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Lord Campbell-Savours: I rise to speak to Amendments Nos. 56 and 83. I apologise for detaining the Committee, but this is an extremely important matter that has been debated at great length in the other place. Outside lobbies are very interested in these amendments, as are many colleagues in the other place.

The arguments have been well rehearsed. Indeed, the noble Lord, Lord Phillips of Sudbury, has done so again this evening. They were convincingly put in the quadripartite reports of July 2000 and March 2001 and were unanimously carried by that committee, which was made up of four Select Committees of the House of Commons. There was almost universal support within those Select Committees themselves. An Early-Day Motion has been tabled in the other place today that has been supported by a cross-party alliance, including a number of former defence Ministers. It is strange that once defence Ministers leave the department, they suddenly become converts to the principle of prior scrutiny. I hope that my noble friend the Minister will have that in mind when replying to my amendments.

My intention is to cast new light on the issue of prior scrutiny and, in particular, the framework for a new scrutiny committee. I am proposing a practical and

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innovative solution, based on the operations of the Intelligence and Security Committee, whose operations would not be binding on the Government. The model framework in my amendment is set out in Section 10 of the Intelligence Services Act 1994. I have lifted the section out of that Act and have amended it to meet the new role of the proposed defence exports scrutiny committee.

Why did I select that structure? I did so primarily because of industrial and government concerns over issues of confidentiality. The truth is that business does not trust the politicians. This structure will give business a framework for a committee that it can trust. It will also deal with the issue of delay, to which my noble friend the Minister referred previously, as have Ministers in the other place.

It is interesting that concerns over confidentiality dominated the arguments within the security services in the 1970s and 1980s prior to the introduction of the Intelligence Services Act 1994. The then Prime Minister, John Major, established a structure that would reassure everyone in the community, which has been very successful. The services have been reassured and Ministers have been able to pray in aid its work in both Houses. On one occasion, that structure was commissioned by a Prime Minster to carry out a report into the Mitrokhin allegations. It carried out a full inquiry and the Committee enjoyed the confidence of both Houses of Parliament.

I shall say a few words about the structure. The committee is not a Select Committee, but a committee of parliamentarians, which is appointed by the Prime Minister. Every member has to sign the Official Secrets Act and it meets in conditions of total secrecy. The ISC structure comprises one Peer and eight Members of the House of Commons. It is always chaired by a politician of distinction and its members are all Privy Counsellors, apart from one, Michael Mates, who, in my view, should be on the Privy Council. The committee meets in Whitehall, not in Parliament, and has access to the whole intelligence community. Its powers are determined by law and it reports to the Prime Minister when necessary. Its role is to comment on matters set out in the 1994 Act. It has no executive power. Its decisions bind no one. Its reports are scrutinised by those who are being scrutinised; that is, the intelligence community. It never leaks. If it did, it would collapse.

What is wrong with setting up such a structure to oversee Britain's defence exports? My proposal is to establish a defence exports scrutiny committee, which we may refer to as DESC for the purposes of this debate. Its remit would be to monitor and report on defence export licence applications and policy wherever necessary. Its modus operandi would be given by a code introduced by the Prime Minister under paragraph 2(5) of the schedule in Amendment No. 83.

The code would deal with the procedures to be followed by the committee both prior to and post notification. It would define applications, which would be exempt from scrutiny. That involves the whole argument about NATO. It would deal with the

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treatment of classified information and it would obviously meet OSA requirements. It would deal with the arrangements for appointing a chairman and the special responsibilities of the chair in order to avoid delay—the very delays that were referred to by the noble Baroness, Lady Miller, who moved some particularly interesting amendments on that matter.

The code would deal with the whole question of a Secretary of State override in special circumstances, such as the potential cancellation of contracts. That issue was raised by the noble Baroness, Lady Miller. The code would deal with conflicts of interest and other matters. It might well reflect many of the ideas that were proposed by the Quadripartite Committee in its second report of 2001.

I place on record my appreciation of the work on the code that is being done by Saferworld and in particular by Vanessa Haines, who has been doing considerable work in that area. I asked Saferworld to help me, and it has been extremely helpful. I have given only recommendations for the code.

