Orders of the Day — Export Control Bill

– in the House of Commons at 3:33 pm on 9th July 2001.

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[Relevant documents: The Seventh Report from the Defence Committee, the Seventh Report from the Foreign Affairs Committee, the Sixth Report from the International Development Committee and the Eleventh Report from the Trade and Industry Committee, Session 2000–01, on the Draft Export Control and Non-Proliferation Bill, printed jointly as HC 445.]

Order for Second Reading read.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry 3:34 pm, 9th July 2001

I beg to move, That the Bill be now read a Second time.

As hon. Members will know, the Queen's Speech set out a programme of reform and renewal in this country: to extend opportunity for all to reach their full potential, and provide excellent schools and hospitals for all. As we build a future here for our people in Britain, we shall not ignore our international responsibilities: to reduce poverty, promote sustainable development and reduce conflict.

That is what the Export Control Bill is about. It is about people like Fatima, the young girl in Sierra Leone who saw her son shot dead in 1997, along with many others in her village. It is also about people such as Mute-garu-gori, who had to watch her mother and father being killed by soldiers in Rwanda, and three-year-old M'penzi, whose parents were killed in the dawn attack on her village in north-east Congo. She was shot in the shoulder and foot, but survived. Those are just a few examples of the people who suffer when guns get into the wrong hands. Illicit gun running and unregulated arms brokering contribute to the suffering and death of children, adult civilians and whole communities around the world. When we consider the Bill, therefore, let us remember what it will mean to people throughout the world.

The Bill introduces new powers to control the arms trade and also greater democratic accountability for the exercise of those powers. The defence industry here in the United Kingdom employs thousands of workers. It is an important part of our manufacturing base and exports are vital to it. Responsible and legitimate trade in arms, together with our own defence efforts, can ensure security and peace for people around the world. Our exports are other people's defence procurement. They help people to keep the peace by deterring aggression, and when that fails, they help them to defend themselves.

Of course, we also know that there is a dark and unacceptable side to the arms trade: the irresponsible—and indeed immoral—trafficking and brokering of arms to conflict zones and areas of instability. The Bill enables us to ensure that Britain cannot be used as a base for an illicit trade that causes so much suffering. It will ensure that Britain has one of the most effective and comprehensive export control regimes in the world.

The legislation that governs our exports is the Import, Export and Customs Powers (Defence) Act 1939.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

Will the Secretary of State give us some evidence to show that Britain is used as a base for such illegal weapons trafficking? On what evidence are her assertions based?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I think that all hon. Members must be aware of the serious danger of weaponry that is made in Britain for legitimate purposes being used abroad for illegitimate ends, as has happened before. All hon. Members will be aware of the danger of equipment or arms that have been licensed for legitimate use none the less ending up in the hands of illegitimate arms traffickers and repressive regimes. I am sure that the hon. Gentleman has read the very full report that the Government publish annually on our licensing decisions. It deals with the very tough controls that we have already imposed to ensure that the illicit use of weapons does not arise.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I have given way on that point, and I should like to make a little more progress before I give way again.

The legislation that governs the export of weapons and related technology has not fundamentally changed since it was introduced at the start of the second world war. The report by Sir Richard Scott—or Lord Scott, as he is now—on defence-related exports to Iraq highlighted the faults of that legislation and called for change. The Bill is the result of the thorough and comprehensive review of legislation for which the Scott report called. The 1998 White Paper on strategic export controls invited views on proposals for a new, more accountable and more modern legislative framework. Earlier this year, we published a draft Bill for further consultation, so hon. Members, non-governmental organisations and business had the opportunity to comment on a draft version before the Bill was formally presented to the House.

We listened to what people had to say and have made a number of important changes. In particular, we decided in the light of responses to the White Paper to introduce a general licensing system for arms trafficking and brokering, as well as our original proposals for controls to allow us to prohibit trafficking and brokering both to embargoed destinations and in relation to torture equipment.

Hon. Members have made a valuable and expert contribution to the review process. We have been greatly helped by the work of the Select Committee on Trade and Industry, which published a report in December 1998 on the White Paper. We have also been helped by the Quadripartite Committee, which so helpfully reported on the draft Bill soon after it was published. Our response to the Quadripartite Committee's report was published this morning. We made some changes to the draft Bill in response to the report. As the Committee requested, the Bill makes it clear that licensing decisions should have regard to the purposes that are set out in the Bill. We have revised the schedule that outlines the purposes to make it absolutely clear that export controls can be imposed when there is a risk of internal conflict.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

I warmly congratulate the Secretary of State on her appointment. Given that the Government are far short of achieving their objective of processing 70 per cent. of standard individual export licence applications in 20 working days—a matter of continuing and widespread anxiety to companies—will the right hon. Lady confirm that the Bill's honourable objectives will not be achieved at the cost of continuing delay and therefore expense to commercial enterprises?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I thank the hon. Gentleman for his kind remarks. Like him, I am worried about the delays and our failure to meet the target for dealing with all the applications on time. However, I am sure that he acknowledges that some of the applications raise complex and difficult issues on which a careful judgment must be made. On the one hand, we must not interfere with proper and legitimate business and thus impose unnecessary or unjustified costs on British business. On the other, we must not risk the prospect of arms and technology that have been developed and manufactured here ending up in the hands of repressive regimes, which will use them against their own people. The hon. Gentleman would want to ensure that those judgments were made properly. We shall do everything possible to speed up decision making, but we shall not risk making wrong decisions.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

In the light of the Secretary of State's reply to Mr. Bercow, will she outline the extent of the parliamentary scrutiny of individual licences that she envisages before they are granted?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

My hon. Friend raises a matter that was of considerable concern to the Quadripartite Committee. It is important to draw a distinction between accountability to Parliament for the orders that will be made under the Bill—I shall revert to that later—and accountability for the individual decisions on export licences. As I suggested earlier, we have already prepared a much fuller report on the detail of the applications and the reasons for granting or refusing them. That allows for parliamentary scrutiny and accountability, which, as my hon. Friend would acknowledge, was never available under the Conservative Administration.

Photo of Ann Clwyd Ann Clwyd Labour, Cynon Valley

We shall revert to the subject of parliamentary scrutiny during the debate. However, the scrutiny that my right hon. Friend is considering is retrospective, whereas the Committee proposed that scrutiny should take place before contentious licences are agreed.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

My hon. Friend makes an important point and I understand precisely the nature of the scrutiny for which she asks. Lord Scott made it clear in his evidence to the Committee that some serious constitutional issues—impropriety, even—were involved in confusing the proper roles of the Executive and the legislature and handing over decisions on individual applications, which should properly be made by Ministers, to a parliamentary Committee. I share my hon. Friend's view, however, that proper accountability is essential. Part of the purpose of the Bill and the detailed annual report, which we have already begun to publish, is to allow more effective parliamentary scrutiny and accountability.

The Bill responds to Lord Scott's key recommendations for new legislation by setting out in primary legislation the purposes for which orders imposing export controls can be made, and providing for effective parliamentary scrutiny of those orders. It will strengthen and improve the effectiveness of strategic export controls, introducing new powers that will enable us to control electronic transfers of technology and technical assistance, and of course it will provide new powers to control illicit arms dealing.

The Bill does provide for wide powers on export controls, which will enable us to meet our international obligations on arms controls, and to respond to changing circumstances and new technology. At the same time, as I emphasised, the Bill gives Parliament more control, to protect against any possible abuse of these powers.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Some of us are very concerned about the sale of arms and what happens to them. I ask my right hon. Friend to help me with an example. In the case of an unfortunate arms sale to Morocco that has been agreed by the Government, it is quite clear that the only reason Morocco would want any of those arms is to pursue a war against the Polisario, when one would hope that there is to be a United Nations-sponsored referendum to bring about peace in the western Sahara. I submit to my right hon. Friend that, had there been parliamentary scrutiny of that export licence before it was granted, it would never have been granted, because many people would have been able to make the perfectly legitimate point that we were in danger of arming one side in a conflict that we wished would not happen.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

My hon. Friend makes an extremely important point. I believe that we are all agreed on the purposes for which we want to license and, in appropriate cases, to limit and prevent the export of arms. We are bound to return to the specific example that my hon. Friend gives during the debate and in Committee. However, as I said, the annual report that we are publishing on these matters and all such applications gives Members of the House far more information on the basis of which to understand the system of export licensing that we are putting in place. Moreover, the system of purposes for export control enshrined in the Bill, and the consolidated national and European criteria, state the precise criteria that we shall continue to take into account when taking these individual decisions.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

I should like to make progress before I give way again.

Perhaps I may say a little more about the specific provisions of the Bill. Under present legislative provision, individuals and companies need a licence to export arms, but they do not need a licence to broker and traffic in arms. That simply cannot be right, so clause 5 provides comprehensive new powers to introduce controls on United Kingdom involvement in trade between overseas countries in goods that are subject to export controls.

We shall use those powers, first, to introduce a new licensing requirement for trafficking and brokering in weapons and related equipment; and secondly, to control trafficking and brokering of arms to embargoed destinations. We shall also use those powers to ban the trafficking and brokering of torture equipment. These measures together will allow us to prohibit the supply of weapons to regions of conflict, while of course continuing to allow legitimate trade by British defence companies.

Photo of Graham Brady Graham Brady Conservative, Altrincham and Sale West

It is obviously right to do what can be done to limit the trade in illegal arms, but can the Secretary of State give any assurance to legitimate engineering and military equipment manufacturers in this country that the current system of licences will be improved and expedited? A company in my constituency has just lost an order. It was an order for repeat business; there were no new or contentious circumstances. It applied for the licences in November and December last year. The goods were ready for delivery in January this year and the company still has not heard from the Department of Trade and Industry whether the licences will be issued.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

If the hon. Gentleman writes to me with the details of that case, I will of course look into it. I should say that on at least one previous occasion, when a problem of that kind was raised with me, I found that the company had not provided the necessary information in time for us to take a timely decision. That may or may not be the case in relation to the company that the hon. Gentleman mentions.

I stress that the Defence Manufacturers Association welcomed the draft Bill, and stated that it

"fully supports the Government's efforts to replace the existing legislation."

It said that it

"warmly welcomes the fact that the Government has sought in the new Export Control Bill . . . to introduce controls on the activities of brokers and traffickers."

I believe that the DMA, to its credit, recognises that what we are seeking to do here is absolutely essential, and does not compromise the legitimate activities of defence manufacturers and exporters in our country.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

Can the Secretary of State reassure me that the new regulations will apply to brokers with UK passports operating abroad?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

We made clear in the White Paper, the draft Bill and the manifesto on which we have just been re-elected our determination to deal with the problem of illicit brokering and trafficking. The specific point that the hon. Lady raises involves complex enforcement issues, and we shall continue to consider the matter as we develop the secondary legislation that will be introduced under the Bill.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

I am grateful to the Secretary of State for giving way, but I must press her on that point. She owes it to Parliament and to the country at large and defence industries in particular—in spirit, they sympathise with the Government's objectives—to give examples of how British-manufactured equipment is getting into the hands of people who are using it unscrupulously; and to identify those British nationals who are engaged in that illegal and quite disgraceful traffic.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

The hon. Gentleman repeats a point that he made earlier and which I have already answered.

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

No, I want to make progress. I have already given way many times.

Clause 2 will give us important powers to control the transfer of technology, including by electronic means. That will end the anomaly that has arisen whereby people need a licence to export paper instructions on how to make a weapon, but are entirely free to send the same information by e-mail. We shall use the powers in clauses 2 and 4 to introduce controls to prevent the transfer of technology or the provision of technical assistance that could help in the development of weapons of mass destruction.

Clause 7 provides for the introduction of tough penalties for export control offences by raising the maximum seven years' imprisonment to 10. Clause 6 will introduce a new power to require exporters to provide information on goods that are to be exported under licences. We need such powers to enable us effectively to fulfil international obligations, including our annual return to the United Nations register of conventional arms. The Bill will provide us with the powers that we need to meet our international obligations and our national commitments.

As I told my hon. Friends earlier, however, the Bill will also ensure that the Government are accountable to Parliament for the use of these new powers. First, in clause 3 we have established the purposes for which export control orders can be made, and they are set out in the schedule. Secondly, clause 12 provides for parliamentary scrutiny of secondary legislation to be made under the Bill. The purposes for which export controls can be imposed include, crucially, meeting our international obligations and our obligations to the EU.

The Bill will allow controls to be imposed to counter risks to national security, peace and stability anywhere in the world and the risk of goods being used for the proliferation of weapons of mass destruction, internal repression, and human rights abuses or serious crime and terrorism.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

I am exceptionally grateful to the Secretary of State, because she has been extremely generous in giving way.

The Secretary of State talks about parliamentary scrutiny, but does she not accept that, on preliminary perusal, clause 12(4) appears to provide for the application of the affirmative procedure and thus to offer an entitlement to parliamentary debate in respect of orders made under clauses 6 and 11, although the negative procedure will apply in respect of no fewer than five other clauses? That means, in simple terms, that Members of Parliament will be denied the opportunity to debate those important matters. Does she sign up to that in every particular?

Photo of Patricia Hewitt Patricia Hewitt Secretary of State, Department of Trade and Industry

As the hon. Gentleman himself says, the crucial measures in respect of which orders may be made will indeed be subject to the affirmative procedure, but I am sure that the point as to whether the affirmative or the negative procedure should apply to other measures will be dealt with in detail in Committee.

We make it clear in clause 8 that the consolidated national and European criteria announced to the House last October remain the basis for licensing decisions. In the Bill, we bind ourselves to abide by the guidance published by me, and by subsequent Secretaries of State, including those consolidated criteria. That is a crucial point when it comes to any possible judicial review, and also crucial to effective parliamentary accountability.

We have ensured, in clause 9, that the Government will publish an annual report on export controls. In its response to the White Paper, Oxfam suggested that publication of the annual report—which this Government introduced—should be enshrined in law. We agree, and the Bill therefore requires Government to submit a report to Parliament every year.

The Bill also provides for control of the export of objects of cultural interest, and replaces the current provisions on the subject contained in the Import, Export and Customs Powers (Defence) Act. The proposals have rightly been welcomed by the art trade.

The Bill builds on a number of steps that we have already taken to develop a responsible, accountable framework for trade in arms. First, we have already presented the most open report on arms exports produced by any European nation. In 1997, we published the criteria against which licensing decisions are made. Since 1999, we have voluntarily laid orders under the 1939 Act before Parliament, and we have published increasingly full annual reports on strategic export controls. Secondly, we have taken action to ban the manufacture of and trade in land mines, and we have banned the export of torture equipment.

Thirdly, we have reached an unprecedented agreement in the European Union on a code of conduct enabling any member state to object if another member state takes up an arms order which has been rejected under the code. That is a crucial provision, ensuring that the approach we take here in Britain will be reinforced by other member states. For the first time, the countries of the European Union have all agreed to abide by similar standards when assessing licences for arms exports.

The Bill will help to ensure that the United Kingdom plays its part as effectively as it can in making the world a safer place. At the same time, it provides a clear, accountable framework for legitimate business, and for our defence industry. I commend it to the House.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 3:57 pm, 9th July 2001

I start by declaring any relevant interests. I do not think I have any as such, but the Bill is drawn so widely that almost any commercial interest may be relevant, so for safety's sake I draw the House's attention to the Register of Members' Interests.

The House should welcome a Bill that defines the controls that should be placed on exports of defence equipment and related goods, and brings the whole subject within the scope of parliamentary scrutiny. The Import, Export and Customs Powers (Defence) Act 1939 on which successive Governments have relied since the second world war, is clearly inadequate and inappropriate, although it was confirmed and extended in 1990 with the agreement of the then Opposition.

Although the aims of the Bill in that respect are welcome, however, I must qualify the welcome heavily after reading it. In truth, it is little more than an enabling Bill: most of the clauses simply give the Secretary of State power to bring in subsequent orders that will supply the actual substance of the legislation. It is difficult for us to form a definite judgment about a Bill the great bulk of which remains submerged.

The Quadripartite Committee, which brought together the Select Committees on Defence, on Foreign Affairs, on International Development and on Trade and Industry, recommended that the Government publish the secondary legislation, in draft form, before the House was asked to give the Bill a Second Reading. That is in the Committee's report published on 1 May this year. I very much regret—I expect that the Select Committee members share that regret—that the Government have refused to do that. In truth, therefore, we are being asked to consider a Bill that we have not really seen yet.

Much worse is the fact that the Government have responded to the report only today. Moreover, at a quick reading, they seem not to have satisfied the report's requirements and recommendations. It really is scandalous that, today, the Government have rushed out a very late response to a series of very good Select Committee reports. That is treating the House with considerable contempt. Hon. Members seeking to speak in this debate will not have had a real opportunity to examine the Government's views. It would also have been a courtesy if the Government had supplied an advance copy of the document to those who they knew would be speaking, such as me.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

My right hon. Friend's concerns about our inability to know what will be in the secondary legislation are shared by the Saferworld organisation, which is perhaps not usually associated with our part of the political spectrum. In its briefing document, it said:

"In the absence of detailed mechanisms for putting the principles set out in the primary legislation into operation, parliamentarians, and also NGOs and the defence industry, will find it impossible to judge the overall impact of the new legislation."

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I am grateful to my hon. Friend for reinforcing the point that, on all sides of the debate, right across the spectrum, people are dismayed about the Government's failure to introduce the necessary draft secondary legislation and by their very late response to the Select Committee report.

It is not as though the Government have not had plenty of time. They published a White Paper on the subject in 1998, but then they did nothing. That omission, too, was critically reported on by the Select Committee to which I have referred, when it expressed its dismay at the Government's failure to introduce earlier legislation.

We all remember that, in 1996, the current Leader of the House, Mr. Cook worked himself up into a lather of self-righteous indignation about the Scott report. However, when he was in office and able to do something about export controls, he simply sat on the subject. It is only now, in another Parliament, that the Government are introducing the necessary legislation. It is yet another example of all words and no delivery.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

Before the right hon. Gentleman works himself up into a lather of self-righteous indignation over parliamentary courtesies, perhaps he will answer a question. Is he not rather ashamed to have been part of a Government who did nothing to introduce legislation to tighten up export control in the light of precisely the abuses that were highlighted in the Scott report?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

If the hon. Gentleman had been awake a few moments ago, he would have heard me say that Governments of all complexions relied on the 1939 legislation for too long. In the light of the Scott report, however, the previous Conservative Government immediately issued a consultation document and said that we would legislate to introduce the recommendations made by Sir Richard Scott, as he then was. Subsequently, however, we lost office. The incoming Labour Government could have introduced the necessary legislation, but they did absolutely nothing. It is only now that the Government are introducing a Bill to try to do the job.

I shall draw another item to the attention of Roger Casale, as he is so interested in the matter. The Select Committee observed that the Government could have used non-legislative means to implement some of the Scott recommendations. They could, for instance, have laid voluntarily before the House the necessary export orders. Instead, they did absolutely nothing in that respect until December 1999. It is, I am afraid, a shameful story of drift and neglect by the previous Labour Government.

Without the substance of the legislation, it is very difficult to make a final judgment on whether the Government have achieved the right balance between the acknowledged need for control over the export of such goods and related technology and the need not to inhibit legitimate trade unnecessarily, by imposing unrealistic or burdensome regulations.

The Secretary of State gave some purported examples of the damage done by unauthorised weaponry, but under questioning she failed to substantiate whether British firms or British defence equipment could be held responsible. It is no good her making generalised allegations about the inadequacies of existing controls unless she is prepared to say which firms are involved and whether the problem originates from a failure of existing export controls.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

Did my right hon. Friend, with his customary powers of observation, note that the Secretary of State declined to reaffirm the Government's commitment to the target of processing 70 per cent. of standard individual export licence applications within 20 working days, in response to my challenge to her to assure the House that the Bill would not exacerbate the delays?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

My hon. Friend is absolutely right. The existing licensing system is a scandal, and the Bill could easily make it worse. It was characteristic of the Government to start blaming industry for the delays. When my hon. Friend Mr. Brady asked about a specific example, the Secretary of State suggested that the delay was caused by the failure of the firm to provide the right information, but the statistics that he cited exclude examples where the Government have to return to the company to get additional information, so the missing of the 20-day target is purely down to the incompetence of the licensing authority—in this case, the Department of Trade and Industry.

Conservative Members know that the defence industry is important in a very wide sense. It employs about 350,000 people in the UK, and the export trade is vital to those people as well as being important in keeping down the cost of equipment for our own armed forces. Moreover, because defence firms are heavily weighted towards manufacturing, they provide about 10 per cent. of the output and the work force in manufacturing generally, and that sector is practically in recession. The sector was ignored and badly treated by the previous Labour Government and is now suffering grievously from excessive regulation and taxation.

We hope that the Bill will not be another opportunity for the Government to repeat all the mistakes that they made in the previous Parliament. We have often commented on their in-built tendency to interfere and over-regulate, to the detriment of the industries concerned.

Photo of Jim Cousins Jim Cousins Labour, Newcastle upon Tyne Central

Does the right hon. Gentleman accept that some of the most difficult decisions concern dual-use technology, with the terrible dangers brought by the proliferation of techniques of warfare that can rebound on our own forces and our own interests in the world? Does he also accept that that was precisely the area in which the Conservative Government failed so badly?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

Of course I acknowledge the importance of the subject and the need for a workable and realistic system of export controls, and I have already said that we give our support to that endeavour. However, we are entitled to look carefully at the Bill and ask whether it will discharge that responsibility. I hope that the hon. Gentleman, in a non-partisan spirit, will help us in that endeavour. The issue does not necessarily split the parties, because the whole House wants a parliamentary system of scrutiny to ensure that the Government are performing that task.

I cannot overlook the Liberal Democrats' contribution to the debate. Their only real contribution to the debate last year on the subject of the defence industry and exports was to suggest that the Government should withdraw cover under the exports credits guarantee system from that industry. In other words, that sector of British industry uniquely should not be able to export with cover obtained from export credits. When it was pointed out that that would put British industry at a disadvantage compared to other competitor countries, Dr. Tonge, who is in her place, conceded that it would lead to job losses. She said, in a slightly unfortunate phrase, that

"we shall have to bite the bullet."—[Hansard, Westminster Hall, 2 February 2000; Vol. 343, c. 193WH.]

Of course, it would be those who work in that important industry who would have to do so, not the hon. Lady and her party.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

I know how committed my right hon. Friend is to the principle of freedom of information. In those circumstances, does he agree that it is important that the Liberal Democrat position on that subject—unprecedented and deeply injurious to legitimate defence commercial interests as it is—should be widely communicated in every constituency that has a substantial defence interest and the misfortune to be represented by a Liberal Democrat Member of Parliament?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I will join my hon. Friend in that endeavour, but he will know as well as I do that Liberal Democrats tell a different story when they are speaking in constituencies with important defence interests.

I welcome parts of the Bill and, in particular, the purposes contained in the schedule for which the Government can impose export controls. That is a definite advance on previous legislation. Rather less happy is the fact that the Government can change the schedule simply by order, and will not need primary legislation. Even worse, the Government can override the schedule and impose export controls that ignore the restrictions in the schedule simply by introducing such a control in secondary legislation. The Bill is a good example of restrictions and controls apparently being applied to the Government, but if they do not like them they can easily change them.

The Government's ability to introduce secondary legislation in that way was the subject of adverse comment by the Delegated Powers and Deregulation Committee of the other place. The Government may have set out with the laudable intention of establishing a system of parliamentary scrutiny of the issue, but they are retreating further towards a system of ministerial discretion. The same is true of the export control orders—in other words, the orders that will be brought forward to impose or change restrictions on exports of defence equipment to specific countries or parts of the world.

The Government say that there are about six such export control orders a year, and the Scott report recommended that they should be subject to the affirmative resolution procedure. However, as my hon. Friend Mr. Bercow has already observed, the Government have insisted on the use of the negative resolution procedure. In other words, they will pass unless they are voted down. The point about the negative resolution procedure is that whether there is a debate or a vote is entirely at the discretion of the Government, not the House.

The Government used weasel words in their consultation document on the Bill, saying:

"the negative procedure would provide Parliament with the opportunity to debate and vote on secondary legislation where appropriate."

I am afraid that that is not true. Parliament does not have control over that. If the Government do not want a debate, there will not be one. If this new Parliament wants to take seriously the issues of parliamentary scrutiny and the powers of the House, it should at the very least ensure that the House itself decides whether there is a debate and a vote on matters of this importance.

The Bill also extends the licensing system. We do not know how many people will be caught up in these controls. They refer to activities that facilitate the acquisition or disposal of certain goods. Presumably, the airlines and shipping companies that transport the goods as well as the banks and finance houses that provide the credit all in some way facilitate the acquisition or disposal of such goods. All, therefore, will—at least in theory—be covered by the Bill. It could—and probably will—include British nationals who are working overseas, even if they are employed by foreign companies. All of them will be swept into the net. If that is not the case, we should be told early in the debate so that we do not unnecessarily suppose that the Bill's scope is as wide as it appears.

The Secretary of State alluded to the extension with regard to the transfer of technology where that is done by electronic means rather than by the physical export of equipment, tapes, plans or drawings. In other words, from now on electronic means will include the telephone, fax and e-mail. The Government's aim is understandable, but is it practical and enforceable?

The academic world is worried about being caught by oral transmission of information. For instance, giving a seminar or lecture on a scientific subject with possible defence implications to foreign students could be a licensable activity because it could mean that information was being transferred to people in another country.

Photo of John Smith John Smith Labour, Vale of Glamorgan

In the example that the right hon. Gentleman uses, is it not the case that people would fall foul of the legislation only if they knowingly divulged sensitive information?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

The hon. Gentleman is right. That assurance has, I understand, been given to the academic world. My point is that it should be in the Bill. It is not good enough for the Government to give verbal assurances to universities and research institutions that are not encoded in legislation. That is my request to the Government.

The Defence Manufacturers Association has a related concern about telephone conversations being licensable. The Bill will require, one supposes, considerable monitoring of employees having such conversations. Monitoring e-mails and telephone calls is a contentious issue in firms, and some trade unions do not like the scrutiny and intrusiveness involved. The Bill and its related literature is silent on that point.

The Bill also extends controls to trafficking and brokering between overseas countries. That raises the separate and important issue of extra-territoriality. Is it realistic to try to control the activities of British citizens, or—as the Bill states—a person acting under the control of a British citizen, when such activities take place entirely abroad? For example, a British citizen might be employed by a foreign company which was ordering, selling or transferring equipment or technology between countries other than the UK—transactions that had nothing to do with this country or anyone in it. However, that person would come within the scope of the Bill.

