[Mr Philip Hollobone in the Chair] — Arms Exports

– in Westminster Hall at 12:00 am on 13th December 2012.

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[Relevant documents: UK Strategic Export Controls Annual Report 2010, First Joint Report of the Committees on Arms Export Controls, HC 419, and the Government response, Cm 8441.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Greg Hands.)

Photo of John Stanley John Stanley Chair, Committees on Arms Export Controls (formerly Quadripartite Committee) 1:30 pm, 13th December 2012

I warmly congratulate my constituency neighbour and right hon. Friend Michael Fallon on his deserved return to the ministerial firmament, and I extend to him my best wishes for his time in his important post.

I would be the first to acknowledge that quantity and size is no indication of quality, whether that applies to speeches in the House or Select Committee reports, but the report that we are considering is of unprecedented length. It is a total of 537 pages spread over two volumes. I suggest to the House that it is compelling reading, not least at bedtime, and I hope that Members have enjoyed devouring it.

The report breaks important ground in five particular ways. First, one of the most important legacies left to our Parliament by the late Robin Cook was that he was the first Foreign Secretary to take the commendable initiative of producing a report to Parliament and the wider public on the Government’s policy on arms exports. Those annual reports have certainly been of material help to the Committees on Arms Export Controls by providing us with background information.

For the first time, the Committees’ report subjects the Government’s latest report to detailed and extensive written scrutiny, and for the first time, it publishes our questions about the Government’s annual report and the answers that we received, which are set out in annex 11 to the report. I hope that Members will agree that that is an important new source of information for the House and the wider public.

Secondly, one of the most important sources of additional information available to the Committees is the Government’s quarterly publication on the Department for Business, Innovation and Skills website of the approvals and refusals they have made on the arms export licence applications that they have received. In addition, the Committees receive a considerable amount of information on a classified basis. After significant discussion with the Government, we reached agreement on a format in which we can make public the non-classified information that we obtained, with our questions alongside the Government’s answers. Our latest report reproduces those questions and answers for the first time, from the first quarter of this Government’s responsibility, starting 1 July 2010, until the latest quarter for which we have information. That is set out in annex 1 to the report.

Thirdly, a key focus of our present inquiry has been the extent to which the Government have approved exports of arms, ammunition and components that might be used for internal repression in countries where such a risk may exist. In our report, we have illustrated such exports. In annex 6, we published illustrations of such exports to Arab spring countries in north Africa and the middle east, and in annex 7 we published similar illustrations for exports approved to authoritarian regimes worldwide that are of human rights concern. I believe that that too will be a valuable source of information to the House and the wider public.

Fourthly, over the past year, I as the Chair of the Committees have had extensive correspondence on the Committees’ behalf with the relevant Secretaries of State, ranging from correspondence with BIS on its priority markets lists for arms exports to correspondence on brass plate companies and arms exports to a variety of countries, including Argentina. We agreed as a Committee that the entirety of that correspondence, including our questions and the Government’s replies, would be published in our report. The correspondence covers a total of 120 pages in the second volume of our report, and it too is an important additional resource of information for the House and the wider public.

Finally, in the report, we scrutinise to an unprecedented extent the field of Government policy on international arms control issues relating to weapons of mass destruction and conventional weapons. We have scrutinised the Government’s policy on, for example, the arms trade treaty, sub-strategic nuclear weapons, the fissile material cut-off treaty and other issues. It is another important area of scrutiny that we will be taking further throughout the rest of this Parliament.

A few months ago, I was invited to the Bundestag in Berlin to give a presentation on the British Parliament’s scrutiny of arms export and arms control policies. After the presentation, a number of Members of the Bundestag came up to me and said that they were amazed at the extent of our questioning of our Government, and even more amazed that the Government gave us the answers to our questions. Next week, I have been invited to the National Assembly in Paris to make a similar presentation, and I shall not be surprised if the response from the French Deputies who attend is similar. The fact that this House’s degree of scrutiny is now attracting international attention from parliamentarians in other countries is a welcome and important development.

Turning to the Government’s policies, the Government have accepted our recommendations in a significant number of areas, and we are on the same track. In other areas, the Government—to put it as constructively as I can—have still to accept our recommendations, and we are in a degree of disagreement. I will cover both of those areas if I may.

First, we are very glad that the Government have accepted that the issue of arms exports and arms control is of sufficiently great importance to warrant the direct involvement of the four Secretaries of State. The Government accepted our recommendation that the annual report that they make—the one initiated by the late Robin Cook—should be signed off not by junior Ministers, but by the Secretaries of State. In addition, last year and, I am glad to say, this year, the two principal Secretaries of State involved—my right hon. Friends the Foreign Secretary and the Business Secretary— have decided to give oral evidence themselves to our Committees. They will do so next week in the context of our current inquiry.

On bribery and corruption, I am glad to say that the Government, in their response, have given us an “unqualified” assurance that if they become aware of corruption in arms deals, they

“will take appropriate action under the provisions of the Bribery Act 2010.”

That is a very welcome assurance from the Government.

On cluster munitions, the Committees strongly endorsed the position taken by the Government in resisting attempts to water down the cluster munitions convention. As the House knows, such an attempt was made by a number of the major holders and manufacturers of cluster munitions, including the United States, China and Russia, which put forward what was called draft protocol 6. The Committees strongly endorsed the British Government’s decision to reject draft protocol 6 and to avoid any watering down of the cluster munitions convention.

