Export Controls

HC Deb 06 November 2003 vol 412 cc337-80WH

[Relevant documents: First joint report from the Defence, Foreign Affairs, International Development and Trade and Industry Committees, Session 2002–03, on the Government's proposals for secondary legislation under the Export Control Act 2002, HC 620, and the Government's response thereto, Cm 5988; and the second joint report, Session 2002–03, Strategic Export Controls—Annual Report for 2001, Licensing Policy and Policy Scrutiny, HC 474, and the Government's response thereto, Cm 5943.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Charlotte Atkins.]

2.30 pm

Mr. Roger Berry (Kingswood)

It is a pleasure to open this debate on the latest two reports of the Quadripartite Committee.

I am aware that the Select Committee on International Development meets at 3.15 pm, and that some members of that Committee want to speak in this debate. I will therefore try to be brief and speak for only 15 or 20 minutes to enable colleagues to contribute to the debate before they have to leave. If there is time later in the debate, I might, with permission, be able to finish what I had planned to say.

I thank my colleagues on the Committee for their efforts in producing yet another unanimous report. I also thank our Clerks for their excellent drafting and advice, and all those who gave written and oral evidence to the Committee, especially Saferworld, Oxfam, the United Kingdom working group on arms, the Defence Manufacturers Association, the Secretary of State for Trade and Industry and the Foreign Secretary.

The Committee again congratulates the Government on the significant progress that they have made in recent years in many areas of arms export control, including the development of consolidated criteria, the introduction of the ban on the export of torture equipment, the Landmines Act 1998, the Export Control Act 2002, and their annual reports, which improve and become more helpful every year and have facilitated greater transparency and accountability.

On behalf of the Committee, I acknowledge yet again the significant progress that has been made in recent years in opening up this important debate on arms export control policy. However, serious issues remain, which the Committee and others outside this place would like the Government to address, such as: licensed production overseas; prior parliamentary scrutiny; the implications for licence decisions of the "war on terror"; the application of end-use conditions; and brokering and trafficking.

I doubt that anyone would argue with the statement that the need for rigorous control of the international arms trade has never been greater. Those who have read the recent report published by Oxfam and Amnesty International, "Shattered Lives", will have had that need reconfirmed in their minds. Every year, more than 500,000 people are killed, and thousands are maimed and forced from their homes. We want to be assured that our Government are doing everything possible to end that situation.

Mr. Gerald Howarth (Aldershot)

I recognise the case that Oxfam and others are making, but the hon. Gentleman should be clear that we already have a rigorous arms export control regime, and that our defence exporters are responsible people. When he links our attempts to engage in export control and the wilful distribution of low-level weapons that cause mayhem in other countries, the public might think that he is connecting that trade with British exporters, when there is little evidence that any British exporter is involved.

Mr. Berry

The hon. Gentleman well knows my views on the matter. Not only do I recognise the legitimate business activities of UK companies that export arms lawfully, but I have argued, and will repeat today, that the UK has the toughest arms export control regime in Europe. Indeed, I have just congratulated the Government on that very policy. However, I return to the point that no one, having read the report published by Oxfam and Amnesty International, can seriously disagree with the proposition that, given the slaughter and maiming that occur as a result of the use of unlawful weapons, we should have greater control over the international arms trade.

There are more selfish reasons why we should control the arms trade rigorously. When a country is engaged in conflict, it is natural to ask who supplied the other side with the weapons. When a country or a group of countries is concerned about the threat of terrorism, and the fight against it, it is perfectly legitimate to ask who is supplying arms to the terrorists. Of course we want an assurance that our Government are doing everything possible to ensure that arms do not get to terrorists in situations in which the UK Government is able to exercise controls. I do not apologise for saying that any sensible person would wish to see a rigorous regime of international arms trade control.

Mr. Howarth

The hon. Gentleman has missed my point. We know that Britain is the second largest exporter of defence equipment in the world—our major companies are represented in constituencies all over the United Kingdom. I ask him to confirm that he recognises not only that the Government are doing their bit but that our arms exporters are responsible people, who share his concerns and mine.

Mr. Berry

I have already referred to the Defence Manufacturers Association and expressed gratitude for its evidence to the Committee. I have constituents who work for BAE Systems, Rolls-Royce and other companies with business interests in the arms trade. I do not criticise lawful arms exports, nor would I argue—I never have done—against the arms trade. All I am saying is that because of the problems in conflict zones around the world, and because of the war against terrorism, we need to address the issue very seriously. I hope that the hon. Gentleman will allow me to continue and will not seek to put words in my mouth.

United Kingdom legislation regulates only the export of arms from the UK. There is nothing to prevent UK individuals or companies from exporting arms from some other country. It would be no surprise if I were to say that the first thing that someone might consider, if he thought that he would not get a licence to export arms from the UK, would be to try to do it from somewhere else. That is what arms brokers do. There are many examples, but I shall not bore hon. Members with more than the one that is frequently cited: the British company, Mil-Tec, which was linked with weapons shipments to Hutu militias responsible for the 1994 Rwanda massacre. Such activities remain perfectly legal under UK law if the weapons do not touch British soil.

The Quadripartite Committee's report on the draft Export Control Bill, published in May 2001, concluded that there are compelling arguments in favour of extending controls on brokering and trafficking to activities outside the country", and recommended unanimously that controls be introduced on the activities of UK citizens and companies wherever they take place. The Government seemed to arrive at the same conclusion before the 2001 general election, because there was a clear commitment in the manifesto: 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. We used the phrase, "wherever they take place", whereas the Labour party manifesto used the phrase, "wherever they are located". I think that they mean the same thing, but others may disagree.

I welcome many things in the Export Control Act, as does the Committee, and in particular section 4, which for the first time gives the Government the power to impose controls on trafficking and brokering conducted by UK citizens anywhere in the world. That is a welcome and long overdue provision and should be applauded. Unfortunately, however, the Government's proposals show that they believe that the actions of UK citizens overseas should be regulated only where they relate to trade either in long-range missiles or in torture equipment, or to an embargoed destination. For trade in other controlled equipment, a licence will therefore be required only if the trafficking or brokering takes place in the UK.

That is a serious weakness in the Government's proposals under the Export Control Act. Such controls would not even attempt, for example, to prevent UK arms brokers overseas from transferring weapons such as machine guns to the war-torn Ivory Coast, to FARC rebels in Colombia or to the Lord's Resistance Army in Uganda. There is no way that the Government's proposals would influence such transactions, nor would they control British arms dealers overseas who wanted to supply surface-to-air missiles, for example, to Governments who have been accused of sponsoring terrorism—such as, some would say, Syria, Lebanon and Saudi Arabia.

Those are examples of how the Government's proposals, welcome though they are, do not go far enough. It is the Committee's view that if national controls alone are applied to trade in arms, those involved in repugnant aspects of the arms trade—I make this point for the hon. Member for Aldershot (Mr. Howarth)—will simply go abroad. That is why extraterritorial controls are necessary. The Committee argues that it would be a missed opportunity if the Government failed to regulate all UK citizens and companies involved in overseas trafficking and brokering activities that would not be granted a licence in the UK if conducted in the UK.

Mr. David Drew (Stroud)

Sometimes that can have a direct effect: for example, I have for many years been pursuing our licensing of arms exports to Morocco. In itself, Morocco will never cause us any particular problems, but it has illegally annexed Western Sahara. It is therefore right to ask whether any arms that are exported to Morocco can be used to subjugate Western Sahara. That is a direct example of why we need to be tough in controlling export licences.

Mr. Berry

I agree.

I should like briefly to address the Government's concerns about the Committee's position, so as to allow time to the Chairman of the International Development Committee, the hon. Member for Banbury (Tony Baldry), before he has to go. The Government have argued several things, one of which is that extraterritorial controls, on small arms for example, would be unenforceable owing to the lack of an international agreement, and that an attempt to enforce them would, under the circumstances, expose the futility of such a unilateral approach and undermine the credibility of our strategic export…control regime". That was in their response to recommendation 7.

I have been impressed by the campaign run by Amnesty International and Oxfam in support of an international arms trade treaty. If the Minister wants to declare full Government support for that, no one in this Chamber will be happier than me. However, until we have an international arms trade treaty that addresses the issue, we must do the best we can. Of course, the Government are committed to attempting to enforce extraterritorial controls in relation to long-range missiles, torture equipment and exports to embargoed destinations. Why are the difficulties greater when enforcing extraterritorial controls for small arms? I do not believe that they are.

The United States applies full extraterritorial controls; so do a number of other countries. Do the Government believe that those controls seriously undermine the credibility of the US export control regime? If they do, given that we rightly export arms to the United States, perhaps questions should be asked. To use their own terminology, do they believe that the US approach is "futile"? I do not believe that it is.

It has also been said that it would be "unreasonable" to expect a UK citizen living and working abroad to be aware of UK laws on arms brokering of conventional weapons, small arms and the like to non-embargoed destinations. However, under the Government's own proposals, the same person would be expected to be aware that they would be subject to the new law with regard to the brokering of long-range missiles and their components, torture equipment and exports to UK-embargoed destinations.

I fail to understand how it can be reasonable to assume that UK citizens should be aware of some parts of the new legislation hut not others. With respect, I must say that the Government response is entirely unconvincing. In their response to recommendation 6, the Government went on to say that extraterritorial control would be likely to lead to conflicts of jurisdiction where other countries take a different view to us on individual cases". However, the Government already propose to assert extraterritorial controls on the brokering of torture equipment and on destinations subject to a national embargo. In both cases there is no international consensus.

The concern about the conflict of jurisdiction is also thrown into doubt when we recognise that the Government address such concerns more sensibly in other areas. For example, under of the Anti-terrorism, Crime and Security Act 2001 bribery is a criminal offence under UK law when committed anywhere in the world by a UK citizen. Why is bribery more self-evidently a criminal act than arms dealing without a licence? Arms can kill. The indirect effect of bribery may be the same, but the direct effect certainly is not.

Why is asserting the legal right to prosecute UK citizens abroad when evidence shows that they have committed acts of bribery and corruption not a problem, whereas doing so when it comes to arms deals is? Do the Government seriously believe that it is easier to obtain a successful prosecution for corrupt payments to foreign officials than for unauthorised trafficking overseas? I do not believe that.

Finally, the Government argued that: Extending extra-territorial controls…would spread our licensing and enforcement resources ever more thinly, distracting our efforts from enforcing controls on the activities of greatest concern". They have calculated, however, that the additional costs of their new controls would be £500,000 to £800,000 a year. Those are not large amounts, given our concerns about arms falling into the hands of terrorist organisations.

In the wake of the tragic shootings in Birmingham at the start of the year, the Government announced their intention to allocate significant resources to prevent the illicit trafficking of weapons in the UK. They have identified countries in central and eastern Europe as significant sources of such weapons. Those countries have also been identified as the sources of illicit weapons that are exported to conflict zones around the world.

The information and co-operation needed to prevent illicit arms entering the UK can and should be used to enforce controls on arms brokering overseas. Yesterday, the all-party group on gun crime published a significant report. One of its recommendations, which I believe was unanimous, was that part of the response to the gun crime problem in the UK should be full extraterritorial control on arms brokers.

I concentrate on this issue not because other issues are not important but because I passionately believe that the Government have yet to get it right. The Committee's unanimous view is that the Government should fulfil their election manifesto commitment to tackle those who engage in arms brokering and trafficking. I repeat that I very much welcome the significant progress of the proposals for legislation, and 1 hope that no one will interpret my comments as a suggestion that the Government are making anything other than dramatic progress, which is long overdue. However, by failing to tackle brokering, their proposals fail to tackle one of the main causes of suffering and instability around the world, and that is why the issue should be addressed again.

2.51 pm

Tony Baldry (Banbury)

The hon. Member for Kingswood (Mr. Berry) has chaired the Quadripartite Committee with great skill, and managed to steer it to produce an excellent report with unanimous conclusions. It is not easy to bring together four Select Committees with diverse views.

I apologise to you, Mr. Benton, and to the Minister and the Chamber, because the Select Committee on International Development is taking evidence from the Chancellor of the Exchequer and the Secretary of State for International Development this afternoon, so the hon. Member for Putney (Mr. Colman) and I, and other members of the International Development Committee, will have to leave fairly soon to take that evidence. Therefore, I will keep my comments as brief as possible.

On Tuesday, the House debated African development strategies. During that debate, many hon. Members raised concerns about conflict constricting development. The Under-Secretary of State for International Development responded to those concerns at the close of the debate, when he stated that the Government are spending a total of £110 million specifically on conflict management and prevention activities. Much of that amount is spent on UN operations, such as those that took place in the Congo. However, we are also working on security sector reform, reducing the prevalence of small arms and carrying out peace-building work."—[Official Report, 4 November 2003; Vol. 412, c. 767.] I do not doubt that the UK is investing such sums for peacekeeping in Africa, but such spending is often negated by aspects of the UK's defence export control legislation, which hampers international development and allows for the proliferation of small arms in Africa and elsewhere.

