Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



  20. You keep on, dare I use the word, retreating to the fact that it is 12,000—we are not talking about 12,000. You know we are not talking about—
  (Mr Cook) You are asking about—

  21. We are talking about a very small fraction of licences. Secretary of State, you do not actually view 12,000 licences, do you?
  (Mr Cook) No, but my civil servants will view a high proportion of the 12,000

  22. How many licences are brought to your attention?
  (Mr Cook) They will then refer a proportion of those up to Ministers, and a few of those will come to me. I absolutely agree it is a very small proportion, I am not challenging that, but you are asking, as a Committee, to involve the 12,000 and you are not giving me, at the moment, any guidance as to what percentage, what number, what proportion of those you wish to take further to a stage 2 process.

  23. Could you tell me—and I accept it will be a rough and ready assessment—what proportion of the 12,000 licences fall on ministerial desks?
  (Mr Cook) I would not want to give a figure off-hand but I can write to the Committee. I do not know that that necessarily helps us, Chairman, because it is not necessarily going to be the same judgment that you would make as my civil servants make.

  24. But it actually produces an "order of". The Committee would not want to be investigating dozens and dozens more licences—
  (Mr Cook) I am not seeking in any way to prevent you having access to data. I am very happy to write and give you the percentage that we think go to ministers, say, in the Foreign Office. I cannot speak for my other colleagues. I am not clear whether you are saying to me that you will accept that as the same percentage which comes to the Committee.

  25. I think we would know that it was not this massive 12,000 that you keep on threatening us with.
  (Mr Cook) I am not threatening you with it, it is in your own stage 1 notification. You are asking for the 12,000, I am not presenting that figure, nor am I presenting that process. This is your own process.

  26. I think one of the reasons why we thought that at some stage there may be a case for a Parliamentary debate or a Committee reporting in the way you proposed is that the debates we have had in the past—let us take the Zimbabwe spare parts, which you said, in the end, was a subject of Parliamentary debate and discussion—were only because there was a leak and sometimes leaks are misleading. At least this would be a proper and ordered approach to the whole issue, whereas at the moment we are depending upon leaks and partial explanations in newspapers.
  (Mr Cook) No, I would very much dispute that, Chairman. As I said, we are the most transparent of any of the arms exporting nations. Our Annual Report is more comprehensive than anything produced by any of the other European countries. It may well be the case that in the very recent past scrutiny and debate on arms export policy was the subject of leak and of guesstimate. It is not now, it is on the record. The issue of principle that weighs heavily in Government and weighs heavily on my colleagues is whether that scrutiny should be prior or post a decision. I will not conceal from the Committee (indeed, it is set out in our response) that there is some nervousness as to where that leaves Government departments in respect of other exercises of executive function. For instance, DFID may not be comfortable with the idea of prior scrutiny of an aid decision; DTI may not be comfortable with prior scrutiny of whether it provides assistance or does not provide assistance in the case of a company; the MOD might well be concerned about prior scrutiny over a procurement contract. All of these are important issues, all of these do require scrutiny in Parliament, are scrutinised by the Members of this Committee, but they are scrutinised after the executive has taken its decision; it is not a decision shared with the Select Committee.

  27. The third area of practicalities that was raised was that, in fact, somehow we would be prying into this important relationship between officials and ministers; that we would be seeking access to the sort of advice that was being put to ministers. I think, if you look back at what you have said, I am not sure that that stands up. We did not ask for that type of information and I do not know why you have put it up as being a sort of obstacle or a problem. We did not ask to receive what officials are advising you or your fellow ministers.
  (Mr Cook) If you want to go into this process, then I think you have got to be honest about the implications. Now, maybe you can robustly defend the prospect that you should have the right to see advice of civil servants to ministers, and that this should be a departure from the general principle.

  28. We have not asked for that.
  (Mr Cook) I am coming to that, Chairman. I do not honestly think you can ask, for instance, for stage 2 notification process without, at some point, mentioning what is the advice coming to ministers. After all, you are asking to see, here, the more difficult, the more contentious, the more complex decisions and you are asking to see them—implicit in the word "prior"—before ministers reach their decision. I cannot readily see how you can make an informed judgment on this unless you are enabled to see papers that canvass the pros and cons for consideration.

