Arms Exports and Controls

(Limited Text - Ministerial Extracts only)

Thursday 30th October 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

It is a pleasure, Mr Amess, to work under your chairmanship today. It is also a pleasure to respond to this important debate on the Committees’ report. I begin by giving an apology on behalf of the Minister for Business and Enterprise, who should be responding to the report. That is his place, but unfortunately, as with other members of the Committees on Arms Export Controls, he is involved in a Bill Committee elsewhere and sends his apologies. It is appropriate, however, for the Foreign Office to be involved. We scrutinise the process of approving or not approving arms exports, although the final decision is with the Department for Business, Innovation and Skills, not the Foreign Office. I am delighted to be here anyway.

I join others in paying tribute to my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) for his tireless and dedicated work in chairing the Committees, which are unique in bringing together the skill sets of other Committees. I was not aware that this was his final report. I do not know what he will find himself doing next year, but he will probably want to write about this issue in another context, because he has lived and breathed it for so long. The House is indebted to him for his dedication and commitment to this important subject. We are grateful for the knowledge and expertise he has brought to the House over many years, and we thank him for his hard work.

I also thank other members of the Committees for their contributions, and I will do my best to answer their points. A challenge was thrown down—not once or twice, but a number of times—in comments about how appallingly the last Minister failed to answer all the questions posed to him. I should make it clear that I am substituting for the Minister who should have replied to the debate, so I am not sure whether I will fare any better, although I can give a commitment that if I am unable to answer any questions, I will endeavour to write to right hon. and hon. Members individually. In that way, it will not be me who gets the grief next year, when Members return to this subject after the next general election.

I thank the shadow Minister for his words, his tone and the constructive manner in which he expressed his thoughts and concerns. He spelled out the situation Britain finds itself in. The defence industry is indeed sizeable, and it is important for jobs and UK security, as well as in terms of the UK playing a responsible role on the international stage. The hon. Gentleman mentioned a number of issues, and I will do my best to answer him. I should say how touched I am that he follows me on Twitter, although I am afraid I have not reciprocated. When I leave here, however, I will certainly endeavour to make up for that misdemeanour.

[Ian Murray]

I will block you.

[Mr Ellwood]

I hope that is as aggressive as the debate gets. Let me reiterate that the Government take their arms export responsibilities very seriously and aim to operate one of the most rigorous and transparent arms export control systems in the world. Our core objective in export licensing is to promote global security, while facilitating responsible exports. That means preventing controlled goods from falling into the wrong hands. It also means that we must not impede legitimate trade in defence and security goods.

All export licence applications are carefully assessed on a case-by-case basis against the consolidated EU and national arms export licensing criteria, taking into account all relevant factors at the time of the application, including the prevailing circumstances in the recipient country, the nature of the goods, the identity of the end user and the stated end use. A licence will not be issued if doing so would be inconsistent with any provision of the criteria, including if there is a clear risk that the proposed export might be used for internal repression or external aggression.

The Government support the responsible trade in defence equipment. All nations have the right to protect themselves, as enshrined in article 51 of the UN charter, and they have the right to acquire the means to do so. Moreover, defence and security exports help to strengthen the UK economy and to support growth. As the shadow Minister said, the industry employs tens of thousands of people across the UK. In 2013, the value of UK defence and security exports rose to £13 billion—a 13% increase on the £11.5 billion recorded in 2012. Those exports also helped the UK to forge close relationships with allies and partners in support of international security objectives.

We must therefore seek to operate an efficient export licensing system that not only ensures rigorous export controls, but facilitates responsible exports. The case-by-case assessment of export licence applications remains the most effective way to balance those concerns. We follow a clear and well-understood procedure for each application, which involves circulating expert evidence to other Departments as a matter of routine, to make the best assessment possible, based on the evidence available at the time.

I want directly to address the perception that, in the relatively rare instances where licences are subsequently revoked or suspended, the export licensing system is in some way broken. That is certainly not the case. In 2012, the then Foreign Secretary conducted a review of arms exports, which found that there were no fundamental flaws with the export licensing system. However, the review did identify some areas where the system could be strengthened. As a result of that review, a suspension mechanism was introduced to ensure greater responsiveness to changing circumstances overseas.