Small arms account for nearly all combat deaths in developing countries. In some parts of Africa, every child appears to have an AK45. It is terrifying to hear what the Lord's Resistance Army has been doing in northern Uganda, and what was happening in Sierra Leone before the UN and British forces intervened. Practically every child seemed to have an AK45. Poverty fuels conflict and conflict fuels poverty. Civil wars leave countries poorer, with many more people living in absolute poverty. Almost all the countries that have recently had civil wars are developing countries. Nearly half the countries with the highest defence burden have the lowest indicators of development. Angola and Eritrea, for example, spend more than 20 per cent. of their gross domestic product on the military. Indonesia, the second highest recipient of net overseas aid, spends almost the same sum on its military forces as it receives in development aid. Pakistan's total defence spending consumes a third of its GDP at the same time as its servicing of debt on loans to finance defence purchases rises to 50 per cent.

Overall, some $22 billion a year is spent on arms by countries in Africa, Asia, the middle east and Latin America. That sum would enable those countries to be well on track to meet the millennium development goals by 2015—to achieve primary education for all and to meet the UN's targets to reduce infant and maternal mortality.

Those stark facts are highlighted not by the Quadripartite Committee's report but by "Shattered Lives: The Case for Tough International Arms Control", the report that was recently published by Oxfam and Amnesty International. I know that hon. Members are conscious of the report, much of which reinforces the conclusions and recommendations of the Quadripartite Committee's report.

The Committee has been speaking much the same language as the "Shattered Lives" report. One need only reflect on the Committee's recommendations in 2001 about sustainable development and enforcement of the EU's criterion 8 on arms exports, with respect to the Export Control Act 2002. Given much of the language used by Ministers during its passage—at least by Ministers from the Department for International Development—it is disconcerting that it is still necessary to raise concerns about the likely effectiveness of the 2002 Act and, now, its secondary legislation.

I shall not repeat what I said in the House on Third Reading. I simply say that putting sustainable development in the schedule to the Bill was a start, but was not nearly enough. From my perspective as Chairman of the International Development Committee, the Quadripartite Committee's report supports the case for robust checks on arms brokering and end use, and robust prior scrutiny.

I believe that the Quadripartite Committee's report supports many of the recommendations in "Shattered Lives". The Oxfam and Amnesty International campaign is sensibly seeking the adoption of the UN's arms trade treaty by the time of the 2006 UN review conference on small arms. Such a treaty would be legally binding and would help to ensure that the international community worked together to the same standards to prevent the irresponsible transfer of arms and to seek to prevent violations of international human rights and humanitarian law. The UK should champion such an arms trade treaty.

The Quadripartite Committee's report also demonstrates the need for the Government to take action domestically. It shows the need to create new international instruments to prevent irresponsible arms brokering, transporting and financing, and foreign licensed production, using the arms trade treaty criteria to define and prevent irresponsible transfers; to establish independent mechanisms to bring to justice, without delay, those who perpetrate serious violations of international human rights or humanitarian law, ensuring that such violations are adequately punished and other steps are taken to end impunity; and to enforce existing legislation or create new legislation to control the import, export, transit, production, management and use of all arms.

The standards outlined in the arms trade treaty should be used when taking decisions on national arms exports, ensuring that human rights, international humanitarian law and sustainable development do not suffer as a consequence of commercial pressure. Transparency and oversight should be ensured by the provision of regular and meaningful information to the public about the production, possession and transfer of arms; the reports should be subject to regular review by legislatures and parliaments.

It is therefore of some concern that the Financial Times—a periodical not known for being left-leaning—reported last month, about the measures that we are discussing, that the legislation will fail to include regulations permitting law enforcement agencies to prosecute Britons who sell small arms illegally outside the country. The legislation is also expected to omit other regulations, including a register for UK arms dealers and a requirement that all arms contracts include end-user certification, which would allow British authorities to ensure that dual-use technologies had been used for non-military purposes. Similar regulations are in place in several leading arms-exporting countries, including the US. One of the questions that we need to ask the Government is why we are doing less than the United States in this context? My hon. Friend the Member for Aldershot (Mr. Howarth) accurately observed that the UK is one of the largest defence equipment exporters in the world. The United States' defence exports outstrip ours by a considerable factor. If the United States can feel confident with that legislation, why cannot the United Kingdom?

That approach contrasts sharply with recent international developments on trafficking and brokering activities, including the EU common position on brokering of June 2003, and the statement of understanding on arms brokerage adopted by the Wassenaar arrangement in December 2002. In response to the Committee's report, the Government stated that they remain convinced that the most effective way of preventing the illicit trade in small arms is through multi-lateral action. However, it is slightly difficult to reconcile that statement with the Government's response to the launch of the "Shattered Lives" report.

Let us further consider the secondary legislation. The Government have rejected calls from the Quadripartite Committee to introduce full extraterritorial controls on arms brokering. In response to the Committee's report, they stated: The new controls will criminalise anyone trading, without a licence, in military equipment from the UK or a UK person anywhere trading in 'Restricted Goods' and in arms to embargoed destinations. This latter control should capture many of the circumstances in which arms are transferred to areas of conflict or rogue States. That statement contrasts considerably with the commitments that the Minister made to me during the passage of the Export Control Bill. In a letter dated 21 February 2002, he said: there is no question of the Government going back on its manifesto commitment in this area. Unfortunately, the Government response to the Quadripartite Committee does not support that claim; rather, it suggests a somewhat stunted ambition on the part of the Government to attempt to control brokering.

It is simply not enough to design legislation to capture, in the words of the Government report, "many of the circumstances". That is a very loose line to take. Comprehensive controls are required. The measure will not capture many of the circumstances in which arms are transferred to areas of conflict or rogue states. It will not prevent UK arms brokers overseas from transferring machine guns and helicopters to the Lord's Resistance Army in Uganda, FARC rebels in Colombia or the war-torn Ivory Coast. It will also still be legal for UK dealers to supply surface-to-air missiles to countries whose Governments have been accused of sponsoring terrorism, such as Lebanon, Saudi Arabia and Syria. Unless the secondary legislation is tightened, the risk will remain that arms brokers will carry out activities overseas to sidestep the legislation.

Similarly, the Government made it clear to the Committee that they believe that the proposed legislation would also be likely to lead to conflicts of jurisdiction where other countries take a different view to us on individual cases, and to enforcement difficulties and administrative overload. That is nonsense. Ministers already propose to exert such controls on the brokering of certain torture equipment and arms to destinations subject to a national embargo, so if they can do that there, why not elsewhere? That raises the question whether the Government believe that it will be easier to obtain a prosecution for corrupt payments to foreign officials made overseas than for the unauthorised trafficking in conventional weapons to a non-embargoed destination. I do not understand the logic in that, so I would welcome clarification from the Minister today.

In evidence to the Quadripartite Committee on 3 April, the Secretary of State for Trade and Industry referred to controls where any part of the transaction, including an email, fax or telephone call, takes place in the UK. However, in response to a question about a company being able to enter into a provisional agreement relating to the sale of equipment that it owns in one overseas country to another overseas country before acquiring the licence, the Secretary of State said that a licence would be required only when a commitment was entered into.

On that basis, there is clearly the risk that UK regulations could be avoided by carrying out the marketing and promoting in the UK, while brokering the deal offshore. Such a loophole needs to be closed by the Government, and the most straightforward and effective approach would be to license all arms transfers brokered by UK persons, regardless of their whereabouts. If all transfers are regulated, the control of negotiations becomes redundant.

I alluded to the Minister reaffirming the Government's manifesto commitment on export controls. As the hon. Member for Kingswood, who chairs the Quadripartite Committee, acknowledged, the Labour party's 1997 manifesto contained the commitment to strengthen monitoring of the end-use of defence exports to prevent diversion to third countries and to ensure that exported equipment is used only on the conditions under which the export licence has been granted". The Government have failed to introduce an effective end-use monitoring system. In the past year, several reports have surfaced regarding the diversion of military equipment from third countries into Iraq, and to Jordan, Ukraine, United Arab Emirates and Yemen, all countries to which the Government authorised weapon sales in 2001, a number of which were suspected of being links in the Iraqi military equipment supply chain.

In February it emerged that UK forces had found UK-made equipment in an Iraqi weapons store outside Basra, and Ministry of Defence sources were reported to have said that the find highlighted the threat from the burgeoning black market arms trade across the middle east.

Obviously, that raises a number of questions, yet the Government declare themselves satisfied that existing pre-licensing checks are sufficient to prevent diversion or unauthorised export, and refuse to institute a system of end-use monitoring. That leads me to the subject of prior parliamentary scrutiny.

The Quadripartite Committee has long called for the introduction of prior parliamentary scrutiny, but Ministers continue to reject it. The Committee's report recommends that the Government come up with proposals for a system of prior parliamentary scrutiny of export licence applications by a Select Committee or Committees of the House. I agree. That same letter of 21 February said that the Government believe that the system of prior parliamentary scrutiny of individual export licence applications cannot be made to work without having a materially adverse impact on the efficiency and effectiveness of the export licensing process, and risks making Parliament complicit in the eventual licensing decision.

Ministers are clearly seeking to say that there is some sort of constitutional impediment to proper prior scrutiny. I do not think so—there is no constitutional impediment that would prevent Parliament from legislating to give itself a role in scrutinising arms export licences, it is simply that Ministers do not wish to enable Parliament to have a greater say or role in this activity.

The impact of small arms on the lack of development in many parts of the world, especially in several parts of Africa, is self-evident to anyone who reads a newspaper. If we are to have an Export Control Act, it is essential that it is effective, as if it is not, it is not worth having. The International Development Committee will shortly be considering the impact of small arms on migration. I hope that the Quadripartite Committee in its next work will want to consider the calls for the strongest possible United Nations arms trade treaty by 2006.

3.7 pm

Sir John Stanley (Tonbridge and Mailing)

Let me say at the outset that although the Government's policy on arms export control still has some material shortcomings, which I will refer to, the present Government since 1997 have made the most enormous strides in achieving a quantum leap in accountability, openness and transparency to the House, and therefore to the wider public, on the issue of arms exports.

Indeed, I do not believe there is any Government, probably in the world, who produce a document that in terms of comprehensiveness and detail is equivalent to the United Kingdom strategic export controls annual report. The Government should be commended for producing such a document, and within the word "Government" I most emphatically include a commendation of the civil servants in the four Departments who put in a great deal of effort to provide the House, and therefore the wider public, with the information in the annual report.

I hope that this does not sound self-serving as far as the Quadripartite Committee is concerned, but having been privileged to serve on the Committee since its inception, I believe that the progress that has been made in achieving greater parliamentary accountability and public accountability on arms exports owes quite a bit to the intensive work that the Committee has done in scrutinising the Government's policy and pressing for additional improvements. If it has made a significant contribution, that has been due in no small measure to the excellent chairmanship of Ted Rowlands, the former hon. Member for Merthyr Tydfil, in the previous Parliament, and the equally excellent chairmanship of the hon. Member for Kingswood (Mr. Berry) in this Parliament.

Those are the bouquets. I now have one or two brambles. They are significant brambles that were highlighted by the hon. Member for Kingswood and by my hon. Friend the Member for Banbury (Tony Baldry). I want to make my own comments on the issue of prior parliamentary scrutiny. I was among a small group of members of the Committee in the last Parliament who visited Sweden and the United States, the two countries that for some years have had a system of prior parliamentary scrutiny of their arms exports. Sweden is a fellow EU member country with a not insignificant arms export business, certainly historically, and the United States is far and away the most significant arms exporter in the world. Our inescapable conclusion from those two visits was that it is definitely possible to operate a prior parliamentary scrutiny system without improperly curtailing the freedom of ministerial decision making and without adversely affecting the competitiveness of the arms export business of those two countries.

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)

I do not want to interrupt the right hon. Gentleman, but did the report not conclude that the system in operation in Sweden could not readily be translated into a UK parliamentary context"? Did it not also highlight four weaknesses of the American system, without coming up with four solutions?

Sir John Stanley

I certainly acknowledge that every country's parliamentary system and the interface between the Executive and the legislature in each country will be different. If we produced our own system of prior parliamentary scrutiny, we would no doubt make it compatible with the way in which we operate here. That does not detract from my main point, that both those countries, in the context of their parliamentary and congressional systems, have been able to run a system of prior parliamentary scrutiny without the dire impact that the Government have consistently and mistakenly forecast would happen if such a scrutiny system were operated here.

