Examination of Witnesses (Questions 120-139)
MALCOLM WICKS
MP, MR GLYN
WILLIAMS, MS
JAYNE CARPENTER
AND MR
DAVID WHITEHOUSE
13 MARCH 2006
Q120 Chairman: So they are aware
of this, are they? Revenue and Customs were advised that this
took place and that officials told these guys to stop so we can
ask Revenue and Customs what action was taken subsequently.
Mr Williams: Yes. They had two
officers at the fair.
Malcolm Wicks: They were issued
with warning letters by HMRC but you would have to pursue with
HMRC as to exactly their activities.
Q121 Judy Mallaber: You said that
when you saw this evidence that we have had it caused you concern.
You are not saying that that was the first you knew about it;
you are just confirming that you did have officials at the fair
that did pick up the problem?
Malcolm Wicks: Soon after I became
Minister I was told about this and it distresses me that that
is happening. We have all been at big conferences and exhibitions,
sometimes speaking at them or whatever. Sometimes there will be
things exhibited that should not be and the important thing to
do is to find out, act on leads and take action. Action was taken.
Q122 Chairman: I accept that action
was taken and that is commendable but, if it had not been for
an investigative journalist who had a pass to visit the arms fair
and if he had not observed this, would we know about it now?
Malcolm Wicks: I alluded to that
earlier. You could well say why did it take an investigative journalist.
Q123 Chairman: So that the record
is clear, what is the answer to that question?
Malcolm Wicks: It is regrettable.
I do not have the materials in front of me but I think some of
them were not prominent. There was not a great display. Some of
them were somewhat buried. I am told that was the case and it
is just a question of what is reasonable. We have laws on this
in this land and they should be obeyed and enforced but sometimes
they are broken. Where they are broken, the authorities have to
take action. This is an instance.
Q124 Chairman: We are all required
to have TV licences but we do not just leave it at that. We have
these vehicles chasing us up and down streets checking that we
have TV licences. In this case, if serendipity had not spotted
this presumably we would not know about it and that raises an
obvious question about the enforcement of our legislation which
is why we are probing these questions.
Malcolm Wicks: It also raises
the point that we are still talking about relatively new laws
and new policies. They should not be forgiven but some foreign
companies may not have been as fully aware as they should have
been, despite what we said to the exhibition organisers.
Chairman: To the government's credit,
the statement on torture equipment goes back to 1997.
Q125 Robert Key: Minister, in your
desperate attempt to cut the number of jobs attributable to the
Civil Service and the DTI, you were forced to see if you could
outsource the ECO. Were you very disappointed that you had to
withdraw from that exercise?
Malcolm Wicks: No.
Q126 Robert Key: How finely balanced
a decision was it?
Malcolm Wicks: In terms of administration
there were pros and cons. Those who argue for outsourcing I always
feel to some extent are arguing for an unknown quantity. I do
not take the view that the grass is always greener somewhere else.
In the end a judgment was made, which ministers endorsed enthusiastically,
that we could manage the thing ourselves, albeit with smaller
staff numbers but cost effectively and efficiently.
Q127 Robert Key: Seriously, it was
suggested that you had downward pressure on numbers, that the
Foreign Office wanted you to get much more friendly with certain
states who you were not allowed to export the military goods to,
that the Ministry of Defence were dead against it and it was a
very finely balanced argument ranging across a number of government
departments. Is that a fair representation?
Malcolm Wicks: It is not the representation
I have seen or heard. Things pull in different directions. Genuinely,
what you said about the Foreign Office wanting to get friendly
I have not heard at all. This is the first time I have heard that.
Q128 Robert Key: We are always pleased
to help.
Malcolm Wicks: It is always a
pleasure to come to select committees and learn of new hypotheses.
Q129 Robert Key: The export industry
was quite strongly opposed to this, as were the NGOs. Did they
make strong representations?
Malcolm Wicks: I heard different
voices, yes.
Q130 Robert Key: Do you agree that
there is a period of stability now for the ECO? There will not
be any attempt now to downsize them?
