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Arms Export Controls

I entirely agree with my right hon. Friend. That is a very helpful intervention all round, so I am grateful to him for it. I shall move on to open general export licences. The UK Working Group on Arms reports that""in 2004, 5 per cent. of OGELs were seen to be misused; in 2005, 8 per cent. were seen to be misused; and in 2006, 11 per cent. That is, just over one in 10, from compliance visits, are shown to have problems with their use."" Indeed, David Hayes, the chairman of the Export Group for Aerospace and Defence, felt that it was a consequence of ignorance about the controls and a lack of concern for the consequences of non-compliance—an issue that the hon. Member for Montgomeryshire raised. That feeds nicely into the issue of enforcement, which the hon. Gentleman also raised. It is surely one of the most important issues, because, without effective enforcement, the rest almost become meaningless. This issue is worthy of debate, as Mark Pyman notes in his evidence to the Commerce Department in the USA, when saying that in the late 1990s""50% of the complaints were about…bribery, even though that is only about 1% of the world trade"." But of course that 1 per cent. is important. Rightly or wrongly, a large number of people view the defence trade with suspicion, because of allegations of bribery or because of the equipment that is traded. A good way of redressing this balance in the eyes of the public is to offer sizeable penalties for breaking the rules, as hon. Members have said. Paragraph 51 of the report notes that David Hayes from EGAD said:""non-compliance with the UK system can make economic sense but non compliance with the US system never makes economic sense."" That quote was also used by the hon. Member for Montgomeryshire to prove that the US system is tougher than the UK system. Does the Minister agree that the potential damage to this business caused by breaching the rules would be a far greater deterrent than any excess legislation or red tape? The Committee makes the sensible suggestion, in paragraph 117, that""in a case where subsequently an exporter is convicted of corruption the Government revoke all his or her export licences."" That was not mentioned by the Committee Chairman, but it is a good idea. Is the Minister still actively considering that? The Committee is also right to suggest that the Government should""set out the timetable for bringing a fully searchable and regularly updated database of all licensing decisions into operation and publish details of its functionality and operating arrangements"," as recommended in paragraph 85. The Government's response suggested that this would occur in early 2009. Perhaps the Minister will give an update and say exactly where we have got to on that project. Cluster munitions were mentioned by the Committee Chairman, I think. We Opposition Members support the agreement that was reached at Dublin and the treaty's subsequent ratification at Oslo. Cluster munitions have caused far too many indiscriminate casualties over the years. We saw that, as has been mentioned, in Lebanon; the maiming and killing caused by cluster munitions was a disgrace. However, it is also essential that the operational capability of our armed forces and their safety in a battlefield situation are not compromised. Therefore, alternative solutions need to be found. In an intervention, the Chairman raised the issue of re-exports, which is a serious matter for concern, particularly in view of the allegations relating to India's re-exporting maritime aircraft to Burma, which we need to consider carefully. The Committee suggests at paragraph 40""that it should become a standard requirement of licensing that export contracts for goods on the Military List contain a clause preventing re-export to a destination subject to UN or EU embargo."" That seems to me to be not only eminently sensible but a vital requirement. If there is an EU or UN embargo, why on earth are we even contemplating that somebody should be able to re-export arms to such regimes? In his evidence, Mr. Doddrell, the director of the Export Control Organisation, noted that the""preferred approach for some time has been to factor all these considerations into the initial licensing decision"." That is the Government's procedure at the moment, so perhaps the Minister will tell us whether that remains their preferred option or whether he would be prepared to put in a clause physically preventing re-export to those countries with sanctions on them. There remains the concern that items may not be sold on for maybe 10, 15 or even 20 years, until the first trading partner has finished with them. The threat of re-exporting is now far easier to assess, through predicting how a country will behave in 20 years' time. Given our better knowledge these days, collected on the ground, surely it should be possible to assess such matters. Extra-territorial and dual-use regulations, internal agreements and end use have been mentioned. The report also raises other hot issues in terms of arms exports in respect of extra-territoriality and dual-use regulations. These areas are obviously a matter of concern and, as with previous subjects, we should not overlook them. But it is imperative that we remember that the British defence industry already adheres to some of the highest trade standards in the world. As a nation with a proud heritage and respect abroad, I feel that our high standards are well recognised abroad. Although we must not take our eyes off our own exporters, it is vital that we expend a significant amount of time continuing to pursue agreements with our partners in the EU and beyond—I am sure that the Minister will say something about this in his summing up—without which continued domestic regulations and restrictions will put British defence exporters at a disadvantage. That will happen if we have a higher regulatory regime than is common for the rest of Europe. Furthermore, that will enable funds to go into the hands of nations without the principles that we adhere to, which will then have the funding to produce ever more abhorrent weapons, leaving our own armed forces, as a corollary, less well equipped to respond to potential threats. Surely we are in the business—I encourage the Minister to say this in his response—of trying to encourage others to live up to the highest standards that we set ourselves. Although good work has obviously been done with the international arms trade treaty so far, there remains much to be done in ensuring a high-level consistent approach to arms trading across the globe. The arms trade is worldwide and there is a clear limit to the effectiveness of national controls. Perhaps the Minister will say something about the progress on the arms trade treaty. Criterion 8, sustainable development, remains a key feature of this report and merits further consideration. Last year, as has already been mentioned by my right hon. Friend the Member for Tonbridge and Malling, Oxfam produced a report entitled "Africa's Missing Billions", at the heart of which was the fact that armed conflict costs Africa around $18 billion per year, seriously derailing development. Some 95 per cent. of the weapons and ammunition used comes from outside Africa. Interestingly enough, because of our arms control regime, British arms exports to Africa in 2007 totalled a mere £44 million. That is still a substantial figure, but small in relation to the whole trade. There seems to be quite a flaw in scrutiny when an export that should be subject to assessment by the Department for International Development as part of Criterion 8 can be "sidestepped", to use the words of the Committee, if the end user is a private company, seemingly regardless of the company's ties to the Government. Perhaps the Minister, with his DFID and DBERR hats on, will say something about that. Once again, I congratulate the Committee Chairman on this excellent report. He has done well to get agreement across the four Committees, but—there is always a but, isn't there?—it is a shame that so many of the issues discussed last year remain as part of this report. Given the importance of the subject of the debate, it should be up to date, highlighting again the importance of the defence industry to our country without ignoring the importance of scrutiny. Tied to this, there is concern that the report gives too much weight to the views of the public sector directly tied to the industry and non-governmental organisations, but contains little about the views of the defence exporters, which, I have to say to the Committee Chairman, is a weakness. Where are the views of defence exporters and the Defence Export Services Organisation? What do those bodies find are the problems with this licensing regime? It would be interesting to hear from them about those problems.