This is a House of Commons Committee Joint Special Report
Business and Trade, Foreign Affairs and International Development Committees
Date Published: 23 January 2024
1. The total value of UK defence export orders in 2022 was £11.2 billion, an increase of £4.6 billion compared to 2021.1 Between 2018 and 2022, the Middle East was the largest market for UK defence export orders accounting for an average of 43% of the total value of orders, followed by Europe (22%), North America (19%), Asia Pacific (6%), Latin America and Africa (both 1%).2 The remaining share (8%) was exported to a mixed or unidentified region. In 2022, the value of UK security export sales was £9.8 billion,3 compared with £8.22 billion in 2021.4 According to the trade association ADS, in 2021-22, the UK aerospace, defence, security and space sectors collectively had 417,000 direct employees, over 20,000 apprenticeships and 2,500 graduates.5
2. The defence and security industry makes a large contribution to the UK economy, sustains thousands of jobs, and plays an important role in the UK’s bilateral and multilateral relationships. At the same time, the export of, and trade in, defence and security goods raises major questions of ethics, national security, and international law.6 The potential consequences of such items falling into the wrong hands are extremely serious, including the violation of human rights and international humanitarian law, the instigation or exacerbation of conflicts, and the proliferation of weapons of mass destruction. The Government consequently needs to exercise significant control over the export of military and dual-use items.7 This control takes the form of a significant and substantial body of licensing regulations, backed up by powers in relation to compliance and enforcement.8
3. The vast majority of export licences issued are Standard Individual Export Licences (SIELs). SIELs allow shipments of a specified quantity of certain items to a named consignee or end-user.9 In 2022, 13,200 SIELS were issued, worth £65.9 billion in total. Approximately £8.5 billion (13%) of these licences were for military goods and £57.3 billion (87%) for non-military goods.10 This was the highest value of SIELS issued in a single year since this data was first published in 2008.11 The second highest was £23.7 billion in 2020 (in cash terms).
4. Since 1999, several House of Commons select committees have worked together—in the form of the Committees on Arms Export Controls (CAEC)—to undertake joint scrutiny of the UK’s arms export licensing regime and practice.12
5. CAEC is not a committee in its own right. It has no members of its own and is not mentioned in the House of Commons’ Standing Orders. It functions by virtue of Standing Order No. 137A which enables select committees to meet concurrently to take evidence and consider draft reports.13 In practice, each of the committees participating in CAEC have often informally identified a delegation of its members to represent it at CAEC meetings.
6. Driven largely by the tenacity and vigorous efforts of successive Chairs, CAEC has kept a spotlight on, and led to, increased transparency of arms export licensing. It has enabled several committees to work together, reflecting differing standpoints in a policy area where there are many competing considerations; and it has benefited from a wide range of members with particular expertise or knowledge of the subject.
7. This said, CAEC is not a versatile model for scrutiny. It relies upon all four committees being represented by a quorum for any formal business to take place. For CAEC to take oral evidence, a quorum of eight is required, compared with the standard quorum of three for select committees. For report agreements, a quorum of 12 is required. This is even higher than the quorum requirements of the Liaison Committee, which as a body represents all Commons’ select committees. These arrangements are not conducive to effective scrutiny of Government licensing and control of arms exports, with quorum sometimes being difficult to achieve and CAEC meetings on occasion having to be cancelled, curtailed, or significantly postponed. This is not in the interests of Parliament, the public, or Government. CAEC’s quorum difficulties have been acknowledged by the Leader of the House.14
8. The Government has stated that it recognises the importance of CAEC’s scrutiny role;15 but its record in submitting itself for the level of scrutiny which the House might expect has fallen some way short. CAEC noted in its Report on Developments in UK Strategic Export Controls, published in October 2022, that it had been unable to secure the attendance of the Secretary of State for International Trade and the Foreign Secretary, to give evidence on Developments in UK Strategic Export Controls, and it had instead been offered junior ministers.16 Its predecessor had had the same experience in 2018.17 Our sense is that Government departments and their Ministers—particularly those holding Cabinet rank—attach greater priority to being accountable to their individual departmental select committees.