The situation would be even more bizarre if such a person was a clerk working for a defence company based abroad who merely filled in export licence applications—perhaps for the export of equipment from the UK to another country. However, although the person was working abroad for a company based abroad, the company would still have to apply for a licence from the DTI. That is wholly unrealistic and certainly unenforceable.

Until now, the UK has been rather critical of the United States when it has tried to claim extra-territoriality over American companies based in this country, so it is odd that we are trying to claim such rights over British citizens and foreign firms based in other countries and trading in goods that have nothing to do with the UK. We all have good intentions, but the Government's good intentions could lead them into the most appalling muddle of unenforceable laws that might discredit the whole system.

Under the Bill, the Government plan to increase the penalties for export control offences—the term of imprisonment will be increased from seven to 10 years. That is somewhat odd because recently there has been only about one conviction a year for such offences, incurring an average prison sentence of 30 months.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

Does the right hon. Gentleman endorse the extra-territorial provisions under legislation relating to land mines and sex offenders? Such provisions are considerably stronger than those proposed in the Bill.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I am merely asking questions. It is not my Bill. We are entitled to ask whether its provisions are realistic and enforceable. In reply to the hon. Gentleman, I think that we should consider carefully whether the land mines legislation is being properly enforced and whether there are lessons to be learned from it; otherwise, Parliament could get into the habit of constantly increasing penalties, while the enforcement of legislation is poor and its applications are confused. Nothing in the Bill supplies an answer to my questions.

What we do know is that such measures have costs. Under the Bill, there will be costs to the Government: extra staff will be needed in Customs and Excise and other departments. There will also be hidden costs to business and industry in complying with the Bill.

Those costs will fall not only on the defence industries. Cultural goods—defined as being more than 50 years old—will be included. If the Government introduce provisions, again by secondary legislation, that require records to be kept of all such goods, the result might be that every antique shop—indeed, every junk shop—might have to keep records of all its goods and, if they found their way abroad, to whom they were sold. Those costs are hidden, but they are real. The Government must provide further information about them, if we are to take a mature view of the measure.

The licensing system for the export of defence equipment is already unsatisfactory—a point made in several interventions. The Government's aim is to deal with individual export licences within 20 working days. However, when I asked the previous Secretary of State whether that target was being met, it turned out that, last year, only 57 per cent. of such applications met the target. The longest time taken was 222 working days. That excludes complex cases in which additional information is required from the applicant firm. That recorded delay is purely one experienced in government and between Departments.

When asked about the issue, the previous Foreign Secretary, the right hon. Member for Livingston, was almost completely dismissive. He said:

"I have limited sympathy with complaints we are not moving fast enough."

I am sure that he has limited sympathy with trade and industry, but that is not good enough for the House. No one doubts that we require a system that strikes the right balance between the legitimate need to scrutinise such applications and the fact that the great delays caused by such scrutiny are costing jobs and causing orders to be lost to British industry. The worry is that the Bill could make matters worse.

The Defence Manufacturers Association says that the Government already underestimate the additional burden that will be imposed under the Bill. In opening the debate, the Secretary of State mentioned other member states and appeared confident that there would be one set of rules for all member states. I am sorry to disabuse her of that view, but that issue was tackled specifically by the Quadripartite Committee, which said:

"There is regrettably little sign that other Member States are taking very seriously the suggestion that they should be more transparent in their reporting of the operation of arms export controls."

Earlier, the Committee warned that

"none of our European competitors have achieved the UK's . . . level of transparency".

Indeed, the previous Foreign Secretary admitted to two examples where licences for export had been turned down by this country, but then agreed by other members states in the European Union. Again, we are in danger of putting our own industries at a disadvantage, and we are not creating the comparability of rules that the Secretary of State said was important.

My conclusion—it has to be an interim one—is that the Bill is necessary and that the Import, Export and Customs Powers (Defence) Act 1939 needs to be replaced, but it is difficult to judge the Bill in the absence of secondary legislation. There has been an unnecessary delay in introducing the Bill, which seems as though it will be over-bureaucratic and highly regulatory. Although it will increase the penalties, we have severe doubts about its feasibility and enforceability. It is in that spirit that we shall continue to scrutinise the Bill in its remaining stages in the House.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston 4:28 pm, 9th July 2001

When Mr. Heathcoat-Amory asked probing questions in Committee—the sort of questions that we would expect—he made some relevant points, but, if he does not mind my saying so, he has also indulged in yah-boo politics. First, that is uncharacteristic—it does not fit well with his personality at the Dispatch Box; and, secondly, the British people were not at all impressed by it, as they unfortunately showed in the low turnout at the election. I therefore hope that he will not mind if I pay a bit more attention to his probing questions and seek to emulate that attitude by making a speech along those lines, because this is a good Bill.

The Bill is welcome, and it says a lot for the Government that they have introduced it at this stage in this Parliament. I am delighted that my right hon. Friend the Secretary of State is associated with it and that she has made her own position clear—I thought it very farsighted indeed. I am also delighted that the Under–Secretary of State for Trade and Industry, my hon. Friend Nigel Griffiths, will make the winding-up speech. I welcome both of them to their rightful positions on the Front Bench. I hope that they will not take it amiss if I, too, ask a few questions, some of which have been put to me by some of the aid agencies, non-governmental bodies and others who also welcome the spirit of the Bill and would like to suggest some improvements that can be made to it during its passage through this House and perhaps another place.

As my right hon. Friend the Secretary of State has done, we can take a lead in being tougher on the international arms trade and in seeking relevant controls. We have two opportunities to do that. The first is provided by the Bill and by the chance that we have to tighten it up. The second results from the fact that the United Nations conference on all small arms starts today in New York. We therefore have an opportunity to send an important signal to the conference to show how seriously the British House of Commons takes such matters. I hope that other countries will seek to emulate us.

There has been a massive proliferation in the trade in small arms in the past decade. That has not been helpful for international development, for human rights or for seeking to improve the lives of millions of people in all parts of the world. Some say that 500 million people—one person in every 12 on the planet—have been victims of the arms trade in the past decade. Clearly, that is an issue that we should address.

As supplies increase, we know that prices fall. I am grateful to one aid agency for drawing my attention to the fact that, in north-east Kenya, the barter rate for an AK47 has dropped from 10 cows in 1986 to the present level of two cows. That might seem a trivial point, but it suggests that, if we are to tackle the problem of world poverty, we must control the terrible issue of the arms trade, which has an impact on poverty and on people's lives.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

Can I tease from the right hon. Gentleman an answer that the Secretary of State was unable to give? He knows a great deal about such matters and he referred to the proliferation of AK47—Soviet—weapons, so can he shed any light on whether British nationals are involved in that trade? In addition, does he know of any similar British equipment that might form part of such an horrific trade?

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

The hon. Gentleman attributes to me expertise that I do not claim, but he makes an important point. I will touch on it later in my speech if he allows me to do so.

We are dealing with the reality of wars in the developing world. Only a decade ago, some people were using spears and bows and arrows, but we are now in a world of automatic and semi-automatic weapons. That is extremely worrying, so it is right that the trade in them should be controlled.

As we all recognise, the victims of the trade are civilians—ordinary men, women and children. On our travels, many us have seen orphans and orphanages in Africa, Asia and elsewhere. Much suffering is caused by this unnecessary arms trade, so I welcome the view of the right hon. Member for Wells that the Bill should receive the scrutiny that it requires. It is far too easy for people to get access to those weapons. If we can tighten the controls, so much the better. We have seen too much suffering in the past 10 years and we must stop it. If we make a start today—as I believe we can—consistent with discussions in New York, the international community can only welcome that.

The United Nations Secretary-General, Kofi Annan, said that the death toll from small arms in most years greatly exceeds the toll of the atomic bombs that devastated Nagasaki and Hiroshima. That is a compelling point. Even those who work in the industry are honest and decent enough to want to address that reality. I have no criticism of hon. Members on either side of the House who have to deal with problems in their constituencies. They should have the support of the whole House when they address the more sensitive issues, such as jobs that conflict with stopping the arms trade for humanitarian and other reasons, which we might consider a reasonable approach. It is not an easy issue.

Of course, there has been too much suffering and displacement and there have been too many deaths, injuries, human rights violations and obstructions of humanitarian aid. If the Bill helps to reduce that suffering, it must be welcome. We need to break the cycle of violence, or people will be reluctant to surrender their weapons, which we must encourage them to do in a practical way. There is a responsibility on nation states, which the Government are accepting, to ensure that weapons do not end up in the wrong hands, as they so often do. The Bill is a big step in the right direction.

My right hon. Friend the present Leader of the House made a major contribution as Foreign Secretary in what he said to the House about the Scott inquiry and the compelling conclusions that he reached. Given that he was dealing with problems that had arisen during the previous 18 years, his contribution in those four short years should be acknowledged rather than decried, and I am happy to do that in his absence.

I welcome what my right hon. Friend the Secretary of State for Trade and Industry said. Most voluntary organisations and non-governmental organisations share her view. However, they have probing questions for the Government, which I am sure she will want to address. I want to raise only two of the many points that concern Oxfam. The organisation says:

"If the secondary legislation includes a requirement for brokers to register and apply for a licence for each deal they arrange then these measures will make considerable progress towards preventing Britons from engaging in the brokering and trafficking of weapons into conflict and human rights crisis zones."

It goes on to say:

"However, Oxfam believes that there are still some significant absences from the bill which, if addressed during its passage through Parliament, would give the UK one of the best control regimes for strategic exports in the world."

I am sure that Mr. Howarth will take that on board. Oxfam accepts that we can make the improvements and that the basis for that is right.

On sustainable development, to which we are all absolutely committed, the organisation says:

"Oxfam is concerned that the introduction of new clause 8 is actually a weaker mechanism for protection of sustainable development than if the issue was addressed in the main Schedule of the Bill, as was proposed in the original draft. "Guidance" is primarily aimed at licensing procedure and will not give the Secretary of State powers to impose controls to protect sustainable development. "Guidance" issued by the Secretary of State will not have full statutory weight, and while changes to the Purposes in the Schedule are subject to an affirmative resolution procedure, no such requirement exists for changes made to the "guidance" referred to in clause 8. It is therefore conceivable that within the lifetime of this primary legislation, reference to sustainable development could be removed without due consideration by Parliament. We therefore urge HMG to reconsider re-introducing such a reference into the Schedule."

I put that on the record so that my hon. Friend the Under-Secretary can reply to it, if he feels so disposed. I want also to underline the fact that it is the view of an important organisation.

The right hon. Member for Wells referred to parliamentary scrutiny, which was dealt with by my right hon. Friend the Secretary of State. The Bill takes us much closer to our goal, although I do not know whether such scrutiny can be conducted before decisions are made. Certainly, we all want to know as much as possible about exports, especially of arms. We want to know where they are going, how they will be received, who will receive them and how they will be used.

As I said, I have some probing questions. What will the Bill do to solve the problems faced by British shippers? Returning to the point made by the hon. Member for Aldershot, we all remember the delivery of arms to Saddam in 1998 by Occidental Airlines, which was co-owned by a UK citizen, and we want to deal with such problems.

There is also the issue of unlicensed production overseas. The Bill does not include powers to enable the Government to require companies to impose controls on their customers regarding the manufacture of arms overseas under UK licence. Many hope that in secondary legislation the Government will take full responsibility for extending licence production controls beyond embargoed destinations. Many end-users fail to observe international human rights and humanitarian law and operate in countries without arms embargoes. Oxfam has led the way in asking the Government to use the opportunity afforded by secondary legislation to tighten end-user controls. In Oxfam's view, the increased use of overseas posts in risk assessment does not go far enough, and results in end-users monitoring subject to ad hoc checks rather than to a proper regulatory system. What thoughts does my hon. Friend the Under-Secretary have on that matter?

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I share the right hon. Gentleman's belief that there is not much point in restricting trafficking and brokering if weapons end up with people who we do not believe should have them. I, too, have been following the contributions of Oxfam and other groups, and it is not clear what effective sanctions could be recommended if that result were to be outlawed. In the groups' recommendations, I have seen only the suggestion that licences could be revoked. Surely by then, however, it would be too late?

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

It may not be, but I am glad that the hon. Gentleman asked that question, because that is what I want the debate to be about. If the Government take it on themselves to revoke licences which they consider to have been used inappropriately, I, for one, will support them. Indeed, I would have advocated that during my speech.

Photo of Ann Clwyd Ann Clwyd Labour, Cynon Valley

Is my right hon. Friend aware of the situation in the United States, which has very clear guidelines indeed? Apart from prior scrutiny, which obviates some of the difficulties surrounding sending weapons to countries with dubious human rights records, all contracts exchanged between the United States and the countries to which it exports arms include an opportunity to revoke the agreement without penalty.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

I am grateful to my hon. Friend, who has done outstanding work on those matters. I very much value her experience and knowledge of the United States; the House has benefited from her contribution. Again, we must take that experience on board.

In response to my hon. Friend and Dr. Lewis, if the Government feel that it is necessary, they should unashamedly exercise their right as a Government to revoke export licences, as I have sought to advocate. If people are aware of that, we will make much more progress. I am therefore grateful for the interventions of my hon. Friend and the hon. Gentleman.

I shall end by referring to the role of the Department for International Development which, I am sure, is very much in the mind of my right hon. Friend the Secretary of State. I am sure, too, that, during our discussion of the Bill, consultation will continue. I shall give a final quote from Oxfam which I am certain my right hon. Friend and my hon. Friend the Under-Secretary will find helpful. Oxfam encapsulates the role that I want for the Department for International Development and says:

"The Department for International Development is asked by the Department for Trade and Industry to comment on the impact of individual arms licences on sustainable development. Whilst we welcome this provision, we believe that it needs to be extended to cover the cumulative effect of arms exports as it is only when the broader picture is considered that the true impact of arms transfers on sustainable development is revealed. We would like the Bill to explicitly state that the Department for International Development has the power to monitor the cumulative effect of export licences."

That is an important point, and I look forward to the response of my hon. Friend the Under-Secretary. It is excellent that the DTI and the Department for International Development are working together because, in our desire to ensure that we continue to make the best contribution that we can as a trading nation, exercising our responsibilities to the developing world, sometimes we come into conflict.

Today, we are seeking to erase at least part of that dilemma and some of those difficulties; we are doing so at a time when international bodies, such as the conference in New York that I mentioned, are seeking to do precisely the same thing. For those practical reasons and because of the inspiration that the Bill is giving all those who deplore the arms trade, especially in developing countries, and all the damage that that trade has done, I welcome the Bill and wish my right hon. Friend the Secretary of State and my hon. Friend the Under- Secretary godspeed in getting it through its various stages.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry) 4:49 pm, 9th July 2001

I, too, welcome the new Secretary of State. I also welcome the Bill which, although belated, completes the work on the implementation of the Scott report, following the European code of conduct and the new arms export criteria.

For those who were not in the House when the arms to Iraq scandal erupted, it is a salutary experience to look at some of the documents and remind ourselves how great the scandal was. The export control system had fallen into such disrepute that British companies could supply Saddam Hussein with the equipment and technology to develop nuclear, chemical and biological weapons. That was the extent to which the system had become porous.

As the Conservative spokesman, Mr. Heathcoat-Amory said, the Bill is essentially a framework measure. Like the right hon. Gentleman—although probably for the opposite reasons—we look forward to seeing as much as possible of the secondary legislation. The White Paper, the draft Bill and the consultations were detailed enough to give us a view on how the Bill should be strengthened. We support Second Reading, but like Mr. Clarke, we feel that some aspects of the Bill should be stiffened, including prior scrutiny. Lest we forget it, I remind hon. Members that, although such scrutiny has been presented by the Opposition as a slightly way-out proposal, it was recommended by the Quadripartite Committee, which comprised four Select Committees. We also want the Bill to be stiffened in respect of brokerage, extra-territorial application of control, overseas production and end use, and we want more explicit provisions relating to sustainable development—all points that the right hon. Gentleman mentioned.

I should like to put the Bill into a slightly wider context. It is essentially about strategic exports and big arms contracts, but as the right hon. Member for Coatbridge and Chryston said, we know that many of the problems associated with the arms export trade now centre on small arms. Indeed, that is probably more clearly understood now than when the Scott report was published. British firms have been involved in such business. Several hon. Members asked for the names of those firms, but I remember at least two relevant debates in this House, concerning Sandline shipments from Bulgaria to Sierra Leone and the Miltec transactions in support of Rwandan Hutu rebels. There must be many other such examples.

Such trade is big business. I understand that there is a stock of about 500 million small arm units in circulation. As a successful manufacturer, Britain must have a substantial share of the originating materials. Why is that important? It has only just begun to be appreciated—

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

The hon. Gentleman says that Britain must have a substantial share in the trade. That is a very serious accusation. Will he specify the nature of the small arms and tell us which British manufacturers he thinks are responsible for allowing this kit to get into the wrong hands?

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

I have just given two examples. Britain has roughly 25 per cent. of the world arms export trade, and simple logic suggests that we must have a substantial component of most segments within it. I am sure that we can discuss the matter in more detail in Committee, but I am surprised that the hon. Gentleman denies the facts.

The importance of the small arms business is that much of the material is highly persistent. Any country that purchases a sophisticated fighter such as the F16, which has about 60,000 moving parts, will be closely tied to the country of origin through maintenance, spares and control. However, even very unsophisticated military operations can keep small arms with few moving parts in circulation for a long time. That is why small arms are a problem and are so destructive.

My other general point was mentioned by the Conservative spokesman, who gave me a friendly trailer on the way in which the arms business functions in this country. It is tempting to say that such business is terribly important for the British economy. That is partly true, as we have a large share of world trade that is disproportionate to our role in manufacturing in general, and as many jobs are involved, but it must be stressed that this is not normal business. It is not based on free-market transactions between private businesses and private customers, as much of it involves the Government in a supporting and sometimes subsidising role. In the current argot, we could almost describe such business as a public-private partnership, even though, through the mediation of the Export Credits Guarantee Department, the private sector has offloaded many of the risks on to the Government. I introduced the debate to which the right hon. Member for Wells referred. So far from its being hidden, I got my party to endorse the policy at our party conference. The debate emphasised the volume of research that showed the extent to which the British taxpayer subsidises the arms export business.

Research showed that approximately £300 million a year was written off as a result of ECGD defaults on the arms trade alone. In the past few weeks, Saferworld has published some useful work, which was endorsed earlier by Conservative Members. Its thorough research shows that the British public subsidy to the arms export business is considerably greater than £300 million. It employed the simple method of ascertaining the cost of capital and the cost of providing for risk in the market, and comparing that with the cost of borrowing under the ECGD arrangement. On average, the cost to the British taxpayer is approximately £400 million a year, when all support costs are added. That is relevant to the debate because it is linked directly to scrutiny.

As the right hon. Member for Wells suggested, I would have reservations about the Government becoming heavily involved in second-guessing private transactions that risk no damage to humanity. However, the taxpayer is substantially involved in many cases, and it borders on impertinence for British companies to claim that scrutiny is no role for Parliament.

Before plunging into detail, I want to explain my position a little. I have no experience of the parliamentary review process; I did not serve on any of the four Select Committees. I served on the Select Committee on the Treasury, which should perhaps also be one of the main parties to the discussions. I therefore have no experience of the way in which Parliament has reviewed arms exports. However, I have some experience of operating the arms export control system from within Whitehall, albeit a long time ago, in the pre-Scott era.

I was a first secretary in the Foreign Office, and I looked after 15 Latin American countries, which at the time were flush with a lot of cash and regarded as one of the primary targets for the British arms export industry. It is probably fortunate for my subsequent career in politics that my signature does not appear on orders that went to General Pinochet—a different bit of the office was responsible for that—or, perhaps more important, on the papers from the Department that authorised the substantial exports of British hardware to General Videla and the junta in Argentina. That hardware was subsequently used to kill British service men.

Being part of that process provided me with considerable food for thought about the operation of the arms export control system. There were enormous institutional pressures to promote arms exports. They came from Ministry of Defence sales staff, who of course have a professional commitment to promoting British arms exports; from the then Department of Trade, which operated—perhaps its successor continues to do so—on the basis of the old-fashioned, 19th-century, French mercantilist view that exports are good and imports are bad, and any method of pushing exports must be good; and the Foreign Office, which had a strong belief in Great Britain Ltd., and that what was good for GE-Marconi or British Aerospace was good for Britain.

There were powerful pressures to sell more and get the deals, with British civil servants working behind them, as I did. I did my job, for which I was paid. There was little counter-pressure. The only source of resistance that I recall was the Treasury, which was always a bastion of economic sanity. It pointed out that our method of operation was not good economics and was costly to the British taxpayer.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

I hope that the hon. Gentleman is not suggesting that what is good for British Aerospace is not good for Britain. As I have the headquarters of British Aerospace—as I continue to call it—in my constituency, I can assure him that British Aerospace is a fantastic force for good in this country.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

I am saying, and have already said, that what is good for British Aerospace is not necessarily good for Britain. It might be, but it is not necessarily.

Photo of Jim Cousins Jim Cousins Labour, Newcastle upon Tyne Central

Does the hon. Gentleman have very much in mind the sales that were made to Iraq—the British taxpayer is still owed upwards of £500 million in respect of export credit guarantees that were never fulfilled—and, with regard to the Conservative Administration, the fact that Saddam Hussein proved to be a very good liar and a very bad payer?

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

The hon. Gentleman is absolutely right, and Iraq is one of the many reasons why the Export Credits Guarantee Department has ended up effectively having to be subsidised by the taxpayer in respect of those defaults. Often with much less publicity, every one of the 15 countries for which I was responsible in my job defaulted on its debt. They were flush with capital in the mid 1970s and they defaulted in the early 1980s. They could not sustain their payments on their export credit guarantees, which had to be rescheduled through the Paris Club. In such circumstances, the credit has an implicit cost.

Only once in my several years in that interesting job was I prevented by the system from approving an arms export. I will tell the story because it is quite instructive to the wider argument. The case was almost comical. We received an application from a small company in the west midlands that wanted to supply an armoured car to Fidel Castro, who had been the subject of several assassination attempts. In view of the other hardware that we were selling, I could see no reason why that sale should not take place, and I approved it and suggested that it was not worth referring to Ministers.

A few days later, the roof fell in. Minutes came from all over the Foreign Office, from people who had not shown a great deal of interest in our exports to the juntas in Brazil and Argentina, to say that this was outrageous, and that terrible human rights abuses were occurring in Havana; people were dying in dungeons and this really was not good enough. The matter was referred to the Foreign Secretary, who referred it back and said, "We must consult the Americans."

I was asked to draft a letter to the Secretary of State, who was then Dr. Henry Kissinger of all people. A few weeks later, an answering letter arrived. I am sure that it will appear in a few years' time under the 30-year rule. It was something to the following effect: "Dear Jim, Had you not informed me of this transaction, I am almost certain that I would never have become aware of it, but since you have asked my permission, the answer is no." That struck me as one of the most eloquent statements of the Anglo-American relationship that I have ever encountered, but it was also an eloquent description of the way in which the arms control system operated until very recently. If one wanted to export to the communist bloc, the answer was no, and there were COCOM rules to underline that; but it was good and desirable, and to be encouraged, to export elsewhere.

Enough of reminiscences. Let me return to the Bill, and to those bits of it that need to be strengthened. First, as the right hon. Member for Coatbridge and Chryston said, there is the issue of development and the Bill's objectives. In the past few years, the Government have advanced in setting out more explicitly what the aims of arms exports should be and the criteria that should be employed, but they contain nothing that specifically relates to the issue of sustainability, especially where there are cumulatively large exports.

It may be one thing to supply a motor torpedo boat to Peru, but if everyone else is doing it and one's exporters are supplying large quantities of other armaments to Peru, it is likely that Peru will eventually default—as it did—so sustainability is very important. That aspect has been picked up by people such as Mr. Camdessus and the International Monetary Fund, who regard the arms export industry, and especially the subsidising of it, as wholly unacceptable, on the basis that the products exported do not generate income, have no asset value, depreciate very quickly and incur a debt. That is why the sustainability of arms exports, in context, must be part of the review process.

The second issue—again I return to what the right hon. Member for Coatbridge and Chryston said—is the issue of end use and overseas manufacture. In yesterday's newspaper, there was a very good illustration of why end use is an important issue. There was a description, I believe in The Sunday Times, of a Ukrainian gentleman who was responsible for supplying most of the equipment that goes to President Taylor in Liberia and to his friends in the murderous Revolutionary United Front in Sierra Leone. That gentleman operated on the basis of supplying most of the arms to Burkina Faso, and one does not need to be Hercule Poirot to work out that a large quantity of arms going to Burkina Faso is not entirely kosher. Eventually, Interpol reached that conclusion, and it has intervened to stop the trade.

Unless explicit end-use provisions are in place, it is difficult to trace the paper and exercise the necessary discipline, and the position on overseas manufacture is similar. Unless we include a clause that specifically refers to it, there will be no provision whereby the Government could act in examples such as British armoured cars being manufactured in the Philippines and trans-shipped to Indonesia and Burma. I know that the Chairman of the International Development Committee has been involved with that case.

The third issue is brokerage and the requirement, which has already been set out by my hon. Friend Dr. Tonge, that British passport holders living and operating overseas need to be subject to extra-territorial control. Such controls already exist in British legislation, so they are not new.

If hon. Members want a good description of offshore brokerage, there is a fictional but near-real example in the recent Le Carré novel "The Night Manager", which describes a gentleman called Richard Roper who flits between the Caribbean and Switzerland. Of course, Le Carré's characters are based on reality. The novel describes how the brokerage system works and why there must be extra-territorial jurisdiction over those who operate almost entirely outside the UK but trade on British citizenship.

On prior scrutiny, the Government have been disappointing. The Quadripartite Committee strongly recommended that prior scrutiny should occur, but two arguments against it have been advanced. The first is delay, but there is a way to deal with that. The Committee clearly said that it is possible to introduce a two-stage process of rapid screening and more detailed scrutiny of the remainder. That is not an insuperable problem.

The second argument—concerning confidentiality—is more worrying. There is an implication that, somehow, Members of Parliament are not as trustworthy as officials. I find that uncomfortable. Why should not MPs observe confidentiality? Confidentiality is observed by Members in the United States, where such a system applies. One operates in Sweden as well, and those countries are important arms exporters. Why should we not operate such a system in the UK?