I turn to the Government's response. They have given a number of responses to the whole idea of prior scrutiny in the first and second reports of the Quadripartite Committee. The most considered response can be found in the second report; that is, the document entitled, Strategic Export Controls: Annual Report for 1999 and Parliamentary Prior Scrutiny. I shall pick out the key sentences of the Government's response. They said that the arrangement,

"could not be made to work in practice".

That is the Government's position. My response is to point out that in the structure that I have proposed, the arrangement would work effectively because it provides for a limited form of accountability. The machinery of decision-taking would not be compromised by open debate because the committee would meet in secrecy.

I turn to another of the Government's responses. They said that,

"it would be wrong for Ministers to be required to consult Parliament before taking decisions in individual cases".

However, they would be consulting not Parliament but a committee of parliamentarians, which is not a committee of Parliament. It is not a Select Committee; it is not protected by parliamentary privilege; it is subject not to parliamentary resolutions but only to primary and secondary legislation. It cannot report directly to Parliament—all reports go through the Prime Minister for sidelining—and it would not have the rights of a Select Committee and Ministers or civil servants could not be held in contempt in relation to the giving of evidence. What further protection could there be for the executive in such conditions?

In their response, the Government said that the committee's involvement would, "compromise confidentiality" and,

"give rise to legal difficulties".

I shall come to that point later. They also said that,

"the public disclosure of any information before a contract is signed could be prejudicial".

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However, that would not occur because all relevant matters take place under the conditions prescribed by the Official Secrets Act. They state that,

"overseas Governments can have legitimate requirements for non-disclosure of their military procurement programmes, for example on grounds of national security, which they would wish to see respected".

A safeguard in that area is built into Schedule 2 under paragraph 4(c). That is why that phrase is included; it is to deal with that specific matter. The Government say:

"Open debate of the merits of a particular proposed export, as the Committee believes it might wish to encourage in some instances, could quite simply result in UK exporter losing the business".

That could not happen because, once again, I stress, the debates are not taking place in public; they are taking place in private inside the DESC.

The Government say that,

"in cases where the Committee's advice to the Government arose from a disagreement over policy, the Secretary of State would be unable to act on that advice without exposing the Government to an increased risk of judicial review on grounds of inconsistency and unlawful sub-delegation".

My response is that, if the committee's position is unknown, clearly any disagreement with the Government is unknown. Therefore, there can be no basis for a legal challenge. The Government say that,

"the committee would be acting on the basis of less information than that available to the Government".

Again, my response is that, if the OSA is in operation, it is impossible to estimate the extent of knowledge available to members of the committee.

The Government say:

"The introduction of the Committee into the decision making process would increase the uncertainties for exporters and could leave those decisions more open to legal challenge. It is also difficult to see how such a system could be introduced without the Committee taking a shared responsibility, and becoming accountable for the role it would play in export licensing decisions. That would, in turn, make its retrospective scrutiny less effective".

Obviously no legal challenge is possible without access to the deliberations of the committee. That access is denied, again, because it meets conditions of official secrecy. Without public knowledge of the committee's advice on an application, shared responsibility simply cannot arise.

The Government say that,

"prior parliamentary scrutiny would introduce further delays into the licensing process".

We have heard a great deal about delays this evening. I understand that the position is that, when the Quadripartite Committee considered these matters, it said, "We shall deal with these matters concurrently with the Government". Therefore, again, I cannot see what the problem is.

Then the Government refer to the fact that,

"the 10 days proposed by the Committee represents the very minimum additional delay, and that in practice the delay would often be a great deal longer".

Again, I refer to the speeches of the noble Baroness, Lady Miller. Today, we have heard about the reason for delays. I cannot understand how the intrusion of

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this committee structure or framework into the consideration of Ministers—in the event that they would wish to have the considerations of such a committee in mind—would delay matters any more than has already been alluded to by the noble Baroness, Lady Miller. The delay is likely only in cases which would be controversial and which, therefore, by implication, would take longer for the department to handle.