9. CAEC added in its report in 2022 that
We have also been frustrated by the length of time it has taken the departments to respond with potential meeting dates, the suitability of the dates offered, especially given the practicalities of securing the attendance of a quorum from four separate committees, attempts to limit this important session to one hour and cancellations on multiple occasions.18
Once again, this echoed the experience of its predecessor, which noted in 2018 that
We [also] experienced significant difficulty in obtaining confirmation that Ministers would be available to give oral evidence to us, with both departments only confirming this at the very last minute.19
10. CAEC also expressed dissatisfaction with the Government’s approach to informing it of new developments, and with its meagre written submissions to CAEC inquiries
The Departments have also failed to adequately inform the Committees of major policy developments and initiatives. For many years the Government has not submitted written evidence specifically addressing the terms of reference of CAEC inquiries, instead sending a one-page letter welcoming the inquiry, highlighting a few policy developments and offering their assistance to our work. The Committees were not notified of the launch of the ECJU [Export Control Joint Unit] Transformation Programme, and before the introduction of the new Strategic Licencing Criteria were given no prior indication that changes to the Criteria were being considered.20
11. We recognise that since the October 2022 Report, the Government has tried to improve its engagement with CAEC by facilitating a visit to the ECJU, a briefing with officials on recent developments and engaging in correspondence.21 Nevertheless, engagement has been slow,22 inconsistent23 and of a lower quality than that which the individual select committees receive from their respective Departments.
12. In January 2023, Mark Garnier MP (who chaired CAEC in this Parliament prior to the International Trade Committee’s abolition) and the Chairs of the four constituent committees wrote to the Leader of the House, inviting the Government to support the establishment of a dedicated committee on arms export controls. The Leader replied on 1 February 2023, saying that she was not convinced that such a change was needed, although she offered to discuss possible changes to the quorum requirements, while noting that any change would need the support of the House.24
13. It might indeed be possible to secure modest changes to quorum requirements to ease some of the practical difficulties faced by the Committees on Arms Export Controls. But the underlying problem—that the Government appears to treat accountability to CAEC as secondary to accountability to individual select committees—would remain. We have therefore concluded that more fundamental changes are required in the approach to scrutiny of strategic export controls.
14. The foundation stone of CAEC’s work has been scrutiny of the UK Strategic Export Controls Annual Reports and associated quarterly reports known as “pivot reports”. Each Annual Report sets out export licensing processes, statistics, policy developments, outreach activity, international policy and information on compliance and enforcement and case studies. The quarterly “pivot reports” provide data on licensing decisions and processing times, a summary of key data trends, and a country-level data report for each country.
15. Since changes to the machinery of Government in February 2023, the Department for Business and Trade has held overall responsibility for the export licensing process. It hosts the Export Control Joint Unit (ECJU), which administers the Government’s export control system, including the issuing of licences for military and dual-use items. The unit brings together policy and operational expertise from the Department for Business and Trade, the Foreign, Commonwealth & Development Office (FCDO) and the Ministry of Defence (MoD). It also leads on production of the UK Strategic Export Controls Annual Reports.
16. The most recent UK Strategic Export Controls Annual Report, covering policy and export licensing decisions in 2022, was published in July 2023.25 During 2022, the reporting period for the Annual Report, the ECJU was located in the then Department for International Trade. The Report provided an account of the roles of the various Government departments and bodies involved in licensing and/or enforcing the implementation of export controls. The Secretary of State for Business and Trade (formerly International Trade) is ultimately responsible for:
The FCDO and the MoD have an important advisory role, because they provide the Department for Business and Trade with advice and analysis on foreign policy, defence and development matters relevant to licensing.26 This includes representation at international fora in respect of many international treaties and agreements to which the UK is a Party. Other departments and agencies, such as the National Cyber Security Centre, advise as necessary but are not represented within the ECJU.
