Examination of Witnesses (Quesitons 87-99)
RT HON
BARONESS TAYLOR
OF BOLTON,
MR STEPHEN
FRENCH, MR
TONY PAWSON,
MS GLORIA
CRAIG AND
MR PAUL
LINCOLN
21 NOVEMBER 2007
Q87 Chairman: This is a continuation
of the session into the UK/US Defence Trade Co-operation Treaty.
May I begin, Minister, by welcoming you to your first meeting
of this Select Committee, so new into your job. You are particularly
welcome since you and I were Whips together and that is a community
which nobody ever can break. I understand that you would like
to begin by saying something to the Committee.
Baroness Taylor of Bolton: Thank
you, Chairman, and thank you for those comments. I do look forward
to working with the Committee. I am afraid that before I introduce
the team to the Committee this morning I have to say that there
was a loss of an RAF Puma helicopter near Baghdad in Iraq last
night and two Service personnel were killed. Their next of kin
have been informed. Two other personnel were seriously injured
and they are being treated in hospital. Obviously we cannot speculate
about the cause of the incident but an RAF Board of Inquiry has
been convened and is en route to Iraq to start that investigation.
I thought it right to tell the Committee because obviously this
will become public news and you have an interest in all of these
issues.
Q88 Chairman: I am grateful. We on
this Committee have travelled regularly on those Pumas in Baghdad
and we were and remain utterly astonished at the things that they
do and the perils that they face, so thank you for telling us.
Minister, would you like to begin by introducing your team and
then would you like to go on to tell us how the Treaty is likely
to work and what the arrangements will be?
Baroness Taylor of Bolton: Can
I introduce the team. Tony Pawson is head of the Defence Export
Services Organisation. Gloria Craig is Director General International
Security Policy and has been leading for the MoD on the transfer
of the defence trade promotion function of the MoD to UK trade
and investment. Stephen French is Director General of Acquisition
Policy—all these wonderful titles—and he has been
leading within the MoD on the Trade Treaty. Paul Lincoln is Head
of Defence and Security Policy from the Cabinet Office, who has
been leading on the negotiation of the Treaty. They are here to
answer detailed questions as well as add any other information
that they think is appropriate. Obviously I am new to this position
but I am quite impressed with what I have inherited in terms of
the discussions that have taken place on the Defence Trade Co-operation
Treaty. I think everyone will recognise that we have very close
links with the United States and that defence relationships between
the UK and the US are very good. We are always seeking to improve
them, not least for the benefit of our front-line troops. Part
of the benefit that will come from going down the route that is
being suggested is that access to the best technology would help
us to support even more our troops on the front-line. We do believe
that the Treaty represents a major opportunity to improve our
ability to operate alongside the United States. It is a long-standing
policy of both sides that that is the direction in which we should
go and we think that both UK and US forces operating together
will benefit from further co-operation. Obviously the threat that
we are facing is an evolving one, it is changing, no-one anticipated
ten years ago the nature of the threats that we have today, so
flexibility and being up-to-date are absolutely essential to everyone.
At present, in regard to UK/US defence trade, or indeed any trade,
there are barriers, there are administrative hurdles that have
to be overcome, and we think if we tackle those administrative
barriers properly and can remove those barriers, it will allow
the UK and the US defence industries to co-operate in new ways.
As I said earlier, there is a great deal of co-operation at present
but we think that there is scope for more and we think that there
is real benefit to come from this Treaty on both sides. Discussions
have been going on for some time, it is not a new issue, but I
think that the approach that has been adopted this time is one
that those working on it are quite confident can lead to some
agreement. We had visitors from the States last week talking about
some of the detail (because there are still some detailed arrangements
that have to be worked out). There is agreement in principle.
Prime Minister Blair and President Bush did sign the Treaty so
there is agreement in principle and there is goodwill on both
sides. Most of the implementing arrangements have been agreed
but there are still some outstanding issues which officials have
been working on very closely with their American counterparts.
Chairman: Thank you very much, Minister.
I think it would be right, because you said you were impressed
by what you had inherited, for us to express our gratitude to
your predecessor who had worked incredibly hard and very effectively
on this Treaty and also to Tony Blair who signed the agreement
with the President. Key to the Treaty will be the implementation
arrangements; Mike Hancock?
Q89 Mr Hancock: Minister, you actually
said that the implementation arrangements were nearly completed.
When would you envisage that process being completed and when
would you expect to publish them? We heard from the defence industry
prior to you coming in that they were wanting to know and wanting
to see what had actually been finally decided. Can you update
us on when you would expect to complete them and when you would
expect to publish them?
Baroness Taylor of Bolton: As
I said, we did have officials from the States over here last week.
