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House of Lords

Wednesday, 6 December 2006.

The House met at three o’clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Chelmsford): the LORD SPEAKER on the Woolsack.

Shipping: Naval Wrecks

Lord Faulkner of Worcester asked Her Majesty’s Government:

Baroness Crawley: My Lords, the wrecks of HMS “Prince of Wales” and HMS “Repulse”, which lie in international waters off the coast of Malaysia, are designated as protected places under the United Kingdom’s Protection of Military Remains Act 1986. However, the Act applies only to British citizens and British flagged vessels. Her Majesty’s Government therefore continue to work closely with regional Governments, diving groups and others to prevent inappropriate activity on the wreck sites by foreign nationals.

Lord Faulkner of Worcester: My Lords, I thank my noble friend for that reply. These two ships were sunk 65 years ago this week and the wrecks are the final resting place of 840 officers and men. Is my noble friend aware of the activities of foreign-owned diving companies, such as Rec ‘N’ Tec and White Manta, which have promoted themselves by placing pictures of human remains on their websites and, in one case, producing for sale a DVD of a full penetration dive on HMS “Repulse” carried out by a US citizen? Does my noble friend agree that the survivors and the relatives of the deceased deserve rather better than that?

Baroness Crawley: Yes, my Lords, I agree absolutely. I have seen stills from the DVD and they are extremely distressing and must be extremely painful for the families and the survivors. The British Government, via the British High Commission in Malaysia, have asked the company to remove the video from its website. It has done so and apologised for the distress caused. The Ministry has also made its concerns known to a number of Malaysian government agencies and to the navies of the region, and of course the Royal Navy itself makes several trips to the site.

Lord Astor of Hever: My Lords, we on these Benches welcome anything that the Government can do to protect these war grave sites. Those tragic

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sinkings taught us the importance of air cover. In the light of that, can the noble Baroness confirm that there will be no further delays to the new carriers?

Baroness Crawley: A good try, my Lords, but it is slightly outwith the brief in front of me. I will, with all due respect to the noble Lord, write to him on his question.

Lord Howarth of Newport: My Lords, what plans do the Government have for more proactive management of historic wreck sites so that they are physically assessed by people with relevant expertise, and management plans are drawn up which would be sensitive to them both as war graves, if that is what they are, and as archaeological sites?

Baroness Crawley: My Lords, we are signatories to several international conventions, most notably the United Nations Convention on the Law of the Sea, and have therefore signed up to the responsibilities under them. We have also begun to designate sites. I was astonished to learn in my brief that there are 15,000 naval and merchant wrecks from the two world wars. Not all of those will be designated, but the most significant wrecks are being designated as protected sites or controlled sites, with all the management that that involves.

Lord Addington: My Lords, can the Minister assure us that international bodies such as the Commonwealth will be made aware of the situation? An international approach is probably what is required; indeed, that is what the Minister has suggested in her earlier answers.

Baroness Crawley: My Lords, there is good communication between those responsible in the Commonwealth War Graves Commission and those responsible for the shipwrecks which have become maritime graves.

Lord Bridges: My Lords, the noble Baroness has not referred to the interests of the New Zealand Government in the “Prince of Wales” and the “Repulse”. There is a very active interest in New Zealand in the fates of the ships and of the bodies of those who were drowned. Are the Government, as I trust they are, in close contact with the Government of New Zealand and listening sympathetically to their interests?

Yes, my Lords. I will write to the noble Lord about the detail of our contact, but, as I understand it, we are in contact with the regional Governments, the Australian Navy and the New Zealand agencies.

Baroness Fookes: My Lords, will the Minister consider contacting the various dive centres which operate in that area? Most SCUBA divers—recreational divers, of which I am one—would operate from such sites.



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Baroness Crawley: My Lords, I thank the noble Baroness for her intervention. The diving companies in the region are contacted and we are in close co-operation with them. But in the end, however many international or national laws we sign up to, we need to educate the diving companies and the individual divers. We are therefore in constant contact with them.

Baroness Sharples: My Lords, can the noble Baroness explain why, if the American Government can protect their wrecks, we cannot?

Baroness Crawley: My Lords, I would say that we do protect our wrecks with the Protection of Military Remains Act 1986. Although it has limitations in applying only to British nationals and to British vessels, we certainly use it as fully as we can.

Lord Roper: My Lords, have the Government made a formal approach to the Malaysian and Singaporean Governments to ask them to co-operate informally in restricting activities from their ports?

Baroness Crawley: Yes, my Lords; we are in constant contact with the Governments through the high commissions. However, after our short debate today, I will certainly ensure that we once again underline our concerns with both Governments.