17. CAEC has regularly sought written evidence on Strategic Export Controls Annual Reports and has held oral evidence sessions on arms exports with academics, NGOs, campaign groups, trade bodies and Ministers. In some cases, CAEC has taken the Annual Report as a springboard for an inquiry and report.
18. Scrutiny of Strategic Export Controls Annual Reports must continue, but it needs to take place on a more secure footing. Scrutiny should be conducted by the Select Committee responsible for scrutinising the relevant Department as part of its regular programme of business, with members from other committees invited to guest at evidence sessions where relevant. Crucially, the requirement for a quorum for evidence sessions would apply only to the host committee: members of other committees would attend under Standing Order 137A(1)(e), a relatively new provision which enables select committees to invite members—including single members—from other committees to attend and ask questions during oral evidence.
19. Given that the ECJU is located within the Department for Business and Trade, and that the Secretary of State for Business and Trade is the ultimate decision-maker for the policy framework of the controls, and individual licence applications, and laid the latest Strategic Export Controls Annual Report before the House,27 the core responsibility for scrutiny will rest with the Business and Trade Committee and it will determine how it conducts its business in relation to strategic export controls, alongside its programme of other work. The Business and Trade Committee will extend guesting invitations to the Foreign Affairs, International Development and Defence Committees as and when it conducts oral evidence sessions on Strategic Export Controls Annual Reports. In certain circumstances, it might also be appropriate for members of other committees to attend. Dates for such meetings would need to be arranged well in advance and in consultation with other relevant committees.
20. As afforded in the Standing Orders of the House of Commons, the Committees will still be able to meet concurrently to agree reports. These would be in the names of the participating committees. A participating committee would be any committee for which a quorum was present.
21. It will also be open to the Business and Trade Committee to raise policy concerns with the Secretary of State, in correspondence (possibly in concert with other committees) or during the Committee’s occasional oral evidence sessions with the Secretary of State on the Secretary’s overall responsibilities. We will also expect the other relevant Secretaries of State to make themselves available to attend with the Business Secretary, where required in the scrutiny of the strategic export controls regime. This would entrench direct accountability of the Business Secretary, as decision-maker for overall strategic export controls policy and export licensing decisions, to the departmental Select Committee which is responsible for scrutiny of their policy decisions.
22. The remainder of CAEC’s work has been more reactive and topical. Recent examples include evidence sessions on the effectiveness of sanctions and trade controls on Russia, in relation to strategic exports28 and the impact of the UK’s withdrawal from the EU on export controls.29 We anticipate that work of this nature would continue, as and when circumstances required.
23. Such work would not necessarily be initiated by the Business and Trade Committee: it might instead be more suitable and timely for another committee to take the lead in arranging and hosting evidence sessions, if the policy consequences fell primarily within that committee’s remit. As with evidence sessions on the Strategic Export Controls Annual Reports, we would expect dates for such meetings to be arranged in advance and in consultation with other relevant committees. Nothing in these arrangements would preclude examination of export licences to potential countries of concern.
24. We expect that strategic export controls scrutiny will become even more vital in the near future. For example the UK-US Atlantic Declaration, announced in June 2023, highlighted that technology protection tools needed to be updated to reflect the changing geostrategic and technology environment.30 It envisages export controls, investment screening, sanctions, and research and development security as essential tools to prevent the leakage of sensitive and dual-use emerging technologies, and other export-controlled commodities and technologies. The intention is “to update and more closely align” the UK and US’s toolkits across these areas. The Declaration also committed both nations to work together to ensure that their export control systems work in a complementary way. This will include implementing export controls related to tackling sensitive technology transfers, including “targeting end-uses of concern” and considering a joint approach to “tackling the challenge of intangible transfers”.31 As part of the Declaration, the Government committed to review by the autumn of 2023 the impact of the expansion of the scope of its Military End Use Controls.32 Additionally the UK Government said it intended to consult later in 2023 on updating its export control regime and also on the targeting of end-uses and end-users of concern.33 However, there have been no announcements by the Government on progress with either the review or consultation.
