3 Promoting arms exports|
The Government's policy
7. The promotion of arms exports is a key part of
the Government's business strategy. While in opposition, the current
Defence Secretary, Dr Liam Fox, said that he would make it his
policy to "maximise the UK's share of global defence exports"
while the Defence Equipment Minister, Mr Peter Luff , has reportedly
said that, "There
will be a very, very, very heavy Ministerial commitment to the
process. There is a sense that in the past we were rather embarrassed
about exporting defence products. There is no such embarrassment
in this Government."
8. The Government's emphasis on arms exports was
reiterated during our oral evidence on 24 January 2011. The BIS
Minister, Mr Mark Prisk, told us that arms exports were "an
important part of the overall wish to see an increase in the export
of manufacturers' goods and services".
The FCO Minister, Mr Alistair Burt, told us that "there are
no worries about expanding the opportunity for exports."
9. In February 2011, the Prime Minister led a delegation
of senior arms exports executives, to the Middle East. At the
same time, the Defence Minister, Mr Gerald Howarth, accompanied
British company executives to an arms fair in Abu Dhabi.
10. This emphasis on arms exports has led to concerns
among some non-governmental organisations (NGOs) that the Government
might prioritise sales to the detriment of controls. The UK Working
Group (UKWG) wrote to us expressing concern that "prioritising
the establishment of a more commercial culture could come at the
cost of conflict prevention and by a reduced emphasis on responsible
arms transfer controls" and it was "not clear how the
Government intends to reconcile these potentially competing sets
11. We asked UKWG to elaborate on its concerns over
the promotion of arms exports. Mr Rob Parker of Saferworld highlighted
that, while "we don't actually have a problem with promoting
arms exports per se, there were specific concerns over
the role of diplomats in promoting arms exports. Mr Rob Parker
told us that:
In some contexts, the UK's diplomatic and political
leadership and pressure would best be used in promoting the kinds
of political and social development and reform processes that
address the drivers and the causes of conflict.
He went on to say:
If the same personnel who should on the one hand
be providing Her Majesty's Government with an analysis of, say,
the human rights situation on the ground in a country that is
requesting UK arms and on the other hand they are being asked
to promote UK exports, we would say that there is potentially
a risk if that is not clear.
12. He stated that this would potentially leave the
UK in breach of its commitments under the EU Council Common Position,
2008/944/CFSP, which defines common rules governing the control
of exports of military technology and equipment to all destinations.
13. In written evidence, the Campaign Against the
Arms Trade (CAAT) highlighted that:
The Government's arms sales unit, the UK Trade
and Investment Defence and Security Organisation (UKTI DSO), has
a list of priority markets for 2010/11. These are Algeria, Australia,
Brazil, Brunei, India, Iraq, Japan, Kuwait, Libya, Malaysia, Mexico,
Oman, Pakistan, Saudi Arabia, South Korea, Turkey, the United
Arab Emirates and the USA.
CAAT noted that this list:
worryingly, include[s] countries that give rise
to grave concern on human rights, conflict or development grounds
including Algeria, Iraq, Pakistan and Saudi Arabia. UKTI DSO is
also working hard to promote military exports to Angola and Vietnam.
14. All of our witnesses from NGOs stressed that
the Government's view on the desirability of promoting arms exports
had not yet been translated into substantial changes of policy.
Mr Rob Parker of Saferworld commented that "it's perhaps
not a policy change, but a continuation with a bit of refocusing"
and Mr Oliver Sprague of Amnesty noted "that many of the
issues that were of concern to the previous Government remain
as a focus of this Government."
He went on to highlight that
we are very early into the new Administration.
I think that there have only been two quarterly reports published
as yet, so it's actually quite difficult to look at specific cases
of licensing to see whether there has been a shift in practice
in licences.[...] It's certainly too early to tell.
Mr Hayes of EGAD also noted that, "It is early
in the new Government to be able to determine whether there have
been any substantive changes."
15. The FCO Minister, Mr Alistair Burt, agreed with
our witnesses that this Government had yet to adopt a radically
different position from its predecessor, and he doubted whether,
despite a more "commercial" outlook, there would be
a fundamental change in attitude. He said that "The Government's
approach to strategic export controls will remain firmly based
on a case-by-case assessment."
He also assured us that "the Committee will see that our
approach to arms controls matters will be very similar to that
of the previous Government."
16. We questioned the BIS Minister, Mr Mark Prisk,
about the concerns expressed by NGOs, including Amnesty and CAAT
that the UK Government was promoting arms sales to states which
posed concerns on human rights, conflict or development grounds.
He told us that ultimately this would be "a judgement call
based on the information [the Government] has", and while
he did not explicitly rule out arms sales to states such as Libya
or Algeria he was confident that the Consolidated Criteria regulating
arms exports would prevent arms sales to 'undesirable' areas.
He said that "the appropriate approach is to make sure that
we look at the risk in each country on a case-by-case basis and
use that judgement accordingly."
The FCO Minister, Mr Alistair Burt, echoed this statement. He
told us that "it is the criteria for arms export that trump
everything" and "there is a firm belief that the robustness
of the criteria will ... ensure that we do not run into trouble
or put other people into trouble."