The suspension mechanism allows for the suspension of pending licence applications to countries experiencing a sharp deterioration in security or stability such that it is not possible to make a clear assessment of whether the consolidated criteria have been met. Following EU Council decisions, it has now been applied to extant licences as well as pending applications. The suspension of licences should, therefore, be viewed not as an admission that there has been a mistake, but as an indication that, on the contrary, the system is appropriately in tune with the reality that circumstances change and that the export licensing system must be able to react appropriately.

Moreover, we have the power to revoke any licence if we judge that changed circumstances mean that it is no longer consistent with the consolidated criteria. Again, revocations should be viewed as indicative of the fact that the system can respond to change, not as a sign that our case-by-case assessment of export licence applications is flawed. We make the best decision possible at the time of each application, and if circumstances change, we can react appropriately. Action to revoke or suspend licences is, then, not a sign that the system is broken; in fact, the flexibility to respond effectively to change is a sign of health and demonstrates how seriously the Government take the guiding principle of responsible exports.

Having set out that overview, I would like to touch on a number of specific issues my right hon. Friend and others have raised. First, however, it would be useful briefly to reiterate the Government’s policy on assessing the risk of goods being used for internal repression.

Criterion 2 of the consolidated criteria, which has been mentioned a number of times, states that an export licence application should be refused if there is a “clear risk” that the goods in question might be used for internal repression or in the commission of a serious violation of international humanitarian law.

Some confusion arose following the former Foreign Secretary’s evidence to the Committees in 2012, which was interpreted as suggesting that the “clear risk” test in criterion 2 had been dropped. Let me emphasise: the threshold of clear risk in criterion 2 has been the policy of successive Governments since the criteria were established in 2000, and it remains our policy. As confirmed in recent correspondence with the Committees, we have no plans to change that policy.

[Sir John Stanley]

May I correct the Minister on the point he has just made? There was no misunderstanding and no suggestion in the Committees on Arms Export Control that the criterion 2 “clear risk” test had been dropped by the Government at any point.

--- Later in debate ---

[Mr Ellwood]

I am grateful for that clarification. I hope that what I have said, and what my right hon. Friend has now said, has set the record straight. Indeed, my right hon. Friend the Secretary of State for Business, Innovation and Skills reaffirmed the “clear risk” test in criterion 2 while amending the consolidated criteria in March.

Let me turn now to Russia, which a number of right hon. and hon. Members have mentioned. As I have outlined, the flexibility to respond to changing circumstances in any export destination is an essential aspect of our export licensing system. Our reaction to the events this year in Ukraine provides a good example of our responsiveness and our determination to ensure that UK exports do not contribute to internal repression or external aggression.

Restrictive measures have been put in place against Russia, with a view to increasing the costs of Russian action to undermine Ukraine’s territorial integrity and sovereignty, and promoting a peaceful settlement of the crisis. It is worth making a distinction between a collective desire to bring in sanctions, which are themselves an attempt to affect behaviour, and taking action when weapons systems or other equipment that has been sold are used in an oppressive manner. There is a distinction between the two, but they can lead to the same thing, which is the removal of some form of arms exports.

In the absence of agreement among EU partners on taking concerted action against Russia, the UK took the initiative in reacting to the deterioration in events in Ukraine by announcing the national suspension of a number of export licences in March, and that is an example of what I was just talking about. The aim was to restrict exports of equipment to the Russian military that could be used in Ukraine. As we did before announcing the action, we encouraged other EU member states to follow suit. The national suspension was superseded by sanctions against Russia, introduced by the EU in July. The package included an arms embargo and prohibitions on the export of certain technologies suited to the oil industry, on the export of dual-use equipment to Russia for military end use, and on the provision of related services.

Further restrictive measures were announced in September in response to Russia’s actions destabilising the situation in Ukraine. In addition, during that period we reviewed existing export licences for Russia and took the decision to revoke 39 standard individual export licences and seven open individual export licences, and to remove Russia as a permitted destination for 50 multi- destination open individual export licences. The Government will continue to monitor conditions in Ukraine and will keep export licensing restrictions under review. My right hon. Friend the Member for Tonbridge and Malling asked whether what the Prime Minister said on the matter referred to all or only some licences, and if I may, I shall write to him about that detail.

I am limited in what I can say about the recent conflict in Israel and Gaza, because it is the subject of ongoing legal proceedings. As hon. Members may know, the Government conducted a careful analysis of existing export licences for Israel. That review, the outcome of which was announced on 12 August, found that the vast majority of exports currently licensed are not for items that could be used by Israeli forces in operations in Gaza. During the review period, no new licences were issued to supply equipment to the Israel defence forces. However, as was mentioned in the review, 12 licences for components were identified as potentially able to contribute to equipment that could be used by the Israel defence forces in Gaza.

