Arms Export Controls

Debate between Baroness Clark of Kilwinning and Toby Perkins

Thursday 20th October 2011 Westminster Hall

[Toby Perkins]

I have no doubt that it is an idea worth considering, but the relationship between the defence industry and our own military interests, in terms of the defence of this nation, are so intertwined that we can entirely understand that relationship too. It is because our defence industry and our defence interests—militarily —span so many different areas that we have the Committees on Arms Export Controls, which was formerly the Quadripartite Committee, looking at arms controls and recognising that it is a defence issue, a Foreign Office issue, an international development issue and an important business issue. That shows how important the issue of arms controls is.

Shortly, I will refer to the contributions that have been made in the debate by Members so far. Before that, however, I want to talk about the contribution that the defence industry makes. Total employment in the defence industry is about 314,000 people, with about half those people being employed directly and the other half employed in the supply chain. The defence industry accounts for about 10% of manufacturing jobs in the UK. A study by Oxford Economics found that the UK defence industry has a highly skilled work force, as my hon. Friend the Member for Islington North (Jeremy Corbyn) has said, with 39% of the workers in the industry holding a NVQ level 4 qualification, which is a similar percentage to that in the UK’s banking and finance sector. There are high-value manufacturing and engineering jobs in the industry that would be very difficult to replace if they were lost. According to the previous Government’s 2009 value added scoreboard, the aerospace and defence sector added £12 billion in value to the economy. In addition, Oxford Economics also found that a £100 million investment in the industry generates an increase in gross output of £227 million and increases Exchequer revenues by £11.5 million. The defence industry is very important to us.

Alongside that, however, there is an issue that was raised by my hon. Friends the Members for North Ayrshire and Arran (Katy Clark) and for Islington North. They suggested that, within the redevelopment and the rebalancing of our economy, it would be preferable if defence played a less significant part. The implication that I took from their comments was that they were suggesting not only that we should grow the rest of the economy while the defence industry stays the same, so that defence becomes less significant, but that we should try to reduce the amount that we are doing with regard to defence. Although I agree with many of the comments that have been made in the debate, I take issue with that particular suggestion. Given that there will be arms going out there into the world; given that we are a country that has a strong track record of taking issues of arms control seriously; and given the many steps that we are taking in terms of increasing transparency, it is absolutely right that we should want to ensure that weapons that are going out into the world are going out responsibly, rather than saying, “Let’s shrink our industry and let someone else do that”.

It is important to get that side of the scrutiny right, and the Select Committee plays a key part in that. In doing that, we take responsibility for what is out there in the world and for the way in which weapons are supplied, rather than simply allowing them to be supplied by nations that would not perhaps take the same care. That is the only point on which I take issue with what was said.

[Hugh Bayley in the Chair]

[Katy Clark]

I am listening with interest to my hon. Friend. Does he agree that we are lucky to live in a stable democracy when the majority of peoples in the world probably do not? We must take that major factor into account when thinking about how to develop our economy in that area, and the Committee’s work is a step in that direction. Does he not believe that we need to think more about that issue?

[Toby Perkins]

My hon. Friend is absolutely right. We are having this debate for precisely that reason, and that is why the Committee’s work is so important and why the previous Government introduced arms export controls and made a lot of progress. I would never say that we should take the view, “Someone’s going to supply the weapons so it might as well be us”—we need strong, stringent controls. Having a Government whom we know are responsible and an industry that is scrutinised as strongly as possible is for the betterment of the world—and, by the way, has strong economic and commercial benefits. I will return later to some of the important conflicts that my hon. Friend mentioned.

In a statement, the leader of the Labour Party, my right hon. Friend the Member for Doncaster North (Edward Miliband), expressed some of the challenges, saying that

“we should never reduce foreign policy to a narrow pursuit of commercial gain for Britain…we should also examine our arms sales to ensure that UK weaponry is not used for the repression of people”

in other countries. I think that my hon. Friend the Member for North Ayrshire and Arran takes great succour, as do I, from that contribution, which recognises that foreign policy is about much more than simply promoting Britain’s interests. Acknowledging that difficult balance, and notwithstanding the areas of agreement between the parties, the Prime Minister got it wrong when he travelled to the middle east with members of the arms industry at an incredibly delicate time for the future of the region. The visit struck entirely the wrong chord; our country got the balance wrong at that point in time.

In their contributions, many Members have recognised the difficult balance on both sides, and the fine line we tread. Generally, however, the strategic approach of both the previous and the current Government has been that arms must not be sold to nations that will use them for external aggression or internal repression, and that they should be used, as it says on the tin, for defence. The approach recognises that nations have the right to defend their sovereign lands but not, as we have seen, to oppress their people and use weaponry to stamp on legitimate demonstration.

Britain is a world leader in export controls, and the previous Government took many steps in that area, but that is not to say that there is not a lot more we can do. Before Labour came to power, we had last legislated on arms export controls in 1939. We had the consolidated criteria in 2000 and the Export Control Act in 2002, and since 2004 the quarterly report has brought much greater scrutiny to our arms exports. The success of that regime is highlighted in annex 1 of the Government’s response to the report—Cm 8079—regarding the number of standard individual export licence revocations, particularly to Bahrain, Egypt and Libya in recent months but, as the right hon. Member for Tonbridge and Malling said, to other countries as well. He talked about the increase in the number of revocations, an increase that is not entirely surprising given the recent Arab spring, and the sense of change in that part of the world quite unlike at any other time in recent history.

