Arms Exports and Arms Control

John Stanley Excerpts

Thursday 21st November 2013 Westminster Hall

[Sir John Stanley (Tonbridge and Malling) (Con)]

The 2013 report by the Committees on Arms Export Controls is the most extensive that we have ever produced. The report, plus its evidence, encompasses nearly 900 pages in three volumes, all of which are available on the internet, although in the interests of economy, only the first volume has been printed. It is entirely for the House and those who are outside it to decide whether the length of the report has been accompanied by additional merit.

In the report, we have broken new ground in two ways that I highlight at the outset, the first of which relates to arms control. Sadly, globalisation extends as much to arms transfers as to pretty much any other activity in which we engage, and the electronic age is accelerating that process. As a result, the ability to procure devices that kill or maim, either individually or on a horrendous scale, has never been more widespread. The consequence is that effective international arms control agreements—whether nuclear, chemical, biological or conventional—have never been more important and imperative. That is why the Committees have substantially extended their scrutiny of the Government’s policies over the entire international arms control agreement area.

The second area in which we have broken new ground is that, for the first time, we have taken the list of 27 countries highlighted in the Foreign and Commonwealth Office’s annual human rights report and asked the Government what existing arms export licences they have approved to each of those 27 countries. The Government’s answer took me and many others greatly by surprise: the total number of extant arms export licences approved by the Government to the 27 countries of top human rights concern was just over 3,000. The value of those licences is equally astonishing, at £12 billion. Even that figure is an understatement, as the Government, reasonably, can provide value information only for standard individual licences, not for open individual licences, where they do not know precisely what quantities will be exported. The details of those 3,000 licences, country by country, can be found in volume 2 of our report, annexe 13. For those who are interested in the subject, it makes concerning reading.

We carried out the same exercise in relation to five additional countries not currently on the Foreign Office’s list, of which four are still of human rights concern: Bahrain, Egypt, Madagascar and Tunisia. The additional fifth country is Argentina, which is of concern due to its posture in relation to the Falklands. Again, the details of extant licences to those five countries are available in our report.

A key point to make is that the Committees’ report would not have been possible on the scale on which we have produced the information for the House without the Government’s co-operation. With one conspicuous and important exception, to which I will come in a moment, the Government have broadly co-operated in providing us with the information that we have sought. As a matter of course, I maintain contact with parliamentarians in the major arms-exporting countries in Europe and north America. I am in contact with those who are interested in the field in the Italian Parliament, the Bundestag, the National Assembly of France, the Swedish and Canadian Parliaments and the Capitol in Washington.

Our Committees will continue to strive to improve our performance as far as the House is concerned, but I think that I can fairly say that at this moment, as far as I am aware, no Parliament and no Government in Europe or north America have the same timely access to detailed information as we do. That is a considerable credit to the British Parliament and to successive British Governments. I say “successive” deliberately because I want to put it on record once again that, had it not been for the initiative of the late Robin Cook in being the first Foreign Secretary to publish an annual arms export report, the Committees on Arms Export Controls might never have been constituted as they have.

[Bob Stewart (Beckenham) (Con)]

Given my right hon. Friend’s expertise and diligence in the matter, will he say which arms export concerns him most? Can he identify one thing, or perhaps two or three? We should highlight those things, perhaps in the press, as concerns for us as the Committees on Arms Export Controls.

[Sir John Stanley]

My hon. Friend will be glad to know that he has anticipated what I will come to a little later in my remarks.

I come to our difference with the Government over one critical piece of information. Members from throughout the House were utterly appalled by the sarin attack that took place in Damascus on 21 August. Sarin is a ghastly chemical weapon. It is one of the most painful and grim ways in which anyone can die, and as we know, hundreds of men, women and children died in that attack. However, the uncomfortable reality that we in this Parliament must face is that between 2004 and 2012, a total of seven export licences were approved by the present and previous Governments for the export to Syria of the dual-use chemicals sodium fluoride and potassium fluoride, which are precursor chemicals in the manufacture of sarin. Those seven export licences have been under detailed scrutiny by the Committees, and that scrutiny commenced well before the sarin attack to which I have referred.

The one crucial piece of information that the Secretary of State for Business, Innovation and Skills has so far not been willing to provide to the Committees is the names of the companies to which the Government provided export licence approval to export the precursor chemicals from the UK. That is crucial information for the Committees, without which the Committees are unable to take either oral or written evidence from the companies concerned. In his latest letter to the Committees, dated 25 October, the Business Secretary once again advanced arguments about why he should not disclose the names of the companies to the Committees. I shall take the arguments one by one.

First, the Business Secretary said that, in deciding not to provide the names of the companies, he had done so in the framework of the Freedom of Information Act 2000, to which I reply: that Act does not circumscribe inquiries carried out by House of Commons Select Committees.

Secondly, the Business Secretary said that companies deal with his Department on the basis of confidentiality. However, he has been willing to provide every other important piece of information that the Committees have sought. He has provided the Committees with the names of the chemicals involved; the quantities of chemicals approved; the financial value of the approved chemicals; the dates of the licence approvals; and, most significantly, the names of the concerns in Syria to which the chemicals were to be exported. On that basis, I fail to see how the names of the companies applying for the licences can be considered confidential.

Lastly, the Business Secretary said that he does not want to disclose the names of the companies because of the reputational risk that the companies would face. He also advanced the argument that there could be physical danger—imagined, in my view—to the companies’ employees. To that argument, I say that if Select Committees were to be debarred from taking evidence from witnesses on the grounds of the risk of reputational damage, that would effectively destroy most of the inquiries carried out by Select Committees. That would clearly be unacceptable.

