Register of Arms Brokers Bill [HL]

Lord Swinfen Excerpts

Committee: 1st sitting (Hansard): House of Lords
Friday 18th November 2016 Lords Chamber

[Baroness Jolly (LD)]

My Lords, I start by thanking the Minister and her officials for a really useful meeting last week. Amendments 1 and 2 are technical and would rectify shortcomings in the original Bill debated at Second Reading, as highlighted by the Delegated Powers and Regulatory Reform Committee report of 25 October this year.

With the leave of the Committee, I should like to outline briefly the purpose of the Bill. It is a small Bill to meet an obvious need. Its purpose is to require British arms brokers to register before they can trade. It brings arms brokers into line with those of other countries, such as the US—a country not recognised as being in favour of unnecessary regulation. Here, I should point out that a strong regulatory regime is already in place to ensure that licences are granted to export appropriate goods to states which we trust to act responsibly with the arms that are purchased.

At Second Reading the right reverend Prelate the Bishop of Derby summed up the issues really well. He said that the Bill,

“builds upon existing legislation about licensing and export control, so we have a set of criteria and an assessment process in place so that all companies involved are scrutinised and licensed. We are doing the work that would provide the register. So the principle of identifying and monitoring arms brokers is established.

Secondly, there has been a recommendation from the House of Commons Committees on Arms Export Controls that the Government establish a register of UK arms brokers. So besides have a principle of identifying and licensing brokers, even in our own parliamentary system there has been some expert scrutiny of that principle and a recommendation that it is taken forward to a formal system of registration”.

Finally, I refer to the right reverend Prelate’s recent experience of being involved in the crafting and implementation of the Modern Slavery Act. He said:

“In the language of that world, which is analogous, there is the issue of … supply-chain transparency: how people trade and make it transparent for the benefit of all concerned, pushing back against temptations towards corruption”.—[Official Report, 10/6/16; col. 958-59.]

As I said, these are two technical amendments, which were prompted by the DPRRC. I beg to move.

[Lord Swinfen (Con)]

My Lords, I apologise for speaking, as I did not have the opportunity to take part at Second Reading.

I am a little puzzled by the meaning of new Section 4A(2) proposed in Clause 1. As I read it, it would mean that members of the Ministry of Defence, civil servants, members of the Armed Forces and the Treasury and various Ministers,

“involved in the financing, transportation, freight forwarding, or taking of any other action that facilitates the manufacture, export, or import of military equipment or military technology”,

should be registered. I find that odd. It is quite obvious that members of the Armed Forces and civil servants in the Ministry of Defence are involved in the design, improvement and manufacture of weapons to be used by our Armed Forces, but I do not really understand why they should be registered as arms brokers.

--- Later in debate ---

[Baroness Jolly]

Perhaps I can better help the noble Lord, Lord Swinfen, by explaining that the issue he raised comes under the second group of amendments. The amendments in the first group are merely technical to determine how such legislation could take effect.

[Lord Swinfen]

I am quite happy for the noble Baroness to answer my query when we come to the second group. I shall wait patiently to hear what she has to say.

[Lord Stevenson of Balmacara (Lab)]

One does not often hear those words in the House. It was very gracious of the noble Lord to agree to reorganise his speech in order to get the answer that he wants from the noble Baroness.

We have gone back slightly over ground that was raised at Second Reading and I do not want to carry on that trend. We should focus on the amendment. As has been said, this amendment has been recommended by the Delegated Powers and Regulatory Reform Committee and it is entirely appropriate for the noble Baroness, Lady Jolly, to bring it forward for the Committee’s consideration today.

Having said that, I feel very strongly that this is a gap in an existing and strong system, as was referred to by the noble Baroness in her introductory remarks. We have a strong regime that deals with these difficult areas, and we have licensing and registers already in place. The additional work required is very small, but it fills a lacuna in our existing arrangements, which is very important, in that we do not currently focus on the agents or people in the supply chain, as she says. I recommend the amendment to the House.

--- Later in debate ---

[Lord Wallace of Saltaire (LD)]

My Lords, perhaps I may press the Government a little on the extent of this register for arms brokers. My noble friend Lady Jolly has spoken about how, in the past, companies in the overseas territories and Crown dependencies have been used for quite extensive arms brokering to foreign companies. Many of us will remember a number of instances of that. I and others will also be aware of the extent to which our Government provide support to companies based in the overseas territories and Crown dependencies in their exporting activity but do not register and regulate them entirely. That is a possible loophole, which the noble Lord, Lord Stevenson, might even describe as a lacuna. It is important that we should be clear quite how far registration and regulation extends. Questions of transparency and proper regulation are always left ambiguous when offshore companies operating in our overseas territories and Crown dependencies are engaged, and historically they have been very active, in the arms brokering trade. I would like further clarification on that.

[Lord Swinfen]

My Lords, I know that I do not hear very well, but I did not hear the noble Baroness, Lady Jolly, answer the points I made on the first amendment, although I heard her say on that one that she would respond to them when taking Amendment 3. I gather that we are now on that amendment and I look forward to hearing from her.

[Baroness Jolly]

The point I thought the noble Lord was making was to do with the breadth of the measure having to cover Secretaries of State, members of the Cabinet and British arms manufacturers who deal perfectly legitimately and regularly overseas. Do I understand the noble Lord aright?

[Lord Swinfen]

The noble Baroness is moving in the right direction, but as I read her Bill it would cover the Ministry of Defence, civil servants working for that ministry, members of the Armed Forces, the Treasury, Ministers in the Treasury and anyone involved in the manufacture and supply of arms for our own forces. I am sure that that is not her actual intention, and I am not a lawyer although I am descended from lawyers, but that is my reading of her Bill. It may be that she needs to look at this point before the Report stage.

[Baroness Jolly]

I thank the noble Lord for that clarification. I am not a lawyer either and neither am I descended from lawyers, but I will most certainly take advice from them and ensure that, should the Bill reach the Report stage, I table any necessary amendments to exclude those particular groups. The aim of the Bill is to catch arms brokers who for the most part operate in small or single-individual companies hiding behind brass plates. Recently there have been several instances of brokers trading illegally. They have been charged and served their time, but because there is no registration, they can come straight back and trade again. That is the purpose of the Bill and so that is what the fit and proper person provision is for.

[Lord Swinfen]

I am most grateful to the noble Baroness for saying that she will have a look at this point, and I look forward to hearing what she decides on it at a later stage.

[Lord Stevenson of Balmacara]

My Lords, I am tempted to say that we probably all want to be sure those who are caught by the broad definitions which have been read into the Bill by the noble Lord, Lord Swinfen, are indeed fit and proper persons. I hope that Ministers would not object if that was a test which was applied to them, although the idea that it might be applied by civil servants to their incoming Ministers might be a bit of a shock to those who aspire to high office. I will not perpetuate that myth any further, and I am sure that the point can be dealt with as we move forward to the Report stage.

Again, the noble Baroness has done a good job in producing a better set of words to try to capture the issues that are in play in the Bill. A further point that she might want to consider before we reach Report is that it might be worth also looking at the recent report from the UN Human Rights Council, which has brought out the principles under which international trade should be regulated in order to make sure that human rights are not breached. Obviously, it is a tricky area and she has acknowledged that the people who operate in this world are often registered outside UK territorial reach and therefore we are not able to pursue them through the British courts or other areas. This is exactly the point raised by the UN Human Rights Council. It is about the need for us all to work together to try and make sure that any gaps in the system are not left unfilled. But these are broader issues than the context of this Bill and I therefore support the amendment as it is framed.