17. We also asked the FCO Minister, Mr Alistair Burt,
how diplomats would cope with the competing set of priorities
between supporting arms exports and raising concerns over human
rights violations. He doubted that "any diplomat or Minister
want[ed] to be placed in a position in which they could be accused
of taking a decision for the wrong reasons, if something subsequently
went horribly wrong". He also hoped that a "sense of
responsibility would also be a significant driving factor in decisions
that colleagues were being asked to make." 
18. We conclude that the validity of the Ministerial
evidence we took on 24 January and the wisdom of some of the export
licences previously granted need to be assessed against the Government's
subsequent abrupt changes in export licensing policy following
the recent uprisings against authoritarian regimes in North Africa
and the wider Middle East. We look at these issues at more depth
later in this Report [chapter 10]. We recommend that the Government
in its response to this report sets out how it intends to reconcile
the potential conflict of interest between increased emphasis
on promoting arms exports with the staunch upholding of human
The Treaty on US/UK Defence Trade
19. The Treaty on US/UK Defence Trade Cooperation,
which was ratified in the UK in early 2008, was eventually ratified
by the US Congress on 30 September 2010. The Treaty aims to streamline
defence export procedures between the two countries. Essentially,
under the Treaty exports from the US to the UK will mirror the
current practice for authorising UK defence exports to the US,
namely, the majority will be undertaken through open, as opposed
to individual, licensing arrangements.
The UK's existing export control system will remain in force alongside
the Treaty and UK arms exports to the US under the Treaty will
still need to meet the Government's export control criteria.
EGAD told us that the US is "a big and increasing market"
and the indications are there would be increased sales to the
20. However, in written evidence, EGAD complains
that there is uncertainty amongst companies in the UK and USA
as to what steps they need to take to benefit from the Treaty.
In oral evidence, they said that the Treaty would not bring major
benefits to British businesses for three main reasons. First,
regulations needed to be implemented to bring the Treaty into
force. Mr Hayes of EGAD complained that, "until we know the
detail of these regulations ... it's difficult to brief industry."
Second, the Treaty negotiations had taken so long to be concluded
that the position regarding exports to the US had improved "almost
beyond recognition." The Treaty was described as "a
solution to a problem that has largely gone away."
Third, the Treaty had limited scope and would be applied only
to "material usable for a UK Ministry of Defence contract."
Overall, EGAD suggested that the Treaty would be of "value
to ... maybe two or three UK companies" and would bring "a
narrow benefit to a narrow population."
21. We asked the BIS Minister, Mr Mark Prisk, about
the benefits the Treaty would bring to British exporters. He called
the Treaty a "stronger opportunity to press the case for
good UK manufacturers."
The Head of the Export Control Organisation (ECO) told us that
BIS was currently in the "implementation phase of the Treaty
... precisely to try to maximise the benefits" and the process
would be completed by the middle of 2011.
EGAD sounded a note of caution over this timetable. They told
us that they were preparing workshops to advise UK industry, but
they had been informed that joint events would not be held until
April/May 2011 "at the earliest."
22. The FCO Minister, Mr Alistair Burt, wrote to
the Chair of the Committee on 10 February to clarify the Government's
policy over implementation of the Defence Cooperation Treaty.
He stated that:
I am aware that UK Industry representatives raised
concerns with the CAEC about the length of time it has taken to
adopt the Treaty and the possible benefits to industry of the
Treaty during their evidence session of 1 December 2010. Officials
at the MoD (who lead on the issue) are currently engaged in discussions
with the US State Department about the implementation of the Treaty.
We will keep the Committee updated with the progress of the necessary
implementation work as it progresses.
23. We recommend the Government sets out in its
response to the Report what specific steps it is taking to ensure
that UK exporters take full advantage of the potential benefits
of the Treaty on US/UK Defence Trade Cooperation. We further recommend
that the Government sets out the respective roles and responsibilities
of the British Embassy in Washington and the British Consulate-General
in New York in obtaining the maximum benefit for UK industry from
5 "The Strategic Defence and Security Review:
A Conservative view of Defence and Future Challenges",
Speech to Royal United Services Institute, 8 Feb 2010 Back
Defence News, Ministry of Defence, 24 June 2010, and "UK
plans arms export drive to offset cuts", Reuters UK, 23 June
Q 74 Back
Q 124 Back
Ev 54 Back
Q 2 Back
Q 5 Back
EU Council Common Position 2008/944/CFSP defines common rules
governing control of exports of military technology and equipment
and replaced the Code of Conduct on arms exports in June 1998.
See also the EU's 12th annual report on arms exports ((2011/C
9/01). The EU Council Common Position is reproduced as Annex 2
of this Report. Back
See HC Deb, 28 June 2010, col 418-9W and Ev 35 Back
Ev 39 Back
Q 1 Back
Q 1 Back
Q 5 Back
Q 47 Back
Q 123 Back
Q 123 Back
Q 124 Back
Q 69-70 Back
Q 124 Back
Q 125 Back
Defence Committee, Third Report of Session 2007-08, UK/US Defence
Trade Cooperation Treaty Back
Q 40 Back
Ev 40 Back
Q 48 Back
Q 50 Back
Q 48 - Q 51 Back
Q 51 Back
Q 80 Back
Q 83 - Q 85 Back
Q 48 Back
Ev 42 Back