Export Control Bill

Public Bill Committee, 17 July 2001.

Standing Committee B

Export Control Bill

Joe Benton (Labour, Bootle)

Before I call the Minister, I should like to say that it is in order for members of the Committee to remove their jackets.

Nigel Griffiths (Labour, Edinburgh South)

I beg to move,

That—

(1) during proceedings on the Export Control Bill the Standing Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at half-past Nine o'clock and half-past Four o'clock;

(2) the proceedings on the Bill shall be taken in the following order, namely, Clause 1, Clause 3, the Schedule, Clauses 8 and 9, Clause 2, Clauses 4 to 7, Clauses 10 to 15, New Clauses, New Schedules;

(3) the proceedings on the Bill shall be brought to a conclusion on Tuesday 23rd October at One o'clock.

On behalf of all members of the Committee, may I welcome you, Mr. Benton, and your co-Chairman, Mr. Malins? It is appropriate that you are chairing the Committee on the Export Control Bill, given the tremendous contribution that Merseyside has made, and continues to make, to exports.

It is important to the Committee and to the Government that we should consider the Bill in as timely a way as possible. The timetable for considering the Bill is accepted by all as appropriate for a 15-clause Bill, and will enable us to deal with one or two clauses per sitting. I believe that that will be an efficient and effective use of the Committee's time. Moreover, it will enable the Government to honour an election pledge to give the United Kingdom a modern system of export licensing and control, thus replacing an emergency measure that was rushed through during wartime, and which is now more than half a century old.

Richard Page (Conservative, South West Hertfordshire)

Mr. Benton, I echo the Minister in welcoming you to chair the Committee, along with Mr. Malins, who will no doubt appear in due course.

I regret that I must start the proceedings on a discordant note. Conservative Members are in favour of the Bill, but we feel that the Government's handling of the whole affair has been lamentable. What I have to say will come as no surprise, as we had a preliminary discussion of the matter in the Sub-Committee that met yesterday. I want to register properly and firmly our concern that parliamentary democracy—proper scrutiny of the Bill—is being cast to one side by this cavalier Government. In the Chamber yesterday even Labour Back Benchers felt that enough was enough—the voting told its own story. These proceedings are following exactly the same route. Parliamentary democracy—proper scrutiny—is being flouted.

That is not the Minister's fault. Pressure is being put on him to rush these matters through. It was interesting to read in this morning's Financial Times that one of the Prime Minister's senior advisers has called for the Department of Trade and Industry to be scrapped because it suffers from a paucity of ambition and imagination. It is amazing that the Labour party has been in Government for four years and the fourth Secretary of State for Trade and Industry is in office. I hope that the present one lasts a little longer than her predecessors.

I am not making this point of order as a delaying tactic. Mr. Benton, you have been in the House long enough to know that Opposition spokesmen make long and detailed objections and points of order just to delay getting on with the Bill. I will not do that. I will not spend hours making my point because, as I said, we welcome the Bill—

Joe Benton (Labour, Bootle)

Order. I am sorry for intervening so early in the proceedings, but I must point out that the hon. Gentleman is not making a point of order: he is replying to the Minister.

Richard Page (Conservative, South West Hertfordshire)

You are right, Mr. Benton. I began to make a point of order, but now understand that we are debating the programme motion. When I have made my comments on the programme motion, I would like to put a point of order to you.

Joe Benton (Labour, Bootle)

We should be clear that the hon. Gentleman is no longer making a point of order. He is making a contribution.

Richard Page (Conservative, South West Hertfordshire)

That is right. I felt that I should register my objections at the start of the sitting, because although we did not vote against the Bill, we voted against the programme motion in the House, just as we voted against the programming details in the Sub-Committee yesterday.

Phyllis Starkey (Labour, Milton Keynes South West)

Will the hon. Gentleman clarify whether he objects to programme motions on principle? Does he take into account the fact that the Bill has been considered in its draft form in a detailed evidence session of the Quadripartite Committee? It has been scrutinised prior to Committee stage.

Richard Page (Conservative, South West Hertfordshire)

I do not object to a programme motion in this case; I object to the way in which the Bill has been programmed. If the hon. Lady will relax, I will come to her point in a moment. I have previously mentioned that we are in favour of the Bill. The Second Reading debate proved that the Bill's teeth are in the secondary legislation, and unless we can view that legislation, it will be difficult to tell whether the Bill is correctly drafted.

On Second Reading, many hon. Members expressed their concern that we would not have the secondary legislation before us in Committee today. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) made that point, as did my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley), who said that

``we have no idea when that important secondary legislation will be introduced. I hope that the Minister can assure the House that it will at least be available in dummy form before the Bill goes into Committee.''—[Official Report, 9 July 2001; Vol. 371, c. 570.]

Although we are now in Committee, the secondary legislation is still not before us. I do not want to delay the Committee, but because of that gaping omission, I ask you, Mr. Benton, to accept an amendment that the whole matter be referred back to the House, and that the Programming Committee review the matter again. We should cancel the next two sittings, and the Committee should adjourn. When the House re-assembles in October, we should sit for only one day, because we do not want to delay the Bill's passage. The Bill is allotted a couple of days this week, and two or three days after the recess, but we should deal with it as a piece, rather than fragment it. The Government have already had four years in office, but who knows, perhaps by October they will have the secondary legislation in place. We could then make progress. Are you prepared to accept such an amendment, Mr. Benton?

Joe Benton (Labour, Bootle)

I have no power to refer the Bill back to the House. The hon. Gentleman may move an amendment to the programme motion, but he would need a precise text.

James Gray (Conservative, North Wiltshire)

I welcome you and Mr. Malins to the chair, Mr. Benton.

I want to raise several procedural points that derive from one curious procedural fault in this House, which is that no records are kept of meetings of the Programming Sub-Committee. There is, therefore, no record of yesterday's Programming Sub-Committee meeting. I know that the Speaker is considering that matter, but will the Committee ask the Speaker whether a Hansard Reporter could be present at the Programming Sub-Committee? If a Hansard Reporter were present, important programming debates would be on the record and could be considered by all members of this Committee, not just those of us who are privileged to sit on the Programming Sub-Committee.

Given that no Hansard Reporter was present at yesterday's Programming Sub-Committee, it is necessary to repeat some of the points raised for the record.

I shall not delay the Committee with our principled objections to the whole notion of programming, which are well known and which apply as much to this Bill as to any other. Bills have proceeded perfectly well over the years without any form of programming. The Government have accepted that principle in this Session in respect of the Homelessness Bill. There was no programme motion for that legislation, so one wonders why there is a sudden need for a programme motion on an uncontroversial and widely supported Bill such as this one.

The Minister says that the Bill is important as it is a manifesto commitment, and it is important to rush it through. There is no reason why it should be important to rush through a Bill that amends legislation that has been in place since 1939. We all agree that it is important to amend the legislation. The Quadripartite Committee considered that matter, and we acknowledge its valuable work.

I disagree with the hon. Member for Milton Keynes, South-West (Dr. Starkey). The House has long established that pre-legislative scrutiny should in no way reduce scrutiny of a Bill on Second Reading or in Committee. Those stages must be conducted as if there had been no previous scrutiny. After all, the Quadripartite Committee sought to be non-partisan and to agree its conclusions on the Bill.

I acknowledge the Quadripartite Committee's valuable work, which should improve the Bill. It is, therefore, odd that the Government should choose to rush the Bill through using a programme motion, when they have already demonstrated in this Session that they do not need to do so in other uncontroversial measures such as the Homelessness Bill. Will the Minister explain why, in the last week before the summer recess when we would all rather be doing something else, the Government are so determined to get the Export Control Bill through? It is unsatisfactory to get half the Bill through before the summer and half through after the summer.

It is also odd that we should be discussing clause 1, or at least discussing a programming motion that suggests that we discuss it today, without the statutory instrument to which clause 1 refers. I understand that the statutory instrument will not be available until the autumn. That is eminently unsatisfactory. We discussed that in some detail yesterday at the Programming Sub-Committee, and when we raised it with the Minister, there was a strange convolution of ideas.