If the Government were prepared to show more flexibility, it would be possible to operate a satisfactory system of prior parliamentary scrutiny here. An accommodation could be reached if they were less stony-faced and more willing to accept some give and take and to allow the Quadripartite Committee to proceed on a selective basis. We are looking only at a selective basis in relation to major export contracts and contracts that are particularly sensitive in terms of foreign policy. Once again, I urge the Government to take a fresh look at this, to show more flexibility and to try to work with the Committee to see whether we can reach a middle-ground position that would enable some prior parliamentary scrutiny to take place.

Mr. Martin O'Neill (Ochil)

The right hon. Gentleman and I visited Sweden and the United States. In both cases, the relationship between the legislature and the Executive is different from ours. Our Executive holds powers that are not quite unaccountable but certainly of an inaccessible character in relation to the legislature. It is on that basis that they are not prepared to give anything up—hence the asinine but well-intentioned intervention from the Minister. The Executive and their creatures in Government will not concede one iota on giving the legislature an opportunity to second-guess. That is the fundamental constitutional point with which we, as a group of legislators confronting the Executive, must contend.

Sir John Stanley

I will leave to the hon. Gentleman the choice terminology of criticism that he made of those on his own Front Bench. I endorse the broad thrust of what he said, but I hope that we can achieve some accommodation. In certain areas, the Government have made important progress in prior consultation. They have made important changes in relation to the prior scrutiny of legislation and of major decisions.

On 18 March, the Government gave the British Parliament and the House of Commons the opportunity to be consulted and to vote on the issue of peace and war. They were the first Government to do that, and I commend them for it. If they can do that, surely it is possible to have prior consultation with the Quadripartite Committee on an altogether less massive decision on individual export cases. I urge the Government to consider the subject afresh and show more flexibility than they have hitherto, in the light of the views expressed today.

I will now move on to the Government's policy on trafficking and brokering. When the Secretary of State for Trade and Industry appeared before the Quadripartite Committee on 3 April, I expressed deep scepticism about the adequacy of the Government's policy. Their brokering provisions cover just three areas. The first, which is self-evidently desirable, is brokered sales to destinations under an embargo, and those are rightly included in the parameters of the legislation. Beyond that, only two other areas of military goods and equipment are covered by the legislation. The first area is torture equipment, and I still hold the view that the definition of torture equipment is too limited; the second is missiles, but only those with a range in excess of 300 km.

I had to go to a Clerk to discover the definition of torture equipment employed by the Government for the legislation, and which items of torture equipment fall within the extraterritorial brokering provisions. Other hon. Members may have found it easier, but in case they had the same difficulty, and for anyone interested outside, it is necessary to look at the schedule to the Trade in Goods (Control) Order 2003. In paragraph 1, the reader is directed to Any good falling within paragraph c. or g. of PL5001 in Schedule 1 to the Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 2003. Looking at paragraphs c. and g. of the second statutory instrument, one finally finds a reference to those items of torture equipment that fall within the ambit of this anti-brokering legislation. It is worth reading out those items for the record. They include leg irons, gang chains, electric shock belts, various dimensions of handcuffs, various dimensions and types of shackles, and certain portable devices for the purpose of riot control or self-protection by the administration of an electric shock. The list is limited to those items. Hon. Members may think that it sounds comprehensive, but it does not take much further thought to realise that it excludes a substantial number of items that could be regarded as torture equipment.

I stress to the Minister that the definition is seriously inadequate. It is far too limited. I will repeat the illustration that I gave when the Committee met the Secretary of State for Trade and Industry. I reminded the Committee that one form of torture used—I fear that it may still be used—in Northern Ireland, by paramilitaries on both sides, is a particularly foul use of the handgun. The handgun is not used in the conventional way, but is placed at the back of the knee, in order to shoot out people's kneecaps. That is torture, by any definition, and is a commonplace form of so-called punishment shooting by paramilitaries. Handguns are wholly excluded from the definition of torture equipment. No doubt there are many other types of military goods and other equipment that could be used to inflict torture on people. The Minister should continue to examine very critically the definition of torture equipment as laid down in the statutory instruments. It is wholly inadequate and should be widened significantly.

The second item concerns missiles. I shall repeat what I said to the Secretary of State when she appeared before the Committee. The policy of including within the legislation only long-range missiles with a range in excess of 300 km seems to me to be unsustainable and, in the present terrorist environment, wholly irresponsible. When I raised that issue with the Secretary of State, I received a disturbing reply. I will quote the exchange that took place between us on 3 April, as reported in paragraph 112.

I asked the Secretary of State: How can you defend missiles above 300 k and not shorter? The Secretary of State, who was accompanied by her official, Mr. Glyn Williams, replied: I wonder whether Mr. Williams would like to comment on that because I am not aware of the detailed thinking on that one. I found that an extraordinary reply. I commend her for her candour, and in fairness, she went on to give a generalised response to my question. However, I found it extraordinary that, in speaking about such a significant policy decision—to restrict the ambit of this legislation to missiles with a range of 300 km or longer—the Secretary of State could say to the Committee that she was not aware of the detailed thinking on that policy issue.

Michael Fabricant (Lichfield)

Does that mean that surface-to-air missiles of the type that were used in Mombasa against an Israeli charter aircraft, or that may indeed have been used more recently against aircraft taking off from Heathrow, would not come under the legislation?

Sir John Stanley

My hon. Friend, with his usual acumen, has anticipated a point that I was about to reach.

The Government have got their policy back to front on the brokering of missiles. I do not know whether there is any history of brokering long-range surface-to-surface missiles, but I am certain that the concentration of brokering activity is on short-range missiles, including surface-to-surface and surface-to-air missiles, and even rocket-propelled grenade launchers. That is where brokers are active and where huge amounts of military goods could be available to terrorist groups. I will not advocate the removal of the provisions affecting brokers of longer-range missiles, but the Government must address the question of shorter-range missiles.

I urge the Minister to reflect on known events that have taken place in the past few months. An E1-A1 civil airliner, on take-off from Nairobi airport, was fired at by a terrorist organisation with a surface-to-air missile, which according to reports missed by just a few metres. The infrared locking-on device was apparently programmed for a fast jet take-off aircraft rather than the much slower-moving civil airliner. If the missile had hit, all the passengers and crew would be dead.

We have also seen one or more full-scale security alerts at Heathrow, backed up with full military deployment, because of intelligence about a possible surface-to-air missile attack on civil airliners taking off from Heathrow. As has been widely reported, a British citizen, Mr Hemant Lakhani, was arrested in the United States while he was allegedly trying to sell up to 50 Russian surface-to-air missiles. The intelligence services should be warmly congratulated on the success of that operation, which happily thwarted that attempt. Tragically, there have also been continuing deaths among Coalition forces in Iraq from rocket-propelled grenades, and in the past few days we have seen the worst ever number of casualties as a result of the downing of a Chinook, apparently by a surface-to-air missile.

Every one of those terrorist events or threatened events would have fallen outside the provisions of the current and proposed legislation, and I am in no doubt that the Quadripartite Committee's recommendation on trafficking and brokering, which we agreed unanimously, was right. In paragraph 50 of the report, we said: We recommend that the Government should seek to extend extraterritorial control to all trafficking and brokering which, if conducted in the UK, would not be granted a licence. I am certain that on this policy issue the Committee has got it right and the Government have got it seriously wrong. I urge them to adopt the Quadripartite Committee's policy as quickly as possible.

Mr. Joe Benton (in the Chair)

Before I call the next speaker, I should point out that a number of people still want to speak and that I propose to start the winding-up speeches, subject to any Divisions in the House, at 4.40 pm. I ask hon. Members to bear that in mind, so that we can try to allow everyone to speak.

3.29 pm

Sue Doughty (Guildford)

I welcome the first joint report. It sets out clearly some of our problems with the proposed secondary legislation. I recognise—albeit slightly grudgingly—the huge progress that the Government have made with controlling arms exports with increased transparency. I certainly support the words of the Chairman of the Quadripartite Committee and the report: there is a long way to go yet. The report sets out clearly the outstanding issues that need to be addressed. In particular, I share the worries that have been expressed about full extraterritorial controls on arms broking. At a time when there is so much arms proliferation throughout the world—we have heard about the problems of arms and their end use—it seems that we are backing off from putting controls in place.

The Government have said that it would be difficult to prove the part played by United Kingdom nationals and that it would not be worth the effort to try to do so. I do not know whether they think that, if they do not close such a loophole, arms brokers will just stay in the UK and desist from such activities. That is not so. Arms brokers will go overseas, do the deal and return. We are almost encouraging such behaviour.

The Government should require that all arms brokers who hold United Kingdom passports operate under a licence. If not, what else could happen? Worries have already been expressed by the Irish Government about there being nothing to stop arms brokers flying to Ireland to conduct business. At this critical stage, the last thing that the Irish Government want is for brokers to go to Ireland to sell arms. The loophole will provide an unregulated shop window for brokers.

The Government have proposed to keep a close watch on matters and said that, if evidence comes to light, they will act. However, evidence can be hard to obtain. Given that we know such events will happen, we must have the common sense to act now. A broker who sells 3,000 Kalashnikov rifles may be supporting the further provision of weaponry in countries that have already been ruined by internal conflict. The Chair of the International Development Committee referred to the problems in Africa. In a debate that took place the other day, he raised important points, as he did earlier. He asked how there can be peace when there are so many arms and said that we must ensure that expenditure is on development, not warfare.

Even though some of the countries have peace, it is a fragile peace. The last thing that we want is a lot of guns, small arms and larger munitions washing around in such countries. We have asked the Foreign Office to put pressure on other Governments, but it is becoming a bit late to do that. How many dead bodies need to be counted before the Government decide that prevention is better than cure? In the case under discussion, there is no cure. It is death and war, or nothing.

The Government said that they could not alone realistically hope to control all exports of military goods arranged and undertaken wholly within other states. We have debated whether it is possible to do so. Finland and Poland have fought extraterritorial control over their respective nationals. Belgium is bringing in a law. Austria, the Netherlands, Norway and Sweden all require their residents to apply for licences when brokering arms between third countries. It is essential that we do not wait for a review. We recognise that we have a national responsibility, and we must take that responsibility.

Do the Government believe that the United States and other extraterritorial systems lack credibility? Is that why they will not bring in such proposals? Given that so many other European countries are introducing comprehensive extraterritorial controls on arms brokers, why is the United Kingdom not acting similarly? At present, £1 billion worth of Hawk aircraft are apparently being sold as training planes to India and not for use in combat, yet that is in a territory where, particularly in the mountains of Kashmir, planes need to fly slower, as training craft do. What will happen with those craft? Will they be used in combat? How would we prevent that? Even if they are training craft, do we want to support the training of pilots in a country that is so often in conflict with its neighbours? Should we be easing the path to training for pilots in a country that wants to improve its nuclear capacity? Those exports are worth £1 billion. How many years' support for sustainable development would that money provide?

What is happening with arms exports? The A team go out to sell the goods in India, but those managing the sales are possibly not the A team. The Prime Minister, the Deputy Prime Minister, the Foreign Secretary and the Secretary of State for Defence have talks with their opposite numbers—high-profile talks between high-profile politicians. Export priorities come faster than scrutiny of use. When we consider what those planes will be used for, how difficult will it be to say that we will not grant a licence, given the sales team who went ahead and promoted those sales? There are a lot of questions about that.

We have queries about licensed production facilities. The Government have said that they will seek more information from exporters about the intended use of their exports. Those of us outside—the great British public—might ask whether they should not be asking those questions already. We are moving a long way forward, yet we are building delay into what could be a major improvement in the way in which we license exports. How do we know where those facilities will export to, and what controls will be in place at those facilities?

What happens if there is a regime change in Saudi Arabia? What end-user restrictions might be needed and what production ceiling should be in place? Should we not ask those questions now and make those points a condition of licence, rather than worrying about the matter later? What do we do when it all goes wrong, and we find that exporters are producing for export to countries that we would not export directly to? Those are major questions.

Parliament has insufficient information. We are not able to scrutinise arms export licences—that is essential. We have historic problems, such as the dubious al-Yamamah deal between BAE Systems, then British Aerospace, and Saudi Arabia. We are still not getting clear answers to those questions and Parliament needs many such answers.

Mr. Gerald Howarth

The hon. Lady has made a serious assertion. She said "the dubious" al-Yamamah project. BAE Systems headquarters are in Farnborough, which I represent—it is near her constituency. Many of her constituents will be employed there. Perhaps she can explain what she thinks is dubious about the al-Yamamah programme?

Sue Doughty

I would like to correct my words to "allegedly dubious". They relate to the articles that have appeared in The Guardian. I will not take up the time of the Chamber on that one deal. They are serious allegations, which have not been proved. However, it would be useful to have more information when such allegations are flying about. The deals may or may not be respectable. However, we do not know what is going on, and Parliament does not have access to that information.

