| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Rotherwick: My Lords, I beg your pardon. The noble Lord was sitting further down earlier. I had wanted to address some of the comments that he made, but my noble friend Lord Trefgarne has, I am glad to say, already done so.
7.27 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, I am grateful to all who have spoken. It has been a stimulating debate with an unexpectedly literary flavour. I do not know when your Lordships last heard a debate in which Le Carre, Horace and Bernard Shaw were mentioned. It was remarkably interesting, especially in a debate on export control.
I am grateful for the opportunity to wind up the debate. The fact that I am doing so underlines the interest of my department in the proposed controls on defence equipment. Such controls form a key part of this country's defence interests and of our wider international commitments. Our commitment to preventing arms proliferation, especially in regions where there is instability, remains at the heart of our defence policy, and the Bill will contribute directly to that aim.
Many points were made in the debate; I shall limit myself to 20 minutes. I dare say that noble Lords will be delighted—or perhaps not—that there will not be any more than 20 minutes. If I do not deal with every point that has been raised—which I will not—I hope that noble Lords will understand. I am certain that many interesting points will be raised in Committee.
The Bill is central to the United Kingdom's foreign and international development policies and our policies for maintaining controls on objects of cultural interest. Such various interests emphasise the extent of cross-government interest in and backing for the Bill. One of the most encouraging features of today's debate has been the universal support for the Bill, albeit with qualifications of varying severity. The Government are grateful for that.
As my noble friend Lord Sainsbury of Turville said in opening the debate, the Bill is primarily intended to modernise the export control regime, against a background of recent improvements, which include the banning of the import, export, transfer and manufacture of all forms of anti-personnel landmines and the banning of the export and trans-shipment through the United Kingdom of torture equipment. In addition, the Government have made the export licensing process more transparent and accountable through the publication of comprehensive annual reports. We believe that our country now makes publicly available more information about its export licensing decisions than most if not all of our trading partners. As my noble friend said, the Bill will place the annual reports on a statutory basis.
The publication of national criteria on which export licence applications are judged, now consolidated with the EU code of conduct on arms exports, is also part of the creation of a more open and accountable regime. Here again, the Bill will underpin this by making reference to the consolidated criteria.
The way in which the Bill modernises the export control regime—by introducing new powers about which we have heard—have already been explained in detail. We fully appreciate that modernisation brings with it concerns on the part of industry, which will be required to comply with the new controls.
It is in recognition of those concerns, as well as the wider interests in the legislation on the part of NGOs and others, and the need to be well prepared for eventual implementation, that the Government have already published dummy orders, giving examples of how the controls might work in practice, and have decided to carry out a public consultation on the proposed orders to be made under the Bill. We attach great importance to this process because it helps to inform industry and others about how the new controls are expected to operate in practice, enables them to become familiar with those controls and paves the way for effective implementation.
However, I want to emphasise that we recognise that there is a mutual interest in the Government and industry working in partnership to ensure that the new controls are implemented effectively and with minimum red tape. Our approach to the control of
strategic exports, as outlined in the Bill, ensures that we will continue to be a responsible exporter, consistent with our defence and foreign policy objectives and a strong UK defence industry.It has been argued that the economic benefits to the UK from defence exports are somehow illusory and even that, on the contrary, such exports are effective only because they are heavily subsidised and therefore actually represent an economic drain. The Government therefore welcomed the publication on 11th December of the findings of an independent study by two leading academic experts into the issue.
That study concluded that, rather than being subsidised, defence exports represented a significant net benefit to the UK economy. Defence export sales averaged about £6 billion in 1998 and 1999 and supported almost 100,000 jobs, many of them high-quality jobs in cutting edge industries. The report further estimated that the ending of defence exports from the UK would involve a one-off adjustment cost of between £4 billion and £5 billion, equivalent to about 0.5 per cent of one year's GDP. In addition, there would be a continuing net cost to government of between £90 million and £200 million a year. The costs of government assistance to defence exports are more than outweighed by savings, including reducing the cost of equipment procured for our own Armed Forces.
The Government welcome the findings of that study, as I am sure will all parties in this House. I know that they all support the defence export policy but if they do not they should say so. I understand that all have said that they do. The study shows that those who argue that the United Kingdom would be economically better off without defence exports are wrong. I want to point out that the report also supports a point all too often overlooked in the argument; namely, that the UK defence industry is so effective in the export market precisely because it is competitive and efficient and not through any lack of application of export controls.
However, I want to make it clear that the Government's policy of supporting the legitimate efforts made by UK industry to win export orders are primarily based on their contribution to our wider defence and international security interests. Defence exports help support a strong UK defence industry and contribute to the security of our friends and allies overseas.
All countries have a right to self defence, as set out in the United Nations Charter. However, that would be an empty provision if nations were then prevented from obtaining the means to defend themselves. Few countries, including the UK, have the defence infrastructure to meet all their defence requirements and rely on being able to buy overseas. Many of our friends and partners look to the UK to assist in this and our exports in that sense are their defence procurement. Such exports can promote international stability by deterring potential aggressors. It is time that that argument was put.
However, while the Government remain fully committed to supporting legitimate defence exports from the UK, we fully accept—as does the defence industry and all people of good will—the need for the proper regulation of such exports. We believe that our system of controlling exports is among the most comprehensive and rigorous in the world. However, there is no room for complacency and we need to modernise our procedures in order to cope with changing technology and to extend our controls where necessary. I hope that what I have just said carries broad support across the House.
