Register of Arms Brokers Bill [HL]

Viscount Waverley Excerpts

Friday 10th June 2016 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I, too, thank the noble Baroness for outlining her Bill in the manner in which she did. My only experience in such matters is having specialist friends who have always complained about having a tough time being issued with the necessary licences.

I have come to the conclusion, with regret, that this Bill is not for now. First, there appears to be a consensus in this House that there is generally too much legislation. Should there be issues that require attention, it is preferable to address these through clarification and interpretation of existing legislation. Secondly, the Bill would add further burden to the criminal justice system.

It is my understanding that a UK register of brokers has been on the table for some time but was quietly dropped by the then Secretary of State. While I recognise that the use of agents or brokers is often a legal requirement in many countries in order to reduce corruption—by imposing a barrier between public officials, military and police officers, and the supply chain, whose representatives are perceived as the principal drivers of such practices—the UK industry is already controlled by the ECA, the licensing system and the Bribery Act. In addition, the UK’s defence and security industry has undeniable respect worldwide as a driver for innovation, manufacturing excellence and other added values, including reputational.

If the result of the upcoming referendum vote is to remain, would it not be better to co-ordinate this with our European competitors to ensure a level playing field? I listened carefully to what the noble Baroness, Lady Jolly, said about the European-wide arrangements, but I disagree somewhat in that there is a register that has the effect of including the players in it. Therefore, I suggest that we do this in unison with our European Union partners. Conversely, if the outcome is to leave, we will require all the comparative advantages that can be mustered.

In conclusion, I feel unable to support the Bill, since a public register would also be seen as a security risk. Its effect would probably lack enforcement follow-through and would cause damage to trade competitiveness for no perceptible benefit.

[Lord Stoneham of Droxford (LD)]

My Lords, I am very pleased to join my noble friends Lady Jolly and Lady Smith in advocating support for this Bill. The noble Viscount has just put what I thought was going to be the principal argument of the Government: that licensing is adequate and that they have a complete aversion to needless regulation. I, too, have an aversion to that, but I have to ask: is the problem easing and getting better or is it becoming more complex, more illicit and therefore more dangerous, both in this country and internationally?

I know, having spoken in this Chamber many times with the noble Baroness, Lady Neville-Rolfe, that the Government are prepared, when they think they have a problem, to consider extra regulation. I did not think there was any need at all for the extra regulation that they introduced on trade unions, but they were quite prepared to do it. But this situation seems to be a critical national interest, so we should give it attention.

The Government have to ask themselves the following questions. Will they be open to blame if they have not done all in their power to regulate arms dealing? Is this problem becoming more difficult because of mobile technology such as drones and therefore it is more immediate that we have closer regulation? Do they have absolute confidence in licensing, where the onus is on investigating the country of destination and not giving the scrutiny we think they should be giving to the backgrounds of people involved in these arms deals and their operations, and doing a proper test of fit and proper people?

The Government have to answer four key arguments. First, they have to argue that we do not need these controls and that the problem is not becoming more complex. Secondly, they have to ask themselves: why do we require similar processes in this country when we are talking about the Section 5 firearms registration process for UK-based arms dealers? Why do they require a process of registration for national security vetting for contractors in the MoD? Are we saying that arms brokers internationally should not be aligned with these processes? It is illogical that individuals brokering overseas arms deals are not subject to an eligibility test. Therefore, the Government have to say why that is the case. Are they confident that they have the processes in place to safeguard public and international interests?

Thirdly, all the evidence is that illicit arms dealing is often associated with offshore tax avoidance. With their efforts in that area of tax avoidance and arms dealing, the Government have to ask themselves: would a registration process actually help deal with both problems that the Government should be concerned about?

Fourthly, the Government have to answer the question posed by my noble friend Lady Jolly: why does a registration and licensing system operate in countries such as the USA, Australia, Canada and 18 EU nations? We may have difficulties, as the noble Viscount, Lord Waverley, said, with regard to the exact details of those, but should we be trying to align those processes? It makes sense for us to learn from those processes. The Government have to ask themselves: why are those processes suitable in those countries, and would similar processes not help the exchange of information between these vital nations?

This issue is becoming more complex and illicit, and the Government need to consider action beyond simple licensing to deal with it.

[Viscount Waverley]

My Lords, if the noble Lord will allow me, there is much in what he said in his last substantive point that I agree with. I apologise to him that my mind wandered just a little at a key time. It is particularly in relation to Section 5, which I heard him refer to, where there is a tough regime where these friends of mine have difficulty in getting the appropriate licences, or at least they have to put their case very firmly through the normal channels.