A point was made earlier about the international arms trade treaty proposals made by Amnesty International and Oxfam. I welcome the support that hon. Members, particularly the Chairman of the Quadripartite Committee, have given them because we need legally binding international arms controls. We cannot continue seeing British weapons being used by corrupt Governments at the cost of lives, stability and economic stability. We need to monitor that, instead of saying, "Yes, there are all these guns in Iraq and, gosh, isn't it difficult to bring about peace?"

Mr. Howarth

The hon. Lady said that British Governments—by definition, she means this Government—have exported to corrupt Governments around the world. Will she be more explicit?

Sue Doughty

Yes, I would be delighted to repeat exactly what I said: we are seeing British weapons being used. I did not say that they were exported directly by the British Government. However, it is a fact that British weapons find their way around the world through third-party deals. That is why we have to accept responsibility and ensure stringent controls. We should be placing stronger and more effective controls on brokers in the first place.

It is not too much to expect the Government to take note of the concerns raised, rightly, in the report. I am an opponent of the arms trade, and that is well known, but that does not mean that the Government and our country should not realise that, if we continue to export arms—and many people's livelihoods depend on that—the Government must accept their responsibilities and do much more to control the business.

3.40 pm

Mr. Gerald Howarth (Aldershot)

This is a useful debate. I join the hon. Member for Kingswood (Mr. Berry) in expressing revulsion at the tragic waste of life around the world as a result of the proliferation of small arms in particular.

I was in the House yesterday when Mr. Parry, the father of Tim Parry, launched an appeal for funds and told us about what the Tim Parry Jonathan Ball Trust is trying to do to bring people together. As part of the launch, there was a presentation, during which a film was shown of some of the atrocities that are being committed throughout the world. No one who sees children aged 13 bearing weapons can feel anything other than huge revulsion, and a duty to do something about the issue and to stop such things happening. The hon. Member for Kingswood and I have that opinion in common.

My hon. Friend the Member for Banbury (Tony Baldry) referred to the AK45; I think that he meant the AK47, which is, of course, Russian, not British, and which is readily available throughout the world. It is the most easily tradeable kind of weapon. It causes the most damage to people's lives and the greatest injury across the world.

Anyone who has been to Peshawar in Pakistan will know that if they drive out of Peshawar towards the border, they will come to a huge arms market where people make whatever small arms people want. I did not venture into it to find out exactly what went on. Instead—rather more calmly—I made my way up the Khyber pass. People at the market make to order whatever weapons the customer wants in a matter of hours or days. The issue that faces us is how to try to deal with that trade.

I am concerned about the effect that the legislation is having on our defence industry, and I make no bones about that. I represent Aldershot, the home of the British Army, and Farnborough, which is the birthplace of British aviation and the main administrative headquarters of BAE Systems, the fourth largest defence contractor in the world. However, I rise to support BAE Systems not because it is in my constituency but as a matter of principle. It is imperative for the defence of the people of our islands that there is a vibrant defence manufacturing capability in this country. Sadly, in order to defend our country, we cannot rely simply on our home market; we have to engage in defence exports in order to ensure economies of scale, so that we can sustain our industry.

Of course, that of itself would be an insufficient argument but there are further moral justifications for the defence industry, and for supporting and approving of its activities. One of them is that we can defend our friends. The hon. Member for Guildford (Sue Doughty) mentioned Hawk sales to India. It is entirely proper to debate whether it is right for the United Kingdom to sell Hawk aircraft to India. The Hawk aircraft is an advanced jet trainer capable of being adapted for more offensive use. The Hawk 200 was developed by British Aerospace for that purpose, but it has not been so used. It is perfectly legitimate for the United Kingdom to support our friends and allies around the world, and one way in which we can do that is to help them to defend themselves. India happens to be a member of the Commonwealth—

Malcolm Bruce (Gordon)

So is Pakistan.

Mr. Howarth

So is Pakistan, which is why it is entirely right that we should have this debate. I have no problem with that. However, the idea that Hawk aircraft are being exported in the absence of any public debate and that Ministers are secretly negotiating deals without telling anyone is wide of the mark.

Sue Doughty

I object to the implication that I suggested that there were secret sales, because I made no such comment.

Mr. Howarth

The hon. Lady came clean towards the end of her comments and said that she was opposed to the arms trade. I am sure that those of her constituents who are employed in that wholly honourable business will take note of that at the next general election.

Sue Doughty

My views on that were known to my electorate at the last election, and they made their decision accordingly.

Mr. Howarth

They will be known even better at the next election, because we shall make sure of that.

It is no good adopting a holier-than-thou attitude. If India did not have access to the Hawk, plenty of similar aircraft are available around the world, and I understand that the Treasury was urging the Ministry of Defence to look at some of the weapons that are available from other parts of the world. I assure the hon. Lady that if we do not export the Hawk to India, plenty of other Governments with similar equipment will be only too keen to take our place, and that they will be a great deal less fussy than even this Government about policing their exports and ensuring that they are used for training purposes rather than adjusted for offensive purposes. She is kidding herself if she thinks that she can stop these exports from the United Kingdom, and the weapons will thereby disappear.

Malcolm Bruce

I hear what the hon. Gentleman is saying but he is inviting us to go down a dangerous avenue. Is he not implying that it would be foolish of us to try to impose standards that are higher than the lowest in the world, on the ground that we would lose business? If that is what he is saying, this debate is pointless.

Mr. Howarth

No, I am not saying that, but I am issuing a warning: this is an important industry in this country. It employs well over 300,000 honourable people, many of whom are constituents of Members in this Chamber.

Mr. Berry

I am one of the joint authors of the two reports. They recognise the important contribution of the UK defence industry to our economy. I do not think that anyone doubts that.

Mr. Howarth

The hon. Member for Gordon (Malcolm Bruce) may have been leading us down that road. I am trying to make the point that it is important to put the matter in context: we are discussing an honourable business that employs many people in this country and contributes to our indigenous ability to defend ourselves.

I agree wholeheartedly with the point made by my right hon. Friend the Member for Tonbridge and Mailing (Sir John Stanley) on long-range missiles. I will not repeat what he said, save to draw to the attention of the Chamber the concerns expressed by the Defence Manufacturers Association, which questions why the Government have identified the trade in long-range missiles, unmanned air vehicles and their components as "activities of greatest concern". I hope that the Minister will answer my right hon. Friend's points, because it is inexplicable why long-range missiles and unmanned air vehicles should be restricted goods. Unmanned air vehicles will take on an even greater importance in future developments of defence technology. It is important that we do not do anything that will interfere unnecessarily with that business. However, the DMA states that it is unaware of any such notorious cases involving LRMs or UAVs or shady gun runners hanging around on street corners in Africa approaching passers by and saying 'Psst… wanna to buy a Tomahawk Cruise Missile?"' That amply makes the point.

Sir John Stanley

I am wholly in favour of long-range missiles in excess of 300 km continuing to be restricted goods. My point was that I also wish to see short-range missiles included in that category. Is my hon. Friend sure about his reference to pilotless aircraft? The only missiles that are within the ambit of the brokering provisions are those that are capable of a range of 300 km or more, and specially designed components for them. If, like me, he is not sure, perhaps the Minister will clarify the point.

Mr. Howarth

I am afraid that I cannot enlighten my right hon. Friend. It is for the Minister to explain what the Government have in mind. Clearly, there is some opaqueness about this, and it would be helpful if it were clarified.

The industry has had a long-standing concern that the new legislation could impose excessive burdens on it. That applies almost as much today as it ever did. The industry has indicated that the Government have listened to its concerns and have moved towards meeting them. However, we have had a note from the Society of British Aerospace Companies, which represents the aerospace industry. It is concerned about the training implications for its staff. It has been suggested that something like half the staff of BAE Systems—some 25,000 people—will have to be specially trained in how to understand the implications of the legislation. As it is a large company, BAE Systems has a range of training resources at its disposal. The same cannot be said of smaller companies, which are located all over the country: they do not have such resources. I would like the Minister to explain how he proposes to deal with that.

There is also the issue of intangible exports. I understand that the United States of America's regulations mean that when a US business man visits London and opens his laptop computer, he is opening it in a discrete part of the United States, which has moved temporarily to London. However, when a British business man goes to New York or Washington and does the same with his laptop, which contains, of course, all the information about the technology or the deal that he is working on, he is opening it in the United States, and therefore he has exported the knowledge to that country. Those are difficult areas. I should like the Minister to explain how he proposes to deal with what could turn out to be an absolute nightmare, in terms of the conduct of business.

My final concern is a parochial one, about the Farnborough air show in my constituency. I hope that all right hon. and hon. Members have visited the show—or, if they have not, that they will accept an invitation to come to next July's show—because it is one of the greatest air shows in the world. However, it is not just an air show: it is also a trade fair. It has won its place in the world by virtue of the fact that we welcome people from all over the globe, and give other manufacturing nations equal access to the world's markets. That does not happen in quite the same way in Paris, which will surprise some right hon. and hon. Members. American manufacturers, in particular, like coming to the UK because they get a fair crack of the whip.

I understand that some progress is being made on the Farnborough air show, but it has been pointed out that the essence of the business that is conducted there—meeting people, negotiating and signing deals—could be put in jeopardy by the new legislation. In 2000, deals worth about $54 million were signed at the air show. That is a huge sum. Much of that business had, of course, been negotiated in advance, but it was signed at the Farnborough air show. I do not want anything to imperil the air show, and nor do the many UK companies for which it is the major shop window.

I hope that the Minister recognises that the global air show circuit is becoming more competitive, and that Paris is not the only competitor—Dubai, Singapore and other places are also important. The SBAC fears that the new legislation could still create a disincentive to sign major contracts in the UK, and lessen the commercial attractiveness of Farnborough as a global business event, so I hope that the Minister will reassure me on that point.

3.56 pm

Paul Farrelly (Newcastle-under-Lyme)

Thank you for allowing me to say a few words, Mr. Benton. I shall make some brief remarks about the Committee's recommendations on extraterritorial controls on arms trafficking and brokering, with particular reference to an international arms dealer based in the UK. I raised my concerns about that dealer with my hon. Friend the Minister during the passage of the Export Control Act 2002. I apologise to him for not giving notice beforehand, but I originally planned to have another meeting, which was subsequently cancelled.

Since I was elected two years ago, I have repeatedly raised the issue of military supplies and arms being supplied to Zimbabwe, both for internal repression and to support its military adventures in the Democratic Republic of the Congo. I have highlighted the activities of one John Arnold Bredenkamp, who holds a dual Zimbabwean-Dutch passport but is resident in the UK—indeed, he has residence rights here. He is certainly not small fry, but is one of the Mugabe regime's biggest arms suppliers, from small-calibre weapons right up to—it is reliably understood—MiG Hind attack helicopters from parts of the former Soviet Union. Cleverly, Mr. Bredenkamp supplies those arms via Zimbabwe-incorporated companies, so they are not directly exported from the UK, but his business empire is firmly based in this country—in Berkshire—and he well known in military and intelligence circles.

When the Export Control Act 2002 was passing through the House, my colleagues and I were naturally concerned to establish whether its provisions and sanctions would catch the activities of those such as Mr. Bredenkamp. The Minister who is to wind up today's debate assured me that they would, saying: My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) referred to some specific examples, but as he knows, I cannot comment on individual cases. However, he raised an important point of principle on which I think the House will want to have the Government's views on record. I can assure my hon. Friend and the House that the Bill will give us the power to control UK citizens and anyone operating in the UK, which I think was the point that he was making. He was concerned about someone who was not a UK citizen who was a trafficker and broker in arms to arms-embargoed destinations such as Zimbabwe. Such people will be caught. That is important."—[Official Report, 8 November 2001; Vol. 374, c. 416.] At a distance, those so inclined might want to quibble about semantics, especially about the meaning of the word "caught". As my question and the debate thereafter show, however, there can be no doubt about the meaning of the assurance that the Bill would catch people such as those I described. I do not want to embarrass my hon. Friend the Minister—the legislation and its implementation are complicated, and I am certain that his assurance was given in good faith—but I have to tell him that his assurance was incorrect because, under the legislation, people like Mr. Bredenkamp will continue to operate with impunity from a UK base. It is simply wrong that people like him can cleverly organise their affairs to outwit legislation and to make a mockery of arms control legislation.

Nigel Griffiths

My hon. Friend is simply wrong.

Paul Farrelly

I repeat that I am certain that the assurance was given in good faith, but the record is in Hansard for everyone to see.

Nigel Griffiths

I am not correcting the Hansard reference, but my hon. Friend's mistaken interpretation of the current and future state of the legislation.

