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Lord Davies of Oldham: My Lords, I am grateful for the contributions to the debate. As the noble Baroness, Lady Sharp of Guildford, said, we have been here
before. In fact, I was at the Dispatch Box for this debate last year, and I remember that the questions were as informed last year as they were this year. This year, of course, I emphasise the fact that the levy rates are not changing. There was a change last year, which occasioned a little more debate.I shall deal as precisely as I can with the questions that were raised. In response to the noble Baroness, I would say that the £75,000 was a cut-off point for one board, and the £61,000 was for the Construction Industry Training Board. The other figure was for the Engineering Industry Training Board. That is why there are two figures for the definition, as it were, of firms whose activities are at such a low level that it would not be appropriate to place the levy on them.
Baroness Sharp of Guildford: My Lords, the Minister referred to the Engineering Industry Training Board. I must correct him. There used to be an Engineering Industry Training Board levy, but there is no longer. This is the Engineering Construction Industry Training Board.
Lord Davies of Oldham: My Lords, I stand corrected. I am talking about the Engineering Construction Industry Training Board. I emphasise that the cut-off point is different for the two industries, on the basis of the figures that I identified.
Of course, we reach the levy position and the cut-off point on the basis of proposals from the boards, after consultation with the industries for which they have responsibility. We have had no representations about the figure or about the use of the absolute cut-off point, so we can safely accept that they have the broad support of the industries affected.
The noble Baroness, Lady Sharp of Guildford, and my noble friend Lord Puttnam asked about the future. I shall be as helpful as I can. As the noble Baroness said, we said in our manifesto that if both sides of industry in a sector agree, we will help to set up a statutory framework for training for that industry. I must report that, as yet, the only sector to express a positive interest in developing a statutory framework is the print industry. Discussions are going on for that industry. The House will recognise that, as far as concerns training arrangements, it is important to work with the grain of the industries involved. That is why we have expressed ourselves in those terms.
In response to my noble friend Lord Puttnam, I must say that I would like the debate to be broad enough for us to engage in a thorough analysis of the training needs of the nation and how we can respond to them. However, there is other business before the House tonight, in which several noble Lords present have an interest, so I shall not go on too long. I respect what my noble friend said about the importance of recognising that the training boards play a limited part in the overall training needs related to the two industries.
My noble friend will know that the Government have, of course, invested a great deal in training strategy, particularly the development of the Learning
and Skills Council, and we are considering the question of sector skills development. That will involve a great deal of intermeshing between these boards, between employers and the development of the local dimensions of the Learning and Skills Council. There is a great deal of work going on to ensure that the objectives—which, I know, my noble friend shares with the Government—are realised. We should not underestimate the fact that, as a nation, we have not invested as much in training as we would have wished. That shows itself in every conceivable statistic of measurement against our major industrial rivals. There is no doubt that it is an important priority for the Government. The only thing that I would say to my noble friend is that it would be remiss of me to dwell for the many minutes that I would like on the broader issues of training. I must restrict myself to the orders.On the basis that I have answered the questions that were put this evening, I can commend the orders to the House.
On Question, Motion agreed to.
Industrial Training Levy (Engineering Construction Board) Order 2002
Lord Davies of Oldham: My Lords, I beg to move.
Moved, That the draft order laid before the House on 17th January be approved [17th Report from the Joint Committee].—(Lord Davies of Oldham.)
On Question, Motion agreed to.
Export Control Bill
8.46 p.m.
Lord Redesdale moved Amendment No. 19:
- After Clause 4, insert the following new clause—
The noble Lord said: The gist of the amendment is to introduce controls on licensing overseas production. We have tabled the amendment because there is a trend among companies to diversify the areas
There are risks in producing overseas. Countries in which the equipment is manufactured require weapons that we would not sell directly to them. The equipment could be exported to regimes to which we would not license direct sales.
During the consultation process on the Export Control Bill, the Government acknowledged the need to address the potential dangers of licensed production. In evidence to the Quadripartite Select Committee, the then Secretary of State for Trade and Industry, Stephen Byers, stated that licensed production is,
The proposals in the draft consultation put the burden of regulation on UK companies, requiring them either to require specific end-use undertakings from the overseas producer or to insert a clause in their contracts providing for restrictions on re-export. In both cases, companies would be required only to prevent re-export to destinations subject to international embargoes.