  29. I did not think that was our suggestion; our suggestion was that we would ask for further information about the licence, much of this information would have been made available when the original licence application comes in, and the information we might ask for would probably be the same information officials were asking for or you would be asking for. We would not be asking officials "What are you going to say to Secretary Cook on this issue or that issue?" We would be saying "Can we have some information about this licence so that we can make an assessment whether we wish to proceed to a notification?" We are not asking for your officials to give us what they would, in the end, be recommending you to do.
  (Mr Cook) In fairness to the Committee, Chairman, they are going to have to have access to some information/advice on the considerations of any complex or difficult application. Otherwise the decision that you are then making is a decision that is not going to be an informed decision, and I am quite confident this Committee would not wish to take such a decision. I would suspect that faced with a stage 2 process and a difficult case the inevitable—and perfectly correct—instinct of the Committee would be to fire us off one of the many letters you send us, and the reply to that letter will be providing the information/advice on which Ministers themselves will come to a decision on.

  30. I think we would make a distinction: we would be asking for facts, not advice.
  (Mr Cook) I would like to think that my civil servants give me facts rather that subjective thoughts.

  31. We would ask for facts.
  (Mr Cook) Yes, but here we are into a sort of slight play on semantics; where do facts tail off into subjective judgment and where is advice? Advice is information.

  Mr Rowe: Mr Chairman, it seems to me that when the Secretary of State said, quite early on, he had some yearning to share some of his responsibilities with Members of Parliament, he was being very sensible, because it seems to me that the kind of application that we are talking about is the kind of application in which at least one of the departments concerned would have some reservations of their own about the appropriateness of granting a licence. That, in itself, would cut the numbers down very, very sharply, which would mean everyone would look at issues which the departments themselves were concerned about. It does seem to me that there is a strong case for saying that Government would actually benefit from, in very contentious problems, getting advice from Members of Parliament before granting the licence because, thereafter, if they grant a licence of which later on the House of Commons strongly disapproves, they have got a much heavier load to carry than they would have had otherwise.

  Chairman: Is that a question?

  Mr Rowe: That is what I think, and perhaps the Secretary of State would care to comment on that.


  32. Do you want us to share in that?
  (Mr Cook) In many ways I would love you to share my responsibility so I can blame all the contentious decisions on Ted Rowlands and his Committee, but I note you are being very careful to leave the responsibility with ministers—

  33. Absolutely.
  (Mr Cook)—not with the Committee. Therefore, it does seem to me a rather one-sided bargain. I would want to contest one point that Mr Rowe is making. One should not assume that any scrutiny that influenced ministers has to be prior scrutiny. Indeed, I think that the decisions that we take on arms exports have been immensely informed over the last three years by the degree of scrutiny and dialogue that there is between us, and the Committee will not be surprised if, in anticipation of what they may say afterwards, it is a factor in the minds of ministers when they approach this. Just as the publication of our report, which is a transparent report after the event, this is a post-event report, also shapes our minds because we know we have to be honest and open and this Committee will scrutinise us. Therefore, I would not under-rate the effect of post-scrutiny influencing a decision.

Sir John Stanley

  34. Foreign Secretary, can we try and clear another one of your road blocks, hopefully, somewhat or totally out of the way. You did say in the Government's response, "Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in the accordance with the powers conferred by Parliament." In other words, the Government is erecting a supposed legal objection to the prior scrutiny proposals of the four Committees. Could I ask you, given the fact that, and I am delighted you have already referred to it, in paragraph 88 of our report, in the first sentence, we make it absolutely clear that responsibility for decisions on arms export licences would continue to lie wholly with ministers there can, in fact, therefore, be no question of any encroachment on the existing legal authority given by Parliament to ministers in this area. Therefore, the legal objection that has been raised would appear to be a wholly specious one?
  (Mr Cook) As I say, I am not sure I am attracted to where the responsibilities are for such a joint process. I would say, Sir John, I am not quite clear where the Committee sees the added value of prior scrutiny. As a practising politician I am slightly sceptical whether the first time I ignore your advice you will sigh with patience and resignation and say, "We accepted the responsibility would rest with the secretaries of state". You will quite properly and quite rightly complain to Parliament that your advice on this matter was ignored. In those circumstances I think that we are somewhere in between that simple stark statement that "the responsibility rests with ministers" and joint decision-making, which would be the ultimate end of this process.