In the Business Secretary’s latest letter to me, he has offered an alternative proposal. He said that he would be willing to give the Committees the companies’ names in confidence and on the basis that they took evidence in a closed session. However, that would defeat the central purpose of Select Committees, which is to carry out open and transparent inquiries and to make full reports to the House on the basis of the evidence received.

The Committees will of course respond to the Business Secretary’s letter. I hope that he will consider the issue further, achieve the change of policy that the Committees are seeking and disclose the names of the companies to the Committees, so that the Committees can take evidence from them.

I am glad to say that, over a substantial area of the Committees’ work, the Committees are broadly on the same ground as the Government. However, I owe it to the House to highlight two important areas where the Committees differ from the Government’s position. The first is the key area of UK arms exports and their possible use for internal repression. There is no difference between the Committees and the Government on the wording of the policy; the difference comes in its implementation.

The policy wording goes back 13 years to a written answer provided by the then Minister of State at the Foreign Office, the right hon. Member for Neath (Mr Hain), on 26 October 2000. That wording was fully reflected in the wording provided by the Foreign Secretary to the Committees when he gave oral evidence in February 2012. The wording is:

“We will not issue licences where we judge there is a clear risk that the proposed export might provoke or prolong regional or internal conflicts, or which might be used to facilitate internal repression.”

When asked whether that still represented the Government’s policy, the Foreign Secretary replied:

“That is still the policy. The ‘or’, as you have pointed out on other occasions, is important.”

The “or” is indeed of crucial importance. The House will see from that statement that there are effectively two tests for the policy in deciding whether an arms export application should be approved in circumstances where internal repression could arise.

The first test is what I call the “clear risk” test, which is a relatively loose test. I can hear the arguments going on around Whitehall regularly, with officials and Ministers saying, “There is a risk, but it isn’t clear, so we can approve the export.” The much more stringent test is in the second half of the sentence—after the “or”—the test of whether an export might facilitate internal repression. That is why both halves of the Foreign Secretary’s policy statement are crucial.

Our deep concern is that the Government repeatedly only refer to the relatively loose “clear risk” test, but fail to refer to the “might facilitate internal repression” test, which is much more stringent. I will provide the House with just two examples. First, paragraph 46 of Command Paper Cm 8707, the Government’s response to our latest report, states:

“The Government will not grant an export licence if there is a clear risk that the proposed export might be used for internal repression.”

The Government’s answer is wholly silent on the second half of the policy—the “might facilitate internal repression” test.

My second illustration of precisely the same point comes from the Business Secretary’s letter to me on 11 October regarding dual-use chemical exports to Syria. He said:

“Specifically with regard to exports that might be used for internal repression, the Government continues to assess applications against Criterion 2 in full, which states that: ‘[The Government will] not issue an export licence if there is a clear risk [my emphasis] that the proposed export might be used for internal repression.’”

Once again, the key words—

“or which might be used to facilitate internal repression”—

were omitted.

Worse still, in that letter, the Business Secretary claimed—without any foundation—that the Committees were over-interpreting the Foreign Secretary’s policy statement to the Committees on 7 February 2012, which I have read out. Let me put the Business Secretary’s mind at rest: the Committees have not made any interpretation of the Foreign Secretary’s statement. The wording of the statement is perfectly clear; it requires no interpretation. The Committees look to the Government to implement that policy statement not selectively, but in its entirety.

Equally, we look to Ministers, in their future public statements on arms exports and internal repression, to state the policy in its entirety, not selectively, and to use the complete wording as endorsed by the Foreign Secretary to the Committees on 7 February 2012.

I now turn to the Government’s implementation of their policy, as stated by the Foreign Secretary to the Committees. In our latest report, we specifically named a total of 32 countries of human rights concern and asked the Government whether they were satisfied that each of the existing Government-approved export licences to those countries conformed with their policy on arms exports and internal repression. I am disappointed with and concerned about the Government’s reply to that key series of questions, because in each case they state that they are compliant with their policy, as set out in paragraph 46 of the Command Paper, from which I just quoted, which only refers to the clear risk test and ignores entirely the phrase,

“or which might be used to facilitate internal repression”.

That is an unsatisfactory feature of the Government’s Command Paper response, to which I am sure that the Committees will return.

I shall now highlight just three instances where the Government’s adherence to their own stated policy appears to be highly questionable: first, Sri Lanka. I read with some amusement a headline on the front page of Saturday’s Independent newspaper. Mr Sutharshan Uthayaswriyan, who is a Tamil refugee and has been since the age of seven, was reported as saying,

“We believe in David Cameron. He is God!”

If I may be presumptuous and bring God down to earth for a moment, I ask the Prime Minister and his fellow Ministers to address arms exports and internal repression in Sri Lanka. I do not need to recite the appalling human rights abuses that have taken place in Sri Lanka. I strongly support the Prime Minister in his calls for an international independent inquiry. However, against that human rights background, the House will wish to consider the British Government’s arms export licence approvals in just nine months of last year. They included 100 pistols, 130 rifles, 210 combat shotguns, 600 assault rifles, unknown quantities of small arms ammunition and unknown quantities of machine guns. I hope that the Minister will not say that these were all for counter-piracy, because I do not find that a credible answer, particularly when combined with the complete list of the 49 extant arms export approved licences to Sri Lanka that we detailed in our report.