Following the review, the Government announced that if there was a resumption of significant hostilities, the 12 licences would be suspended. In addition, the Government continue to monitor the situation in Israel and Gaza closely, and existing licences that are found to be no longer consistent with the consolidated criteria will be revoked. It remains our overarching priority to ensure that there is a lasting settlement that enables Israelis and Palestinians to live alongside one another securely and peacefully. The UK Government will continue to work closely with colleagues in the EU and elsewhere to help achieve that. I visited Gaza, Jerusalem and Israel last month and saw what was happening on the ground. I am conscious of the mood of the House, after the Palestine debate last week. We will continue to monitor the situation.

There has been extensive interest in the recent protests in Hong Kong and the use of tear gas by the Hong Kong police. There is one extant open individual export licence to Hong Kong that includes tear gas. After careful consideration, the Government have decided that no action should be taken to revoke or suspend it. In our assessment, the use of tear gas by the Hong Kong police, with whom we have a close relationship, was judged to be an uncharacteristic response at an early stage of the protest and not indicative of a wider pattern of behaviour that would cross the threshold of criterion 2 of the consolidated criteria.

[Ian Murray]

I am grateful to the Minister for answering the questions that have been asked. He has said that that use of tear gas was uncharacteristic, so will he give a commitment that if it were to transpire that the Hong Kong authorities used it again, the licence would be revoked?

[Mr Ellwood]

I do not want to move into hypothetical situations. We will continue to review matters, but I have explained the situation as it stands. If events move forward and circumstances change, we will review that and react responsibly according to criterion 2.

The Export Control Organisation has continued to perform efficiently over the past year in spite of various pressures. The ECO has maintained its performance targets despite an increasing volume of licence applications, with standard individual export licences up 3% on last year, and ECO’s high priority advice service to Her Majesty’s Revenue and Customs on the licensability of goods stopped at ports and airports up 30% in the same period. Together with extra work caused by the Russia sanctions, that has meant increased pressures on the ECO, which has worked hard to maintain both service levels for its customers and the robustness of our export controls, as the objective of giving applicants a decision as quickly as possible cannot outweigh the need to give every application very careful consideration.

The ECO has two main targets for processing export licence applications: a primary target to process 70% of applications within 20 working days, and a secondary target of completing 99% of applications within 60 working days. Year-to-date performance to the end of September on the primary target stands at 76%. We have now had a full year of working towards meeting the new ambitious secondary target of 99%; the target previously stood at 95%. The new target was introduced to improve the efficiency of the licensing system further. As of the end of September, I am pleased to announce that we are now meeting the new target for the year to date.

My right hon. Friend the Business Secretary decided last year that it was appropriate to look at the proposal for a pre-licensing register of arms brokers; that has been mentioned in the debate. The Export Control Organisation made a public call for evidence this year to help to gather the necessary evidence to allow the Government to decide whether to introduce such a register. Our emphasis when looking at the proposal has been on the relative costs and benefits, and the likely effectiveness. The feedback from the call for evidence is being analysed and discussed. We intend to publish the results as soon as possible, most likely towards the end of the year.

The Government remain committed to greater transparency in export licensing, as demonstrated by the transparency initiative announced last year, which expanded reporting activity under certain open export licences. As has been explained to the Committees previously, in making the final preparations for the initiative, it became apparent that we may not have had the right balance between the twin objectives of increasing transparency and avoiding unnecessary bureaucratic burdens. In particular, my right hon. Friend the Business Secretary became concerned that the proposed reporting would put UK exporters at a disadvantage in relation to exporters from other countries. That is why he decided that users of certain open licences would be required to make reports on their usage of those licences on an annual basis, rather than quarterly as originally envisaged.

It is important to reiterate that we have not reduced the overall level of reporting; we will publish considerably more information about the usage of open licences than we do now. All such initiatives are subject to review, but the new reporting requirements came into place at the start of this year, and the data for this year are due to be published in 2015. It is important to allow sufficient time for the new measures to be established before we can consider whether further changes are necessary. We therefore intend to commence a review of the initiative towards the end of the year.

