Background to the inquiry
1. The Scott Inquiry report of February 1996 criticised
the export control regime at that time for its lack of accountability
and transparency, and recommended that "the present legislative
structure, under which Government has unfettered power to impose
whatever export controls it wishes and to use those controls for
any purposes it thinks fit, should … be replaced as soon
as practicable".[1]
Following a number of non-legislative changes to the export control
regime, in March 2001 the Government published a draft Export
Control and Non-Proliferation Bill.[2]
The aims of the proposed legislation were described by the Government
as:
- setting out the purposes of export control in
legislation;
- providing for parliamentary scrutiny of secondary
legislation made under the Bill;
- requiring the Government to publish annual reports;
and
- creating new powers to impose controls on the
transfer of military and dual-use technology by intangible means,
on the provision of related technical services; and on trafficking
and brokering of military and dual use equipment.[3]
The new powers to impose controls, as well as some
existing powers, were to be contained not in the bill itself,
but in secondary legislation.
2. In May 2001, at the end of the last Parliament,
our predecessor Committees published a Report on the draft Bill.
They described "intangible transfers of WMD[4]
technology, brokering and trafficking, end-use, and licensed production
overseas" as "legislative issues of our time",[5]
but noted that the draft bill itself was "largely an enabling
Bill" with the "meat of the proposals" awaiting
secondary legislation.[6]
The Defence Manufacturers' Association (DMA), representing industry,
and the UK Working Group on Arms (UKWG), representing non-governmental
organisations,[7]
agreed with this assessment. The DMA told the Committees at the
time that the "devil will be in the detail" of the subordinate
legislation,[8]
while the UKWG noted "the absence of detailed proposals for
operationalising the principles set out in the primary legislation".[9]
3. During evidence on the draft Bill, the then Secretary
of State for Trade and Industry, Rt Hon Stephen Byers MP, told
the Committees:
I do think we stand a far better chance of having
a Bill and secondary legislation which flows from it in a form
which is more likely to achieve broad support if there has been
a genuine consultation around not just the Bill but any secondary
legislation which flow from it. I have been very clear with my
own officials that I want the secondary legislation after this
consultation period on the primary legislation to be brought together
as quickly as possible and then to have an opportunity for there
to be a further round of consultation on the secondary legislation.[10]
The Committees concluded that "the assurance
that there will be a … consultation on the draft secondary
legislation is particularly welcome".[11]
4. The Export Control Bill received its first reading
in the House of Commons on 26 June 2001, and received Royal Assent,
after considerable debate in both Houses of Parliament, on 24
July 2002.[12]
5. Our predecessor Committees had recommended publication
of a consultative version of the secondary legislation before
second reading of the bill.[13]
In the event, so-called "dummy orders" were not published
until mid-way through the bill's committee stage, in October 2001.
In Committee, the Minister in charge of the bill, Nigel Griffiths
MP, again reiterated the Government's commitment to holding "a
full public consultation" on the proposals for secondary
legislation,[14]
and in a written answer he revealed that he expected this consultation
to take place in Spring 2002.[15]
6. The promised consultation did not in fact begin
until late January 2003, when the Export Control Organisation
(ECO) of the Department of Trade and Industry (DTI) published
a consultation document on draft secondary legislation under the
Export Control Act 2002. The "draft orders" contained
in this document are in substance very similar to the "dummy
orders" published eighteen months before during the passage
of the Export Control Bill.
7. The consultation period lasted until the end of
April 2003. We are producing this Report at some speed so that
the Government can consider our views before taking any final
decisions on the form of the secondary legislation.
8. We are grateful to the Government for honouring
its promise to "give time to the Committees to consider the
draft secondary legislation and, if the Committees wish, to question
Ministers on its broad content".[16]
On 3 April 2003 we took evidence from the Secretary of State for
Trade and Industry, Rt Hon Patricia Hewitt MP, and from the Director
of the Export Control Organisation, Mr Glyn Williams. This followed
evidence from industry, represented by the Defence Manufacturers
Export Licensing Group (DMELG) of the DMA, and from NGOs, represented
by the UKWG. We have also received written evidence from both
the DMELG and UKWG, as well as from the Society of British Aerospace
Companies (SBAC) and the Campaign Against Arms Trade (CAAT). We
are publishing this evidence together with our Report.
9. We begin this Report with a brief overview of
the Government's proposals. We then examine the principles behind
the legislation, before we turn to the scope of the proposals
themselves. We look at the arguments of those (mostly NGOs) who
claim that the proposals do not go far enough and of those (mostly
in industry) who think that they go too far. We make our own suggestions
as to how the proposals might better be refined to make them fit
for purpose.
10. The test of the law will be how it works in
practice. The notable procedural advantage of secondary legislation
is that it can be made, amended and, if necessary, revoked, swiftly
and decisively. We recommend that the
Government should keep under close review the operation of secondary
legislation under the Export Control Act. We hope to have the
opportunity to submit our views on any future proposals of substance
under the Act.
1 