First, the Minister told us not to worry, because the statutory instrument will not expand the Government's powers, which will remain exactly the same. It will merely clarify existing statutory instruments. I told him that we would accept that if—to use hyperbole—he would put his hand on the bible and swear on oath that it will not expand the Government's powers by one jot or one iota. He would, however, have to stand by that in the autumn when we finally see the statutory instrument. We said that we would examine it in the greatest detail to see whether it exceeded the Government's existing powers in the slightest, so the Minister would be staking his career and his position as Minister on the promises that he had given us. The Minister then told us that that was not quite the case, but that the intention was to try not to expand the Government's powers when the statutory instrument was introduced. He said that the Government could not be tied down too much. That is fundamentally unsatisfactory.

The Minister asks us to consider clause 1 and to take his word that the corresponding statutory instrument, which we shall not see until the autumn, will not expand the Government's powers unnecessarily. However, when we truly pressed the Minister and said that his position would come under scrutiny, he backed off pretty sharply. That form of scrutiny is entirely unsatisfactory.

As my hon. Friend the Member for South-West Hertfordshire (Mr. Page) said, the House asserted its power over the Government yesterday when it refused to be pushed around. We are also being pushed around. The Government say to us, ``Please, get this Bill through. We want to rush it through.'' Even though the legislation has been around for 70 years, we are being asked, for reasons that we do not know, to rush through the first part of its scrutiny in the week before Parliament rises. Even though we do not have the statutory instrument to look at, we are still being asked to start considering the Bill now because it is important. The Government are saying, ``Don't worry, leave it to us, the SI will be fine when you see it in the autumn.'' That is a fundamental abuse of the whole scrutiny process. It is wrong, and is symptomatic of what the Executive have done recently.

My hon. Friend is right to say that a more satisfactory procedure to scrutinise the Bill is required. The Bill is not controversial; we did not oppose it on Second Reading. However, it is important that we get the detail right, because if we get it wrong we could damage the arms manufacturing industries in some of our constituencies. Surely it would be more sensible to delay scrutiny of the Bill until the autumn when we could examine it quietly, because we would not be rushing around trying to do everything that we are trying to do this week. We could examine the Bill in the light of the secondary legislation, and we could give it quiet, sensible, non-partisan consideration, rather than the deeply unsatisfactory scrutiny that we shall give it this week.

I entirely support what my hon. Friend said. It would be much better to table an amendment to the programme motion to refer the Bill back to the House, so that its detailed scrutiny could be delayed until after the recess. In return, as my hon. Friend said, we would happily reduce the length of time that we request for Committee stage. As a result, the Bill would be delayed by only one day, and we could give it the careful scrutiny that it deserves.

Vincent Cable (Liberal Democrat, Twickenham)

I add my welcome to you, Mr. Benton. We also made it clear on Second Reading that we support the Bill in principle. However, I suspect that we shall approach the Bill from the opposite direction to the Conservatives on most of the issues of substance.

We entirely endorse what Conservative Members have said. It is unfortunate that what should have been a discussion on a fairly uncontroversial Bill has begun in an unnecessary atmosphere of ill-will and suspicion. Our problems do not relate to the basic principles of programming, but to the way in which this legislation has been approached. It is a peculiar mixture of extreme delay and haste.

The report of the Quadripartite Committee contains fierce criticism of the languid pace at which the Government approached the issue. Nothing happened for five years, yet suddenly an extra day of parliamentary time is crucial. That sudden change of gear is difficult to understand. However, the reason is fundamental: the meat of the Bill is in the secondary legislation. The importance of that is clearly set out in the Quadripartite Committee report of 1 May, which was referred to on Second Reading. The hon. Member for New Forest, East (Dr. Lewis) quoted the report, which states:

``We recommend that every effort is made to ensure that a draft consultative version of the relevant secondary legislation is published before the House is asked to give the Bill a Second Reading.''

That did not happen, and it still has not happened. However, it is important to have the secondary legislation because that enables us to judge whether the Bill is good or not. Our attitude to the Bill will be conditioned by the nature of the secondary legislation. If it is satisfactory, we shall do all that we can to expedite the process, to be sympathetic and not to table disruptive amendments. If it is bad, we shall adopt a totally different approach. At the moment, we do not know whether the Bill is good or bad.

The whole spirit of a multi-party group has been wholly disregarded. The hon. Member for South-West Hertfordshire suggested various reasons why that has happened. We can only advance our own theory. I suspect that the Secretary of State—perhaps wanting to earn a few brownie points from Cabinet colleagues—introduced the Bill three or four weeks ago, assuring her colleagues that it could be got through without any hitches. She then got back to the office and discovered that the officials and lawyers could not deliver on the small print. An embarrassing cock-up has occurred, and rather than lose face and admit that there has been a mistake, the Department and the Ministers are determined to press ahead with the Bill. I urge them not to do so.

The hon. Member for South-West Hertfordshire has suggested that he is willing to move a new motion. Given the good will shown towards the Bill on Second Reading, I hope that the Minister will take our arguments on board. It would cost neither him nor his Department much to admit that they have fallen behind with the preparation. He could make his introductory remarks, and then say that he would like to adjourn proceedings until after the recess when we will have had plenty of opportunity to examine the secondary legislation. What would be the problem with that? The Government have a large majority; we face a long Session, and there is no danger of their overall legislative programme being derailed. It would cost the Minister and his Department very little to lose an extra day or two of parliamentary time in order to get this right. We appeal to him in a spirit of good will to do that, and to get both the legislation and the Committee into the right frame to provide proper scrutiny.

Gerald Howarth (Conservative, Aldershot)

Like my hon. Friend the Member for South-West Hertfordshire and the hon. Member for Twickenham (Dr. Cable), I welcome you to your post, Mr. Benton, and your colleague, Mr. Malins. I should like to give some friendly advice to newer hon. Members. If they wish to curry favour with Mr. Malins, they should pronounce his name correctly, rather than as if it was spelled Mallins, because anyone who calls him Mr. Mallins will not be called. In his absence, and just between us, I wanted to give colleagues on the Committee that friendly piece of advice. I served for four years on the Select Committee for Home Affairs and know only too well how angry he gets when his name is mispronounced.

There is sometimes a ritual element to the way in which the Opposition deal with programme motions and with debates in Standing Committee. On this occasion, there is a deep-seated unease, certainly on this side of the Committee—as expressed by the hon. Member for Twickenham in support of my hon. Friend the Member for South-West Hertfordshire—at the way in which the Government are dealing with the legislation. This is an enabling Bill. As the hon. Member for Twickenham said, the meat will be in the secondary legislation. The Quadripartite Committee strongly recommended that the draft orders should be made available in advance of Second Reading--let alone the Committee stage--so that we could examine the proposal in detail.

In the aftermath of what happened last night, the Government would be well advised to take into account the growing unease—not only among their Back Benchers, but among the public at large—at the way in which they are perceived as contemptuous of Parliament. Clause 1(1) shows the magnitude of what is involved. For the benefit of others, I shall quote it.

``The Secretary of State may by order make provision for or in connection with the imposition of export controls in relation to goods of any description.''

The Bill gives that huge, sweeping, blanket power to the Government, and the idea that we must rush it through in just four and a half sittings—two and a half of them separated by the recess—is a contempt of Parliament.

I do not particularly blame the Minister, who has been helpful in trying to provide us with information, because he inherited the problem. However, I hope that, given the debate of the past few years, he realises that people outside Parliament will fail to understand why the Bill must suddenly be rushed through its Committee stage. We are supposed to be engaged in detailed scrutiny, but we do not have the legislation that we are supposed to scrutinise. It is like Hamlet without the Prince of Denmark—I was about to say Hamlet without the Prince of Darkness, but I do not want to cause any more problems for the Government.

We have a serious problem. The Minister kindly wrote to us all last week to express his delight that we had been selected as members of the Committee.

Joe Benton (Labour, Bootle)

Order. For clarification, I remind the hon. Gentleman and other members of the Committee that only five minutes remain to debate the programme motion. I ask the Committee to bear in mind the fact that the Minister has yet to respond, and I want to give the hon. Member for South-West Hertfordshire time to propose his amendment.

