Select Committee on Defence Minutes of Evidence


Examination of Witnesses (Questions 1 - 19)

TUESDAY 30 JANUARY 2001

RT HON ROBIN COOK, MP, MR WILLIAM EHRMAN, MR TIM DOWSE AND MR IAN BAILEY

Chairman

  1. Secretary of State, may we welcome you. If I may just preface my remarks, because inevitably in a session like this we address the critical issues, I would like to say we do appreciate the 1999 Annual Report in every sense; it is an amazing document in many ways, in terms of the sheer amount of information and the openness that it reveals. I do not think we have seen a parallel document in any of our journeys, therefore we do appreciate that. Secondly, I would like to put on record our appreciation to the officials in all the four departments. We have at various times asked detailed questions and their patience and the industrious way in which they have replied to our inquiries has been much appreciated.

  (Mr Cook) Can I respond to that, Chairman, and thank you very much for that. I am proud of the Annual Report which we have produced. It is by far the most transparent of any European nation. It contains a wealth of information, both on the licence we provide to an individual country and the overall totality of our policy. It is substantially thicker than the 1998 one, and that reflects the fact that there is substantially more information in it. I would thank the Committee for some of the very helpful suggestions that it has made that have assisted us in improving the transparency and the quality of the document. For instance, the individual value by country that we have included this year is a specific recommendation of the Committee. The table on the reasons why we have refused licences also flows from a recommendation of this Committee. I think, in that sense, the relationship between both our departments and the Committee has worked well, and I value that.

  2. Thank you very much indeed. I am afraid that is why it has encouraged us to go further, because we feel that it has worked. The kind of scrutiny we have adopted and the responses from yourself and the other departments has encouraged us to believe that, in fact, the Committee could actually embark upon a system of prior scrutiny, which was the central recommendation of our report. If we could, in the first part of this hearing, rehearse the arguments that we have on the issue of prior scrutiny, we have produced our report, you have produced your response and we have had a debate in Westminster Hall, and that has clarified where you find difficulty and where we think we can address, certainly, the practical difficulties that have been expressed. Perhaps we could dwell on the issue of prior scrutiny for a while, while we see if we can find some accommodation and some arrangement between us.
  (Mr Cook) I will not disguise that I had expected you to do so.

  3. There were three areas of practicality which your reply addressed. There was the issue of delay, there was the issue of confidentiality and there was the issue of information/advice to ministers. If I may, may we look at each of those three points to start with. On the delay issue, would you accept, frankly, that barely half all the licences meet your own 20 working days' target, and that anyway the small group of licences that tend to be the tough decisions takes not 20 working days but, indeed, many, many months? If that is the case, our 10 working days is a very modest suggested "delay" when, in fact, those delays only occur in the very small clutch of licences which would involve difficult decisions. I wonder if you could explain to us why our modest desire to have 10 days to consider what will be some of the most contentious possible licences is unacceptable when, in fact, it takes the department many months to consider them?
  (Mr Cook) Can I preface my remarks, Chairman, by saying that I appear here as a composite on behalf of three, maybe four, different departments, and that the line in front of you is the composite view of those different departments. I am very happy to hear what further representations or arguments you wish to make to me, and will share those with my colleagues. In the meantime I will respond to your questions as best I can on behalf of all four of us. On the issue of delay, let me begin, first of all, by picking up what you said. Frankly, we are not ourselves yet satisfied with our performance in clearing the applications for export licences. Our target is to achieve 70 per cent of such applications within 20 days, we are currently on 57 per cent. We would very much like to improve on that and get that up to target. Against the fact that we are already not meeting our target, we take a deep breath at the idea of anything that might significantly affect our ability to perform quickly in the turn around of those applications. Ten days, as you rightly say, is 10 days; it is also 50 per cent of our target of 20 days. Moreover, we are dealing with 12,000 applications in the course of any one year. The sheer effort and staff diversion of consultation at committee of 12,000 will be quite significant. I am not clear from the Committee what proportion would then proceed to stage 2. Even if we went for 10 per cent we are still looking at 100 a month then proceeding to stage 2 notification, which is substantially in advance of the proportion that the United States examine—about 3 per cent of the total. I am perfectly happy, Chairman, to accept that there is room for doubt as to how long the time will be or how much staff will be involved in that. I do not think anybody denies, though, that it would require a significant investment of staff time and is not likely to speed up the process.