25. As part of the Declaration’s objective of more closely aligning the UK and US’s export control systems, the US has added the UK as a “domestic source” within the meaning of Title III of the Defense Production Act.34 This is intended to help “deepen industrial base collaboration, accelerate, and strengthen AUKUS implementation, build new opportunities for United States investment in multiple strategic sectors, and support our [US and UK] efforts to increase our respective and collective industrial capacity across both clean energy and key technology sectors”.35 The UK also intends to examine “its export control regime to streamline the flow of defence trade among the AUKUS partners”.36 The Business and Trade Committee questioned the Business and Trade Secretary on these matters in September 202337 and it will be important to continue to scrutinise progress on the Atlantic Declaration and AUKUS.
26. As part of the new arrangements set out above, we expect the Government to honour the commitments it made to CAEC on the provision of information such as the Government Internal Audit Agency reports on the implementation of the Mills Review following the Saudi court judgment38 and the regular updates the Government agreed to provide on the new LITE IT system.39
27. In addition, we expect the Government to continue its work on CAEC’s recommendations to increase the transparency of the export controls process and the information contained in the Strategic Export Controls Annual Reports.
28. We note that despite the Government accepting CAEC’s recommendation to provide updates to the Committees on the ECJU Transformation Programme in January 2023,40 it has since decided to not provide any updates on the Programme, other than those published in the UK Strategic Export Controls Annual Report.41 The Government states this is because the “Transformation Programme had closed at the end of December 2022.”42 Seeing as according to the Government’s timeline, the Transformation Programme had already closed by the time it provided its response accepting this recommendation in January 2023, we find this reasoning to be illogical and this inconsistency in response to be unsatisfactory. Any further backtracking or reneging on commitments would be unacceptable.
29. These new scrutiny arrangements represent a shift away from a system which was admired by some. But we believe that the gains outweigh any losses. The core responsibility for scrutiny will rest with the committee that monitors the Government department which holds executive responsibility, and that scrutiny will continue to reflect the concerns of other committees through direct participation by their members through guesting at any oral evidence sessions it might decide to conduct on arms exports. The power to produce joint reports—perhaps the greatest strength of CAEC—can still be exercised under the new arrangements. And procedural requirements will no longer hinder the exercise of scrutiny powers in the same way. We also commit to continue to engage with CAEC’s stakeholders on this important policy area and hold that these new arrangements represent an opportunity to engage with a larger number of individuals and organisations with an interest in these matters.
1 UK Defence and Security Exports, UK defence export statistics 2022, Executive Sumary, Section 3 and Figure 1, November 2023, accessed 11 December 2023
2 UK Defence and Security Exports, UK defence export statistics 2022, Section 4 and Chart 2, November 2023, accessed 11 December 2023
3 UK Defence and Security Exports, UK security exports statistics 2022, Executive Summary, December 2023, accessed 15 December 2023
4 UK Defence and Security Exports, UK defence and security export statistics 2021, Summary and Chart 11, February 2023, accessed 11 December 2023.
5 ADS, Industry Facts and Figures 2023, accessed 11 December 2023
6 Committees on Arms Export Controls, First Joint Report of Session 2022–23, Developments in UK Strategic Export Controls, HC 282, p4
7 Dual-use items are goods, software, technology, documents and diagrams which can be used for both civil and military applications. They can range from raw materials to components and complete systems, such as aluminium alloys, bearings, or lasers. They could also be items used in the production or development of military goods, such as machine tools, chemical manufacturing equipment and computers (Department for International Trade, United Kingdom Strategic Export Controls Annual Report 2021, HC (2022–23) 628, July 2022, p3, footnote 1).