  35. That slides away from the particular point that I put to you, which is the suggestion that there is some legal objection to the proposal which the Committee is making. I put it to you that the Government, of course, can take a view that it does not like the proposals but I do put it to you that to try to knock down the Committee's proposals on legal grounds is, and must be, wholly specious, given the fact that the Committee in the clearest possible terms made it clear that the responsibility will continue to lie with ministers?
  (Mr Cook) I am sceptical whether that would survive the first three months of the process. Laws can be changed, a legal argument is not in itself an eternal argument against. There is a bona fide issue of legal consistency. We have set up criteria by which we judge arms applications. I am happy to say despite two or three years of the type of scrutiny we now go through nobody has really come up with a case where we have departed from those criteria. Nobody has actually complained that we have departed from this criteria. It is important for us that we stick to the criteria because we are all vulnerable to review by an applicant who feels he has been treated unfairly. Therefore in every decision we make we have to be confident it is a consistent decision, to the extent that we share that decision beyond the Government. So, it does raise the possibility that you may end up with a decision that is inconsistent with the criteria.

  36. Following what Mr Rowlands said on the issue of advice to ministers, is it not the case that already, in the great majority of questions, which you, Foreign Secretary, have taken from the Foreign Affairs Committee asking the Government's view on specific questions of foreign policy, inescapably the response which you give must rest on advice you have received as the Foreign Secretary, but you never suggested to the Foreign Affairs Committee you cannot respond to our questions because you are drawing on the advice you have received from your officials. Why is this particular question in any way any different from what you do regularly as a matter of course in the voluminous correspondence between you and our Committee during this Parliament?
  (Mr Cook) In sheer self-defence I think I should say at this point that I do not always accept advice and it is not always advice from officials you hear in response to the Foreign Affairs Committee. The issue here is not how we defend a decision that we have taken or a course of action we have taken, but whether the Committee should intervene before that decision is taken. Indeed, in the nature of ministers, sometimes you take decisions against your officials.

Mr O'Neill

  37. Secretary of State, I have a little bit of difficulty, you have already said to us that if we could sort out numbers that would not necessarily be a problem. If criteria could be mutually agreed we could get that issue out of the way?
  (Mr Cook) It would be a help.

  38. It is not the obstacle that was once suggested, perhaps if we tidied up procedures. I do not want to go over the ground again. Numbers in themselves are not the single biggest issue. The second question is about the publication and confidentiality. The Intelligence Committee has a relationship with the appropriate authorities and it seems to operate quite satisfactorily. Could you envisage a situation where a sensitive case was discussed with this Committee prior to a licence being granted and that no publication of the discussion that we would have would take place until the licence was issued and the deal was struck? Could there not be a procedure whereby that concern could be accommodated? If you assume that there is goodwill on both sides and that if we made representations and they were not accepted we would not release that story to the press or seek to raise it by other means in the House?
  (Mr Cook) First of all, can I go back to the general point you are making. It seems to me there are two separate levels of this discussion, one which is a practical consideration touches on the question of delay, and the issue of delay, of course, unavoidably touches on what proportion you wish to see from the start and what proportion of that proportion you then wish to pursue. It does seem unavoidable to me that the larger the numbers involved the greater the amount of work on my staff and other departments, and the greater the potential for delay. That is a very serious concern and we should not push it to one side. It is an important management concern for any minister. It is not the issue of principle, and the issue of principle we have also touched on, which is whether the department would feel comfortable not with scrutiny, that is the nature of life of a minister, but with prior scrutiny and what is the precedent for other parts of that department's work. Dealing with the first part of that does not resolve that major question of principle. Confidentiality is also part of this practical consideration. I anticipate we are going to have a private session later on in which I have no doubt some pending applications will be raised by some of you. We have no principle of prior scrutiny, no requirement of prior scrutiny, without conceding that I am very happy to have discussion on some of those things that concern colleagues. As a generalised rule for every application to be available to the Committee may cause pause amongst some of those industries that make applications and, more likely, may cause pause for those who might place contracts with them and may go elsewhere.

  39. There are also those people who currently make applications and after six or nine months come to us because they are sick and tired of the manner in which it is being handled by you and your officials. We all have innumerable instances of manufacturers who just decide to give up and lose the contract. It is probably, more often than not, done because you and your officials choose not to come to a decision and you hope the difficult cases might go away.
  (Mr Cook) I dispute that, Martin. It may well be the case that not everyone runs departments efficiently and that has to be resolved by a process of dialogue and sometimes in those circumstances, which are very few, you are dealing with a changing situation in the country. I am not going to resile from what I said at the beginning. We are not satisfied with our performance in terms of turning round export licence applications. We would like to achieve a closer performance to our target. Whatever the merits of the Prior Scrutiny Committee it is hard to deny it is going to make it more difficult rather than more easy to meet those targets.

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