Lord Hodgson of Astley Abbotts: My Lords, does the Minister agree that, in addition to the dreadful personal tragedies referred to by the noble Lord, Lord Faulkner of Worcester, this is a site of particular historical significance? It proved once and for all that capital ships—as my noble friend Lord Astor made clear in his “outwith” question—could no longer operate without adequate air defences. As such, it is the place where the course of naval warfare changed for ever.

Baroness Crawley: Absolutely, my Lords; that was a very significant event on 10 December 1941. Naval historians consider it a turning point in history.

Export Licences

3.07 pm

Lord Razzall asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Truscott): My Lords, it would not be appropriate for me to comment on the Serious Fraud Office investigation, but I can say that the Government have not reassessed their granting of the export licences in this case as the licences have now expired.



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The Government’s decision to issue export licences for an air traffic control system for Tanzania was taken after careful consideration, on a case-by-case basis, of each licence application against the Government’s consolidated EU and national arms export licensing criteria. The Government listened and responded at the time to concerns expressed in Parliament and elsewhere.

Noble Lords may know that I was an associate fellow of the Royal United Services Institute for Defence and Security Studies. I resigned that fellowship on taking up my ministerial post.

Lord Razzall: My Lords, I thank the Minister for that Answer. Although it was before his time, he obviously has been well briefed on the controversy that arose when this export licence was granted. He will of course have been informed that a lot of the opposition to the granting of the licence was led by Clare Short when she was the relevant Cabinet Minister. Does he not agree that, in the light of what has happened since, her judgment on that, and indeed on many other things, was entirely correct?

Lord Truscott: My Lords, the noble Lord, Lord Razzall, should know that the Cabinet is bound by collective responsibility and that any decision of the Cabinet binds all its members, so I do not really agree with his point. The fact is that the Government took the decision to issue the licences after careful and detailed assessment against the consolidated criteria. That was the decision of the Government, and that is what the Cabinet signed up to.

Baroness Wilcox: My Lords, how long has the Serious Fraud Office investigation been going on? In the light of the significance of all this to an important British company, is it not vital that it be concluded as quickly as possible?

Lord Truscott: My Lords, I cannot, for legal reasons, reply in detail to noble Baroness, Lady Wilcox, but I will say that the Government's decision to issue export licences for an air traffic control system for Tanzania, as in the case of all export licence decisions, was taken after careful consideration. Those criteria included whether the proposed export would seriously undermine the sustainable development of the importing country. I understand that an investigation is going on, but at the time of the licensing decision the Government had no evidence that there was anything untoward about it.

Lord Garden: My Lords, I declare an interest as an adviser to Transparency International in its studies into prevention of corruption in the official arms trade. Do Her Majesty's Government plan to use their considerable leverage with the UK defence industry, they being its major customer and also the granter of export licences, so that they can put in place greater anti-corruption safeguards? If there are such plans, what are they?



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Lord Truscott: My Lords, I can inform the House that the Government are committed to working with all our international partners and the business community to ensure that there is effective action both here and abroad to tackle corruption. That is underlined by the UK's ratification of the OECD convention on combating the bribery of foreign public officials and the Anti-terrorism, Crime and Security Act 2001.

Further to the point made by the noble Lord, Lord Garden, I should mention that the DTI processes about 10,000 applications for export licences each year. In doing so, it takes advice from the Foreign Office, the Ministry of Defence, the Department for International Development and Customs and Excise. That takes into account issues such as national security, regional stability and human rights. In each case, the Government always ensure that any relevant UK, EU or UN embargoes are taken into account.

Lord Bach: My Lords, from the opposition Front Bench, the noble Baroness, Lady Wilcox, mentioned the inquiry. I remind the House of my declared interest in this matter. Another SFO inquiry, not the one into this Tanzania case, has been in existence since the first part of 2004, so it is about to celebrate its third birthday. Does my noble friend agree that it is not acceptable that any inquiry should continue without decision endlessly? Does he understand that if the present position continues noble Lords on all sides of this House fear that many thousands of British skilled workers could lose their jobs for ever, that important contracts, defence and civil, could be lost, costing this country billions of pounds, and that the United Kingdom could become a laughing stock with our international competitors?

Lord Truscott: My Lords, my noble friend Lord Bach has a great deal of experience in the defence field and I always listen carefully to his contributions. I can assure him that my department is aware of the concern on all sides.

The UK has a vibrant defence industry—one of the strongest and most open in the world. It produces excellent equipment and secures thousands of highly skilled British jobs.

Earl Ferrers: My Lords, does the Deputy Leader of the House not agree that Questions and Answers should be short and not read?

