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Mr. Mark Hendrick (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?

Sir John Stanley: 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:

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:

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

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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:

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.

5.50 pm

Mr. Roger Berry (Kingswood): 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 the Member for Redcar (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 the Member for Coatbridge and Chryston (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

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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.

Ms Dari Taylor (Stockton, South): Would my hon. Friend have liked the Bill to be introduced at least 15 years earlier?

Mr. Berry: 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

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

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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:

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

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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.

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