I return to the Committees’ original question. How can the Government’s approval of these arms export licences to Sri Lanka be compatible with their arms exports and internal repression policy, as stated to the Committees by the Foreign Secretary?

I do not need to recite the serious human rights abuses that took place in Bahrain in the wake of the Arab spring. They have been well documented and were all too observable by any and all of us on television, where we saw police vehicles being driven towards and into those demonstrating peacefully in Bahrain. Against that same human rights background, it is extraordinary that the Government’s existing approved arms export licences to Bahrain include licences for small arms ammunition, pistols, gun silencers, assault rifles and machine guns, to cite just a few of 105 extant Government-approved arms export licences to Bahrain.

The third area is a group of arms exports by category. The category is cryptographic equipment, which encrypts clear speech and text and is intended to make that impenetrable to others. It is, of course, dual-use equipment —I entirely accept and understand that—with a perfectly legitimate civil use to protect confidentiality, but it is also key equipment for security services, not least in countries noted for internal repression and human rights violations.

The Committees’ report has exposed the fact that, of the Foreign and Commonwealth Office’s 27 countries of top human rights concern, as detailed in the FCO’s latest human rights report, no less than 23 of them have received UK Government approval for licences for the export of cryptographic equipment, cryptographic technology, cryptographic software and cryptographic components. Those countries include Belarus, Iran, Russia, Saudi Arabia, Sri Lanka—once again—and Zimbabwe.

The two biggest recipients of approval for cryptographic exports among those 27 countries of top human rights concern are of most concern. First, China has the largest number of extant cryptographic licences of any country among the 27: a total of nearly 200, with a value of £600 million. China is a one-party state, where there is no clear boundary between the Communist party and the private sector. It would seem highly likely that there is a real risk that some cryptographic exports that may be going into the private sector initially end up being utilised by security services in China.

The second largest recipient of approval for cryptographic exports, with more than 100 extant cryptographic licences, but with far and away the largest value, is Israel. The value of those cryptographic export licences is staggering, at nearly £8 billion. Hon. Members might think that I have misspoken, but I repeat: £8 billion. Again, it seems highly likely that some of that massive cryptographic export to Israel will be used, sooner or later, to the advantage of the Israeli security services in operations against Palestinians. For all those reasons, the Committees’ scrutiny of the Government’s extant licences, particularly in countries where there is significant internal repression, will continue intensively.

A second area where we have a significant policy difference with the Government is in relation to authoritarian regimes. The policy followed by the present Government, and indeed by the previous Government, could be described most charitably as benign. Others might describe it as reckless and possibly even irresponsible. The policy that the two successive Governments have followed is one of broadly supporting most types of exports to authoritarian regimes, providing that the regime appeared stable and there was no blood on the streets. Hence the flow of British arms export approvals from the present Government and the previous Government to Gaddafi’s Libya, Mubarak’s Egypt and to Assad’s Syria—I have previously referred to the dual-use chemical exports.

In fairness to both Governments, they recognised that there was something of a safety net if their policy approvals turned out badly. They recognised that they could revoke licences after they had been granted. The previous Government, for example, revoked a handful of licences to Israel after the last major Israeli attack on Gaza. The present Government have now revoked—this is a massive number—more than 200 licences to north African and middle eastern countries following the Arab spring and to Argentina following the fairly bellicose statements by the Argentine leadership towards the Falklands. Those revocations are detailed in annex 12 of our report.

With much trumpeting, the present Government have introduced a further safety net if things turn nasty in authoritarian regimes—namely, the power to suspend licence applications, in addition to the power to revoke them. The problem with both revocation and suspension is that they are of only limited practical effect for the simple reason that, once military and dual-use exports have been exported out of the UK, there is effectively no means to stop their use. As I have said previously, the bullets have bolted.

I hope that the Minister will not trot out the familiar ministerial response that there is no evidence that British arms exports are being used for internal repression. In case my right hon. Friend is tempted to do that, I say to him that that line simply does not stand scrutiny for anyone who takes the trouble to look at the approved arms exports to the countries with the worst human rights records, as set out in annex 13 of our report.

Annex 13 shows at a glance that the overwhelming majority of exports will not be visible once they have been exported from this country. Those exports are made up of components, software, technology, communications equipment, cryptographic equipment, ammunition, small arms, automatic weapons and sniper rifles, which will not be identifiable as having come from the UK once they have left our shores, even assuming—it is most unlikely—that we have anyone on the ground to see what those items actually are. We are dealing with exports that, by and large, are invisible once they have left this country.

The crux of the Government’s policy decision and the Committees’ scrutiny is the nature of the original decision to grant the export licence. The Government have a simple choice: do they follow a relatively risky policy that has been the policy hitherto, or do they adopt a more cautious policy when approving export licences to authoritarian regimes? For the Committees, the fact that the present Government have now had to revoke more than 200 arms export licences to countries predominantly in the middle east and north Africa is the clearest possible indication of the extent to which both this Government and the previous Government misjudged the risks that they were running in approving those arms exports in the first place.

I stress very clearly that the Committees do not criticise the Government for being unable to predict the future. None of us can reliably predict the future, and it is precisely because neither the Government nor any of us can do so that we believe that the more cautious policy should be adopted. That is why, for two years in succession, the report of our four Committees unanimously urges the Government to adopt a more cautious policy on arms exports to authoritarian regimes, particularly on those items that may be used for internal repression.

I am only too aware that I could have raised a great many other issues, but I have tried to focus on what I consider to be the two most important policy areas before the Committees and, indeed, before the Government. I look forward to hearing the contributions of right hon. and hon. Members to this debate.

