Select Committee on Foreign Affairs Appendices to the Minutes of Evidence


Letter from the Chairman of the Quadripartite Committee to the Defence Manufacturers Association

  I have now had the opportunity to read your letter of 25 September addressed to William Benson, providing the DMA's reaction to our July Report. It has of course been circulated to Committee Members. I gather that you copied your letter to the departments concerned. I therefore thought it helpful to put on the record now the reactions of myself and several of my colleagues to the points raised, and copy them to the four relevant Secretaries of State. I will deal with your points in the order you raised them in your letter.

  (a)  You note that "the Government is able to take decisions of substantially greater impact on foreign relations and the lives of people overseas . . . without prior parliamentary scrutiny . . . There is not a wellspring of UK public opinion demanding the changes envisaged." I believe that the quadripartite committee representing a very broad range of political opinion is in a far better position to judge public opinion on these issues. As we argued in Para 80 we do believe that the public have specific and particular concerns about arms sales which justifies prior scrutiny. May I assure you that we are quite capable of distinguishing between lobbies and genuine public opinion. Governments have in fact consulted Parliament before committing the nation to military action, and such action is subjected to constant scrutiny through ministerial statements and debate.


  I am sure your members will accept that our Reports, and the 1998 Report from the Trade and Industry Committee, have laid much emphasis on the unacceptable degree of delay in dealing with some applications, and with appeals. We are confident that there would in the overwhelming majority of cases be no delay at all. The small minority where the Committee would require notice of a pending decision on an application would almost inevitably be cases which had in any event been of sufficient complexity to have led to a breach of the indicative time-limits. The Committee's proposals are designed so far as possible to accommodate scrutiny of proposed licences within the overall time limits laid down by government departments. But, let me stress for the benefit of your members who have not had the chance to read para 88 of our Report that it will remain entirely open for the Government to grant a licence, without complying with prior scrutiny procedures.


  You refer to the growing expectation for delivery in four weeks or less, and the importance of UK industry being able to preserve its competitive position by meeting tight schedules. We agree.

  (a)  "We believe that the potential workload on the Committee would be even higher than it currently believes . . . We are convinced that the sheer scale of the workload required has not been properly taken into account, both on officials and on Members of the Committee." We have not published our internal working assumptions on our likely workload. There can therefore be no grounds for your belief that we have underestimated it. Our proposals to handle licence applications in two stages will mean that the vast majority of the licences will be cleared as a matter of routine. We are satisfied that we will be able to handle the workload.

  (b)  "We believe that the proposed system would result in significant additional staff work by the already stretched resources within the DTI, MOD(UK), FCO and DfID . . ." That is of course a matter for discussion between ourselves and departments. Some discussions have already been held at official level.

  (c)  ". . . as well as Industry. . . . We believe it would be unfair for the Committee to make decisions on export licences, specially in cases of possible/likely refusals, unless the companies involved were allowed to make representations in support of the applications . . ." This seems to be based on the misconception that the Committee proposes to make decisions. We do not. Proceedings will be conducted in confidence. It is not envisaged that evidence will be taken from any parties. There is therefore in our view no reason to foresee any effect on industry's resources.

  (a)  "Industry has strong concerns about the essential issue of confidentiality . . . Clearly it would be essential under my new system for this confidence to be maintained." The Committees set out at para 84 the Stage 1 information required: it does not include the identity of the intending exporter. As we have set out in earlier correspondence, and demonstrated in our recent Report, we are quite capable of keeping information confidential.

  (b)  "If the introduction of the system proposed results in customer knowledge that the application might be made public, this could prove to be a major disincentive to buying British. Some important customer nations could find it an affront to national pride to have their countries; procurement decisions subject to possible Parliamentary debate in another country". The confidentiality of Stage 2 notifications is in the final analysis a matter for the Government, and for discussion between the Government and the Committee. In any event, neither the price of an item nor the identity of a supplier would be relevant. It would for example have been possible to come to a view on the Zimbabwe Hawk spares, or on the supply of military radar to China, on the basis of information which is already in the public domain.

  Applications are indeed not now public, but of course licences granted are published, albeit tardily, in the Annual Report. It is not uncommon for other Parliaments to debate such matters. But in any event I hesitate to accept that the sensitivities of customer nations should be regarded as an absolute bar on parliamentary scrutiny.


  "There is no explanation of how this system might work. . . . The Committee has not yet worked this out." I regret that you seem to think that it is the role of the trade association you represent to involve itself in how an organ of Parliament operates. Your members can be assured that the undertakings given in para 85 will be honoured, in respect of all the Committee's proposed responsibilities.


  The Committee has of course no intention of relying on the technical knowledge of individual Members for its work, any more than do Ministers or most officials. In the rare cases where clarification of the function of an item is required beyond what is readily available, means can readily be found. In our work to date, we have only on rare occasions found it necessary to seek such clarification.


  "The report does not clarify how this (Stage 2) selection process would take place. . . . This undermines the potential for a system to be put in place forthwith . . .". That a trade association should be unfamiliar with the practices and procedures in private deliberative meeting of parliamentary committees can scarcely be advanced as argument against operation of the proposed system.


  "The DTI's Export Control Organisation would have to delay the issuing of a licence . . .". The 10 working days proposal is intended to give the Committee a short time in which to forward any observations. We are of course aware of the workings of the system and hope to come to detailed working arrangements. These could in due course ensure that the Committee was alerted to a pending decision on a licence application one way or another sufficiently early to ensure that the process of Stage 2 scrutiny did not cause delay.

  The target turnaround time of 10 working days to which you refer of course only applies to uncirculated ELAs, which you will know are the minority, and which are in any event likely to be almost wholly uncontroversial.


  I am surprised and disappointed that your letter makes no reference to the time and effort we have devoted in our two Reports to looking in considerable detail under our existing procedures to all licences refused and to all refusals appealed against. You might wish to draw the attention of your members of paras 57-58 of our recent Report.


  "Comparison of our system with those of other nations is flawed. . . . The introduction of additional bureaucracy and delay into the UK export control system could have much more profound and damaging effect than in either of the two countries that the Committee has used for comparison." Our recent reports stressed the differences between the two existing prior scrutiny systems we have examined in detail. We have not compared the systems but used our analysis of them to inform our conclusions as to an appropriate system here. I am astonished that you should in all seriousness advance the absence of parliamentary scrutiny in France as a reason to resist its introduction here.


  We do not know when the next Session is to begin. We are happy to consult with industrialists on their concerns.


  Your memorandum makes no reference to the unsatisfactory way current licence decisions are made. The current arrangements have left Parliament and public frequently depending upon partial leaks and slanted briefing and sometimes distorted media reporting. I should have thought that the Industry and Parliament have a common cause and interest in ensuring a scrutiny system conducted on the basis of the facts of a case rather than the retrospective recriminations that occur in Parliament and the press when controversial sales are made in secret which have not been subject to any parliamentary scrutiny.

  In some cases it leads to sudden reversal of decisions and abrupt alteration in licensing policy which, surely, has not necessarily served the industry's interests or enhanced the nation's reputation as a reliable supplier. Our proposals would mean that all decisions would command greater respect and authority having been subjected to the sensible and pragmatic scrutiny procedures we have recommended.

30 October 2000

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