Photo of John Stanley John Stanley Conservative, Tonbridge and Malling

Does the hon. Gentleman agree that the canard that MPs cannot be trusted with confidential information was laid to rest by the decision of the House to set up the Intelligence and Security Committee, which has shown itself over many years to be entirely capable of handling confidential information?

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

That excellent contribution reinforces the point.

Were the Government not involved in supporting arms exports in cash and in kind, through subsidy and political backing, there might be an argument for saying that business priorities should prevail. However, public support makes all Members of the House stakeholders in the arms export business. We therefore have every right to demand that such business decisions be subject to scrutiny, and prior scrutiny at that. 5.8 pm

Photo of Vera Baird Vera Baird Labour, Redcar

Thank you, Madam Deputy Speaker, for calling me to make my maiden speech to the House.

We are debating a topic of considerable public interest. I say that in particular because the first parliamentary correspondence that I opened when I arrived here four weeks ago was a letter from the Redcar branch of Campaign Against Arms Trade bemoaning the failure to pass such a Bill in the previous Session and asking whether I would support its introduction.

The second letter that I opened four weeks ago was from the Redcar branch of Campaign Against Arms Trade bemoaning the fact that no such Bill had been passed in the previous Session and asking whether I would support its introduction.

The third letter that I opened as a new Member of Parliament was from the Redcar branch of Campaign Against Arms Trade. And so on. I replied to all 34 letters, saying that I would support the introduction of such a measure and that, furthermore, I would write to my right hon. Friend the Secretary of State to commend the Bill to her. So I sent the letters on to her. We are all very pleased to see the Bill, but I think this is an unpromising first step towards the eventual publication of my collected parliamentary correspondence.

My distinguished predecessor is said to be about to publish. As to that, I cannot say; but I do know that the right hon. Dr. Marjorie Mowlam—my distinguished predecessor—has earned, and will keep, what can only be described as the affectionate veneration of the people of Redcar. I suspect that she will also long retain the admiration of the House. In Redcar, she has helped countless people. On the doorstep, stories of Mo's good deeds were legion—and she did them, famously, always remembering an individual's name, and treating that individual as a friend.

Mo did so much for the place. Legendary is the occasion on which the biggest retailer for our new town centre might have pulled out. Mo left her Whitehall office. Mo strode down the street. Mo entered the developers' office and told them, in what I believe was a quite straightforward way, what they had better do. The supermarket, happily, was re-engaged.

Mo's well known warmth, her openness and her lack of pretension undoubtedly played a great part in all that she did, but, centrally, she was a great shadow Minister, a great Minister and a stateswoman, because she is a formidable intelligence. She will go on to a different career; I know that the whole House, together with the people of Redcar, will wish her good health, success and satisfaction in that new career.

Redcar was fortunate in having Mo as its Member of Parliament, and now I am its lucky representative. The constituency's western boundary is the River Tees, which, although it is an industrial artery for much of its old age, is pure enough at its mouth for seals to play around the lighthouse at the tip of the breakwater. There is usually a chain of massive ships anchored off, until the pilot cutter can come to guide them through the narrow channel into Teesmouth, the second busiest port in the United Kingdom.

I pause to indicate what a debt of gratitude hon. Members and the public owe to Customs officers who serve at Teesport, for it was they who, on 10 April 1990, detained eight large steel tubes which they believed might require an export licence and which were, in fact, the components of the Iraqi supergun. There can be no doubt that, but for their vigilance, serious military consequences could have followed. I believe that those diligent officers—who, in many senses, have brought about this Bill—will welcome its introduction.

A mile from the estuary where the officers work, down a duney coast, is the seaside town of Redcar itself, set on miles of golden sand. Fish and chips, amusements, buckets and spades and bracing walks along the esplanade summarise its principal attractions. Until 1872, the beach was used for horse racing; then they built our famous Redcar race course. It is in the middle of the town, and race days fill the streets with a carnival atmosphere.

Four miles away is Marske, an ancient fishing village, now a pleasant residential area. Inland lies the leafy Domesday book village of Kirkleatham, with its newly renovated Sir William Turner almshouses. Inland, also, is Dormanstown, built in 1917 as a garden city for the steelworkers of Dorman Long. It is green and it is spacious, but it now suffers from the inner-urban deprivation that is all too often the concomitant of a damaged industrial base, and to which I must later return.

Within a tiny distance of pretty Kirkleatham lies, rather less prettily, the Wilton International chemical site. It is a major manufacturing location for petrochemicals, polymers and fibre intermediaries, and is one of three complexes on Teesside that, together, make up the United Kingdom's largest cluster of chemical manufacturers. Currently, they directly employ 11,000 people; indirectly they employ 25,000 more; and they contribute an annual cash turnover that sustains many more thousands of jobs.

There is one matter about the complex that I hope to pursue with my right hon. Friend the Secretary of State—namely, that it is imperative to our Teesside economy that she support as actively as possible proposed new investment in the complex. That is particularly so since the complex is in cluster formation, with plant linked with plant, and some components of some chains are now approaching the end of their viable life.

The Tees has a proud history of shipbuilding and repair. In April, however, Cammell Laird went into receivership. The next day, 110 workers at the South Bank yard in my constituency were told, "Pack up and go." The yard, which used to be called Smiths dock, is a byword in the north-east for the highest skills and craftsmanship. It was a shattering blow, dealt in an unacceptable manner. The council, regional agencies and I are doing everything that we can to support the efforts of a respected local business man to restart the yard, to run it on its own as a viable local enterprise.

Between Redcar and the river is the mighty Corus Teesside steelworks. In the same week in April as the shipyard went down, the closure of the Lackenby coil plate mill was confirmed. In all, 1,100 jobs are to be lost in a work force who have improved productivity year after year. They, too, were treated with scandalous disregard. Both of those body blows to the traditions, morale and economy of my constituency have made it plain to me that it is unacceptable that such restructuring and cutting should be lawful without any reference to loyal employees. Those of my constituents who have suffered thus join me in giving a strong welcome to the directive on information and consultation rights for employees.

Travelling west in the constituency, one comes to Eston, at the foot of the Eston hills, where the iron ore that gave Teesside that industry was found. The first blast furnace was built in 1851, after which the area produced one third of the country's output, with nearby South Bank and Grangetown two of its proud industrial producers.

Now, Grangetown has a 14.6 per cent. unemployment rate, which is about four and a half times the national average. With South Bank, it suffers according to every index from critical social deprivation. I need not list its characteristics, as they are all too familiar to hon. Members whose regional constituencies were, like mine, neglected to the point of abandonment by the previous, Conservative, Government. Those hard-hit communities house what that Government called an underclass, but what I see, and what I believe the Government recognise, are families who want nothing more than to work, earn a living, educate their children and live in dignity and safety.

Although the figures all remain high, critical ones such as youth unemployment, nursery provision and five A to C GCSE scores in schools are much improved in the past three years. Such communities welcome the Government's certainty that regional economies must be made to flourish if the national economy as a whole is to grow still stronger. We applaud the Government's resolution to apply substantial regeneration resources on a regional basis to poor areas such as these.

The constituency could therefore be described as going from Redcar rock to many a struggling industrial hard place. The Redcar people are positive, however. That can be seen by the fact that, despite a heavy industrial culture, which usually reinforces traditional polarised gender roles, they have elected two successive women Members of Parliament. I do not know what comment to make about the fact that they have now elected their first lawyer, but I do know a lot of jokes about lawyers.

My two roles merge when I welcome the Bill to encourage women further into democratic life. It is a far from straightforward legislative drafting task, and one that I urge be carried out in time to legislate this Session. Local authority elections for, among others, Redcar and Cleveland council, are but a short time away. We intend, in our new party women's forum, to set up a system of prospective councillor candidates, so that those who are selected to stand can get involved early in their wards' affairs. It is essential, if we are to build on the confidence that my electors have shown in women, quickly to have available to us weapons to use against any reactionary backlash.

As a criminal lawyer, I am interested in issues of crime control, access to justice, the courts and criminal sentencing. Sadly, the communities that I have described in my constituency have high crime rates and seemingly intractable drugs problems. This morning's bad news was that knife crime has soared on Teesside. In the past six months, there were 62 stabbings, three of them murders, one of which was in Grangetown.

The police see the problem as drugs related, with dealers mainly arming themselves in self-defence in this dangerous world. In that context, I welcome the Home Secretary's weekend announcement that he will hold an open-minded inquiry into the possibility of legalising cannabis. Unless it proves to be a gateway to hard drugs, it is an area of crime on which I suspect that police have to spend an amount of time disproportionate to its social mischief, leaving them less time for graver criminal matters.

I further welcome many of the proposals in "Making Punishment Work", the report on sentencing by Mr. Halliday, delivered last week—especially its emphasis on extended periods of post-prison supervision in the community for violent offenders, and its revelation that the social exclusion unit is already working with the Home Office on ways of cutting ex-prisoners' reoffending rates by boosting employment and lowering homelessness: joined-up government of the very best kind.

Our phrase, "A lot done, a lot still to do," applies to crime. I resort again to my dual role as a woman representative and a lawyer in mentioning that I hope to ask Ministers to examine again the question of rape and the use of women's previous sexual history in trials; to reassess the criminal defences to murder, which ill serve women victims of domestic violence who finally kill their batterers; and to implement straight away the gender impact assessment scheme for criminal justice measures, which was set up at the Home Office when my right hon. Friend the Minister without Portfolio was Minister of State there, but which is not yet in operation.

I congratulate my right hon. Friend the Secretary of State on her appointment to high office, and seriously return to where I facetiously started in complementing her on the coincidence of her judgment with that of many of my constituents in the wisdom of the measure that she has introduced today.

Photo of John Stanley John Stanley Conservative, Tonbridge and Malling 5:24 pm, 9th July 2001

I am sure that the whole House will want me to offer warm congratulations to Vera Baird on an admirable maiden speech. She spoke with deserved generosity about her predecessor, who, I can assure her, will be remembered with respect and admiration in all parts of the House. She spoke with fluency and humour, with already a deep knowledge of her constituency, and clearly with much to bring to the House by way of her legal background and knowledge of the criminal justice system. I am sure that the whole House will regard her as a worthy successor to her distinguished predecessor, and we look forward to hearing plenty more from her in the future.

I am glad to have the opportunity to speak on the Second Reading of a Bill that has been much delayed. That delay occasioned me to read the origins of the commitment to the Bill contained in the Labour manifesto in 1997. In pristine new Labour terminology, an unequivocal commitment was given, which stated:

"Labour will not permit the sale of arms to regimes that might use them for internal repression or international aggression. We will increase the transparency and accountability of decisions on export licences for arms."

We confidently expected that the Bill would appear in the previous Parliament, but it is welcome now because the export licensing system is much in need of an overhaul. The current system dates back to 1939, as has been mentioned.

On the issue of delay, I echo the comments by my right hon. Friend the Member for Wells (Mr. Heathcoat- Amory). The Bill is an important piece of legislation. It has been preceded by some intensive work by four Select Committees of the House in the Quadripartite Committee and it was effectively published in draft in the White Paper. Despite that, the Government's response to the Quadripartite Committee's report on the Bill was published this morning—the very day of Second Reading. In a Session of more than usual length, in which the Government have many choices of date for the Bill's Second Reading, to publish a document as important as that response a matter of hours before the debate is a shameful way to treat Members of Parliament and the many outside bodies that have taken a great interest in the Bill, which would have wished to pass on comment to right hon. and hon. Members if they had had the opportunity to do so.

I give a broad welcome to the Bill, even though it is difficult to reach an overall judgment on it, given that it is enabling legislation. The guts of the Bill will depend on the nature of the secondary legislation, and it is again disappointing that the Government have not yet been able to give the House any sight of that key legislation in draft before Second Reading. The House is therefore unsighted on the real implications of the legislation.

I wish to highlight three areas in the Bill that give me some concern. The first is the Government's position on extending arms control procedures to licensed production overseas. It is not a viable basis for a credible arms control policy if it is possible for UK companies to circumvent UK export controls by the simple device of a licensed production agreement in a third country where export controls are limited or barely exist.

There was a glaring example of that in the previous Parliament. In 1999, the Turkish company MKEK exported Heckler and Koch sub-machine guns to the Indonesian police. That order, had it come before the British Government, would certainly not have been given an export licence. Those Heckler and Koch sub-machine guns were manufactured under licence in Turkey and, at the time, Heckler and Koch was owned by Royal Ordnance plc. That is a clear example of a British company being enabled to circumvent British arms export control policy by the expedient of licensed production.

In its report, the Quadripartite Committee recommended that controls were introduced for licensed production overseas. It said:

"We do however continue to believe that some statutory powers may be necessary to control licensed production overseas, and recommend that the Bill provide for such powers to be taken in the future under secondary legislation, to be used only if a non-statutory regime is shown to have failed."

The Government's response this morning reads as follows:

"The Government has decided, in the light of the results of the consultation, not to introduce specific powers in the Bill on licensed production overseas."

The Government give no reasons as to why they have reached that conclusion; I hope that the Minister will give us some indication. The Government's response is strange, given the obvious gaping hole that it opens up in arms export control arrangements if, by the simple expedient of entering into licensing agreements overseas, a British company is able to evade the export control policy that the Government have established.

In addition, I put this point to the Minister: if the Government are to continue to have the power to exempt licensing arrangements, there may be a significant danger that some British defence manufacturers will decide to move manufacturing capacity overseas by means of licensing arrangements to widen their export market potential. The Government's failure to deal with that loophole could have adverse implications for jobs in Britain in the defence manufacturing industry.

Secondly, I want to consider how the Government will deal with the key issue of trafficking and brokering. As with licensed production overseas, this is another area in which, unless the right legislation is brought forward, there is considerable capacity effectively to nullify the Government's arms control policy.

Trafficking and brokering require the introduction of a measure of extra-territoriality. As Dr. Cable said, that is not unprecedented in legislation. The Quadripartite Committee said, in paragraph 96:

"Whilst recognising the practical difficulties in policing activities outside the United Kingdom, we see compelling arguments in favour of extending controls on brokering and trafficking to activities outside the country and recommend that controls be introduced on the activities of UK citizens and companies wherever they take place."

The Government's response is somewhat mystifying. They simply say:

"The Government notes the Committee's views. This is a matter that will be set out in secondary legislation, which as noted in our response to recommendation (a) we aim to submit to Parliament in dummy form as soon as possible."

The Government propose the introduction of secondary legislation. For reasons best known to themselves, they do not tell us whether they accept the Quadripartite Committee's recommendation. Furthermore, we have no idea when that important secondary legislation will be introduced. I hope the Minister can assure the House that it will at least be available in dummy form before the Bill goes into Committee. That is a key point. I am sure that the right hon. and hon. Members who are asked to serve on the Standing Committee will want to see that and other dummy secondary legislation before the Committee's proceedings commence.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

The Committee stage will begin a week from tomorrow and, even though I shall be serving on the Committee, I have received no information as to when the details of the secondary legislation will be available.

Photo of John Stanley John Stanley Conservative, Tonbridge and Malling

I am grateful to my hon. Friend for that information. I hope that the Minister has taken careful note of his and my remarks. Later in the debate, other hon. Members may also refer to the importance of the House having sight, before the Committee stage, of those key measures that the Government describe as dummy secondary legislation.

Transportation is another aspect of trafficking and brokering. In her opening remarks, the Secretary of State referred to the terrible tragedy of the Sierra Leone civil war. It was widely reported, and not denied by the company concerned, that a British-based company—based in Luton—was involved in the air freighting of arms to rebel forces in Sierra Leone. The weapons came from the Ukraine via Burkina Faso—the hon. Member for Twickenham will be interested to know that—and Liberia. There is strong circumstantial evidence for that report. Apart from the fact that a British company was involved in the transportation and brokering of arms in a civil war, British armed forces are currently deployed in Sierra Leone. A British company may thus unwittingly or not have been engaged in the transfer to rebel forces of arms that could be used against British forces.

The Government's response on the logistics of trafficking and brokering notes that

"Clause 5 of the Bill provides a broad power which does allow for the introduction of controls on the transport, or the arrangement of transport, of controlled goods."

However, notwithstanding that response, clause 5 does not include the words "transport" or "transportation". I assume that behind the Government's response is a reference to clause 5(5)(c). If it is the Government's intention to cover transportation, would not it be far better to make that word explicit in clause 5? The point may be implicit, but that gives rise to the possible danger of subsequent litigation as to whether transportation undertakings in relation to arms trafficking and brokering are included within the legal powers in the Bill.

Finally, I want to consider the key question of whether it is possible to introduce a degree of legal control in the sphere of the transfer of knowledge and technology relating to the construction of weapons of mass destruction. I certainly applaud the Government's intention to try to choke off a key route for the proliferation of weapons of mass destruction. Indeed, it could well be argued that the greatest danger in the proliferation of chemical and biological weapons lies in the transfer of technical information and knowledge, rather than that of hardware and materials.

I strongly support the Government's policy aims, but as my right hon. Friend the Member for Wells rightly said, unless the Government are extraordinarily careful, the Bill could affect wholly legitimate research and academic activities in higher education. In an example that the House will easily understand, at what point does knowledge gained in academic research into the toxicity of certain chemicals create a risk of proliferation of chemical weapons; or at what point does academic research and teaching into the microbiology of anthrax constitute a proliferation danger in the manufacture of biological weapons?

As I have said, the Government have to be extremely careful. For the benefit of the Minister and the House, I wish to put on record the wording of a fax that I received just before the debate from Universities UK.

"You will remember from our evidence to the Quadripartite Committee in April that we support controls on weapons of mass destruction. But Universities UK is concerned that new controls might have the unintended consequence of damaging higher education. We believe that the proposal in the Bill to extend licensing controls to include intangibles could have adverse effects on universities and the UK research base generally."

The Government have said that they will submit dummy legislation to Parliament as soon as possible. I trust that they will take very careful note of the views of the higher education establishment so that the proper teaching carried out in higher education in Britain and the proper work done in research establishments is in no way jeopardised by the certainly well intentioned and wholly laudable efforts that the Government are making to try to choke off such proliferation.

Photo of Mark Hendrick Mark Hendrick Labour/Co-operative, Preston

What is the right hon. Gentleman's view of the fact that many of the most revolutionary technologies—whether nuclear power, computers or genetic engineering—can be used for good and for evil? Will he please tell us how he thinks the Government might differentiate between those technologies and know whether they are being used for good or evil?

Photo of John Stanley John Stanley Conservative, Tonbridge and Malling

The hon. Gentleman is on to the key point—how the Bill is drafted. I should be happy to share with him the fax that I have received, and he may be interested to know that Universities UK has suggested an alternative way to define what should be outside the arms export licensing control regime from that which the Government appear to offer. That will be a matter for detailed consultation between the Government and the higher education establishment.

Prior parliamentary scrutiny has been mentioned by the Liberal Democrat spokesman and other hon. Members in interventions. I was disappointed by the Secretary of State's replies to interventions, because it is clear that she had not been adequately briefed or had not done sufficient reading on the Quadripartite Committee's proposals. She cited the criticism of prior parliamentary scrutiny that Lord Scott had made when he came before the Committee, but I am afraid that she quoted him very selectively.

Lord Scott made an initial—if I may presume to say so—knee-jerk response to a question about prior parliamentary scrutiny from another member of the Committee. However, when I pursued the matter further and asked Lord Scott whether he had read the Committee's detailed proposals, he replied; as paragraph 142 of the report of the proceedings of 25 April shows:

"I can confirm that I have not read that material and I reserve on this occasion, as most, the right to change my mind."

Lord Scott is not a good witness to call to defend the criticisms of prior parliamentary scrutiny that the Secretary of State may or may not have advanced.

The Secretary of State also said in response to interventions that prior parliamentary scrutiny might create a blurring of the responsibilities between the Executive and the legislature. I therefore draw the House's attention to the fact that the Quadripartite Committee is absolutely clear on this point. There is no blurring or removal of the Executive's responsibility for arms export policy. That is stated with total and unambiguous clarity in paragraph 88 of our report of July 2000, which says:

"We fully understand and accept that, even with a system of prior parliamentary scrutiny in place, responsibility for strategic export decisions will continue to lie wholly with the Government, who will be accountable to Parliament for those decisions."

Our proposal for prior parliamentary scrutiny would lead to no blurring whatever of responsibility between the Executive and the legislature.

I wish to return to the Government's failure to respond to our final proposals made, to the Government on 14 March. There has also been a sad delay in their previous response to the Quadripartite Committee's proposals on prior parliamentary scrutiny. We made our initial proposal in July 2000, but it took the Government five months to respond even though they should respond within two months to the proposals of Select Committees. In our latest submission to the Government in March this year, we said:

"Our new proposals deserve proper scrutiny within Whitehall; but there is no reason to wait another five months for an answer. There is every good reason to have a system of prior parliamentary scrutiny ready to operate as soon as committees are set up in a new Parliament."

As the House knows, there is every sign that Select Committees will be set up before the House rises for the recess at the end of next week. We still await the Government's response to our final and refined proposals and we are wholly confident that the unanimous report of the four Select Committees concerned will in no way jeopardise or weaken the competitive position of British arms exporters, but that they will materially increase the Executive's accountability to Parliament in this key area. We earnestly hope that the Government will make their response on this key issue before the Committee stage of the Bill begins.

Photo of Roger Berry Roger Berry Labour, Kingswood 5:50 pm, 9th July 2001

It is a pleasure to follow the right hon. Member for Tonbridge and Malling (Sir J. Stanley). As someone who served on the Quadripartite Committee and who would like to do so again, may I say that he made a significant contribution to the Committee's work? In addition, I congratulate my hon. Friend Vera Baird on her maiden speech and welcome my right hon. Friend the Secretary of State and the Minister to their new positions on the Front Bench.

I warmly welcome the Bill. As my right hon. Friend Mr. Clarke said, the opening session of the UN conference on the illicit trade in small arms takes place today in New York. Such sales are not the sole problem but make a significant contribution to the difficulties that arise from arms sales. In the past 11 years, illicit small arms sales have been blamed for 4 million deaths. Most of the victims have been civilians, 80 per cent. of them children and women. UNICEF UK is running a campaign on children who are alone because of war. Most of them are the victims of people who sell arms and who are interested only in the money that they make on a deal; they do not think about the consequences. It is a major problem in our society and the international community.

I recognise the right of countries to export and import weapons for their own defence. Indeed, the UN charter guarantees that. Many of my constituents work in the aerospace industry and I welcome the contribution that it and others make to legitimate arms sales. However, the Bill deals with the export of arms that may be used to violate human rights which, if we are not careful, will result in external aggression or internal repression. Its underlying principle is an attempt to control such exports.

Arms control is a major problem for the United Kingdom. We account for a quarter of arms exports, worth about $7 billion each year. Two issues need to be addressed: the first is what policy a Government should adopt towards arms exports; the second is what control regime should be put in place to enable that policy to be effective. I congratulate the Government on the progress that has been made on those. It was churlish for the Conservatives to make snide comments about why the Bill was not introduced earlier. I, too, should have liked that, but we have achieved many things that we did not obtain under the previous Conservative Government.

Photo of Dari Taylor Dari Taylor Labour, Stockton South

Would my hon. Friend have liked the Bill to be introduced at least 15 years earlier?

Photo of Roger Berry Roger Berry Labour, Kingswood

I would indeed, but I should have also liked decent and sensible criteria to evaluate arms exports. It was not until July 1997—two months after the general election—that they made any sense. I wanted the Landmines Act 1998 to be introduced earlier—the Conservative Government refused to act on that— and a White Paper on arms export controls to be produced before 1998, when the Labour Government addressed the problem for the first time in that way.

I shall not detain the House by referring at length to other achievements except to mention our support for the European Union code of conduct on arms exports and the establishment of the Quadripartite Committee on strategic exports. The Committee might not have the most elegant title, but it deals with arms exports and considers important business. I am sure that other Committee members in the previous Parliament will agree that its Chairman, the former hon. Member for Merthyr Tydfil and Rhymney, Ted Rowlands, made a major contribution in ensuring that its work proceeded efficiently and effectively.

My first concern relates to brokering and trafficking. The Bill, which we also saw in draft form, has powers in clause 5 to impose controls on those activities, which I welcome. They go further than the proposals in the 1998 White Paper. It is unacceptable that if a UK company brokers a deal, no licence is required so long as the arms do not touch UK soil. A child of 10 knows that if he wants arms to go to country X, he can simply broker a deal to export from country Y without bringing them on to UK soil. There is nothing clever about avoiding export controls; it is dead simple. Unless we address brokering and trafficking, there is one obvious mechanism available for dodging arms export controls. Conservative Members might never have heard of the problem. Perhaps they have not read the Scott report and do not know how the UK company Miltec brokered arms to Rwanda in 1994 at the height of the genocide.

If I want to drive a car, get married, watch television or run a raffle for my local Labour party, I have to get a licence. If I want to sell alcohol or go fishing, I probably have to get a licence. However, if I want to broker arms deals with the most unscrupulous individuals and regimes, I do not have to obtain one. That is the absurdity of the current arrangements. A licence is required for many activities, but not to broker arms. I am delighted that clause 5 gives the Secretary of State powers to impose controls on brokering and trafficking.

Extra-territorial controls are the subject of clause 5(6). It is essential that we have those. The Labour manifesto made a clear commitment to introduce a licensing system

"to control the activities of arms brokers and traffickers wherever they are located".

People who draft manifestos tell me that they choose their words carefully. The phrase "wherever they are located" can have only one clear interpretation. Controls must apply to UK passport holders who operate overseas, for the simple reason that if they do not, it is possible to evade controls simply by stepping out of the country. I cannot believe that anyone would want a system of arms export controls with such an obvious loophole. I welcome the Government's commitment.

There are countless examples of extra-territorial powers in our legislation. Reference was made to the Sex Offenders Act 1997, the Landmines Act and the Chemical Weapons Act 1996. There is nothing novel about the Bill. It would be extraordinary if anyone thought that we could have effective arms export controls without extra- territoriality—a terrible phrase, but I hope that the House knows what I mean. Interestingly, German controls on trafficking and brokering suffer from that weakness.

When the Defence Manufacturers Association gave evidence to the Quadripartite Committee, its exports director, Brinley Salzmann, said of the German system:

"It catches the good guys and the bad guys have moved to Cyprus."

