Re-Export Controls Bill [HL]

My Lords, I am indebted to everyone who has taken part in our short debate this morning. The intervention of the noble and learned Lord, Lord Mackay of Clashfern, illustrates how much common ground there could be among us and shows that many of the problems that the Minister has raised are not insuperable. If there is not a problem with end-user exports and if other countries do not have a problem in placing re-export provisions into their domestic law, it is difficult to see why there should be such problems for us in the United Kingdom. I am particularly pleased by the support given to the Bill from the opposition Front Bench by the noble Lord, Lord Young of Norwood Green, who talked about the importance of aligning ourselves to others. The noble Baroness, Lady Falkner of Margravine, speaking for the Liberal Democrats, made a similar point. She said that, although the integrity of our country has to come first, that is not incompatible with achieving trade objectives. We were rightly reminded by the Minister and others of what has already been achieved. However, as the noble Baroness, Lady Kinnock, said so eloquently, we need to cut the umbilical cord that links conflict and poverty. She also said that we need to give clear leadership as this issue comes to be debated at the United Nations in 2012. Those objectives are not incompatible. Putting this modest measure on to the statute book would show that we wish to be in line with all the other nations on the Security Council and with many of our European Union allies. I am grateful to the noble Lord, Lord Lyell, who rightly pointed out the importance of aligning ourselves with other nations in achieving these objectives. To have any degree of enforceability and any assurance that such controls will become normative throughout the world, we will have to use all our diplomatic skills to draw others alongside us. The noble Lord, Lord Bates, asked a key question in his interesting, helpful and welcome speech. Why would we not want to know where arms or equipment manufactured in our country end up? Why would we not want to know their destination and use? As he said, it is crucial to our own defence and security to know the answer. He quoted the Development Secretary, Andrew Mitchell, who has also said that our objective is to ensure, "““100 pence of value for every pound””," of development aid. He is absolutely right, and I know that many noble Lords share that view. However, where there is untold conflict in a country, that jeopardises development. Unless we get conflict right, much of the resource that we put in to try to tackle health and education issues ends up being wasted. There has been considerable agreement among us today, but the Minister raised three specific objections. She said that buyers are put off by the bureaucracy involved in the USA’s ITAR—international traffic in arms—controls, on which she mentioned that she had shared with me the Export Group for Aerospace and Defence letter that was sent to her. However, that is rather like Don Quixote being invited to tilt at imaginary windmills, because my Bill does not propose the American system or a system linked to ITAR. Plenty of other states apply re-export controls in a far less intrusive way and we should look to them as models. In Sweden, for example, a threshold is applied so that, when Swedish companies export relatively insignificant components for integration and onward export, re-export controls do not apply. Although buyers might be put off by the US ITAR controls, I know of no evidence that they are put off by less intrusive bureaucratic systems. Indeed, if they are put off, that would suggest that the United Kingdom is currently winning from competitors that apply re-export controls the business of buyers who have ambitions to re-export. Perhaps the Minister could write to tell me whether she is aware of any such cases. If there are such cases, I think that that reinforces the need for us to act. The Minister also talked about inconsistency. EGAD’s argument is that introducing re-export controls would be inconsistent with ongoing European Union intra-Community transfers initiatives, which, it says, require European Union members to remove transfer restrictions wherever possible. That overstates the case. The ICT initiatives explicitly provide that states can apply re-export conditions. In any event, it is not clear why national re-export controls cannot be organised in a way that is consistent with the requirements of the ICT measures. Many of the states that negotiated those initiatives already applied re-export controls, so presumably they had to take that issue into account during the process. Again, I would be most grateful to the noble Baroness, Lady Wilcox, if she could address that issue when she responds in writing after the debate. Finally, the perfectly legitimate question of enforcement was raised during the debate—indeed, I raised it myself. One of the arguments against introducing re-export controls is that the United Kingdom cannot prosecute foreign Governments for exporting UK arms against our wishes, as there is no court with the legal jurisdiction to enforce that. No one is suggesting that the UK should prosecute a foreign Government. Nor should the UK look to prosecute or punish the original UK suppliers, which could not and should not be expected to enforce the contract. To see this as a struggle between opposing forces or as a matter of legal enforcement is to miss the point. The countries that regularly buy UK arms exports are responsible trading partners—or at least one hopes so—and one assumes that the licensing procedures ensure that those to whom we export will honour their obligations. In the unlikely event that they decided to re-export without our permission, that information could then be shared with other arms-exporting states and be factored into future licensing procedures. That would reinforce what this country already does and would place us in line with other nations that have introduced these provisions. I am extremely grateful to all noble Lords who have contributed to the debate and I thank them for their support. I now ask the House to give the Bill a Second Reading. Bill read a second time and committed to a Committee of the Whole House.