When the Government are making military and security equipment available by export as part of a British overseas security and justice assistance programme, the Committees recommended that their official human rights guidance should be much stronger to draw the attention of officials and, indeed, Ministers to the need to adhere very closely to the procedures and policies on arms exports. I am glad to say that the Government have responded in favourable—positive—terms to that recommendation.

The most important single issue on which we finally managed to reach agreement with the Government was Government policy on arms exports in relation to areas and countries where arms might be used for internal repression. It took a considerable degree of correspondence and of questioning, but we got there in the end, when the Foreign Secretary gave evidence to the Committees on 7 February this year. That oral evidence exchange is so important—so fundamental—that I want to read out a brief extract from it. It is the key extract. The Chair said to the Foreign Secretary:

“As far as arms exports that involve weapons that could be used for internal repression are concerned, your junior Minister, Alistair Burt, in his press release statement on 18 February last year, entirely accurately and correctly summarised the previous Government’s position carried forward by the present Government on policy in this area. He summarised that accurately in these words: ‘The longstanding British position is clear. We will not issue licences where we judge there is a clear risk the proposed export might provoke or prolong regional or internal conflicts, or which might be used to facilitate internal repression.’ Foreign Secretary, has that policy changed, or is it as correctly stated by Mr Alistair Burt?”

The Foreign Secretary replied:

“That is still the policy. The ‘or’, as you have pointed out on other occasions, is important.”

The Chair then said:

“It is profoundly important, Foreign Secretary, and I am glad that you have acknowledged that.”

Therefore, the British Government’s policy is that they will not issue export licences for arms that might be used to facilitate internal repression. That is a very strict but very necessary policy in this area.

I have set out the areas where we are in agreement with the Government. I now turn to the areas where we are not yet in agreement. The first is extra-territoriality. The Committees see no good reason why a British person—an arms broker, say—should be able to carry out an arms export deal from overseas to, say, an embargoed destination that would be a criminal offence if carried out in the UK, and enjoy complete immunity from prosecution in this country. The Labour Government conceded that extra-territoriality was appropriate in this area, but they conceded only part of the way, so the situation today is that some arms deals overseas in relation to certain types of arms are within the scope of extra-territoriality, but others are not. It is, in my view, a wholly anomalous position.

For example, small arms and light weapons are within the scope of extra-territoriality; heavy weapons are not. Unmanned aerial vehicles—UAVs—are within the scope of extra-territoriality, but manned combat aircraft, whether fixed wing or rotary wing, are not. Long-range missiles are within the scope of extra-territoriality, but short-range missiles are not. The anomaly is glaring and should not be continued. Extra-territoriality should be extended to the remaining items on the military list as the Committees have recommended.

On torture end-use control and end-use control of goods used for capital punishment, the Committees recognise that the Government appear to have taken effective steps by way of temporary action to stop the export from the UK of drugs that are to be used for capital punishment executions in the US, but given the seemingly endless delay in the EU carrying out its promised review of the EU’s so-called torture regulation, we do not understand why the Government are still so reluctant to introduce national legislation in the UK in this important area. Perhaps the Minister can shed some light on that.

On trade fairs, the Committees were highly critical of the fact that illegal goods, such as torture equipment and cluster munitions, were found being marketed at the last defence and security equipment exhibition, held in London in September 2011. It was not the first time that had happened. In addition, that marketing material was found not by the organisers and supervisors of the event, but by visitors walking round the exhibition.

The Government’s response to our criticism was frankly extraordinary:

“The Government does not agree with the Committees’ conclusion that the two instances of promotion of undesirable materials via exhibition stands at DSEI 2011 are evidence of a lax approach to enforcement.”

If that evidence is not clearly evidential of a lax approach, I do not know what is.

Photo of Mike Gapes Mike Gapes Labour, Ilford South

The Chairman of the Committees will be aware that was not the first time it happened, but it is important to place it on the record. There were similar incidents at previous defence exhibitions four or five years earlier. Promises were made that the situation would be improved. There are clearly outstanding issues that raise further questions about the level of scrutiny and enforcement.

Photo of John Stanley John Stanley Chair, Committees on Arms Export Controls (formerly Quadripartite Committee)

The hon. Gentleman makes a wholly correct point. I said in my remarks that that exhibition was not the first time, and he is entirely right to reinforce the point.

We continue to be in disagreement with the Government on whether there is an inherent conflict between strongly promoting arms exports to an authoritarian regime while criticising their human rights performance and abuses. To the Committees, it is blindingly obvious that if the UK is trying to land a major arms export contract in an oppressive regime country, the chances of its doing so will be materially diminished if Britain, at Government level, gives a high profile to criticisms of human rights abuses in that country. The temptation will be to make those criticisms sotto voce in private. The conflict is inherent, although that is not to say that we should necessarily give up on pursuing particular export contracts, but the Government would do better to stand up and acknowledge the inherent conflict in their position, rather than trying to pretend that no such conflict exists.

I turn to the Committees’ response to the arms export review, which the Government carried out in the wake of the Arab spring, of exports to the middle east and north African countries. The review resulted in a wholly unprecedented number of revocations of arms export licences: a total of 158, way beyond anything that has occurred in response to a single international event hitherto, as far as I know. I do not in any way criticise the Government for making those revocations; indeed, I applaud them for doing so. It was the correct decision in the wake of the Arab spring in the countries concerned.