I recognise many of those steps forward, but doubts remain. I was struck by the many wise contributions of colleagues. The right hon. Member for Tonbridge and Malling talked about the Government’s suggestion that the defence industry’s funding of the Export Control Organisation would be an improvement, and I share entirely his reservations about how the public would view that. Can the Minister explain whether that is being considered because the country wants to address its budget deficit, or because for some reason the Government think it would improve the body’s independence? It sounds rather simplistically like, “He who pays the piper calls the tune,” and I would be very concerned about how that was perceived. Will the Minister, either now or in his contribution, tell us the Government’s thoughts on why that option would be better?

The right hon. Member for Tonbridge and Malling referred to the important matter, detailed in the report, of brass plate companies acting with relative impunity. There is a suggestion in the Foreign Secretary’s statement that there will be easier ways to revoke licences, but there is little information about how that would be delivered, and I hope to hear more detail from the Minister. The right hon. Gentleman also spoke about the importance of pressing, in the European Union, for the amendment of article 4.2, and more broadly about the importance of the Government’s work in getting international co-operation within the EU on the arms trade treaty. I am looking for a commitment from the Government that every necessary resource will be given to our negotiating team, to ensure that, given the Government’s worthwhile intentions, we have done everything possible to secure a much stronger realisation among our international partners of the importance of the treaty, and that vested interests do not get in the way of delivering the detail that we need.

My hon. Friends the Members for North Ayrshire and Arran and for Islington North talked about the importance of the report and of this debate, and expressed their hope that the continued work of the Committee—work that does it great credit—is as strong as it has been in its first year. My hon. Friend the Member for North Ayrshire and Arran reflected on the conflict between commercial and ethical considerations, and on the delicate balance that exists. In simple terms, what is laid out strategically in the document, if properly enforced and enacted, should strike the correct balance. It makes it clear that the UK defence industry is important and contributes commercially and that we have high expectations for its administration and transparency, but that notwithstanding any commercial interests, if attempted trade conflicts with the criteria—if weapons will be used for internal repression or are likely to aggravate armed conflict—licences should either be revoked or not given. The policies before us contain the means to act; we must ensure, where failures have occurred, that those policies are pursued as they should be.

My hon. Friend the Member for North Ayrshire and Arran reflected on the importance of ensuring that we keep the review in our minds after it has faded from the news and that our focus on it does not move on when the news agenda does. My hon. Friend the Member for Ilford South (Mike Gapes) spoke about security, assistance overseas and conflicts between that and other services and trade. He spoke particularly about the lack of transparency in counter-narcotics work. With his tremendous experience in foreign affairs, he will recognise that there is always a balance between transparency and security. None the less, he expressed the view that he wanted more transparency. He asked valid questions about the visits of the former Defence Secretary to Sri Lanka, and if he does not get answers today, I know that he will pursue them on another day.

My hon. Friend the Member for Islington North focused on the particularly important issue of torture equipment. The Committee’s work to hold the Government to account on that issue is valuable. He also focused on the corruption of armies’ aims under some regimes in other parts of the world.

The importance of US-UK defence trade co-operation was mentioned in the report, but not in the debate. We welcome it and recognise that its primary purpose is to improve the delivery of military capability and UK firms’ access to US-sourced equipment and information, but it also has knock-on benefits.

Will the Minister reflect in his response on the performance of the Export Control Organisation? Does he believe that the complaints about its performance by the industry are valid? I have written to him with a parliamentary question asking how delayed the 36% of standard individual export licences are that are not processed within 20 days. I recognise that the report says that last year, the ECO missed its target, and that there have been improvements since then, but I am interested specifically in the percentage of SIELs that are not processed within 20 days. Are they a couple of days late, a couple of weeks late or much later than that? He will, as I say, shortly receive a written parliamentary question to that end, but if he can shed any light on the matter today, that would be wonderful.

Given the extent of the cuts to UK defence budgets and the tremendous pressure they are putting on the UK defence industry, it is vital that licence applications be processed in a timely fashion when our defence industry attempts to trade with trusted nations that present no large-scale concerns. The defence industry reports that contracts have been lost in cases where there were no worries about the licence application, but the process simply took longer than it should have. Business vital to this country’s defence industry is being lost as a result of bureaucratic failure.

The Foreign Secretary’s report has been some time in coming. The Committee’s report was published in July and contains numerous questions to which we have awaited the Foreign Secretary’s response. He said that he would return to it in his statement, but the brevity of the statement and its lack of detail are disappointing. I look forward to hearing the Minister expand on it.

On the new ability to suspend arms licences, on what grounds does the Minister think that is likely to happen? Will it be based purely on evidence, or will it take risk into account? If there have been no failures in the past but risk assessment procedures suggest that there will be problems in future, will arms licences be suspended on that basis? Will he expand on the revised risk assessment procedures, which will consider more factors? The Foreign Secretary’s statement says that there will be greater ministerial oversight. How will that be triggered? Are any extra resources being provided for that? How will it be delivered within the improvements in end-use monitoring? What specifically are the improvements to transparency in reporting?

I agree with the Committee that the Government’s move to bring the British consolidated criteria in line with the EU consolidated criteria appears too protracted. What is the time line on that? Do the Government accept the view of the Export Group for Aerospace and Defence on the ECO’s performance? Finally, what resources will the UK negotiating team on the arms trade treaty have at its disposal to push for the strongest possible deal internationally? Can the Minister assuage the Committee’s concern that the resource being given is insufficient to ensure that something sustainable, workable and powerful will be delivered?

We are grateful for the work done by the Committee, and we look forward to working positively and constructively with the Government on the issue. We recognise that there are good intentions across the House. If we feel that the fine line to which many colleagues have referred is being overstepped, or that this country’s vital commercial interests are superseding equally vital, if not more vital, ethical interests, we will be quick to say so. We want to be certain that the stamp “Made in Britain” can go out around the world with pride, and that everything possible has been done to ensure that those products are being delivered to nations and organisations we can be proud to trade with.