Paul Farrelly

For the first time in my two years in the House, I am grateful to be told that I am mistaken. I look forward to my hon. Friend's concluding remarks. Given hon. Members' contributions today, however, it is fair to say that the question still stands: when will something be done about merchants of death such as Mr. Bredenkamp who are operating from the UK? When I have asked that question outside the context of the Act, the answer has generally been, "Bring us the evidence and we will have a look." That brings me to another aspect of the effectiveness of our arms control regime.

Mr. Bredenkamp is well known. He is one of the UK's richest people—one only has to look at The Sunday Times guide to the rich every year—and he has a long track record of arms dealing. He helped Ian Smith's Rhodesia bust international sanctions, and supplied weapons, including anti-personnel mines, to Iraq during its bloody war against Iran, which were eventually used against British troops in the 1990 Gulf war. [Interruption.] My apologies. I have now switched off my wife.

Cleverly, in pursuit of profits, Mr. Bredenkamp has long since turned his allegiance to Robert Mugabe. He was named in a recent United Nations panel report as one of those who are supposed to have profiteered from the tragic war in the DRC by looting the country of its precious minerals, which is the price for his arms supply to Zimbabwe. The hon. Member for Aldershot (Mr. Howarth) may be interested to know that he has also been a BAE Systems agent in Zimbabwe. Given the position of the hon. Gentleman's right hon. Friend the shadow Foreign Secretary on the Mugabe regime, I am sure that he will be as concerned as I am if BAE Systems is exporting spares to Zimbabwe for use in Hawk jets, which are being used to prosecute the war in the DRC. I mention this history because any arms control regime needs to be proactive, not just reactive, if it is to deal with merchants of death.

Given that my hon. Friend the Minister corrected me, will he state the Government's position on UK-based individuals who are trafficking arms abroad by whatever mechanisms? Will he also agree to calls made by hon. Members here today and by the Quadripartite Committee for the scope of the Act and its implementation to be extended to cover such individuals?

Mr. Berry

I understand that it is correct to say that section 4 of the Export Control Act 2002 gives the Government the power to exercise full extraterritoriality, but that under secondary legislation, it specifically will not cover trafficking and brokering unless part of that transaction takes place in the UK. Is that my hon. Friend's understanding? That may help to clarify the Minister's response later.

Paul Farrelly

The problem is indeed the scope of the secondary legislation to give effect to the Bill.

4.4 pm

Sitting suspended for Divisions in the House.

4.28 pm

On resuming—

Paul Farrelly

I was just saying how important it is for any arms control regime to be seen to be proactive and not merely reactive. I do not want the Chamber to misunderstand my comments today. I welcome the Act and congratulate my hon. Friend the Minister on the effort that he has put into a complicated piece of legislation, the implementation of which is also complicated. However, confusion and misapprehension remain as to how easy it may be for clever and resourceful individuals and businesses—such as those involved in the arms business—to evade the provisions, particularly by relocating offshore.

I hope that I am simply confused and wrong. In view of the Minister's comments, I would be grateful if he wrote to me to clarify the position of individuals such as Mr. Bredenkamp, who have UK residence rights but who organise their affairs so that no transaction takes place in the UK. Will they fall under the new legislation, which is to be enacted on 1 May? If not, as part of a learning process, will the Government consider extending the legislation?

4.29 pm

Mr. Andrew Lansley (South Cambridgeshire)

I am grateful for the opportunity to contribute briefly to the debate. I had not thought that I would do so, because I spoke in the debate on 27 March, in which I covered some of the principal subjects according to my lights. Hon. Members know my views, but I wish to add a few points, as events have moved on slightly since then.

I will not talk about prior parliamentary scrutiny, as it has been mentioned by my right hon. Friend the Member for Tonbridge and Mailing (Sir John Stanley) and others. As he knows, we are not unanimous on that. I do not wholly endorse the use of prior parliamentary scrutiny as a mechanism to scrutinise the export control system. However, if we are not to have formal prior parliamentary scrutiny, it is important that at every point at which something might be construed as changing policy in the export control system, it should be disclosed to Parliament and the Committee in a form that enables the Committee to seek to influence and scrutinise that policy before it is put into practice. It is not wholly the case that that happens now. Policy has seemed to develop, particularly in relation to incorporation. That was discovered during our inquiries, rather than its being disclosed to us as an explicit intention of the Government.

That leads me on to the subject of incorporation, which I touched on in March. The Government have responded to us on that subject, among others, but I am not entirely happy with where we have gone since March. The Government interpreted my concerns as though our argument about incorporated equipment was simply that the Government were abandoning the consolidated criteria in favour of some other set of criteria. That is not really my argument. I am sure that the Government continue to look at applications against the consolidated criteria, but they then go one step beyond that and add particular considerations of incorporation that could conflict with the consolidated criteria. In their response to our recommendation 30 in the annual report, the Government stated that it is likely that if the UK is the only source for certain goods, or if the UK-origin goods are being supplied as part of a long-standing supply programme that the implications of refusing licences on the UK's defence relations with the incorporating country are likely to be greater. This will be taken into account in reaching any decision. As far as I am aware, that is expressly beyond the consolidated criteria. We do not say that if there is a long-standing supply contract and if circumstances change, export licences will none the less be granted in recognition of that fact. We do not say that if the UK is the only source of particular licensable goods, they should be licensed because of the impact that not doing so would have on someone else's defence industry. We are lucky that the consolidated criteria do not operate in that way. We want to know whether equipment that is relatively immaterial to the final product is more likely to be licensed.

The Government are not answering that question. If it is immaterial, it may not make too much difference. but if the items are integral to the defence equipment and the UK is the only source or origin, the question whether it is licensed becomes very relevant. It is instrumental to the further point of whether the export controls of the country to which goods are sent—America is the obvious case in point—are not only robust in themselves, as the American ones no doubt are, but aligned with those of the UK. In one relevant instance they are not. After May, the waiver regime with respect to the Americans, and collaboration with them, may make some difference to us.

On the matter of small arms and light weapons, and the question of extraterritoriality, I am somewhat heartened by the Government's response to the first joint report, and particularly our recommendation 7. The Government have rightly set out how they have pursued international consensus on the trade in small arms and light weapons, and I think that the range of that response reinforces the Committee's argument that, in so far as we should extend the scope of our extraterritorial jurisdiction, small arms and light weapons meet the Government's broad criteria.

There is an international consensus, which seems sufficiently well established to be the basis of the UK's activity in the international arena. It should not necessarily require us to go to the point of turning every potential destination into an embargoed destination to achieve enforcement. As the Government said, the approach is about international consensus, and that was the basis on which we discussed the matter in March; there is an international consensus on small arms, and if it is not enforceable in every state of the world, it is substantially enforceable in line with a set of international agreements. It would certainly encourage other countries to subscribe to those agreements if we were to extend our extraterritorial jurisdiction to show, in this very particular respect, the UK Government's intentions.

I want to mention the timing of what is happening. As I understand matters, we should have seen the orders by now, and I confess that I have not. I do not think that the orders have been laid, although the Minister may tell us otherwise. We were told in the Government's response that they would be laid by the end of October. The Minister is not interrupting me, so I assume that that has not happened.

I think that the Government's response stated that the user guidance was going to be made available at the same time as the orders and that the final regulatory impact assessment would also be available then. I think that the latter item is available to the industry. If we are moving towards a commencement date in May 2004 and the orders are now late I should like to be sure that we know the precise timetable.

Much hangs on what is being done. As my hon. Friend the Member for Aldershot (Mr. Howarth) said, there is a substantial training and implementation task for the industry. Training sometimes seems to be a discretionary activity, but in the present context it is not. It would be rash to allow—and I do not think that any responsible employer would allow—someone to be engaged in the relevant kind of activity without the appropriate training, because of the penalties that might ensue if they behaved contrary to the regulations. If 50 per cent. of the staff of BAE Systems were thus affected, the training requirement would be enormous. That would be very testing if it had to be achieved in six months.

All that work must be done by the industry alongside its continuing tasks. Of course, one of the questions that we considered during our inquiry was the extent of the additional burden. The industry tells us that the regulatory impact assessment cites the latest figure of a 22 per cent. increase in the number of applications that are required. That is something like six times more than the number of additional licences originally anticipated in the first regulatory impact assessment. When we return to the question of minimising burdens on business, the Minister must address those points.

In particular, will the Minister consider what we have not seen from the review of the licensing system, which is the point about compensating reductions in burdens in the licensing system in the range of existing applications, to be achieved through the use of more open licensing and so on? Will he also consider continuing to speed up the system? Ensuring the certainty of the timing of licence applications will mean that, even if the burdens of bureaucracy still exist, those in the industry can be reasonably confident of an early response, which will give them some commercial benefit.

The situation has moved on since March, and I wanted to put those points on the record, not least because many believe that the Minister can give us some information on them.

Mr. Joe Benton (in the Chair)

As hon. Members will recall, to facilitate the attendance of the hon. Member for Banbury (Tony Baldry) at a Committee, the hon. Member for Kingswood (Mr. Berry) curtailed his speech. With the leave of the Chamber, I call him again.

4.41 pm

Mr. Berry

Thank you, Mr. Benton. With your permission, I have two points to make to complete my speech, and I will make them as quickly as possible.

I commented almost exclusively on trafficking and brokering because they are an important part of the debate about how the Government use the Export Control Act 2002, which gives the Government powers further to control the arms trade. On the Committee's behalf, the Clerk of the Quadripartite Committee wrote to the Foreign Office on 12 September to raise the case of Hemant Lakhani, the British citizen about whom hon. Members may have read in the press. He was arrested in the USA and accused of attempting to sell shoulder-launched surface-to-air missiles to supposed terrorists.

It is my understanding, and that of our Clerk, that the Government's proposals would not make it an offence for a British citizen to sell or arrange for the sale of such missiles from outside the UK. Such missiles would be covered if their range were 300 km or more. Therefore, if someone is trying to broker arms sales to terrorists, as long as any missiles on the shopping list do not have a range of 300 km or more and the sale takes place outside the UK, they will not be controlled by proposals under the Export Control Act.

We asked the Foreign Office to clarify why the Government's proposals do not regulate extraterritorial trade in equipment that would be of such obvious interest to terrorist groups. We have not yet received a reply, which is not a criticism. However, if the Government are not proposing to take control over the activities overseas of British citizens who are brokering the sale of missiles to terrorists, I would not want to be a Minister if, heaven forbid, a terrorist group used a missile that had been brokered by a British citizen. I mentioned terrorism at the beginning because one reason to be ever more vigilant about controlling the international arms trade is the threat and reality of terrorism. I would appreciate my hon. Friend the Minister's comments on that. I cannot emphasise strongly enough how seriously all Committee members, including the right hon. Member for Tonbridge and Malling (Sir John Stanley) who raised it earlier, feel about it.

My other point relates to end use. The Government try to control arms exports from the UK by not granting licences for exports that they believe are going to the wrong places and by granting licences for legitimate arms exports. From time to time, the Government attach specific conditions to the use of equipment that they allow for export: for example, in 2000 they sought and received assurances from Israel that United Kingdom military equipment purchased by Israel would not be used in the occupied territories. It turned out that our attaché observed equipment such as Centurion tanks being used in the occupied territories. The Government were clear that the Israeli Government were in breach of the assurances that they had given to the United Kingdom and decided that they would no longer take Israeli assurances into account when deciding whether to allow exports. However, I no longer know what that means. We export a fair amount of military equipment to Israel. Do the Government have assurances that henceforth all exports will not be used in the occupied territories? Do they believe that they can accept those assurances?

Richard Burden (Birmingham, Northfield)

My hon. Friend will know that the issue has caused great worry. Does he share my concern about an article that appeared in The Guardian yesterday? Perhaps the Minister can comment on it. The newspaper claimed: Exports approved by the government this year cover categories including leg-irons, electric shock belts and chemical and biological agents such as tear gas. They also include categories covering mortars, rocket launchers, anti-tank weapons, military explosives, and infrared and radar sensors. The report focuses on exports from this country to Israel that seem to breach absolutely all our guidelines.

Mr. Berry

I share my hon. Friend's concern. I confess that I am great reader of The Guardian. Although it occasionally contains inaccurate information, hon. Members will know that that is true of all sections of the media. Sometimes, those in the media get things right; other times, they get it wrong. More importantly, I hope that the Minister can arrange for those of us who have an interest in the issue, especially my hon. Friend the Member for Birmingham, Northfield (Richard Burden) and me, to receive a written response to the series of allegations outlined in The Guardian. I will understand if the Minister is unable to response to such matters today, because he has so much to cover in the winding-up speech. If the allegations were true, that would be of enormous concern.