  4. I do think, Secretary of State, you exaggerate the difficulties. First of all, the vast majority—overwhelming majority—of the licences we are talking about are routine licences which will go through almost on the nod. We are, in fact, trying to identify, probably, for stage 2 notifications a very small proportion, I think, from our experience of even post-facto scrutiny, calling in licences; it is a fraction of the 10 per cent, to be honest. I think it is far fewer than that. Those will, I suspect, be the same licences that you and your officials are deliberating upon and would never meet the 20 day target anyway.
  (Mr Cook) We are already not meeting the 20 day target in the case of 43 per cent, and I would—

  5. Most of those are not contentious, though.
  (Mr Cook) Chairman, you say "on the nod". I would not wish you to think that the 12,000 applications go through on the nod through all four departments. Many of them do give pause for thought. But, if it is the case that the Committee is thinking of something much less than 10 per cent (you are not advancing any guidance as to what percentage may be in your mind), I find it difficult to understand why the Committee cannot define some parameters which would cut down the reference in the first place. Your proposal as it stands is you wish to examine stage 1, all 12,000 applications. If you really think there is only a very small percentage of the 10 per cent that you would wish to examine, I do not see why it is not possible for the Committee to produce parameters, for instance, similar to the United States' ones, which substantially reduce the number that are referred to you.

  6. In relation to the comparison with the United States, the United States has a threshold on the size of the contract, and I do not think that will—
  (Mr Cook) I am not recommending the United States' system, but I think your criticisms of the United States' system are telling. I am merely saying that they do have parameters which reduce the burden.

  7. We could try to do some analysis, but a very large number of the licences—for example, going to fellow allies and NATO countries—we could, almost generically, pass those and say "Those are not ones which need or require anything but just nodding through"?
  (Mr Cook) That is open to the Committee, but it is not what you propose to us.

  8. With that kind of approach, would you find the delay point less of a strong one?
  (Mr Cook) I think the delay issue would still rest with the remaining 30-40 per cent that do not fall within those categories. I rather suspect it will be in this 57 per cent that we are looking at those that do go to our NATO, EU partners and other countries like Australia, with whom we have an understanding. The remaining 43 per cent, I suspect, have a higher proportion of those outside that area. So we are both identifying the same area that already takes us over 20 days.

  9. I think, if I may say, you are exaggerating the problem. We can address that.
  (Mr Cook) I am not seeking to exaggerate the problem, or to quantify the problem, I am merely saying that I find it difficult to accept that it is not going to be a factor in making this process lengthier, more complex, require more staff time—all of which is a factor and is not likely to assist us in reaching our target which is 70 per cent in 20 days.

  10. Finally, before asking other colleagues whether they would like to come in on this point, I would make one further point: we do make it very clear that ministers would remain free to grant the licence, and if the Committee in its scrutiny was, in fact, delaying matters there would still be the power for the minister to grant the licence irrespectively. We made that clear in our recommendation.
  (Mr Cook) Yes. I notice, in the course of your paper, you are quite explicit that the responsibility rests with ministers. If I might gently suggest, I might be more attracted to the idea of prior scrutiny if you were willing to share the responsibility with us.

  Chairman: Check! Anybody else on this question, before I move on?

Ann Clwyd

  11. Secretary of State, obviously no United Kingdom Cabinet is going to ban arms exports completely, even though we might wish them to do it at various times. However, I do think we need a scheme which identifies the good guys from the bad guys in the world, and our perception of the good guys and the bad guys changes from time to time, obviously. Would it not be a good idea to bring MPs into an arena where they can exercise scrutiny and hold debate on whether arms should be exported to certain countries? I would have thought it would be quite helpful to you actually, instead of being criticised for a decision after it has been made. Why not involve us in helping to make the decision in the first place?
  (Mr Cook) Can I just take one step back? There is no question but that our policy on arms exports might be subject to Parliamentary scrutiny. Indeed, this Committee has done an enormous amount in order to improve both the Parliamentary and the public scrutiny of our arms export decisions. Secondly, we, in our turn, have taken what have been major, historic steps towards opening up the opportunity for scrutiny, particularly with the publication of such a detailed and full Annual Report—the best there is around. That is important, not simply in reporting on what we have actually decided, it is also very much a factor in the minds of ministers when they make decisions that now that decision will go public in our annual report and will be open to challenge in open debate. I think that scrutiny is entirely healthy and is well within our constitutional procedures. In our response to your proposals we did offer ways in which we might improve that dialogue, for instance, by confidential briefings with the ministries. The issue of contention is not whether our policy on arms export should be or is subject to scrutiny—which it is and I think we have improved our scrutiny—the issue is whether a decision we are about to take should be a matter of prior scrutiny.