--- Later in debate ---

[Ian Murray (Edinburgh South) (Lab)]

This is the first time that you have been in the Chair, Mr Pritchard, during my shadow ministerial career, and I am grateful for your chairmanship. I thank the Committees on Arms Export Controls for producing what is the most comprehensive report that I have seen from any Select Committee. I asked the Vote Office for all three volumes, but I was told that it would be difficult to provide them. I am glad that they were not provided, because of the depth of the issue, which is incredibly important and complicated, and often incredibly controversial. The Committees should be commended for the way in which they deal with the issues.

I have the utmost respect for the Chair of the Committees, the right hon. Member for Tonbridge and Malling (Sir John Stanley), and his work. The hon. Member for Beckenham (Bob Stewart) was right to suggest that the sole voice that does so much on this issue is that of the Chair of the Committees, and that we should all thank him, not just for chairing the Committees and producing reports, but for holding Governments of all shades to account on this important and often controversial issue.

UK Governments, whatever their colour, have had in place a robust system of export controls that has led the world. It dates back to the first arms export controls in 1939 and was consolidated at the start of the century with the Export Control Act 2002. Since 2004, we have had quarterly reporting to provide greater scrutiny. The success of the system is highlighted by the way in which it operates and the fact that the Committees can look at an issue in great detail. We do not want export licences to be revoked, but the fact that they are shows that the system is robust. It is not perfect and unimprovable, but it is robust.

I was struck by the opening comments from the Committees’ Chair when he referred to globalisation of the arms trade and the widespread consequences of that, which requires greater controls and countries working together. The international scale of the arms trade treaty and the extension of scrutiny are welcome.

The right hon. Gentleman talked about the increased number of revocations of arms export licences applied for, and that is not entirely surprising, given the continued instability in north Africa, the middle east and many other countries mentioned in the report. It is worth reflecting for a few moments on the risk profile of authoritarian regimes and how the UK Government and other Governments who issue export licences do so when we do not know what will happen.

The hon. Member for Beckenham has great experience, which we are lucky to have in this place, of what can happen when licences are granted because operational matters require the use of the goods on the battlefield or for defence. There may be consequences many years later in more peaceful times or when regimes change, and we are seeing that in Libya and Egypt. The risk profile must be examined, and it will be interesting to hear the Minister’s response to risk profiling, not only in countries that we are concerned about now, but in those that we have been concerned about in the past.

We should note that since our last debate, which I believe was at the end of 2011, the first international arms trade treaty has been adopted. It is right to congratulate the Government, particularly the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills, on ensuring that it came to fruition. It dates back to the previous Government and it is right that there is cross-party consensus. Hundreds of my constituents wrote to me about this, and they and I never thought that that treaty would come to fruition. We are all delighted that it has.

My hon. Friend the Member for Glasgow North (Ann McKechin) was right to highlight the treaty’s implementation. The signatures may be dry, but that does not mean that the job is done. In fact, it has just started. I was struck by her comments about ensuring that there is implementation in other countries and that the UK can support other regimes to ensure that the treaty is implemented. It would be useful to know the Minister’s thoughts about how that can be supported in other countries.

I shall make only one slightly partisan point, because there is generally cross-party consensus. Concern was raised by the Committees’ Chair about how some of the good work may be undermined by the Government’s role and how it operates in other countries. We have seen that in Sri Lanka, and the right hon. Gentleman mentioned Libya and other parts of north Africa. It is all about perception. When the Prime Minister takes trade missions to areas that have just had the significant upheaval of regime change and so on, the perception may be that arms sales are at the top of the agenda. I am not sure that the Government should operate in that way. It may be only perception, but the Government should work hard to ensure that that perception is not carried through in practice. The Sri Lankans called the Prime Minister “God”, and that should probably debar any exports.

There has been a lot of discussion about Syria and the controversial decision in January to grant two export licences. My hon. Friend the Member for Glasgow North was right to highlight the fact that the goods were never delivered, but two licences were granted to a regime that, at that time, was collapsing in a region that was in turmoil following the Arab spring. The decision-making process that led to that conclusion must be highlighted in detail.

The Committees highlight such issues—they did so on Syria in their report—and the Government have had to respond. The Syrian issue highlights something that I said earlier about the risk profile. If there were a different risk profile for some of these regimes, perhaps the granting of those two licences would have been justified. In the black and white of the legislation—the black and white of the process, as the Secretary of State for Business, Innovation and Skills said—it was probably, on balance, the right decision, but a question remains about whether that right decision should have been achieved, given the risk profile.

I share the Committees’ disappointment at the Government’s response to dual uses. There must be greater transparency. Just calling something “dual use” is not enough, and that goes back to perception. We should be completely transparent about what an export licence is being granted for, and that there may be different uses depending on who is operating the equipment. In Syria, that was chemicals.

A licence may be granted in good faith for chemicals to be transferred to a regime under the export licensing criteria, but they could fall into the wrong hands, and that feeds right back to the risk profile and how we deal with dual use. I would like further clarity from the Minister on the Government’s thoughts about dual use. The Joint Intelligence Committee concluded in a letter that the Syrians had used chemical weapons and that it was clear that the Assad Government had used them. There are still issues about whether those export licences should have been granted and whether an error might have been made.