Malcolm Wicks: I think there is
a period of stability. We have made the decision. We are not about
to revisit it. Whether colleagues in the distant future revisit
it is a matter for them. As the Minister responsible for this
immediately, I personally feel more comfortable about it being
within the public service.
Q131 Malcolm Bruce: What you have
said is reassuring. As you will recall, this started in the previous
Parliament and I think I asked Patricia Hewitt about it in oral
questions. Her reply was that she had no plans to privatise the
export credit guarantee department, for which I think there is
some merit, when she knew perfectly well that we were asking about
this organisation, which you then answered after the election
as not being the case. It was interesting to us that the industry
itself sees no case for a private Export Control Organisation.
Can I press you as a matter of government policy? Is the Export
Control Organisation simply an instrument of policy that should
be within government and the privatisation or outsourcing of it
is really not compatible with the role that we are trying to secure,
namely the prevention of arms getting into the wrong hands? There
is a conflict of interest involving a private agency.
Malcolm Wicks: One dimension is
that this needs to be run efficiently and, given our objectives,
cost effectively. That is one dimension to the argument. If one
day in the distant future someone revisits this, that will be
up to that government, but I said earlier to Mr Key that as the
Minister responsible I feel more comfortable about this being
within the domains of the public service. There are certain issues
for government which are so sensitive—and this is certainly
one of them—where that would be my desired outcome.
Malcolm Bruce: I am glad to hear it.
Q132 Mr Borrow: The department sought
advice from ASE Consulting and ASE Consulting gave us the view
that it should not be outsourced but amongst the findings of ASE
Consulting was that unless the department continued to invest
in this area there was a danger that the functions would not be
met. Obviously, you mentioned that this was a new area of work
and there are signs that in certain areas perhaps controls are
not being implemented as tightly as many people would wish. Do
you accept that there is a resource side, not simply a stacking
side? In a general sense, there is a duty on the department to
ensure that there are sufficient resources devoted to this area
to make sure that the functions as laid down by Parliament are
carried out efficiently and effectively?
Malcolm Wicks: I am satisfied
that there is adequate resource. We face this in other parts of
government but I do not think that head count is always entirely
correlated with effectiveness. The head count is going down. I
am satisfied that we are running the operation effectively. Obviously,
there are always judgments to be made about where we use resources.
Should we have two or three people on these websites, for example,
or not? Of course there are judgments to be made but they are
judgments you would have to make if you had double the resources.
There are always those judgments to make in any organisation.
Q133 Mr Borrow: Would you agree with
me that it is reasonable in the early days of the implementation
of this policy to keep the resource aspect under constant review
and be prepared to listen to those organisations with a direct
interest in the effectiveness of these controls when concerns
are expressed that perhaps they are not being implemented as effectively
as Parliament would have intended? I recognise it is early days
but there are at least concerns amongst many people that, after
a couple of years, things should be a bit tighter than they are
at the moment.
Malcolm Wicks: Of course I agree
we have to listen. As the Minister responsible I need to make
sure that I am getting enough resource for the ECO as I think
and am advised is appropriate. At the moment, with strong management,
greater use of IT and so on, we are doing the job well.
Q134 Mike Gapes: Can I pursue this
ASE review? It was concluded in December 2004 but not published
until after the election in June 2005. It contains rather strong
criticisms of the IT systems in operation, including, it says,
"Specifically, the Department needs to invest now"—we
are talking about the Department of Trade and Industry—"in
additional resources and deployment of pan-government IT/IS systems
if they wish [the Export Control and Non Proliferation Directorate]
to make a step change in its operation." I understand that
£157,000 was invested, according to a letter we received
in December, on small scale IT systems but clearly you need to
do a lot more than that if you are going to get a pan-government
integrated system that works efficiently, rather than what is
described as a wide range of disjointed IT systems. Can you tell
us what progress has been made so far in solving that problem?
Malcolm Wicks: The ECO at the
moment is currently reviewing proposals to replace its main licensing
database with new IT systems. The issue of pan-government is something
we touched on earlier. We would need to evaluate that carefully,
even if we had the resource because obviously there are issues
about confidentiality of data of HMRC et cetera.
