, let alone others. People are choosing to take their income from sources other than post offices because other sources give a better choice. That is why we are investing more than £1 billion in a programme that will provide a platform for additional services to older people and other customers, which will transform the Post Office over the next few years. If we did not make those changes, we would ensure that a major national network slowly bled to death.
  I shall send the hon. Lady and other hon. Members a detailed note to keep them in contact with the changes as they are phased in. I want to ensure that all hon. Members have access to the Department for Work and Pensions and to the Post Office. There must be an open process, and we shall deal directly with any problems that hon. Members raise during the transformation period, whether they are connected with the service in general or with specific aspects of the Post Office. If we are serious about maintaining the Post Office network, it is in all our interests to install the system sensitively.
  Older people have voted with their feet in the pilots: they have appreciated the opportunity to continue banking with the Post Office for cash and used their building society accounts—with Nationwide, or, indeed, the new Post Office account. I am certain that we shall deal with the matter as sensitively as we can over the next few years to ensure that the needs of older people are met effectively.

  Health Service Ombudsman
  Mr. David Heath: When the Government will issue fresh continuing care guidance arising from the health service ombudsman report.[104457]
  The Minister of State, Department of Health (Jacqui Smith): On 27 February, we reiterated to strategic health authorities that they should report whether the continuing care criteria in use since 1996 are consistent with the Coughlan judgment, and if not, when that was identified and what action was taken. We asked for an estimate of the number of people who might have been wrongly assessed and reiterated to strategic health authorities that they should agree one set of criteria across their area. We expect the results of those considerations to be reported back to the Department of

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  Health by the end of March. We shall review the existing guidance carefully and consider whether any further action is necessary once that process is complete.
  Mr. Heath: It is important that transparent and consistent criteria are applied across the country. Tomorrow is the closing date for strategic health authorities to report back on their reviews of the criteria and the number of people who are likely to be affected. Will the Minister give an assurance that the Department will publish that information, and that an early assessment will be made of the total financial implications? If those implications are significant, how will they be met? Is contingency funding available to the strategic health authorities?
  Jacqui Smith: The hon. Gentleman is right that we need first to assess those results and then, as we have said previously, to ensure that strategic health authorities have criteria that cover the whole of their area to ensure greater consistency. On the whole, the guidance that we have issued has ensured that in most areas health bodies have carried out the assessments in line with the legislation. In the light of the urgent action that we took after the issue of the health ombudsman's report, we must carefully consider how to ensure that older people are confident that their needs are properly assessed and that they receive the appropriate support for those needs, whether that is through continuing NHS health care, a contribution to nursing care, or a means-tested contribution elsewhere.
  Mr. Mark Francois: I am sure that the Minister appreciates that the health service ombudsman's ability to deal with any issue is partly conditioned by the resources at her disposal. As complaints about the NHS increase and more cases are referred to the HSO, it is taking longer to get an adjudication. What are the Government doing to increase the resources available to the HSO, so that people who complain about something materially important to them get a quicker and more effective determination?
  Jacqui Smith: I am sure that the hon. Gentleman considers it important that the health service ombudsman's considerations are separate from Ministers' decisions.
  Mr. Francois: New resources?
  Jacqui Smith: Well, I do not want to end Question Time on a discordant note, but for Opposition Members to call for more resources at the same time as they propose—[Interruption.] Well, even on the basis of a generous analysis of the proposals, which are about bureaucracy, I am not quite sure where the hon. Gentleman would find the money to resource the NHS or any complaints process related to it. However, I can assure him that the new bodies that we are setting up and
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  the new legislation that we recently introduced will ensure that patients have the opportunity to voice their concerns about the health service and to have their views properly represented. We will ensure that all the relevant structures—from the complaints process up to the health service ombudsman—are appropriately resourced.
  Mr. Paul Burstow: On a point of order, Mr. Deputy Speaker. I seek your advice on the procedure for notifying Members of cross-cutting Question Times. Only 17 Members submitted questions for the session that we have just concluded, hence the large number of Liberal Democrat colleagues whose names appeared on the Order Paper. Could steps be taken to ensure that more Members table questions for cross-cutting Questions Times?
  Mr. Deputy Speaker: A memorandum is published in the Order Paper, and notice of these events should be given at business questions. I hope that Members will get used to the idea and know what to do.
  Mr. Tim Boswell: On a separate point of order, Mr. Deputy Speaker. You will have noticed that our most intense exchange was about community pharmacies. By way of setting a marker for further consideration in what is an experimental process, may I ask that the House authorities ensure that the distribution of Ministers assigned to respond is coincident with the questions asked? It would have been extremely helpful to everyone had a DTI Minister been here alongside his Department of Health colleague to respond to questions about community pharmacies. Instead, we had the not inelegant spectacle of a Minister of State at the Department for Education and Skills, the hon. Member for Barking (Margaret Hodge), having to answer not a specific question, but one of only general concern to her. None the less, we had no DTI Minister. It was a little like "Hamlet" without the prince.
  Mr. Mark Francois: Further to that point of order, Mr. Deputy Speaker. May I humbly suggest that even Health Ministers might appreciate a DTI Minister being here the next time we have questions about community pharmacies?
  Mr. Deputy Speaker: I am sure that Ministers are grateful for that helpful suggestion.
  As I said at the beginning, we are still at a very experimental stage with the present procedure. Hon. Members may need to think about the questions that they table, because they will be slightly different from those that they would table for a single-Department answer in the House.
  As I said, I am very willing to receive ideas and suggestions, and I am quite sure that Ministers are listening. Indeed, the Parliamentary Secretary, Privy Council Office, listened to a great part of this cross-cutting Question Time and to the previous one as well. We will perhaps find our way through to a system that makes the most of the idea.

Strategic Export Controls
[Relevant documents: First Joint Report from the Defence, Foreign Affairs, International Development and Trade and Industry Committees, Session 2001–02, HC 718, and the Government's response thereto, Cm 5629; and the Minutes of Evidence from the Defence, Foreign Affairs, International Development and Trade and Industry Committees, 27th February 2003, HC 474-i.]
Motion made and Question proposed, That the sitting be now adjourned.—[Charlotte Atkins.]
4.14 pm
Mr. Roger Berry: It is a pleasure to introduce the report on strategic export controls. It was produced by the Select Committees on Defence, Foreign Affairs, International Development and Trade and Industry, which together are commonly known as the Quadripartite Committee. I thank my colleagues for their efforts in producing yet another unanimous report. Indeed, given that the Quadripartite Committee consists of four Committees, we did rather better than that and simultaneously produced four unanimous reports, and I am grateful to my colleagues for their contributions to that process. I should also like to place on record my thanks to our Clerks, whose skilful drafting of the reports has been instrumental in ensuring our success.
The need to control arms exports has never been greater. When a country is engaged in war, it is not out of idle curiosity that people ask, "Who armed our enemies and why?" When a country is faced with terrorism and the threat of terrorism, it is especially important that we know where our arms exports are going and why, to ensure that they do not fall into the hands of terrorists. The issues analysed in the report and the Government's response thereto are extremely important at the present time.
I shall start by echoing one of the report's opening comments and congratulate the Government on the real progress that has been made in recent years. That progress includes the development of the consolidated criteria, the Landmines Act 1998, the ban on the export of torture equipment, annual reports and greater transparency and, the Export Control Act 2002. The Government have taken many steps to bring our arms export control regime up to date, to make it transparent and to make Government accountable. As the Quadripartite Committee acknowledged, and as I am sure that my hon. Friend the Minister would accept, I have spent a considerable amount of time recognising that throughout the country.
The Committee and I pay tribute to the Government for the progress that has been made but, as is inevitable in debating the report, I suspect that all right hon. and hon. Members will want to focus on those areas of Government policy on which they want greater clarity or on which they are in substantive agreement. The report identifies several concerns that I want briefly to mention. They include how the war on terror has affected the licensing regime; end-use monitoring and the policy on the monitoring of arms exports after they have been delivered; policy on the export of military components and the incorporation issue; the Export Control Act 2002 and the issues arising therefrom, particularly arms brokering and trafficking; how
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regional tensions have affected exports to India and Pakistan; the account taken of sustainable development when licensing exports, particularly in the context of the export not long ago of the military air traffic control system to Tanzania; and the proposals for prior parliamentary scrutiny of export licences—an issue that exercised our Committee for some time.
Before I come to those issues, I want to comment on three others that deserve brief mention. The first relates to the information made available in the annual report not only to the Quadripartite Committee but to the public. There is a continuing dialogue between the Committee and the Government about the importance of ensuring that we can access the information that we require to fulfil our job of scrutiny. We do not wish to impose undue burdens on Government Departments but the fact is that, however valuable the information in the annual reports may be, it raises more questions than answers, and it is inevitable that the Quadripartite Committee will need to seek further clarification if it is to do its job properly.
Secondly, there is a fair amount of potentially sensitive information relating to arms export policy that it would be desirable to make available to the public in an appropriate form. I am sure that the Government share the Committee's view that we should provide the fullest possible information, so that people know what decisions have been made and why.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mike O'Brien): I am sure that my hon. Friend would agree with me that what is important is to have effective export controls. It is key, therefore, that the officials working on that should be able to concentrate on that job. It is important to respond to parliamentary scrutiny. It is also important that those who are scrutinising recognise that the same officials will reply to the extremely large number of questions asked. It is right that we should answer them, but it is also right that the officials should ensure that the control mechanism is effective.
Mr. Berry: Of course it is important that the officials with responsibility for running the export control regime have the resources to do so. It is also essential that the Quadripartite Committee has no difficulty in securing answers to questions when it seeks once a year to clarify issues in the Government's annual report. The Clerk of the Committee and I spent a considerable time examining answers to supplementary questions. Without the necessary expertise, it was often difficult for me to know what a particular piece of equipment was designed to do or who Mr. Bloggs in Iran was. It is inevitable that the Committee will require full and speedy answers. I am sure that I could suggest to my hon. Friend on another occasion how resources in the civil service might be deployed in relation to the arms export business, but the Committee must have prompt replies to questions.
I welcome the Government's commitment to give our Committee time to consider the draft secondary legislation to the Export Control Act next Thursday, when we will take evidence from the Secretary of State for Trade and Industry, the Defence Manufacturers Association and the UK working group on arms, which, as many hon. Members will know, includes