I am sure that the House would not regard that solution as adequate. Comprehensive measures should be taken to control the activities of British arms brokers operating on foreign soil.

I turn now to another obvious way of circumventing existing controls which must be dealt with. I refer to the practice of allowing a second company in another country to produce the arms under licence, which was mentioned by the right hon. Member for Tonbridge and Malling. He gave the example of the Turkish company MKEK, which in 1999 exported to the Indonesian police sub-machine guns manufactured under licence by Heckler and Koch, which was owned by Royal Ordnance. That incident was at the height of the East Timor conflict, and the shipment would not have been given an export licence by the UK. Indeed, an application for a licence from a British company for a similar transfer had already been rejected by the Government.

It is important that we deal with licensed production. It is unfortunate that the Bill contains no new statutory powers to control licensed production overseas. I believe that it should. I realise that the Government are considering non-legislative measures, but they will need to convince the Committee and the House that they will be effective. Without adequate control, the objectives of export control policy, and of the Bill, will be seriously undermined.

I turn now to end-use monitoring. The Scott report showed how easy it was for UK arms exports to be diverted. The subject of the report was arms that had been diverted to Iraq via Jordan. I served on the Trade and Industry Committee a couple of years later, and we considered the problem of large numbers of arms exports being diverted, via Singapore, to Iran. As I said, a child of 10 who wanted to get around the controls could find various ways of doing so, and one way of allowing people to get around them is to have inadequate monitoring of the end use of arms exports.

It is ironic that this country, which has led the way in tracing the movement of beef from producer to consumer, should still have so much to learn about tracing the full journey of arms exports. I am sorry that the Bill does not contain new measures for end-use monitoring. We need to strengthen end-use controls at the licensing stage, and we need follow-up checks when the equipment has been exported.

On parliamentary scrutiny, I cannot add much to the recommendations of the Quadripartite Committee and the comments of the right hon. Member for Tonbridge and Malling. I warmly welcomed the publication of annual reports on arms exports, which never happened under the Conservative Government, and I welcome the proposal in the Bill to put them on a statutory footing. That is a major step forward. I recognise that the reports are the best in Europe, and possibly the world, but no matter how transparent and comprehensive they become, they will be no substitute for prior parliamentary scrutiny of sensitive licence applications.

The House will be aware that there has been an interesting dialogue between the Quadripartite Committee and the Government. The Committee submitted revised proposals in its report of 6 March which took account of the Government's earlier objections, and we eagerly await their response. Prior parliamentary scrutiny would enhance ministerial accountability, and such a system could operate without damaging our defence industries or bilateral relations, as is the case in Sweden and the United States, among other countries.

The Bill is a breath of fresh air. Who would have thought, six years ago, that we would eventually have a Bill that took the Scott report seriously? It is a great improvement on the White Paper, and it gets better with each drafting. I hope that we can continue gradually to improve it as it proceeds through its parliamentary stages. I warmly welcome the fact that the Bill makes a clean break with the past, and the Government have every reason to be proud of it. Nevertheless, it has several significant weaknesses, which, I hope, can be dealt with in Committee. I hope that the Bill achieves an unopposed Second Reading.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater 6:06 pm, 9th July 2001

As you can see, Mr. Deputy Speaker, the number of Conservative Members present is somewhat depleted because there are five reasons for not being here.

Vera Baird spoke most eloquently about her predecessor. I do not think that anyone will forget the time that Mo Mowlam spent in Northern Ireland or the work that she did to try to resolve the problems in that troubled Province.

I pay tribute to my predecessor, who was also very involved in Northern Ireland. He was the Member of Parliament for Bridgwater for 31 years, and in that time he worked tirelessly for his constituency. He was also involved in the environment and in transport, Northern Ireland and defence. I am, of course, talking about Tom King. Tom said recently that he felt that the problems in Northern Ireland were a great shame because, when he was there, he felt that great progress was being made to resolve them. That was nearly 15 years ago. What is the position today? We must continue to work as hard as we can to solve the problems in the Province.

Much of Tom's time in the Ministry of Defence was taken up with the Gulf war. At the same time, he was responsible for the leadership election, so he had not only to strive to ensure that Saddam Hussein was put firmly back in his box, but to look after what was happening in this country.

As a Member of Parliament, Tom strived always to give Bridgwater the representation that it deserved. It is a very diverse constituency, running from Exmoor down to the Levels. It is very large, and resembles, if anything, a banana. It is also unusual in that it is a high constituency—it contains the highest peak in Somerset—which extends to land below sea level. In Bridgwater itself, the constituency has the most westerly industrial town in the United Kingdom.

We are discussing export controls, and Bridgwater has many companies that send huge amounts of goods across the world. They include Gerbers, which is now the largest supplier of soft drinks in Europe, and British Cellophane. The constituency also produces pistons of the highest grade made in this country, and they are sent all over the world. Bridgwater has many other companies that have transformed it from the second largest port in the 15th century to what is now not a high-tech but a medium-tech industrial town.

Bridgwater has a long history. It is the home of the tile and brick industry, which, I am afraid, is long gone, owing to exports and imports. The last battle on English soil was fought in Bridgwater—that was the last time, I am glad to say, that republicanism reared its ugly head, and it was beaten fairly soundly on the Levels outside Sedgemoor.

In the past few weeks we have had our first case of foot and mouth. I was told about it on the night of the election. As a farmer, I had wondered what it would be like to be told that there was foot and mouth in the area, and I found out that night. I can assure the House that everyone was extremely concerned to be told that we had to start slaughtering cattle and sheep. I am glad to say that the Department for Environment, Food and Rural Affairs has made great strides, and we hope to have the exclusion zone lifted in three weeks so that normal trade can be resumed.

Bridgwater has a large tourism industry. We have one of the largest Butlins—there are only three. Butlins attracts 13,000 people a week, and has made an enormous contribution to local industry. Without a shadow of a doubt, west Somerset would not have been sustained without that extremely large employer; indeed, without Butlins, west Somerset would have been like a transposed part of rural Scotland.

There has also been another menace—flooding—which has got worse in the past few years. In west Somerset, we used to expect flooding once every 60 years; we have now experienced it in three of the past five. In the past two years, it has been so bad that not only has the town represented by my hon. Friend Mr. Flook nearly gone under water, but so has Bridgwater. The Environment Agency is based in Bridgwater, and its total budget this year for capital works to maintain defences and make sure that we do not have a disaster is £3.7 million. I am afraid that that sum is woefully inadequate when one takes into account the fact that we have a coastline which, in the past two years, has suffered two major breaches that could have been catastrophic and put under water a major proportion of industry and farming.

Our rivers have given rise to a moral dilemma that the House may, in future, have to debate. Our rivers silt easily; we have one of the highest tidal ranges in the world—22 ft—and, as hon. Members can imagine, our rivers go up and down like a yo-yo. In the past few years, they have silted badly, but they are not being dredged because people wish to maintain them as habitats for wild birds and mammals. However, if we do not dredge, we create a bottleneck of water. As that bottleneck gets tighter and tighter, there is bound to be a breach somewhere. When it comes, it could be disastrous.

The Environment Agency has pleaded the case for Somerset with this Government and the previous one. The Levels cover thousands of acres and include the island of Avalon in the constituency of my right hon. Friend Mr. Heathcoat-Amory; all hon. Members know that after the battle there, King Arthur was laid to rest. We do not want serious flooding there again, as it will cause untold damage.

The House must address the issue of building houses on flood plains, not just in Somerset but throughout the country. If we continue as we are doing under present planning laws, ultimately we shall have to build on flood plains. In my constituency, if we do not build on Exmoor, the Quantocks and the flood plains, we have very little space to build on. If we do not sort that out in the near future, we may be in situation where, because of the policies decided by the House, we cannot avoid having to build in those areas.

Looking further ahead, the problem must be resolved either by the House passing legislation or by local councils being given the capability, with the Environment Agency, to sort it out. The longer we leave it, the more likely we are to have a disaster. Last year, in Malton in Yorkshire, the town centre went under water; the Environment Agency calculated that had that happened to Bridgwater, it would have been under 18 inches of water—think of the exports that would have been wiped out, to put it crudely. We do not want that to happen; I am sure that no Member does.

To give a council or the Environment Agency the capability to sort out the problem, we must look at the issue of money; that is what it boils down to. We cannot get money from Europe; we must get it from taxpayers. The longer we put things off, and the more we push the problem away, the more likely we are to have a disaster.

I was left in no doubt about the importance of flooding, when, in this august building, I was allowed to have an office in the yellow submarine. Since then, I have felt that I need a submarine to deal with the problem, unless we can sort it out soon.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West 6:14 pm, 9th July 2001

I congratulate Mr. Liddell-Grainger on his excellent and interesting maiden speech. I am sure that he will be a major asset to the House. It is a measure of his worth that, having been allocated an office in the yellow submarine and finding out that I, a fellow new Member, had not been allocated an office, he immediately and kindly offered to lend it to me if I needed it to meet constituents. I salute him for his generosity and look forward to his future contributions.

I am the newly elected Member for Wolverhampton, South-West in the industrial heartland of the west midlands. I am grateful for the opportunity to make my maiden speech in this important debate. Before the House is a Bill radically to reform the United Kingdom's export control regime, principally in relation to defence and military matters but also in relation to objects of cultural interest. I propose to make some remarks about the former. I am delighted that the Bill will implement the recommendations of the Scott inquiry; no doubt Lord Scott of Foscote, as he now is, will follow its passage with interest. I am only sorry that, next month, it will be three years since the original White Paper was published.

The indiscriminate peddling of weaponry around the world is a major evil. There must be strict controls on the export of military equipment and know-how; there must be no export of items for torture nor of instruments of repression. Until now, our controls have been based on legislation dating back as far as 1939. It is a tribute to our predecessors that the old legislation continued to have relevance for as long as it did. However, the Bill brings us into the modern age, as it encompasses the computer revolution and new technology which even one of my heroes, Alan Turing, could barely have envisaged in 1939.

I commend the Government for introducing the Bill. I am particularly pleased that there will be annual reports to Parliament on its operation. However, I hope that clause 9 can be tightened further and that the provisions on the negative resolution procedure can be revisited.

In making my first speech about defence-related matters, I am following something of a local tradition. One of my predecessors, Herbert "Billy" Hughes, who represented what was then Wolverhampton, West, made his maiden speech on defence matters. He represented the seat from 1945 until 1950, then became the distinguished principal of Ruskin College for almost 30 years. In the House in 1945, he was presciently concerned about a possible atomic arms race.

Herbert Hughes's erudite successor also made his maiden speech on defence matters. Enoch Powell represented Wolverhampton, South-West from 1950 until February 1974, and subsequently returned to the House in October 1974 as the Ulster Unionist Member for Down, South. In 1950, Mr. Powell was concerned about the size and ethnic composition of our armed forces.

Many Members will recall Mr. Powell's successor, Nick Budgen, who represented the constituency from 1974 until 1997. For benefit of the curious, I might say that his maiden speech concentrated on inflation. Mr. Budgen was a colourful character of the old school—mostly a Conservative, except at the odd time when the Whip was withdrawn. His manifest contributions to the workings of the House earned him the accolade of "Back Bencher of the Year" on one occasion.

Like me, Mr. Budgen was a lawyer; like me, he opposed the death penalty, as Mr. Powell interestingly did before him and as Jenny Jones did after him. Jenny Jones represented the constituency ably in the last previous Parliament. Through her work in the House and the Council of Europe, she, with others, persuaded hon. Members to vote to restrict further the rare circumstances in which that ultimate sanction, death, might possibly still be allowed.

It was as a delegate to the Council of Europe that she really made her mark, bravely upholding the cause of human rights and democracy; she continues that struggle while her term of office there lasts for a few more months. She was in Albania last weekend, monitoring the second round of elections. I pay tribute to her hard work in the Council of Europe, in the House and on behalf of her constituency.

The constituency is wholly urban, and lacks the golden beaches of Redcar, which were mentioned earlier, and the Butlins of Bridgwater. Wolverhampton was proud to become a city last year. It took us only slightly more than 1,000 years to get there after our founding by Lady Wulfruna. The city is perhaps unique in terms of its representation in Parliament. It has three hon. Members who are sometimes styled as the three musketeers. My hon. Friend Mr. Turner, who is sitting beside me, was born and raised in his constituency and still lives there. The same is true of my hon. Friend Mr. Purchase. I complete the set, as I was born and raised in the constituency that I am now proud to represent, and I still live there.

My constituency is home to the venerable Wolverhampton Wanderers football club—the Wolves—which is currently in the first division. Although the Molineux stadium is one of the finest in the country, the team, alas, is not. After 40 years, we are still waiting for renewed success. It took us more than 1,000 years to achieve city status, but I hope that we will not spend so long outside the premier division.

Soccer is by no means the only sport in Wolverhampton. We have cricket on the green at Tettenhall, one of the oldest swimming clubs in the country, and lots of field hockey and rugby. At Aldersley stadium, we have cyclo-cross, shooting and, above all, athletics. The freedom of the borough was recently awarded to Olympic champion Denise Lewis, who was raised and went to school in the constituency, which also boasts Dunstall park, the only floodlit, all-weather race course in the country. I confess that I was there last week, but only to use its excellent conference facilities.

There is not only sport; we are also a literate lot in Wolverhampton. Headquartered in my constituency is the United Kingdom's largest regional newspaper, the Express and Star, which has the largest circulation of any newspaper in the country and is a local institution that sells almost 300,000 copies a night, six nights a week. Like many midlanders, it has a fine tradition of embracing new technology. For example, it was the first daily newspaper in the country to publish colour pictures.

We are also a centre of learning, as we are home to the university of Wolverhampton, which has an admirable record of tackling social exclusion. Less than a quarter of its students are admitted through the traditional means of entry and it is now the sixth largest university in the country.

Perhaps student numbers are so high because we are such a friendly city. Northerners feel comfortable coming that far south, and southerners are happy to venture that far north, as hon. Members will doubtless discover when they flock to Wolverhampton on their summer holidays in a few weeks' time.

Of course, student numbers might be high because of the fine local ales. The constituency is the home of Banks's, the largest independent brewer in the country, which is sadly now facing a most unwelcome takeover bid. Many hon. Members will know its excellent beer. For those who do not, I suggest a short trip downstairs to the Strangers' Bar, where it is on sale.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I thank my hon. Friend.

I am delighted that Wolverhampton, South-West is a multicultural and multi-faith community. It is well served by the Inter-Faith Group and by Wolverhampton Race Equality Council. As well as many Christian churches, we have four Sikh gurdwaras, five mosques, a Hindu temple, and a large Buddhist temple. Long may our communities continue to live in harmony. That harmony has come about only because of the hard work of many people from all the communities and from many spheres, who have worked hard for years. In Wolverhampton, we celebrate our diversity, because it enriches us all.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park 6:23 pm, 9th July 2001

It is a great pleasure to follow the maiden speech of Rob Marris. Although I represent Richmond Park, I was born, bred and educated in the black country and am a black country woman. The hon. Gentleman's speech was a trip down memory lane, although I am not a supporter of Wolverhampton Wanderers; I am a Baggies supporter—for me, it is West Bromwich Albion to the death. None the less, I congratulate him and welcome him to the House.

Today is a great moment for me in my time as a Member of Parliament. I am pleased to be here as we discuss this Bill, which is long awaited—indeed, I have asked for it on many occasions during my four years in Parliament. I congratulate the Government on publishing the draft Bill, which allowed time for scrutiny and for valuable comments to be made by non-governmental organisations before the final Bill was published.

I make many speeches against arms brokers and the arms industry but I am not a pacifist and I have no hang-ups about the industry, which, sadly, has to exist. It employs thousands of people—the United Kingdom has the second largest share of the world's defence industry—and is worth $10 billion every year. Clearly, about 18.7 per cent. of the world's defence industry is not to be sneered at. All countries have legitimate defence needs and the Government have already gone some way to making the industry more transparent by introducing their annual reports, however incomprehensible they are—and I at least find them incomprehensible when they are first published; it is pretty difficult to wade through them before the NGOs have had a go and have explained what all the codes mean. The Quadripartite Committee has also been introduced to scrutinise exports.

Great strides have been made in that direction, but I support my hon. Friend Dr. Cable on the idea that we should not have export credits for arms. There seems to be no reason why the defence industry should be picked out for subsidy by the taxpayer. It cannot be right. I shall stick to my support of measures against that practice and I hope that the Government will consider the matter seriously. As I said in another debate, I realise that dropping export credits may lead to job losses, and I remember saying that we had to bite the bullet. I am usually telling people to swallow the pill, but I thought on that occasion that the other suggestion was more appropriate.

There is still a huge need for prior scrutiny, for which issues of sustainability are the main reason. Let us consider a few brief statistics. Of the 40 poorest countries in the world, 24 are engaged in conflict or have just emerged from it, as we were told in the Department for International Development White Paper. Some 20 per cent. of the population of Africa is currently affected by war and civil war. Military expenditure in Africa in 1999 amounted to $11 billion. Interestingly, Oxfam says that universal primary education could be provided for $8 billion—$3 billion less than the cost of the wars.

The Bill must take account of the consequences of arms exports for sustainable development. The draft Bill dealt with those issues, but they have been dropped in the Bill that is before us. I do not understand why the Government have dropped them. I know that the Secretary of State for International Development can issue guidance on the issues during the licensing process and can take into consideration the EU code of conduct on arms, but how much notice do the Government take of what she says? If past experience is anything to go by, the guidance will not have much impact. The Secretary of State signs only a small percentage of current export licences. She has raised objections in the past, but licences have still been granted. For example, she was not listened to in 1992 with regard to the export of arms to Ethiopia and Eritrea. She chooses not to sign the annual report on strategic export controls. I understand from a letter that I received from her Minister in April last year that it was Clare Short's decision not to sign off that annual report.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Lady must remember to refer to hon. Members by their correct titles.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

I apologise and accept your correction, Mr. Deputy Speaker.

No licence has been refused under criterion 8 of the European code of conduct because it is impossible to prove that any single licence will damage development. However, what about the cumulative effect of many export licences? That has already been mentioned, and we should take it into account in prior scrutiny, before we let arms go to a developing country.

My four years in international development, two of them as a member of the Select Committee on International Development, have left me in no doubt that arms brokers and trafficking cause some of the greatest evil and suffering in the world today. In a brilliant and interesting speech, Mr. Berry mentioned 4 million deaths in 46 conflicts since 1990. Trafficking is such a scourge.

I have visited areas of the world where the illegal arms trade has fuelled conflict and destroyed lives. This country abandoned southern Sudan more than 40 years ago; a civil war continues there.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

The hon. Lady probably anticipates my question. She refers to conflicts around the world, which are a source of great anxiety to all hon. Members. But how will the Bill make a substantial, tangible difference? No evidence has been forthcoming to show that British weapons are involved in that ghastly business.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

I expected the hon. Gentleman's intervention. If the claims for the secondary legislation are to be believed—I hope that they are—we shall have a register of arms brokers. We can thus identify people in this country who traffic. On several occasions, the hon. Gentleman has asked about the identity of those people. The examples of Sandline and Miltec have already been cited; there could be many more. We must not assume that all Brits are honourable and would not dream of becoming arms brokers, because the opposite is true. The Bill will make a difference; a similar measure has made a difference to practices in the United States of America.

I have visited the civil war area Bahr-el-Ghazal in southern Sudan. I have seen rebel commanders, who, faced with villagers who have come to hear their words, brandish a kalashnikov and say, "This is strength. This will save you. If you follow the gun, you will be all right." That gun was supplied by an arms broker. Who are we to say that it was not a British arms broker?

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

We do not make kalashnikovs.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

One does not have to make guns to traffic them. Surely the hon. Gentleman understands that an arms broker needs no more than a mobile phone to contact an eastern European country and get the guns to wherever they are wanted in Africa.

Colombia is racked by drugs and arms dealers; the two often go together. We spend much time, money and effort on the illicit drugs trade; why do not we spend as much on the illicit arms trade? People have been raped, tortured and mutilated for refusing to grow coca on their land. All those actions are backed by illegal arms, which are supplied through trafficking.

In Rwanda and the great lakes, the genocide is supported by the illegal arms trade. Before the hon. Member for Aldershot leaps up to tell me that genocide in Rwanda was committed with machetes, I emphasise that they were backed by men wielding guns. Guns multiply violence. Women in southern Sudan are used to Arab raiders from the north attacking their cattle and villages. In the old days, they had spears; now they have guns, and they do far more damage.

All those conflicts were backed by arms from eastern Europe. Bulgaria is currently the largest supplier, and Makarov pistols sell for £80. It was said earlier that an AK47 costs two cows in African markets; a non- governmental organisation claims that it now costs a chicken. Those weapons are getting cheaper by the minute.

European enlargement offers an opportunity to control the trade and strengthen the Bill. That also applies to the United Nations conference on small arms, which starts today in the United States. The Secretary of State for International Development will be there, but the Foreign Secretary will not. The previous Foreign Secretary—I am pleased that he has just appeared in the Chamber—was interested in the conference and intended to attend it. What an insult that neither the new Foreign Secretary nor any representative of the Department of Trade and Industry there. The Department for International Development has to cope with the consequences of arms trafficking, but other Departments are responsible for the practice. Why do not their representatives attend? There is still a lack of joined-up government.

I was appalled to read in newspapers today that the President of the US has ordered his delegation to block the main proposals for a legally binding United Nations resolution to control the flow of small arms because he fears the gun lobby, which is led by the National Rifle Association. Until now, the US has had a good record on this issue. Perhaps the Under-Secretary will explain later what the Government intend to do about that. Are they going to continue to be a lapdog of the US, as they were on national missile defence, or are we going to join our European partners and protest?

The proposals on brokering are welcome, but I am worried about the application of controls to United Kingdom passport holders who operate overseas. Clause 2, which deals with transfer control, is almost a Gilbert and Sullivan patter-song of legal language about UK passport holders operating here, there and everywhere. Sadly, the clause does not apply to the brokers who traffic in arms. The Minister must tell us whether the secondary legislation will contain such measures. We must ensure that UK nationals, wherever they are in the world, are prevented from trafficking. It is easy for an arms broker simply to pick up a mobile phone and do a deal from beside his pool in the Bahamas.

It is sad that we shall not be debating programming. We have been told that the Committee stage will start next week and be completed by 23 October. We hoped that secondary legislation would be available for scrutiny at the same time. I am worried at the fact that only 10 days of parliamentary time has been allocated to the Committee. It is simply not enough.

A lot of persuasion is required about aspects of the Bill, but I am pleased that the Government have introduced it at last. I thank them on behalf of many women in the countries that I have visited who begged me to try to stop the flow of arms into their towns and villages. It is those women and their children who suffer most.

Photo of Kevan Jones Kevan Jones Labour, North Durham 6:39 pm, 9th July 2001

Thank you, Mr. Deputy Speaker, for calling me to make my maiden speech in this debate.

I congratulate my hon. Friend Rob Marris on his first contribution to the House. I had to confess to him that, until the other week, I had never been to Wolverhampton, but I feel that I have learned a lot about it in the past few weeks and as a result of hearing that speech. I am sorry to say, though, that I do not think that I will be giving up my summer holidays to visit my hon. Friend's home town.

I also congratulate Mr. Liddell-Grainger on his speech. I know that he has very strong ties with the north-east of England. I am glad that he has finally found a berth in Somerset, having unsuccessfully fought several election campaigns in the north-east.

Standing for election and being elected to the House is both humbling and a proud moment in one's life. I should like to thank the people of North Durham for giving me the opportunity to represent them in the House, and I give today a clear commitment to repay the trust that they have put in me.

I follow into the House Giles Radice, a man of great courage and integrity who, in the 28 years that he served here, was respected by all in the House. When my party was facing its darkest days, in the early 1980s, Giles was one those few who fought for the survival of our party, not because—as he will admit—he was born into it, but because he passionately believed in it. He saw it as the only political party that could give a voice to those who had no voice, and right the wrongs that he saw in society. Like me, before entering the House he worked for the GMB—in his days, the GMW—an organisation with which he maintained close links, acting as chair of the parliamentary GMB group. He was proud of that association, a pride which I share.

Giles Radice was never one to say something just because it was the right thing to say. I am confident that, over the coming years, we shall be hearing much from him from the Benches in the other place. Giles is a passionate European, and I share some of that passion, but a few weeks ago I had the nerve to tell him that he was taking his support for the single European currency a little far by naming his new dog Euro. It conjures up some great images. I can see it now—my right hon. and noble Friend, in carpet slippers and dressing gown late at night at home in Grantham, shouting, "Come in, Euro! Come in Euro! That's a good boy," obviously to the great distress of his Conservative neighbours. I trust that he and his wife, Lisanne, will enjoy a long, happy and active retirement. On a personal note, I look forward to his continued counsel for many years to come.

The Chester-Le-Street part of my constituency holds a unique place in the history of my party, having returned a Labour Member to the House continually since 1906. Even at the disastrous election of 1931, when Labour returned fewer than 50 Members nationally, Chester- Le-Street remained loyal to the Labour party.

Chester-Le-Street is only one part of North Durham, the other major town being Stanley. My constituency is rural. The two major centres of population that I have mentioned are supplemented by numerous villages: Sacriston, Tantobie, Tanfield, Beamish, Bournmour, Lumley, Pelton, Craghead and Ouston, all former mining communities.

I noted from Giles Radice's maiden speech to the House in 1973 that there were five pits in the constituency then. Alas, today there is only one, at the Beamish open air industrial museum, to remind people of the days when my constituency formed part of the mighty Durham coalfield. The mines may have gone, but there is still a proud sense of tradition across the constituency and, sadly, a legacy of those who still suffer from crippling industrial diseases, which blight their old age.

My constituency must also be unique in having a place—a village, in fact—called No Place. It is located on the road between Chester-Le-Street and Stanley. I have asked numerous times how it got its name—or did not get its name—but alas, nobody has yet come up with a good explanation. Likewise, between Tantobie and Stanley is the charmingly named community of Sleepy Valley.

On being elected, I was asked how I would sum up my constituency in social and economic terms. The phrase that I used then, and will use now, is that it is a rural constituency with urban problems. I have described my constituency's mining tradition. Its decline was long; it began in the 1960s and was brought to an abrupt end in the 1980s by the action of the Conservative party. That decline, with the closure of the Consett iron works and the downsizing of the Royal Ordnance plant at Birtley, brought about a community where hope on the jobs front had disappeared and young men and women had no sense of their place in the world.