There has been a lot of talk this afternoon about other countries, including Bahrain. I was pleased that the Committees looked at the 27 countries of concern and reached conclusions. I was staggered to see the £12 billion figure. I thought that I had read it incorrectly and that there should have been a decimal point somewhere, so that it was £12 million with a few pence on the end. It is a staggering amount in export licences to countries with human rights issues. The Committees were right to highlight that and to challenge the Government on their criteria for ensuring that that does not happen again.

My hon. Friend the Member for Llanelli (Nia Griffith) and the hon. Member for Beckenham mentioned brass plating. Although brass plating in a UK context works well, this is about brass plating across international communities, where companies that have brass plating in this country operate against the rules that would apply here when operating overseas. That must be looked at clearly, but it again highlights the globalisation of the issue. International co-operation is required to deal with some of the bigger issues on brass plating, and the Chair of the Committees is absolutely right to highlight that issues relating to the globalisation of the agenda are greater than ever.

I briefly turn to the points made on systems for spying and other such technology. I say flippantly that I notice that we have not sold anything to the Americans—they seem to be able to do quite well themselves—but a significant problem would not have passed the Committees by. In particular, there was £8 billion of such spending under export licences to Israel and £600 million to China; I think that was the figure given by the Chair of the Committees. We have to deal with that kind of issue and see whether the export goods are being used for the purpose that they should be used for. I would like the Minister to dig down further into that and address whether there is widespread use of mass surveillance technologies against populations when perhaps there should not be and whether we should look at tightening up such licensing.

Egypt and export licensing was discussed by my hon. Friend the Member for Glasgow North. Export licensing to Egypt seems to be a bit of a hokey-cokey, and that highlights the problem of not knowing what is happening in the future and with the risk profile. Licences are granted, then have to be revoked, then some are re-granted and others revoked. There seems to be a problem about whether we should be licensing any exports to Egypt while it is experiencing its current operational and regime difficulties. At the risk of repeating myself, it looks as though, again, that all feeds back into risk, and that was rightly highlighted by the Committees as being part of the problem.

On top of the issues that I have raised, I shall finish by asking the Minister two specific questions, the first of which is on paragraph 46, which has been referred to a lot, and the Chair of the Committees highlighted the ambiguity in relation to that paragraph. The Foreign Secretary was pretty categorical in what he said to the Committees. However, it seems that the common position that is referred to can be used by omitting certain phrases from terminology. Many countries are highlighted by the report, including Iran, Argentina, China and various others, but if we refer back to paragraph 46, that is where the ambiguity lies. We need clarity on that issue. I realise that the Government’s action on the consolidated criteria in paragraph 46 was to wait until the European common position had been developed in 2012 and until the arms trade treaty had come into force and been implemented. However, it would be useful to get some time scales from the Minister on whether that position will be resolved.

[Sir John Stanley]

The hon. Gentleman has raised, as I did in my opening remarks, an absolutely key point. It may help hon. Members if I set out exactly why we say that the Government are quoting selectively. The key document, in annex 8 of volume 2 of the report, is the consolidated criteria written answer given by the then Minister of State at the Foreign Office, the right hon. Member for Neath (Mr Hain). In the written answer, two references are made to policy in relation to arms exports and internal repression. The one that the Government keep referring to is stated in criterion two—the so-called “clear risk” test—but the Government continue to ignore the crucial paragraph that immediately precedes the list of criteria in the right hon. Gentleman’s written answer.

If I give the sentence in full, the hon. Gentleman will see the point that I am making:

“An export licence will not be issued if the arguments for doing so are outweighed by the need to comply with the UK’s international obligations and commitments, by concern that the goods might be used for internal repression or international aggression, by the risks to regional stability or by other considerations as described in these criteria.”—[Official Report, 26 October 0200; Vol. 355, c. 199-203W.]

There it is in black and white. That is the policy statement, and that is why there are two parts of the statement that the Foreign Secretary made. Sadly, the Government—in particular, the Department for Business, Innovation and Skills—insist on only referring to the criterion two statement. I hope that is helpful.

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[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

It is a pleasure to respond to this important debate. I, too, thank all those who have contributed this afternoon. I also thank the Committees for their hard work in scrutinising our actions in the area of export control.

I first reassure the Chamber that the Government are committed to managing all transfers of strategic goods responsibly. That involves, as the Committees recognised, a delicate and continual balancing act. On the one hand, there are valid concerns, articulated on many occasions by right hon. and hon. Members, that strategic goods should not fall into the wrong hands. That is why all export licence applications are carefully assessed, case by case, against the consolidated European Union and national arms export licensing criteria, taking into account all relevant factors—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 to do 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. On the other hand, the Government support responsible defence exports and we remain committed to a strong defence industry. Our defence exports rose by 62% in 2012, and totalled £8.8 billion in that year. Defence exports are only a proportion of what we license; defence and security exports, taken together, rose to £11.5 billion in 2012. The importance of those exports to our economy is self-evident from those figures, so we need to operate a fast and efficient export licensing system that facilitates responsible exports while imposing the minimum regulatory burden on legitimate business.

[Philip Davies in the Chair]

The approach of case-by-case assessment that I have set out remains, I believe, the most effective way of balancing those concerns. There are often difficult decisions to make, but we follow a well established procedure for each application and make the best possible assessment based on the available evidence at the time. We have a robust, efficient and transparent system that produces rational decisions, but I recognise of course that the world is not static and, when circumstances change in any country, we can and do act.

However, such action—there was one reference to this in the debate—including revoking or suspending licences, is not an admission of failure. On the contrary, the fact that our export licensing system allows us to respond effectively to changing circumstances is, I suggest to the House, a further sign that our system works.