Gerald Howarth (Conservative, Aldershot)

That was extremely helpful, Mr. Benton, and I shall bring my remarks to a conclusion.

The Minister wrote:

``I know the Committee will be keen to see draft dummy orders made under the Bill and I intend to make sure they are laid before Parliament as soon as possible.''

We welcome that, but those orders are not yet available. Half of our detailed consideration of the Bill will have taken place before the House rises for the recess, and it seems unlikely that we shall have any more information before then. The Minister also wrote:

``I would like to be as helpful as possible to the Committee so I have asked my officials for information we could make available to the Committee before the first meeting.''

I did not arrive in the House until late last night, and I have not seen any such information. It is a travesty of our proceedings that we should be asked to consider such draconian and extensive legislation without having the very meat of it before us.

Nigel Griffiths (Labour, Edinburgh South)

May I make it clear that clause 1 does not expand the Government's powers, and statements to the contrary are simply wrong. Indeed, the powers in the Bill are more limited than those in the Import, Export and Customs Powers (Defence) Act 1939, because they are subject to the purposes laid down in the Bill. The secondary legislation to be made under clause 1 will be a rationalisation and consolidation of current legislation.

For the benefit of the Committee, I have put copies of the current legislation on the Table. I can assure the Committee that the secondary legislation to be made will have substantially the same effect as that already in force, which I am sure hon. Members will have been poring over in preparation for our debates.

James Gray (Conservative, North Wiltshire)

Will the Minister guarantee that the statutory instruments produced in the autumn will not expand the Government's powers in any shape, size or form, in any iota or in any detail?

Nigel Griffiths (Labour, Edinburgh South)

I think that I can give that guarantee to the Committee. I therefore hope that no amendment is moved, and that we can make progress.

Richard Page (Conservative, South West Hertfordshire)

I hear what the Minister has to say. I ask him carefully to consider that remark. Indeed, I would be quite happy if he withdrew it, because I believe that he is putting his career at risk. I would not want that, especially after his dramatic return to the Front Bench.

My hon. Friend the Member for Aldershot (Mr. Howarth), the hon. Member for Twickenham and the Quadripartite Committee of senior Members of the House have all said that the secondary legislation should be in place. Even my Whip, my hon. Friend the Member for North Wiltshire (Mr. Gray), has argued that that is necessary. I therefore move a manuscript amendment to the programme motion.

Manuscript amendment proposed:

``To leave out from `That' in line 1 and insert—

`the Standing Committee reports back to the House that proceedings in the Committee shall be brought to a conclusion when it shall have met for nine sittings after the production of the secondary legislation required to allow proper scrutiny of the Bill.'''--[Mr. Page.]

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 10.

Joe Benton (Labour, Bootle)

I shall now put the Question on the programme motion.

Question put and agreed to.

Joe Benton (Labour, Bootle)

I remind the Committee that there is a financial resolution in connection with the Bill, copies of which are available in the Room. I should also remind hon. Members that adequate notice should be given of amendments. As a general rule, my co-Chairman and I do not intend to call starred amendments. Clause 1 Export controls

Clause 1 - Export controls

Richard Page (Conservative, South West Hertfordshire)

I beg to move amendment No. 33, in page 1, line 2, leave out `may' and insert `shall'.

In keeping with my comment that I do not want to delay the Committee, I shall be remarkably brief. Hon. Members who have served on a number of Committees will know that ``shall'' and ``may'' are old friends. We have cantered over considerable ground and taken up considerable time debating their relative values, so I shall not spend much time expanding on them.

The purpose of the amendment is to probe the Government's intentions and to ask the Minister to define them a little more closely. That is because we have no secondary legislation against which to evaluate them—that phrase might come up once or twice during the Committee's deliberations. The Minister has been remarkably helpful and has pointed to a pile of legislation in the Room, but that is the old legislation, and we want to see the new legislation.

When the Secretary of State came to the Dispatch Box on Second Reading on 9 July, she stated that the Bill would introduce

``new powers to control the arms trade'',

and we all say amen to that. She said that it would offer

``greater democratic accountability for the exercise of those powers'',

and we all say amen to that. She added that it would ensure that

``Britain cannot be used as a base for''

the illicit

``trafficking and brokering of arms to conflict zones and areas of instability.''

Again, the whole Committee would agree with that. Finally, the Secretary of State noted that the Bill would provide

``one of the most effective and comprehensive export control regimes in the world.''—[Official Report, 9 July 2001; Vol. 371, c. 542.]

I want that to happen, because I would like to think that where this country leads, others will follow. Such a development would mean the gradual tightening of control over those who trade illicitly in arms, making it harder for them to operate. That will make the world a safer place. I would like to think that we are as one in moving towards those aims. In all that, there is also the intention to introduce a general licensing system for arms trafficking and brokering.

The terms used by the Secretary of State on Second Reading were unambiguous, and she supported them with moving examples of the suffering caused to individuals and families when arms reached the wrong hands. She drew to our attention some of the terrible circumstances in Africa. In newspapers and other media, we have all seen horrendous scenes; some of them turned my stomach. On Second Reading, she said:

``When we consider the Bill, therefore, let us remember what it will mean to people throughout the world.''—[Official Report, 9 July 2001; Vol. 371, c. 542.]

We would all echo that sentiment.

Clause 1(1) gives the Secretary of State, in a permissive sense, power to make orders to impose controls on the export of any goods, and to make provision about matters connected with the imposition of export controls. The word used is ``may''. It is a logical possibility that he or she, depending on who is Secretary of State for Trade and Industry, may decide not to make orders imposing such controls in general or specific terms. If he or she failed to do so, the commitments made on Second Reading would not be honoured. That would breach a promise. Through the amendment, my hon. Friends and I invite the Government to convert the promises into an obligation to the House and the country to meet the general and specific needs.

Nigel Griffiths (Labour, Edinburgh South)

By replacing ``may'' with ``shall'', the amendment would impose on the Secretary of State the legal requirement to make orders for the imposition of export controls of any description. It would remove the Secretary of State's discretion to take action or refrain from doing so when the United Kingdom's national interest might be at stake and when international obligations allowed such national discretion.

It is essential to recognise the fact that export controls may be imposed to comply with the UK's obligations under various international export control regimes. Such obligations would normally result from agreements between the UK and other sovereign states, in an EU or other international context. However, export control orders may be made for reasons determined by the UK itself, in the form of unilateral action in exceptional cases, such as export controls on broadcasting equipment to Yugoslavia, or in the timing or manner of introduction of orders to comply with international obligations.

In the absence of international agreement, it will be for the UK to decide whether to take action. In such cases, the Secretary of State must be allowed to have discretion to propose export control orders for parliamentary approval, or the discretion to decide not to do so, depending on the circumstances. The imposition of an obligation, as required by the amendment, would remove the Secretary of State's essential discretion to act or refrain from acting in the UK's interests when a choice had to be made. It is important that he or she has some discretion, so I invite the hon. Gentleman to withdraw the amendment.

Richard Page (Conservative, South West Hertfordshire)

In view of the Minister's clear and concise response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Gerald Howarth (Conservative, Aldershot)

I beg to move amendment No. 34, in page 1, line 2, after `order', insert

`, after consultation with the relevant industrial organisations,'.

The amendment is extremely important. As we know from our discussions, and as the Minister has just acknowledged, clause 1(1) is wide-ranging. There is no limitation on the scope of the goods that could be subject to export control. It could therefore cover virtually any manufactured or traded good in the United Kingdom. The powers are extremely wide. Our amendment would impose on the Government the obligation to consult the relevant industrial organisations. Naturally, the Govt would want to do that, and I am sure that the Minister will tell us that that is their intention.

The Bill deals principally with defence exports, although it is much more comprehensive than that. Defence exports are, however, the key issue. I am aware that the Government have had lengthy negotiations with, for example, the Defence Manufacturers Association, the Society of British Aerospace Companies and the National Defence Industries Council. I am not suggesting that the Government have brought the measure before Parliament and the country without consulting the relevant organisations.

