Clause 2 - Purposes of orders under section 1(1) or 2(1)
Export Control
10:30 am
Mr Robert Key (Salisbury, Conservative)
I beg to move amendment No. 48, in page 2, line 21, after second `transfer', insert `other than within a company or group'.
Under the current legislation, only the physical export of defence equipment is regulated. Controls on the transfer of dual-use technology were introduced in September 2000 when the revised European Community dual-use item regulation came into force. It is reasonable that the Government should propose to close the loophole in the Import, Export and Customs Powers (Defence) Act 1939. However, controls on the transfer of technology by intangible means need to be clearly defined to avoid damaging the competitiveness of the UK defence industry.
The Bill takes little or no account of the globalisation of the defence industry or the increasingly multinational character of defence companies. It is important to recognise that defence manufacturers do not oppose the idea of the Bill covering electronic communications; it is an anomaly that they have not been covered. However, they are concerned about how the provisions will work in practice.
The reality of the defence industry has not been fully recognised. For example, fast and efficient access to and exchange of information is essential for multinational companies and for any collaborative programmes. I recall—it seems like yesterday—the scenes on the doorsteps of various chancelleries and Prime Ministers' residencies, when the Government tried to persuade the German and French Governments to move towards a more together defence industry for Europe. All sorts of mergers were proposed and sounded out, but various companies blasted them out of the water and they did not get as far as some people might have wished. If those companies had got together and formed one company, they would still have been caught by the Bill, as existing companies might if, for example, a United Kingdom-based engineer in a UK company wanted to make a telephone call to another engineer on a collaborative project in another country—a friendly ally. Would that call require an export licence or could it be covered in some way?
In my local pub in Salisbury over the weekend I happened to meet a person who worked for QinetiQ, the privatised part of the Defence Evaluation and Research Agency. He recalled that things were easy for him and his colleagues when they were civil servants at DERA; they would not have thought for a moment about whether an export licence was needed to make a telephone call to Lockheed Martin, Airbus or anyone else. Now that they are in the private sector, they have to think all the time about what is on their computers and whether they should be in rooms for meetings. He said, ``We didn't realise that the private sector had to behave like that.''
Everyone now has to tackle that cultural change. My amendment simply attempts to clarify what the Government mean. We want to know whether the Government really intend that someone in a company or group on one project could find himself in trouble if he did not have an export licence every time he sent an e-mail from one part of the group or joint project to another. That cannot be the Government's intention, but that is what the Bill says, as I and industry read it. The Government cannot intend to impose such strict regulations and bureaucratic controls on UK companies that our manufacturing industry will become known throughout the world as an especially difficult partner. I hope that the Minister will allay those fears.
It is far more sensible to allow the free flow of information within companies, and to require export licences for information that will go outside a company, group of companies or a collaborative project sanctioned by Governments. That is the purpose of the amendment. It does not seek to exempt swathes of British industry from reasonable surveillance or permissions, but to ensure that the burden placed on them does not make them hopelessly uncompetitive. That would not be to the advantage of anyone.