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organisations such as Saferworld, Amnesty International and Oxfam. The Committee is grateful to all those organisations for their serious interest in our work and the significant contributions that they have made to our deliberations.
Mr. David Drew: I presume that next week the Committee will consider the subordinate legislation to the Export Control Act with specific regard to small arms. If not, will my hon. Friend say when it might consider it? He mentioned Saferworld, which always highlights the issue of small arms. I am especially interested in issues relating to the re-export of small arms, which may have come through Britain as an intermediary country on the way to somewhere else.
Mr. Berry: I am grateful for my hon. Friend's intervention. We will certainly consider the draft subordinate legislation, which includes references to brokering to which I believe he is alluding. I shall comment on that later.
I was about to make a point about the administration of the licensing process. The Committee has consistently pressed the Government to improve the processing of licensing applications. We need a speedy system. It can be irritating not to receive a speedy reply, and it imposes a burden on business. The Government have undertaken a review, and I would appreciate any comments that the Minister may like to make about it.
There are substantive issues, including the war on terror. The Government told the Committee that the consolidated criteria do not need to change to deal effectively with terrorism. However, the report highlights two specific issues that are difficult to handle but that need to be addressed. The first issue is the balance that we strike between security concerns and human rights concerns when we consider the export of arms to countries that use them to engage in conflict with their own domestic sources of terrorism. The gift of assault rifles and helicopters to Nepal is a recent example. The Committee commented that it is legitimate for another Government to use force within its borders to achieve security and to defeat terrorism. We must, however, remain alert to the threat of violations of human rights. Great vigilance is required to ensure that appropriate balance. The Nepalese armed forces have a legitimate need for weapons because they are engaged in a struggle against terrorism, but they do not have a spotless record on respect for human rights, and that issue must be addressed. There is also the question of whether money from the conflict prevention pools should be used for helicopter equipment, as was the case in Nepal.
There are real concerns, outside and inside the House, that the Government may be relaxing export controls to some countries that are perceived to be "on side" in the war against terror, even when those countries have poor human rights records. We can probably all think of examples. The Committee may wish to examine that matter further when we consider our report on the 2001 annual report, but I would appreciate the Minister's comments on those concerns.
The second issue in relation to the war on terror is obvious. We must do everything possible to deny arms to terrorists and proliferators. That concerns not only
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weapons, but dual-use goods that could be used by terrorists, and must be a key priority for our arms export control regime. In evidence to the Committee four weeks ago today, the Government said that the
"controls are pretty robust as they stand. To give you a figure, of all the export licence refusals that we issued last year, 50 per cent. were because of WMD"—
weapons of mass destruction—
"concerns."
I welcome that, and would like to place on record that we applaud the efforts of those responsible for operating our export control regime. It is a difficult and time-consuming task, as we have been reminded. However, I repeat the obvious point that, at a time when we are faced with the threat of terrorism, we need rigorous and comprehensive arms export controls.
Granting a licence is one thing, but the end use may be another. After a licence has been granted, how do we ensure that the actual end use is that for which approval was given? What is our policy on end-use monitoring? In our report, we expressed the view that the Government should consider producing clear guidelines for the circumstances under which end-use monitoring should be undertaken. On a number of occasions, the Government's response has been that the surest way of preventing diversion or misuse of defence exports is to examine the risks carefully when assessing the export licence application, and to refuse such an application when those risks are unacceptable.
That is the best way to do it if there is full and perfect information. If the information received when the decision on the licence application is to be made is accurate, it is self-evident that the decision can be made at that point, and the end-use monitoring issue disappears. However, if that information is incomplete or inaccurate, how do we ensure that the purpose for which an arms export was licensed is the purpose to which it is put? I suggest that the Government's policy on end-use monitoring in those circumstances is unclear. That may be illustrated by the case of military equipment exported to Israel; the example is well known and I will be brief in making the point.
In February 2002, during the passage of the Export Control Bill in the other place, the Government, in relation to the end use of equipment exported to Israel, said:
"We have no evidence that equipment or components manufactured in the UK and licensed for export were used … in the occupied territories during the recent violence."—[Official Report, House of Lords, 7 February 2002; Vol. 631, c. 834.]
That statement was made because the Government, quite rightly, had secured a written assurance from the Israeli Government that
"no UK originated equipment nor any UK originated systems/ sub-systems/components are used as part of the ߪ Defence Force's activities in the Territories".
The Government had sought the assurance that arms exports to Israel, which are not banned, took place on condition that they were not used in the occupied territories. Therefore, as of February 2002, the Government were saying that there was no evidence of any violation of that agreement.
In March 2002, in a written answer in the other place Baroness Amos stated:

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"British Embassy staff in Tel Aviv do not undertake physical checks on the end-use of UK licensed equipment, components and spare parts supplied by the UK to Israel. They do not have the resources to do so. In addition, many UK defence exports in recent years have been components or pieces of technology embedded in other systems and therefore not very visible."—[Official Report, House of Lords, 7 March 2002; Vol. 632, c. WA31.]
I will come to incorporation in a moment. A week later the then Foreign Office Minister, the Parliamentary Secretary, Privy Council Office stated:
"New information has, however, come to light that UK supplied equipment licensed for export under a previous Administration and a different export control regime is being used by the Israelis in the Occupied Territories.—"[Official Report, 11 March 2002; Vol. 381, c. 689W.]
Those were the British Centurion tanks that had been exported a long time ago and were observed being used in the occupied territories.
Since then there have been different versions about how that information came to light and how it was that modified British Centurion tanks were being used in the occupied territories. Initially we were led to believe that it came to light by chance. Four weeks ago our Committee was told that:
"the Israel case was a particular one where we had received certain assurances from the Israeli government that British equipment would not be used in the Occupied Territories. We obviously then made an effort to ensure those assurances were being met and our attachés in Israel, at considerable personal risk in some cases, did make tours in the Occupied Territories with this in mind."
I then asked:
"This discovery by the Military Attaché was not just ߪ accidental ߪ was it?"
The reply was:
"No, it was part of his task."
That appears to contradict Baroness Amos's statement last year that British embassy staff do not undertake physical checks. I am now rather confused about the Government's policy on end-use monitoring.
Mr. O'Brien: I do not think that there is any great confusion about what happened. The defence attachés and other embassy and consulate staff make tours of the west bank. One of their objectives is to ensure, in so far as they can, that no equipment is used in breach of any undertakings. As my hon. Friend will know, these chassis, which ended up as troop carriers, were adaptations from 1940s and 1950s exports from the then British Government to Israel. They were subsequently changed on a number of occasions into troop carriers. That was spotted by an alert defence attache. One of his jobs is to keep an eye on those issues. I am sorry, Mr. Deputy Speaker, that I am taking a little too long here. I will be brief. It is not his job to do that exclusively, but it is among a number of tasks that those who do these tours undertake.
Mr. Deputy Speaker (Mr. John McWilliam): I thank the Minister for his courtesy in apologising. However, interventions should be short.
Mr. Berry: The fact is that on one occasion last year we were told that this activity does not take place because there are not the resources to do it. It is not a question of whether someone does it full time or not. More recently we were told that this is a more explicit
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responsibility. I simply make the point that some of us at least believe that that case demonstrates that there is some confusion in the Government's policy on end-use monitoring, or that it is rather ad hoc.
Why have the Government not considered the American system, the blue lantern approach, where careful attention is paid to the end use of arms exports? We need a more robust system of end-use monitoring, particularly when there are growing concerns about diversion. If blue lantern is good enough for the United States, will the Minister tell us why it is not good enough for us?
The problem of end use is complicated by that of incorporation. Many of the exports listed in the annual reports are not complete weapons or weapon systems. In fact, most of them are components, which is one reason why it can be difficult to understand exactly what is going to whom and why. Most of the licences detailed in the annual reports are issued for components, which are covered by the consolidated criteria-there is no question about that. On 8 July last year, the Foreign Secretary announced in a written answer that new guidelines would be taken into account alongside the existing consolidated criteria for
"licence applications for goods where it is understood that the goods are to be incorporated into products for onward export"—[Official Report, 8 July 2002; Vol. 388, c. 653W.]
The effect of that is to hand control of re-export to the incorporating state when the Government are satisfied with its export control regime.
It seems clear that the guidelines were precipitated by an export licence application for the export of head-up display units to the United States for incorporation in F-16 aircraft for subsequent export to Israel. Our Committee regretted that the guidelines were announced in a written answer, because if the Foreign Secretary had made an oral statement on the Floor of the House, he could have been questioned and challenged. More substantively, when giving evidence to our Committee four weeks ago, he said that he had taken into account
"the export control systems of the incorporating country, which in this case is the United States, whose system is a very effective one".
The Government have often prayed in aid a statement by the Committee in support of the sentiment that the United States has an effective export control regime, and, indeed, a previous Committee report said precisely that. However, I must make the obvious point that although the USA's export control regime may be effective, it is the USA's export policy that matters, particularly with regard to arms sales to Israel, for the simple reason that it has a different policy from the United Kingdom. In our report, we say that
"the comments of our predecessors on the effectiveness of the US system of export controls should not have been called in aid to justify the decision of Ministers in relation to policy on the export of aircraft components to Israel via the USA."
I have made that point on several occasions, but I am afraid that the Government have misunderstood our Committee's view. I hope that that now puts the matter to rest.
The substantive point is that I have no doubt that if an application had been made for a licence to export head-up displays directly to Israel, it would not have been granted without an assurance that they were not to