I did meet them but my officials obviously spent a great deal
more time with them. Officials are going over to Washington next
week to try to finalise some of those arrangements. There are
a couple of issues which are outstanding which will require some
discussion and we are hopeful that we will make progress, but
we cannot at this stage absolutely guarantee it because we have
to protect our position on these issues. It is looking optimistic.
In terms of the actual publication of the implementing arrangements,
it is not anticipated that they will be a published document.
Obviously we will have to be willing to discuss these with the
Committee and one possibility might be to share with the Committee
in confidence what actually is agreed once those are concluded,
but it is not anticipated that that will be a published document.
Q90 Mr Hancock: Would that be different
to what the Americans will do? We heard previously that the anticipation
was that the American Senate, in particular, would not agree to
ratify this Treaty without seeing the published implementation
arrangements. So how can it be that we would only get them in
an unpublished form through a confidential meeting, whereas—
Baroness Taylor of Bolton: There
will be a Memorandum of Understanding when this is completed.
Perhaps Paul would like to comment.
Mr Lincoln: Indeed. We are still
in discussion with the US on exactly the form in which we will
place those implementing arrangements to either the Senate or
to the Committee here. Clearly, we are prepared to share that.
Of course, the difference is—and there will be concerns
by industry on whether or not we need to share those as well—the
implementing arrangements set out the commitments between the
two governments are not necessarily the commitments which we place
directly to industry. We will, of course, share and work up in
detail with industry the exact requirements which need to be put
in place with them. So, clearly, those will be done in detail
with those who will be affected by this.
Q91 Mr Hancock: My question was that
we were told that the Senate made it quite clear that they would
only ratify this Treaty subject to full documentation on the implementation
arrangements. As far as I know, they offered no caveats to that,
it was as straight as that, but you are now suggesting it is different
to that.
Mr Lincoln: I cannot speak for
my US counterpart about the arrangements which they have come
to with Congress. They will be speaking to them to give them briefings,
I believe, starting Monday next week, to talk through, in exactly
the same way as we doing now, where we have got to on any outstanding
issues. However, it will be for them to decide whether or not
to give detail, but I would expect, quite clearly, we would not
expect the situation to be different on each side of the Atlantic,
with one side putting the Treaty implementing arrangements into
the public domain and the other side not.
Q92 Mr Hancock: Would the implementation
arrangements be simply an addition to the Treaty or would they
have to be subject to further ratification?
Mr Lincoln: As we envisage it
now, the implementing arrangements will be a Memorandum of Understanding
between the two governments which, as such, would not require
further ratification.
Q93 Mr Hancock: But if that Memorandum
of Understanding is not a public document how will industry know
that this Treaty is beneficial to what they hoped it would deliver?
Mr Lincoln: Having the Memorandum
of Understanding between the two governments is very different,
as I said, to what we then put to industry and say: "These
are the requirements which will be placed on industry as a result
of this Treaty", which they will have very public access
to.
Q94 Mr Hancock: Would you expect
the British Government to ratify this Treaty without those implementation
arrangements being made public, at least to this Committee?
Mr Lincoln: I am not going to
answer that.
Baroness Taylor of Bolton: I did
say that it was clear to me that the implementation arrangements—
Q95 Mr Hancock: Before ratification.
Baroness Taylor of Bolton:—
would have to come to this Committee.
Q96 Mr Hancock: Before ratification.
Baroness Taylor of Bolton: I cannot
see any reason why not, but I would take advice on that before
I made an absolute promise. Can I just go back to one point you
said about industry knowing? I think it is important to stress
that industry has been involved in the background to a lot of
these discussions and it is not envisaged that we will be agreeing
to anything that will take industry by surprise or which will
cause them difficulties. Their approach and their concerns, if
there are any—their situation—has been taken into
account in all of these discussions. So industry will not be unsighted
or surprised by the kinds of things that are being discussed.
Q97 Mr Hancock: Were there issues
that they have raised during the consultation on this that you
have not been able to get a satisfactory response from the US
on?
Mr Lincoln: I am sorry. Could
you repeat the question?
Q98 Mr Hancock: Were there issues
raised by industry in this country on the implementation arrangements
on which you have not been able to negotiate a satisfactory conclusion
with your US counterparts?
Baroness Taylor of Bolton: There
are two issues that we have not absolutely got conclusion on,
and they are not issues that industry would be concerned about,
as opposed to government. They are issues we have got to work
through.
Q99 Mr Hancock: So, for the record,
would it be fair to say that all of the issues raised by British
industry in respect of the implementation arrangements for this
Treaty you have been able to satisfactorily conclude with your
US counterparts?
Mr Lincoln: I think it would be
fair to say that we have taken account of industry's concerns
throughout this and discussed with them—
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