Where we differ from the Government is in our judgment over whether the original decisions to grant those export licences were correct. The licences included sniper rifles to Bahrain, equipment for armoured fighting vehicles to Mubarak’s Egypt and military communications equipment to Gaddafi’s Libya. The Government’s position is that none of those exports—items that have now been the subject of revocations—represented policy misjudgments. Our Committees’ position is that when the judgments were originally made, at least some were seriously flawed. Our report therefore recommends that the Government apply a more cautious judgment to weapons and equipment that can be used for internal repression when they are to be exported to oppressive and authoritarian regimes. The Committees’ position is the right one for the Government to adopt.

Our final point of disagreement with the Government is over our recommendation that the review of arms exports to the middle east and north African countries should be extended worldwide, to review extant export licences to authoritarian countries and those of human rights concern, as listed by the Foreign and Commonwealth Office in its latest human rights report. The Government initially responded:

“Although this review was originally commissioned in response to events in the Middle East and North Africa, any conclusions will apply to our procedures for arms exports to all countries.”

To say that the lessons learnt from the middle east/north Africa review will be applied to all other countries is not the same as the Committees’ recommendation that the review itself be applied to authoritarian countries and countries worldwide where there are significant human rights abuses. When the Foreign Secretary came to the Committees on 7 February this year, we pressed him at considerable length on that point. Although he said:

“I did not agree with the recommendation of the Committee.”,

I am glad to tell the House that the Committees, by pressure of questions, achieved the review that was the original subject of our recommendation.

In our most recent questions, we put to the Government:

“Is the Government satisfied that none of the extant UK arms export licences worldwide, in addition to those to the countries specifically referred to above”— the middle east and north African countries—


(a) The Government’s stated policy on UK arms exports and internal repression as set out in Paragraph 191 of the Committees’ 2012 Report, or

(b) either the UK’s Consolidated Criteria for arms exports or the Criteria in the EU Council Common Position on arms exports?”

The Government replied:

“The Government is satisfied that none of its extant licences contravenes its stated policy on arms exports and internal repression, the Consolidated Criteria or the Common Position.”

The Committees got there in the end, but the Government would have done better to accept our recommendation initially, rather than having to carry out a review in response to our questioning.

Lastly, I have three specific questions to put to the Minister. If he or one of his ministerial colleagues wishes to reply in writing subsequently, I will entirely understand. The first question concerns the arms trade treaty. The next attempt to reach agreement will be in March next year. Thus far, the negotiations have all been subject to the consensus principle—the principle of unanimity. I fully understand that it is often necessary to adopt the consensus principle to begin a drafting process. However, I must flag up that continuing adherence to that principle will almost certainly be the kiss of death to the conclusion of an arms trade treaty. I have been racking my brains to think of a single significant multilateral arms trade agreement to which everybody signed up, and I cannot think of one. If we had had the consensus principle, we would never have had the non-proliferation treaty, the land mines convention or the cluster munitions convention. Will the Government tell the Committees in what circumstances the British Government would be willing to abandon the consensus principle to get the arms trade treaty agreed by the great majority of countries in the United Nations?

My second question is about the fissile material cut-off treaty, and the issue is similar. The drafting of this much-needed treaty has, as we know, been deadlocked for years in the conference on disarmament in Geneva, again because of the consensus principle, coupled with the India and Pakistan nuclear situation. In their answers to the Committees, the Government said that their policy is to keep responsibility for drafting that crucially needed treaty in Geneva, notwithstanding that there has been deadlock for years. Will the Government at least set a deadline for the start of the drafting of that treaty in Geneva? It is a matter of judgment what the deadline should be. I would offer one of, say, the end of calendar year 2013. Will they at least consider setting a deadline? If no drafting takes place, the obvious next step must be to take the responsibility for the drafting back to the United Nations. Alongside that question, will the Government tell the Committees what action they are taking within the P5, all of whom basically support a fissile material cut-off treaty, to maximise pressure to secure progress on that treaty?

My final question is about unmanned aerial vehicles or drones, and it is in two parts. First, are the Government entirely satisfied that existing arms export control legislation applies fully to drones, and their technology and components? Secondly, can we be assured that the British Government will resist the attempts being made by members of the missile technology control regime to reduce the degree of control it exercises on the proliferation of drones and drone technology? Are the British Government standing up firmly and clearly against any loosening of controls on proliferation in that area within the missile technology control regime?

In conclusion, I do not wish the House to take away any other impression from my speech but that the Committees are determined to continue to improve and strengthen their degree of scrutiny. However, I believe that the level of scrutiny that the Committees have achieved and—I stress this—the level of transparency that the Government have shown in response to the Committees’ scrutiny are now as high, if not higher, than those of any other Parliaments and Governments in the major arms-exporting countries. That is a situation with which I believe we, in the British Parliament, can be satisfied, although as I said, we will try to improve our performance still further.

Photo of Mike Gapes Mike Gapes Labour, Ilford South 2:05 pm, 13th December 2012

Thank you, Mr Hollobone. I apologise for being slightly late for this debate. I had responsibilities to attend to at the Inter-Parliamentary Union.

