In response to your letter of 26 March (Ref D/AUS (EPF) 1/6/3/1 (160f/96)) about the disclosure of information on defence export sales. We have now had a chance to consult some of our Members on this matter and are able to give you the DMA's considered response.

  Whilst we do not dissent with the Scott Report's recommendation for a review in respect of public and Parliamentary openness over the release of information on defence export sales, we believe that there must be sensible safeguards to assure political and commercial confidentiality in individual cases if UK companies are to maintain their reputation as dependable suppliers.

  We believe that accusations about the secretiveness of defence export sales are rather over-stated. Information is made available to the defence press and is already in the public domain in many instances, especially where major items of capital equipment are concerned. Sales of certain types of material are also currently reported as a result of the UK's treaty obligations. Moreover, companies almost invariably issue press releases after winning major contracts in an effort to "blow their own trumpet". When press releases are not issued, it is almost certainly due to the customer specifically stating that confidentiality is to be maintained and for there to be no publicity given to the acquisition. For example there are a number of countries who are concerned at the passing of information on the acquisition of equipment or technology to their neighbours (eg Greece and Turkey, India and Pakistan). Consequently, the level of information to be released is usually dictated by the customer.

  Most importantly, the wider disclosure of information must not put the UK at a disadvantage to its competitors in the defence export market. It is clear that there are widely diverging, and seemingly irreconcilable, views amongst the major exporting nations on the subject of the disclosure of contract related information. The global divergence of view is clearly indicated by the marked difference in the quality of information which has been supplied to the UN since the establishment of its annual Register on Conventional Arms Transfers. To maintain equity it is essential that any changes in the ground rules on disclosure of export information should also be agreed and enforced by our major competitors to ensure "a level playing field".

  It must also be pointed out that a demand for the mandatory disclosure of even very basic defence export sales information, which has been supplied in confidence to the Government by companies, will establish a potentially dangerous precedent. In particular, constraints must continue to be placed on the release of technical data in respect of technologies embedded in major equipments as the release of such information would clearly compromise the position of both customer and supplier.

  In conclusion, the Defence Industry believes that it is essential that adequate safeguards are retained to ensure the commercial and political confidence of overseas customers. For this reason it is considered that it will be impractical to make siginficant changes to current procedures, and that any information that is made available should concentrate on historical statistics.