In reference to the use of British-supplied Hawk aircraft and Scorpion personnel carriers in Aceh in Indonesia, I was advised that the UK Government had received assurances that military equipment in Indonesia would not be used against civilians who were exercising their human rights and that that meant specifically that the equipment could not be used to harass the citizens of Aceh. After that, I had the pleasure of appearing on the "Today" programme—I have now alienated more than half the Chamber by referring to The Guardian and the "Today" programme in the same speech. When I recounted what I understood to be the Government's policy, I was astonished when a spokesperson for the Indonesian Government said, "Well, we bought these planes and I do not know what on earth people thought we were going to use them for if we weren't going to fly them around and enforce our policy."

What information do the Government have about the Indonesian authority's use of British-built military equipment in operations in Aceh this year? Was the equipment used in a way that breached the Indonesian Government's assurances not to use such equipment offensively or in violation of human rights? What representations have the Government made to the Indonesian authorities about the way in which they have used British-built military equipment in Aceh? Do the Government believe that the assurances have—or may have been—breached? Have they taken any action against Indonesia or in relation to existing export licence applications that may be pending?

In conclusion, there are general issues about the assurances that our Government rightly seek from those who purchase weapons from the UK, and about the assurances that are given. I am not clear about a couple of points. What do the Government believe would be the appropriate action for them to take if an end user did not abide by assurances it had given? If you have received an assurance, but it becomes clear that the end user has broken that assurance, what can you do? Do you stop exporting and review all existing arms licences? What do you do? I am using "you", Mr. Benton, in the "what does one do?" sense. What particularly interests me is whether, when end user assurances are requested and obtained, the Government set out to the end user what the consequences of breaching those assurances might be and, if so, how they do it.

Those questions require detailed answers. In fairness to my hon. Friend the Minister, he has been asked thousands of questions this afternoon. I hope that all of them will be answered, but if he cannot answer them in his winding-up speech, please will he do so in writing as soon as is convenient? I am grateful for having been allowed to speak again.

4.50 pm

Malcolm Bruce (Gordon)

This has been a useful, interesting and informative debate. I congratulate the Quadripartite Committee, although I wish we could find a friendlier term for four Committees coming together in one body to do work that has, both in the reports before us and over the years, been so productive.

Let us recognise that we started from a point at which there was considerable embarrassment about the lack of a control system, and we had an incoming Government who had a clear political obligation to put in place a regime that was considerably better than the one that had been exposed. We have the Committee to thank for identifying the considerable progress that has been made: there is much greater transparency and consequently we can justifiably claim to have one of the best and most transparent systems in the world. We should acknowledge that and I do so unreservedly.

Having said that, it seems that there are some underlying problems. Let us start with public opinion. Many people are uncomfortable about all aspects of the arms trade—indeed, my hon. Friend the Member for Guildford (Sue Doughty) says simply that she is against the arms trade. She is not alone; many say that we should not trade arms at all. In return, the hon. Member for Aldershot (Mr. Howarth) points out perfectly reasonably that the nature of the defence industry is such that one cannot sustain one's capabilities purely within the domestic market and that it is therefore necessary to internationalise it. However, it is important to set out clear criteria for what we are trying to achieve. The argument that if we do not sell somebody weapons, somebody else will, is about the weakest that I can think of for not imposing controls and standards.

We have to acknowledge two fundamental facts. One is that the purchasing power of the United States in defence systems is 50 per cent. greater than that of the rest of the world combined. The US can afford to waste a great deal on its contracts and it throws a lot of money away; however, it ends up with much more powerful equipment and more of it, and the capacity to undercut and compete with everybody else in the world. Secondly, the only counterbalance to that in the European context is both to co-operate where we can with the United States, and to develop some Europe-wide capacities. I remind the hon. Member for Aldershot that that issue has at times rent his party asunder, leading on one occasion to the spectacular resignation of Michael Heseltine.

Having put that into context, we should identify the countries with which we have a natural defence association and with which we wish to trade, co-operate and share technology—as well as compete in business. Clearly, the United States, our main NATO ally, is at the core of that. What can become a problem are cases in which competition and co-operation cut across each other—that has been alluded to. In addition, competition in third markets can become a significant economic raison d'être for some defence contractors. We need two things: first, a clear policy on who we will and will not sell to, and what we will and will not sell; and, secondly, a transparent mechanism for delivering that. When making decisions, we have to accept that there may be some economic disadvantage attached to certain decisions, but that we may have to balance the issues and conclude that what might be called the higher aspirations of public policy should take precedence.

Reading the report, particularly the country-by-country report, it is satisfying to note that many countries that I think should not be in the list are not, and that, in the case of some of the countries over which there are question marks, there appear to be answers. Take Uzbekistan, for example, to which my immediate reaction is: "Are we sure we should be doing business with that country?" The reassurance given is that we are not; I hope that that is true. The United States and we are operating out of Uzbekistan. Given the travails of our ambassador there, we have to be assured that what goes on in Uzbekistan is entirely under our control and that of our allies, and that it is not in the hands of a Government whose human rights record is severely questioned.

I take the point made by the hon. Member for Kingswood (Mr. Berry). There is something slightly perverse about selling weapons to people and then complaining when they use them, or about what they use them for. Clearly, one expects the country to use the weapons, or at least have them in provision, for the purpose for which they were intended. That brings me to a particular point of debate: the supply of weapons, in particular Hawks, to India. That is a matter of debate and I do not have a definitive view about it, but it must be acknowledged that there is genuine public concern, given the potential escalation to the point of nuclear trigger of the situation between India and Pakistan. Many people think that we should not be arming either side, or adding any kind of fuel, and there are much more complicated arguments that people can put into play. Although I regard myself as a friend of India, I have great concerns about the imbalance between India and Pakistan. India has a substantial conventional superiority, and it worries me to add to that because to do so lowers the nuclear threshold.

Mr. Gerald Howarth

The point is that the issue is in the public domain and is being discussed. It is not as though the Hawks will be marketed by nefarious characters operating from Berkshire, Zimbabwe, or anywhere else.

Malcolm Bruce

I accept that, but there is legitimate concern. The prime purpose of the aeroplanes being sold is to serve as training aircraft. The question is: who is the country training? It is training pilots to fight in combat. It is a little naive to suggest that by selling only trainers, one is not adding to defensive or offensive capabilities. The basic point of concern—the imbalance—still applies, although I completely take the hon. Gentleman's point.

A subject that has not been touched on but is worth mentioning is the role of the Export Credits Guarantee Department in guaranteeing exports in some cases. It has been identified that it is quite difficult to get detailed information out of the ECGD on how much of its total guarantee budget is for defence and non-defence projects. However, it appears that £3.1 billion is spent on underwriting defence contracts. Some of that will go to countries with a bad record on payment. I ask the House to consider the following: if a contract with a Government for military equipment is in some way in default, or if payments are not being made on time, how can one be sure that a Government who cannot fulfil their financial obligations will fulfil their contractual obligations regarding what they do with the equipment that has been supplied? Any Government who have been given guarantees for defence contracts that they have not honoured should, de facto, fall off the list as a matter of principle. I should be interested to see whether the Minister thinks that that such a view is in process or should be.

The role of Ministers in promoting contracts has been mentioned. No one suggests that they should not be doing so or that it is wrong of them to do so, although some people do not like them doing it and would prefer them to promote other things. However, it is a problem if Ministers promote something in a questionable area where a licence is a debatable issue. If high-profile Ministers have made anything that looks like a commitment, it clearly prejudices the licensing process thereafter.

One matter to which the report alludes—I am surprised it has not been given more attention—is the trade between ourselves and the United States and third parties, the most obvious example being Israel. I happen to be a member of the Technological and Aerospace Committee of the Western European Union. I do not regard myself as an expert, but serving on the Committee gives me an opportunity to engage in discussions about the exchange of technology, trade and joint ventures. Having visited defence interests in the United States, I am aware of some of the obvious issues.

A "Buy America" Act is proposed. It is clear that it is part of a populist campaign. It is superficially attractive to be able to say on US doorsteps, "If we are spending all this money on defence, we should make sure that every cent goes to American contractors. We should only buy American, and we can do it. We spend two thirds of the world's defence budget." Defence experts, however, say that America must get some things from other sources either because they are better or because they are subject to patents and therefore unobtainable from domestic sources. A component may be very small, but if the Americans were prevented from buying it, in extreme cases, their planes would not be able to fly. Defence contractors never want to be constrained in their ability to buy the best, whatever it costs and wherever it comes from. That is the natural instinct of every defence procurement person I have ever met. That is one of the reasons why that piece of legislation will not come into play, but the sentiment behind it will not be lost.

The head-up display units that we traditionally supply through established contracts in the United States to be fitted in aircraft that are subsequently sold to Israel would, if they were supplied direct to Israel, fall completely under our own ban. In other words, we would supply neither the planes nor the equipment to be installed in such planes in a direct contractual arrangement with Israel. The Government argue that they have a long and established contractual arrangement with American defence sources and if, having bought the units from us, the Americans choose to fit them in aircraft and send them to Israel we should not interfere. As I understand it, the Government are worried about the implications for defence contract relations between the US and Britain, which I understand are large, and feel that they just have to accept that.

The Committee makes it clear, and I entirely endorse its recommendation, that as the United States has no compunction in attaching conditions to its armament exports to any third party, including this country, it is not unreasonable of us to say that we will not sell certain things to the Israelis and the condition of our selling them to the US is that it will not use them in that context either.

Mr. Gerald Howarth

It should be put on the record that a head-up display has no offensive capability whatsoever. It simply enables the pilot to see out of the cockpit without having the instruments reflected on the glass. It adds nothing to the offensive capability of the aircraft.

Malcolm Bruce

I am not sure that I am grateful for that intervention. Certainly the report suggests that it is an aid that is relevant. Before the Chairman of the Committee intervenes, I should point out that the fact remains that we have decided that the units are not something that we would sell to the Israelis. My argument is not altered by that intervention.

Mr. Berry

Is it not the case that the Government's export control criteria apply not only to finished products, but to components? The fact that one cannot commit an offensive act with a head-up display on its own—although one could probably hit someone with it—is neither here nor there. It is a component in a piece of hardware that can be used offensively and therefore is subject to controls.

Malcolm Bruce

I am grateful to the hon. Gentleman for his intervention. The report makes that point clear, which is why I picked up on it. I repeat: we have identified the items as a product that we would not sell direct to Israel.

The hon. Member for Newcastle-under-Lyme (Paul Farrelly) put his finger on a point that needs to be clarified. I do not wish to be churlish, and I hope that now or in future we will have put our finger on something that becomes positive rather than negative. There is a danger that we pass primary legislation which sets out clear, fine criteria about ideals that we wish to set as our standards, but in the detailed administration, either there are exemptions or we do not take up the powers that people thought were important. In a sense, we create primary legislation that sets out the ideals, and secondary legislation that overtly creates loopholes in order to undermine the spirit, and to some extent the letter, of the primary legislation.

That is putting it starkly, and it is up to the Committee to get their hands on it and decide whether it is a genuine point of criticism. We are in part talking about ethics, not just about the defence industry. We all acknowledge that the defence industry is important, but we are trying to set ethical standards and limit the misuse of defence equipment. Small arms are perhaps the biggest problem, but as the right hon. Member for Tonbridge and Malling (Sir John Stanley) said, none of us would regard missiles with a capacity of 300 km as small arms. The Chairman of the Committee made it clear that equipment that terrorists are actively seeking and trying to use—indeed, some have used it—is the subject of real, legitimate and active concern

I listened with considerable interest to the right hon. Member for Tonbridge and Malling, who is familiar with the subject and has been through the hearings and reports. I am astonished by the situation as he described it. It flies in the face of our practice and policy and makes absolutely no sense—indeed, it makes nonsense of the objective of preventing the misuse of weapons. I strongly endorse what the hon. Member for Kingswood said, and I advise the Minister responding to the debate to communicate the message to his colleagues very powerfully. If any such terrorist activity happened here and it became apparent that a British citizen had been instrumental in the weapon's procurement, I think that not one Minister, but the whole Government, would have to resign, so serious would the matter be. We have identified that there is a problem and it seems absolutely clear that the loophole should the closed as quickly as possible. I am genuinely grateful to the Committee for drawing that to our attention, because it is an issue that Ministers cannot walk away from.

We have had a good debate. The Quadripartite Committee is serving an extremely useful purpose. I acknowledge that the dialogue is producing a genuine improvement in our transparency and our principles, but—to put my finger on the nub of the problem—there is still a conflict of interests involving British defence contracts and capabilities, important though they are. Ensuring that our exports are not misused is not only an ideal but a principle that we wish to establish. We need to check our experts, to follow them through and, on occasion, to do random tests on what is being done with our export commodities in third-party markets, so we can be sure that they are not being misused.

