Export Control Bill

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Rob Marris: The hon. Gentleman made a serious allegation when he referred to an unofficial blacklist. He is alleging that officials in the various Departments or Secretaries of State are acting outwith their statutory powers. Will he expand on that statement or have I misinterpreted what he said?

Mr. Page: The hon. Gentleman has grasped what I said clearly and effectively. I am glad that he has done so, and I should be delighted to hear the Minister's answer. Sometimes, companies that are blacklisted are not officially recorded as such, and that is wrong. The list should be examined more thoroughly. British manufacturers are suffering because of those refusals.

Dr. Starkey rose—

Mr. Page: If the hon. Lady will hold her horses for a second, I shall be delighted to give way.

Let us suppose that a Member of Parliament is approached by a company that has waited seven or eight months for permission to go ahead or not to go ahead. It is most worrying when that Member of Parliament makes an application and, wham, within a week or two a refusal comes through. One of the reasons that I welcome the Bill is that matters will be much more open and transparent.

Dr. Starkey: The hon. Gentleman has confused me still further. Will he clarify whether he is talking about the problem of delay in reaching a decision? That issue was highlighted by the Quadripartite Committee, which has made many representations to the Government about avoiding such delays. Is he talking about an official blacklist, which is the reason for refusal? If an application is refused, does he accept that the applicant has the right of appeal? The Quadripartite Committee has discussed the important occasion when an appeal was won and arms were exported that many of us consider should not have been exported.

Mr. Page: Given her experience of Select Committees, the hon. Lady will be aware that the procedure is most cumbersome. I feel sorry for the Minister because the Department of Trade and Industry is the postbox for applications. They are then handed to the Ministry of Defence and the Foreign Office. The applications travel backwards and forwards. The system is not smooth and efficient. It takes an extraordinarily long time. Some delays are inordinate and I do not believe that some of the reasons for refusal are clear and fully understood by those companies that make the applications. Moreover, some companies from overseas that are placing orders are starting to put onerous conditions on a British company if it is asked to quote, because of the delays and the less clearly understood reasons for the refusal.

I have said from the start that I do not want to be unfair to the Minister. I know that the Department is working on export applications. There is a genuine acceptance that the present system is not satisfactory and that the Government are trying to improve it. The purpose of the amendment is simple. It would ensure that the annual report sets out how matters are developing. Annual announcements are made concerning the various crimes that are committed. We know whether the number of robberies is rising or whether the violent crime rate is decreasing. I see no reason why the annual report cannot show how export licensing is proceeding, which would help, because we would find the bottlenecks. The House recently witnessed a splendid example of how supplying a little pressure could help reinforce an argument for removing a bottleneck.

I need not continue to emphasise the point in this day of openness, targets and objectives. An annual report would present no difficulties, and I cannot understand why we cannot see as of right how export licensing is operating.

11 am

Several hon. Members rose—

Nigel Griffiths: I hope that the Committee will forgive and indulge me in speaking to the amendment. At the beginning of his speech, the hon. Gentleman raised the important subject of commercial confidentiality. Applications for export licences are assessed carefully against the consolidated criteria—

Mr. Howarth: On a point of order, Mr. Benton. Forgive me, but have you called the Minister to reply to my hon. Friend, or may we continue to debate—[Interruption.] I thought that the hon. Member for North Durham (Mr. Jones) was trying to catch your eye, too.

The Chairman: Amendment No. 43 is grouped with amendment No. 44. After I stated the question no one rose, so I called the Minister.

Mr. Howarth: Further to that point of order, Mr. Benton. I rose, and so did the hon. Member for North Durham.

The Chairman: I apologise if I have been remiss, but that was my understanding. After the Minister has spoken, nothing prevents hon. Members from doing so.

Nigel Griffiths: In your defence, Mr. Benton, I believe that the hon. Member for Aldershot was distracted and had stopped standing by the time that you called me. I waited, because I want all hon. Members who want to contribute to do so. I shall be happy to consider any subsequent comments that are made and will keep my response brief and relevant to the amendment, which I shall ask the Committee to reject.