8 See for example, Export Control Act 2002 and Export Control Order 2008 (SI2008/3231).
9 ECJU, Standard Individual Export Licences (SIELs), updated 9 December 2021, accessed 11 December 2023. There are also open individual export licences (OIEL) licences granted to cover multiple shipments of specified items to specified destinations and/or, in some cases, specified consignees. An OIEL is a tailored and flexible licence, which does not specify a limit on the quantity of an item that can be exported and is generally valid for five years (Department for International Trade, United Kingdom Strategic Export Controls Annual Report 2021, HC (2022–23) 628, July 2022, p 9).
10 ECJU, Strategic export controls: licensing statistics: 1 January to 31 March 2023, Tables A and E, accessed 24 October 2023
11 It is noted in the statistical commentary that most of this value can be attributed to a small number of high value licenses.
12 Four committees are currently participating as Committees on Arms Export Controls: the Business and Trade Committee, the Defence Committee, the Foreign Affairs Committee and the International Development Committee.
13 Only Commons select committees may meet concurrently under the Standing Order to consider draft reports.
14 Corresepndence with the Leader of the House, dated 11 January and 1 February 2023, regarding the establishment of a Select Committee on Arms Export Controls.
15 Correspondence with the Leader of the House, dated 11 January and 1 February 2023, regarding the establishment of a Select Committee on Arms Export Controls.
16 Committees on Arms Export Controls, First Joint Report of Session 2022–23, Developments in UK Strategic Export Controls, HC 282, paragraph 13
17 Committees on Arms Export Controls, First Joint Report of Session 2017-19, UK Arms Exports during 2016, HC 666, paragraph 6
18 Committees on Arms Export Controls, First Joint Report of Session 2022–23, Developments in UK Strategic Export Controls, HC 282, paragraph 13
19 Committees on Arms Export Controls, First Joint Report of Session 2017-19, UK Arms Exports during 2016, HC 666, paragraph 6
20 Committees on Arms Export Controls, First Joint Report of Session 2022-23, Developments in UK Strategic Export Controls, HC 282, paragraph 14
21 Please see Formal Minutes of the Committees on Arms Export Controls in Session 2022-23, for a record of the Committees’ formal activities.
22 For example, it took the Government six weeks to reply to the Committees’ letter, dated 30 March 2023, following up the Government Response to CAEC’s October 2022 Report and it took one year from the Committee agreeing to visit (see entry in Formal Minutes for 16 November 2021) the ECJU, for the visit to actually take place (see entry in Formal Minutes for 15 November 2022) with the then Department for International Trade slow to offer dates and twice cancelling planned visits.
23 For example, see below section entitled ‘Government commitments and recommendations’.
24 Correspondence with the Leader of the House, dated 11 January and 1 February 2023, regarding the establishment of a Select Committee on Arms Export Controls.
25 Department for Business and Trade, United Kingdom Strategic Export Controls Annual Report 2022, HC (2022–23) 1681, July 2023
26 Department for Business and Trade, United Kingdom Strategic Export Controls Annual Report 2022, HC (2022–23) 1681, July 2023, pp6-8
27 Votes and Proceedings, 19 July 2023, p9
28 Committees on Arms Export Controls, Oral evidence taken on 7 December 2022, Strategic Export Controls and Russia, HC (2022–23) 927
29 Committees on Arms Export Controls, Oral evidence taken on 29 June 2021, UK Arms Exports in 2019, HC (2021-22) 224
30 HM Government, Atlantic Declaration, section 1.3, June 2023
31 HM Government, Atlantic Declaration, section 1.3, June 2023
32 HM Government, Atlantic Declaration, section 1.3, June 2023
33 HM Government, Atlantic Declaration, section 1.3, June 2023
34 HM Government, Atlantic Declaration, section 1.6, June 2023; see also US National Defense Authorization Act for Fiscal Year 2024 and “US Congress passes bill allowing sale of Aukus nuclear submarines to Australia”, The Guardian, 14 December 2023
