Examination of Witnesses (Questions 140-159)
MALCOLM WICKS
MP, MR GLYN
WILLIAMS, MS
JAYNE CARPENTER
AND MR
DAVID WHITEHOUSE
13 MARCH 2006
Q140 Linda Gilroy: When we had evidence
on 31 January from representatives of the industry, they told
us that because of staff cutbacks there were no longer any in-house
capabilities to provide expert guidance on encryption matters.
Is that right? Why did you make that particular cut and are there
other areas of technical expertise that are no longer available?
Mr Williams: We have expertise
at our disposal. It does not need to be always within the ECO.
For encryption we can go out to GCHQ and the MoD, for example,
and solicit advice from them. I have no worries about our ability
to tap into expert advice that we may need.
Q141 Linda Gilroy: You can get that
and commission it from other departments. What is SPIRE?
Mr Williams: That is the IT programme.
Q142 Linda Gilroy: That is an acronym
of the IT?
Mr Williams: Yes.
Q143 Linda Gilroy: The ECO currently
has plans to reduce the head count by a further 10 posts as the
information technology changes are fully implemented?
Mr Williams: Yes. If I can bring
the Committee up to date, the current head count is 110. Substantively,
that is 115 because we have five IT experts who are effectively
working for us, who have been transferred to the centre at the
DTI. We expected that further IT investment might allow us to
reduce the head count by, say, another 10 but I cannot guarantee
that because that depends on exactly what form of IT investment
we decide we can afford and implement.
Q144 Peter Luff: Can I ask two questions
of the director and the Minister? Can I ask the director, first
of all, how much enthusiasm is there for work in your organisation?
When I was a specialist adviser at the DTI, it was regarded as
something of a pariah status for the rest of the department because
it did not do policy; it just administered which was a very dreary
task for civil servants. That was a problem then but now there
has been cut upon cut upon cut. You must be a very demoralised
bunch of people.
Mr Williams: Not at all. I have
a tremendous staff and I am very proud of the achievements that
they have made over the last three years. It is not true that
we do not do policy. Much of the discussion within your Committee
is about policy. We are responsible for the legislation. It is
true the FCO and the MoD obviously in many ways lead on policy
but the DTI is responsible for legislation, the Export Control
Act and all the regulations made under it, all the EU stuff, all
the sanctions legislation, and there are some important issues.
Q145 Peter Luff: You are satisfied
with the morale of your staff in these rather difficult circumstances?
Mr Williams: The whole of the
DTI has faced cutbacks and we are not immune from that. We are
not a special case in any respect.
Malcolm Wicks: The ECO is regularly
set challenging and detailed questions by this Committee which
stimulate of course.
Q146 Peter Luff: You have one of
the most important jobs in government at present as Minister for
Energy. How much time do you spend on the ECO?
Malcolm Wicks: I certainly spend
a great majority of my time on energy policy which, wearing one
hat, would no doubt please you but I do not neglect my other responsibilities
and this is one of them. When I talk to officials in the ECO,
yes, like any other area of government there is an amount of administration
and, I guess, routine work to go through but officials are very
much aware that they are at the forefront in dealing with some
immensely important issues of national concern. I think they take
their work very seriously, as I do.
Q147 Peter Luff: You are happy that
your day job as Energy Minister does not get in the way of an
effective supervisory role for the ECO?
Malcolm Wicks: Yes.
Q148 Chairman: How much was the ability
to cut staff made easier by the fall in the number of standard
individual export applications? I think they fell by about 13%
in 2004 and it clearly required more effort to evaluate an application
for open licences.
Malcolm Wicks: You probably have
the data that I have on this. There has been something of a fall
since the early part of the century, I suppose I could say. There
were about 9,000 SIELs processed in 2004 and a similar number
in 2005, while the number of multiple ones issued had a blip upwards
in 2004, which I am advised was for technical reasons, but I think
they have been relatively steady as well. I know the Committee
is concerned about this but when I look at the data does it bear
it out, Chairman?
Q149 Chairman: In terms of applications
received, yes, it does bear it out. Do you accept that the greater
use of open licence does reduce transparency?
Malcolm Wicks: Yes. We need to
balance here the number of applications against the numbers issued,
yes, and the ones issued—the OIELs, the multiple ones—has
been fairly steady, I believe.
Q150 Chairman: I am assuming that
the ECO staff deal with applications.
Malcolm Wicks: Yes.
Q151 Chairman: The figures that we
have indicate a very substantial decline in SIEL applications.
That would seem an obvious way in which it would be possible to
save staff without too many dire effects elsewhere in the system.
What has happened is that we therefore have a higher proportion
of applications being open licences which you have accepted reduces
transparency. We do not have data on volumes and values and so
on. I do not know whether you regard this as a problem in a way
that some members of this Committee might regard that as a problem?
Malcolm Wicks: The short answer
is no, but I will let Mr Williams answer. I hope that we have
the same statistical table in front of us. The number of SIELs
processed has gone down. In 2000 it was about 10,500.
Q152 Chairman: We have got it from
page 20 of the annex in the document you gave to us.
Malcolm Wicks: I have got it going
down from 10,500 number of SIELs processed in 2000.
Q153 Chairman: I am talking about
applications received.
Mr Williams: As we have seen in
the process there is a slight difference but not much. Between
2000 and 2003 the number of SIELs processed or received was in
the 10,000s and something. In 2004 and in 2005 it was just over
9,000, so there has been a drop of just over a thousand. It has
been stable.
Q154 Chairman: At around 10%.
Mr Williams: Yes. It has been
stable in 2004 and 2005. The number of OIELs which were received,
processed and issued has been stable, except that in 2004 the
number received went up from the 600s to 806. I think that was
linked to the advent of the new controls with companies getting
in open licence applications in advance of those coming into force.
Q155 Chairman: There are two separate
issues, are there not, between what has happened and what your
attitude is towards what seems to be a greater use of open licences.
We have heard what you have said and we will, as a committee,
think further on that and perhaps even have a recommendation on
that issue as well, Minister, who knows?
Malcolm Wicks: We look forward
to that.
Q156 Chairman: We look forward to
drafting it as well.
Malcolm Wicks: If it is a 10%
decline or whatever it is, then it is 10%.
Chairman: That is quite a lot of staff
I would have thought, but there we are.
Q157 Mr Crausby: I would like to
ask a couple of questions on how responsive the open licence system
is to security concerns. For example, let's take a UK company
exporting computer components to a company within the EU under
an Open General Export Licence. Then the recipient country's security
services discover that the company has been taken over by a terrorist
organisation. The computer components would then obviously be
of some concern. Firstly, how would you stop the UK company exporting
further components? Secondly, will the ECO have records of other
UK companies and their exports to that initial front company?
Malcolm Wicks: The short answer
to the first part of the question is that if we became aware that
someone in the UK was trying to export to a company that had been
taken over by a terrorist organisation, then they would not be
given a licence. That must be the simple answer, Mr Williams,
must it not?
Q158 Mr Crausby: The point I am making
is that these things move on part-way through. How do we deal
with that?
Malcolm Wicks: Do you mean if
after the licence has been granted? If it had already been exported
then it has been exported, I guess, but it would not happen again.
Q159 Mr Crausby: How would we do
that? We would clearly clamp down on that. What information would
we have on other UK companies? Would the information be available
that other UK companies were exporting into that front company?
Mr Williams: If you are talking
about exports under an individual licence, we can revoke the licence
if the export has not already gone. We would ask the authorities
in the other country to see what they could do at their end. We
would put that end user on our watch list to ensure if it came
up in future it would get a red flag in the system and we would
not issue a licence to it.
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