However, it would be tactful of the Government to acknowledge the concern that has been expressed about the haste with which the Bill is being advanced through Parliament—the fact that it is being pushed through without the relevant secondary legislation being made available to us for scrutiny. It would mitigate the Government's embarrassment if they were to accept the amendment because, by doing so, they would be showing that they understood such concerns. They would demonstrate that, although they have not been able to bring forward for the Committee the ``dummy orders'', as the Minister described them in his letter to us, as evidence of their good will they are prepared to accept a provision in the Bill that obliges them to consult the relevant industrial organisations.

I am sure that that would be welcomed by the Defence Manufacturers Association and the Society of British Aerospace Companies, for whom the Bill has serious implications. From speaking to the DMA, I know that it accepts the need to update the Import, Export and Customs Powers (Defence) Act 1939. I know that it has had meetings with the Minister, and I think that the Minister would accept that those meetings were cordial. There was not much dispute about the general principle. However, in advance of bringing the orders before Parliament, the Government should accept that they have an obligation to consult with the relevant industrial organisations.

That is fine as regards the defence industries, but the Bill deals with industries well beyond defence. It would be to the Government's advantage, given the sweeping powers conferred upon them by the Bill—which re-enact sweeping powers already available under the emergency legislation of 1939—if they included in the Bill the obligation to consult. The Government and any future Government would be emphatically bound to that obligation. In the case of industrial or commercial activity that is not subject to export controls, but could be in future, there will be a reassurance in the Bill that the Government will consult such industries before bringing orders before Parliament.

Logic and reason militate in favour of the amendment, and the Government would be well advised to accept it. They would lose nothing by that; their powers would not be materially circumscribed. By accepting the amendment they would acknowledge that before enacting sweeping powers, they should consult those who would be affected. They would also advertise to industry and commerce that they desire partnership and do not want to rush measures through without appropriate consultation.

These days, sadly, too few Members of Parliament have commercial experience, too few represent the core of the outside world, and too many have arrived here by the route of being special advisers and political activists. However experienced Members of Parliament may be, Parliament no longer has the breadth of experience that it once had. Therefore, hon. Members may not have suitable experience on which to draw in assessing the possible impact of export control orders on industry and commerce.

Rob Marris (Labour, Wolverhampton South West)

Will the hon. Gentleman give way?

Gerald Howarth (Conservative, Aldershot)

I shall with pleasure give way to the former pupil of St. Edward's school, Oxford, who is now the hon. Member for Wolverhampton, South-West, which used to be represented by the fantastic Enoch Powell.

Rob Marris (Labour, Wolverhampton South West)

Will the hon. Gentleman specify four industrial organisations that relate to objects of cultural interest, as the Bill also covers such matters?

Gerald Howarth (Conservative, Aldershot)

The hon. Gentleman makes a useful maiden intervention. I recognise that it will be difficult in some circumstances to define which industrial organisations are the relevant ones. The Bill ranges so widely across every aspect of industrial and commercial life that naming all the relevant organisations would produce a list much longer than the Bill itself. It is not sensible to specify all such organisations. I accept that an element of discretion would be introduced by the word ``relevant'' and that deciding which organisations were relevant would be a matter of interpretation. I am trying to think of an organisation that might represent cultural interests. Perhaps the hon. Gentleman can assist me. What organisations does he have in mind?

Rob Marris (Labour, Wolverhampton South West)

I can think, for example, of the Arts Council, although I remind the hon. Gentleman that he moved the amendment. I do not suggest that the Bill should specify bodies such as the Arts Council. I merely wanted to point out that it is not an industrial or commercial organisation—those are the two adjectives used by the hon. Gentleman in connection with relevant organisations—and to ask the hon. Gentleman to specify four such organisations relating to cultural matters.

Gerald Howarth (Conservative, Aldershot)

The hon. Gentleman makes an interesting point. I am not sure that the Arts Council, a Government organisation, is necessarily a cultural organisation of the kind that might represent the owners of historic works of art or other historic artefacts such as vintage aircraft, in which I have a keen interest. I take his point that the use of the word ``industrial'' might be limiting. I would welcome an amendment from him to delete that word. I apologise if the amendment is not perfect—as both he and the Minister know, the Bill has been so rushed that there has been precious little time since Second Reading for proper scrutiny or for the preparation of amendments. My hon. Friend the Member for South-West Hertfordshire, who leads for us, was busy in the Chamber on Friday—when the amendments had to be tabled—debating the important matter of small firms.

In a spirit of good will, I am happy to accede to the helpful suggestion of the hon. Member for Wolverhampton, South-West (Rob Marris), and to accept his minor change, as is my hon. Friend the Member for South-West Hertfordshire. I am sure that the Minister will accept the amendment in principle, but will note that the terms in which it is couched are defective. If the Government consider that the amendment is worthwhile but that the terminology is not correct, will the Minister undertake, if the amendment is withdrawn, to have it redrafted by officials to ensure that it complies with legislative requirements so that it can be considered on Report?

I see the Minister smiling. He clearly has enormous sympathy with my point. That is a good start, as it will do nothing but good for his second advancement in Government, and there is a strong argument in the Government's self-interest to include a properly worded amendment.

Jenny Tonge (Liberal Democrat, Richmond Park)

I wonder whether the hon. Member for Aldershot was born with a silver bullet in his mouth, rather than a silver spoon. We all know that he is thinking about the arms industry. The amendment to consult with relevant industrial organisations is intended to give the arms industry an added advantage—a little more consultation, a little more contact with the Secretary of State—so that it can put its oar in early. That is unacceptable. We could say that all industries, not simply the arms industry, are relevant, but would we ever get anywhere? Who is to say what the relevant organisations are? Some might say that the Church of England should be consulted too, and that cultural relevance should be considered, as well as the relevance of the arms industry. Certainly the non-governmental organisations would have to be considered, and we all know how many of those there are.

The amendment is totally impractical. It would not work. I suggest that it was tabled simply to advantage the arms industry. We could not support it unless it included all other relevant organisations, but no one would ever be able to determine which were relevant and which were not, and far too many organisations would be involved.

Vincent Cable (Liberal Democrat, Twickenham)

I want to echo my hon. Friend's remarks: there is a wider issue about other organisations. For instance, if we were dealing with an arms export control order to a politically sensitive country, would it be possible for Amnesty International to have prior consultation alongside the arms industry? I do not think that the hon. Member for Aldershot envisaged that question. If his interpretation of the clause is sufficiently elastic, he may sympathise with it.

A more important point concerns the role of Members of this House. One of the most important debates on the Bill will be about prior consultation of Parliament and, alongside our amendments, some helpful amendments have originated on the Labour Benches to try to entrench prior consultation.

The hon. Member for Aldershot envisages a situation in which arms manufacturers would have prior consultation, but elected representatives who represent the work force would not. From what I remember of his comments on Second Reading, he was not well disposed to prior consultation through Parliament, which is crucial. If he were willing to support the grass roots feeling from several parties for prior parliamentary consultation, a request for industrialists to be part of the consultative process would be fairly anodyne and I would not feel too strongly about it. However, we would find it difficult to sympathise with a serious suggestion that only the manufacturer should be consulted, cutting out from the process not only NGOs but elected representatives.

Gerald Howarth (Conservative, Aldershot)

I have some problems with prior consultation, but my remarks were not solely about the defence industries. The hon. Gentleman is out of date to suggest that I am in favour of the consultation of the management but not the work force, given that these days the work force work so closely with management in our major defence industries, especially through trade unions. They have a common interest, so management speaks for the work force on such issues. As regards the narrow interests of the defence industries, there is no question of them and us.

Richard Page (Conservative, South West Hertfordshire)

I am wounded, because I was responsible for the drafting of the amendment. The cavalier abandonment of its purity by my hon. Friend the Member for Aldershot has wounded me. I expect nothing less from the hon. Member for Richmond Park (Dr. Tonge); that is the way life is. On reflection, I admit that the amendment may not be the perfect, polished jewel that I originally envisaged, and it may need a little professional polishing before it becomes as it should be and is added to the Bill.