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be used in military equipment to be deployed in the occupied territories. In fact, I do not think that it would have been granted at all, because the Government do not regard a previous Israeli Government undertaking as valid after the experience with the Centurion tanks. It is perverse that the Government would have turned down licences for export to Israel, but because the United States has a less stringent policy, there is nothing to prevent that component being used in Israel for any purpose. That point was not made explicit in the guidelines, and it is not clear to me that it is justified in terms of arms export control policy because, politically, it will put the Government in a curious position. Exporting the head-up display units to the United States of America gives a greater chance that they could be used in aircraft in the occupied territories. Perversely, under these guidelines, the Government appear to be licensing the export of military components even though the final destination is Israel where they are more likely to be used in the occupied territories. I do not believe that they would have granted the licence if the export had been direct.
Ironically, under US law, recipients of controlled goods—weapons or components—must seek the permission of the United States before re-export. Why should we not apply the same control? Does not the Government's arms export control policy seek to control the end use of components as well as of complete weapons systems?
It is clear, not least from the evidence that we took four weeks ago, that different EU countries have different policies on incorporation. Will the Minister comment on the steps that the Government are taking to try to secure common agreement on the application of EU criteria in these cases?
Any policies that are adopted in relation to end-use monitoring and incorporation are of limited value if they can be easily avoided and, at present, arms brokers are able to do just that. That is why many of the arms that are used by terrorist and criminal groups in the world's conflict zones are provided by arms brokers.
The report that is before us refers to the Export Control Bill, which became an Act in 2002, and I am delighted that section 4 of that Act gives the Government the power to impose controls on trafficking and brokering by UK citizens located anywhere in the world. That is long overdue. However, the Government have said that it is their intention to introduce those extraterritorial controls only for trade in long-range missiles and torture equipment—which, thankfully, is banned in any case—and to destinations subject to embargo. The Government do not intend at present to control trafficking and brokering in small arms by UK nationals located outside the UK—that is my understanding of the situation, but I would be grateful for clarification on it if I am wrong. I regret that, and I said so at the time of the debate on the Export Control Bill.
I remind the Government of their 2001 election manifesto commitment to control British arms dealers wherever they are located. This is a serious loophole in the Government's plans to regulate arms exports. Their view seems to be that to close it would be unfair because the arms dealer cannot be expected to know that he or
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she has to get a licence or, perhaps, because it is unenforceable. I am not a lawyer, but I did not think that ignorance of the law was a defence. There must be a number of laws on the statute book that are difficult to enforce, but that is no excuse for not trying.
The Government are also inconsistent on the issue of extraterritoriality. There are many examples of that, but I shall offer only one: under section 109 of the Anti-terrorism, Crime and Security Act 2001, bribery is a criminal offence in UK law when it is committed anywhere in the world by a UK citizen or company. Why is bribery a more self-evidently criminal act than arms dealing without a licence? Unlike bribery, trafficking and brokering cause deaths, so why are the Government committed—I believe rightly—to criminalising bribery carried out overseas, but not trafficking and brokering?
Mr. Barry Gardiner: Is my hon. Friend aware of chapter 2.14, under the section on penalties and enforcement, of the consultation document on draft orders under the Export Control Act 2002? It states that
"the Government believes that ignorance of the law should not exempt an offender from the possibility of receiving a custodial sentence for engaging in behaviour which any unreasonable person could be expected to know would constitute an offence".
Mr. Berry: My hon. Friend makes an important point, which strengthens the arguments of those of us—and he is one—who want the loophole to be closed.
Will the Minister confirm that other European countries are introducing full extraterritorial powers; that Finland and Poland have already done so; and that such powers are under consideration in Belgium and—dare I say it—France? We should be looking to our colleagues elsewhere.
Dr. Vincent Cable: Is the hon. Gentleman aware that the Government have already accepted the principle of full extraterritoriality in other areas, such as that of female genital mutilation, which is very much to the Government's credit? It raises the question, however, of why that principle is not being applied elsewhere.
Mr. Berry: The fact is that an arms broker who is a UK citizen can hop on the Eurostar to Lille and do the deal, and that would not be covered by the Government's plans. That is silly, as hopping on the Eurostar is not difficult. I have described my personal views on arms brokering, but the Select Committee will consider the issue when it examines the draft secondary legislation.
I shall move on because I am conscious of the time and the fact that several hon. Members want to speak. On India and Pakistan, criterion 4 of the consolidated criteria allows an export licence to be refused
"if there is a clear risk that the intended recipient would use the proposed export aggressively against another country or to assert by force a territorial claim".
The Committee has been concerned by the Government's arms export policy response to the varying tensions between India and Pakistan, including the recent and serious tensions over Kashmir, not least because both nations are nuclear powers. We have

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examined information on the licensing decisions in relation to India and Pakistan in 2000, 2001 and early 2002. More recently, we have considered the proposed sale of Hawk aircraft to India, and have been keeping an eye on measures by the Government to prevent the export of equipment that might be used in either country's nuclear arms programmes. Those are the two key issues.
The Committee felt that if the situation in India and Pakistan in the spring of last year did not fully engage criterion 4—hon. Members will recall that that was a time of high tension between the two countries—it would be difficult to conceive of circumstances that would, short of all-out war. These two nuclear powers primarily have a dispute over Kashmir. If that, combined with a time of high tension, does not require careful consideration of the risk of arms exports being used aggressively to assert by force a territorial claim, I do not know when such a concern would be prompted.
I should like to make one more remark about arms exports to India and Pakistan in relation to Hawk aircraft. When the Foreign Secretary gave evidence to the Select Committee last month, he responded to the suggestion that senior members of the Government had been lobbying the Indian Government to buy Hawks by saying:
"Would either the Prime Minister or I have been urging on the Government of India the merits of Hawk, if we believed that the sale of Hawk would be contrary to the criteria? No, of course we would not."
That raises the question whether the Government should be promoting the sale of military equipment with a potential for aggressive use to either India or Pakistan while tensions over Kashmir continue, and whether a Minister who has been involved in promoting an arms sale can avoid pre-empting the objective judgment that must be reached when assessing an export licence application. Was the Foreign Secretary speaking for all four Secretaries of State? Has the decision already been made?
Criterion 8 deals with sustainable development criteria and suggests that the Government would refuse a licence if the equipment for which it is sought has the potential seriously to undermine sustainable development in the recipient country or seriously to undermine its economy. No licence has ever been refused on criterion 8 grounds, although that does not prove anything in itself. However, the controversy over criterion 8 blew up in autumn 2001 in relation to the application for a licence for the export of a military air traffic control system to Tanzania.
There was a substantial body of opinion at the time—there still is—in the World Bank and the International Civil Aviation Organisation, that the air traffic control system did not best meet Tanzania's needs. Nevertheless, the licences were granted. Criterion 8 has never been used in this country as a reason for refusing an export licence, so it is impossible to assess the threshold for invoking it. If it does not bite in the case of Tanzania, when would it bite? In a written answer published in September last year, the Government gave some clarification of how they apply the sustainable development criterion. However, when we questioned the Government in Committee it emerged that
"no number or combination of indicators, or their degree, will pre determine the judgement in a particular case".
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If that means that we do not pre-determine anything, I agree with that. We need clarification from the Minister of what "number" and "combination of indicators" mean. Precisely how does the new guidance help those who are applying for export licences and those, like ourselves, who seek to scrutinise Government policy?
Mr. Drew: Does my hon. Friend accept that part of the problem is that it is difficult to consider a licence for a country, whatever its merits, in isolation from the countries surrounding it. In the case of Tanzania, Sudan, Somalia and Ethiopia will each have a view.
Mr. Berry: The more important consideration is how you deal with such issues when they have a cumulative effect. With the sustainable development criterion, having one licence application in which you consider the implications for sustainable development is one thing, but there are problems when you get a second, third, fourth or fifth. The cumulative impact on an individual country is the more serious problem, rather than what neighbouring countries might think.
Mr. Deputy Speaker: Order. The hon. Gentleman used the phrase "cumulative effect", which leads me to draw to his attention the fact that, when he uses the word "you", he refers to me, and I have done none of the things that he accuses me of doing.
Mr. Berry: You certainly have not, Mr. Deputy Speaker, and I apologise unreservedly for not choosing my words carefully.
I am sure that other hon. Members will wish to comment on prior scrutiny. As the Minister will know, the Quadripartite Committee has consistently recommended that it should have a role in the scrutiny of a small number of contentious export licences before decisions are made by the Government. The reason for that is straightforward. Arms licensing decisions and weapons being exported to other parts of the world are sensitive issues, but except in a few extreme circumstances, decisions are usually irreversible.
The hon. Member for Cynon Valley (Ann Clwyd) is not in this Chamber this afternoon. Members of the Select Committee on International Development are away and I am sorry that the timing of today's debate is such that they have not been able to participate. She tabled an early-day motion, which was signed by 311 hon. Members from all sides of the House, calling for the
"prior scrutiny by a committee comprising honourable Members of Parliament."
Mr. Alan Duncan: Both sides of the House.
Mr. Berry: I know that some Liberal Democrat, Plaid Cymru and Scottish National party Members signed it. I assumed that certain Conservatives had signed it, but I suspect that a contribution later this afternoon will demonstrate that they did not. It is remarkable that 311 hon. Members signed that early-day motion.
The issue was discussed during the passage of the Export Control Bill. A proposal by Lord Campbell-Savours, which was not supported by the Quadripartite