Let me turn to some of the countries mentioned in the debate and then some of the more specific cross-country issues. May I begin with Egypt? Egypt provides an example of our responsiveness and our determination to ensure that our exports do not contribute to internal repression or human rights violations. Following the worsening events in Egypt this year, we conducted a review of extant export licences. As a result, on 19 July, five licences were revoked, as they were assessed to be no longer consistent with the consolidated criteria.

On 21 August—I think this answers the query from the hon. Member for Glasgow North (Ann McKechin) about the month—in response to increasing levels of violence in Egypt, the Foreign Affairs Council of the European Union agreed to suspend all export licensing to Egypt for equipment that might be used for internal repression. That is a lower threshold than the consolidated criteria that we applied, whereby the test is whether there is a clear risk that goods might be used for internal repression. The UK fully supported the Foreign Affairs Council decision and, as a precautionary measure, we applied that suspension to all licences to the Egyptian army, air force and internal security forces. That resulted in 47 extant licences being suspended and a hold placed on new applications for those entities.

As the situation in Egypt has become clearer, we have been able to revert to a case-by-case assessment. As a result, following a further review, on 25 October we decided permanently to revoke seven of the suspended licences, because we then judged that there was a clear risk that the goods might be used for internal repression. A further 24 licences were removed from suspension, because we no longer judged that the goods might be used for internal repression. The remaining 16 licences will remain suspended until we are in a position to determine whether they should be revoked or restored.

I am pleased that we took firm action to revoke licences in July and that our precautionary action in the light of the Foreign Affairs Council decision, at a time when we were considering further unilateral action, allowed time for a proper assessment of conditions on the ground, which in turn means that we can now consider each case properly on its own merits.

I suggest to the House that that is a good example of how a responsive and rational export licensing system operates in a very difficult situation, but I assure hon. Members that the Government will continue to monitor conditions in Egypt and we will keep the terms of the licensing suspension under review. We will continue to assess the situation against the European Union consolidated criteria, taking particular care to consider the nature of the goods and the identity and track record of the end user.

Let me turn now to Syria. The Committees have rightly been very concerned about licences for the export of chemicals to that country. I would like to take this opportunity to state categorically that the Government have done nothing to assist Syria’s chemical weapons programme. Doing so would, of course, be illegal under the Chemical Weapons Act 1996, and there is no evidence that exports from the UK have contributed to Syria’s chemical weapons programme.

As the Committees know, two licences were issued by BIS in January 2012 authorising the export of sodium fluoride and potassium fluoride for commercial metallurgical processes—the treatment of aluminium fittings. Those licences were revoked in July 2012 under strengthened European Union sanctions that the United Kingdom was instrumental in bringing about. The exporter has confirmed that shipments were not made prior to those sanctions coming into force, so no goods were actually exported under those licences.

[Sir John Stanley]

The Minister has come back with the “There is no evidence” response. Will he at least acknowledge that the British Government cannot possibly have any idea at all of what subsequently happened in Syria to the potassium fluoride and sodium fluoride that have been exported there since 2004? That being the case, the Government surely cannot just take refuge behind “There is no evidence”, because they have no ability to track what happens to those chemicals once they have left this country and gone to Syria.

[Michael Fallon]

I was referring to the two licences issued in January 2012 and, as my right hon. Friend will know, no shipments were actually made under those licences.

Let me now turn to the licences that my right hon. Friend is concerned about—the five licences granted under the previous Government, between 2004 and 2010, before the current conflict in Syria began, for the export of sodium fluoride for the manufacture of toothpaste. Those licences were no longer extant at the time of the revised sanctions, but I do have to say to my right hon. Friend that we have no evidence of any diversion to any different end use.

--- Later in debate ---

[Michael Fallon]

That is a perfectly reasonable question, and we are, indeed, exploring with the companies concerned whether they would be prepared to give evidence on a confidential basis. I will let the hon. Gentleman have an answer on that when we have one.

I was asked one other question about Syria, by the hon. Member for Glasgow North. She asked about the position of Croatia, but I am not able to answer her straight away. If I may, I will write to her on that—and, indeed, on any other points that I have not been able to answer.

Let me now turn to Bahrain, another country that has been mentioned in the debate. Since the events of the Arab spring, the Government continue to monitor the situation in Bahrain closely. We assess all export licence applications case by case against the consolidated and the national criteria. The assessment considers all those factors, including the risk of the proposed exports being used for internal repression and in any developing internal tensions.

Since February 2011, we have approved a number of licences for the Bahrain air force, navy and defence force where we have been satisfied that there is no clear risk of items being used in human rights abuses or internal repression. We have refused licences for the Bahrain internal security forces where we have not been satisfied about the risk in respect of internal repression.

We reacted quickly to the events of the Arab spring in 2011, reviewing all licences to Bahrain and revoking those no longer in line with the criteria. In total, 23 single licences and seven open licences were revoked.

Let me turn now to Sri Lanka. The hon. Member for Edinburgh South (Ian Murray) made the rather unfortunate suggestion, in what was otherwise a really good speech, that the Prime Minister was somehow prioritising the selling of arms in his recent visit to Sri Lanka. Let me be very clear: during the recent Commonwealth Heads of Government meeting, he was the first foreign leader since independence in 1948 to give the local population the chance to be heard by an international audience. He shone a light on some of the human rights concerns in the aftermath of the recent prolonged civil conflict and demonstrated our commitment to reconciliation and accountability in Sri Lanka.