I have spoken about the traditions of my constituency and the hard times that it has been through, but there are signs of recovery and the rebuilding of communities, and unemployment is falling for the first time in a generation.

In Craghead, a community that lost its pit in the 1960s and its clothing factory in the 1980s, is leading the way in community regeneration. The Craghead partnership, formed in 1996 by local people, is making a real difference. With the support of funding from the lottery, Europe and the single regeneration budget, Craghead has a new village hall. Modern, with internet access, it is becoming a focal point for young and old in the village. The project, along with countless others, aims to involve everyone. Tribute must be paid to the energy of local people and their local councillors, Janice Docherty and Garry Reed, and to former county councillor Lennie James, for their hard work and commitment to their community. I know that such commitment, and the measures in the Gracious Speech, will make a real difference to constituencies like mine.

I speak today in a debate on the control of arms. I come from a region whose wealth at the beginning of the last century was founded on the production of arms and armaments. There was a time when the mighty Armstrong works on the Scotswood road and the yards of the Tyne supplied the world's arms. Today, the industry is smaller and more diverse but remains important to the economy of the north-east. The northern defence initiative alone has 80 companies in the region, and estimates that 250 other companies in the region depend on defence-related work, adding about £500 million a year to the regional economy.

The industry has also become more diverse. The best example in the region must be the House of Hardy in Alnwick, Northumberland, producer of fine fishing rods but now also producing aerials for military radio equipment. Many of these companies rely on exports. SAFT, in South Shields, which employs constituents of mine, produces batteries, 15 per cent. of which are exported for military use.

The measures in the Bill set out clearly a framework for the regulation of arms and defence-related exports. Many, rightly, like me, call for regulation but recognise the importance of the defence industry to regions such as the north-east. The Bill, long awaited, gets the balance right. It is about setting out the ground rules for the first time, thereby enabling companies in the north-east and elsewhere to tender for overseas contracts while meeting the high ethical standards that the public of today demand.

I thank the House for listening to me tonight. I look forward in the coming years to contributing to the work and debates of the House and championing the cause of my constituency and that of the north-east.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot 6:49 pm, 9th July 2001

I am delighted to follow Mr. Jones and I congratulate him most warmly on an excellent maiden speech—I am sure that the whole House will echo that view. He follows a distinguished and hugely civilised predecessor; it will be no easy act to follow. His predecessor is a splendid chap, although of course hopelessly Euro-fanatical. I am not at all surprised that he called his dog Euro. Of course, the difficulty may be that the Prime Minister has aspirations to kick the issue into the long grass. I hope that the same fate does not befall Lord Radice's dog.

The hon. Gentleman not only paid tribute to his distinguished predecessor and his long and distinguished service to the House, but made interesting comments about his constituency. I can tell him that I experienced the same difficulties with coal mine closures when I served as Member for Cannock and Burntwood. I do not want to make a partisan point, but the previous Government in particular and no doubt this Government also have sought to ease the transition from coal mining to other activities in such constituencies.

Hon. Members will be interested to know that so much defence activity goes on in the hon. Gentleman's constituency. We have regular defence debates in the House, and I see the Leader of the House in his place. I can tell him that even though we had many defence debates in the last Session of the previous Parliament, we have not exhausted the matter, so we look forward to another debate in due course. I am sure that the hon. Gentleman will contribute to it.

Like the hon. Gentleman, I, too, have constituency defence interests. Indeed, they very much dominate. BAE Systems, which was formerly known as British Aerospace, has its headquarters in my constituency. It is the world's third largest defence contractor and is a massive, hugely successful organisation that employs people of great skill throughout the United Kingdom. BAE is represented in many constituencies, so many Members are keen both to know what it is up to and to represent the concerns of their constituents who work for the company. Indeed, 80 per cent. of its production goes to export. Of course, Airbus accounts for a large part of that, although its defence activities are also extremely important.

What was known as the Defence Evaluation and Research Agency has its headquarters in my constituency, although it has assumed a new name—QinetiQ, which carries no "u"—as it is about to be privatised. It has been at the forefront not only of developing defence equipment for the United Kingdom and undertaking splendid research but of applying defence equipment to civilian uses. We were all interested to hear that Hardy fishing rods are finding a military use as aerials. That is an example of civilian industry spilling over into the defence industry, and I am sure that Sir John Chisholm of QinetiQ will take note.

The Bill will replace the Import, Export and Customs Powers (Defence) Act but I am bound to say that the latter does not seem to have done too badly over 62 years, given that it was introduced as an emergency measure and that large chunks of it are to remain on the statute book. In addressing the issue, we must acknowledge not only that there has been a defence export licensing system in this country—listening to some commentators, one gets the impression that no such system was available at all—but that, overall, it has worked pretty well.

I criticise those who suggest that previous Governments, particularly the Conservative Government, were cavalier in approving export licences for defence equipment. Successive Governments have always taken a keen interest in ensuring that we have a proper licensing system and it is clearly not in the interest of any Government for equipment manufactured in the UK to end up in the hands of our enemies and be turned on our own forces wherever in the world they are called to serve their country. Clearly, that would be monstrous, and successive Governments have always tried to prevent it from happening.

After the Scott report and the Matrix Churchill scandal, however, it seems that everybody is agreed that we need to update the 1939 legislation. I understand that, but it is important to recognise that the Bill contains draconian powers. As my right hon. Friend Mr. Heathcoat–Amory said, it is an enabling measure and we do not have the secondary legislation before us. As Dr. Tonge rightly pointed out, it appears that it will not be available for scrutiny by the House until half way through consideration of the Bill in Committee. That is a scandal, and I hope that the Leader of the House will take note of my remarks.

Conservative Members often complain that we are unable properly to scrutinise legislation, but as the Leader of the House is new to his post, I hope that he will take on board the criticisms made not only from these Benches, but from the Liberal Benches. Given that the Bill is so dependent on the detail of the secondary legislation, it is unacceptable that it is to be made available to the Committee only half way through its deliberations, following the summer recess. Perhaps the Leader of the House will bear those points in mind, as he will be asked about them at business questions.

We are debating Second Reading, but the Secretary of State herself and other hon. Members have failed adequately to answer the concern that I have raised throughout the debate—namely, that no evidence appears to have been produced that British citizens are acting irresponsibly in promoting illegal trafficking in weapons, thereby adding to the human misery in domestic conflicts around the world.

The Liberals have referred to a couple of companies in the debate, but everybody else has been talking about the AK47 Kalashnikov and similar small arms, which are not manufactured in the United Kingdom. I am not aware that great supplies of the SA80 or other British equipment are ending up in the appalling conflicts that are taking place around the world, so it is important to produce evidence of abuse by British companies or British individuals to justify the acquisition of the extensive powers proposed in the Bill.

The Secretary of State referred to tragic examples of children caught up in horrific conflicts, citing Sierra Leone, the Balkans, Rwanda and a host of places around the world where atrocities are taking place, but no one has suggested that weapons produced in the UK have fallen into the hands of those terrorists.

I want to make it clear that I support the concept of licensing. However, although I am not enough of a libertarian to believe that there is no need for licensing, there is also a moral case for defence exports. It is easy to be pejorative about the arms trade, and newspaper headlines about people engaged in nefarious activity often refer to arms dealers, thereby implying that there is something disreputable about that activity. I refer generally to the defence industries, because it is important to recognise the contribution that our defence industry makes to the United Kingdom.

I shall set out five key points as to why I believe that defence exports are morally sound. I have called them the Masefield five, as a tribute to Sir Charles Masefield. After a distinguished career with British Aerospace, he served with even more distinction as head of defence export sales. He has now returned to BAE.

The first key point is that article 51 of the UN charter upholds the right of every nation to acquire defence equipment to protect itself. That is the most fundamental of human rights. I believe that, in pursuance of article 51, it is entirely right and proper that we should assist those nations around the world that we consider to be our friends, because that helps them to defend themselves against invasion. It also helps us to cement relationships with countries with which we want to do business.

Let me cite an example: Saudi Arabia. The biggest defence contract ever signed in the United Kingdom was the Al Yamamah contract, signed by the British and Saudi Governments. That contract helped to bring the United Kingdom and the kingdom of Saudi Arabia together, and as a result of the relationship we were able to rely on an Arab state to support our endeavours to liberate Kuwait from Iraqi invasion. Who knows? If we had not had that relationship with Saudi Arabia, those land bases might have been denied us and we might have been unable to liberate Kuwait.

Clearly, there are risks. Governments can change, and the assessment of the stability of the Government of a country to which we export defence equipment is a key consideration. Nevertheless, we will not always get it right; inevitably, on occasion we will get it wrong. The argument in favour of British military exports to Iraq was based on a wish to overcome an imbalance whereby Iran seemed more threatening than Iraq—but I will not go into that history, especially as the Father of the House is not present. Mine would probably not be a very fruitful argument.

As I think was mentioned earlier, the Argentines deployed Exocets against us, which were supplied by the French.

My second key point in favour of defence exports is that exporting defence equipment is the best guarantee of peace and stability. That follows from my first point. Being weak, Kuwait could not defend itself, and became vulnerable to attack from Iraq. If it had had a stronger defence of its own, it would have been able to deter Iraq.

There are some safeguards. We sold Hawk aircraft to Zimbabwe. We control the supply of spares for those aircraft. I do not think there are 60,000 parts in a Hawk aircraft, as there are in the F16, but there may well be: it certainly contains thousands of parts. Anyway, we are able to exert some influence over Zimbabwe, if only a modicum. In the case of other countries engaged in exporting their particular brand of tyranny, I think that the ability to withhold the supply of spares is advantageous.

My third point is a particularly important one, which I think we must all bear in mind. Defence exports enable us to produce economies of scale in the production of our own equipment for our own services. If we did not have longer production runs, we would not be able to buy British for our armed forces. The idea that the United Kingdom should not supply its own equipment—tanks, aircraft or warships—to its own services would land us in very hot water with the British people. I think that they expect us, especially as a nation that has this ability, to manufacture equipment for our own purposes, and for our own forces. Unless we can secure longer production runs, however, we shall not be able to afford to buy that equipment from our own factories, because the unit costs will be prohibitive. There will be pressure on us to buy off the shelf, from overseas.

Moreover, by buying equipment in the United Kingdom and maintaining economies of scale, we maintain our ability to compete technologically, to keep up our scientific advances, and not to become dependent on other nations. That in itself helps to secure the defence of the United Kingdom.

Fourthly, as has been mentioned, jobs are involved. There are some 400,000 jobs in the defence industries, which sustain families throughout the United Kingdom. I believe those who work in the defence industries to be honourable. We have noted the implicit criticism that they do not care what they do, and are impervious to some of the atrocities being perpetrated around the world. That is an outrageous suggestion: they are honourable and decent people. They not only provide the United Kingdom with its defence, but enable us to help the defence of our allies.

Manufacturing industry faces a severe difficulty. It is already in recession, and I think that we have now seen two successive quarters of falling output, which is the official definition of a recession. We should avoid landing them with further burdens at this time. The Defence Manufacturers Association has already expressed concern about the additional burdens that the Bill threatens to impose on it. It is incumbent on the Government to make it clear that they do not intend to impose intolerable burdens on business.

Fifthly, we have competitors. Although, as has been pointed out, Britain is the world's second largest defence exporter, there are those competitors, and I suspect that they are infinitely less scrupulous than we are. We must not lose sight of the need to protect our own industry, and ensure that comparable actions are taken in other countries engaged in defence exports.

BAE Systems has written to a number of us. Its representative wrote to me:

"it is . . . our hope that the Bill wil not have the effect of adversely affecting either the competitiveness of UK companies or their ability to collaborate effectively with EU and/or US partners."

That is an extremely important point which the Government must take on board.

I suspect that industry is, to an extent, inhibited in respect of whatever criticisms it wants to make of the Bill, given that so many defence companies rely on the British Government as their principal customer. I suspect that the criticisms, or concerns, that we may have heard are of a muted nature.

Let me conclude my five key points by drawing attention to what the Ministry of Defence has said. According to the MOD, it is estimated that, without export markets, the British defence industrial base would be less than half its current size, with a loss not only of jobs but technological capability.

Mention has been made of the role of the Liberal party. The hon. Members for Twickenham (Dr. Cable) and for Richmond Park (Dr. Tonge) were candid enough to say that they were in favour of scrapping Export Credits Guarantee Department support for defence exports. I hope that all Conservative candidates and Conservative MPs in the country—and, indeed, Labour MPs and Labour candidates—whose constituencies contain substantial military facilities, including manufacturing plants, will note the Liberal policy, which is to cut the ground from under their feet. If the Liberals had their way, when those businesses were competing against the French, the Americans or others, they would not benefit from British Government support, and would be seriously disadvantaged in a highly competitive world. We would thus lose the value of defence exports, and all the benefits that I have described.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

Of course I will give way to the hon. Lady, having provoked her.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

Another feature of Liberal policy is our suggestion that we should join the single currency. That would counterbalance the possibility of a loss of exports, because exporting would be so much easier if the exchange rate were different.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

I am not sure that that is entirely relevant to my argument, but I note the hon. Lady's point. We would then have a uniform interest rate across Europe. We know how difficult it is to achieve a uniform interest rate across the United Kingdom that matches the requirements of its component parts; it would be even more difficult across Europe, and I suspect that ultimately that would damage manufacturing industry.

I am not sure that the Bill will do anything to help civilians who are caught up in the horror of domestic conflict. I have been to Peshawar in Pakistan, at the base of the Khyber pass. In the market, it is possible to get any weapon of any kind made—and it does not take long: I think it takes about a week to have the most sophisticated weapon made, while others can be knocked up in a matter of hours. The idea that the Bill will eliminate that type of trade is simply wishful thinking on the part of some hon. Members. They need to be absolutely clear about that.

I am clear that the Bill could seriously disadvantage one of the United Kingdom's most responsible and successful industries. The devil will be in the secondary legislation. When we are able to see that, we shall be able to judge whether the Bill will seriously undermine one of Britain's great success stories.

Photo of Ann Clwyd Ann Clwyd Labour, Cynon Valley 7:10 pm, 9th July 2001

This has been an interesting debate particularly for those of us who were members of the Quadripartite Committee on arms exports because we have been able to hear the views of colleagues who were not members of it. The Committee was an exceptional experiment in combining four Select Committees, composed of hon. Members from all the main parties in the House, to discuss an issue on which we had very divergent views. Initially, I was almost afraid to speak because I did not want to upset the apple-cart. However, after several sittings, a consensus seemed to emerge. Considering some of the hon. Members on the Committee, I was very surprised to see it coming together on the issue.

I come from a very particular standpoint on the issue. I am very concerned about human rights and have been very active in that sphere for many years. I have also been critical of the arms export industry, particularly its effect on developing countries and on human rights in some of the countries where our arms have gone. I am not proud that we are the world's second biggest arms manufacturer—it is not a matter of pride, because arms kill. I do not particularly want to be involved with an industry that kills people.

Photo of Ann Clwyd Ann Clwyd Labour, Cynon Valley

I shall in a moment. I have listened for many months to the hon. Gentleman's attacks in the Chamber on members of the Campaign for Nuclear Disarmament and on the women of Greenham common, but I remind him that the Greenham common march started in Cardiff and that I was the only politician present. I am exceptionally proud of that fact, and it should be quite clear where I am coming from in this debate.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I thank the hon. Lady, whom I much admire, for her sincerity in giving way and for that little trip down memory lane. I take issue only with her statement that arms kill. Is it not also true that, sometimes, arms prevent killing, deter killing or even stop killing?

Photo of Ann Clwyd Ann Clwyd Labour, Cynon Valley

I thank the hon. Gentleman very much for that observation, which is patently true. It is also patently clear that arms kill.

I am sorry that the Leader of the House has left the Chamber and is not participating in this debate. He has been so heavily involved in the issue since the then Conservative Government exported arms to Iraq and he responded to the Scott report after having seen it for only about half a day. It was an occasion that anyone who was in the House will never forget.

I do not believe that hon. Members would ever have allowed arms to be exported to Iraq if they had been asked. Anyone who knew about events such as Halabja and the chemical gassing of the Kurds would never have agreed to export arms to Iraq, unless they thought that those considerations were of no importance. When he was Foreign Secretary, the Leader of the House was deeply involved in those issues and attempted to introduce an ethical foreign policy. He also knew that Scott had criticised the fact that the House was not involved in that type of decision making. As the right hon. Member for Tonbridge and Malling (Sir J. Stanley) said, some of Richard Scott's comments on that issue have been quoted out of context.

We could not believe that those who were making the decisions on exports to Iraq were not aware of the type of regime that existed in that country. We were aware of the nature of the regime; so why were those making the export decisions not aware that the Iraqi regime would eventually use those arms against us? Although that may be water under the bridge in some respects, Iraq still owes us at least £500 million in export credit guarantees. That is a loss to the British taxpayer.

The confessions of Dr. Cable about his days as a civil servant at the Foreign Office and elsewhere were very interesting. He described some of the considerations in decisions that he had to make, and he made it clear that he had doubts about some things. When 30 years have elapsed, perhaps we shall even see whether his signature was on those documents. The point is that, occasionally, some hon. Members are more aware than Ministers or civil servants about the situation in some of the countries that the hon. Gentleman listed.

The Select Committee had an exchange with the former Foreign Secretary on arms to Indonesia. As we all know, in 1997, while attempting to introduce an ethical foreign policy, one of his first major speeches at the Foreign Office was on that very subject. Those of us who had been campaigning since 1987 for human rights in Indonesia were very much hoping that that speech would influence the ultimate decision on whether to continue exporting Hawk aircraft and spare parts to Indonesia.

It was at that time that the former Foreign Secretary and I first fell out. He argued that legal considerations required him to continue those exports. As I said in an earlier intervention, we should not be in such a position. There may be an agreement with a country, but we should be able to review that agreement when circumstances change in that country.

The right hon. Member for Tonbridge and Malling, some other Select Committee members and I visited the United States. People there expressed astonishment that the United Kingdom Government were bound by legal considerations in determining whether to continue sending arms to Indonesia. They said that that would never happen in the United States, and that they could cancel exports to a country if the circumstances in that country changed. They said that their contracts contained a provision enabling them to do that without any obligation at all, including financial obligation.

In the past few years, and even in the past few months, there have been some interesting developments in the United States in relation to arms exports to Indonesia. Although we continue to export to Indonesia, the United States has stopped not only its arms exports but its military training there. I believe that that change is due primarily to the prior scrutiny exercised by members of the United States Congress.

Despite prior scrutiny, the United States is still the world's biggest arms manufacturer. Such scrutiny simply spares United States Ministers and congressional members the embarrassment that was felt all too often by Ministers in the previous Government and in the current one when they discovered that arms were being exported to a country that was committing human rights abuses.

I cannot see any objection to our having a similar system of prior scrutiny. I would have thought that the Government would welcome it. In his last session of giving evidence to our Committee, the then Foreign Secretary seemed to be coming round to our point of view. He saw that our arguments were consistent, and we came up with a compromise that would probably have been acceptable to him.

I ask the Department to think again about this important aspect of arms exports. The Government have done good work in producing the annual report, which I welcome. It was a considerable stride forward, as was producing a common European Union code of conduct. However, to fail on prior scrutiny would be a major failure and would not bring the transparency that Labour Members have been calling for since Scott.

Licensed production deals are increasingly supplementing or even replacing direct strategic exports. The number of licensed production facilities worldwide has grown dramatically in recent decades and continues to grow year by year. It is vital to introduce strict controls to ensure that such arms production is not allowed where there is a likelihood of use for human rights violation in the country of manufacture or subsequent transfer to other destinations or end users of concern.

One example of a licensed production deal of concern is the agreement between GKN Defence Ltd. and Asian Armoured Vehicle Technologies in the Philippines to produce Simba vehicles. It was reported in 1994 that the first seven Simba armoured personnel carriers had been delivered to the Philippine armed forces. A total of 150 vehicles had been ordered and fitted with a 12.7 mm Browning machine gun turret. Eight vehicles were to be supplied from the UK, several as kits, and the rest to be assembled at the plant operated by Asian Armoured Vehicle Technologies.

I asked the President of the Board of Trade

"what control she has over the transfer of (a) armoured vehicles and (b) armoured personnel carriers to (i) Indonesia and (ii) other countries from the GKN Defence licensed production facility in the Philippines."

The answer was:

"The control of exports from the Philippines is a matter for the Philippine Government. Any export of licensable goods from the UK to the Philippines would be subject to UK export controls."—[Hansard, 15 July 1997; Vol. 298, c. 134W.]

That answer illustrates the fact that the inadequacy of UK licensed production agreements leads to the establishment of new centres of production of military/security equipment over which the UK Government have little or no control. We must introduce statutory powers to control licensed production overseas.

I am concerned about end-use monitoring. Those of us who have spent many years asking questions about arms exports have found it very difficult to get answers. I could paper many walls with the questions that I have asked about exports to Indonesia, for example. We are told that we cannot get answers because of "disproportionate cost", meaning that no one plans to answer the questions at all. We have yet to get to the bottom of what "disproportionate cost" means. At a conference in Ireland to discuss East Timor, an Irish senator handed me an Irish £10 note, which I still have, and said, "This is to help the UK Government answer your questions on arms to Indonesia."

Fortunately, things have changed a bit since then. In her international development role some time ago, Lynda Chalker admitted that end-use monitoring was practically impossible. When he was a Foreign Office Minister, Derek Fatchett said that no formal mechanisms existed to monitor the end use of British defence equipment once it had been exported. It is true that it is almost impossible to monitor the end use of arms that we send to some dodgy countries.

Campaigners on Indonesia and East Timor have told me that British-supplied armoured cars, fitted with water cannons, were used by the Indonesians to spray protesters with coloured water, enabling them to be identified, arrested and probably tortured. Hawk aircraft were spotted flying over East Timor just before the referendum. When asked about that, Ministers said that embassy staff were monitoring the situation. Given that East Timor is a long way from Jakarta and that people from our embassy did not go there all that often, the reality is probably that people did not know.

I welcome the Government's steps to improve risk assessment at the licensing stage and the strengthened pre-sales checks on exports, but there are no specific measures in the Bill for monitoring goods once they have been exported. With the best will in the world, all Governments make mistakes, and it is quite possible that some of the countries that are not currently considered dodgy may become dodgy in the future. All export licences should have end-use certificates, and minimum requirements should be specified. It would be fairly easy to do that. Monitoring by embassy staff is not a sufficient answer.

Those of us on the International Development Committee know the consequences of selling arms to countries that simply cannot afford them. The world is littered with developing countries that bought arms under previous rulers, sometimes spending 50 per cent. or more of their budget, leaving the poor people there with the bill after the regime had changed. It is important that the schedule of purposes for export controls should contain specific reference to the need to ensure that arms transfers do not have an adverse effect on the economy of any country or the sustainable development of the country to which the goods are exported or the technology transferred.

It is a matter of concern that so many developing countries are in debt, and our Government have led the way in addressing that problem. The Chancellor has done everything in his power to try to get help for those countries that are bogged down by past bills for arms that they did not need. Without those arms, they would have had the scope to spend more on education and health.

The Quadripartite Committee was a particular experience. It showed that Members of Parliament can come together, even on a contentious subject, to test the arguments on representatives of, for example, the Defence Manufacturers Association. By the way, the association's point of view was heard, in spite of what Mr. Howarth said.

We are convinced that prior scrutiny will not affect the arms trade, if that is what people are worried about. The right hon. Member for Tonbridge and Malling (Sir J. Stanley) mentioned the amount of money that is spent propping up the defence export industry by the Defence Export Services Organisation, which has a considerable budget, and we need to ask whether that is good value for money or whether it would be better to prop up other industries, such as the pharmaceutical industry. I personally think that that would be much more worth while, and that is the sort of debate that we should have in the House. Samuel Brittan, one of the leader writers for the Financial Times, has made the argument several times that if we were looking for value for money, we would not spend money propping up the defence industry, because we could use that money for other reasons and on better causes.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford 7:33 pm, 9th July 2001

I am most grateful for the opportunity to make my first contribution in the House. I preface my remarks by congratulating the hon. Members for Redcar (Vera Baird), for Wolverhampton, South-West (Rob Marris), for North Durham (Mr. Jones) and my hon. Friend Mr. Liddell-Grainger on excellent maiden speeches. My only regret is that they chose today to make them before me, but excellent they were in their entirety.

I wish to begin by paying tribute to my predecessor, Mr. Bowen Wells. Bowen served his constituents for 22 years, first as the Member for Hertford and Stevenage, and after 1983 for the redrawn division of Hertford and Stortford. In addition to his roles in the Government, Bowen played an active part on various Committees of the House, culminating in the previous Parliament with his chairmanship of the International Development Committee. Members on both sides of the House have told me of his extensive knowledge of the problems of the third world and of his dedication in seeking their solution. I am pleased to report that Bowen remains as committed to that cause now as he was when he first entered the House and that he is continuing his work to help the poorest nations of the world.

In the constituency, Bowen's dedication to service was just as strong. He believed, as I do, that Members of Parliament have a duty to serve every constituent, no matter how they may have voted. Indeed, many people in Hertford and Stortford have told me that they felt lucky to have Bowen as their Member of Parliament; they described him as one of the last gentlemen in politics. I am not sure whether they will say the same of me. At school, I played rugby in the front row, as hon. Members can probably guess from my shape, where we do not take a genteel, subtle approach. Indeed, some would say that we take no prisoners. I therefore suspect that people will regard me as less of a gentleman and more of a player.

Hertford and Stortford is a wonderful constituency to represent. Situated in the south-east corner of Hertfordshire, it is in many ways the epitome of shire England. It has a combination of attractive market towns, historic villages and that soft, gentle rolling countryside that could only be England. I live in Much Hadham, in the heart of the constituency, and I know how lucky I am, as are many of my constituents, to live in such a beautiful part of England. However, in both the towns and villages, we are having to face up to new pressures and challenges.

Our towns are struggling to compete for shoppers and some local family firms such as Gravesons in Hertford have had to close. Our roads cannot cope with the traffic, but for many people their car is not a luxury but a necessity. Our public services are unable to recruit and retain the staff they need. Our health service is in debt, school class sizes have risen, and by Christmas our county could be short of 250 police officers.

