Export Control Bill

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Mr. Gerald Howarth (Aldershot): I welcome you back to the Committee, Mr. Benton, and I thank the Minister for providing us with dummy orders. I am delighted to know that there will be a consultation period, because someone in industry to whom I spoke this morning told me that he and his colleagues would be closeted with their lawyers for a month, pouring over the detailed legislation to understand the full implications of the dummy orders for them.

May I be permitted to single something out in passing, Mr. Benton? I was interested, as you may be, in the definition of a robot, which is:

    ``A manipulation mechanism, which may be of the continuous path or of the point-to-point variety,''

and ``may use `sensors'''. There is a variety of descriptions, but there is an exception for robots that are

    ``Mechanically controlled variable sequence manipulation mechanisms which are automated moving devices, operating according to''

programs in which the motions are mechanically

    ``limited by fixed, but adjustable, stops such as pins or cams''

and in which

    ``The sequence of motions and the selection of paths or angles are variable within the fixed program patterns.''

Clearly that is a reference to the Secretary of State for Transport, Local Government and the Regions. I am sure that he will find the dummy orders as interesting to peruse as we have done.

I welcome the consultation period. If the industry takes longer than 12 weeks, I hope that the Minister will be flexible.

I strongly endorse the remarks of my hon. Friend the Member for Salisbury on the amendment. Like him, I have associations with QinetiQ. Its name presumably has something to do with physics. The people in QinetiQ have operated under a very different system, called the Ministry of Defence form 680 procedure. Under that system, if they wish to discuss restricted matters with somebody in another country, they have to obtain permission. They have been able to work with that, and it is an established procedure with an element of flexibility.

I entirely understand my hon. Friend's point that those people who prior to 1 July were part of DERA frequently held discussions with their counterparts, and those in Defence Science and Technology Laboratories—the remaining public sector defence research establishment—will continue to have discussions about sensitive matters with the United States in particular, but also with our allies elsewhere. It is important that the Bill does not obstruct the sharing of important information among scientists who are trying to develop defence equipment for the protection of our own people. It would be a paradox if, at the same time as we are looking for co-operation on a broad scale to defeat terrorism, we were to place in the path of industry and the scientific community impediments to their ability to work together to make the world a safer place. The United Kingdom is a world leader in this area, so we must be careful how we deal with the matter.

10.45 am

This country is participating in a number of joint projects. For example, as part of the joint strike fighter project, BAE Systems is involved in both the Boeing project and the Lockheed Martin project in the United States. We need specific assurances that there will be no attempt, either by the state authorities such as the Crown Prosecution Service or by others seeking to move the law, to inhibit the efficient and proper consultation that must take place among people in this country and people in the United States on one of the most important military projects on the drawing board.

That applies not only to our relations with the United States, but to our relations with our continental partners as well. The Typhoon—formerly and unfortunately known as the Eurofighter, but now with a much better name—is a project being conducted by the United Kingdom, Germany, Italy and Spain. Clearly, an exchange of information is necessary for that project. I hope that the Minister can assure us that the Bill is not intended to catch the transmission of information such as my hon. Friend referred to—in particular, oral communications by telephone or communication by e-mail or fax. If the Bill were to do so, it would seriously inhibit the ability of defence manufacturers to work on important joint projects across national boundaries. Future projects may involve the United Kingdom in partnerships not just with the United States or other EU member states, but with countries such as Singapore or Australia or elsewhere where there are not exemptions for EU member states.The point made by my hon. Friend is important.

Thales is another instance relevant to the United Kingdom. It was formerly known as—

Mr. Key: Thomson-CSF.

Mr. Howarth: I thank my hon. Friend--I was just checking. Thomson-CSF and Racal are now known as Thales, and my right hon. and noble Friend Lord Freeman is chairman of the British end of that important company. Like BAE Systems it has offices around the world. It is a French-owned company operating in the United Kingdom. Will it fall foul of the Bill if there are normal on-going discussions between various units of Thales, such as the United Kingdom element and the headquarters in Paris?