I congratulate, the Chair of the Committees, my right hon. Friend Sir John Stanley, on his comprehensive and excellent introduction. As always, he has gone into great detail and shown that our Committees are assiduous in their work. I have served on the Committees on Arms Export Controls in both of their incarnations—first as the Quad and then as the CAEC—for many years. I have also been on the Defence Committee, and then on the Foreign Affairs Committee during the last Parliament and this one. It is important to place on the record that the Committees, which are not easy to manage because of the rules under which we operate, have done and continue to do an important job. The Chair plays a particularly important role. That is now being carried out by the right hon. Gentleman, as it was by his predecessor, Roger Berry—he also did an excellent job—in the last Parliament.

It is important to recognise that the Committees do not ever split on party lines and do not normally split on Committee lines. Sometimes, there are tensions between people from the defence, the international development, the foreign affairs and the trade and industry or business sides, but we nevertheless come to an agreed position. When the Government look at our reports, they need to understand that they too should have a joined-up approach. I sometimes get the impression that some parts of the Government are pulling in one direction and other parts in other directions. That is not a party political point; those tensions have always been there. There is nothing wrong with the Prime Minister going to countries that have issues about human rights and the process towards democracy specifically to promote UK arms exports, but there needs to be a common presentation of the context. We cannot have situations in which, internationally, many people think that human rights issues are being downplayed in some countries as opposed to others. I flag that up as a general problem of politics and governance in this country.

I also want to talk about what is about to happen with the European Union arms embargo on Syria. A decision has been taken, apparently at the instigation or with the support of the UK Government, to change the review of the continuation of that arms embargo from three months to one month. It is on the record that in the Syrian conflict or civil war, the Syrian Government are using cluster munitions and, just yesterday, Scud missiles—they presumably got them from Russia, perhaps in the dim and distant past or perhaps more recently. We know that the Iranians are arming the Syrian regime, and that the Governments of Qatar and Turkey have been giving military assistance to the Syrian opposition forces, or at least to elements of them. There is a question about which elements are being well armed, but it is clear that some more extreme jihadist groups, including the one that has just been designated as a terrorist al-Qaeda affiliate by the United States Government, are well armed and involved in the conflict.

Following the decision taken by NATO to supply, authorise and support the deployment of the Patriot anti-missile system in Turkey—presumably to stop stray fire over the border from Syria—is a decision imminent to modify, change or lift the European Union arms embargo on exporting arms to Syria to allow the arming of elements within the Syrian opposition. That raises some important questions of principle, and there are international parallels. We can go back to what happened in the Bosnian civil war, but at that point, it was the state of Bosnia-Herzegovina that was requesting weaponry. Elements in the US, under the Clinton presidency, wished to lift the embargo, but the British Government at that time—Douglas Hurd was the then Foreign Secretary—were vehemently against such action, and the embargo continued.

There is of course the issue of what happened in Kosovo. Other issues also come to mind that set historical precedents. Today, it appears that the Syrian regime is being armed by the Iranians and the Russians. No UN Security Council position is being applied to stop that arming. There may be UN resolutions, but they are weak and ineffective because Russia and China refuse to allow a stronger resolution. At the same time, it is reported clearly in the press that not only the Qataris and the Turks are supporting some of the Syrian opposition, but the French and perhaps the Americans.

Given that discussions have been taking place recently, what is the British Government’s position on the future of arms control and exports and supply of weaponry to elements within Syria? I will not accept just a bland phrase that says, “There is an international embargo through the EU, so we are not supplying.” There is a live debate on this matter. There was a meeting in Qatar recently of some of the key players in the process, including top military, defence and intelligence advisers. We in this Parliament should be informed, and we should be able to discuss and debate the matter. There may be a strong case to be made. I am one of those who have been advocating support for humanitarian

intervention. There may well be a case for supporting those elements in Syria, but it should not be done by subterfuge or in an underhand way, or without full public debate and political accountability.

It is also clear that whatever happens in Syria will have knock-on consequences for its neighbours. This country supplies armaments to many of those neighbours, and we are in a partnership with, and allied to, some of them. We have excellent relations with Turkey, a fellow NATO member. We have excellent relations with Jordan, which, like Turkey, is harbouring many refugees who have fled the civil war in Syria. At this moment, there are 240,000 refugees who have had to flee the country and go into neighbouring states, and there are more than 2 million internally displaced people. An estimated 40,000 people in the region—no one is sure of the exact number—have lost their lives in this conflict, mainly, but not entirely, killed by the brutality of the Assad Ba’athist fascist regime.

Twenty one years ago, when the current Foreign Secretary was a member of the Cabinet, we brought in a no-fly zone to protect the Kurds fleeing into the mountains in the winter. This winter in Syria, hundreds of thousands of people will be fleeing into the mountains, which can get very cold. Many, many people will die because the international humanitarian support will either not get through or will be insufficient.

We are involved in this conflict because of our partnerships, our neighbours and our support for our allies. We also know that things could drag on for months or years, or could come to a very speedy conclusion. We need clarity from the Government about what our position is, what we are doing, and what discussions are going on with our French and American allies and partners, with Turkey and with the Arab states in the region. Furthermore, if a generalised Sunni-Shi’a conflict is going to come out of what is going on in Syria and potentially in Lebanon, which could perhaps spill over into Iraq, we need to think through very carefully the actions we might be taking over the coming weeks and months. That goes beyond the representations and the report that the Chairman introduced, but when we take a decision to supply arms, or not to supply arms, there are long-term political consequences.

