Re-Export Controls Bill [HL]

My Lords, after those contributions—I do not know about the mouse—I am trying to think of the right metaphor. Certainly, as someone who is new to this subject, my first observation is that while everyone can support the objectives, how to achieve them in a highly competitive global marketplace is a complex challenge. However, I congratulate the noble Lord, Lord Alton, on the Bill and on the tour de force and tour d’horizon of his contribution. We can see from this debate that there is unanimous support for what the noble Lord, Lord Bates, described as a modest proposal. We have to recognise that we have a highly developed defence and armaments industry which makes a significant contribution to our manufacturing industry and to the economy as a whole. It was the noble Lord, Lord Alton, who demonstrated what could be achieved if we could turn all those swords into ploughshares. We recognise that that will not happen in the current environment. His speech reminded us of how much of the world’s economy goes into armaments. I would defend the record of the previous Government because they played a significant role in developing international and national policy on this issue, arising from our manifesto commitment in 1997, which stated: "““Labour will not permit the sale of arms to regimes that might use them for internal repression or internal aggression. We will increase the transparency and accountability of decisions on export licences for arms. And we will support an EU code of conduct governing arms sales””." That was a positive and constructive commitment and we honoured it. It culminated in the Export Control Act 2002. In 2007, we conducted a review of that Act to examine the effectiveness of the controls introduced under the Act, particularly with respect to brokering, trafficking and licensed production, and determine whether further changes needed to be made to the legislation without imposing a disproportionate burden on business. The review led to a series of changes to the UK’s legal and regulatory framework for arms exports. The extra-territorial provisions of export control legislation were extended by the introduction of a new three-tier system of trade controls. Following requests from the Committee on Arms Export Controls in 2009, the previous Government commissioned an independent survey of compliance levels in the dual-use sector. The survey concluded that levels of non-compliance were low. However, it is interesting to note that NGO and industry stakeholders questioned aspects of the survey, including its main conclusion. When researching for this debate, I looked at the scale of the problem, examined in a report, Biting the Bullet. It says: "““In most countries, substantial quantities of SALW””—" small arms and light weapons— "““and ammunition are legally held by the armed forces, police, other various government agencies or contractors, manufacturers, wholesalers, shops, clubs and private security companies. Each year, large amounts of SALW and ammunition in authorised holdings are diverted to unauthorised users and uses, contributing to all of the problems associated with uncontrolled SALW proliferation and misuse””." We have heard a number of examples today of the terrible effects of such diversions. The report continues: "““Moreover, of the estimated 600 million SALW in global circulation approximately two-thirds are held by civilians. Firearms and ammunition held by individual citizens are mostly stored at home, often with minimal security and large numbers of firearms are stolen from homes each year. Most countries’ systems for licensing and controlling firearms possessions by individual civilians have major weaknesses that can be exploited by irresponsible or criminal gun-shops or individual licence-holders””." Therefore, there is a huge problem around the world. The noble Lord, Lord Alton, has already talked about the size of the market but it is a point that bears repetition. I quote from a paper on recent trends in the arms trade: "““One of the most marked aspects of major arms transfers over time is the stable composition of the list of the five biggest suppliers, with only slight changes in the ordering. For the period 1980-1984, when global arms transfers were at the highest, the Soviet Union, the United States, France, the United Kingdom and Germany accounted for 84 per cent of all exports. The five largest suppliers of major conventional weapons for the period 2004-2008 were the USA, Russia, Germany, France and the UK. Those suppliers accounted for 78 per cent of world exports for this period, compared with 81 per cent for the period 1999-2003””." Therefore, as we can see, this is a huge global industry in which we play a significant part, and I think that at this point it is legitimate to question whether, although the controls have been improved, we have made sufficient progress. As a number of speakers have said, we have been at the forefront of conventional arms transfer controls internationally. However, in one area—re-export controls—it is fair to say that we are now seen as lagging behind. As has already been noted, the UK Government have so far been reluctant to apply re-export controls as a matter of routine. However, as a number of contributors to the debate have said, this is not about tightening controls on where and when the UK is willing to export; it is about making sure that UK arms exports do not end up in places where the UK Government do not want them to be—where they may inflame a conflict or even be used against UK troops abroad. The UK Government have acknowledged the principle of controlling re-exports by introducing a clause on end-use declarations, stating that the buyer will not re-export to any destination which is under embargo. As has been noted by a number of speakers today, that is a significant step in the right direction. However, there are states which are not under embargo but to which the UK would have serious concerns about its arms being re-exported. We feel that the Bill is a timely initiative that would extend the application of re-export controls and provide legislative protection. That is why we feel it is worthy of consideration. I certainly agree with the noble Lord, Lord Alton, that the Bill is an attempt not to limit exports but to ensure that in the re-export market exports do not end up in destinations that would damage the interests of this country. There is of course a balance to be struck. I noticed that the Government have issued a further set of guidance to exporters, and another speaker has referred to the searchable database and other aspects that are of use to exporters. I suppose that the question being posed here is: have we gone far enough? My noble friend Lady Kinnock pointed out that, in going down this road, we would align ourselves with other countries—not insignificantly, the US, Russia, Belgium, France and Germany. Although we are supporters of the potential arms trade treaty, it is, as has been pointed out, still in gestation and will not totally solve the problem. There was also a candid recognition that, whatever legislation is passed, there will be limitations to its enforcement. However, such legislation does position the United Kingdom in the right place in this industry, and the noble Lord, Lord Bates, made the important comment that the Bill is a modest measure entirely consistent with national security policy. I was interested to hear the noble Lord, Lord Bates, quote Peter Luff. Mr Luff also said that the new coalition Government have signalled that promoting arms exports will be a high priority. He said in June: "““There will be a very, very, very””—" he obviously likes emphasis— "““heavy ministerial commitment to the process. There’s a sense that in the past we were rather embarrassed about exporting defence products. There’s no such embarrassment in this Government””." I do not think that anyone in this House was seeking to embarrass the Government; they were simply trying to ensure that we have a consistent policy—one that is in our own interests and in the interests of our national security.