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Committee, was considered during the debate in the other place, at which time the Government made it clear that they would look at it.
I emphasise that the Committee is not asking for a role in decision making: that is a job for the Executive. We are asking for an opportunity to comment on a few sensitive issues before decisions are made. We are not asking for the licensing process to be held up; we have put forward detailed proposals, of which the Minister will be aware, to avoid that happening. Confidentiality is, perhaps, the nub of the Government's concerns about what we are saying. However, our Committee has handled, and handles on a regular basis, confidential information without any problems arising. It is a shame that the Committee and the Government have been unable to reach agreement on prior parliamentary scrutiny. I hope that we may yet get agreement.
I apologise for speaking for too long. I conclude by saying that there are few more important areas of foreign policy than decisions about whether or not to export arms to a country. The Government have made a significant and brave start to getting arms export controls under some kind of control with a clear, transparent set of policy objectives. However, many concerns remain, and I have only been able to comment on some of them this afternoon. I hope that this and other debates will persuade the Government that significant progress can still be made to ensure, above all, that, at a time when we are rightly concerned about war and terrorism, our arms export control regime works, that it is effective and that it is comprehensive.
4.58 pm
Mr. Andrew Lansley: I am conscious that other hon. Members want to speak, so I shall avoid reiterating what the hon. Member for Kingswood (Mr. Berry) said on behalf of almost all Committee members, although I depart from him on various points.
It is clear from current events in Iraq that the Government and the international community attach importance to the avoidance of proliferation of weapons of mass destruction. Weapons in the wrong hands are a matter of considerable concern to the Government. From my own observation, important efforts are made to support that view through the export control and licensing process, and in the House through the scrutiny process. Much has been done in recent years to make that process more effective. I put on record my appreciation of the work that has been and is continuing to be done in that respect.
Leaving aside issues of international importance relating to weapons of mass destruction, the present conflict offers opportunities to assess the extent to which Iraq has been the recipient of weapons of many descriptions, about which there has been speculation. It will perhaps enable the international community to assess how effective end-use monitoring has been in other countries. I flag that up as an important matter to which we should return. I am sure that the Government intend to assess how many weapons have reached Iraq and where they have come from.
The hon. Gentleman raised the matter of incorporation, which the Committee considered in the light of head-up displays in relation to F-16 jets. I had
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more concerns about the issue after the Foreign Secretary gave oral evidence a few weeks ago than I had before. I had understood, perhaps erroneously, that the purpose of the guidance issued on 8 July was to set out the factors that applied to incorporation, which was a sub-category of exports. It may be my ignorance, but when I looked at it in detail, it immediately became obvious that incorporation is a common feature of exports; such a large proportion of components are being exported that incorporation is widespread.
There may be a sub-category of components; for example, the Committee was told that in at least one European country, if the value of the components for incorporation is less than 20 per cent. of the value of the final product, the box is ticked and they do not get the subsequent export control scrutiny that they should. That is not the way in which the British Government do such things. However, if all components that are to be incorporated into a final product are to be treated as a category, I suspect that that applies to a large number of exports.
The question, therefore, is what did the guidance issued last year achieve? I suspect that it was set out because the Government were not confident that the consolidated criteria had been applied in respect of a particular export and they needed some additional criteria in order to justify it. The terminology of the consolidated criteria and the guidance applied to incorporation made it clear to me. Criterion 5 of the consolidated criteria was a reference to the defence and security interests—of the United Kingdom, in our Case—and that was converted in the incorporation into the defence and security relationship with the incorporating country. In subsequent questions, the Foreign Secretary made it clear that the relationship between BAE Systems and the United States defence industry is a significant part of that matter.
A balance must always be struck between the defence and security interests of the United Kingdom and our strategic industrial interests in respect of arms and defence manufacture. I understood that they were intended to be reflected in the consolidated criteria anyway, but to be circumscribed. I am concerned that different terminology on incorporation seems to have been applied specifically to justify exports to America for incorporation.
If that is not the case, I do not understand why the terminology has changed. If it is the case, we must understand that a very particular relationship with the United States defence industry is being protected by the way in which we are expressing the criteria. Perhaps that is a distinct relationship, different from others. However, if so, we should put additional effort into trying to understand all the circumstances in which we are exporting for incorporation into American defence equipment. We must understand the basis on which, as the hon. Gentleman made clear, the policy is to be applied, and make that a substantive part of the negotiations that we have with the United States on the international traffic in armaments regulations. The policy should apply as much to exports from the Americans to us as to those from us to them. There would then be, in effect, a bilateral understanding of the policy and we would know where the United Kingdom could draw lines—there are clearly lines that we wish to draw, beyond which we would not want our defence

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manufacturers to export. The Americans should respect that, just as we, under the international traffic in armaments regulations, are expected to adhere to the American end-use controls.
I have a point on small arms brokers. A dozen of my constituents have raised that matter with me during the past few days, and we can return to it when we examine the statutory instruments to be made under the Export Control Act 2002. However, I take issue slightly with other hon. Members who have raised the matter. There is a difference, in policy and practice, between seeking the extraterritorial application of UK laws to other countries to support understood, internationally agreed standards—whether United Nations sanctions, UN arms embargoes or internationally understood restrictions on the export of long-range missiles—and seeking the extraterritorial application of UK laws in ways that would not be in line with the law and practice of the countries concerned.
Mr. Gardiner: I have listened to hon. Gentleman carefully. Does he think that the same should apply in countries where the age of consent for sexual conjunction is lower or where the practice of the country allows what we call female genital mutilation? Under the logic of his argument, extraterritoriality would not apply there either.
Mr. Lansley: The logic of my argument is that we need to understand different cases very carefully. I must confess that I was not present in the House when the private Member's Bill on female genital mutilation was discussed last Friday. If we are dealing with matters over which there are internationally agreed standards, the logic of my argument applies to them too, but I do not want to get drawn at length into an argument on a subject with which I am less familiar. My point is that if we start applying extraterritorial jurisdiction in this matter, we should remember that there is a substantial difference between doing that in ways that differ from the laws of the host country and doing it in ways that differ from internationally agreed standards or internationally applied legislation.
Mr. Gardiner: I am grateful to the hon. Gentleman for kindly giving way a second time. Does he agree that the extraterritoriality that we have introduced in this country to cover British citizens going abroad to engage in paedophilia in countries where there may not be laws prohibiting such action is absolutely right? Is not the key factor that that applies to British citizens going abroad to do something that would be proscribed in this country under UK law?
Mr. Lansley: We have to be very careful here, and I shall not go on at great length. The logic of the hon. Gentleman's argument is that UK citizens should, in any country in the world, be able to do only what they can do legally in the UK. I can remember many instances when I fought against the United States' desire for extraterritorial application of its laws, for example in relation to corporations, or—[Interruption.] My hon. Friend the Member for Rutland and Melton (Mr. Duncan) says tax, and actually that is my recollection. If we go too far down that path, we will be in the absurd situation of seeking to apply our laws in countries across
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the world, even when they are directly contrary to the laws of that country and cannot be enforced effectively. That would be unsatisfactory.
The Government may be wrong to draw the line where they have done, but they are trying to arrive at a practical point on the issue of enforcement between my argument and that of the hon. Member for Brent, North (Mr. Gardiner).
Mr. O'Brien: Perhaps I can help the hon. Gentleman with his argument. I do not think that the example of paedophilia and female genital mutilation is the right one. I do not know of any country that encourages female genital mutilation or paedophilia. However, a country might encourage the sale of arms and other things to another country, and a British person in that country might find that they fell foul of a law relating to something that was encouraged in that country. The comparison with female genital mutilation and paedophilia is entirely bogus, because clearly those are things that almost every country—or certainly any civilised country—would seek to discourage. However, that is not always true of the trade in arms.
Mr. Lansley: I am grateful to the Minister for setting the seal on that argument.
I had hoped to talk about the administration of the licensing process, but it seems pointless to do so before the Government have concluded and published the outcome of their review of that process. I hope that, as soon as the Government have completed and published their review, the Minister will encourage us on the direction that our inquiries should take, and the evidence the Committee should hear. Companies in my constituency and businesses across the country still have difficulties with the time it takes to secure licences, particularly where appeals are concerned.
I come to prior parliamentary scrutiny. I shall sit down soon for fear that I take too many interventions on this subject, too. The Committee was not of one mind on the subject—at any rate, two of the Committees that make up the Quadripartite Committee divided on the question of prior parliamentary scrutiny. The matter is not really about whether the Quadripartite Committee can come up with a process that guarantees confidentiality; I am sure that we can. Nor do I think that it is an issue of whether, legally, the Government would expose themselves to the risk of judicial review through inappropriate sub-delegation and the like, because that could reasonably be guarded against. The issue is what is the purpose of a Select Committee?
The purposes of Parliament, as distinct from the Executive, are very well established, and we are seeking to trespass on them. The purpose of Parliament is to set out legislation, and next week we will begin formally to consider some of the statutory instruments; that is where we set out the legislative framework for Government. Every time that Ministers change Government policy, they should tell us and expose themselves to scrutiny on that policy. If there are decisions that give rise to policy issues on which Ministers feel they need to take the advice of the Quadripartite Committee, there is absolutely nothing to constrain Ministers from doing so. If, as a result of that, the policy is changed, they should be under an obligation to tell us. None of that