  12. That is the point I am pushing. Some of us went to the United States and Sweden, where this is not a problem for them, and I do not see why it should be a problem for us. Then we read in the newspapers that there is a fall-out amongst Cabinet members who deal with these matters. Is not the country and are not MPs entitled to know who in the Cabinet is in favour of prior scrutiny and who is not, and for what reasons? I know you are speaking collectively, but there are leaks to newspapers in which we frequently read about divisions in the Cabinet itself. Should we not know what they are and why?
  (Mr Cook) You will not be surprised that I also read those leaks with absorbing attention, but I am here speaking on behalf of all four voices and I do not intend to soliloquise which voices say which.

Chairman

  13. On the delay issue, I believe that we can accommodate your arguments, Secretary of State, and I think we can carefully look at it and discuss it further with the departments to see, in fact, whether we could reduce the numbers and, therefore, cut down the time. I do not think the numbers you are talking about are, frankly, those that we are talking about. I think we visualise the vast majority of licences going through perhaps not "on the nod" but going through very quickly and, therefore, identifying those which would take more time and which the department will need to take more time over anyway. So our 10 days would not, in that context, be such a dreadful thought.
  (Mr Cook) Chairman, if the Committee is willing to consider what parameters would narrow the initial reference, and if it can give us any indication about that very small fraction you are now hinting at, then I am very happy to discuss that again with my colleagues. I am not guaranteeing that it will change the outcome of that discussion but I am willing to take it to them. At the moment the proposal is for all 12,000 to be circulated with no guidance as to what number might then proceed to stage 2.

  14. The second area of practicalities that was raised in your response was on the issue of confidentiality and when stage 2 notifications, as it were, could or would be made public. This was a matter of concern—it would cause commercial concern, it would cause problems. We have thought about that and in the letter I sent to you it was the collective view of the four Committees that we could accept that, in fact, stage 2 notifications might be made in a confidential manner. How do you respond to that? Do you find that meets your point?
  (Mr Cook) You do intend, though, in some of those cases to proceed to report to the House, and it is difficult to see how you can proceed to report to the House without the question of confidentiality arising. I think we would also have to be very aware of the fact that many of those who apply for the licence are applying to the Government, not necessarily wishing to see that circulated further than Government machinery. That is, I am afraid, a matter of record. That, then, in turn, becomes a question as to whether that would become a factor in a licence application. I think, however, the main issue here is if you are going to preserve confidentiality it is hard to see how you can report to Parliament. On the comparison made with the United States, it should be borne in mind that the United States' system, as I understand it, kicks in after a contract has been signed. In other words, at that point there is no longer a contract to be picked up by a competitor or by another nation. It is actually our policy to counsel companies not to sign contracts until a licence has been determined, because of course we cannot give guarantees that the licence will be granted. Therefore, the system of prior notification you are suggesting would kick in before a contract was signed, which in the event of any material becoming public—whether through a report to Parliament or some other way—would potentially leave that contract vulnerable to competitors.

  15. If we agreed to then explore the question of how subsequently one would report to Parliament, if it was agreed that the stage 2 notification procedure remained confidential, it is still the Committee exercising their degree of scrutiny—as indeed, for example, the Intelligence Committee deals with things like this—and, in fact, if that was the case that would remove your objection on this ground?
  (Mr Cook) I think that the area of confidentiality is a very important one. It may be that if we were to go down this road we would have to look again at which point we could carry out the notification. Do we, for instance, encourage companies to sign the contract before we refer them to the Committee? If we do so, where does that leave us in our presumption that a licence will not necessarily be granted? There is a serious issue of principle.

  16. Yes, but if we accepted the degree of confidentiality that you drew our attention to in that notification procedure, if we could come to arrangements on that grounds, would that be sufficient for you?
  (Mr Cook) I would not like to say yea or nay to that. I think we would need to reflect upon that. Of course, when the DTI receive an application from a company they can guarantee its confidentiality in that it is being handled entirely by ministers or by their servants. I think, therefore, we have to—

  17. Select Committees have a very good record in dealing with confidential matters.
  (Mr Cook) I was not seeking to make any criticism whatsoever of Select Committees.

  18. The trouble with much of this is that we often deal with a leak situation where the stuff has been leaked—perhaps there has been a bit of in-fighting inside Whitehall, or perhaps elsewhere, it all happens, it has happened in the past—and therefore you are going to have a debate in Parliament before the licence is finalised or agreed anyway. Are there not occasions when a debate of this kind—let us take the issue of the difficult problems you had over Zimbabwe spares.
  (Mr Cook) I recall it, yes.

  19. Why could Parliament or the House of Commons not debate that? In the end it did debate it and did raise issues.
  (Mr Cook) Yes, it did discuss it, and indeed it was repeatedly discussed on pretty well a monthly basis. The issue of arms supplies was a sub-set of that wider argument and discussion. However, I am not sure that the wide range of manufacturers who submit those 12,000 applications would be encouraged by that as a parallel for them.


 
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