It is a sensible suggestion that the words

    ``other than within a company or group''

should be added to the clause, and perhaps we should also add the words ``or where companies are working together on a joint international project''. Whatever the merits of the Bill—and I quite understand that it has its merits—none of us would want so to hobble British industry, and particularly our defence industries, that they were unable efficiently and effectively to contribute to the defence of the United Kingdom and of freedom in the wider world.

Dr. Vincent Cable (Twickenham): We welcome the spirit behind clause 2. It is obviously necessary to exercise control over software as well as hardware if the objectives of the Bill are to be achieved. The transmission of technology, and the means of transmission—fax and telephone—must be part of that.

The Chairman: Order. Is the hon. Gentleman speaking to the amendment? It sounds as if he is on clause stand part.

Dr. Cable: I was putting my remarks in the context of the clause.

I understand the basic point made by the hon. Member for Salisbury that the structure of industry is changing and globalising. That is important, and creates a need for tighter control as well as for an understanding of how the industry functions. In the old days, a company like BAE systems would have been an old-fashioned British company with a large labour force, lifetime employment, internal cohesion, conditions of confidentiality and so on. That was the old way of doing things and it probably made it rather easy to exercise control over the inappropriate dissemination of technology.

The more fluid structure described by the hon. Gentleman, with lots of subcontracting, a small core management team and overseas alliances that come and go, undoubtedly makes businesses more efficient. However, it also creates plenty of opportunities for the transmission of technology to countries that should not have it and where there are genuine problems of end use. That is why we support the clause in its unamended form. The amendment would weaken the spirit of the clause.

A separate concern, which may or may not be dealt with by the amendment, is that of the universities about how far proper academic discourse can be allowed under the Bill. I do not think that the amendment is specifically directed at those concerns, but perhaps the Minister could explain how, in the Government's view, the universities' concerns are being taken care of. Perhaps he will need to prepare some amendments of his own that set out how information that is in the public domain and of a genuinely academic nature can properly be protected. I realise that that is not the objective of the amendment, but it is relevant to the discussion and I hope that the Minister can respond.

I apologise for not being able to stay for the Minister's reply, but I am on the Speaker's list to participate in another debate at 11 o'clock.

Rob Marris (Wolverhampton, South-West): I understand the concerns of the hon. Members for Salisbury and for Aldershot, but I think that the amendment is opaque and misconceived. It is opaque because it does not describe what ``group'' means, unless it is defined later and I have not seen it. For example, a group of companies may have encompassed Iraq in the mid 1980s, and if the amendment were agreed, we would not be able to stop the transfer of technology there. The amendment is misconceived in that the fifth word in line 18 on page 1 of the Bill is ``may''. That is permissive, not mandatory.

Mr. Kevan Jones (North Durham): I have sympathy with the concerns of the hon. Member for Aldershot, because there have been worries about arrangements made by some companies—for example, Swan Hunter in the north-east, which is now Dutch-owned. We need reassurance from the Minister that these companies are now clearly international and pan-European. I agree with my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) that the amendment does not cover this issue because it mentions a group. I am not sure how ``group'' is defined, because a lot of defence contracts these days are made by consortia of different companies and groups. Industry needs reassurance on the matter because the clause does not, in its present form, answer its concerns. I look forward to hearing from the Minister.

Nigel Griffiths: I thank the hon. Member for Salisbury and other hon. Members for their kind words of welcome to the developments on the Government side since the recess began, and for the dummy orders which hon. Members have clearly studied in detail.

I shall go through the points that have been raised and explain why I shall urge the Committee to resist this amendment. The hon. Member for Aldershot raised an important point, and he illustrated it with examples such as QinetiQ and Thales, expanding our lexicography if confusing our spelling. Industry will be able to apply for licences to cover a single or joint project or groups within a company for intra-company transfers and for industry partnerships. I heard with concern what my hon. Friend the Member for North Durham (Mr. Jones) said, and I hope that that goes some way to reassuring him also. The planned public consultation will provide a further opportunity to take into account the views of those affected by the new controls. Naturally, the Government will make every effort to fine tune the controls to meet any concerns expressed so far as is possible within the bounds of agreed Government policy. I am pleased to announce that the Export Control Organisation will be carrying out an awareness and education programme in the run-up to the introduction of new controls. We aim to work together with exporters to ensure that the transition to the new export control regime is as smooth and effective as possible.

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