A few years ago, during the civil war in Sri Lanka, an arms embargo was put in place and yet when there was a ceasefire, that embargo was not maintained—this was under the previous Government—and the Sri Lankan Government bought all kinds of things, including ammunition, small arms, components and a huge amount of hardware that was used by their armed forces. That ceasefire broke down after 2002, and in 2009 we saw scenes of absolute carnage and brutality when the Sri Lankan armed forces decided to eliminate the Tamil Tigers. I am not here to speak for or defend the Tamil Tigers, but it is clear that there is strong case for the Sri Lankan Government to participate in a proper independent international inquiry into the war crimes that were carried out. Many of those crimes were carried out using weaponry that had been imported from around the world. Officials in the Foreign and Commonwealth Office were unable to tell us whether UK-supplied ammunition, components or weapons were used by Sri Lankan Government forces, but I suspect that they were.

There is a wider issue. My right hon. Friend the Member for Tonbridge and Malling referred to the Government’s revocation of the 158 licences as a result of the events in the Arab world—I am no longer using the term “Arab spring”. If we look at what is going on in Egypt today and in some other countries, I can no longer talk about a “spring” any more. The Prague spring was, no doubt, the parallel that people wished to draw, but it was not followed by a move to authoritarianism, undemocratic behaviour and a theocracy; it was followed by Vaclav Havel, leading to a democratic transformation of Czechoslovakia and ultimately to the Czech and Slovak states becoming part of the democratic European Union and NATO. It is unclear to me that what is happening in Egypt will have a similar outcome, and it is also unclear whether events elsewhere in the Arab world within 15 or 20 years will be as positive as the developments we have seen on our continent since 1989.

I return to the issue of the revocation of licences. It is clear that the previous Government—the Labour Government—and this coalition Government continued to export materials, weapons and components to authoritarian, undemocratic regimes, regardless of the internal situation in those countries, because there was clearly an economic agenda. There was also a political agenda. If we were trying to wean Gaddafi away from his past terrorist activities—that was the right policy to adopt, and Tony Blair was absolutely right to adopt it—and if we are trying to keep Egypt as a stable country with a “cold peace” with the Israelis, it was probably right that we had to pay some price for those aims.

Nevertheless, as the Committees point out, we did not ask enough questions and our restrictions were not tight enough. As a result, many of the weapons that are now slushing around north Africa, and many of those that are in the hands of Islamist groups and Salafist groups in Egypt, in other parts of Arab north Africa and in Mali, were exported to that region—to Gaddafi in particular—by western European arms manufacturers, with the approval of western European Governments.

We cannot duck that issue, because there are lessons here—from Sri Lanka, and from north Africa. My right hon. Friend the Member for Tonbridge and Malling said that we in this country have the best parliamentary scrutiny of arms export policy, and probably the best transparency in that regard. Nevertheless, we are not perfect and never will be, and decisions that were made in the past will potentially come back to bite us.

I conclude by congratulating my right hon. Friend. It is very important that the Committees—the four component Committees in this House—continue their work in all political circumstances under this Government, as they did under previous Governments. I hope that those in the Foreign and Commonwealth Office, or the Department for Business, Innovation and Skills, who draft the responses to the questions we ask will try to persuade the Ministry of Defence and the Department for International Development that we must have a joined-up, holistic, comprehensive and clear approach to these questions. There is a danger that, given understandable commercial and economic pressures, we might take our eye off the ball regarding the long-term implications of what we export or sell.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran 2:23 pm, 13th December 2012

Thank you, Mr Hollobone, for calling me to speak. It is a pleasure to see you in the Chair this afternoon.

It is also a pleasure to congratulate the Chair of the Committees on Arms Export Controls, Sir John Stanley, on making an absolutely excellent contribution to the debate, as usual, and on discussing many of the issues addressed in the very substantial report from the Committees. I am a member of the Committees on Arms Export Controls. I sit on the Business, Innovation and Skills Committee, and I echo the points made by my hon. Friend Mike Gapes, who is the Chair of the Foreign Affairs Committee

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

I was not aware that my hon. Friend was no longer in that position, and I will now use this opportunity to pay tribute to the huge amount of work that he has done on these issues during many years, and to the contribution that he has made and indeed is making today.

As my hon. Friend said, the Committees on Arms Export Controls are very broad Committees, in terms both of the politics of their members and of the various Committees that regularly sit in their meetings. As has already been said, the Committees on Arms Export Controls are very difficult Committees to manage, not least because of the rules of the House, which mean that there has to be a quorum for each of the Committees in the room—all four Committees—which has at times been an extremely difficult thing to achieve. Nevertheless, the Committees have done a huge amount of excellent work over many years, and in recent years that work has been taken to new heights by the Chair of the Committees, who has repeatedly and in great detail put together the questions that need to be put to Government, to ensure that we have a higher level of transparency on these issues in this country.

The issues have developed over many years, since the Committees were established by Robin Cook when he was Foreign Secretary in the Labour Government, but the tremendous amount of work that has been undertaken by many who have sat on the Committees over many years is the reason why we are bringing so many more pieces of information to the public’s attention. As the Committees continue, I hope that we continue to push in that direction, to ensure that we are able to bring into the public domain all information that can be reasonably brought there.

I say that because the reality is that there is still a huge amount of secrecy surrounding the issues, and quite often it is far from clear why one application for an arms export licence is granted and another refused. Most applications are, of course, granted; only a small number are refused. The concern of the Committees is often about those that are granted. Often there is a feeling that perhaps the healthy cynicism of many of the politicians who sit on the Committees, and their seasoned view about whether an organisation applying for a licence will necessarily be falling over itself to provide all truly relevant information, is shared by others involved in the process. The rounded political views of many members of the Committees bring a lot to the process.