I commend the report's recommendations to the Minister, who should respond positively to this debate and recognise that there is some additional action that the Government need to take if people are to be reassured that both principles and protection are at the heart of the Government's objectives.

5.8 pm

Michael Fabricant (Lichfield)

As the hon. Member for Gordon (Malcolm Bruce) said, this has been an important, interesting and unusually surprising debate, because a number of issues have been raised that were not necessarily covered by the two reports, yet are vital to the interests of the United Kingdom and its citizens. I will return to that shortly.

The debate was opened by the hon. Member for Kingswood (Mr. Berry) in his usual admirable style, which we all expect from him. He presented a private Member's Bill on disability in 1992–93, which he also did very well. He talked in this debate about the progress in recent years. Opposition Members accept and welcome the very good progress that has been made.

The hon. Gentleman mentioned that there is considerable interest in the issue outside Parliament. I for one will receive a petition on it in the close of Lichfield cathedral on Saturday from Andrew Jacobs, representing Amnesty International. The issue interests not only pressure groups such as Amnesty International and Oxfam but other organisations and individuals, because the trade in arms is an emotive issue. It is also important because, as my hon. Friend the Member for Aldershot (Mr. Howarth) pointed out, it involves jobs, and even the defence of the realm.

The hon. Member for Kingswood said that we have the toughest regime in Europe, in which we can take pride, but that does not mean that we can be complacent. Knowing the Minister, I suspect that "complacency" is not a word in his lexicon. Nevertheless, we have seen that there is a huge lacuna in respect of brokering and factoring, to which I shall come shortly.

The hon. Member for Kingswood spoke about gun crime. That is interesting because gun crime is increasing in this country, partly as a result of weapons—small arms—being imported from eastern Europe. When those countries join the European Union—I welcome their entry—we must ensure that rules are in place to impede any illegal arms transfer between countries in the EU.

My hon. Friend the Member for Banbury (Tony Baldry) apologised and explained why, as Chairman of the International Development Committee, he could not stay for the whole debate. He made the interesting point that, on the whole, it is the poorest developing countries that spend most on arms. I was tempted to ask him about the causality of that. Does the purchase and consumption of arms make those countries poor, or do they feel that they need to buy arms to protect themselves because they are poor? That is an interesting question, but I suspect that it is not for debate today.

My hon. Friend talked about the brokerage of torture equipment and the controls on that, as did my right hon. Friend the Member for Tonbridge and Mailing (Sir John Stanley). My right hon. Friend made the interesting point that Sweden and the United States offer prior parliamentary scrutiny of export sales, and called for a similar legislative procedure here. I do not think for one moment that he would expect every export licence to be discussed here first, but I suspect that he was saying that Parliament should have the prerogative to look at any export licence before it is issued. That would have advantages and disadvantages. One disadvantage might be that it could slow the provision of an export licence, but my right hon. Friend addressed that when he asked why, if that were the case, the system worked in Sweden and the United States.

The Minister said, rather robustly, that he thought that the system did not work in the United States and that it did not work well in Sweden. The hon. Member for Ochil (Mr. O'Neill), the Chairman of the Trade and Industry Committee, referred to the Minister's comments as "asinine".

One of the most interesting and relevant points made by my right hon. Friend the Member for Tonbridge and Mailing concerned trafficking and brokering, which were also mentioned by the hon. Member for Gordon. The definition of torture equipment seems far too limited. I accept that it is difficult to define these things in Acts of Parliament or secondary legislation, but I would welcome the Minister's comments on whether there is some way of drafting statutory instruments more tightly, so that torture equipment is defined more closely. It would be dreadful if there were a loophole.

On the subject of loopholes, surely the biggest is the brokerage of missiles. I was shocked, and people listening to this debate will be shocked, to know that missiles with a range of less than 300 km do not come within the ambit of trafficking and brokering as defined in the Export Control Act. Again, I remind colleagues of the point made by my right hon. Friend the Member for Tonbridge and Mailing. At a time when we are at war with agents of terror and know that they have used ground-to-air missiles in Kenya, are using them in Iraq and could use them on us here—there was a scare only a few months ago—it is quite extraordinary that ground-to-air missiles are exempt. I, for one, want a commitment from the Minister that that loophole will be closed. It must be closed and it is in our national interest that it be closed.

My hon. Friend the Member for Aldershot is always a doughty defender of the defence industry, and rightly so. He said that there is always a balance between ensuring that we try to protect the interests of those who suffer from terrorists or belligerent nations, and recognising that many people in the United Kingdom are legitimately employed in the defence industry. That is a difficult balance. Slow and cumbersome regimes will do nothing for the defence of the realm, or the employment of the tens of thousands of people who are gainfully and legitimately employed directly in the defence industry in the UK. Some have argued that several hundreds of thousands of people are indirectly employed in the industry.

My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly)—I am allowed to call him my hon. Friend because he is a fellow Staffordshire Member and we rightly co-operate closely on a number of issues, as does the hon. Member for Staffordshire, Moorlands (Charlotte Atkins), who is the Government Whip in this debate—raised an extraordinary case. I will not repeat the Dutch—I believe he is Dutch—gentleman's name. However, it seems that he is able to operate legitimately—although there may be some doubt about that, according to the Minister—in the UK in the sale of arms overseas to Zimbabwe and from there to other countries. I must repeat the stricture raised by the hon. Member for Gordon: the Minister will bear a huge burden of responsibility if a single British citizen or a single person on UK soil is injured due to those lacunae in the law. Directly or indirectly, he will be responsible and we need some clear answers at the end of the debate.

My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) always speaks informatively and raised a number of issues. I shall not cover them all but he referred to a growing and helpful international consensus on the control of small arms and light weapons. We sometimes forget when discussing ground-to-air missiles, grenade launchers and fighter and trainer aircraft that small arms and light weapons often cause much damage. I remind the Chamber that the Lord's Resistance Army, which operates in Sudan and Uganda, has abducted more than 10,000 children in the past few years. That is appalling. Many other people have been murdered and maimed not just by the LRA but by other terrorist groups, not with heavy weapons but with light arms and small weapons. Those issues need to be dealt with.

The Conservatives welcome the findings of the Quadripartite Committee's report on Government proposals for secondary legislation. The report correctly highlighted the extreme sensitivity in the industry about the Government's original consultation document.

There is no question but that the issue of licensing proposals is one of pivotal importance for British industry, as my hon. Friend the Member for Aldershot pointed out. The Quadripartite Committee received protestations about the Government proposals from such established trade bodies as the Defence Manufacturers Export Licensing Group, representative of exporters in the Defence Manufacturers Association, which said that it had "grave concerns" about such proposals, and that they "could be disastrous" when they are implemented. In that situation, it is vital that the proposals are laid bare and undergo thorough scrutiny. This debate is a part of that.

The primary issue of importance for the industry was the lack of clarity in what the proposals mean for business. The DMELG said that the proposals are phrased far too vaguely and loosely…relying on a pragmatic and common sense approach by Government". Will the Government have that pragmatic and commonsense approach? The Quadripartite Committee stated: Industry and the public rely on a pragmatic and commonsense approach by Government in many areas of life. We fail to see why such an approach should be undesirable here". We can all agree with that.

The proposed new trade controls are at the centre of the industry's concerns about the lack of clarity in the new regulations. The Government have estimated that annual individual trade licence applications will number between 100 and 250. The DMELG believes that those hypothetical figures are a gross underestimate of the number of licences that will be required by both UK industry and overseas business visitors to the UK. The system has to work.

For example, a coincidence took place a couple of days ago. I received an e-mail from a Mr. Anderson, the managing director of a firm in Burntwood, in my constituency, called Eco-Tec. He wanted to know whether equipment that the company was selling to China needed an export licence. On 5 September, the firm contacted the Department of Trade and Industry. Eco-Tec is a small firm wanting an export licence. I used to be in business—not in the arms trade, I hasten to add, but selling radio and television stations overseas—and if one does not move quickly on such matters, other countries come in as well. All that the firm wanted to know was whether it needed a licence.

Two months passed and nothing happened. The DTI gave no answer. Finally, we managed to contact the DTI and, as ever with any large organisation, spoke to a number of jobsworths. At last, we got through to a Mr. Richard Hickman. I hope that the Minister is listening, because Mr. Richard Hickman deserves a gold star. Richard Hickman promised that he would contact Mr. Anderson. He did so within hours and the matter was resolved. If Mr. Hickman is here today, he should stand up and we should salute him, because at least he got things moving. However, that is just one small example. If hundreds of applications are going to be made and the DTI get slower in dealing with them, the industry is right to be concerned.

The important issue of open licences also caused concern in the industry. We have discussed some of the issues. The Government have informed us that open licences are intended to reduce some of the burden of applying for individual licences and to ensure that applications for such licences can be kept to a minimum. We welcome that but we are not sure that it will work in practice. It is worrying when we feel that there has not been a clearly thought through process regarding how the licences will work.

Then there is the question of record keeping. The Government have proposed two options for companies: the prescriptive approach and the functional approach. The Committee believes that industry and the Government should devise a pragmatic record-keeping system between them, which would be sufficient to show compliance and avoid imposing an unreasonable burden on industry. We welcome that. However, there are problems with the electronic transfer of information. If a company is exporting around the world, the quickest way to get something delivered on paper from A to B is by e-mail. In fact, that is the quickest way to get something on paper delivered from A to B in this country, given the postal unrest. Under the draft Export of Goods, Transfer of Technology and Provision of Technical Assistance Order, it is not clear how e-mails and other forms of electronic data should be stored.

My hon. Friend the Member for Aldershot raised the question of trade fairs and gave a good advertisement for Farnborough. I am sure that all Quadripartite Committee members will go if we receive tickets, provided that we are let off by the Whips—there might be an important debate that week. The Committee emphasised that it recognised the great importance attached to trade fairs by the British defence industry. The report concluded that there is a danger that the new legislation will make it difficult for participants in trade fairs in the UK to take advantage of spontaneous business opportunities, which do occur. I am not saying that someone will appear at Farnborough and say," I would like to buy a squadron of fighters." However, from time to time, people make spontaneous purchases and although firms have a duty of care to ensure that a spontaneous sale is not made to an unreasonable company or individual, it would be unfortunate if they were overburdened. There needs to be greater flexibility. The industry and I feel that the Government have not addressed the question of trade fairs adequately.

I have raised a series of issues, and many more have been raised in the reports and in the debate today. It behoves the Minister to address those issues. He must turn to the issues raised by my hon. Friend the Member for Aldershot: how do the Government intend to achieve the balance between promoting exports and employment in the defence industry and ensuring that arms do not fall into the hands of terrorists and belligerent nations?

My hon. Friend the Member for Banbury and my right hon. Friend the Member for Tonbridge and Malling raised the question of the overseas brokerage of arms and torture equipment. Why can controls in place in the United States not be applied here? If they work in the United States, why can they not work here? Why is there such a loophole regarding the brokerage of small arms and missiles? How can decisions leading to the issue of licences, or a refusal to issue them, be made more efficient? At a lime of world instability and terror, does it make any sense for grenade launchers and ground-to-air heat-seeking missiles to be exempt from the brokerage provisions? Is that not a most reckless omission?

Will the Minister clarify that non-UK nationals trading in arms from the UK fall within the ambit of the Export Control Act? When will the Government take action on the sort, of individuals named by the hon. Member for Newcastle-under-Lyme? Why are such individuals still permitted to carry on with nefarious activities, which cost lives in Zimbabwe and in the poorest parts of Africa? At a time when we are fighting a war against terror, those giant loopholes cannot be allowed to persist. Would it not be both ironic and desperate if those loopholes permitted British weapons, or weapons provided either by people in Britain or by British citizens operating overseas, to be used against us?

The Minister bears a heavy burden of responsibility on export controls. He has a great duty of care to prevent acts of terrorism and belligerence through arms sales. Serious issues have been raised in this debate. They deserve serious answers.

5.30 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)

I am grateful for the opportunity to discuss the helpful reports that the Quadripartite Committee has published on both secondary legislation on export control and the annual report. I am grateful for the thoughtful contributions that right hon. and hon. Members have made, and for the serious points that they have raised, which I shall address.

Before I do that, however, may I say how pleased I am to be the Minister who supervised the completion of the most comprehensive and open review of the UK's export control regime for more than 60 years? The review followed Lord Scott's recommendations, and the new legislation consolidates all existing controls, puts on a statutory footing many of the innovations that were introduced on a voluntary basis, such as our annual reports, and extends our control to reflect 21st century technologies. The new controls will ensure that we do better than the assessment that was given by the right hon. Member for Tonbridge and Malling (Sir John Stanley), who was generous enough to say that we have the toughest export control regime in Europe, and will give the UK one of the most comprehensive, open and transparent export control regimes in the world.

