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Session 2001- 02
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Standing Committee Debates
Export Control Bill

Export Control Bill

Standing Committee B

Tuesday 16 October 2001


[Mr. Joe Benton in the Chair]

Export Control Bill

Clause 6

Power to require information

4.30 pm

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

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): An amendment proposing the deletion of the clause has not been taken, so I am in the slightly awkward position of advising the Committee to oppose the motion that clause 6 stand part of the Bill and persuading it that we should strike the clause from the Bill. After due consideration, the Government have concluded that the wide powers provided in clause 6, about which the Select Committee on Delegated Powers and Deregulation in another place had expressed concern, are not necessary.

Committee members may have seen from the dummy orders that no substantial new powers are introduced in relation to record keeping. The Government have concluded that record-keeping requirements may be met by using the powers under clauses 1, 2, 4 and 5, which is reflected in the dummy orders. The introduction of an additional power under clause 6 is unnecessary. The Government wish to omit clause 6 and, for the avoidance of doubt, make a small addition to clause 7. We will discuss amendments to clause 7 shortly, and there will also be a minor consequential amendment to clause 12. For those reasons, I hope that the Committee will agree that clause 6 should not stand part of the Bill.

Mr. Robert Key (Salisbury): I understand where the Minister is coming from. I had worked out that the powers introduced by clause 6 will be added elsewhere. I believe, however—I hope that the Minister will correct me if I am wrong—that there will be an unfortunate consequence. The orders made by affirmative resolution under clause 6 would, if made instead under the amendments that the Minister proposes to clause 7, be made under the negative procedure. That means that we would have less influence on decisions taken. That is my one concern about striking out clause 6, and I would be grateful if the Minister would reassure me on it.

Nigel Griffiths: As the hon. Gentleman knows, that was the subject of deliberation and comment by the Select Committee on Delegated Powers and Deregulation in the other place. The hon. Gentleman is correct in his observation that orders under clause 6 would be subject to affirmative resolution procedure and that that will no longer apply if clause 6 is removed. However, the new powers provided for under clause 7 are much narrower than those provided for under clause 6. The amendments to clause 7 simply make clear the powers already contained in clauses 1, 2, 4 and 5, to which the negative procedure applies. The majority of the alterations to record-keeping requirements are routine or derive from European regulations. The Government are therefore satisfied that the alterations to record-keeping requirements are not deserving of full affirmative parliamentary scrutiny. The hon. Gentleman is right, however, to point the matter out to the Committee and I am sure that we are all grateful to him for that.

Mr. Key: I am grateful to the Minister for that clarification. I observe that there will be an opportunity, under amendments that have been tabled later in the Bill, to discuss the question of extending the affirmative resolution procedure. In order not to delay the Committee unnecessarily, I think that we can safely leave such discussion until then.

Mr. Ian Liddell-Grainger (Bridgwater): I notice the difference between clause 6(1)(a) and (b) and the amendment proposed to clause 7. Does the Minister think that the amendment is strong enough? Clause 6 refers to persons producing records to specified authorities and to providing

    ``an authority specified in the order with such information about their activities as may be so prescribed.''

That is watered down in amendment No. 63, proposed to clause 7, page 5, line 7. Will that be strong enough to give the information required from individuals?

Nigel Griffiths: I am just cross-checking. Did the hon. Gentleman mean the amendment proposed after clause 7(1)(b)?

Mr. Liddell-Grainger: Indeed, I did.

Nigel Griffiths: The answer is yes, it will be.

Question put and negatived.

Clause 6 disagreed to.

Clause 7

Control powers: supplementary

Dr. Vincent Cable (Twickenham): I beg to move amendment No. 68, in line 6, at end insert—

    `( ) for the revocation of any licence granted under the control powers in subsection (1)(a) for the export of goods, the transfer of technology, the provision of technical assistance or the trade in controlled goods if the exportation, transfer, provision or trade subsequently results in any of the consequences referred to in the Table in paragraph 4 of the Schedule or if there is a failure on the part of any of the co-parties to honour their contractual obligations;'.

The amendment refers to the revocation of licences and will clarify and strengthen the Government's powers in that respect. The problem of revoking licences arises because of changing circumstances. There are several classic cases, the most obvious being Zimbabwe under Robert Mugabe. Some years ago, it was considered to be a reputable member of the Commonwealth and we supplied it with Hawk aircraft. Since then, the Mugabe regime has descended steadily into anarchy and abuse of human rights. It has been considered, rightly, that we should stop the supply of spares for those Hawk aircraft, but there have been contractual difficulties in revoking the licences, or doing so speedily.