I want to touch on the arms trade treaty. I had the privilege of participating in a number of decisions at the UN General Assembly in September. I am delighted to say that 54 countries have now ratified the treaty, which will enter into force on 24 December—Christmas eve. The successful conclusion of the arms trade treaty was a significant achievement for the UN, but also for the UK, which has worked tirelessly with the co-authors group, and bilaterally. We are, as has been requested, encouraging other nations, in the course of regular contact with them and via the EU ATT outreach project, to sign and ratify it. The UK places a great deal of importance on as many nations signing up as possible; and I believe that we are heading in that direction.

The hon. Member for Glasgow North (Ann McKechin) spoke about the spread of conflict in Libya and Syria, and that is a massive concern for the Government—and for others. We are concerned about the flow of weapons systems, and the loss of control over what is happening spilling down to Mali, and so forth. The situation reflects the changing circumstances that we must deal with. The hon. Lady also spoke about intrusion software. The pace of the technology that we are aware of can sometimes run ahead of legislation, so the work of the Committees and the Government to keep pace with changing technology is always important.

It is worth mentioning that the controls on monitoring equipment were agreed in the 2011 Wassenaar arrangement, and implementation through the EU dual-use regulation amendment is expected by the end of 2014. There will be a publication, and a journal put forward, in due course.

[Ann McKechin]

Will the Minister confirm—or, if he cannot do so today, write to confirm—whether his Department or fellow Ministers are assured that implementation will occur by the end of this year? If not, are alternatives being considered?

[Mr Ellwood]

That was going to be my next point. I cannot give the hon. Lady an answer today, but I had written down “timetable”. I will certainly get in touch with her to provide more information.

The hon. Lady and others mentioned the Defence and Security Equipment International exhibition. I have visited it many times and find it a little bizarre that one can buy things that are illegal in this country. The Government are reviewing their response to DSEI 2013 to consider any improvements to the processes that can be made before next year’s event. Officials from across Government will continue to work closely with Clarion Events to ensure that exhibitors comply with export and trade controls and understand their obligations.

The hon. Member for Islington North (Jeremy Corbyn)—I almost called him my hon. Friend—and I have met four times in debates or meetings over the past few days. I will be astonished if we meet tomorrow at the Conservative party away day, but he is always welcome. I join him in paying tribute to the late Robin Cook, who pioneered much of the work that we are now taking forward. That is his legacy. Members on both sides of the House remember him for that, pay tribute to the work that he did in ensuring that Britain plays a more responsible role in arms exports, and encourage other countries to do the same.

The hon. Gentleman also mentioned Gaza and the cycle of destruction. The matter came up at the UN General Assembly; Ban Ki-moon, the Secretary-General, was almost in tears when discussing whether destruction, reconstruction, destruction, and then reconstruction is what now happens. I digress slightly, but Britain must play its part with the EU and the international community to try to break that cycle.

The hon. Gentleman also raised concerns about Bahrain. There is no evidence of UK equipment sold to Bahrain being used in breach of the EU or national consolidated criteria on export licensing, but we have refused licences to Bahrain for internal security forces, where we are not satisfied about the risks around internal repression. If he has anymore thoughts on that, he can write to me and I will be delighted to respond.

I do not have the details to respond to the hon. Gentleman on Sri Lanka, but he mentioned the Prime Minister’s visit. It was bold to go out and make a case about the Tamil people’s concerns. I will write to him regarding our position on arms exports and Sri Lanka.

Finally, the hon. Gentleman mentioned the Vienna conference, which we discussed at Foreign and Commonwealth questions. The trouble is that it is unclear what the conference wants to achieve other than the removal of all nuclear weapons. It is Britain’s long-term intention to reach that position, but if we drop our guard before other hostile countries with nuclear weapons do, we will leave ourselves vulnerable. We share the long-term ambition, but differ on how we will get there.

The shadow Minister mentioned brass-plate companies and enforcement action. Existing legislation would, in certain circumstances, allow such action to be taken against brass-plate companies and their officers. However, any action must be justified by sufficient evidence. With other relevant agencies, the Government continue to pursue the possibility of using other legislation to discontinue the UK registration of such companies on public interest grounds. As he will appreciate, the issue is complex and raises difficult questions about the nature of the evidence that might be disclosed in any proceedings. We will update the Committees and the shadow Minister when any firm conclusions have been reached.

In conclusion, I again thank my right hon. Friend the Member for Tonbridge and Malling and other hon. Members for their attendance today. I reiterate my thanks to the Committees on Arms Export Controls for their report and work. The Committees’ scrutiny remains an important aid to the licensing process, and I continue to look forward to their contributions and continuing dialogue over the coming year.