We should be asking serious questions of those who are trying to export arms or other items to countries where there may be concerns about their end use. We should be asking what those items actually are, whether they could have a range of different uses and who are the people who will actually have those pieces of equipment at the end of the process? The Committees have done a huge amount of work in asking those questions.

The Chair of the Committees spoke at great length about the issues surrounding the so-called Arab spring, and the countries in north Africa and the middle east. Of course, the Committees look at many other issues too, and I am pleased to put on the record both my support for a robust arms trade treaty and my hope that it will be possible to get a treaty next year, even if it is not possible for every country to sign up to it. It is absolutely essential for all of us that we get the strongest possible treaty, with as many key players as possible signing up to it. I hope that is something the Government will be able to achieve, and I know that all members of the House wish to give those taking part in the negotiations as much support as we can.

The other issue that I want to raise today is the Government’s position in relation to exports to Israel, particularly in light of the recent events in Palestine, especially Gaza. The Minister will be aware that on 4 December I asked, in a question in the House, whether consideration had been given to suspending the export licensing process with regard to exports to Israel, in light of the recent hostilities in Palestine and Israel. The response, from the Minister in the Chamber today, was that no such formal suspension had taken place.

On 7 February this year, the Secretary of State for Business, Innovation and Skills announced that there would be a new suspension mechanism, which would allow the Government quickly to suspend the processing of pending licence applications for export to countries experiencing a sharp deterioration in security or stability, and that the suspension would not be invoked automatically or lightly, but would be triggered, for example, when a conflict or crisis conditions suddenly changed the risk or made conducting a proper risk assessment difficult. The Secretary of State said that situations would be assessed case by case, to determine whether a licensing suspension was appropriate.

Will the Minister use this opportunity to address the approach to Israel that has been taken over the past few weeks? Surely the sudden intensification of the Palestinian-Israeli conflict and, in particular, the Israeli bombing campaign in Gaza—there has been further action since—must qualify as a crisis condition. It would be helpful if the Minister could outline what the thinking was and what the Government’s actions were in relation to the matter. If the view was that in the particular circumstances such a suspension was not appropriate, will he outline what types of circumstances would trigger suspension of the licensing process?

We have spoken at great length today about the Committees’ work in bringing more transparency to the process, but over the past few weeks it has been difficult to get to the full truth about exactly what military relations are between the UK and Israel. We know that Israel is one of the lead countries in the world in relation to drone technology, and we also know that Britain is involved through the EU in joint work with Israel on the technology. We know, or we believe it is likely, that in the past UK components have been used by Israel in hostilities in the Palestinian territories. It would be helpful if the Minister could outline whether the Government’s view is that such components might have been used in recent times and whether, in the light of the latest developments in the region, there is an examination of the UK’s military relationships with Israel, particularly in relation to arms export controls.

Israel is just one of the many countries the Committees looked at. The Committees play an extremely helpful role in bringing information to the public, and these annual debates provide a valuable opportunity for Members to question Ministers and get more information into the public domain, about what, at the end of the day, are life and death issues.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

If the Front-Bench spokespeople split the remaining time between them, they will have an hour each.

Photo of Iain Wright Iain Wright Shadow Minister (Business, Innovation and Skills) 2:33 pm, 13th December 2012

That sounds like a target to me, Mr Hollobone. It is a pleasure to serve under your chairmanship. This is a very important topic, considered by extremely important and serious Committees of the House, and the quality, if not the quantity, of the speeches this afternoon has matched the importance of the matter under consideration. I pay tribute to those who have spoken: Sir John Stanley, who is the Chair of the Committees on Arms Export Controls and a member of the Foreign Affairs Committee; my hon. Friend Mike Gapes, who is the former and very distinguished Chair of Foreign Affairs Committee; and my hon. Friend Katy Clark.

As the report somewhat immodestly, but nevertheless entirely correctly, points out, the Committees on Arms Export Controls have scrutinised, in unprecedented detail, the Government’s latest report on strategic export controls, their quarterly information on individual export licence approvals and refusals, their policies and performance on arms export controls and arms trade policy in general.

The report is a substantial and weighty document, in every sense, and it is a credit to the Committees and the Members who have undertaken the work in such painstaking detail. They have packed a punch when it comes to the Government listening to what they have said, for example, about ensuring that the strategic export controls annual reports are presented to the House by the four relevant Secretaries of State, rather than by junior Ministers, as was mentioned by the right hon. Member for Tonbridge and Malling. It is a testimony to the Committees’ strength of purpose that the Government have listened. Equally, it is through the determination of the Committees that this debate has become an annual fixture in the parliamentary calendar. That encourages greater scrutiny, transparency and accountability—themes that have been a large part of today’s debate and to which I shall return. I hope that this annual debate will be embedded as a permanent fixture in the House’s calendar.

It must not be forgotten that the defence export industry is an important contributor to the UK economy. Britain is the world’s second largest defence exporter, and our defence export industry is worth an estimated £35 billion. It makes up about a tenth of our manufacturing base, employs directly and indirectly about 300,000 people and is a leading driver of this country’s innovation ecosystem. There are more small and medium-sized enterprises operating in the UK defence manufacturing sector than in France, Italy, Germany and Spain combined. Research and development undertaken in the defence manufacturing sector not only makes our country safer, in that it ensures that we have access to state-of-the-art defence technology, but has commercial spin-offs in complementary sectors such as aerospace and automotives. The UK rightly has ambitions to continue to play a leading role in the global markets of those sectors.