Equally importantly, development at the edge of towns such as Bishop's Stortford, Hertford and Ware is draining the life away from the town centres, while putting a great strain on essential services. Without concerted and co-ordinated investment in our roads, our public services and our local amenities, our town centres, and those mentioned by the hon. Member for North Durham, could face a future of decline.

At the same time, our rural communities face the greatest agricultural crisis in a generation. Sadly, Whitehall seems to have other priorities. It seems determined to force us to build thousands of extra houses, many of them on our green belt. Those problems of town and country are interwoven, and I for one will fight and fight again to ensure that we breathe life back into our towns and that we defend our green belt from excessive development.

The Bill before the House today seeks to strengthen the controls on the export of defence equipment. No one doubts the need to improve the accountability and transparency of decision making in Whitehall, by Ministers and officials alike, and I take a direct interest in that issue, for two reasons.

First, the economy of Hertfordshire has a long and respected tradition in the defence and aviation sectors, and many of my constituents work for leading names in those industries. Secondly, I have a long-held interest in matters of defence and international security. Indeed, I believe that the first duty of Governments is to ensure the security of their people.

While it is right to try to keep military hardware out of the hands of tyrants and terrorists, it is also essential, as several hon. Members have pointed out, that we recognise the right of every nation, large and small, to defend itself. As Mr. Berry pointed out, that right is upheld in the United Nations charter. Without the means to deter and repel aggression, that right is worthless. Many small nations today—the names of which are familiar to us all—would not be enjoying their independence had they not had the means to defend their freedom.

It is freedom that has brought me to this House. I believe that personal freedom—freedom of speech, the freedom to be oneself, free choice, free enterprise, or simply the freedom from constant intrusion and interference in our daily lives—lies at the heart of a civilised society, but throughout my lifetime each of those liberties has been steadily eroded. There is always a plausible reason—always a good excuse—but every intrusion, ban and restriction tilts the balance away from us as individuals and local communities and towards the large lobby groups, multinationals or big business. Indeed, the Government are perhaps the largest lobby group of all.

Only an effective Parliament can restore that balance. Throughout this country's history, this House, more than any other institution, has been the champion of our liberty. We, as Members of this House, are privileged, for we are free to speak without fear or favour. We also have the opportunity to provide a voice for those who are rarely heard. That is why I say that we all have a duty to challenge Government—every Government—and to question and hold to account those in authority, not for ourselves but for those whom we seek to represent.

In recent years, I have been saddened to watch the status of this House diminish in our nation's affairs. The impact of the European Union, a burgeoning media and the development of semi-detached Government agencies have all served to undermine the role of this place; yet I still believe that this House can and should remain at the heart of our national debate. That is why, even though I am a new boy, I passionately believe that we must strengthen the House's Committees, extend the scope and powers of scrutiny and ensure that the career of a parliamentarian is as respected as that of a Minister: after all, it is likely to last somewhat longer. The recent Hansard Society report is an excellent manifesto for restoring the House as our national forum, and I strongly support its aims and conclusions.

To be elected to this House is an honour. I will do my best to serve my constituents as well as I can. I know that I will make mistakes along that path and probably upset some people in the process, but none of that will matter if I can make a small difference to the lives of some of my constituents.

To be a member of this House is also a privilege because it affords each of us the chance to speak freely and hold authority to account. It gives us the opportunity to provide a clear, distinctive voice for those values that we each hold dear to our hearts. I am grateful to you, Mr. Deputy Speaker, for this opportunity to make my first contribution, and to right hon. and hon. Members for listening to me with such patience.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South 7:43 pm, 9th July 2001

It is a new experience for me to congratulate an hon. Member on a maiden speech. I congratulate Mr. Prisk on a thoughtful and well-judged speech. He rightly paid tribute to his predecessor, who was renowned in the House for his work with the third world. I am sure that the hon. Member for Hertford and Stortford will continue in the same vein.

The hon. Gentleman said that he lives in a lovely part of the country. I hope that if I holiday down there, I will be able to experience his delight in that part of the country. He gave notice that he will be a champion for his constituents. I wish him well in this House over the next few years.

I congratulate my hon. Friends for North Durham (Mr. Jones), for Wolverhampton, South-West (Rob Marris), for Redcar (Vera Baird) and Mr. Liddell-Grainger on their excellent speeches. The talent that has been displayed today demonstrates that the House is in very good hands for the future.

I wish, in welcoming the Bill, to show my support for the opportunity that it provides. We can rightly be proud of the fact that we are overhauling export control powers for the first time in 60 years. The Bill clearly responds to the increasingly complex and volatile world in which we live, and I believe that it will bolster and enhance the vital and significant role that we can play in making the world a safer place now and in the future.

I welcome the action that the Government have already taken on export controls, including the adoption of a European Union code of conduct on arms exports and the publication of comprehensive annual reports on strategic export controls. The fourth report is currently being prepared, and I believe that it will be welcomed by hon. Members on both sides of the House.

In addition, the Government have strengthened and improved the effectiveness of export controls. A key measure that comes to mind is the Landmines Act 1998, which has been referred to today. The Act gave effect to the Ottawa convention banning the import, export and manufacture of all forms of anti-personnel land mines.

We have sought to minimise the risk of United Kingdom defence exports being diverted to undesirable end-users by putting in place procedures to strengthen the process of risk assessment at the export licensing stage. We have played a leading role in contributing to the work of international bodies, which has resulted in the UN conference taking place in New York today on illicit trade in small arms and light weapons. More clearly needs to be done in this area, and I welcome the further advances that the Bill will make possible.

I should like to focus on two specific areas addressed by the Bill—the trafficking and brokering of weapons and related equipment and the transfer of technology by intangible means. It is important to recognise that the UK arms industry employs thousands of workers. I declare an interest as a former official of the Amalgamated Engineering and Electrical Union, which covered the defence industry. The arms industry is a vital component of an already declining manufacturing base, and I believe that it deserves support. We must also recognise, however, the distasteful and dangerous side to the arms trade through the trafficking and brokering of arms to areas of instability and conflict.

At present, a licence to broker in arms is not required. As the former Secretary of State for Trade and Industry, my right hon. Friend Mr. Byers and my hon. Friend Mr. Berry have pointed out, in a country where one needs a licence to marry, go fishing and drive a car, that is clearly absurd and must be addressed. The benefits of a system of licensing have been articulated succinctly. As the director of Oxfam, David Bryer, has said, tougher licensing will make a real difference to countless people in developing countries whose lives are wrecked by bullets and guns sold by British arms brokers.

In an increasingly volatile world, with the worrying proliferation of rogue states, the balance of world power will in large part be decided by the military hardware and destructive capability of individual nation states. There is increasing evidence that significant amounts of arms flowing into regions of conflict are being transferred there by arms brokers. For example, in 1995 a company based in the Isle of Man was involved in supplying arms to Rwandan rebels based in Zaire.

I therefore welcome the new powers that the Bill will provide to enable a licensing regime to regulate the trafficking and brokering of arms. Among other things, it will cover all major weapons and weapons platforms, light weapons and small arms, ammunition and key items of military equipment. I particularly welcome the fact that details of those applying for licences will be placed on a register, which will make the process more transparent and open, and it would be further enhanced if such a system were made available on an international basis.

A key area of concern remains, however. Although the Import, Export and Customs Powers (Defence) Act 1939 allows the Government to regulate exports from and imports to the UK, it does not allow them to impose controls on UK persons overseas trafficking in goods between overseas countries or brokering such deals. Although I welcome the Government's intention to tackle the issue through secondary legislation under the Bill, it is essential that such legislation effectively addresses that serious omission by controlling the activities of UK citizens and companies wherever they are conducted.

Concern was recently articulated by Dr. Ian Davis of Saferworld. He said that if full extra-territorial measures are not taken, the danger is that British citizens will simply evade controls by operating from another country. A recent case provides a perfect example. In 1997, Sandline was involved in supplying Sierra Leone with military hardware from Bulgaria. It is vital that the measure covers such cases.

It has been argued that legislation would be difficult to implement and police, but there is increasing international co-operation to deal with trafficking in other goods, such as humans and drugs, and to combat organised crime through organisations such as Interpol and the use of joint intelligence operations. Surely such international co-operation could be used to combat and police the international arms trade.

Previous legislation was compromised by the fact that extra-territorial questions were not dealt with adequately. I am sure that the House will welcome and appreciate the Government's intention to introduce secondary legislation that will allow powers to tackle such questions.

My second focus is on the transfer of technology by intangible means. At present, a licence is needed to export certain technologies. Controls on technology and software exports derive mainly from various international export control regimes. However, for technologies and software—mainly military—to be subject to national control, export licences are currently needed only when technology or software is exported in a physical form, such as a disk. Crucially, that does not include export by electronic or other intangible means.

That provision does not dovetail with the European Council regulation in respect of dual-use technology and, furthermore, it clearly highlights the inadequacy of the 1939 Act, which gives the Government power to control only tangible exports. The Act falls short of the provisions required in the age of e-mail, fax, telephone and sophisticated computer technology. Indeed, when the 1939 Act was passed, the bright age of the computer had yet to dawn.

In the 21st century, it is plain that the central means of communication—especially over considerable distances—will be electronic. It is thus vital that we recognise that advance and the potential and power that it provides. The current loophole under the 1939 Act will obviously be effectively and systematically exploited unless we close it.

For that reason, I welcome the new powers that the Bill provides to allow the Government to control transfers of technology by intangible means. The measure will allow for the establishment of controls on military technology exports, in line with those that already exist for dual-use technology. Those controls will, rightly, include the export of documents, blueprints, manuals, diagrams and so forth by both tangible and electronic means. I also welcome the provisions made for the introduction of controls on the transfer of technology by non-electronic tangible means, together with controls on the provision of technical services where they would assist in the development of weapons of mass destruction or related missile programmes.

I welcome the Bill. It provides the UK with a more adequate legislative framework and will promote global peace. I welcome powers to prohibit the supply of weapons to regions of conflict, while allowing legitimate trade by British defence companies. I welcome powers to introduce a licensing requirement on the export of military technology by electronic means as well as in tangible form. At the same time, the Bill responds to the Scott report by ensuring that the Government are accountable to Parliament for the use of those new powers by providing for parliamentary scrutiny of the secondary legislation introduced under them. In the main, the Bill meets the rightful criticisms made in the Scott report about the lack of such provisions in the 1939 Act. It will undoubtedly contribute to meeting our global obligations and in making the world a safer place.

Photo of Elfyn Llwyd Elfyn Llwyd Shadow PC Spokesperson (Home Affairs), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Defence) 7:55 pm, 9th July 2001

I add my sincere congratulations to those already offered to Mr. Prisk on a thoughtful and confident maiden speech. I wish him well for the future.

The debate has been most interesting. It takes place on the first day of the UN conference in New York on the reduction of global trade in small arms. I share the dismay expressed by Dr. Tonge that the American delegation will scupper any decision on that trade—mainly owing to the influence and pressure exerted by the National Rifle Association in the US in upholding the principle of the right to bear arms and so on. That casts a dark shadow over that important conference.

Understandably, much of our debate has been about small arms. However, after the Dunblane massacre, when we in this place rightly and swiftly brought in strict controls, it is distasteful that the UK remains happy to be a major manufacturer and exporter of those items that were so urgently and correctly banned.

I welcome the Bill. It will tighten the UK's export control system, although perhaps not enough. In that respect, Mr. Berry made a thoughtful and thought-provoking speech from the standpoint of considerable experience. We all know the consequences of the indiscriminate use of weapons: we see refugees displaced by civil war and genocide, and we see the peril that our relief personnel experience daily. In today's wars, most of the people killed are civilians and almost half of those casualties are children. Directly or indirectly, conflict causes and aggravates poverty.

Given the importance of the Bill, it is surprising that it has taken more than five years, since the publication of the Scott inquiry into the arms to Iraq scandal, for the measure to come before the House. I am pleased that the Bill has been introduced, but it has taken a long time. As other speakers have noted, primary legislation on the subject has not been introduced since 1939, and the Scott inquiry amply showed the shortcomings of current legislation.

In the meantime, the Government have—to their credit—introduced more stringent controls. The export of land mines and torture equipment has been banned. We talk about end-use certificates—was there ever a moral justification for the production and export of torture equipment? Could there ever be such a justification? The answer is no. That is only common sense. It is disgusting to think that the UK was involved in such trade. However, the Government have introduced a ban on such exports and also on the granting of export licences when there is patent evidence of human rights abuses. Of course that, too, is welcome—as is the fact that the UK has signed up to the European Union code of conduct.

However, we have seen many disgraceful examples of the misuse of the arms control system in the UK since Labour came to power. That shows that much more must be done, not only by strengthening the system through this Bill but by further intervention. In the first eight months of the Labour Government, 31 per cent. of UK arms export licences were issued to conflict-vulnerable societies. In January 2000, it was revealed that spare parts for Hawk fighter jets were being sold to Zimbabwe. Those planes were being used by that country in the civil war in the Democratic Republic of the Congo. In her opening remarks, the Secretary of State referred to the injuries of people in the Congo. The Zimbabwean presence there is playing a major part in keeping the conflict alive—and, of course, Zimbabwe is not known for its human rights record, even within its own borders. At about the same time, the premature lifting of the arms embargo on Indonesia led to Hawk aircraft being sold to Indonesia when armed militias were still hounding the East Timorese. All that took place while a purported ethical foreign policy was being followed. Those examples show that the current system of scrutiny is not adequate. Hon. Members on both sides of the House have mentioned the need for pre-scrutiny by Parliament, and I add my voice to theirs.

It was reported in the Official Report of 23 January 1997, that an export licence granted for six water cannon to Indonesia included "associated equipment". Parliamentary questioning eventually revealed that the "associated equipment" was 310 armoured personnel carriers. That is rather disturbing, and those answers would obviously not have been given if those questions had not been asked, so there is a need for better scrutiny and far better transparency.

Plaid Cymru has long sought to draw attention to the ethnic cleansing of Tamils and the many stories of extra-judicial killings by the police and armed forces in Sri Lanka. During 1997 alone, 67 export licences were granted for the sale of military equipment to Sri Lanka, rendering it the fourth most popular destination for UK arms that year. Yes, Britain is one of the top exporters of military equipment in the world. That gives me no pleasure, any more than it does Ann Clwyd. Britain has between 20 and 25 per cent. of the world market. That trade contributes £203 million a year to the United Kingdom economy. However, the industry receives Government subsidies worth £431 million. According to my mathematical interpretation, it makes no economic or ethical sense to pursue such an agenda.

The Export Credits Guarantee Department guarantees that moneys are paid in respect of such exports. The aim is to break even, but any shortfall comes from taxpayers' pockets. The arms companies need export credit guarantees—without them, many arms deals would be too risky for the companies concerned and would not happen. In 1999, the then Foreign Secretary instigated a review of the ECGD to find out how it could better contribute to sustainable development. The review concluded that cover for military projects in the 63 poorest countries would not be extended. That was a step in the right direction but it did not go far enough. I should like the ECGD to withdraw its support from all military exports, as Liberal Democrat Members have suggested. It is also something about which some Labour Members are concerned.

The problem is that those exports are often to the very poorest of countries, which can least afford them and which, in effect, least need them. No one would argue with the right to bear arms in self-defence, nor with the right to provide arms where they are strictly necessary to defend countries that come under seige. Only an idiot would say that that is not right, but far too many of those arms are being supplied to countries in which civil wars are being fought. That is unjustified. Arms are going in by the back door as well, and Britain is contributing by producing those arms.

Early-day motion 191 was tabled during the 1999–2000 Session, and I am proud to say that a Plaid Cymru Member and Scottish National party Member were two of the six sponsors. It was signed by 120 Members, some of whom are in the Chamber this evening. That shows that the view it expressed had considerable support.

The sale of arms often diverts money from much-needed civil projects, which takes money away from funds that could contribute to sustainable development. The schedule to the draft Bill detailed the purposes for which export controls can be imposed and included a section referring to sustainable development. That provision has been removed, seemingly without explanation. That is surprising, bearing in mind the fact that the Secretary of State referred to sustainable development when she opened the debate. It is unfortunate that those words have disappeared from the schedule, and I hope that, in winding-up the debate, the Minister will explain why that very important principle disappeared from the Bill. I also hope that those important words will be reintroduced in Committee.

I should also like to refer briefly to tied aid. I welcome the fact that the Government have committed themselves to getting rid of that practice. Many of the recommendations of the Scott inquiry have been incorporated into the Bill, but several hon. Members have voiced the genuine concern that too much is being left to secondary legislation. The Quadripartite Committee has called this a mainly enabling Bill, as much of the substance will be in the secondary legislation. Of course, the devil will be in the detail, making it hard to judge the real impact that the Bill will have. No doubt things will become a little clearer in Committee, but it is difficult to have as full a debate as we would like on Second Reading. I am very disappointed that the Government's response to the Quadripartite Committee report was not published until today. Surely parliamentary business should not be conducted in that way on such an important issue.

One of the loopholes in the Bill is that it does not seem as though end-use controls will be tightened. I know that there is a substantial problem, but if we do not attempt to solve it, we shall do nothing at all. That is patently obvious. It is also obvious that the current system of end-use certificates is easily abused. To get a licence to export from the United Kingdom, a company must give the Government an end-use certificate, naming the importer of the weapons and the uses to which they will be put. In theory, that sounds good; in practice, it has proved utterly worthless. Apparently, it is easy to get an end-use certificate, and no one checks how the arms are used when they leave the United Kingdom. We need a follow-up monitoring and inspection system. I hope that that important issue will be tackled in Committee.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I agree with the point that the hon. Gentleman makes. Will he share with the House his thoughts on what sort of sanctions he would recommend if such an abuse occurs? Revoking licences has been mentioned, but could penalties be imposed that would continue when the company wanted a future application to be approved?

Photo of Elfyn Llwyd Elfyn Llwyd Shadow PC Spokesperson (Home Affairs), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Defence)

Indeed; I am sure that that is right, and both those points are valid. We are currently talking about developing the international courts, and I wonder whether they will be able to impose sanctions—I know not, but I hope that the important points that the hon. Gentleman makes will be discussed in Committee.

I welcome moves to regulate arms traffickers. In September 1998, Kofi Annan spoke about making arms brokering to embargoed countries a punishable crime and said:

"Possibly no other single initiative would do more to help combat the flow of illicit arms to Africa."

That important principle should be considered very carefully. The Bill will impose trade controls on goods passing through the United Kingdom, or if the transaction involves a UK national. Again, it is worth noting that that will be done through secondary legislation. The Bill simply states that the Secretary of State may make provisions by order, and so on. We need to extend regulation to British nationals based abroad, not just to those operating in this country. Without that safeguard, it will be all too easy for brokers or for traffickers simply to move their operations to another country. The Bill refers to that problem, but it says only that the Secretary of State "may" do something about it. Again, many important provisions in the Bill will be left to secondary or subordinate legislation.

I also seek clarification of how British companies can license foreign arms manufacturers. There is another potential loophole, because the growth of such licensed production effectively allows companies to circumvent regulations. In the United States, if a company producing arms overseas under a US licence wants to export goods, it must obtain a further licence from the US Government before that export can take place. I hope that this issue will also be discussed in Committee and that the Government will consider an equally stringent system.

One advance in the Bill is the extension of parliamentary scrutiny, but I and many other Members have argued that that might not have gone far enough. I have no doubt that this issue will be discussed in Committee.

The Government have published three annual reports on strategic export controls, and I am pleased that the publication of the annual report on this subject has now been given a statutory basis. In the past, Plaid Cymru has been concerned that this report has not included full information on the number and type of weapons exported. In its report of 2 February 2001, the Quadripartite Committee made several recommendations on expanding the level of detail in the annual reports to include the quantities of equipment supplied and end-user information. The Government promised more detail but, so far as I know, it has not yet appeared.

The Bill does not allow for prior parliamentary scrutiny of applications for licences. The issue has been debated today, so I shall not go over that ground again but I believe that parliamentary Committees are made up of responsible people who are there to do a job and I see no reason why prior parliamentary scrutiny should not occur even though issues such as commercial confidentiality mean that it is not a simple matter. I hope that before we dismiss the possibility of such scrutiny out of hand, we will consider it further in Committee.

Such scrutiny takes place in the United States and Sweden, and the Quadripartite Committee suggested a wholly workable two-stage process whereby only the licences that could cause concern need be examined in detail. The Government refused the Committee's first suggestion, but I believe that the Committee has come back with a modified model, which the Government are still considering. I hope that this important issue will be considered in Committee and that the Bill will be amended accordingly.

The problem of misuse of the arms exports systems is a global one, but the Bill is a very welcome step forward. We in Plaid Cymru—I also speak for the Scottish National party—argue that, once the UK has put its own house in order in relation to arms controls, it will be in a better position to influence the development of arms controls elsewhere. The ultimate goal should and must be the development of truly international safe- and-sound controls.

Photo of Eric Joyce Eric Joyce Labour, Falkirk West 8:13 pm, 9th July 2001

Although Mr. Prisk is no longer in the Chamber, I congratulate him on his excellent speech. I have been sitting here rubbing my neck—very stupidly, I once agreed to play a season as tight-head in the front row and he has brought all those memories flooding back. I have had a sore neck ever since.

I was also refreshed to hear the speech of—I shall try to pronounce this correctly—Mr. Llwyd. It was refreshing to hear a nationalist speak about foreign affairs. However, saying that one has obtained the agreement of the Scottish National party does not necessarily commend one's policies. The SNP policies that I have seen often form the weakest foreign policy that I can imagine.

I welcome the Bill, which follows a number of improvements made to the arms control export regime since 1997 that have not required legislation, including the introduction of tough new arms export licensing criteria and a unilateral ban on the export of equipment used for torture. Other improvements have been this country's role in securing a European Union code of conduct on arms exports and the Government's widely welcomed ban on the import, export, manufacture and transfer of anti-personnel land mines.

Peace and security across the world require sovereign states to be able to ensure the security of their citizens. Ultimately, from time to time that will require that those states have the ability to use, or threaten to use, force on actual or potential aggressors. That, of course, requires weaponry. However, as all states are not capable of manufacturing their own weaponry, it is important that they should be able to import such equipment as can reasonably be demonstrated as a necessity for legitimate security and defence purposes. A legitimate arms trade therefore has a role to play in intelligent world governance. However, there is a flip-side to the arms trade and it takes the form of a dangerous underbelly where immoral trafficking can blight the lives of many of the world's most vulnerable people.

The defence industry in this country is an essential part of our manufacturing base, and exports are a fundamental part of that industry's future. That is why it is important that the UK maintains the most transparent and accountable arms export system in the world. I understand that the Defence Manufacturers Association has said that it fully supports the Government's efforts to replace the existing legislation and welcomes the Bill's aims to introduce controls on the activities of brokers and traffickers.

Non-governmental organisations with interests in this subject have welcomed the Bill. They include the Red Cross, which believes that the Bill will contribute to the reduction in global levels of armed conflict and the attendant human suffering. Oxfam, too, has noted that the Bill is an important step towards closing the loopholes in existing legislation.

I welcome the Bill's emphasis on controlling the brokering of weapons and related equipment. I also suspect that many unscrupulous people at the margins will seek to exploit any loopholes that it might inadvertently leave. I hope that there will be none, but it is worth raising two or three potential hazards.

Mr. Howarth asked for specific examples. Although he is not here at the moment, I hope that he will appreciate that I have attempted to respond to his request. In April this year, The Guardian uncovered evidence revealing that British pilots and air cargo companies had been involved in supplying weapons on both sides of the war in the Democratic Republic of the Congo. A British pilot, Brian Martin, told Oxfam that he had flown planes registered in Swaziland for two Congolese carriers from Entebbe in Uganda and Kigali in Rwanda. Meanwhile, the UK company Air Charter Services was found to have leased a Boeing 707 to a Dutch company that flew arms from Bulgaria to Slovakia to Harare for transit to the Zimbabwean forces in the Congo. In both cases, it seems that the Government were powerless to intervene.

The Guardian today points out that such unscrupulous arms dealers are past masters at creating confusing paper trails that go across the world and into areas that are the responsibility of different sovereign states so that they avoid proper oversight of their work. That is why it is so important that the Bill covers UK dealers who operate overseas. A private company called Avient Aviation is a good example of that practice. It is based in Harare and run by a British citizen, Andrew Smith. The Financial Times has obtained a contract signed in December 1999 by Mr. Smith and the Congolese Government. It says that Avient would provide a crew of Ukrainian pilots to fly Antinov 12 aircraft to operate along and behind enemy lines to support ground troops and to work against invading forces in the Congo. Avient is understood to have received about £20,000 a month for that. It is highly desirable that the activities of companies like Avient be brought within the influence of the UK Government.

It is important to mention the significance of end-user controls, which was most notably referred to by Dr. Tonge and my right hon. Friend Mr. Clarke. The Bill will improve the checks and risk assessment at the licensing stage, which is welcome, but unless a system exists to monitor the end use of weapons that are sold from the UK, there is a significant risk that British arms might continue to be used in unacceptable conflicts and repression, which is always unacceptable. However, I appreciate that that is difficult to do, as my hon. Friend Ann Clwyd said.

In 1994, the UK company Miltec supplied more than £5 million of small arms and ammunition to the then Rwandan army from Albania and Israel. The end-use certificate said that the cargo was destined for the Ministry of Defence in Goma in the former Zaire. However, on arrival in Goma, the merchandise was loaded on to trucks and moved into neighbouring Rwanda. In 1997, the Ugandan Government bought four helicopter gunships supplied by the UK-based Consolidated Sales Corporation, registered in the Virgin Islands. Later reports in a Kampala newspaper quoted a Rwandan official as saying that two of the gunships ended up in Rwanda. He said:

"This country has to turn to its friends in neighbouring countries as it is difficult for us to acquire items directly on the international arms market."

Rwanda might find it difficult, but the examples that I have given of people circumventing the rules hardly sit at the apex of logistical sophistication.

The Bill represents a significant step forward and will make a considerable contribution to peace and security in troubled parts of the world. However, there remains cause for concern on some issues, and I hope that my hon. Friend the Minister will reassure us about UK traders who are based abroad, shipping agents and end-user controls.

Photo of Peter Viggers Peter Viggers Conservative, Gosport 8:22 pm, 9th July 2001

Mr. Joyce has obviously studied the subject and feels keenly about it. The House listened to his speech with interest.