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should change the fact that such decisions are executive decisions, made by the Government. We have a separate scrutiny role in relation to those decisions, and it is our responsibility to assess whether Ministers have taken those decisions properly.
There is a danger that the Committee might become heavily engaged in trying to interpose our views on policy decisions, but in practice trying to do so in a way that was influencing individual decisions. Tanzania was an example. We came very close to the point of asking questions of Ministers at the time of and in relation to a specific decision, supposing that we were dealing with policy when in fact our purpose was to determine the outcome of a decision.
That is not our role—we must be clear about the distinction. It is the role of Government to make decisions and to be held accountable for them. We can do our jobs effectively as long as we are clear about the distinct responsibilities. If we were to reach a point when the Quadripartite Committee became an adjunct of the export licensing process, not only would we inevitably introduce delay and hazard the efficient working of Departments, we would undermine the subsequent scrutiny process and the distinction between the Committee and the Executive.
5.15 pm
Mr. Barry Gardiner: I congratulate the Quadripartite Committee on its work and my hon. Friend the Member for Kingswood (Mr. Berry) on the way in which he introduced the debate.
Last Sunday, the British troops who engaged with Iraqi forces outside Basra discovered Iraqi bunkers that contained an arsenal abandoned by Saddam Hussein's southern army. Many of the cargo crates in that lethal arms depot bore a stamp that said:
"Wallop Defence Systems, a subsidiary of Cobham plc",
which is based in Hampshire, England. Nothing makes our debate more important than that. We are allowing weapons made by British companies and supplied by British arms dealers to kill British troops. Of course, that is not the Government's intention. It is not what the system of export controls is designed to do, but it is the very real effect of the present system, and it must stop.
I commend this Labour Government for the important changes that they have made to the UK's arms export policy. They ratified the Ottawa treaty on land mines and introduced a ban on the export of equipment that is designed for torture. They secured the European code of conduct on arms exports and committed themselves to publishing an annual report on strategic export controls, which is a model of transparency for others to follow.
This Labour Government also included the following words in their election manifesto for the 2001 general election:
"Labour will lead efforts to control the trade in small arms ߪ We will legislate to modernise the regulation of arms exports, with a licensing system to control the activities of arms brokers and traffickers wherever they are located."
The Government's response to this debate and to the present consultation by the Department of Trade and Industry on the draft orders to be made under the
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Export Control Act 2002 will determine whether they keep their manifesto commitment. If they do, we can confidently predict that in future conflicts the chances of British soldiers being killed by British-supplied weapons will be enormously reduced. However, if they capitulate to the business interests of the powerful industrial lobby, we can be certain that more British soldiers will be killed by weapons made and sold illegally and recklessly by their fellow citizens to regimes such as that of Saddam Hussein.
The defence industry is important to this country. It provides many jobs and much-needed income to UK plc. Defence is a legitimate business, and the primary obligation of any state is the protection of its citizens. Therefore, I approach the issue not wishing to close down our defence industry but to ensure that it is properly and comprehensively regulated. As the events of the past week in Iraq have shown, that would not be against the interests of this country. On the contrary, it would act against the interests of our enemies.
I wish to concentrate my remarks on two principal issues: end-use monitoring controls and extraterritorial controls. The diversion of military equipment from authorised countries such as Jordan, Ukraine and Yemen to end users who are clearly not authorised, such as Iraq, is well known and documented. Despite that, the Government profess that existing pre-licence checks are satisfactory and act as a surety against diversion and unauthorised re-export. By contrast, the United States operates a system of post-export checks on end-user countries if it believes that there are grounds for suspicion. In 2000, in the 218 end-user checks that the US conducted, it found that unauthorised diversion or re-export had occurred in 25 per cent. of them.
It is essential that our Government institute a system of end-use controls on exported arms and dual-use equipment. They should explicitly prohibit unauthorised re-export or an unauthorised change in the end use or end user of UK-licensed military equipment. The controls should include a formal end-use monitoring system that gives the Government an absolute right to verify, in the country of the end user, that the relevant undertakings are being implemented and respected.
It may be argued that such a system is cumbersome and disproportionate to the enormous number of export licenses granted by the UK each year. To those who might be tempted by such an argument, I would point out that common sense dictates that end-user checks are carefully targeted at those countries that give rise to the greatest concern. Indeed, the US statistics are significant. Only 218 checks were made out of all its thousands of export licenses. However, 25 per cent. of those checks showed material non-compliance with the conditions. The US operates a flag system to identify contracts in which investigation and follow-up is required, and that is what we should do in the UK.
The Government spend more than £20 million a year promoting the arms industry. I do not begrudge that investment in British industry, but I will not accept a Minister pleading that end-user controls cannot be implemented on the ground of cost. Such controls