Lord Truscott: My Lords, apart from noticing that I seem to have been promoted, I do not think there is anything I can say.

Baroness Whitaker: My Lords, does my noble friend agree that all UK businesses, including the defence industry, have said that if corruption can be eradicated, they will have the level playing field that will enable them to be really competitive?

Lord Truscott: My Lords, in the interests of being concise, I would say that I agree.



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Lord Lawson of Blaby: My Lords, is the Minister aware, however, that that level playing field will never arise, and that many countries—I will not mention names—are committed to continuing the present process, which involves “corruption”—to use the word that has been used? The question before the Government and Parliament is: are we going to say that we will play the same dirty game that everyone else plays, or are we going to go it alone, or relatively alone, in being clean? That is the issue. To talk of some international agreement is nonsense, because either it will not be reached or, if it is reached, it will not be honoured.

Lord Truscott: My Lords, a number of countries have their own legislation to cover these matters, as we do. There is, of course, the European Union’s code of conduct for arms exports; so there are many moves internationally to co-ordinate an approach to this matter. That should be welcomed.

Railways: Channel Tunnel

3.16 pm

Lord Bradshaw asked Her Majesty’s Government:

Lord Davies of Oldham: My Lords, to support the development of rail freight through the Channel Tunnel, we will encourage the introduction of robust commercial arrangements between the parties, coupled with the liberalisation of access to the wider European rail freight market and an increase in competition both within Europe and through the Channel Tunnel.

Lord Bradshaw: My Lords, I thank the Minister for that reply. Bearing in mind the forecasted freight traffic when the Channel Tunnel opened—we all know why those levels went down with illegal immigrants—does he foresee the growth of traffic to reach again the forecast levels?

Lord Davies of Oldham: My Lords, the whole House will be pleased at the growth in freight traffic in the United Kingdom, by 55 per cent in the past eight years. There is a particular difficulty with the level of charges for going through the Channel Tunnel, and we have been in substantial discussions with Eurotunnel to guarantee that the present freight services can continue and, in due course, expand. We are pleased to note that the difficulties have been overcome, and that EWSI is to continue its Channel Tunnel freight services.

Lord Marsh: My Lords, given the cost and disruption that this would involve, and the shambles over the original Channel Tunnel created by the then Government, of whom I was a member, what real benefit would flow from such a massive disruption?



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Lord Davies of Oldham: My Lords, the problem is that the capital costs of the tunnel hang like a huge, dead weight on its viability. It is therefore prone to put very heavy tolls on current users, with the result that EWSI, the British company solely operating freight services from this country through the Channel Tunnel, is running at a loss and will continue to do so for the immediate future. We are concerned as a Government to give what support we can. State aid ended on 30 November this year, in line with European agreements, but we are giving environmental support to the tune of £6.5 million a year, which demonstrates how much rail use saves in environmental terms compared with the use of lorries and ships to cross to the continent. The noble Lord is right; there are very real difficulties in the operation of Eurotunnel.

Lord Berkeley: My Lords, I declare an interest as secretary of the All-Party Group on Rail. I thank the Minister for his answers and congratulate the Government on participating in keeping the service going. Does the noble Lord agree that the current charges for using Channel Tunnel rail freight are probably illegal under the EU rules, which were designed to encourage rail freight? What action could the Government take to ensure compliance for this very important rail link?

Lord Davies of Oldham: My Lords, my noble friend is very knowledgeable on these issues and therefore will know that EWSI is to appeal against the charges, on which I cannot directly comment. Suffice it to say that the French state railways complain as vociferously as EWSI about the cost of running trains through the tunnel.

Lord Dykes: My Lords, the Minister sounded a little equivocal in his previous answer. Will he confirm that, because it literally has to, the Channel Tunnel will remain viable and open, and that the scheme with the bankers will succeed because it must? After all, it should have been a public-sector scheme in the first place.

Lord Davies of Oldham: My Lords, it might well have been a public-sector scheme but that does not mean we countenance a loss-making operation. The problem is that the tunnel is sustaining very significant losses. The solution is certainly not to reduce usage of the tunnel. We and the French are at one. We want to see expanded usage of the tunnel—both by passengers and for freight—which is why, when EWSI threatened to withdraw freight services through the tunnel, the Government did their best to ensure that that threat was withdrawn, which it has been.

Lord Hanningfield: My Lords, we all want to get more freight on to rail, particularly through the Channel Tunnel. Why have the Government cut in half the grant to encourage that over the past three years? Is the Minister also telling us that because of European regulations we cannot use grants to encourage more freight through the Channel Tunnel?


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