Ann Clwyd is closely associated with arms control. She regretted the absence of the Leader of the House who took a keen interest in arms control when he was shadow Foreign Secretary and Foreign Secretary. May I echo her concern at his absence? Of all the ways in which the Government have treated the House with contempt, the one which I regret the most and which would be the most easily remedied is in relation to the presence of senior Ministers during important debates. The right hon. Gentleman was very concerned about arms control and argued vociferously in discussions on the Scott report that the then Conservative Government were to blame for their lack of legislation. The fact that he has made only one transit through the House in this debate is regrettable. I shall never fail to notice the absence of senior Ministers. It would be easy for them to encourage their supporters and the House by being present. Their absence is unfortunate.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

The hon. Gentleman is an experienced Member. Did he give my right hon. Friend notice that he was going to refer to him?

Photo of Peter Viggers Peter Viggers Conservative, Gosport

I did not. I have regretted only his absence, not his conduct, which I have not criticised. I may be reprimanded by Madam Deputy Speaker, but I would not normally regard an expression of regret at a Minister's absence as requiring the courtesy of a letter. Of course, I respect the fact that, as the right hon. Gentleman points out, if one is to make a personal attack, one usually makes it known to the Member concerned.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

In support of my hon. Friend, I must point out that it would surely have been difficult for him to give notice of that reference because he did not know, before today, whether Mr. Cook would be present.

Photo of Peter Viggers Peter Viggers Conservative, Gosport

During another debate, a Cabinet Minister was present on the Front Bench for a few moments. I saw him later in the day, and expressed my regret at his absence from the Chamber, and he replied, "I can't sit in there. I've got a country to run." That is regrettable. The House deserves the presence of senior Ministers.

The right hon. Member for Livingston was very vociferous during the discussions of the Scott report in 1996. He demanded legislation of the Conservative Government, who set up an inquiry to consider that. This Government came to power in 1997 and were greatly criticised for their inactivity in that respect. In the previous Parliament, the Quadripartite Committee—the meeting of the Defence Committee, the Foreign Affairs Committee, the Trade and Industry Committee and the International Development Committee—of which I am a member, criticised the Government for failing to introduce legislation as they had said they would. In February this year, the Committee said that it was dismayed by the lack of movement.

Finally, in March, a draft Bill was published, and then there was a reference to legislation in the Queen's Speech. Now the Bill is being introduced quickly but without much detail. That presents a conundrum—why inactivity, then sudden activity but little detail in the Bill? I have become very cynical in the past four years, and I suspect that there is a broader reason behind the timing and the strategy, because the Government are masters of timing and strategy.

Let us consider the broad political framework within which we must set the Bill. I will stay in order, Madam Deputy Speaker, because the background is very relevant. Let us look at the Government's position: the railways will stay privatised; air traffic control will be privatised despite everything; there has been no move on proportional representation; private medicine will contribute to the national health service; there are no concessions to the trade union movement; there has been a crackdown on habitual offenders rather than the adoption of liberal attitudes towards them; the Government are forcing single mothers to work; they are taking incapacity benefit away from many people.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I have allowed the hon. Gentleman some licence, but he is now wandering rather wide of the subject under discussion.

Photo of Peter Viggers Peter Viggers Conservative, Gosport

I have finished sketching the background, Madam Deputy Speaker.

Looking at the glum faces behind the Prime Minister when incapacity benefit was being discussed, I realised that something needed to be done. How on earth could the Government cheer up this large influx of Labour Members? What could they do to make them feel that it was all worth while? What could they do that would cost nothing? The answer was to legislate on arms control, which will damage the defence industry, cost the Treasury nothing and cheer up Members such as the hon. Member for Cynon Valley. This is a framework Bill with no detail but it has cheered hon. Members up, and we have heard them saying how pleased they are to see it. The Government thought, "Let's throw the left wing a bone—one without much meat on it, of course."

Photo of Roger Berry Roger Berry Labour, Kingswood

If this Bill is only a bone being thrown to Members, why did every Conservative member of the Quadripartite Committee urge the Government to act on the matter even more quickly than they did?

Photo of Peter Viggers Peter Viggers Conservative, Gosport

We were very happy to encourage the left wing in their hunt.

I welcome the Bill because the Scott report recommended a review of the primary legislation on weapons exports. It was unsatisfactory for that matter to be dealt with by an Act that was passed by the House of Commons in one day in 1939, in the run-up to war. That Act obviously had defects, but there are two major defects in the present Bill. The first is that we have had no sight of the proposed related orders and secondary legislation, so it is impossible for the House to judge the impact of the Bill. Secondly, the Bill is clearly defective because it continues the power of the Import, Export and Customs Powers (Defence) Act 1939 to control imports. Surely, after four years, the Government should be capable of remedying, updating and modernising that Act; they should deal not just with exports, but with imports as well. The Bill is defective in those two major areas.

The Government's handling of existing legislation is certainly defective and is failing exporters; we should not play down the importance of exports of defence equipment. The defence industry employs 350,000 people in this country; it has been calculated that 90,000 of those jobs relate directly to the export of arms equipment. The Government are letting down those people because they are failing to meet their 20-day target for consent for an arms export licence. They aim to give such consent within 20 days in 70 per cent. of cases, but they have done so for only 57 per cent. of applications. Their handling of appeals is worse; the Quadripartite Committee was told by members of the Defence Manufacturers Association that some applications for arms exports are so old, fusty and dusty that they think of sending them birthday cards every year; year after year, the Government have not done anything to deal with them.

The Leader of the House of Commons said:

"I have limited sympathy with complaints we are not moving fast enough."

The House should not be satisfied with a Foreign Secretary—as the Leader of the House then was—saying that he has limited sympathy for a major British industry; the Government should do better.

There is no doubt that the Bill, which will be imposed on the industry, will put a heavy burden on business. Looking at it clause by clause—which, of course, will be done not here but in Committee—one can see that sweeping powers are taken for the Secretary of State to control the transfer of any kind of technology and technical assistance, of which a wide definition is given. Clause 2 governs the provision of information inside the United Kingdom, if it is transferred

"by a person or from a place outside the United Kingdom to . . . a place . . . also outside the United Kingdom (but only where the transfer is by, or within the control of, a United Kingdom person)".

That seems like a legal nightmare. Of course, it would make sense if we had secondary legislation and orders. However, we do not; the Bill is effectively a framework measure and I am not surprised that defence manufacturers have expressed serious concern about its effect on their industry.

I shall give another example of the imposition of control. Although details are not yet available, controls will be imposed on transfers between subsidiaries of companies and transfers of the control of technology by intangible means, including telephone and e-mail. That would mean that an employee using an e-mail or a telephone to talk to another employee of another subsidiary could be transferring technology and committing an offence under the Bill. There is therefore a sweeping power, which is worrying.

Finally, as I have said, control over extra-territorial activity may be impracticable. If it is followed through in all possible severity, it sounds like a job creation scheme for MI6. My conclusions to my brief contribution are: I am suspicious of the timing of the Bill; I am not reassured by the absence of detail; I am worried about the burdens on business; I am concerned that the Government are seeking to impose sanctions on citizens working outside UK territory; and I am worried about whether the measure is practicable. Is there a better way ahead? I think that our defence manufacturers and arms exporters are extremely responsible; almost without exception, those companies take their public responsibilities and world responsibilities very seriously indeed. Looking around the world, we see that it is not the United Kingdom that is responsible for the vast proliferation of arms in third-world countries, but other nations. The United States is a very large arms exporter and I believe that it is a responsible one, but I cannot say the same of Russia, China, India, South Africa and Israel, which are less responsible in this field.

The best route ahead is for us to work with our European Union and American allies, as well as our allies around the world. I think that we have leverage with countries such as Russia and India that will enable us to exert pressure on them, but I accept that the 1939 legislation needs upgrading and uprating. I therefore support the Bill, which will improve the moral climate and the stance with which the United Kingdom Government can negotiate further improvements from other countries, where the main blame for arms exports lies.

Photo of John Smith John Smith Labour, Vale of Glamorgan 8:36 pm, 9th July 2001

Thank you, Madam Deputy Speaker, for giving me the opportunity to speak in this debate, which has been absolutely fascinating. I have tried to sit through most of it—unfortunately, I had to leave briefly—and the contributions that I have heard were sincere and covered a range of issues. Indeed, this has been one of the better debates that I have heard in the House. I should like to congratulate the Under-Secretary of State for Trade and Industry, my hon. Friend Nigel Griffiths, on his appointment; I am delighted to see him back on the Front Bench. I also congratulate my right hon. Friend the Secretary of State for Trade and Industry on her well-deserved promotion.

I do not want to repeat the arguments that have already been advanced. Instead, I should like to develop a slightly different theme and approach the Bill from a different perspective. I do not claim to be an arms control or arms reduction expert, but I take an interest in defence matters and have the honour and privilege, as you once did, Madam Deputy Speaker, of representing this Parliament on the NATO Parliamentary Assembly. Hon. Members from all parties might be surprised to hear that issues such as arms control and reduction probably play a greater part in debate in such international arenas than ever before, certainly since the second world war. I also want to comment briefly on the contribution made by the Bill to a much wider debate in international defence forums, and to explain my conclusion that, far from damaging British defence interests, the Bill enhances them.

Defence manufacturers have welcomed this well-balanced Bill. We must remember that they are commercial organisations that exist not out of worldwide altruistic concern but to make money. They recognise that the Bill provides an opportunity to do just that, as it allows them to operate in a framework that will help them to continue as world leaders not only in the production and distribution of arms, but in anticipating the changes that are occurring in the defence world and in being ahead of the game.

Before I develop those arguments, I should comment on some of the spurious criticisms that have been made of the Government's record on arms control. It is outrageous for the Government to be criticised for delay by a party that had almost 20 years to do something about the control of arms exports. Not only did the Conservatives fail to act, but in 1990, they strengthened the powers under the 1939 Act, an emergency measure that was introduced under the immediate threat of war to conceal arms production and exports. That was right at the time. However, it is outrageous that all Governments let that position continue for so long. It is especially outrageous that the last Government allowed it to go on for 18 years and strengthened the legislation by ensuring that it could not be challenged by the European courts.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

My hon. Friend mentioned 1990. In the 1980s, the Conservative Government breached the regulations on aid and arms sales. We should also remind hon. Members of the Pergau dam scandal.

Photo of John Smith John Smith Labour, Vale of Glamorgan

Exactly. It does not stop there. Great play has been made of the Conservative Government's White Paper. Why did they produce it? Because of the scandal of the sale of arms to Iraq. They were caught conniving with business and trying to persecute business people when they were found out. They were therefore obliged to make it appear as if they were doing something. I shall not develop that argument too far, but it is a damn cheek for Conservative Members to criticise the Government's record, which is a good record and one of which we can be proud.

It has already been said that, immediately after taking office in 1997, the Government took steps to strengthen our control over arms exports. They signed the European code on arms sales without hesitation, and played an important part in abolishing land mines—a leading role in the Ottawa summit, which has effectively removed land mines from the major arenas of war. It would be inconceivable for NATO to consider using land mines in an operation, especially one that involved European forces, even though the Americans have not signed the relevant treaty.

The Bill is ground-breaking because it will set standards for defence manufacturers and for exporting weapons that will be recognised throughout the world. It will put our defence manufacturers in a stronger position. I envisage that they will expect to support regimes and controls that do not allow them to abuse arms exports and that prevent arms from getting into the hands of children—something that has led to so much slaughter, particularly in third-world countries.

The security environment has changed fundamentally, and it continues to change. The threat is not from the former Soviet bloc or a clearly identifiable enemy. The current fear and great insecurity is caused by rogue, destabilised nations, which can threaten the first world with weapons of mass destruction. The great fear is of weapons delivered not on the end of a ballistic missile, but in suitcases or through the actions of terrorists and extremists. Where do they come from? Not from the obvious candidates of the past but from some of those smaller nations that are fundamentally destabilised by civil war and internal warfare, supported by the sale of illegal arms, and especially small arms.

There is a defence interest in this country, and throughout NATO and the United Nations, in removing that destabilising factor. That means that the future of the arms industry will change dramatically and fundamentally. The Bill will help us lead that change. The defence industry plays a role as vital as our military forces—and I need not tell you, Madam Deputy Speaker, and I hope I need not tell other hon. Members, that although our military forces may be among the smaller forces in the world, they are undoubtedly the best, leading standards of military practice and military conduct throughout the world. In almost every recent conflict, including those in the Balkans, our forces have played a tremendous role. Our defence industries are right behind them, and I believe that they will be the industries of Europe tomorrow. This Bill will facilitate that development by introducing standards now that may seem by some to put us at a disadvantage, but which will undoubtedly put us in the forefront in years to come.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons) 8:46 pm, 9th July 2001

I hope that I shall be forgiven if, in congratulating all those on both sides of the House who have made their maiden speeches today, I single out that of my hon. Friend Mr. Prisk, who spoke with great commitment, conviction and clarity. He was a credit to the people who selected him to be the Conservative candidate, and to the people who elected him to be their Conservative Member of Parliament, and I am sure that he will go on to be a great credit to all those he serves in his constituency.

I can make that prediction with some authority, because I first met my hon. Friend the Member for Hertford and Stortford, as he now is, in 1982 when he was an undergraduate student at Reading university, where he had set up a society—a multilateral society—that was campaigning to keep Britain's strategic defences strong at a time when my good friend Ann Clwyd, whom I really do greatly admire, was proudly proclaiming her conscience at Greenham Common with her sisterly friends. I believe that my hon. Friend has been vindicated by time and I know that, in future, he will go on to show that he still possesses the good judgment that he showed in abundance in those fraught and controversial debates.

I also give the warmest possible welcome to the Under-Secretary of State for Trade and Industry, Nigel Griffiths. He may not be as senior a Minister as my hon. Friend Mr. Viggers would have liked to be present, but I am particularly glad to see that the hon. Gentleman has demonstrated that there is, in new Labour politics, such a thing as life after ministerial death. I congratulate him on his return to the Front Bench. I thought that he was a jolly chap, with a cheerful disposition, and a good Minister, and I was at a loss to know why he lost his job in the first place.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

That has finished him off.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I certainly hope that I have not finished the Minister's prospects for the future. I would point out that he is not the first person to make a return from the living dead. Mr. Mandelson did that once before, but I am sure that many hon. Members on both sides of the House are particularly anxious that he should not do so again.

The problem that we must deal with in addressing the Bill is that the questions that we would like to ask are not really susceptible to being answered at this stage. We would like to ask how practical it is. We would like to ask whether the measures that it proposes can be monitored and enforced abroad. We would like to ask whether it will be an effective measure or merely a unilateral gesture.

As has been pointed out time and again, all that depends on the specific secondary legislation, which we have not yet had a chance to read. Much has been made of the work of the Quadripartite Committee, and the first recommendation in the summary of conclusions and recommendations in its 1 May report states:

"The Bill itself is largely an enabling Bill. The meat of the proposals being made will be in the secondary legislation to be made under the Bill. We recommend that every effort is made to ensure that a draft consultative version of the relevant secondary legislation is published before the House is asked to give the Bill a Second Reading."

I am sure that the Committee had good grounds for making that recommendation. Sadly, it has not been heeded.

Similarly, in an intervention on the shadow Secretary of State, my right hon. Friend Mr. Heathcoat-Amory, who opened for the Conservatives, I quoted the view of Saferworld, which is remarkably similar to the points that were made from the Conservative Front Bench. Saferworld said:

"The key challenge ahead is to ensure that the controls introduced are as comprehensive as possible; the devil will be in the detail of the secondary legislation proposed in the DTI consultation paper which accompanied the draft Bill. In the absence of detailed mechanisms for putting the principles set out in the primary legislation into operation, parliamentarians, and also NGOs and the defence industry, will find it impossible to judge the overall impact of the new legislation."

Indeed. I shall say more about non-governmental organisations later, but our problem is that, because we are unable to have much of a debate about what is in the Bill, we are reduced to debating what is not in it and what may appear in the secondary legislation.

I want to discuss contributions from NGOs which, greatly to their credit, have taken a close interest in the subject over many years. I can sum up their concerns as five, which I have drawn from a compilation of what Oxfam and Amnesty International in particular have described in briefings to parliamentarians on both sides of the House.

The NGOs want licensed production controls that can be applied when goods of strategic and potentially lethal significance are made under licence overseas. We would therefore be unable to ban a product from being exported from this country to a certain destination while allowing the very same product to be made overseas and sent to the very same destination. They also want reference to be made to the effect on sustainable development. That point has been mentioned a number of times in the debate, but I must take issue with it.

Photo of Roger Berry Roger Berry Labour, Kingswood

It would help the House if the hon. Gentleman gave his personal opinion on each issue. Does he endorse the views of the NGOs or is he simply reading out their brief?

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I am happy to give my view; that is precisely my intention. I urge the hon. Gentleman to contain his impatience. He may be pleasantly surprised to find that I have more sympathy with some proposals than he would perhaps expect, having heard the reference to me by the hon. Member for Cynon Valley.

The NGOs say that they are concerned about the effect on sustainable development, but I have less sympathy with that than with the first point to which I referred. If a country has a fundamentally democratic regime, it should have the right to make what decisions it thinks best regarding its own priorities. If a fundamentally democratic regime in a poor country fears that it is in danger of being overthrown and that the regime that will replace it will be massively detrimental to the country's future, I would argue that that Government should have the right to decide whether to spend a proportion of the national wealth on importing weapons to defend itself against subversion or incursion. It is up to such a democratic Government to decide; it is not for us to make the decision for them, on the grounds that we know better than a democratic Government in a poor country what they should be doing to safeguard their country's future.

That proposition is very different from the common ground that I suspect exists between Mr. Berry and me on the question of not allowing arms sales to undesirable regimes. Such regimes are covered by other aspects of what is proposed. I do not consider it right for a western Government such as ours to second-guess the priorities of a respectable Government in a struggling country that is trying to develop, but also trying to protect itself.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I will, but then I must make some progress.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

Let us suppose that two countries have elected Governments, but are also engaged in a long-standing territorial dispute. Exporting weapons into the area could inflame the regional conflict and lead to its continuation, and that might fuel an arms race in the region.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I do not accept the premise. I was talking about countries with representative democratic Governments, albeit perhaps rudimentary ones. I believe that we learn this lesson from history: when two countries have Governments of that sort, such circumstances seldom arise in the first place.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

I must make some progress. I realise that the hon. Gentleman does not accept my point, but we must leave it at that for the moment. Perhaps the hon. Gentleman will make a speech of his own later.

We do not usually find Governments who are broadly representative and broadly democratic racing to war with one another. That is certainly true of developed societies, and I would also argue that it is more likely than not to apply in developing countries as well.

The NGOs' third concern is the one that I mentioned briefly in an intervention. It relates to end-use certificates, and whether they can be followed up through monitoring. On the whole, I agree with recommendations suggesting that more needs to be done. It will probably not be possible ever to follow up more than a tiny fraction of these abuses, but I do not accept the argument that just because the whole problem cannot be solved, a sanction should not be provided to make an example of those who can be caught abusing the system. I note that the hon. Member for Kingswood indicates assent. I am delighted to have reached across the divide in the House on this issue.

The NGOs also have a strong case in regard to something that I have not heard mentioned in the parts of the debate that I have been privileged to attend. I am sorry that mine has not been a continuous presence. I refer to the question of whether British airlines that transport goods that we would ban, and that would be covered by the legislation, will have any responsibility for the transport of illicit goods and strategic weapon exports, or whether they will be able to say, "What goes into the packing cases in our cargo holds is not a matter for us." I should be grateful if the Minister would tell us whether those who transport the weapons will be affected by the secondary legislation.

As for prior parliamentary scrutiny of specific licence applications, I must say that I am inclined to sympathise with the Government. They have stated at various stages of the process that it would involve such difficult questions of commercial confidentiality and competitive disadvantage that it is probably impracticable—but I am happy to leave them to fight that out with their own Back Benchers.

Are these measures enforceable? We have seen from what little legislation has been placed before the House that, if someone can be caught in breach of the law as it will be in the future, that person will now face a maximum of 10 rather than seven years in jail. However, I should like to know who will enforce the electronic interception provisions, for example. Indeed, who will address the oral communications issue, which is mentioned in the legislation itself?

Although the controls provided in the Bill are massively lacking in detail and substance, they are enormously wide-ranging in scope. I shall briefly survey a few of them. Clause 1(1) deals with

"export controls in relation to goods of any description."

Clause 2(1) deals with

"transfer controls in relation to technology of any description."

Clause 2(5) states:

"In this Act—

'transfer', in relation to any technology, means a transfer by any means (or combination of means), including oral communication and the transfer of goods on which the technology is recorded or from which it can be derived".

Although it is easy to conceive of such an offence being committed, it is enormously difficult to conceive of such an offence being prevented or detected and punished.

Clause 4(1) deals with

"controls prohibiting or regulating participation in the provision outside the United Kingdom of technical assistance of any description."

Clause 5(1) deals with

"trade controls in relation to controlled goods of any description."

That is what we are talking about in relation to trafficking and brokering overseas.

As I said, those are fascinating goals and worthy ideals. However, we want to know whether they will make good legislation. To make it good legislation, what precisely do the Government propose to do about all those matters that they wish to control? I ask the Minister what opportunities we shall have to examine in detail the specific provisions being proposed to make those mostly worthy aims into practicable realities.

I believe that a few little nuggets in the legislation are sufficiently specific to be worth singling out for praise. Clause 6(1), on information, is well worth while in requiring anyone involved in activities potentially subject to control to keep records as specified in the order, to produce them when demanded, and to give such other information as required.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

I am becoming increasingly alarmed as my hon. Friend reads out the litany of draconian powers that the Bill confers on Ministers. What provisions does he think the secondary legislation might contain to flesh out some of those quite fearsome powers? They make me feel that I should be voting against the Bill.

Photo of Julian Lewis Julian Lewis Opposition Whip (Commons)

My hon. Friend is making my point for me. It is possible for us to look at the Bill and for me to take one interpretation that encourages me to support it and for him to take another that encourages him to oppose it. As I said, none of us will be in a position to know what to say about the legislation until we see what the Government are proposing to do.

I doubt that it could be argued that many of the proposals are more draconian in principle than the 1939 legislation which they supersede. After all, that was emergency legislation introduced on the eve of war. The question is how the overarching new structure will be applied in practice. Will it be applied too tightly, as my hon. Friend Mr. Howarth fears, or will it be applied so loosely that it will be subject to the very criticisms that the 1939 legislation attracted when the Scott report was published?

There are essential problems of practicality and gaps in our knowledge. There is a bit of a hidden agenda among some Labour Back Benchers who seem more concerned with getting at the arms industry as a whole than with achieving anything very effective for the countries concerned. Sometimes the export of arms is a necessary development to allow countries to preserve their emerging democratic systems.

With Mike Gapes, I had the sobering experience of visiting Sierra Leone and seeing at first hand the effects of atrocities carried out not with high-tech weapons but with machetes. Only last week, I was reminded of that visit by a radio programme recorded in Sierra Leone that talked about the irony of the fact that in one part of the country large dumps of small arms that had been captured or handed in were being destroyed, while Britain was sending new small arms to the Sierra Leone army precisely in order to reinforce stability and underpin the democracy that we hope will be permanently restored.

We need to think not only about arms but about the people who have them. Weapons are not in themselves bad: what matters is the use to which they are put. I do not believe that it is right for a poor, struggling democratic system to be denied the arms that it needs to defend itself against insurgents, just because it is poor.

I was ashamed of my own party's conduct in the early 1990s, because when moderate Bosnian Muslims were suffering so greatly and the Governments of western Europe and NATO were not prepared to do anything about it, we also refused to allow arms to go to those people to allow them to protect themselves and their families. The then Conservative Foreign Secretary—to whom we are always supposed to genuflect and who is often quoted by Ministers as though every word that he ever says, especially on Europe, should be carved in stone—said that we did not want to arm or to allow to be armed the Bosnian Muslims because we did not want to create "a level killing field".

If there is not a level killing field, there is an uneven killing field, where those who are doing the killing can do it with impunity. That is why, when making decisions about arms sales, it is not enough to say that arms going to a certain destination are automatically a bad thing. Sometimes, arms are necessary to deter, to defend or to liberate. We know a lot about that, because this country made mistakes in the past, disarming when we should not have done so.

I welcome the Bill's broad principles, but I do not want it to become a cudgel with which those who always hate anything to do with armaments, defence or force, even in the cause of democracy, can belabour those of us who believe in their necessity.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon 9:09 pm, 9th July 2001

I wish to begin by welcoming my hon. Friend Nigel Griffiths back to the Front Bench. His return illustrates the sound principle, which should have wide application, that one cannot keep a good man down for long. Although I was unable to be in my place for some of the maiden speeches, which—as we have heard—were excellent, I congratulate my hon. Friends and other hon. Members who made their maiden speeches today on choosing this debate in which to do so.

I am in favour of the Bill for three main reasons. The first is that there is an obvious, urgent and practical need for tighter arms control measures. Secondly, I want to see Britain leading the way on arms exports, as the Bill demonstrates that we are doing. Thirdly, the Bill is built on recommendations in the Scott report and, ever since that report was published, there has been a political imperative to introduce such measures.

On the practical need for reform, we must recognise that the legitimate arms trade can ensure security and peace in certain areas, but we must also recognise that the unscrupulous trafficking of arms to conflict zones in areas of instability contributes to the terrible account of human suffering and the destruction of communities and lives that occurs especially when conflicts are fuelled by the presence of small arms. The Government recognise that and the Opposition seemed to recognise it during the debate. The non-governmental organisations recognise it and have pushed for reform. Even the Defence Manufacturers Association seems to recognise that, but it is only now that the Bill will introduce the practical measures of control that we need on the types of equipment, their destinations and modes of transfer. It will also introduce much stiffer penalties for export control offenders. Let us hope that the measures will see more of those offenders brought to book.

The Bill is overdue in an increasingly unstable and dangerous world. It has taken time to act, but we have been engaged in detailed and comprehensive reviews of the existing system. In the meantime, we have introduced several other important measures, including the EU code of conduct on arms exports, in which we had a leading role.

Photo of Mr Malcolm Savidge Mr Malcolm Savidge Labour, Aberdeen North

I agree with my hon. Friend about the terrible toll from small arms. The United Nations' estimate is that some 4 million people—80 per cent. of them women and children—have died because of illegal small arms just since 1990. Does my hon. Friend agree that that requires not only our national action but international action, and is he concerned at reports that the Bush regime may block the UN agreement on small arms?