I see no problem with views such as those of the hon. Member for Wolverhampton, South-West being accommodated in a suitable adaptation of the amendment. As my hon. Friend the Member for Aldershot said, I think that the Minister will say that he will table suitable amendments on Report, especially after he has heard the compelling and rational arguments that I shall advance. If so, I should be only too happy to withdraw my amendment.

On Second Reading, the Government made considerable play of the extent of the consultation that they had undertaken since the publication of the White Paper and the draft Bill earlier this year. I welcome that; I would like such consultation to happen more often, so that when legislation reaches Committee, most areas of doubt and query are ironed out. Of course, the big area of doubt with this Bill is that we do not have the secondary legislation, so we cannot fully examine the impact and direction of the Bill. However, we are where we are.

The Secretary of State claimed that business had had the opportunity to comment on the draft Bill before it was formally presented to the House. The Government said that they had listened to what people said and made several important changes. I welcome that; it is a correct and legitimate route for drafting legislation. However, as a former DTI Minister, with part of the portfolio now held by the Minister, I am aware that the word ``industry'' goes wider than the arms industry. I invite every member of the Committee to read subsection (1). It states:

``The Secretary of State may by order make provision for or in connection with the imposition of export controls in relation to goods of any description.''

That includes everything—food, medicines and any form of small business that can be exported for the first time. It gives the Minister carte blanche to introduce orders on goods of any description. The Committee will surely agree that that is a fairly wide and extensive remit.

The Secretary of State's rather roseate view of the Bill is not completely appreciated by all parts of the defence industry—which probably pleases the hon. Member for Richmond Park. On 29 March, the Defence Manufacturers Association told the DTI that it was not convinced that the draft Bill would do much to improve the performance of the export licensing system, a change that the defence industry regards as important. I agree with that view. The way in which the existing system works is nothing short of disgraceful, and it affects not only the defence industry. For instance, I have declared interests in the export of machine tools, and the handling of export licences for that industry is not of the quickest.

The Defence Manufacturers Association also said that there should be adequate consultation on the proposed secondary legislation promised by the then Secretary of State, and said:

``It is essential that all such detailed consultations do take place on all aspects of the proposed secondary legislation, and that industry is given an adequate opportunity to play a part in this process.''

The Society of British Aerospace Companies told me on 5 July that it wished to

``reiterate . . . just how essential it is that industry is thoroughly consulted before the introduction of secondary legislation.''

I would be prepared to bet the Minister 10p—I do not want to make the bet too large, or he might take me up on it—that he will say that the amendment is unnecessary, that we have a really lovely Secretary of State for Trade and Industry and that she is a genuine lady who will, of course, talk to everyone and not rush forward with an order. He will tell us that there will be proper consultation and that it is unnecessary to include a provision in the Bill. He will put his hands somewhere near his wallet and say, ``Trust me because I am a politician.''

Of course I trust the status quo, but Secretaries of State at the DTI have a pretty poor record in terms of survivability—not only under this Government, but under previous Governments. We are now on our fourth DTI Secretary of State in four and a half years, and during their glorious and successful 17-year reign, Conservative Governments managed to get through about 11 or 12. Becoming Secretary of State at the DTI is, therefore, a high-risk strategy. As the wheel turns, the Secretary of State will move to bigger and better things and will be replaced. As it turns even further and the Conservative party comes back into government, there could be a Conservative Secretary of State. Being a Conservative, he might not be so kind and generous; he might be ruthless, hardnosed and unfeeling. Unfortunately, Hansard cannot record irony or sarcasm properly, and my comments at this point should perhaps be put in inverted commas. None the less, despite the ministerial assurances that are no doubt coming, it is right that the Bill should provide for consultation with the correct industrial organisations.

Malcolm Savidge (Labour, Aberdeen North)

May I posit the possibility that arms manufacturers might sometimes be ruthless, hardnosed and uncaring? Would not the amendment give their lawyers the opportunity to drive a coach and horses through any export control? They could claim that a relevant industrial organisation had not been consulted and that they could therefore challenge any legitimate use of the export control. The Government would have to consult with the most improbable organisations in case there was a challenge.

Richard Page (Conservative, South West Hertfordshire)

The hon. Gentleman raises a valid point, but provisions for such a consultation process have been written into Bills that have been enacted and are, therefore, possible. I freely admitted that the amendment was not a polished jewel, and I would not want members of the Committee to pick it apart on the basis of its literal sense. The Minister will no doubt do that and try quite adequately to destroy it. However, the principle behind my argument reflects what industries are saying, and I am talking not only about defence industries. Subsection (1) relates to goods of any description. We are an exporting nation, and the provision could apply to anything, including foods and medicine.

James Gray (Conservative, North Wiltshire)

Does my hon. Friend agree that the answer to the point raised by the hon. Member for Aberdeen, North (Mr. Savidge) is that subsection (1) refers not to particular export licences, but to the Secretary of State's ability to make provision for their introduction? It would therefore be perfectly reasonable to consult the relevant industrial organisations before such provision was made in secondary legislation. We are talking about statutory instruments, not licences.

Richard Page (Conservative, South West Hertfordshire)

My hon. Friend is right. I was trying to answer the specific concerns of the hon. Member for Aberdeen, North, but my hon. Friend has given the broader view, which is correct.

We are an exporting nation, and subsection (1) refers to goods of any description. A provision should therefore be inserted in the Bill to compel direct consultation. There is a useful and powerful section of the DTI that deals with trade associations. It is absolutely right that when an order is being considered, a relevant trade association should be consulted. That is what we want to achieve through the amendment.

The amendment will also ensure that the assurances given to the House during consideration of the draft Bill last spring are translated into reality. So much of the Bill's importance hangs on the content of the orders to be made by the Secretary of State. It would be invidious of the Government to resist the amendment, unless the Ministers wish to obstruct their declared aims. I would like the Minister to say that the amendment is not well drafted, but that he will ask for it to be withdrawn and will produce his own polished jewel of an amendment on Report.

Nigel Griffiths (Labour, Edinburgh South)

I have studied the seven words in the amendment with great care, and despite digging deep into my lexicography I cannot find seven other words, or indeed any other words, that would make the amendment sensible or practical. The hon. Gentleman showed great wisdom in limiting his bet to 10p. I am not a betting person—I am one of the probably very few people who have stayed in Las Vegas without betting a cent. However, it is not just a question of whether the amendment is necessary.

I thank the hon. Member for Aldershot for his perceptive description of the consultation that has taken place so far, and which industry has valued. I am sure that he has given the industry some wise advice on that. We have a commitment to making consultation a key part of the legislative process. Members will remember that the Bill was published in draft form in March and that, before that, in 1998, the consultation paper was the subject of comments from a wide range of valued contributors, from industry through to non-governmental organisations and others. The draft Bill was the subject of full, public consultations. Comments have been made by the Quadripartite Committee and the Delegated Powers and Deregulation Committee in another place.

I can assure the Committee that when draft orders are submitted to Parliament and published, they will be made available to the Committee as soon as possible, and certainly before it scrutinises clauses 2, 4, 7, 10 and 15. We welcome comments from all interested parties on the orders. The Government's record on consultation is already good. The care that we have taken to consult industry throughout has been reflected in the comments that we have received. The DTI and others have a valuable on-going dialogue with industry on the operation of our controls, and there is a joint working group with the CBI that examines a range of issues, including forthcoming legislation.

James Gray (Conservative, North Wiltshire)

If indeed the Minister's record of consultation with the industry is as good as he describes, what could possibly be wrong with accepting the amendment? It would simply oblige the Government to do what they claim to be doing already.

Nigel Griffiths (Labour, Edinburgh South)

Accepting the amendment would have a number of unfortunate consequences. Most important, European Community law on export control often takes direct effect in the United Kingdom. Although the UK may sometimes need to make orders to implement such law—for example, to set out the enforcement provisions—it would mislead industry and make a pretence of the consultation process if the Government were obliged to consult on orders that implement legislation on which there is no room for change. In addition, we must take account of our obligations to other international bodies as quickly as may be, which would not necessarily allow consultation.

