Defence Exports (Hansard, 23 July 1996)

§ Mr. Arbuthnot

It has been the practice of Ministers in successive Administrations to decline, on grounds of public policy, to answer questions about arms sales, although some information is provided to Parliament, for example by placing the UK's submission to the UN Arms Register in the Library of the House. An examination of this convention was commissioned following the publication of Sir Richard Scott's report.

As explained in the background note placed in the Library of the House on 26 February by my right hon. Friend the Chancellor of the Duchy of Lancaster, the Government's policy on defence sales is based on respect for the right of other countries, as sovereign states, to protect their independence and exercise their inherent right to self-defence as recognised by the UN charter. The Government also place considerable importance on the maintenance of a healthy defence industry which supports 212W overall some 400,000 jobs, 80,000 of which are dependent on defence exports. Last year, British defence equipment manufacturers won contracts worth some £5 billion and the size of our export market is a major factor in protecting the security of supply and reducing the cost of the same equipment to our own forces. It therefore remains Government policy to support the sale of British defence equipment overseas wherever it is compatible with our political, strategic and security interests and to grant export licences on a case-by-case basis in the light of established criteria including internationally agreed guidelines and our treaty and other international commitments.

There are four main reasons why, on occasions, information about defence exports should not be publicly disclosed. First, our national security may be jeopardised if a third country obtains details of an importing ally's defence inventory. Secondly, importing nations have their own legitimate security concerns and therefore an interest in protecting information about the detail of their defence inventory or, even on occasion, its composition. Exporters not prepared to respect these considerations will be seriously disadvantaged. Thirdly, providing competitors with commercially sensitive information may weaken the competitive position of British exporters, leading to lost orders and serious industrial consequences, not necessarily limited to the export of defence equipment. Fourthly, our bilateral relations with other countries might be weakened, potentially resulting in the dilution of the UK's influence.

The Government share Sir Richard Scott's view that commercial confidentiality may, in many cases, continue to constitute a valid reason for withholding certain categories of information. The code of practice on access to Government information (Cm 2290) recognises the need to respect a third party's commercial confidences and other information given in confidence. It also recognises defence, security and international relations as reasons for withholding information. Nevertheless, these considerations need to be balanced against legitimate parliamentary and public interest in the provision of information about British defence exports, which are controlled strictly in accordance with our international obligations. We have therefore decided that we shall in future answer questions about defence exports as fully as the four constraints outlined above permit. Any exceptions will meet the test in the code of practice that the harm or prejudice which might arise from disclosure outweighs the public interest in making such information available.

A number of other countries provide annual reports on defence exports, containing varying degrees of detail. The Government propose in future to include as part of the annual statement on the Defence estimates a report about defence equipment exports to supplement the information already provided elsewhere.

Two other reviews arising from Sir Richard Scott's report are continuing which are relevant to the provision of information on defence equipment exports. Ministerial accountability and responsibility are under examination in another place by the Public Service Committee which has been asked by the Defence Select Committee to take account of the latter's submission, including the recommendation that Select Committee Chairmen be given, in confidence, details of the background when a 213W Minister does not give a full answer to a parliamentary question. The examination of export control legislation being led by my right hon. Friend the President of the Board of Trade will include all issues relevant to strategic export licensing and procedures. The Ministry of Defence will be closely involved with both of these reviews.

I am today placing in the Libraries of both Houses a more detailed account of the review just completed.