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

I am extremely concerned about what might happen to the initiative that Kofi Annan has taken and what may happen at the conference starting today in New York. The Secretary-General said that small arms have been responsible for 4 million deaths in 46 different countries since 1990 and it is worrying that initiatives to control small arms may be blocked because of the US Government's threatened failure to co-operate. That is why it is so important that Britain is seen to be leading the way on arms exports.

We have some remarkable NGOs in this country. Some were mentioned by Dr. Lewis and I would mention organisations such as Oxfam and Amnesty International, which have campaigned for arms reduction. We can represent their views in the House and Members from both sides can say they agree with those views, but the Bill is proof that a Labour Government are able to act on those views and introduce new export control measures. The values that underpin the passion for change in those NGOs are deeply felt by many decent people who understand the case for arms reform and want that pressure for reform translated into practical action. That is why it is so important to have the commitment from the Government to make those reforms and to push to see them replicated by other countries.

The Bill is also important because of the legacy of the Scott report. The former Foreign Secretary, my right hon. Friend Mr. Cook, is not in his place, but I read the report of proceedings on the Scott report in preparation for my speech. After an investigation lasting three years, my right hon. Friend was given three hours to prepare what was a searing attack on the whole decrepit system. Although my right hon. Friend made attacks on individual Ministers—especially those who ordered civil servants not to blame them, so that they could blame the civil servants—he also made attacks that went to the heart of a system of government that was decrepit, failing and embedded in the culture of secrecy. That is what the Bill is seeking to tear away. No longer are we plagued with the central charges of the Scott report—that the Government of the day had changed the rules on arms exports and repeatedly failed to admit that to Parliament and to the courts. Let us hope that such behaviour will no longer be possible under the Bill.

We ask why people feel disengaged from politics and do not trust their political leaders. Perhaps we should go back to the days of the Scott report and see what happened then.

I echo the remarks of my hon. Friend Mr. Smith that we need to set the debate in a wider context. Broad and important questions need to be answered—they are beginning to be addressed by measures such as this—about who should adjudicate between human rights considerations and matters of trade and foreign policy; who can best decide whether the nation's defence interests will be served or whether an unstable situation in a given conflict area will be made worse by allowing a particular export of arms to go ahead. It remains for the Government to decide on those important issues, but they must be held to account for their decisions. That is the purpose of the Bill.

This measure, and others like it, must work to make the Government more accountable in the difficult balance that must be struck between competing considerations and concerns. Let us build on the principles of openness and transparency that are anchored in the Bill. Let us not hesitate in redoubling our resolve to see this measure replicated in other countries around the world. Let us not be deterred for one moment by the lukewarm, rather grudging, acceptance by the Opposition, who seem to understand the practical need for the Bill without conceding the principle. Let us resolve to implement the measure quickly, because I want to see more convictions, and because to hesitate will cost lives and weaken international resolve.

This is a good Bill which helps this country take a further step in seeking to tame, in part, the worst excesses of a world in which too many lives are still cut short needlessly by weapons made, brokered and/or trafficked by citizens of the United Kingdom. I commend the measure to the House.

Photo of Dari Taylor Dari Taylor Labour, Stockton South 9:17 pm, 9th July 2001

I welcome the Under-Secretary of State for Trade and Industry, my hon. Friend Nigel Griffiths, to the Front Bench and wish him success. I also warmly welcome the Bill, which I do not believe will place needless regulation on business. Indeed, I have been thoroughly disappointed and disheartened by the way in which Opposition Members have stressed how those in the defence industry object to the Bill or believe that it could undermine them. I have not received such a postbag, and have noticed in the press that the Defence Manufacturers Association fully supports the Government's efforts to replace the existing legislation. It warmly welcomes the fact that the Government are introducing controls to reduce, if not eliminate, the activities of brokers and traffickers. So I wish to start my remarks on that positive note.

I see the Bill as an important step, as many right hon. and hon. Members have stated, towards closing the loopholes in the arms trade. I am delighted that Oxfam and the Red Cross have made similar statements. In fact, with other NGOs, they have stated that they are particularly pleased with the Government's determination to control the activities of brokers and traffickers.

The detail of the Bill makes a commitment to overhaul and modernise the legislative framework governing strategic export controls. That is long overdue. As Dr. Tonge said in her impassioned speech, women and children throughout the world who have spoken to her have asked for one thing only—for controls that will give them the opportunity to live in their lands in peace. The Bill is one small but significant step along that road.

I am delighted that the Bill incorporates so many of the recommendations of the Scott report. Again and again, the report emphasised the need for increased transparency and accountability in export controls. That is clearly provided in the Bill.

Furthermore, the Bill introduces new powers to control arms trafficking and brokering. Clause 5 is most important because it introduces powers to control intangible technology transfers and the provision of technical assistance overseas. We are beginning to take measures that will persuasively lead other Governments along the road that they should travel to achieve control over the illegal trafficking of guns.

When we pick up our newspapers, we read again and again of the stark and unappetising results of gun trafficking. Today, a report in The Guardian described the aplomb of Leonid Minin who is reputed to be a millionaire gunrunner and has, apparently, recently delivered 113 tonnes of small arms from his native Ukraine to west Africa. We know exactly what will result. Although everyone in the House would say, "But we're British, we wouldn't do that", we know that if there are profits to be made, there will always be someone unscrupulous enough to make them.

Leonid Minin is being prosecuted by an Italian court and may be convicted. However, what is not reported is the straight fact that the trade in small arms is the scourge of sub-Saharan Africa. That trade entrenches unscrupulous regimes in power. It arms legions of child soldiers—at present, it is believed that there are 120,000 such young soldiers. The trade fuels insurrection and civil war. It is high time that we realised what those unscrupulous gunrunners are doing.

Africa-watchers say that gun running could rank with the AIDS epidemic or debt as one of the most debilitating factors hampering Africa's development. This measure is one small step. It begins to give us the belief that we can ensure security and peace for some people—hopefully all people—across the world. A responsible and legitimate arms trade is the crucial key to ensuring security and peace.

Many hon. Members have spoken about the current United Nations conference on the illicit trade in small arms. Many have referred to the fact that the President of the United States is evidently persuading his delegation to block the main proposal. It is extremely disheartening that the gun lobby in such a large country—one of our partners, which I cherish as part of NATO—should want to take that stand. It is an outrage and I hope that we are all prepared to make it clear to our American friends that it is wholly unacceptable. Of course, the reports may be wrong. Perhaps the conference will not end up with an empty statement of intent, but with something that is more legally binding.

In this place, we shall end up with something that is legally binding. We shall take positive action because we shall ensure that the Bill receives its Second Reading and that it is successful. We shall start to establish a responsible, transparent and accountable system of export controls—a regime that the world will applaud. I hope that it will achieve the peace that many, many of us dearly seek. I warmly welcome the Bill.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South 9:24 pm, 9th July 2001

I agree with all the earlier remarks about the Bill being overdue but very welcome. The Select Committee on Defence and the Quadripartite Committee called for such a Bill, but clearly legislation has to be drafted carefully, and we look forward to finding out how it will develop beyond Second Reading. It is crucial to recognise that the Bill brings together various different aspects, some of which are complicated and many of which have been mentioned.

Not only did Dr. Lewis and I go to Sierra Leone together, but we have a history of competitiveness in such issues that goes back 20 years or more. I agree with him about the right of countries to national defence. I also agree that it would not be helpful to state that no arms sales should take place anywhere and thus that every state, whatever its size, should be encouraged to develop its own indigenous armaments industry. Small countries, those threatened by big neighbours and those outside alliances have a right to import weapons to preserve their territorial integrity and their national self-defence, but we cannot and should not have a policy of allowing arms sales to project power, or to try to change the nature of regimes or the balance of power in regions. That is why we need to be cautious.

The terrible situation in Afghanistan today is a direct result of the misguided policies pursued by the Conservative party in this country and the Reagan Administration in the 1980s. Those policies have led to an absolute surfeit of armaments in that region and terrible death and destruction, as well as the imperialist policies pursued by—

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

I was getting there—just wait. Those policies were also pursued by the misguided, pre-Gorbachev regime in the Soviet Union.

We need international measures, and clause 4 includes provisions that will take account of the joint action agreed by the European Union. That inestimable organisation has played an important role in co-ordinating European attitudes. Collective European action is important because we shall then perhaps have more weight in international councils when talking to the United States and in trying to persuade the US that it should also co-operate in such issues. It is a bit ironic that the Bush Administration talks about unilateral reductions in its nuclear weapons programme while not being in favour of entering into multilateral international agreements to limit weapons. That is a contradiction, and we must continue to pursue such matters with the American Administration.

My final point is that it is important that the Bill will make provision for extra-territoriality. Without such provisions, we shall not be effective. Reference has been made to Ukrainian arms smuggling, and to the fact that those arms go to the Revolutionary United Front in Sierra Leone through Burkina Faso, and there are similar examples in other parts of the world. If we do not have effective extra-territorial provisions that apply to European Union countries and others, we shall never get to the essence of the problem: the brokers, the dealers and their criminal activities. International action is needed, but we must start with what we can do in this country to strengthen that policy. That is why I very much welcome the Bill.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 9:28 pm, 9th July 2001

I congratulate the Minister on his re-emergence. It is not often that an hon. Member comes from the Back Benches to the Dispatch Box, goes back to Back Benches and then returns to the Dispatch Box, and only time will prove whether that happened by luck or skill, or whether the hon. Gentleman's ability was recognised again. I must tell my hon. Friend Dr. Lewis that the phrase "back from the dead" was a little unkind, and the parallel with Mr. Mandelson is hardly one that I should wish to develop.

I had better play safe by declaring an interest, even though I do not think that I have one. As I do not know what the secondary legislation will be, I should declare an interest because I know how paranoid the House is about the issue of interests.

We have heard a clutch of very good maiden speeches that augur well for the future. My hon. Friend Mr. Liddell-Grainger rightly warmly praised his predecessor, Tom King, for his long and distinguished service to the House. My hon. Friend also rightly spoke about the importance of local industry and touched on the dangers of building on flood plains. That problem is not exclusive to his constituency and it is one that we should adequately and urgently address.

Rob Marris took the high-risk strategy of praising his football club. That normally produces howls of derision, and it nearly did so in this case, but his remarks fell into place when he mentioned his predecessors, Enoch Powell and Nick Budgen. His speech bodes well for the future and I look forward to his carrying forward the Wolverhampton, South-West policy of individualism. That will regularly get him into hot water, but it will be entertaining for everyone else.

Vera Baird is unfortunately not present, but I am glad that she was generous to her predecessor, Mo Mowlam. We all had affection for Mo when she was in the House and we still do. The hon. Lady made a positive speech. Although I did not sign up to everything in it, that is the privilege of an uninterrupted maiden speech. I am sure that there will be more to come from that source in the fullness of time.

Mr. Jones spoke affectionately of Giles Radice—a Wykehamist, if I remember rightly—and his struggles to try to keep the Labour party away from extremism in the past. We welcome that contribution, too.

I welcome my hon. Friend Mr. Prisk to the band of Conservative Members in Hertfordshire of whom I am a humble and insignificant member. I welcome his powerful speech and the tribute that he paid to his predecessor, Bowen Wells—a true friend of mine—and to the work that he did. My hon. Friend's speech led on to the importance of freedom, and that point should be stressed in Committee when the time comes.

Like other Conservative Members, I offer the Bill a warm welcome. The Conservative Government established the Scott inquiry, which, almost five years ago, concluded that our system of controls over defence equipment exports was inefficient and, out of date and should be replaced by modern procedures appropriate to the post cold war era. We accepted that view in July 1996 and welcome the Government's decision to follow that advice. The Bill is necessary.

As Ministers will appreciate, however, we have some specific concerns about the Bill, and I shall mention some today and some in Committee. It is serious and an abuse of parliamentary democracy that we do not have secondary legislation before us while the Bill is being discussed. It is amazing that we shall go into Committee in a mad rush a week tomorrow and the chances are that we shall not have the secondary legislation before us then.

Secondary legislation will make up the teeth of the Bill. We will not know how it will work or what it will do until we see it. We are signing up blind and that is a serious error and a slap in the face for the Quadripartite Committee, which strongly recommended that the details of the secondary legislation should be in place even before the Bill was debated on Second Reading.

The Minister may argue that the rush to Second Reading and into Committee is the result of the Government's wish to show good intent to the United States Government in line with the memorandum of understanding that was signed by the Secretary of State for Defence. However, if that argument is used, I merely point out to the Government that the past four years would have been better spent working out the secondary legislation than worrying about other "vital" matters such as the future of hunting. I wish that we had the secondary legislation so that we could discuss it.

The Secretary of State came to the House with many warm words, but it was a lot of spin and not much substance. She produced distressing examples of what weaponry can do, and the House sympathises with those cases. My hon. Friend Mr. Howarth agreed that they were serious and sad, but when he asked about British involvement, an answer was not forthcoming. The right hon. Lady made a virtue of the fact that the response to the Quadripartite Committee's report was announced this morning, but it is not good enough to produce it just before a Second Reading debate on the subject. My right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) made that point effectively and forcefully.

The Secretary of State told us how clause 5 will bring controls to brokering and trafficking. I hope that it does, but she was a tad short of the details on how it will work. No doubt it would be embarrassing to give those without referring to the secondary legislation. The right hon. Lady mentioned that the Defence Manufacturers Association welcomes the Bill, but she omitted to follow up its concerns and those of other organisations about the bureaucracy, increased costs and practical operation of the Bill. I hate to support the Liberal Democrats, but the Secretary of State definitely dodged the question that Dr. Tonge asked about how brokers with a UK passport who operate abroad might be tackled. We heard nothing on that. The right hon. Lady also said that clauses 2 and 4 will stop electronic transmissions, but again she was short on the detail of how they will do so.

I am not able to address all the points that were made—they were, in the main, pertinent and relevant—but if I had to sum up the debate I would say that it was sincere. There was not too much political posturing and the views were genuinely held. I pay tribute to the House for that.

My right hon. Friend Mr. Heathcoat-Amory referred to the importance of industry. That has even wider implications because we might be facing a manufacturing recession. My right hon. Friend the Member for Tonbridge and Malling made the broader point that, unless we are careful, our actions could have an impact on university research programmes, on whose intellectual information we rely to drive the nation forward. He also gave a powerful example to drive home the difficulties of forcing aspects of the Bill on overseas companies. Mr. Clarke raised Oxfam's concerns, which I hope the Minister will address.

My hon. Friend the Member for Aldershot rightly said that the 1939 Act has not done too badly for the past 61 or 62 years, but that it is in need of modernisation. He also spoke of the importance of defence in creating a country that is secure from external attack. If one accepts that that is the first duty of any Administration in any country, then it is a powerful argument in defence of our defence industry.

My hon. Friend Mr. Viggers correctly emphasised the delay in the delivery of the Bill. The remark,

"If you prick us, do we not bleed?" was apposite at that time with regard to Labour Members. I support what he said about enforcement. I hope that the Committee will have a short time to discuss that.

My hon. Friend the Member for New Forest, East rightly drew attention to the lack of secondary legislation to guide our affairs and reinforced the Oxfam and NGO arguments that were introduced by the right hon. Member for Coatbridge and Chryston.

It is difficult in a short time accurately to set out the Opposition's view and our concerns. We share the Secretary of State's view that the existing controls on the physical export of defence equipment are no longer appropriate, but I do not subscribe to the view that the Government have a good record of operating those controls. They have failed to meet their targets for processing 70 per cent. of standard individual export licence applications within 20 days: last year, the figure was only 57 per cent. Their record on appeals has been described in the Chamber as even worse.

Defence manufacturers have expressed their concerns, and they told me last week that some applications have taken between two and a half and three years to be processed: that is unacceptable by any standards. The costs have had to be absorbed by manufacturers. Other organisations that sell equipment overseas have been subject to such delays. I declare an interest in the machine tool industry, in which companies that make equipment have suffered from delays in the handling of licences.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

Will my hon. Friend comment on Sir Richard Scott's recommendation that there should be a default system whereby, if a licence is not issued within a certain period, the application should be deemed to have been successful?

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

That idea should be adequately investigated in Committee. Unfortunately, I am concerned that the draconian time reduction in the Government's programming means that there will not be enough time to develop that argument, which is perfectly legitimate and should be available to our manufacturers as a form of recompense.

We seem to be envisaging the Bill as a catch-all—a considerable extension of bureaucratic controls. The Government are confident that the measures will have only a modest bureaucratic impact, but that view is not shared by the Defence Manufacturers Association or the Society of British Aerospace Companies, both of which believe that there will be a significant rise in the number of inquiries made of the Department of Trade and Industry. We recognise that the Department is only a postbox for inquiries, which go on to be dealt with by the Ministry of Defence or the Foreign Office.

There will also be a rise in the number of export licence applications. Last week, the SBAC estimated that there could be a fourfold increase in licensing activity. The measures will represent a significant additional burden for large firms. For small and medium-sized businesses, it could be too much to bear. The CBI has made known its concerns about the difficulties that the extra work could cause. I am afraid that the cost to our companies will be high. We can see that the red tape machine inside the Government is alive and well, and producing.

I must take issue with the costs in the explanatory notes. The estimate that implementation of the measures will cost £800,000 in the first year, and £500,000 in subsequent years, is not only low but absolutely ridiculous.

Time has beaten me, and I am prevented from tackling all the issues that I wanted to mention, including the enforcement difficulties posed by electronic transmission, the question of what records have to be kept by companies to protect themselves and what will happen to employees working overseas. No doubt, some of that will come out in Committee. As I said at the beginning of my speech, the Bill is necessary: whether it is sufficient or goes too far is another matter. No doubt time, and the Committee stage, will tell.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary, Department of Trade and Industry 9:44 pm, 9th July 2001

The Export Control Bill is the product of four years' work and is the culmination of a series of great improvements that will ensure that the United Kingdom has one of the most effective, comprehensive, open and transparent export control regimes in the world. Today, we heard a number of quality contributions from right hon. and hon. Members; there were five exceptional maiden speeches and several embarrassing references to myself—it is not so much "The Mummy Returns" as "The Minister returns".

We want to create a world climate of non-proliferation. We have demonstrated our commitment to non- proliferation by greatly reducing our holdings of nuclear weapons. We have signed and ratified the comprehensive test ban treaty and, clearly, we have made significant changes to the export control regime since coming to power in 1997. Five memorable maiden speeches were given in the House today, the first by my hon. Friend Vera Baird, who spoke eloquently and warmly of our colleague Mo Mowlam and the fact that the constituency had produced two successive women MPs. We hope and trust that Redcar has produced two exceptional MPs.

The hon. Member for Bridgwater (Mr. Liddell- Grainger) paid a fitting tribute to his predecessor, Tom King, and his towering role in the House. The hon. Gentleman listed manufacturing success stories and spoke about tourism, farming and flooding; he will be a doughty fighter, I am sure, for his constituents. My hon. Friend Rob Marris—or perhaps I should say my hon. Friend the Member for the city of Wolverhampton, South-West—showed an immediate and impressive grasp of Second Readings in the House. He, too, praised the much admired work of his predecessor, Jenny Jones—especially her work on abolishing the death penalty. His mention of his local paper, the Express and Star, will, I am sure, mean that he will be given a long honeymoon.

My hon. Friend Mr. Jones demonstrated his keen knowledge of his constituency and made a relevant contribution to the debate. He also demonstrated his detailed knowledge of the many companies involved in defence projects, and brings to the House a wealth of experience from the manufacturing sector. Last, but certainly not least, Mr. Prisk, paid tribute to Bowen Wells, a much respected Member of Parliament who chaired the Select Committee on International Development. In a wide-ranging maiden speech, which covered the defence and aviation sectors, the hon. Gentleman's remarks on the need to challenge Government are well timed; I hope that he devotes his parliamentary career to that cause.

It was a pleasure to listen to all those speeches and many others. Several thoughtful comments have been made by colleagues, and I should like to deal with them as they arise in the Bill. Before doing so, however, I shall take up several points made by members of the Quadripartite Committee and others. Many hon. Members, including my hon. Friend Ann Clwyd, asked about prior parliamentary scrutiny. As she will acknowledge, we have introduced more scrutiny in the past four years than there has been in the past 50 years of the operation of the Import, Export and Customs Powers (Defence) Act 1939.

The Bill ensures that, for the first time, annual reports are required to be published by statute. For the past three years, each report has been more informative than the last, mainly in response to comments from the Quadripartite Committee and organisations like Saferworld, Amnesty and Oxfam. The reports themselves now allow much more effective scrutiny after decisions have been taken. We shall soon report our conclusions on prior parliamentary scrutiny to the House in our detailed response to the Quadripartite Committee report.

The right hon. Member for Wells (Mr. Heathcoat- Amory) alleged that the Government had done nothing on export control for four years. I have to ask him what he calls the weighty documents that have been published. There are 668 pages, many of which detail the firm action that we have taken. Does the right hon. Gentleman not realise that we have banned the import, export, transfer and manufacture of all forms of anti-personnel land mines, as has been mentioned, as well as the export and trans-shipment through the UK of torture equipment? We have also published national criteria against which UK export licence applications are judged, and have worked with our EU colleagues to develop an EU code of conduct on arms exports, which we consolidated into our national criteria in October 2000.

We have taken many other measures, and it was uncharacteristic of the right hon. Member for Wells not to give credit to the Government and my right hon. Friend the new Leader of the House of Commons, the original architect of so much of the drive to modernise. We published the White Paper on the legislation in 1998. In the light of the many comments that were made, we have gone significantly further than its proposals on trafficking and brokering, which have been raised by hon. Members on both sides of the House.

The right hon. Member for Wells suggested that the Bill might place an excessive burden on British industry. We are working closely with industry and others to ensure that we achieve targeted and effective controls without overburdening legitimate business. Let us consider the industry's constructive and positive attitude to the Bill. A recent CBI press release states:

"The CBI welcomes this legislation. Business supports the need for strategic export controls, including improved accountability."

We are sure that that will prove possible.

The right hon. Gentleman also asked about the time taken to provide the response to the Quadripartite Committee and was concerned that it was published only this morning. The response to the Committee's line, which was set out in the report published on 9 April, has been published within the two-month period that is conventional for a Government response to such reports. We will respond to the Committee's other report as soon as possible.

The right hon. Gentleman and Mr. Bercow spoke about the performance of the Department of Trade and Industry on licensing. I assure the House that all applications are processed expeditiously and with care. The whole House will realise that some cases cause particular concern and raise especially difficult issues, and therefore take longer to process.

Many hon. Members asked for proper and even better checks to be made by our overseas staff in embassies and consulates abroad. All that takes time. Concern was expressed about the fact that in 2000, 57 per cent. of processed standard individual export licence applications were within target. The figure has so far risen to 62 per cent. this year and we are working to improve it still further.

The right hon. Member for Tonbridge and Malling (Sir J. Stanley) asked why the Bill did not deal with licensed production overseas and said that its absence would leave a gaping hole in UK legislation. Following consultation on the Bill, the Government have concluded that specific measures in primary legislation are not the best way of dealing with licensed production. We set out in the consultation document a range of options, of which primary legislation was only one.

It is simply not true to say that there is a gaping hole in our export control legislation. The Government already control the export of technology needed to set up such production overseas, as well as the export of production equipment and components especially designed for military use. We continue to believe that the surest way to prevent diversion is not to let the technology or other equipment out of the UK in the first place. We must certainly not let it get to any place where we fear that products may be diverted for illegal purposes.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary, Department of Trade and Industry

I hope to come to the hon. Gentleman in a minute. I am keen to respond to as many points as possible.

The hon. Members for Twickenham (Dr. Cable) and for Richmond Park (Dr. Tonge) mentioned the Export Credits Guarantee Department. The hon. Member for Twickenham also mentioned a recent Saferworld report and allegations of subsidies. I am aware of allegations about the amount of the subsidy. A forthcoming Ministry of Defence study will tackle them, and we do not expect it to justify the claims in the report. The ECGD charges a premium for the business that it supports; it is required to run its credit insurance operations as a business and to generate sufficient reserves to break even. It has contributed money to the Exchequer in the past few years. It also puts United Kingdom exporters on an equal footing with overseas competitors, who receive similar support from their Governments.

ECGD support for exports to the poorest countries is limited to those that back economic and social recovery. It does not support exports of defence equipment to other countries unless a valid export licence is obtained.

My hon. Friend Mr. Berry asked about end-use monitoring. Sadly, that is the best example of shutting the stable door after the horse has bolted. End-use or follow-up monitoring can confirm misuse or illegal diversion only after they have taken place, when it offers minimal opportunity of effective action. Several examples have been cited this evening.

The most effective way to ensure that products and technologies do not get into the hands of unscrupulous end users is to refuse an export licence when there is a risk of such an outcome. The Government therefore set our overseas posts the task of considering proposed end users when we have ground for anxiety.

We monitor reports from human rights activists, international organisations, non-governmental organisations, journalists and even, I suspect, my hon. Friends. The end user's track record is taken into account. Our latest annual report on strategic export controls shows that the reason for the second highest number of export licence refusals is the risk of diversion or re-export to undesirable end users. That shows that we share the aims of the Quadripartite Committee, Amnesty and Oxfam. Our latest report covers the matter, but the powers that the Bill proposes do not limit the introduction of further improvement to the rules on end-user certification.

Dr. Lewis asked whether the powers were too broad. We need to be able to adapt controls to fulfil our obligations under the international export control regimes. However, we have made changes to deal with the anxieties of the Delegated Powers and Deregulation Committee in another place about the extent of specific measures in the draft Bill.

Mr. Viggers suggested that the Bill is defective because it does not repeal the import section of the 1939 Act. The Committee recommended that we consulted about the clauses to repeal those import powers. We have considered the recommendation carefully. We believe that the controls effect import control regimes under specific United Nations Security Council resolutions. Those regimes are subject to full parliamentary scrutiny procedures and the import powers do not give rise to the sort of issues raised by export control provisions.

If hon. Members wish me to respond to other matters, I shall be happy to do so.

We led the world in halting the manufacture and export of anti-personnel land mines. We banned UK dealers from trading in torture equipment such as electric shock batons. The Bill enshrines our policy to deny export licences to any regime for any product or technology intended for internal repression. It ensures that the UK has one of the most effective, comprehensive, open and transparent export control regimes in the world, and that even the latest technology cannot be used to evade our tough export controls. The Bill puts Britain at the forefront of international efforts to control an explosion of illegal weapons, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.