Before the point of order, I was outlining the procedures that we adopt, to reassure the Committee that we adhere to commercial confidentiality in the usual way. We advise exporters not to enter into a contractual commitment until they have a licence. The danger of not following that advice is that the refusal of an export licence would make an exporter unable to fulfil a contractual commitment. It is therefore important to maintain the confidentiality of export licensing information before a decision is taken. Knowledge of an application by a particular company could constitute valuable market intelligence to a competitor, and it would clearly not be right if making an application led to a competitor's ousting the original applicant. The amendment does not specify a particular test of commercial confidentiality, and I hope that in light of my assurances about how seriously we treat the matter, the hon. Gentleman will withdraw it.

Mr. Page: We are talking about the annual report, not someone applying for a licence. There is a fundamental difference. I should be appalled if someone submitted an application for a licence and any confidentiality was disclosed, as that would negate the process. I echo what the Minister says about not entering into contractual arrangements. Delays have been so long that it would be to the detriment of British companies to do so and to be hit and held by the many costs involved when they fail to obtain a particular licence. I am talking about the draft report, what goes into it, and confidentiality, and I seek editorial guidelines on that point.

Nigel Griffiths: I hope that I can help the hon. Gentleman. I have in my hand the last annual report, which is full and detailed. I am not aware of any firm that said that its confidentiality was breached in this or the previous two annual reports. I have some responsibility for better regulation, and I do not want non-governmental organisations or firms to have to pore over even more legislation. Currently, I am not aware that there have been any complaints or problems of commercial confidentiality resulting from what has been published in any of the previous three annual reports, so in that spirit amendment No. 43 is unnecessary. The proof of the pudding is in the eating, and we have had three years of eating not a bad pudding.

Mr. Page: I thank the Minister, particularly for the last aspect of his reply. I was delighted to hear what he said. We are in a new ball game and are framing new legislation. As I said, I do not want to include the amendment in the Bill, but I was seeking assurances about how we will proceed in the future. The Minister has given a firm commitment that we will continue as now, so I am delighted to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Gerald Howarth: It might be easier if I made my remarks on the clause now, so that the Minister has the opportunity to hear the pearls of wisdom that I have to offer him, and he can respond.

In our earlier discussion about the previous amendments, my hon. Friend the Member for South-West Hertfordshire raised an important point about the nature of the information that will be supplied in the annual reports. The Minister sought to assure us that, by virtue of his Department's past practice, we should be confident that the Department of Trade and Industry will be careful how it couches the reports so that commercial information is not imparted to a wider public that would benefit the competitors of British industry. I am sure that we all welcome that assurance, but I emphasise the point that my hon. Friend made and invite the Minister to assure us that as the debate and scrutiny of defence export contracts progresses, he and his Department will resist pressure to reveal information that would not be in the interest of British companies.

Clearly, there is a conflict between the need for scrutiny and the need to protect British companies and not handicap their operations. From my own experience, I can tell the Committee that this is a serious matter for British companies. Hon. Members should not take my word for that, but should consult defence contractors in their own constituencies, if they have not already done so—I am sure that many have. It is very competitive world out there. If we are to maintain the level of defence exports that provides British industries with the economies of scale that enable us to manufacture defence equipment for our own forces in the United Kingdom at a non-prohibitive price, we must be very vigilant so as not to handicap British companies in their pursuit of the markets. I accept the Minister's assurance, but I also hope that he—along with his departmental colleagues and whoever might succeed him—will be vigilant about the information that they reveal.

My hon. Friend the Member for South-West Hertfordshire referred to the delays in the issuing of export licences, as did the hon. Member for Milton Keynes, South-West—although she is not in attendance at present. Those delays are a major concern to business. I have discussed the matter with the Defence Manufacturers Association, which is concerned that, although the French can get things through almost at the drop of a hat, it is more difficult for British companies to obtain licences.

I am raising the matter in relation to the clause under discussion because the annual report would be a suitable place to record the operation of export licences, and particularly the processing of them by the Department of Trade and Industry. My hon. Friend the Member for South-West Hertfordshire mentioned that there are key performance indicators for almost every area of public life. Perhaps there should be a key performance indicator for how the Department of Trade and Industry issues export licences, particularly for defence contracts.

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