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would cost a fraction of that budget to implement and, in the opinion of many British people and soldiers, that would be money much better spent.
Mr. Drew: My hon. Friend makes a point with which I have a great deal of sympathy. I would link it to the comments of the hon. Member for South Cambridgeshire (Mr. Lansley) about the role of parliamentary scrutiny being seen as intervening on the role of the Executive. There is a precedent for that. The Executive share information with the Intelligence and Security Committee in total confidence. As I understand it, that has always worked and I cannot see why we could not have a similar arrangement in this regard. Would my hon. Friend agree?
Mr. Gardiner: I have not entirely grasped my hon. Friend's point, but I believe that there is sufficient information in the intelligence community for us to be able to focus our end-user controls and checks in such a way that they would not be overly costly or cumbersome and so that they would produce significant results. If that is his point, I entirely agree with him.
The second issue I would like to address is that of extraterritoriality. I welcome the Government's intention to introduce full extraterritorial controls on the sale of weapons of mass destruction. torture equipment and long-range missiles to embargoed destinations. I am deeply concerned that the Government will not introduce controls on British arms brokers operating outside the UK in relation to other armaments from handguns to tanks.
The Government's proposals establish that a broker must have a licence before entering into a "commitment" leading to acquisition, disposal or movement of controlled goods. The definition of "commitment" is left unclear. A licence for brokering is required only if
"any part of the deal takes place in the UK"
and will be triggered only by the commitment. What the phrase
"any part of the deal"
expressly does not include is marketing and promotion. That is clear in the clauses. It is therefore possible to market and promote controlled goods in the UK and to conclude a deal offshore, with no requirement on the broker to obtain a UK licence. Under that regime, unscrupulous brokers can become promoters for the purposes of UK law, maintaining their base in the UK but concluding their brokering deals outside the UK with impunity. If a licence were required by all UK persons engaged in brokering arms, regardless of where that activity occurred, such a loophole would be closed.
The system proposed by the Government is much more bureaucratic and difficult to monitor and enforce. Did the broker require a licence? Where was the commitment made? Was his activity in the UK promotion or brokerage? Decisions would have to be taken on those questions in monitoring any deals with which the Government were concerned. Such determinations are the stuff of the civil service long grass. They are the weasel words that enable effective regulation to collapse.
If the Government truly want effective controls, they will recognise the need for simplicity. If all arms transfers are regulated by licence, the control of the
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negotiations becomes redundant. The Government machinery is freed from looking at deals to check whether they should have been licensed, and can focus on those deals where unauthorised transfers may occur. A law requiring a licence for all deals would shift the burden of proof of a deal's legality on to the broker, and help to prevent arms sales to embargoed countries or known diversion points.
I stress that brokered deals have a particularly harmful effect. It is assumed that they comprise only a small percentage of all arms deals—we cannot know for sure because no comprehensive broker licensing exists—but weapons transferred by brokered deals are often sent directly into conflict zones. The brokers' register should not be a de facto one. All brokers should be required to register upfront. In that way, we could have a system of fit and proper persons, such as that properly introduced by the Government under the Financial Services and Markets Act 2000. Brokers would be assessed upfront on that basis, and the activities on which we need to focus and with which we are concerned about the transfers could be properly controlled.
Finally, I shall refer to the controls that are not extended to shippers and transporters. The Government excluded shippers and transporters from the remit of the Export Control Act 2002, even though such groups are key players in shipping arms to conflict zones throughout the world. Let me give an example. Christopher Barratt-Jolley, a well known gunrunner, recently went to jail for flying £22 million worth of cocaine into Britain. He also flew weapons into countries such as Angola and South Yemen. Because the new law proposed by the Government does not cover shippers and transporters, it would allow the activities of people such as Christopher Barratt-Jolley to remain unregulated. That, too, is an important matter for which the Government should increase the strength of their controls.
5.28 pm
Dr.Vincent Cable: I welcome the debate and the undoubted progress that has been made towards more effective scrutiny and transparency in the arms control process. That said, there is something a little odd about the debate. We are dealing, in many ways, with a fast-moving situation.
Mr.Alan Duncan: On a point of order, Mr. Deputy Speaker. I think that there is about to be a Division in the House.
Mr.Deputy Speaker: The hon. Gentleman is right: we appear to have a Division. However, the Division Bells are not ringing and the screen shows that the Minister of State, Northern Ireland Office, is still speaking in the House. We shall therefore carry on until we hear that a Division is taking place.
Dr.Cable: Thank you, Mr. Deputy Speaker—
Mr. Deputy Speaker: Order. We now have a Division. In the middle ages, the hon. Member for Rutland and Melton (Mr. Duncan) might have been burnt at the stake for that degree of prescience.
5.29 pm
Sitting suspended for a Division in the House.
5.56 pm
On resuming—
Dr. Cable: This debate increasingly resembles a test match at Headingley, but I shall continue for as long as I can. I had got as far as welcoming the debate and the procedures that have been set in place. The legislative framework is evolving rapidly, and post-11 September the world situation has also changed rapidly.
We have been asked to consider the Quadripartite Committee's report on the Government's annual report for 2000, much of which relates to licences issued several years ago. In a sense, this is archaeology rather than scrutiny. That is one reason why I am in favour of contemporary scrutiny of the kind that seems to be emerging in some Select Committees. For example, the hon. Member for South Cambridgeshire (Mr. Lansley) described the type of scrutiny that takes place in the Select Committee of which he is a member.
Before leaving that point, it is worth reading the Quadripartite Committee's conclusion on whether we should progress to a prior scrutiny approach. It suggests a sensible compromise to which the Minister may be able to respond positively. The report says that
"when we examine the arguments put forward by the Government to support their rejection of our predecessors' proposals for prior parliamentary scrutiny of certain licence applications we find many of them to be either ill-founded or exaggerated. We recommend that the Government come forward with their proposals for an experimental scheme for prior scrutiny so that their concerns can be tested against experience."
The debate rests on the possibility of having such an experimental scheme.
My other introductory remark will explain where I am coming from. I am in the unusual position of having progressed from gamekeeper to poacher on the issue of export control for armaments. I spent a period in the 1970s in the diplomatic service signing off hundreds of millions of pounds of arms exports to Latin American dictators of varying degrees of venality and brutality. That experience left me with a strong impression of the lack of control and scrutiny. There was a forceful Great Britain Ltd. approach in the Foreign and Commonwealth Office, the Department of Trade and Industry and the Ministry of Defence, and very little restraint from any other side. In fact, the only real restraint was from the Treasury, which was under Lord Healey, who would argue from time to time that the policy was expensive for the British taxpayer because of the hidden subsidies in the Export Credits Guarantee Department. None the less, there were tremendous pressures to sell.
Things have clearly moved on. We have a more sophisticated system of control and scrutiny but, whatever the formal arrangements within it, it shows a basic lack of common sense. A minor item caught my eye when I read the report—the details about British export licences for sales of armaments to the Channel Islands. I wondered what was going through officials' minds about such matters. To take a tick-box approach, there is no torture, no civil war between Guernsey and Jersey and no threat of military action. The area clearly passes all or most of the criteria. Why, however, are the islands importing large numbers of sub-machine-guns, major components for combat aircraft and armoured
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cars? What are they doing with them? Sub-machine-guns are not needed for the Jersey flower festival, as the chances of being invaded by France are zero. Why is such action being taken?
The obvious common-sense explanation is that a process of evasion is taking place, either of the export control regime or of the financial arrangements governing money. At the very least, a certain amount of critical intelligence should be applied and questions should be asked about why such action is taking place. I accept that that is a minor example, but it is one of the problems in the system.
I come now to some of the major issues that came to the surface in the Quadripartite Committee's report. Some of the big issues have already been dealt with, such as incorporation. I shall not repeat the consolidated criteria, but just dwell on the development criteria and its particular application in Tanzania. It is an interesting case study and one that has many loose ends. In many ways, the transaction was small, given that it was a £28 million contract. However, in relation to Tanzania, that is a big sum; it is about half the total amount of annual debt relief granted to heavily indebted poor countries.
Furthermore, there are unsatisfactory aspects to that project, in terms of process and substance. Construction was started well before the licence was granted under an unusual F680 procedure. The matter deserves further consideration. The Secretary of State for International Development publicly signalled her opposition to the project, even to the extent of cutting off aid to Tanzania while other Departments were actively promoting it. Two major multilateral financial institutions, the International Monetary Fund and the World Bank, clearly said that it was not developmentally sound and that equally valuable equipment could be obtained for about an eighth of the price.
In some ways, that is water under the bridge, but we must bear in mind the loose ends. The Quadripartite Committee said that the Government had promised a cost-benefit study on the project, but that has not yet been published. Where is it? What about the International Civil Aviation Organisation study that was undertaken to evaluate whether the project was developmentally useful? The Department for International Development has copies of it, but the study has never been released. Why has it not been released? When will it be released?
There is an interesting postscript to the story. After the British BAE Systems apparatus was installed, the Tanzanians soon discovered that it was inappropriate and they have subsequently ordered a separate air traffic control system from the European Union through European aid finance at a fraction of the cost. It is now being installed on top of the British system. In many ways, this case was a development disaster and there is still a good deal of explaining to do.
I am aware of the fact that there may be another Division in the House and I want to allow time for the hon. Member for Rutland and Melton (Mr. Duncan) to speak and for the Minister to reply. However, I want to raise the issue that was effectively pursued by the hon. Member for Brent, North (Mr. Gardiner). It concerned the new environment in which we operate. There is a heightened awareness of terrorism, particularly the problems of rogue states, and how our export control