35 HM Government, Atlantic Declaration, section 1.6, June 2023
36 HM Government, Atlantic Declaration, section 1.6, June 2023
37 Business and Trade Committee, Oral evidence taken on 19 September 2023, The work of the Department for Business and Trade, HC (2022-23) 1837, Qq68-71, and Correspondence from the Secretary of State for Business and Trade, 1 November 2023
38 Correspondence from the Secretary of State for Business and Trade, 12 May 2023
39 HM Government, First Joint Report of the Committees on Arms Export Controls Session 2022-23 Developments in UK Strategic Export Controls: Response of the Secretaries of State for International Trade, Defence, Foreign, Commonwealth and Development Affairs, CP 775, January 2023, p3; see also correspondence from the Secretary of State for Business and Trade, 12 May 2023, and the Minister for International Trade, 29 August 2023 and 6 September 2023
40 HM Government, First Joint Report of the Committees on Arms Export Controls Session 2022-23 Developments in UK Strategic Export Controls: Response of the Secretaries of State for International Trade, Defence, Foreign, Commonwealth and Development Affairs, CP 775, January 2023, p4
41 Correspondence from the Minister for International Trade dated 29 August 2023
42 Ibid
The International Development and Business and Trade Committees met concurrently, pursuant to Standing Order No. 137A.
Sarah Champion
Chris Law
Kate Osamor
Rt Hon Liam Byrne
Mark Pawsey
Charlotte Nichols
Mrs Emma Lewell-Buck also attended under the provisions of paragraph (1)(e) of Standing Order No 137A (Select committees: power to work with other committees).
Rt Hon Liam Byrne was called to the chair, in accordance with Standing Order No. 137A(1)(d).
The Committees considered this matter.
Draft Special Report (Scrutiny of Strategic Export Controls) proposed by the Chair, brought up and read.
Ordered, That the draft Special Report be considered concurrently, in accordance with Standing Order No. 137A (1)(c).
Ordered, That the Chair’s draft Special Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 29 read and agreed to.
[Adjourned to a day and time to be fixed by the Chair.
The Business and Trade Committee withdrew.
Sarah Champion, in the Chair.
Chris Law
Kate Osamor
Draft Special Report (Scrutiny of Strategic Export Controls) proposed by the Chair, brought up and read.
Resolved, That the draft Special Report prepared by the International Development and Business and Trade Committees be the Second Special Report of the International Development Committee to the House.
Ordered, That the provisions of Standing Order No. 137A(2) may be applied to the Report.
Resolved, That Rt Hon Liam Byrne make the Joint Special Report to the House.
[Adjourned till 9 January 2.30pm.
The International Development Committee withdrew.
Liam Byrne, in the Chair.
Charlotte Nichols
Mark Pawsey
Draft Special Report (Scrutiny of Strategic Export Controls) proposed by the Chair, brought up and read.
Resolved, That the draft Special Report prepared by the International Development and Business and Trade Committees be the First Special Report of the Business and Trade Committee to the House.
Ordered, That the provisions of Standing Order No. 137A(2) may be applied to the Report.
Ordered, That Rt Hon Liam Byrne make the Joint Special Report to the House.
[Adjourned till 19 December at 9.45am.
Dan Carden
Neil Coyle
Fabian Hamilton
Brendan O’Hara
Henry Smith
Royston Smith
Graham Stringer
Resolved, That, at this day’s sitting, Royston Smith take the Chair of the Committee.
The Committees considered this matter.
Draft Special Report (Scrutiny of Strategic Export Controls) proposed by the Chair, brought up and read.
Ordered, That the Chair’s draft Special Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 29 read and agreed to.
Resolved, That the draft Special Report prepared by the International Development and Business and Trade be the First Special Report of the Foreign Affairs Committee.
Ordered, That the provisions of Standing Order No. 137A(2) may be applied to the Report.
Resolved, That Rt Hon Liam Byrne make the Joint Special Report to the House.
[Adjourned till 23 January 2.00pm