Again, we assess all export licence applications to Sri Lanka case by case, in accordance with the consolidated and the national criteria. Decisions on Sri Lanka, of course, take into account alleged violations of international humanitarian and human rights law during the military conflict that ended in 2009, as well as the nature of the equipment—in other words, would it be used in a manner inconsistent with the criteria?

Arms exports to Sri Lanka have increased recently, as we have issued a number of licences for weapons and other equipment that will be used by maritime security companies undertaking commercial anti-piracy work. Those ongoing efforts to fight piracy are important for international trade and security. Our assessment of those applications has taken into account the fact that the weapons will be held in secure storage while in Sri Lanka and that the companies are fully signed up to the international code of conduct for private security service providers. The licences that have been mentioned were all for anti-piracy, and they were not supplies to the Sri Lankan Government.

[Sir John Stanley]

Before my right hon. Friend leaves the issue of Sri Lanka, is he really telling us that 600 assault rifles will be deployed by private security companies operating out of Sri Lanka to deal with piracy? There are also a number of machine guns, but what use are they for anti-piracy measures?

[Michael Fallon]

I am happy to write to my right hon. Friend on that, but it is my understanding that the licences are being used for anti-piracy measures, in which we all have an interest. However, if I am wrong about that, and if I can give him further particulars about the use of machine guns in anti-piracy work, I will of course do so.

Finally, on the countries that have been mentioned, let me turn to Israel. A number of Members have asked about the single licence that accounted for nearly £8 billion of cryptographic equipment. The licence was for “equipment employing cryptography” and

“software for equipment employing cryptography”

with a value of £7.7 billion.

The licence was granted in the first quarter of 2013, and it permits the export of equipment and software for building public mobile phone networks in residential areas and for small businesses. Those items are subject to export control because of their encryption—information security—capability. That capability, it must be said, is a standard feature of the mobile phone network. The goods are for purely commercial end use.

Again, we assessed the application against the consolidated and the national criteria. A licence would not have been issued where there was a clear risk that the proposed exports might be used for internal repression or to provoke or prolong internal conflict, or where they could be used aggressively against another state.

I appreciate that the value of the licence appears extremely high and may not represent a realistic goal on the part of the exporter. The exporter has confirmed to us that the value of the licence was based on an expectation of a large number of orders over the two-year validity period of the licence. Given the nature of the goods and the end use, that was not considered to be a particular concern.

Let me turn now to the arms trade treaty, which is a notable achievement; I am grateful to those Members who referred to it as such. It is not an achievement simply of the past year; it has required long and challenging effort, involving work by two successive Governments over seven years. It was a significant achievement for not simply the United Nations, but the United Kingdom—it was an effort that the United Kingdom led.

The treaty will introduce robust, effective and legally binding controls, which will begin to constrict flows of unregulated or illegal weapons. It will require Governments to block transfers of weapons that pose unacceptable risks and to take strong steps to prevent weapons from being diverted into the illegal market. Authorisations of exports will be reported and arms brokering will be regulated. At the same time, the legitimate trade in arms, vital for national defence and security, will be upheld.

For the United Kingdom, the treaty will be relatively straightforward to ratify because we already have a highly developed export control system. The Government hope to complete the ratification in the next few months. We also hope that the treaty will soon achieve the 50 ratifications that it needs to be brought into force. We and our partners are actively lobbying other Governments to encourage them to sign and ratify it as soon as possible. We are providing funding to support states that need to introduce new legislation or regulations to bring their export controls up to the higher standard required by the treaty.

The performance of the Export Control Organisation in the past year is also— albeit on a more local scale—an important achievement to note. Until recently, the ECO worked to two main targets for processing export licence applications: a primary target to turn around 70% of standard licence applications within 20 working days, and a secondary target of completing 95% of those applications within 60 working days.

Year-to-date performance to the end of October on the primary target is 80.2%, which is a further improvement on the 71% achieved in 2012. However, we listened to industry concerns that, although the old secondary target of completing 95% of licence applications within 60 days was being met, that still left a sizeable number—about 850 a year—taking longer than three months to get a decision. In March I therefore announced a new, more ambitious, secondary target of completing 99% of cases within 60 working days, with the aim of further improving the efficiency of the system. Those additional cases, of course, tend to be more difficult and often require additional scrutiny because of their destination, but the performance since July, when the new target came into effect, stands at a very encouraging 98.4%.

Several Members, including the hon. Member for Glasgow North, mentioned transparency. We remain committed to greater openness and transparency in licensing as that provides the means for Committees, the House and the public to hold us to account. At the same time, in generating more information for disclosure, we should not create unnecessary red tape for businesses.

In the most recent initiative, we have sought to increase transparency by requiring exporters to provide us with information about their export and trade activity under certain open licences. While the final preparations were being made for that, it became clear that we had not struck the right balance between the twin objectives of increasing transparency and avoiding unnecessary bureaucratic burdens.

In particular, the Government became concerned that the proposed reporting of each export would put our exporters at a disadvantage in relation to exporters from other countries, notably the United States. Clear evidence emerged that the proposed rules might lead to some of our companies relocating some operations overseas, with negative consequences for British jobs.

[Michael Fallon]

I am happy to write to the hon. Lady with more evidence to back up what I have said about the fear that some operations might be relocated overseas. She has challenged me on that, and I am happy to write to her in detail.

The Government announced in Parliament on 18 July that we had decided to dispense with some proposals relating to quarterly reporting. As a result, users of open-general and open-individual licences will be required to make reports on their use of those licences annually, rather than quarterly as originally envisaged. They will still have to provide information on the destination country, the type of end user and the number of times the licence has been used for that country and end user type.