Only one of the Government's proposed options would have required the adoption of additional powers in the primary legislation. However, the Government have decided against giving themselves power in this area, stating that:
Maintaining control over licensed production overseas is clearly more difficult than controlling direct sales. Yet if the Government feel it is right to exert full control over direct exports, they should do the same with licensed production overseas. I beg to move.
Lord Sainsbury of Turville: Amendment No. 19 seeks to include on the face of the Bill specific
It is important to recognise, first, that the Government are already able to exert a significant degree of control over the supply lines on which licensed production arrangements typically depend; and, secondly, that the new powers in the Bill will significantly strengthen and widen that existing control. That is because licensed production usually requires an initial and often continuing supply of component parts and design or production technology to the overseas producer by the company licensing the manufacture of its products.
Where the product to be manufactured under commercial licence has a potential military use, an export licence will in most cases be required before the equipment and technology necessary for the establishment and operation of the licensed production facility can be supplied. We have made clear that an export licence will not be granted where there is a clear risk that the finished products of the licensed production arrangement could be used for internal repression, or international aggression, or where they could be diverted to an unacceptable end-user.
It is clear that licensed production does not take place unless there is some transfer of technology or knowledge, and the way we can control that is by licensing the technology and knowledge, which is greatly strengthened in this Bill. At present, however, the Government are able to control transfers overseas of design and production military technology to licensed production facilities only where the transfer takes place in a physical form; for example, on a piece of paper or on a computer disk. The new power in the Bill will add an important new pillar to our existing control regime on licensed production by allowing us to control electronic transfers of sensitive military technology to such facilities as well. The Bill will also enable us to control trafficking and brokering in the component parts often required for the production of arms overseas.
Additionally, the Government are committed to making more explicit in the UK export licensing process our existing commitment to taking account of whether any proposed export of military equipment or transfer of technology is destined for use in a licensed production facility. The UK also recently made a formal approach to the EU presidency and obtained agreement that there should be discussion of the issue of licensed production overseas among member states, with a view to seeking EU-wide agreement to adding explicit reference to licensed production in the EU Code of Conduct on arms exports.
There is therefore no doubt that the UK already takes and will continue to take seriously the issue of licensed production. Moreover, the new powers in the
Reference was made to the Secretary of State for Trade and Industry, Stephen Byers, when he appeared before the Quadripartite Committee in April 2001. My right honourable friend was right to say that the Bill will allow us to put into place a more effective regime on licensed production. The new powers the Bill provides to control electronic transfers of technology will be particularly useful in strengthening and widening our existing capacity to control the supply of design and production technology to overseas licensed production facilities. In view of that, I invite the noble Lord to withdraw his amendment.
"CONTROL OF LICENSED PRODUCTION OF GOODS OVERSEAS
(1) The Secretary of State may by order make provision for, or in connection with, the imposition of controls regulating the licensed production of controlled goods overseas.
(2) In this section "licensed production" means production under commercial licence from a United Kingdom person, United Kingdom company or company based in the United Kingdom of that entity's proprietary controlled goods or technology.
(3) An order under this section may make provision in connection with any controls that may be imposed by a directly applicable Community provision on licensed production agreements.
(4) Controls shall be imposed under this section on acts done outside the United Kingdom, but only if they are done by a person who is, or is acting under the control of, a United Kingdom person, United Kingdom company, or company based in the United Kingdom."
"one of those areas where I think experience shows us that we could be in a potentially embarrassing position for the United Kingdom, as a country that cares about these issues, not to have an effective regime on licensed production in place. We need to use this as an opportunity to do precisely that".
That recognition has not been reflected in the Bill. In the draft Bill consultation document, two possible options for how such controls might be structured were advanced. There was also a commitment to push for reference to licensed production overseas to be included in the EU code of conduct on arms exports.
"The Government has decided, in light of the results of the consultation, not to introduce specific powers on licensed production overseas".
The purpose of this amendment is to put those powers back. The fact that the Government proposed extra controls on licensed production overseas in the consultation document and proposed new EU measures suggests that additional steps are necessary. Furthermore, it is difficult to see how the Bill's existing clause on international transfers addresses the particular characteristics of licensed production—say, how to apply controls on equipment produced under licence, not just the transfer of technology by intangible means.
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