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5.24 pm

Sir John Stanley (Tonbridge and Malling): I am sure that the whole House will want me to offer warm congratulations to the hon. Member for Redcar (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.

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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

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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 the hon. Member for Twickenham (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.

Mr. Richard Page (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.

Sir John Stanley: 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

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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

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jeopardised by the certainly well intentioned and wholly laudable efforts that the Government are making to try to choke off such proliferation.

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