Those revised reporting requirements will apply from 1 January 2014, with the first year’s data being published in 2015. All that information is additional to the existing quarterly and annual reports. We are not reducing the overall level of reporting—quite the opposite. We will be publishing considerably more information about the use of open licences than is currently the case.

I think it was my hon. Friend the Member for Beckenham (Bob Stewart) who raised the matter of the register of arms brokers. My right hon. Friend the Secretary of State for Business, Innovation and Skills has decided that now is an appropriate time to look again at the issue of a pre-licensing register of arms brokers. We will therefore be launching a public consultation to help in gathering the necessary evidence to allow the Government to decide whether to introduce such a register. There will, of course, be an emphasis on the relative costs and benefits, alongside the likely effectiveness of such a register. The public consultation is now planned for early next year.

My hon. Friend the Member for Beckenham and, I think, the hon. Member for Llanelli (Nia Griffith), asked about brass-plate companies. The existing legislation would, in certain circumstances, allow enforcement action to be taken against those and their officers, but sufficient evidence is necessary to justify such action. We continue to pursue with other relevant agencies the possibility of using other legislation to discontinue the UK registration of such companies on public interest grounds. I hope that that is helpful. It is a complex issue, which raises difficult questions about the nature of any evidence that may be disclosed in any proceedings. We shall, of course, update the Committees when firm conclusions have been reached.

I was asked by the hon. Member for Edinburgh South about risk profiling. I reassure him that licence applications are reviewed by officials in a number of Departments and agencies. We take account of all the available relevant information. As I have said, we look at the goods, the end user and the risk of diversion. We will of course not grant a licence if that would breach the consolidated criteria. Risk is integral to everything that we do on export licensing.

I was asked about the paragraph 46 ambiguity, and I am anxious not to add to it. I am assured that if there is any confusion, criterion 2 is the policy, but I am happy to write more formally to my right hon. Friend the Member for Tonbridge and Malling on that issue.

[Sir John Stanley]

Before the Minister sits down, will he give way?

[Philip Davies (in the Chair)]

Order. Has the Minister already sat down?

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[Sir John Stanley]

I regret that the Minister has chosen not to give way to me before he sat down. I think that that is a less than courteous way to treat the members of the Committees. He does not need to write to me on the key point that I was going to raise with him, because I was asking whether he would confirm that he and his Department accept that the Government’s policy on arms export and internal repression is that stated by the Foreign and Commonwealth Secretary in his oral evidence to the Committees on 7 February 2012.

I am grateful to all colleagues who have contributed to the debate. The hon. Member for Glasgow North (Ann McKechin) has been a most diligent and valuable member of our Committees. I entirely support what she has said about the need for a rapid and effective implementation of the arms trade treaty, and I agree with what she said about the importance of scrutiny of arms export policies towards both Syria and Egypt. I can certainly assure her that we will be continuing our scrutiny of the export of surveillance services and equipment, which we embarked on in our report last year.

My hon. and gallant Friend the Member for Beckenham (Bob Stewart) somewhat undersold himself towards the end of his speech. He is a diligent and important member of our Committees, and he contributes unique expertise and experience. On the points that he raised, I assure him that we will continue our inquiries into brass-plate companies. We will be paying close attention to the welcome and long-awaited change of policy on a pre-licence register of arms brokers that the Minister has just announced. We hope that the Government will conclude their consultation and reach a policy decision on that well before the end of the Parliament.

I am grateful to my hon. and gallant Friend for his remarks about cluster munitions. He gave a graphic account of his personal experience in Bosnia, in which one of his soldiers was seriously wounded as a result of those unacceptable weapons. We also noted what he said about anti-personnel weapons. May I say how much I appreciate his generous personal comments towards the end of his remarks? I would like to endorse absolutely what he and the hon. Member for Glasgow North said about the invaluable contribution that our Clerk, Keith Neary, has made to the production of our most recent report.

I am grateful to the hon. Member for Llanelli (Nia Griffith) for her contribution, and I firmly support what she said about the need for early and effective implementation of the arms trade treaty. She also made important points about brass-plate companies, and we will follow up what the Minister has said in reply. She made an important point about whether the EU arms embargo towards Syria should be resumed. It has always been somewhat mystifying to me that the British Government took steps to end the EU arms embargo on Syria, but they have yet to come up with any suggestion about how Britain would renew arms exports to Syria and ensure that the arms got into the right hands. There is a lot of force in what the hon. Lady has said, and we need a similar clarification on policy towards Egypt. I am glad that she raised Colombia, which is an important issue given the human rights situation in the country. She rightly drew the attention of the House to the fact that we have a total of 53 extant licences to Colombia, which are valued at £20 million.

Finally, I am grateful to the hon. Member for Edinburgh South (Ian Murray) for his opening personal comments. With regard to volumes 2 and 3 being available only on the internet, I will let him into a little secret. I have managed to obtain a limited number of hard copies of volumes 2 and 3, and I will be delighted to make a personal presentation of them to him if he has a carrier bag big enough to take them. I am grateful to him for his support on the Committees’ position on more disclosure from the Government on the export of chemicals to Syria. I am also grateful for his support of the Committees’ decision to bring together the 27 countries of top human rights concern and to establish exactly what are the extant arms export licences going to each of them.

I am grateful for the opportunity to make a brief response, and I am grateful to all those who have made a contribution to the debate.

Question put and agreed to.