The UK defence manufacturing sector also helps this country to achieve its foreign policy objectives, one of which, quite rightly, is always to ensure that civilian casualties from operations are avoided, or at the very least minimised. In the Libya operation, for example, the sophisticated Brimstone missile, developed by British-based MBDA, played a pivotal role in ensuring that specific targets, such as tanks and missiles, were destroyed, while avoiding civilian casualties, due to its technological ability.

Libya and last year’s Arab spring—on which all Members have commented—have presented all too vividly, however, the question whether the current system of controls over defence exports is appropriate. All countries have the right to defend themselves, and defence exports, as I have said, are an important part of our manufacturing sector, but the key question that the Committees have rightly considered in the report is whether we should strengthen the system still further, to ensure that we do not sell defence equipment to countries that are volatile and to regimes that have poor human rights records or might use the equipment to repress their own people.

I have mentioned the importance of defence manufacturers, particularly with regards to exports, and that importance is only likely to increase in the next few decades. I hope that the Minister does not take my next remarks as a narrow partisan criticism—that is genuinely not my intention—but because of reductions in the domestic defence budget, UK defence manufacturers will have to look overseas at export markets if they are to maintain or grow revenues. In many ways, that is not necessarily a bad thing, and we are already seeing it in the statistics: ADS, in its review of 2012, stated that spending cuts have led to an 18% year-on-year fall in domestic orders and a 2% fall in the work force. That has been compensated, to some extent, by a sharp rise in exports, which were up 12% in 2011, so the defence exports market now constitutes 48% of all UK defence revenue—up from 43%. The areas of the world in which defence exports are particularly increasing include the middle east, which is volatile and is expected to remain so in the near future.

The trends in global defence exports business will, I think, put a strain on the export controls system in different ways. In general policy terms, I hope that the Minister will use this opportunity to reiterate the need for strong, if not stronger, controls on exports and will not dilute this long-standing British approach in the face of possible economic and industrial pressure to increase export performance.

In specific terms, there is evidence that pressure is being placed on the system. There seems to be deterioration in the percentage of standard individual export licences processed within the 20-day and 60-day limits, which is linked to a steady rise in the number of applications. That reflects the strain in the system, although no doubt the Minister will say, as the Government’s response does, that targets have been met in 2012.

Given those trends in global defence export markets and the prospect of more UK defence firms seeking greater export opportunities in volatile global areas, the figures on performance show that the system is finding it difficult to cope now, and in future it will have to do so with reduced resources. Will the Minister comment on that?

Similarly, does the Minister agree that as much simplicity and certainty as possible should be provided to firms thinking of exporting in this field? When I read the transcripts of the Committees’ evidence sessions, I was struck by the report that some manufacturing firms thought in the aftermath of the Arab spring that there was a blanket ban on selling to the middle east and so missed out on potentially lucrative commercial opportunities. Clearly, better communication is required for the benefit of industry, both to provide opportunities in the marketplace and to set out clearly what is and what is not permitted to be sold and to which countries. Will the Minister outline how he is working within his Department, with UK Trade and Investment and across the Government and business to provide that greater clarity and better communication for industry?

Additionally, I hope the Minister will say something on enforcement, which has been a central theme of today’s debate. I was struck on reading the Committees’ evidence hearings that enforcement is considered to be an issue. One witness said “capacity is certainly worse” on effective enforcement than it was five years ago. The right hon. Member for Tonbridge and Malling in his opening remarks told us about torture equipment being publicised at a trade fair here in the UK. In general, how will the Minister ensure that he strengthens controls, improves performance of applications, tightens up enforcement capability and achieves better clarity and communication?

Talk of enforcement brings me on to the concerns raised in the report on so-called brass-plate companies. The current system of export controls should in principle prohibit the operation of companies registered in the UK but operating in arms dealing from overseas with virtual impunity. However, enforcement is clearly a concern. More should be done to prevent the practice of brass-plate companies, and the report makes it clear that

“the Government has failed to provide a substantive response to its recommendation” from last year. Additionally, it took 10 months for the Government to respond to the Committees’ conclusions and recommendations on that issue and other matters. Will the Minister outline what precise action he will take? In particular, will he use the Companies Act 2006 to dissolve companies that operate in that way against the public interest?

The right hon. Member for Tonbridge and Malling has been far more eloquent than I have on extraterritorial legislation, both today and in the past. The Committees on Arms Export Controls have always been consistent in arguing that, on issues as important as arms exports, extraterritoriality should be expanded to cover all types of arms exports. The current system, as the Minister knows, is based on a three-tier categorisation, and both this Government and the previous Government have worked on moving some specific goods from category C to category B to tighten enforcement. Anti-vehicle land mines, for example, were moved from category C to category B in 2010. The Committees want extraterritoriality extended to category C goods to address, as the right hon. Gentleman has said, wholly anomalous circumstances. Will the Minister update hon. Members on the Government’s thinking on that important matter?

Assessment of risk is the central element of an effective and responsible export control system. If we are to export defence equipment but are determined to do so responsibly and, as far as possible, ethically, assessment of risk is vital. In light of events in the Arab spring and subsequent developments, as my hon. Friend the Member for Ilford South said, it seems clear that that needs further consideration.