My hon. Friend the Member for Aberdeen, North made a good point about the wording, but it would be difficult to find a wording to which his comments about culture and who should be consulted did not apply. The amendment would require my right hon. Friend the Secretary of State for Culture, Media and Sport to consult industrial organisations about the process of drawing up an order concerning objects of cultural interest—including items of historic or scientific interest—and that would not be appropriate. For all those reasons, I hope that the hon. Gentleman will be willing to withdraw the amendment.

Gerald Howarth (Conservative, Aldershot)

We have had an interesting debate. I shall not disappoint the hon. Member for Richmond Park. I am unashamedly supportive of the military in this country. It is one of the few institutions that commands continuing respect throughout the nation and I am proud to represent the home of the British Army. If that is the kind of brigade that I represent, perhaps the hon. Lady will be happy to represent the bleeding heart brigade as the Committee's spokesman for NGOs. Despite my trenchant remarks about her, the hon. Lady and I are perfectly amicable outside the Chamber and the Committee Room. I think that the profound political disagreements that exist are extremely healthy.

Phyllis Starkey (Labour, Milton Keynes South West)

Is the hon. Gentleman suggesting that the interests of the military are always wholly at variance with those of NGOs? For example, does not he accept that in conflict prevention the interests of many NGOs and the military tend in the same direction?

Gerald Howarth (Conservative, Aldershot)

I entirely agree, and military personnel at Aldershot who have been involved in conflict zones, with whom I have discussed such matters, have been only too anxious to work with NGOs. The reservations of the military concern the extent to which their role is that of peacekeepers as opposed to peace enforcers. However, that is a matter for another debate.

Joe Benton (Labour, Bootle)

Order. May we kindly return to the amendment?

Gerald Howarth (Conservative, Aldershot)

Indeed, Mr. Benton. I had anticipated that you might intervene, but was unable to prevent it. You are right to bring me back to the point.

The hon. Member for Richmond Park suggested that the amendment was intended to provide advantage to defence industries. She spoke with near contempt for those industries. People should know about her attitude—particularly those Hampshire people who are represented by a Liberal Democrat. They should know that that is what the Liberal Democrats think. They have contempt for our defence industries, which are hugely successful. Defence exports run at £5 billion a year. The arguments for defence exports were well rehearsed on Second Reading and I do not intend to rerun them now. However, I think that people in the Hampshire constituencies that are currently represented by Liberal Democrat Members of Parliament will be interested to know that at least one hon. Member from that party has such a disparaging attitude to our defence industries.

Jenny Tonge (Liberal Democrat, Richmond Park)

The hon. Gentleman knows perfectly well that I have no contempt for defence industries, but that I frequently wonder aloud why they receive such special treatment from Government. I do not see why they should, and in the present context I see no reason to give them prior consultation with priority over the other organisations concerned.

Gerald Howarth (Conservative, Aldershot)

I am sure that the Committee is in agreement with the hon. Lady. However, when I wounded my hon. Friend the Member for South-West Hertfordshire, my purpose was to show that we did not want to restrict the amendment to the defence industries, and that we were interested in broadening its scope. That is why my hon. Friend was able to say that he acknowledged that a little polishing here or there would be advantageous. He especially mentioned the food and pharmaceutical industries, which could be covered by the Bill in due course. We have acknowledged the need to consult them. The hon. Member for Wolverhampton, South-West made a valid point about cultural matters. There is no question of special treatment for the defence industry, but the Bill is principally geared towards defence exports. We do not want to give defence special advantages, but want to point out that it plays an important role in the Bill and that consultation with those who speak on its behalf is important, as the Minister acknowledged.

I was disappointed that the Minister did not rise to the bet offered by my hon. Friend the Member for South-West Hertfordshire, but he made some interesting points. He said that unfortunate consequences could arise if the amendment were made, citing one on European Community law about which the wider public should be aware. He said that, in many cases, European law has immediate effect and we have no power to amend it. People who are not accountable to the British public could enact a European law on artistic or defence exports. Any United Kingdom Government and Parliament would be powerless to change such a law, so the Minister cannot give any guarantee to be able to consult. The British people, Government and Parliament would be presented with a fait accompli that they would have no power to change. That was a serious admission for him to make, and on that basis I feel that the matter should be considered on the Floor of the House.

James Gray (Conservative, North Wiltshire)

My hon. Friend is making a good point, but should he not go further? The Minister has suggested that European organisations of some sort can impose law on the export of weapons from this country without consultation. If so, should the consultation on those laws not be even greater than on laws passed by this place? If those Europeans have some say over our exports, my goodness, we must consult with the industries concerned.

Gerald Howarth (Conservative, Aldershot)

I entirely agree. Therefore, it is even more important that the amendment is made, so that we send the clearest possible message to our European partners that we will brook no overbearing superiority by the European institutions, especially the European Commission, on our actions on the subject, and that we will not accept the limitation on Britain's freedom of movement.

As the Minister has made such an extremely important announcement about what he calls an unfortunate consequence of accepting the amendment, and as that consequence severely limits the rights of the British Government or Parliament to pass laws as we think fit, it is important that the House should consider the matter. On the basis that we will revisit the matter on Report, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Richard Page (Conservative, South West Hertfordshire)

I beg to move amendment No. 35, in page 1, line 3, after `description', insert

`and shall have the powers by order to revise existing controls on the export of goods'.

If I thought that the previous amendment needed polishing, I fully admit that amendment No. 35 is a little rough. It is intended to give the Minister the opportunity to explain and expand on the position taken by the Government on this aspect of the Bill. The explanatory notes make it clear that they intend that

``existing controls on the export of goods will be reviewed and (where necessary) revised under this power.''

The notes are most helpful on that point.

The Department apparently intends to use the powers to consolidate existing secondary legislation on export control—especially, as the Minister mentioned in his letter to the Committee, the Export Goods (Control) Order 1994 and the greater part of the Dual-Use Items (Export Control) Regulations 2000, made under the European Communities Act 1972. The secondary legislation thus envisaged will specify the goods or classes of goods that will be subject to export control. Further secondary legislation on strategic export controls should be made under powers contained in the Bill.

The power to review and revise those existing controls is important. As we have said so many times, those provisions are the teeth of the Bill. The framework before us is simply the stage on which the players will operate. The Committee should therefore be extremely concerned with that power. I believe that it would be better for the Secretary of State's power to review and revise existing controls to be explicitly stated in the Bill. Indeed, the Quadripartite Committee stated:

``We recommend that Orders under the Act should be first exposed in draft and in confidence to the Quadripartite Committee and, if then made and laid, the Government should undertake to use their best endeavours to find time for a debate if the Committee so recommended.''

That would broaden the examination and inspection of the orders that are to be made. I have heard no objection or complaint about that from the industries involved, but the huge problem is that vast areas of industrial and commercial activity have no idea just how far the Bill's powers will stretch. As much as possible should be done to ensure that the orders are relevant and that they take account of the particular interests of industries concerned.

The amendment would ensure that the Secretary of State took a consistent approach to the duty of controlling the export of goods and to reviewing and revising existing controls. The obligations to be imposed on exporters by the new secondary legislation and the provisions of the old should be consistent and uniform with the provisions of the old.

Nigel Griffiths (Labour, Edinburgh South)

The amendment simply seeks to provide the Secretary of State with powers to revise existing export controls. Under subsection (1) the Secretary of State may revise existing export control orders, and in making new export control orders under that provision he must, of course, have regard to the provisions of the schedule.

Clause 3(3) provides that the schedule does not apply to orders made under clauses 1 or 2 that revoke or amend provisions of earlier orders, or that re-enact provisions of earlier orders, except when existing export controls on goods and technology are being strengthened or when controls are being imposed on goods or technology not previously controlled. Put more simply, the powers available to us enable the Government to make changes to existing export controls. Given that the Bill already contains provisions for changes to be made in new and existing export control orders, the amendment is not required and I invite the hon. Member for South-West Hertfordshire to withdraw it.

