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5.30 pm

Many of the difficulties have arisen with small and medium-sized enterprises and, sometimes, very small family-based engineering companies in our constituencies. For example, I learned recently of a small family-run civil engineering company near Manchester. It specialises in high-quality, low-volume production of orders made to high specifications. Some of its orders are involved in defence. For example, it makes parts of a periscope for tanks as well as all sorts of bits and pieces, such as fins, for aircraft and, on occasion, missiles.

Anyone who knows anything about the engineering industry knows that, although there are the big boys, most of the work takes place in small firms in our constituencies that might employ only a dozen or so highly skilled engineers. They are the hardest hit by delays in export licensing.

That particular company in the north-west was approached to make a piece of equipment. It quoted, got the order and immediately put in a licence application.

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It went ahead, produced the goods and finished production on time but could not release them and so lost the order. It had done the work, but because three Departments could not process the application in time, it lost the order and was not paid.

On 9 July this year, my hon. Friend the Member for Buckingham (Mr. Bercow) asked a question of the Secretary of State for Trade and Industry. He congratulated her on her appointment and asked what she would do about the issue of the 20 working days. In a straightforward answer she said:

We all understand that; it is inevitable. However, many issues are not complex. For example, a company in my constituency has made marine flares for the best part of half a century. It had a repeat order from Turkey—a member of NATO. It lost the order. It did not get the export licence in time because someone had decided that they suddenly did not want Turkey to receive flares any more. It was not even a new order. That is another frustrating example. There are many more, but I will not bore the House.

It is important to flag up this problem and for the Opposition to try to be constructive. Let us put target times in the Bill to encourage industry and give Ministers and officials an extra incentive. It is not that Ministers are being idle, not doing their boxes or failing to do their duty. I know what it is like; I have been there too. The boxes pile up and woe betide anyone who does not get them back. I admire enormously colleagues who tell their private secretaries that they are not taking boxes home. There are some who do that, but I never managed it. At 7.15 every Saturday morning the boxes arrived, never fewer than three, often as many as five, and that was the weekend gone. We know the feeling. It is not that Ministers or officials are failing to do their jobs properly but the system needs more discipline if we are not to disadvantage British companies. The purpose of the amendment is to introduce such discipline.

The Secretary of State said that she would do everything possible to speed up decision making, but that the Government would not risk making wrong decisions. I agree that they should not risk that. I shall table a written question in a few minutes asking what initiatives the Export Control Organisation is taking to reduce the processing time of licence applications because that touches on the livelihoods of some 400,000 people in this country. If the Government's objectives for the success of British industry are to be realised, export licensing must be an important part of that process. That is why I encourage the Government, through amendment No. 28, to consider inserting a specific sub-paragraph on the time necessary to process applications.

Dr. Cable: I should like to say a few words on amendment No. 35, which is on a theme rather different from that of amendment No. 28. It tries to bring together the two streams of argument current throughout this afternoon's debate. One is that there should be a new way of tackling the issue of appropriate parliamentary scrutiny. Opposition Members accept that the Government's business must be done and that small procedural questions

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must be dealt with speedily. That is why in many cases the lowest level of parliamentary scrutiny is appropriate. However, in other cases, stricter parliamentary scrutiny is required.

That leads me to the second theme: sustainable development. A successor Minister might wish to change the export criteria, and that should be taken seriously and subject to proper scrutiny. Now that the Minister has had an hour or so to cool down, he might accept that his part in that debate was not his finest hour in Parliament. Perhaps he will respond, therefore, to our helpful suggestion in the amendment that he tackle the problem, which is recognised on both sides of the House, in a different way. We suggest that a distinction should be drawn between narrow procedural problems, which are properly dealt with by the most limited form of parliamentary scrutiny, and changes to the consolidated criteria, which are very important and require proper parliamentary oversight.