Mr Williams: It is accepted that
the IT we have could be improved. Management consultants always
say that but in this case it is largely true. We are looking to
improve the way exporters first apply to us to make that more
of an electronic process. We are looking to improve the work flow
systems within the ECO and to join up electronically with the
FCO, the MoD and DFID so that we can send them licence applications
electronically and get them back electronically and be able to
extract more management information and data from the systems.
Q135 Mike Gapes: Where are we with
this review? What you have just said is hardly the significant
investment in IT that was called for. Is the review at a point
where we could say that there is agreement to go forward or nearly
go forward on a business integration of the type that was called
for, or are we just doing a kind of sticky paper and Sellotape
exercise to try to get over the cracks and pull the thing together
in an ad hoc way? Is this going to be a systematic improvement
so that the systems are integrated and work efficiently and we
do not have the problems of the ECO depending upon different computer
systems and different departments which do not talk to each other?
Mr Williams: We would like to
make it as systematic an IT system as possible. It is not easy,
as I have discovered over the last three years since I have been
director—and this has been talked about during that period
in varying forms—to link up IT systems across different
government departments that have their own security protocols,
for example—that is a big issue—and their own IT systems
and so on. This is a serious proposition. We have been drawing
up detailed user requirements. It is an investment of the order
of two, three to four million. We have to make sure the business
case is right because the running costs of the ECO are four to
five million a year. As soon as you start talking about an investment
more than your running costs, that raises questions. The systems
we have at the moment have been described as disjointed by ASE,
which is true. The performance levels within the ECO, which are
a great credit to the staff, despite the head count reductions,
have been excellent since 2003. One has to see all this in perspective.
We are not in a disastrous situation where we need to invest endlessly
in IT to rectify it. We have a sound base to build on.
Q136 Mike Gapes: When are we going
to get the decision?
Mr Williams: I hope that we will
move into the procurement phase of the IT project in the next
two to three months.
Malcolm Wicks: I have been in
one or two areas of government where the grand computer solution
has not always worked entirely efficiently and on time.
Chairman: We were not going to remind
you of that.
Q137 Mike Gapes: Can I refer to the
Foreign Office Prism system which you will see if you read the
annual report of the Foreign Affairs Select Committee which was
published last week. We also have some problems in departments
other than those which you worked in.
Malcolm Wicks: That is my Easter
reading.
Q138 Linda Gilroy: Various references
have been made to head count loss. Between 2003 and April 2006
there will have been a staff cut of a quarter down from 146 to
117. How has this affected activities? What activities have been
cut and how has it particularly affected the availability of ECO
staff for UK and international outreach?
Malcolm Wicks: I am sorry; again
I have to defer to my colleagues who are at the operational end
of this. As you know, we are not alone in government in terms
of facing head count reductions. A judgment has been made, I think
appropriately, that we need to reduce the size of the Civil Service
and it is not surprising therefore that we are having to make
our own contributions to that.
Q139 Linda Gilroy: A head count loss
of a quarter when it is a very new organisation merits some explanation,
especially when sometimes that follows IT being put in which increases
productivity, but we have just heard that these head count losses
are not following in advance of IT being procured.
Mr Williams: We are not a new
organisation. The new controls have been in place since 2004 but
they are obviously building on the existing controls. I have not
cut any single function that we do in the ECO because we do not
have any optional extras. We have achieved a reduction by a combination
of measures such as restructuring. Not all the units were arranged
very logically and they have been better integrated. We streamlined
business processes. I think the Committee has already had evidence
in the past about innovations like the so-called smart front end
filter mechanism at the front end of the process. We are giving
staff better training in export control so that they are more
flexible and deployable. The joined up working—this is a
cliche« but it is true in this case—of the government
departments has become much better. The ECO is only one cog in
the export licensing wheel. The support we get from the FCO, the
MoD and DFID is crucial. The system as a whole is only as strong
as its weakest link so it is not just a question of getting the
ECO up to strength; it is a question of keeping everything together
in tandem. I think we have become much better at that and we have
put a lot of effort into outreach to exporters to improve the
quality of the applications they put in to us in the first place,
which helps.
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