A similar problem arose with Indonesia, which was once considered to be a reputable receiver of Hawk aircraft. When it became involved in East Timor, the circumstances changed and the issue arose of how quickly the terms of the licences could be changed. Another example with which I understand the Government are having legal trouble concerns the western Sahara. Arms contracts with Morocco predated the use of those weapons in the western Saharan conflict and pressure arose to change the contracts.

The purpose of the amendment is to write the power of revocation into the Bill and thereby make it clear that licences may be revoked by the Government without a messy, prolonged and perhaps unsatisfactory legal process. The amendment is within the spirit of the Bill and I hope that the Government will have no difficulty in accepting it.

Mr. Gerald Howarth (Aldershot): I have some sympathy with what the hon. Member for Twickenham (Dr. Cable) is trying to do. He cited some interesting examples of export licences being approved with a subsequent change in the regime making the position difficult. However, we must be reasonable and sensible about the limitation on our powers. A Government may be friendly at one moment and we may want to provide military assistance by making British defence products available, but we cannot determine for ever the complexion of that Government. Some of us foresaw what would happen in Zimbabwe, and said so many years ago, but in other cases it would not have been possible to foresee 10 or 15 years ahead that a coup would take place and an undesirable Administration would succeed an Administration we had deemed to be desirable and worthy of military support. It is self-delusion to imagine that by providing a power of revocation in the Bill we shall be able to avoid some of those events about which some feel embarrassed.

In fairness to the previous Conservative Government—I hope that this will be able to be said of this Government in 15 or 20 years—there have been few occasions when we have sold military equipment that has subsequently been used against us. In the case of the Iraq, we were discussing Hawk aircraft, which are training aircraft. The Hawk 200 does have a potential ground-to-air capability. However, we are talking about Hawk training aircraft in Zimbabwe; we are not discussing intercontinental nuclear ballistic missiles. The United Kingdom's record has been pretty good. We can be proud of the judgment that has been exercised by previous Governments in taking the advice of civil servants and other professionals in the field.

We ought to serve a clear warning that simply writing on the face of the Bill that there will be a power of revocation will not, in itself, prevent that which the hon. Gentleman is concerned about. Indeed, even if one writes the power of revocation into the Bill, the Government must exercise that power. They must say that they will renege on the contract. The truth is that as far as Zimbabwe is concerned we have withheld supplies of the Hawk aircraft, while we imposed other conditions on Indonesia. However, if we get a reputation as an unreliable supplier, do not be surprised if other countries do not want to do business and prefer to take their orders to other countries that are more than happy to do business and have far fewer scruples than us. I do not mean third-world countries; I mean countries such as France and the United States. Let us be under no illusions. It is not simply a question of being able to prevent the undesirable from happening. It requires decisions and judgments, which will, we hope, stand the test of time, to be made today—but that will not always be possible.

Nigel Griffiths: The amendment is unnecessary because the Government already possess the power to revoke export licences. Perhaps it would be useful to the Committee if I explained the position now and as it will be under the Bill.

The current position under the Import, Export and Customs Powers (Defence) Act 1939 is that the Secretary of State has the power to revoke any form of licence, whether open or individual. Such revocation may, for example, take place where there is clear evidence that an undertaking given by the end user is likely to be broken where the situation in the recipient country changes significantly after a licence is issued. Revocation may apply where new information comes to light after a licence has been issued that would have led to refusal of the application. Another point worth mentioning is that if we had reliable evidence of a past breach of end-use undertaking, or a risk of diversion in relation to a specific destination, that would certainly be a factor to be taken into consideration in assessing any future licence applications involving that end user or destination. Those are the sorts of licence that I, as the Minister, consider. They do come up and they are considerations that are given the most active attention.

As to the new Bill, the dummy orders that we provided to the Committee contain revocation provisions. In particular, the dummy order on Exports of Goods, Transfer of Technology and Provision of Technical Assistance, which are all issues mentioned in the amendment, provide for the revocation of licences in article 10(5). The dummy order on Trade in Controlled Goods provides for revocation under article 5(2). The example that we provided in the dummy order giving effect to an embargo includes revocation of article 4(2). The circumstances in which revocation would be considered are the same under the Bill as in existing legislation. All matters to which the amendment relates are already fully accommodated within the dummy orders on the basis of the power contained in clause 7.

The power of revocation follows the well established precedent in the 1939 Act whereby the related secondary legislation also contained the revocation provisions. In the case of the Export of Goods (Control) Order 1994, a copy of which we provided to the Committee before the recess, article 7(1) mentions the revocation control.

For us, the key issue is for the Secretary of State to possess the necessary powers of revocation, and that power is contained in clause 7. The Bill does not need to include detailed provisions about this matter, and I therefore invite the hon. Gentleman to withdraw the amendment.

4.45 pm


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