I remind the Minister of his comments in the earlier debate on sustainable development that might make him think again about facilitating a separate bite of the cherry and providing a different way of safeguarding parliamentary scrutiny. He said that sustainable development was not the only exception to the consolidated criteria that he had not included in the schedule. I endeavoured to intervene to tell him—he was not willing to accept the point—that when he first introduced the Bill, he explained that the concept of diversion had not been included because it was a totally different idea. In fact, that was not a good reason for excluding sustainable development, which is conceptually very similar to issues such as internal repression. When he reflects on that, he will realise that his arguments were weak.

A difficulty was also made of the fact that there are different ways of interpreting sustainable development. I have since in the past hour had an opportunity to check the way in which different Departments deal with the matter. One Department has several definitions, all of which are consistent and relate to the Brundtland criteria. I mention those points because, when the Government reflect on the day's work, I think that they will realise that they did not handle the matter well. There are other ways of safeguarding the criteria from future changes by any Minister who might wish, perhaps capriciously, to ignore the will of Parliament. By splitting the guidance criteria into two, we have suggested a neat legislative way of doing so.

Mr. Peter Luff (Mid-Worcestershire): It is a pleasure to have the opportunity to speak briefly on an issue that has been of some concern to me in the past in two capacities, one more recent than the other. In the 1980s, I had the privilege of being a special adviser at the DTI. I formed a deep admiration for the work of its officials, but felt that they were generally more concerned with policy than its implementation. Inventing a new policy is a wonderful thing, requiring a great deal of intellectual exercise and agility. Going through the rather dreary process of making sure it works in practice is slightly less appealing.

When it came to export licensing, there was perhaps a tendency to relegate the importance of that part of the Department's work. What my hon. Friend the Member for

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Salisbury (Mr. Key) had to say was very important, as it reminds officials that it is as important to deliver a policy speedily as it is to invent a marvellous policy. I commend what he said and hope that the Government will reflect that it would do no harm to accept this important amendment.

More recently, I had experience of this problem as a constituency Member. It was a particularly strange occurrence. A company in my constituency that had been actively encouraged by the DTI to export to Pakistan—and had received great assistance from the export promotion wing of the Department, for which it was grateful—then found that the export of the piece of machinery concerned was frustrated by the export licensing regulations. The machinery was impounded at the dock and it took weeks and weeks for the Department to make a decision on the granting of the licence.

We had a bizarre situation, in which the company had been encouraged to export a product by one part of the Department but the export of that piece of kit was frustrated by another part of the Department. Eventually, the Department decided that it should not be exported at all, so all the work of the export promotion part of the DTI was entirely wasted. Now, the same company is being encouraged by the Department to export the same kit to China. Will it get an export licence in reasonable time for the export of that piece of kit? It is odd to see a Government who boast of joined-up government not being able to join up the work of one Department of State.

It would be a generous and wise act to accept the amendment to ensure that there was some pressure on the export licensing function of the Department to act speedily in the interests of British business.

Mr. Gerald Howarth (Aldershot): I rise to support my hon. Friend the Member for Salisbury (Mr. Key) and amendment No. 28, which would make a vital contribution not only to the efficient working of the system, but to reassuring companies up and down the country. Many of these companies are small. They are not necessarily located in the major centres of defence manufacturing, but in constituencies across the country. Their concerns ought to be taken into account.

I cannot see the harm in adding to the Bill this modest amendment. It is not specific in terms of the number of days within which the Department should make a decision, but it puts in the Bill the need to provide a timetable as guidance to officials. That would provide industry with a degree of certainty. Despite being, generally speaking, favourably disposed towards the Bill, industry sees an element of uncertainty in it. Industry does not like uncertainty; it likes to be certain about the conditions that apply to its operations.

The amendment would send out to industry a strong signal that the Government understand their concern that they must expeditiously handle applications for defence export licences. It is in the Government's own interests to accede to my hon. Friend's suggestion. It would be beneficial to them not only in their relations with industry but from a macro-economic point of view because, as the Minister—and I believe the House—knows, I believe strongly in defence exports. They are vital to the success of Britain's aerospace and defence manufacturing industry, which employs 350,000 people, and absolutely essential to ensure economies of scale in our

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manufacturing for our own forces. Therefore, anything that we do to enhance those exports, within a system of licensing, must be good news for Great Britain generally.

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