Richard Page (Conservative, South West Hertfordshire)

I thank the Minister for his answer. I appreciated that the amendment contained either duplication or tautology, but I was seeking to draw out the background to his position, which I am grateful to have had. He did not respond to the recommendation in the report of the Quadripartite Committee that draft orders be given to it for examination in confidence and, if necessary, debated in the House or in Committee.

Nigel Griffiths (Labour, Edinburgh South)

I draw the hon. Gentleman's attention to the Government's response to that suggestion. It said that the Government were content to show draft orders to be made under the Bill to the Committee whenever time allowed.

Richard Page (Conservative, South West Hertfordshire)

I thank the Minister for that answer. I did not go down that route because the qualification about time allowing means that we would be drawn into debate about whether there is sufficient time. The Bill already suffers from the problem of insufficient time—there has been a rush into Committee, followed by an unnecessarily long break. The Government have had several years in which to prepare it, yet we are now pushing it forward.

If a similar situation were to occur at this stage, the Government would argue that there is no time available to prepare secondary legislation. How many times will the Government argue that there has not been sufficient time for the Quadripartite Committee to look at draft orders in confidence? That is why I raised the matter. I hoped that the Minister would be able to provide a fuller and more generous response to that recommendation. Nevertheless, half a loaf is better than none, so I welcome the acknowledgement that orders will be put in draft to the Committee. It will then be up to the Committee to press the Department to examine the draft orders as soon as possible. In the light of the Minister's response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Nigel Griffiths (Labour, Edinburgh South)

The clause is a vital part of the Bill. Subsection (1) gives the Secretary of State powers to make orders imposing controls on the export of any goods, and to make provisions about matters connected with the imposition of export controls. Without clause 1 it would be impossible to repeal key sections of the Import, Export and Customs Powers (Defence) Act 1939. We all agree that the 1939 Act is seriously deficient in its approach to the control of exports. However, without it, or without clause 1 in its place, it would be impossible to control the export of military goods, which can cause so much damage in the wrong hands.

The clause is also essential in that it provides powers for my right hon. Friend the Secretary of State for Culture, Media and Sport to reproduce and update the provisions for the control of export of cultural objects. This control ensures that all such objects manufactured and produced more than 50 years before the date of exportation are controlled to all destinations. The effect of that is to allow for ``national treasures''—objects of major cultural significance to the UK—to be identified, and to provide the opportunity to retain them in the UK. In due course, my right hon. Friend the Secretary of State for Culture, Media and Sport will lay before Parliament an order to replace the Export of Goods (Control) Order 1992, which currently controls exports of cultural objects. The new order will not significantly change the controls, but will consolidate and update provision for the control of export of cultural objects under a new Act.

Subsection (2) defines export controls as meaning, with respect to goods,

``the prohibition or regulation of their exportation''—

including objects of cultural interest—

``from the United Kingdom or their shipment as stores.''

The powers set out in subsection (3) allow controls to be imposed on the export of goods wholly or partly on the grounds of the uses or possible uses to which the goods may be put, as is done at present under the Dual-Use Items (Export Control) Regulations 2000, as amended, which apply the EC Council regulations known as the dual-use items regulations. That also extends to information recorded on or derived from the goods to be exported. The provision therefore has the effect of patrolling the export of technology in a physical form, such as a computer disk, or on paper. Under the 1939 Act, controls are imposed on certain technology, including the technology needed to develop, produce and use military equipment, and that power is replaced by the clause. It also reflects controls already directly applicable under the EC dual-use items regulations.

It is our intention to use the clause to consolidate existing secondary legislation on export controls, namely the Export of Goods (Control) Order 1994, as amended, which was made under the 1939 Act, and the greater part of the Dual-Use Items (Export Control) Regulations 2000, made under the European Communities Act 1972. That is why subsection (4) makes provision for supplementing controls imposed by Community regulations on the export of goods, for example by providing for the enforcement of such regulations. That should ensure that all future secondary legislation and strategic export controls can be made under powers contained in the Bill rather than under different pieces of legislation. We anticipate that the resulting legislation will be easier to understand for those who must comply with it. This subsection will also enable my right hon. Friend the Secretary of State for Culture, Media and Sport to supplement any directly applicable Community measures that control the export of cultural objects.

Subsection (5) clarifies the nature of the goods subject to export control, including vessels, vehicles and aircraft, whether or not they contain cargo or passengers.

I urge the Committee to agree that the clause stand part.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 3 - Purposes of orders under section 1(1) or 2(1)

Vincent Cable (Liberal Democrat, Twickenham)

I beg to move amendment No. 11, in page 2, line 33, leave out subsection (2).

The amendment takes us to the heart of the argument about democratic control and accountability of the export control procedure. This is a procedurally complicated area, and I suspect that even those of us who are involved in the debate are struggling to understand its complexities. It may help if I set out my understanding of the hierarchy of permissions and authorisations that will operate once the legislation has come into force.

There are essentially four types of approval mechanism. First, there is the most demanding type—the prior approval involved in the affirmative resolution procedure, which will apply to changes in the purposes for making an arms control order specified in the schedule. That process clearly requires the full involvement of Parliament. Secondly, there is the deferred affirmative procedure, which will apply to temporary orders. That, essentially, is what we are concerned about with regard to the clause. Thirdly, there is the negative resolution procedure, which applies to changes that the Government consider to be more minor, but may well involve important considerations. Lastly, there is the informing of Parliament of very small technical changes.

We acknowledge that some distinction must be made between different export controls. A one-size-fits-all procedure is not appropriate. We recognise that there is a role for prior approval—for which we must argue strongly in many cases—and for a routine procedure, which is set out in clause 8 and which would be the least demanding. We suggest that the two intermediate stages be eliminated.

On later clauses, we shall debate upgrading the negative procedure so that Parliament has proper prior scrutiny. I do not want to trespass on that subject, but I shall focus on the second stage in the hierarchy of procedures—the temporary orders. There are two problems with the temporary order procedure in the Bill, and the Quadripartite Committee dealt explicitly and somewhat critically with one of them. Two sentences from the Committee's report, ``Draft Export Control and Non-Proliferation Bill'' are relevant and capture the essence. Paragraph 45 states:

``The draft Bill makes provision at Clause 3(2)''—

with which we are dealing—

``for Orders which are not subject to the purposes set out in the Schedule. They are to be subject to modified affirmative procedure''.

The report then refers to the House of Lords Committee that considered the regulation procedures and

``expressed its concern over Clause 3(2), finding it not `right in principle and therefore appropriate to delegate a power to impose controls for purposes which are not set out in this Bill . . . The Committee does not at present consider that a restriction on the freedom to trade should be granted in such wide terms'.''

The Quadripartite Committee clearly and explicitly endorsed the criticism that there were not sufficiently good grounds for providing temporary orders that operated according to different rules.

The second set of criticisms relate to the fact that it is possible to envisage perfectly plausible circumstances in which there may be no parliamentary scrutiny whatever under the clause. If the order applied for fewer than 40 days, there would be no need for parliamentary scrutiny. Substantial and substantive changes in the export control procedure could simply be pushed through with no reference to Parliament. That relates partly to the time factor, and the Quadripartite Committee again focused on the problem, saying that

``the 40 day period of grace allowed before such an Order lapses unless parliamentary approval is given . . . seems to us too generous''.

In other words, the provision gives Ministers too much power to put through orders that have far-reaching implications without parliamentary scrutiny. The Committee suggested substantially reducing the period of 40 days.

The purpose of the amendment is to take out that second stage in the parliamentary scrutiny process to eliminate any ambiguity. The amendment is entirely in the spirit of the comments made by the Quadripartite Committee, to which members of all parties signed up. It is a building block that we can use to build stronger parliamentary scrutiny into the Bill.

Nigel Griffiths (Labour, Edinburgh South)

The amendment, which would delete subsection (2), would prevent the Government from imposing temporary export controls by order for purposes that fell outwith those contained in the schedule.