At present, emphasis is given within the process to retrospective assessment. The consolidated criteria will ensure that Ministers consider whether there is evidence of a Government having previously breached criteria. In light of changing events, the current system tries to suspend licences quickly, with rapid revocation of export licences. During the witness sessions, that was described as shutting the stable doors more quickly after the horse had bolted.

The Arab spring has demonstrated that past stability is not a guarantee against future volatility or future repression of domestic populations. Does the Minister accept that greater work needs to be done to shift the current balance away from retrospection towards the consideration of existing or emerging social, economic and political drivers of instability? I fully appreciate the difficulty and complexity of such an approach and accept that hindsight is a wonderful asset on such matters.

The Arab spring, however, shows that the revocation and suspension of licences occur largely after items have left UK shores. If the policy objective, which I think we all share, is the prevention of the sale of arms or defence equipment to those regimes with a likelihood of external aggression or internal repression, it is important to consider how better to assess and mitigate that risk. Does the Minister accept that such an approach might provide more effective assessment? Will he elaborate on how the assessment of risk is now being reconsidered?

The CAEC and this annual debate have, as the right hon. Member for Tonbridge and Malling said, moved a great deal towards improving parliamentary scrutiny, building on improvements over the past decade. It is now 10 years since the then Labour Government introduced the Export Control Act 2002, which provides for parliamentary scrutiny of new export control orders.

A statutory instrument containing a control order must be approved by affirmative resolution in each House within 40 days of the order being laid.

Although, as we have heard, Britain has some of the tightest regulations in the world, I think we all accept that there should never be room for complacency. Parliament should be considering further ways to improve the situation, to enhance transparency and accountability and to allow the House greater opportunity to scrutinise decisions. I was particularly taken with what the right hon. Gentleman said about his remarks to the Bundestag and his imminent remarks to the National Assembly in Paris. I want us to remain the tightest jurisdiction anywhere in the world on strategic export controls, and Parliament has a key role to play in that.

The current system scrutinises a ministerial decision once it has been taken. There is an opportunity to consider a system of pre-scrutiny for export decisions. We would like that to be considered as a means to ensure greater parliamentary oversight, to provide a cross-party consensus on issues that are important to our country economically and industrially and to our country’s foreign policy, security and ethical objectives and obligations, and to help to guide final ministerial decisions. We do not wish additional scrutiny to impose delays on decision making or to add additional bureaucracy, but we believe such an approach could improve transparency and add a greater dash of both robustness and consensus to that important decision-making process, as other countries do.

In the United States, for example, Congress—specifically the Senate Foreign Relations Committee, the House International Relations Committee and the House and Senate Appropriations Committee—is given prior notification of all foreign military sales and can object ahead of the Administration making a decision. That system of prior scrutiny has not harmed the competitive position of the United States; it remains by far the No. 1 defence exporter in the world and has seen sales increase by 34% in the five-year period from 2006 to 2011. Will the Minister say whether the Government will consider such an approach in the UK?

The right hon. Member for Tonbridge and Malling mentioned the arms trade treaty, which is the final issue that I want to raise. Will the Minister update hon. Members on where we are, particularly with the negotiations and the possible conclusion of the arms trade treaty?

As the right hon. Gentleman said, this matter was discussed at the UN in the summer, but a conclusion looks no closer to materialising than it did last year, and another conference is being convened at the UN in March 2013 to discuss it further. The prospects of an international agreement seem as remote as ever. In those circumstances, it would be useful if the Minister elaborated a little bit more on that and provided the House with an explanation about when he thinks the treaty will be finalised, agreed and ratified and what the Government are doing in diplomatic circles to achieve that objective. I agree with the right hon. Gentleman and my hon. Friends about trying to tease out from the Minister what he is doing about breaking with consensus in the international team, to achieve some degree of ratification.

This has been an important debate. I reiterate my thanks to the Committees for their hard work, dedication and extraordinary attention to detail on this issue.

There does not have to be a conflict between a strong, internationally competitive UK defence industrial sector and equally strong export controls; indeed, they are complementary. Reputation is everything in business and the “Made in Britain” tag is a hallmark, not only of high and innovative manufacturing quality, but of responsible and ethical practices in exports. We must maintain and enhance that reputation, as we must maintain and enhance our competitiveness in the global markets in which we compete.

It is clear from today’s debate that the House wants to engage with the Government on this agenda in a constructive and cross-party approach. We in the Opposition wish to do so, too. I look forward to hearing from the Minister about how we can go about achieving that shared objective for the good of our country.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

If the Minister does not use up all the time available to him, I should like to call Sir John Stanley again to make a few concluding remarks.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills 2:51 pm, 13th December 2012

I repeat hon. Members’ welcome to the Chair of the Committees, my right hon. Friend Sir John Stanley, and thank all those who contributed to our short debate. I thank my right hon. Friend in particular for all the work he does in chairing the Committees and for his kind words at the beginning of the debate.

Since becoming the Minister with responsibility for export controls, I have become acutely aware of the challenges posed and the passions aroused by the export of strategic goods. On the one hand, we want to give export licence applications the fullest scrutiny to ensure we do not license anything that would be used for internal repression or would fuel conflict or breach an embargo. We also want to be as transparent as possible about our activity in this area, in recognition of the strong parliamentary and public interest. On the other hand—Mr Wright recognised this—successive Governments, including this one, have been committed to a strong defence and security industry, which helps to meet not only our own defence needs but the needs of other states.