Appendix 1: Letter to the Chairman
from the Secretary of State for Trade and Industry
I am writing to propose changes to the way we
publish data in the Annual Report to Parliament on strategic export
controls, in order to increase transparency and accountability.
The main proposal is that we publish licensing data quarterly
instead of once a year. I would be grateful for responses by 9
July 2004.
As you know, the Government has been considering
ways in which it can meet the Committee's request for enhanced
scrutiny of export licensing decisions. In the course of his evidence
to the Committee in February, the Foreign Secretary indicated
that we had been looking within Government at enhancing retrospective
scrutiny. I am now in a position to set out our proposals.
We all share the objective of promoting as transparent
an export licensing system as possible, consistent with efficiency
and commercial confidentiality. That is why we introduced the
Annual Report, and also provided in the Export Control Act for
better scrutiny of secondary legislation, published guidelines
(the Consolidated Criteria) and clear parameters for strategic
export controls. We are also subject to a high level of scrutiny
by the Committee, which has increased very significantly in recent
years. Furthermore, we are committed to improving efficiency in
the export licensing system, and for the first time ever, achieved
the over-arching target of deciding on 70% of SIELs in 20 working
days last year. The number of long outstanding cases is also at
the lowest it has been for some time.
We now want to build on these innovations, accepting
that more can be done to achieve greater accountability and transparency,
whilst respecting commercial confidentiality and the constraints
imposed by the resources available to us.
The three main proposals are:
— to move to quarterly statistical
reporting via the internet;
— to use a clearer format; and
— to prepare a separate quarterly confidential
report for the Committee alone. This will cover enhanced information
on refusals; and lists of extant OIELs, neither of which it would
be possible to include in the published reports because of security
considerations and commercial confidentiality.
We believe that these proposals would enhance
the Committee's scrutiny of export licensing decisions by publishing
licensing data more frequently and to a greater level of detail
than currently. In shaping them, we have taken account of the
specific areas in which the Committee has requested that additional
information is included in the Annual Report.
In addition, we need to be sure that we do not
compromise industry's legitimate concerns about confidentiality.
As now, no commercially confidential data will be included in
the new reports.
We have consulted industry informally on the
new proposals. They have some concerns that more frequent publication
increases the risk that information on licences (and especially
temporary licences to allow demonstration) could alert competitors
to a business opportunity, where a contract has not yet been signed,
and could therefore jeopardise a sale. However, we think this
risk is low we are proposing to publish the data three months
after the end of the quarter in question, not immediately and
is outweighed by the public interest in increased transparency.
At present the delays in publication up to 18 months for licences
issued at the start of the calendar year are unnecessarily long.
The Committee has also asked for more information
on refusals and on OIELs. We propose to provide this to the Committee
in confidence. I am afraid however that, because of its inherent
sensitivity, we are only able to provide the Committee with end-user
information following careful checking that to do so would not
compromise commercial confidentiality. As such, end user information
cannot routinely be provided for all export licence applications,
even in the confidential reports. We have looked at whether we
could provide information on categories of end users (eg government/non-government),
but the limitations of our current licensing databases mean that
this is not currently possible.
It is particularly important that the Committee
respects the confidentiality of any information provided to it
as such, including the quarterly confidential reports. I mention
this because the Committee, in its last report, chose to publish
end user information which the Government had provided to it in
confidence. Disclosure by the Committee of information in the
confidential reports would of course lead us to review whether
or not these could be continued.
I attach a paper giving more information on
the proposals. They represent a step change in the level of transparency
offered to readers of the Reports.
Having, as we committed to do, considered the
issue very carefully, the Government remains of the firm view
that prior scrutiny of export licence applications raises
unacceptable constitutional, legal and practical difficulties
and does not intend to take this issue further.
I look forward to receiving the Committee's
comments on these proposals. We would then hope to implement them
as soon as possible, ideally by publishing in July the data for
licences issued in the first quarter of this year. I should be
grateful if the Committee could provide a response by 9 July 2004.
I am copying this letter to Jack Straw, Geoff
Hoon, Hilary Benn, and the Cabinet Secretary.
Patricia Hewitt
June 2004
| 