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system should adapt to deal with that situation. Instinctively, I should have thought that we should be heading for an environment that is more selective, restrictive and suspicious in the way that the hon. Gentleman implied. However, I have the sense—if I am wrong I am sure that the Minister will correct me—that, in practice, our system has become liberalised in some key respects. There are 18 countries—32 categories—that are now able to access arms from the UK in a less restrictive environment than used to be the case. I am talking about quite sophisticated kit: short-range missiles, air combat aircraft and tanks.
Some of the countries involved would raise eyebrows in any circumstances. First, there are the former Soviet Union central Asian republics, such as Turkmenistan and Uzbekistan. Many of those countries—well, I think that there are only five in total—are still ruled by people who were installed by Brezhnev and who still operate their countries using the same principles that were used to run the former Soviet Union. Such regimes are wholly repressive and, in the long run, potentially rather unstable. Supplying arms to such countries, particularly in the present environment, seems questionable.
Secondly, there is Pakistan. I appreciate the sensitivity of the issue and the importance of giving Pakistan's Government some support through aid, trade and other means. However, it seems dangerous to supply Pakistan's military forces, which have been heavily penetrated by extremists, with sophisticated military equipment. The same logic applies to Saudi Arabia.
Is it the case that, since we became much more aware of the problems of terrorism, what seems to be liberalisation has indeed occurred? I reinforce the point made by the hon. Member for Brent, North about end use. The countries that have received British arms in the past few years include Yemen and Ukraine. Ukraine is notoriously and utterly corrupt and chaotic, in terms of its central Government, and has long been part of the Iraqi arms supply chain. Yet it has been receiving British military equipment. It is hardly surprising if such equipment ends up in Iraq and comparable countries.
To give other Members an opportunity to reply, I will terminate my remarks shortly. I return to what seems to be the central issue. Although this debate is valuable and it is useful to go back through the records of what happened in years past, we need a more contemporaneous system of scrutiny. I hope that the Minister will respond positively to the suggestion of adopting at least an experimental system of prior scrutiny in the case of some of the major licence applications.
Mr. Peter Pike (in the Chair): Before I call the next speaker, I want to point out that, unless there is another Division in the House, we will conclude the debate at 6.37. If there is another Division, the position will change. I also remind Members that I am not to be referred to as Mr. Deputy Speaker; I am Mr. Pike.
6.7 pm
Mr. Alan Duncan: Thank you, Mr. Pike.
This is an important and timely debate, because, with the current conflict in Iraq, along with a host of other conflicts in the world, the responsible export of arms and
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controls to keep them out of the hands of unscrupulous regimes and groups are topics that assume an ever greater significance. There have been some well-informed contributions from my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) and the hon. Members for Kingswood (Mr. Berry) and for Brent, North (Mr. Gardiner).
I take this opportunity to acknowledge the hard work of the Committee in producing the report, which tackles a complex subject about which there are rarely black-and-white or cut-and-dried judgments to be made. It is a matter of making an imperfect system work as well as possible. Obviously, the annual report that the Committee discussed preceded the Export Control Act, which itself replaced a raft of older laws and orders. It is important to consider the annual report in the light of what has occurred since, as the Committee did. In some ways the trouble with that Act is that it authorises most things through secondary legislation. We must watch that secondary legislation with care, because it will determine whether the Act is effective. We welcome the Government's reaffirmation of their promise, in response to Committee recommendation (c), that they will give the Committee the opportunity to consider the secondary legislation in draft form.
We recognise the importance of responsible defence exports to legitimate Governments for their defence requirements, and the importance of the defence industry to our domestic economy. A strong indigenous defence industrial base is important for national security and, of course, for jobs. Indeed, the UK possesses one of the largest defence industry sectors in Europe. By and large, our defence companies operate responsibly, but transparency and accountability are naturally vital for public approval to be earned and sustained. It is important that the export of arms should be as palatable as possible, which is why Conservative Members support a register of licensed UK arms dealers.
I must be briefer in my comments than the subject deserves, but there are a few areas that I want to cover quickly. The report and the Government's response cover many issues, some rather broader than others. They examine the format of the annual report, the structure of the licensing system, the central issues of accountability, prior approval, the criteria used and the need for the regional stability of areas to which goods are exported. There are also more mundane but equally important matters such as delays in the processing of licence applications and the administrative efficiency of the export control organisation.
The annual report is extremely detailed. We welcome the Government's commitment to the openness signified by the reports, as in recommendations (1) and (n), and their willingness to discuss the report's content with organisations such as Saferworld. External feedback and participation, as in recommendation (d), are extremely important. Although there are calls for its details to be increased, having waded through the document, I have some sympathy with those who are concerned that it is already beginning to look like a telephone directory.
In some cases, however, as touched on in recommendation (I), tables of dual use items could be useful, and I would welcome the Minister's suggestions on how that information might be made available without compromising the cost and the accessibility of

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the annual report. Perhaps there are ways in which the information might be made available simply to the Committee in its deliberations. A balance must be struck between providing the Committee with too much and too little information. In that respect, has the Foreign Secretary decided whether to provide the Committee, in confidence, with the detailed calculations behind the licensing decision for the air traffic control system exported to Tanzania, as in paragraph (t) of the report's conclusions.
A balance must also be struck between proper scrutiny of the licensing system and the damage caused to industry by unnecessary licensing delays. Contracts and jobs can be lost through unnecessary administrative delays in processing licensing applications. Paragraphs (n) and (o) of the report suggest, and the Government appear to concur, that the efficiency of the export control organisation leaves much to be desired. While care must always be taken with statistics, especially given the backlog of applications, can the Minister give us the average figures for the number of new applications for all licences, not simply standard individual export licences processed within the target period mentioned?
The consolidated export licensing criteria, helpfully reproduced in appendix (f) of the annual report, are largely well drawn. The bottom line is that defence exports are legitimate when they are not to be used for internal repression or international aggression. Considerations such as regional stability and developmental progress are also important, but a list of criteria can only be a guideline. I am therefore pleased that the Committee and the Government reaffirm that each case must be judged on its own merits. However, I have some concerns about references to precedents being set by the Foreign Secretary's decisions, and officials then being able to use them to judge other cases. It is impractical for a ministerial decision to be made in every case, but in highly sensitive potential conflict areas, ministerial involvement is a requirement in every case. Particular care is required with exports to countries such as India, Pakistan and Israel, as in recommendations (e) to (h). Those countries all have legitimate defence needs, but there is also a risk of their breaching criteria 3 or 4.
I agree with the report's questioning whether the Kashmir situation did not fully engage criterion 4. The report also mentions end-use monitoring in the case of Sri Lanka and Zambia. What end-use monitoring systems are in place in Israel, India and Pakistan to monitor not only the end use of any weapons exported, but also that of dual-use components? There is also much debate about the concept of prior approval. Sweden and the United States are the only two countries that operate prior parliamentary scrutiny. Does the Minister agree that the introduction of such a procedure could risk drawing the Committee into what is more properly an Executive function? It could also risk creating even more delays in the licensing process, which would cost UK companies exports and competitiveness. That would have declaration of interest implications for our Parliament. We make a distinction between hon. Members of this House who have Executive responsibility and those who do not. If there is a blurred
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area in which massive arms exports could be influenced by the decision of a Back-Bench Committee, that would have a bearing. I raise the matter as a question, not as a conclusion.
Mr. Berry: May I briefly state again that the Committee and its members have never suggested that they should share in the Executive responsibility? A similar example of involvement would be that of the Foreign Affairs Committee, which gave prior scrutiny to the ministerial position taken at the Nice conference some years ago. There is no question of our taking any part of that Executive responsibility.
Mr. Duncan: I accept what the hon. Gentleman says. In that case it would appear to be properly defined and described as prior scrutiny and not prior approval by his Committee. I appreciate the distinction that he has drawn; it is important that that should be understood. I do not suggest for a moment that retrospective approval and scrutiny is ideal. However, the system of prior approval—better described as prior scrutiny—would have drawbacks. What proposals do the Government intend to advance in that area, given their "ethical commitment" to doing so?
Another matter for debate is the Government's manifesto commitment to finding ways to apply the Act to UK passport holders dealing in arms outside the UK—the extra-territorial exercise of authority through secondary legislation. We have yet to see the Government's detailed proposals. What assessment has the Minister made of the enforceability of such a policy? Does he believe that it would be possible to detect breaches, and then gather sufficient evidence to proceed in such circumstances? What sovereign authority does he think we have over such matters? What progress has been made in ensuring a level playing field across the EU in terms of individual countries' export criteria being the same, notwithstanding the EU consolidated criteria referred to earlier? As usual, if we play by the rules, does he think that the French will too?
The publication of the annual reports and the excellent work done by the Quadripartite Committee in examining them, and the wider export controls system, is vital to creating the openness increasingly, and rightly, demanded in these areas by the public. I could say much more, and I would like to mention other issues covered in the report, but time dictates otherwise.
With increased threats to international security, increased instability and the growing problem of failed states degenerating into violent conflict, it is more important than ever to keep tight controls over the weapons that can fan the flames of conflict while allowing the legitimate trade supplying the defence needs of responsible and respectable Governments to proceed; balancing the two will always prove a delicate judgment. I hope that the Minister will strive to address all the points that have been raised.
6.18 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs(Mr. Mike O'Brien): This has been a good debate on an enormously important issue, in which Parliament takes a great interest, and which the Government take extremely

