Examination of Witnesses (Questions 1
TUESDAY 30 JANUARY 2001
MP, MR WILLIAM
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
(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
(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 examineabout 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 majorityoverwhelming
majorityof 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
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 licencesfor example, going to fellow
allies and NATO countrieswe 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 timeall
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
Chairman: Check! Anybody else on this question,
before I move on?
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 Reportthe
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 scrutinywhich
it is and I think we have improved our scrutinythe 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.
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
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 concernit 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
publicwhether through a report to Parliament or some other
waywould potentially leave that contract vulnerable to
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 scrutinyas
indeed, for example, the Intelligence Committee deals with things
like thisand, 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 leakedperhaps
there has been a bit of in-fighting inside Whitehall, or perhaps
elsewhere, it all happens, it has happened in the pastand
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 kindlet 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.