Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 80-86)


21 NOVEMBER 2007

  Q80  Mr Jenkin: But we will now be under an international obligation under this Treaty to share that technology which at the moment we are not under? That is correct, is it not?

  Mr Hayes: No, we are not under an obligation to share technology at all. It provides an opportunity for us to do so—

  Chairman: I think we have understood that. I want to move on now. The prospects of ratification; Kevan Jones?

  Q81  Mr Jones: In terms of ratification in the US—and quite a few of us have had the experience of meeting Congressman Hunter—what is US industry doing in terms of ensuring in lobbying that this will be ratified throughout the Senate?

  Dr McGinn: US industry, as I mentioned, has been very supportive of the Treaty in principle but US industry is also very keen to see how the implementing arrangements will work because, as we have discussed, the real devil is in the detail, so to speak, and how this regime will be set up will govern how useful it is. We have seen the Government on the US side as forward leaning as I have seen them trying to make this a very useful regime. One previous effort was done with the Joint Strike Fighter to try to do something through global project authorisation. That did not work and therefore the Governments have tried to make this as useable as possible. We have not seen the implementing arrangements so we cannot really comment on those. So far as your question on ratification, we have had some initial discussions with staff in the US Senate and there have been some discussions with members of the Senate as well. The responses we have heard have all been very positive in the sense that they see that this is a recognition of the strong relationship we have but, that said, one thing they want to see before they approve the Treaty are the implementing arrangements. They want to see how the mechanism will work, but in our discussions the underlying assumption—and again I cannot speak for the US Senate—is that this is a good thing and the prospects look pretty strong for passage.

  Q82  Mr Jones: Has US industry been lobbying hard for this?

  Dr McGinn: This is a national security priority for our two Governments. That is the perspective that we have taken. It was not done as an industry initiative so we do not want to get in front of the Governments. We have taken the approach where we had some initial conversations and now we want to wait until the implementing arrangements are complete and the Senate has had time to consider them, but we will very likely be strongly supportive with members in the US Senate.

  Q83  Mr Jones: That sounds like a "No" to me.

  Dr McGinn: No, that is not the case.

  Dr Wilson: Could I give a perspective here?

  Mr Godden: I will as well.

  Dr Wilson: In the UK, GD UK has worked through the trade associations to get its point of view across, and we are doing exactly the same in the US. Underlying that, because we have specific issues on ITAR and TAAs, we have been lobbying quite hard for improvements to the system in a much more general sense than this specific Treaty. We have done that directly into the State Department at the normal governmental level and we have involved the UK MoD as well in that because these are things that affect the UK. I think we have been fairly even-handed in the way that we have approached this both in the US and the UK through the trade associations which is the right way to engage with government when it is a government-to-government deal.

  Q84  Mr Jones: Let us be honest, Mr Wilson, we saw the ITAR waiver and other things fail not because the two Governments did not agree but because the people on the Hill just did not want this and stopped this. Surely in terms of both trade associations and industry, if this is actually going to go through the Senate a hell of a lot of work has got to be done with the Senate because Senators I have talked to do not have a great deal of understanding of some of these issues. Although government-to-government relations might be good and everybody might be slapping themselves on their backs in the embassies saying how wonderful it is, if it does not get through the Senate, frankly, it is a waste of time, is it not?

  Mr Godden: Can I comment having just come back from the US and discussing with the trade associations in the US this very point. I came back last week from Phoenix. My interpretation is that the associations are very active. Whether they are active enough, I cannot judge, but they are active, they are very positive about this Treaty and they are promoting the idea of the Treaty. I cannot say any more than that. I cannot comment not being on the Hill all the time but from the positive mood in SBAC's equivalent association, the AIA, of which Jerry is a member, my observation is they are very positive and are campaigning for it.

  Mr Havard: They are being very careful about who they bankroll to be the next President as well.

  Q85  Chairman: Our next witnesses are waiting. I said that I would ask you a few questions about DESO. I will ask you, Mr Godden, one question about DESO because I want to get on. The decision to abolish DESO—and this has got nothing whatever to do with the American Treaty and it will not form part of our report—which in my own personal view was a bad decision, is one which has been taken. The operation now moves to the Department for Business, Enterprise and Regulatory Reform. What in British industry's view are the key safeguards that need to be put in place in order to ensure that the new regime is as helpful as possible to the British defence industry and to the British military?

  Mr Godden: We remain disappointed that that was done. However, we have moved on and the two key things from our point of view are the quality of the leadership of the new unit and the fact that it needs to remain as a unit and not be dispersed in some manner. From our point of view, the remaining unit with strong leadership reporting into the ministers is absolutely essential, and secondly, the continued support by the Ministry of Defence and the Armed Forces on the whole concept of defence exporting in the field round the world—

  Q86  Chairman: —with uniformed personnel?

  Mr Godden: With uniformed personnel and with equipment, ships, etc., that is essential and in fact that is probably where our worry has shifted as a result of the budget cuts which have been imposed on that Ministry. Our concern is strong leadership of a separate unit within UKTI and a continued commitment by the Ministry of Defence, tough as that may be within the budget cuts, to the support of defence exports. Those are the two key points.

  Chairman: That is very helpful. It being now two minutes past your witching hour you are just about to turn into pumpkins, so if I may say thank you very much indeed for a very helpful session. You have managed to get through a lot of ground with great discipline. We are most grateful to you all for coming.

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