Finally, the Government say:

"The Government would need to devote significant extra resources to implement the much increased level of liaison with the Committee that would be needed by the system of prior scrutiny proposed by the Committee".

The proposals for fast-tracking, which I would include in a code and which would be introduced by the Prime Minister, would, in my view, deal with that problem. I believe that if one fast-tracks, clearly one does not have to devote as much resource to the committee as Ministers may have in mind at present.

I also understand that there has been some argument about unlawful delegation. I understand that Matrix Chambers has responded that it may be better to deal with advice—that is, advice from the committee—in primary or secondary legislation. In the case of my framework, because it is not a committee of Parliament, I do not believe that even the Matrix Chambers representation is relevant. The question of advice is covered adequately under paragraph (5) of the new clause proposed in Amendment No. 56, which states:

"The Committee shall make an annual report on the discharge of their functions to the Prime Minister and may at any time report to him on any matter relating to the discharge of those functions".

That is a direct take from the 1994 Act as it applied to the intelligence community. We know that that structure can work.

I am also told that one of the final, core positions of the Government is the principle that governments must govern and parliaments must check. My response is that, before decisions are taken, consideration by the executive of the views of the legislature is not unprecedented. That happens all the time.

The other day I visited the tea room to talk to some of my old friends in order to acquire some examples of that. Within about half an hour I had been given a series of examples of Select Committees making recommendations to Ministers prior to Ministers taking decisions. I shall lay one or two of those on the record.

The Select Committee on Transport carried out two inquiries into the privatisation of NATS which preceded decisions by Ministers. On the restructuring of the TA, the Defence Select Committee took a view and made its recommendation to Ministers. On rail privatisation, the Transport Select Committee, under the chairmanship of Robert Adley, met for 185 hours on one issue and then Ministers took decisions. They may not have taken the decision that I wanted them to

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take, but they fully considered the recommendations of the Select Committee. I was in the House of Commons when a Statement was made to Parliament.

Another inquiry carried out by the Transport Select Committee considered the United Kingdom/US negotiations relating to the Bermuda agreement on transatlantic airline traffic. The Home Affairs Select Committee inquired into ID cards. That was immediately prior to Michael Howard's decision on smart cards, an idea that he turned down in the 1992/97 Parliament. The Public Administration Select Committee is currently inquiring into reform of the House of Lords prior to a decision being taken by the Government. We are told by the Lord Chancellor that that committee's recommendation will be taken into account in whatever decisions are taken by the Government.

The Agriculture Select Committee has inquired into the quarantine of animals. Some say that that was an inquiry that was born in the department with responsibility for agriculture and that the committee was asked to carry out that inquiry by Ministers. In that case Ministers turned down the recommendations of the committee, but they were implemented by the previous government.

Of course, prior to the decision that was announced today in the House of Commons, there was an inquiry into the PPP for London Transport. The one that may be of most interest to the Minister, because it deals with an individual decision, was the Daresbury Syncotron facility inquiry that was carried out, if I remember rightly, by the Science and Technology Select Committee in the other place. That committee made its recommendation to the Government and the Government took it into account.

I believe that often Ministers ask committees to carry out inquiries prior to taking decisions so that they have help in their deliberations. I place those examples on the record because we are being told that governments must govern and that parliaments hold governments to account. Already in this country a system is in operation whereby committee recommendations are being considered by government before government take their final decisions.

I believe that we have a powerful case on prior scrutiny. It has been widely put. I believe that the structure that I am proposing will deal with that. It is a structure based on trust. As relationships develop behind closed doors, away from public debate, between departmental officials, Ministers and members of committees that operate in these conditions, all sorts of information flows. I believe that in those conditions there will be a more sensitive appreciation of the concerns of elected Members of Parliament and Members of this House in the decisions that are finally taken by Ministers.

I ask my noble friend tonight not to knock it all on the head. I ask him in winding-up the debate to tell us that over the next five or six weeks prior to the Report

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stage that he at least will consider these arguments and perhaps have them in mind when we table amendments again, if necessary, on Report.

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