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seriously. Given the present circumstances, I hardly need to point out the importance that the Government attach to tackling the threat posed by the proliferation of weapons of mass destruction—or of any weapons.
We have to be aware that tyrannical regimes might take control of particular types of weapons and turn them on us, or threaten us or our interests with them. What is perhaps less well understood is the central importance that effective export controls play in this work. I shall deal with some of the individual points that have been raised during the course of the debate. I should also like to set out the broad principles under which we will determine these important and difficult decisions.
I shall deal first with a couple of specific issues before getting on to the broader issues such as price scrutiny and incorporation. One apt case was raised by my hon. Friend the Member for Brent, North (Mr. Gardiner) who spoke about media reports about the discovery of rocket-propelled grenades in a bunker near Basra in a box with a UK company's name on it. I cannot comment in detail on that finding until we know all the facts. The company has told us that it makes only such items as flares and smoke grenades and has never sold anything to Iraq. Its best guess—its guess, rather than ours at this stage—is that the boxes once contained smoke grenades, which were sold to Kuwait in 1985, and that they were taken back to Iraq following the invasion in 1990 and 1991. If my hon. Friend has any new facts in relation to the matter, we will look at them with great care.
Mr. Gardiner: I understand that Wallop has denied any involvement. I hesitate to quote Mandy Rice-Davies, but as she would have put it, "It would say that, wouldn't it?" Wallop is well practised in the art of denial. Does my hon. Friend remember that in 1991 the company denied links with Iraq when documents found in the Iraqi embassy in London allegedly implicated it in the supply of munitions to Iraq during the Iran-Iraq war?
Mr. O'Brien: Those are serious matters that we will examine with a great deal of care. As I indicated to my hon. Friend in the break we took for the Divisions, we must be sure of the facts before Ministers can comment any further.
I should like to deal with another serious issue raised by my hon. Friend the Member for Kingswood (Mr. Berry). The Government fully support the BAE Systems bid to sell Hawk aircraft to India. That has been made clear by the Prime Minister and is in line with the Government's commitment to support legitimate defence exports. We understand that the proposed Hawks would be used by the Indian air force for training purposes only. However, all export licences will continue to be considered rigorously on a case-by-case basis against the consolidated criteria.
My hon. Friend asked whether any decisions had been made. In September 2001, a licence was issued for a range of components and production equipment to enable the local assembly and later production under licence of the Hawk in India. The licence does not permit the export of fully assembled and operational aircraft. I am confident that it is fully consistent with the consolidated EU and national arms exports licensing criteria.
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In terms of the operational role of the Hawk, under the proposed deal the first aircraft would not be delivered for some years. These aircraft are intended solely for training purposes, although they would have limited combat capability as they are fitted with the necessary systems and interfaces to allow them to carry a range of weapons for combat training. The Indian air force already has a range of other modern aircraft that are much more suitable for combat purposes, including the Mirage 2000 and the SU30.
Reference was made to the specific case of Channel Islands exports, on which I have some advice. There were several applications in respect of the Channel Islands, but I gather that some of the more interesting ones were for the private collection of antiques, many of which will be covered by the licensing procedure. There were also some issues relating to aircraft, and some law enforcement sales were apparently approved.
The hon. Member for Twickenham (Dr. Cable) referred to central Asian states and Gulf states that have poor human rights records. We do not intend that there should be any liberalisation of our policy because of the war against terrorism, but I assure hon. Members that criterion 2 of the code of conduct, which relates to internal repression, is fully applied when open export licences to central Asian states are considered. We will want to be sure that there is no clear risk that exports would be used for internal repression. It is also important to remember that the exports authorised under open licences are not necessarily destined for that country's armed or security forces.
My hon. Friend the Member for Kingswood talked about incorporation, an issue that the hon. Member for South Cambridgeshire (Mr. Lansley) also raised. The statement made to the House on 8 July 2002 clarified export licensing policy, but it did not change the export licensing criteria—nor did the statement present a means of bypassing the criteria. On the contrary, the incorporation statement refers to other factors, which must be taken into account when it is known that goods are to be exported to a state that will incorporate them into another product for onward export.
As the hon. Member for South Cambridgeshire said, the incorporation statement allows Ministers properly to take into account the implications of a contract for the United Kingdom's commercial relationships, as well as for our strategic, security and defence interests and defence industrial base when making a decision. However, any licence application is considered against all the other usual criteria. On the particular example that the hon. Gentleman raised about the US, it is not for the benefit of the US that the Government clarified their position on incorporation; that is very much in our own national interest.
The UK's relationship with the US is fundamental to our national security, as well as to our ability to play a strong and effective role in the world. Defence collaboration with the US is also key to maintaining a strong defence industrial capability. In itself, that is a strategic asset, which enables us to provide high-quality equipment to our armed forces at a lower cost to the taxpayer. So we took the view that, because the criteria of the US was similar to our own—I shall return to the particular issue raised by my hon. Friend the Member for Kingswood in a moment—and because of the close relationship between our two countries, it was possible

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to take all that into account in making a decision, although I repeat that that does not change the nature of the criteria.
My hon. Friend the Member for Kingswood and others raised the issue of prior parliamentary scrutiny. I agree with the broad view set out by the hon. Member for South Cambridgeshire that it is the role of Ministers to make decisions, for which they are accountable to Parliament, and it is right that they should be challenged on those decisions and made to justify them. That is the role that a Minister undertakes when he accepts the post, but I am pleased to say that the Government have a reasonably good relationship—I hope a very good one—with the Quadripartite Committee. Indeed, I am not aware of any Government who spend more time accounting to Parliament for their export licensing operations, and that is as it should be. That demonstrates our commitment to accountability and transparency in the export licensing process. That does not mean that it is right for the Quadripartite Committee to play a role in scrutinising individual export licence applications before the Government have taken their decision on them.
The Government have made it clear that the form of prior parliamentary scrutiny proposed by the previous Quadripartite Committee would not be right in principle. It could not be made to work in practice without having a materially adverse impact on the efficiency and effectiveness of the export licensing process. If I remember rightly, my hon. Friend the Member for Kingswood and the hon. Member for Rutland and Melton (Mr. Duncan) both raised concerns about the delays and time taken for some decisions. If we prolong the period even further, we must consider the impact that that would have on the efficiency and effectiveness of the process.
The Government have the responsibility of ensuring that the licensing system delivers quick and accurate decisions to our industry. However, we are still considering how best we can increase still further the accountability and transparency of the current system in the context of Parliament. As a sign of our commitment, I am happy to offer confidential policy briefings to the Quadripartite Committee.
My hon. Friend the Member for Kingswood also asked about our policy on end-use monitoring. We refuse applications in which there is a clear risk of the end use being in breach of the criteria. He referred to the example of Israel and the chassis. We do not employ a defence attaché solely to check on the equipment that we have sold to the Israelis. He has a series of roles, of which that is only one, and he has a wide range of duties. He must establish effective liaison with the Israeli defence forces on issues such as their actions on the west bank—my hon. Friend will remember the case of Ian Hook and others in which we needed effective information about what happened.
The roles of the limited numbers of staff that we have in Israel and the occupied territories are diverse. One role is to report any breaches that they see by Israel, and a report was made about the somewhat ancient chassis. None the less, we still need to resolve the issue with the
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Israelis, and I hope that we will reach a situation in which they comply with the guarantees that they have given.
Mr. Berry: Although I am full of admiration for the individual who spotted the vehicles, we have been told specifically—I gave the quotations in my speech—that British staff in Tel Aviv do not undertake physical checks on end use. I only pointed that out because it is contrary to what we have just heard from the Minister, and to other statements that they sometimes carry out checks. I seek no more than clarification of the end-use monitoring policy.
Mr. O'Brien: I do not want to suggest that we employ someone specifically to carry out end-use monitoring and nothing else. We give a range of tasks to those who are employed in our embassies and consulates and see what they can do in the available time. End-use monitoring is one task, on a long list, that staff are sometimes able to undertake. However, if I said to my hon. Friend that their job was to carry out end-use monitoring in a broad and consistent way so that we catch all breaches, I would be misleading him. I do not want to do that.
I am saying only that there is a limited amount of time in which the staff are able to do certain things, and in this case they were able to identify a particular example. If there are other examples in other countries, they will undoubtedly be reported, and we carry out some inquiries, as was indicated in confidence to the Quadripartite Committee on Monday. We often impose certain re-export conditions, and much informal checking is carried out by posts. It would not be useful to have a formal requirement for end-use monitoring, because if we did that on a formal basis everywhere, it would consume a vast amount of resources. We must have a sense of realism about this. It is possible to do things on a limited basis in certain specific circumstances, but it is not possible to give my hon. Friend the blanket reassurance that he sought—that we shall carry out end-use monitoring everywhere.
Mr. Gardiner: Will the Minister give way?
Mr. O'Brien: I will give way briefly, although I have only two minutes remaining.
Mr. Gardiner: Will the Minister accept that that is not what my hon. Friend the Member for Kingswood (Mr. Berry) and I asked him to do? We requested him to put in place a system of end-use monitoring, such as that in the United States, in which the focus of attention—it is not a blanket check—is on those deals in which there is most likely to be a problem. The USA has shown that a quarter of the deals that they then check are subject to complaint.
Mr. O'Brien: I am grateful for that clarification of the position adopted. It would be useful if the Quadripartite Committee could give further clarification as to exactly what it wants, because it seems to me that the confusion lies not in the Government's policy, which is clear, but in the request. However, those matters can be discussed at length in due course.

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I am aware that hon. Members have raised a number of other issues, and, given the limited time available, I shall have to respond to some of them in writing.
We seek to speed up the whole process of considering licensing applications. We aim to reduce the decision-making process to a reasonable period of time, and good results have recently been achieved in that area by the Foreign and Commonwealth Office and the Department of Trade and Industry. I should like to congratulate staff
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in the Foreign and Commonwealth Office on the speed at which decisions are being made, without any loss of quality. The Government's aim will continue to be to get export licensing decisions right every time—consistent with our stated policy—and to do that quickly and fairly. We take that aim seriously, and I can assure the House that we will continue to do so.
Question put and agreed to.
Adjourned accordingly at twenty-four minutes to Seven o'clock.