I now turn to some of the issues raised in the debate. First, I compliment the noble and learned Lord, Lord Scott of Foscote, on his contribution today. Although there were many distinguished speakers, as regards this debate he was the most distinguished. Although he probably will not want to be called the author of the Bill—frankly, having heard him I am sure that he would not—the book can be legitimately dedicated to him. His incredible work gave rise to the change, which should have taken place many years ago. We greatly welcome the support which he gave to the Bill in general terms.
The noble and learned Lord, Lord Scott, expressed concerns about whether the schedule to the Bill fully achieves what he correctly understands to be the intention; namely, to provide the basis for the introduction of controls on military dual-use and paramilitary goods and technologies, as well as goods of cultural interest. We are already aware of the noble and learned Lord's views on that matter. That is one of the reasons why my noble friend mentioned in his opening address that the Government are looking at whether we can further clarify the role of the schedule.
That brings me to sustainable development. Many noble Lords spoke on the topic and my noble friend in opening mentioned concerns. I assure the House that it is neither the intention nor the effect of the Bill to downgrade in any way the Government's commitment to sustainable development; a commitment we have made clear since we first published criteria for arms exports decisions shortly after the 1997 election. However, perhaps I may reassure the House that the Government are listening to the concerns which have been expressed in another place and again here today about sustainable development and that we are considering what we might do.
I want to turn to the effects on United Kingdom industry, referred to in particular by the noble Lord, Lord Freeman, who has great experience in the area. We appreciate the concerns which have been expressed about the new controls on industry, but industry's views on the Bill have been largely positive. The Defence Manufacturers Association has been quoted. It stated that it fully supported the Government's efforts to replace the existing legislation and the CBI also welcomed the Bill. I am pleased to say that we have excellent contacts with industry and have included it in all the consultations about the Bill so far. Of course we shall continue to do so.
I now turn to an area mentioned by many noble Lords; namely, trafficking and brokering and extra-territorial controls, which are dealt with in Clause 4. The Bill as drafted gives the DTI the power to apply trade controls extra territorially through Clause 4(8). The dummy orders demonstrate how the Government intend to use this power. We will introduce extra-territorial controls on trafficking and brokering to embargo destinations in equipment whose export is banned because of its use in torture and missiles with a range of over 300 kilometres and their component parts. We believe that extra-territorial jurisdiction is justified for those activities because a United Kingdom citizen abroad could reasonably be expected to be aware that activity of such a serious nature would constitute an offence.
However, we do not believe that it would be appropriate to apply that extra-territorial jurisdiction to all equipment on the military list. We believe that extra-territorial jurisdiction is justified only in the case of serious offences which are subject to universal international condemnation. This does not apply to the licensing regime for military equipment, which will encompass a vast amount of legitimate trade. To apply the controls extra-territorially would be to risk criminalising UK citizens' involvement in legitimate defence exports from an overseas country of residence. The inevitable enforcement difficulties arising from extra-territorial jurisdiction would also distract valuable resources from tackling the most serious cases as well as reducing confidence in our export control regime as a whole.
That is why we believe that international co-operation is the way to ensure effective action against those who fuel conflicts through the supply of arms. To that end, the Government have supported the recently adopted EU Statement of Principles on controlling arms brokering. We shall also continue to press for international embargoes to be imposed on countries and regions of conflict.
The noble Lord, Lord Phillips of Sudbury, among others, asked how we could take that line, bearing in mind the Home Office criteria. The Home Office criteria suggested that extra-territorial jurisdiction can be considered in cases of serious offences subject to general international condemnation, for which the offender could reasonably be expected to be aware that he had committed an offence. Hence, extra-territorial jurisdiction will apply to trafficking and brokering to embargoed destinations, as I have outlined, of torture equipment and long-range missiles.
However, the new controls on trafficking and brokering of military equipment do not come into that category. The vast majority of transactions here will consist of legitimate trade by United Kingdom defence companies carried out according to the laws of the appropriate country. Nevertheless, under the new controls we will be able to prosecute offences which take place largely outside the United Kingdom. Where any part of a particular trafficking and brokering
transaction is carried out inside the United Kingdom, be it by phone call, sending a fax or e-mail, we will have the power to prosecute that offence.Perhaps I may turn briefly to Tanzania and the issue which has been mentioned in passing by many noble Lords during the course of our debate. I shall not be able to satisfy noble Lords, least of all the noble Lord, Lord Redesdale, who asked questions about that licensing application. Following the policy set out by previous governments, the Government do not comment on individual applications for reasons of commercial confidentiality. Details of export licensing decisions will continue to be published in the Government's annual report on strategic export controls and will be scrutinised retrospectively by the much-praised all-party quadripartite committee.
However, in any licensing decision, the Government take into account criterion eight of the consolidated EU and national arms export licensing criteria, which states that the Government will take into account whether any proposed export of licensable items would seriously undermine the economy or seriously hamper the sustainable development of the recipient country. We continue to take this into account.
Many other issues have been raised in the debate. So far as concerns the cultural aspects of the Bill, I am not in a position to respond to a question put by the noble Lord, Lord Redesdale. However, the noble Baroness, Lady Miller, touched on this aspect of the Bill. The legislation provides the basis for both strategic export controls, which in the main we have been discussing, and cultural exports controls, as demonstrated by the dummy orders. Both regimes currently operate under the 1939 Act, whose export control powers this Bill will replace in full. That is why the DCMS aspect of the Bill is in place.
I hope that my remarks have addressed some of the main points raised in what has been a fascinating debate. I look forward with some apprehension to the Committee and Report stages of the Bill, during which no doubt we shall discuss further some of the interesting subjects that have been raised today. I conclude by commending the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Next Section
Back to Table of Contents
Lords Hansard Home Page