That is reflected in the annual report, which, I am told, gives more information than any other annual report. We introduced the annual report on a voluntary basis after taking power in 1997—before then there was no annual report—to aid Parliament's scrutiny of our export licensing and decisions, and to open up the Government's export licensing policy and practice. We have put the reports on a statutory footing to ensure that future Governments cannot cancel them without primary legislation in Parliament. We also hope that placing a statutory requirement on the Government to produce a report every year will ensure even greater transparency.

I am determined to do more, however: to put more information in the public domain, and to work with the Quadripartite Committee to ensure greater accountability and transparency in the licensing process. I welcome the Committee's input on the Government's secondary legislation under the Export Control Act 2002, which shows the House's commitment to a strong, effective and transparent UK export control regime. The Committee's helpful report on our secondary legislation proposals also contains a number of recommendations that we have acted on.

We share the same overarching objective that the UK should be actively involved in the fight against proliferation and that the UK strategic export control policy should effectively promote global security. The Government are already committed to assessing all licence applications on a case-by-case basis against other national arms export licensing criteria and the consolidated EU criteria. We are committed to ensuring that UK strategic exports neither contribute to regional instability, internal repression or external aggression, nor seriously undermine the development of poor nations, and we want to prevent the proliferation of weapons of mass destruction.

More than one hon. Member referred to the report in The Guardian, so let me say that the Government have not licensed leg irons, electric shock belts or tear gas for export to Israel. Leg irons and electric shock belts are never approved for export to any country.

The new legislation consolidates the existing controls, which I have referred to in one specific case mentioned by hon. Members. It puts on a statutory footing many innovations that had previously been voluntary, such as the annual report. The 2002 Act ensures that the UK has one of the most comprehensive, open and transparent export control regimes in the world. The Act achieves that by introducing powers to impose controls on the electronic transfer of technology for military goods, and on the transfer of technology intended for use in connection with weapons of mass destruction. It also introduces powers to impose controls on the provision of technical assistance to a WMD programme, and the trafficking and brokering of goods outside the UK. The Act implements the recommendations of the Scott report by providing for greater Government accountability and transparency in the export control regime.

The new weapons of mass destruction controls were first proposed in 1998, but, in the aftermath of 11 September 2001, we all recognise the threat posed by the use of weapons of mass destruction by terrorists and terrorist regimes. In responding to questions about the range of the missiles, it may be helpful if I tell hon. Members that the controls were originally proposed and accepted under arms control regimes, such as the missile technology control regime, which identified the range of 300 km as the threshold of WMD capabilities. I appreciate that it is a problem that weapons of mass destruction below that threshold would not fall under present regimes, and that is why we have addressed the problem.

Several hon. Members raised the issue of terrorism and terrorists. The trafficking in shorter-range missiles by terrorists, or for the purposes of terrorism, is covered in many circumstances by the anti-terrorism legislation, which also has extraterritorial effect. United Nations sanctions are already in place to prevent trafficking and brokering to designated terrorists and their associates. We have made it an offence for anyone in the UK, or any UK citizen abroad, to supply or arrange to supply arms to those designated people, wherever they are located.

Mr. Berry

I appreciate my hon. Friend's response to the queries raised, but he said that the issue has been addressed in most circumstances. Will he advise us in which circumstances the issue has not been addressed? Does he acknowledge that if missiles are not covered through the extraterritoriality provisions, they could be supplied to one or two individuals who could subsequently supply them to terrorists? He will appreciate our concerns if we do not have comprehensive extraterritorial control.

Nigel Griffiths

My hon. Friend's point is covered. One reason why we consider exports on a case-by-case basis is to review reports on where they end up. It is our intention to stop exports being passed on by anyone beyond the designated destination. That is the most effective way to keep weapons out of the hands of terrorists, or anyone else.

Mr. Lansley

Will the hon. Gentleman give way?

Nigel Griffiths

I shall not, because I want to make progress. Several questions were put and it is unfair to other hon. Members if I do not answer their points in as much detail as I am attempting to answer points already made.

We corrected the anomaly in the previous regime that controls the physical transfer of technology but not the transfer of the same technology—

Sir John Stanley

On a point of order, Mr. Benton. Given that there have been two Divisions, could you clarify for the Chamber how much injury time we have beyond 5.30 pm, and at precisely what time you will call for the debate to end?

Mr. Joe Benton (in the Chair)

The Chamber will adjourn at 17.54.

Nigel Griffiths

Thank you, Mr. Benton.

As I was saying on the key issue of the extension covering the transfer of technology under the new Act, it is covered if it is a physical transfer but not if it is by e-mail or by other electronic means. In 2000, we introduced controls on the electronic transfer of dual-use technology and are extending those powers to cover all electronic transfers of controlled items.

I share the strong desire of all my hon. Friends to control the supply of weapons that fuel so many conflicts throughout the world. We already have stringent controls on exports from the UK, and we will now also have controls on trade overseas. These controls are the first of their kind in UK legislation, and our EU partners recently agreed a common position on arms trafficking and brokering, which is reflected in our new controls.

Since the 1998 White Paper, the Government have consulted extensively on the scope of the controls, and the scope of the legislation and our intention to introduce secondary legislation were set out during the Bill's passage through Parliament in 2001–02. The consultation on the draft secondary legislation, which ended on 30 April, provided an opportunity for detailed comments on the operation of the new controls.

The Committee's reports have provided further opportunity to scrutinise the Government's secondary legislation proposals. We have responded in each phase of the consultation process, and have accepted most of the recommendations made by the Committee in its recent report. The new controls are far-reaching. They will challenge industry and the Government, but are also designed to be practical, workable, effective and enforceable in our fight against proliferation. They will affect every aspect of modern defence business.

As we heard today, UK manufacturers have voiced serious concerns about the practical implications of the controls, emphasising the increasing globalisation of the sector. Manufacturers engaged in international collaboration were concerned that they would not be able to communicate easily with partners abroad, as the hon. Member for Aldershot (Mr. Howarth) suggested. The new controls must not undermine legitimate defence exporters who want to abide by the export control regime, nor should they be undermined by shady and unscrupulous illegal arms dealers.

The Committee's report contained helpful recommendations on how the Government should work with industry to ensure effective implementation of the new controls while minimising the burden on legitimate business. As I said, we have acted on most of its recommendations. The DTI has worked closely with business to secure effective solutions to the practical administration of the new controls, and its export control organisation has worked with industry representatives to develop detailed user guidelines that explain how to operate under the new controls. This guidance makes clear the essential record-keeping requirements and how companies will be expected to comply fully with them.

The Quadripartite Committee reflected concerns that defence companies should not have to keep records of all the e-mails that they send out about electronic transfers, which we accept.

Mr. Gerald Howarth

Will the Minister give way?

Nigel Griffiths

No, I want to make progress.

We have also agreed that the requirements on record keeping should relate only to technology that is controlled and that can therefore be licensed. They will relate only to the actual transfer of the technology and not to extraneous matters, such as associated follow-up e-mails, which are not part of the actual transfer. We do not require records to be kept of every e-mail to a particular end user if a transfer takes place over a prolonged period. I am informed that it is sufficient to identify the technology transferred, the dates between which it was transferred and the identity of the end user.

As for record keeping for trade transactions under open licences, we recognise that it will not always be possible for businesses to obtain the paperwork from overseas companies on the shipment dates of brokered deals. However, we will require records to be kept of the date on, or period of time over which, the trading activity took place. For example, a project manager in the UK who authorises the movements of components between various third countries will have to record the nature of the goods to be transferred and the dates over which the activity took place.

It is vital that the staff of companies fully understand their responsibilities. Compliance officers from ECO will work closely with industry throughout the implementation period to ensure that staff are fully prepared for those record-keeping requirements and that they are fully aware of what is required in order to be compliant.

I welcome the Committee's strong endorsement of the need to maximise the use of open licensing to minimise the burdens on legitimate industry and to enable us to focus our licensing effort on the areas of most concern. The user guidance sets out what licences will be available under the new controls. I am grateful to my hon. Friend the Member for Kingswood (Mr. Berry), the Chairman of the Committee, and to the Committee as a whole for supporting the need to maximise the use of open licensing to minimise the regulatory burden on legitimate business, and in particular to ensure that new business is not lost. That will enable us to focus the licensing efforts on the areas of most concern.

In addition to extending existing licences automatically to cover electronic transfers, an open general licence is available to cover most transfers of goods involving the EU and most other OECD countries. If the trade is to a destination that is too sensitive to be included on the open general licences, companies will have to apply for open individual licences.

The Committee reflected industry's legitimate concern that some employees may inadvertently breach export controls by opening their e-mails while abroad. A new open general licence will cover remote access of controlled military technology to allow persons authorised by the exporter and normally based in the UK to access their intranet site in the UK from a temporary destination overseas, but only for their own personal use and on condition that the technology would not be further disseminated.

Two new open licences are being introduced. The first will permit the export of most goods on the military list—

Mr. Howarth

The Minister is dealing with the particular point that I raised about accessing computers. He says that the individual should not be able to disseminate that information. What would happen if that individual were to open his e-mail and find information there that was not available to him when he left the UK, and then discuss that information with, for example, his joint strike fighter partner in the United States, or with a potential customer?

Nigel Griffiths

What is important is that a record is kept of all those transactions. We are trying to make it clear that an e-mail such as that would be highly pertinent to the export licence relating to technology, compared with communications of a less significant or insignificant nature between the employee and their base in the UK.

We are introducing two new open licences, one to permit the export of most goods on the military list, provided that the export relates to an eligible UK Government contract. The second will permit the supply of goods and technology as set out in the licence to UK forces engaged in a specific operation. There will be such an open licence for each operation. Unusually, those licences will include nuclear, biological and chemical equipment, which is typically excluded from open general licences, due to the potential for it to be misused if it falls into the wrong hands, and assist illicit WMD programmes. Those licences specifically address the Committee's concern that the new controls could impede industry's ability to fulfil contracts with the Ministry of Defence and provide operational support to UK armed forces, in particular protection for our troops from nuclear, biological or chemical attacks.

Recommendation 21 of the Committee's report highlighted the importance of trade fairs to British defence manufacturers—a point that was raised by more than one hon. Member today. Following discussions with the organisers of major trade fairs, it is clear that the speculative marketing activity that typically takes place will not fall within the definition of trafficking and brokering because the legislation refers to a specific activity done in return for a consideration. That will be kept under review. T he Department of Trade and Industry, the Ministry of Defence and trade associations will ensure that a full package of information and guidance on the controls and available licences is provided to companies registering to attend trade fairs. We have secured the agreement of fair organisers to ensure that overseas exhibitors and visitors are made aware of the new controls and agree to abide by them.

As Minister with responsibility for export control, I have taken several steps to ensure that the system of considering licences is made more efficient. I introduced timelines to ensure that all Departments providing input into licences were aware of unacceptable delays. Partly as a result of that, for the first nine months of this calendar year the Government have for the first time exceeded the target of processing 70 per cent. of standard individual licence applications in 20 days. I am glad that the constituents of the hon. Member for Lichfield (Michael Fabricant) have benefited from a speedy decision.

We have focused on reducing the number of longstanding export licence applications and have successfully reduced them to less than a handful. When I became Minister, over 174 cases were more than six months old and approximately 270 were between three and six months old. At the end of October, we had only three cases more than six months old and 25 between three and six months old. I am now looking at them individually.

The Committee stressed the need for the civil service to be geared up to operate the controls effectively. ECO is reorganising and will redeploy staff. New processes are being introduced as a result of the JEWEL project—joined-up more efficient ways of export licensing—to ensure that all relevant Departments work together and that applications are dealt with expeditiously. We are formulating new performance indicators, IT systems, business processes, joint working arrangements and our interface with exporters to achieve a speedy and fair processing of the controls, whether the answer is yes or no.

The Committee urged that transitional periods for implementing the secondary legislation should not be unduly protracted. I met representatives of the industry last week and was pressed for a delay in the implementation period of the orders. Suggestions ranged from 12 months to a rather longer period. I have considered that carefully and, in the light of the Committee's request for a "modest delay" in implementation, I have already agreed to twice the normally recommended implementation period. I am informed that six months should be adequate for industry to prepare. The user guidance will set out in detail the practical record-keeping requirements under the new controls and how businesses will be expected to comply with them.

In addition, to assist industry preparations and ensure full compliance, ECO is already holding seminars on the new controls and, together with trade associations, will hold further seminars, workshops and regional roadshows in the new year to raise awareness and understanding of the new controls and the licences available. Officials have agreed to monitor industry preparations, through the seminars and from direct feedback from compliance visits, to ensure that staff are fully prepared for the record-keeping requirements and aware of what is required in order to be—

It being six minutes to Six o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.