The purpose of subsection (2) is to allow the Government to respond to emergency situations by imposing controls that, exceptionally, do not or might not fall clearly within the proposals set out in the schedule, where the need for such controls is likely to be short term. An amendment to the schedule of purposes is therefore not warranted.

Although we do not anticipate needing to use the power, there is a strong case for retaining it. By definition, the controls involved will be of a kind and needed for a reason that we cannot foresee, so it is not easy to give an example. However, we continue to believe that it is only prudent to take the power, although we also consider it right that it should be subject to Parliament's express approval. As a result, we have imposed a requirement that any orders made for reasons that fall wholly or partly outwith the purposes must be approved by Parliament by the affirmative resolution procedure. That means that any orders made under the subsection would cease to have effect if not approved by both Houses of Parliament before the end of a 30-day period. Moreover, such an order could not remain in force longer than 12 months unless approved again by Parliament under the affirmative resolution procedure.

I remind hon. Members that the power would have to be exercised in a manner consistent with European Community law. The likely effect would be to confirm its use in national emergencies. The published draft of the Bill proposed that the purposes for which export controls could be exercised could be amended by an order subject to delayed affirmative action. The Select Committee on Delegated Powers and Deregulation in another place recommended that such a power should be exercisable under the draft affirmative procedure rather than the delayed affirmative procedure. In view of that recommendation and the fact that the procedure set out in clause 3(2) would be available in an emergency to permit control of exports outside the purposes listed in the schedule, the Bill has been altered. Clause 12(2) now provides for purposes to be amended under the draft affirmative procedure. In addition, orders made under clause 6(1), to require information, are now subject to the affirmative procedure.

I hope that I have demonstrated that we have listened to representations about the draft, and that we have strengthened the Bill after taking the advice in those representations. The use of affirmative resolution procedures would give Parliament an appropriate degree of scrutiny of orders made under the subsection, and I hope that the hon. Member for Twickenham will be willing to withdraw the amendment.

Richard Page (Conservative, South West Hertfordshire)

Before the hon. Member for Twickenham responds, will the Minister explain how the operational details for the handling of export licences would fit into the framework? Concern has been expressed about the delay in dealing with export licence applications. The target times have been exceeded. How will the two aspects of the matter fit together? Following an application for a licence, how far would the resolutions that the Minister has outlined cover the process, and how much of it would be a matter of the Department's ordinary handling of the timetable?

Nigel Griffiths (Labour, Edinburgh South)

There would not necessarily have to be a licence application. If it was decided that the UK would unilaterally impose an embargo in response to an emergency somewhere in the world, details of that would be circulated. Any subsequent application for a licence would be measured against that. Clause 3(2) is intended to allow for the application of the Bill to unanticipated cases, enabling the Secretary of State to take appropriate action in possibly highly unusual circumstances. All such actions would be reported to Parliament and subject to Parliament's express approval under the resolution procedure.

Vincent Cable (Liberal Democrat, Twickenham)

I understand that unforeseen circumstances arise, but the subsection would create a potentially very large loophole enabling parliamentary scrutiny to be relaxed. The Minister says that there may be national emergencies. Most hon. Members are patriotic, and if there is such an emergency they will respond quickly. There is no reason why the prior scrutiny requirement of Parliament should create an obstacle to that. Equally, if the purposes defined in the schedule prove inappropriate, procedure under clause 11 allows them to be changed. The legislation provides some flexibility so, with the good will of hon. Members, there is no reason why affirmative action should represent an obstruction.

I do not propose to press the amendment, but I ask the Minister to consider the time period as he moves some way towards those who are unhappy about the clause. The Quadripartite Committee asked about it and unforeseen circumstances. The Committee was generous about accepting the Minister's good will, but said that the 40 days should be cut down substantially. It said that so that parliamentary prerogative would be preserved, and to ensure that the period could not be used to abuse Parliament and rush through large numbers of exemptions from parliamentary scrutiny. I ask the Minister to have a fresh think about the time period, even if he does not have one on the principle.

Nigel Griffiths (Labour, Edinburgh South)

Our response to the Quadripartite Committee's recommendations is clear. We considered them closely and noted them, but are not persuaded that there should be a shorter period in which orders remain in force before they are subject to parliamentary approval. Should that become necessary in circumstances that I have said are difficult to outline, we will know by example whether we have been vindicated. I believe that we will be vindicated on that time scale.

Vincent Cable (Liberal Democrat, Twickenham)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Richard Page (Conservative, South West Hertfordshire)

I beg to move amendment No. 37, in page 2, line 39, leave out subsections (3) and (4).

I shall re-state the obvious. The ostensible purpose of the Bill is to introduce a new system of controls on the export of arms, to replace one essentially based on the Import, Export and Customs Powers (Defence) Act 1939. That is how the Bill has been represented—perhaps I should say sold—to the House and the country. The speeches on Second Reading by the Secretary of State for Trade and Industry and the Minister offered ample proof of that. As has been mentioned more than once, the 1939 Act has served us rather well. I do not know whether it is the longest serving Act, but it must be somewhere near the top 20.

I want to tease out from the Minister how he envisages the provisions working. Subsections (3) and (4), which my amendment would delete, make it apparent that the much trumpeted purposes for which orders can be made under clauses 1 and 2, as listed in the schedule, allow orders that revoke or amend an earlier order or re-enact provisions with or without modifications to be made outside the purposes permitted in the schedule. The schedule's provisions have to be taken into account only if such orders strengthen existing controls or impose controls on goods or technology previously not subject to controls. The Committee will recognise the fact that there could be concern about that.

The conclusion must be that the House is being invited to allow existing orders to be amended or re-enacted without being subjected to the provisions of the schedule, unless the controls are being strengthened or extended. It is working on the assumption that everything is fine as it is and need not be changed.

The question that inevitably arises is whether the Government envisage more than one system of export control. The amendment has the merit of seeking to ensure that our manufacturing companies apply one set of criteria, rather than combining the old and the new. The Minister should explain why the hotch-potch that has been proposed is better than the case that was put forward in principle for the new controls. However, the proposals in this clause are belied.

Nigel Griffiths (Labour, Edinburgh South)

The deletion of subsections (3) and (4) would have the effect of the purposes in the schedule applying to orders or provisions in orders made under clauses 1 or 2 that simply revoked, amended without strengthening, or re-enacted controls without modification.

The purpose of the subsections is to ensure that while the purposes must apply for the imposition of any new or strengthened controls, no doubt must be cast on the legal validity of controls simply as a result of a re-enactment of controls or technical changes in an order. The most frequent reason for changes to be made to export control orders at present is to reflect changes agreed to the control lists in the international export control regimes, such as the Wassenaar arrangement, missile technology control regime and nuclear suppliers group. There will inevitably be some time lag before such changes are carried through into national legislation.

The subsections are included for the avoidance of doubt, to make it absolutely clear that any decision by, for example, the international regimes to remove a particular item from their control lists—which might be considered to remove the main purpose for which the controls were originally enacted in orders—could not throw doubt on the legal validity of the secondary legislation under the Bill. I am sure that the Committee will recognise that controls in secondary legislation that have been validly introduced under the purposes should not subsequently be challenged, as that would undermine our export control regime. I hope that that satisfies the hon. Gentleman and I urge him to withdraw the amendment.

Richard Page (Conservative, South West Hertfordshire)

Although I am grateful for that answer, I have ended up even more confused than I started. I suspect that if the Minister had to start again, he would end up even more confused. He has not reassured me; he seems to be confirming that we shall be operating two systems. That worries me. In view of his response, I should like—when this is recorded in tablets of stone via Hansard—to take it away to study. I might return later, if possible, to take a second bite at the cherry. As it stands at the moment, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Jenny Tonge (Liberal Democrat, Richmond Park)

I beg to move amendment No. 12, in page 3, line 20, leave out `or 2(1)' and insert `2(1), 4(1) or 5(1)'.

Joe Benton (Labour, Bootle)

With this we may discuss the following amendments: No. 13, in page 3, line 21, leave out `or transfer controls' and insert

`, transfer controls, controls on the provision of technical assistance overseas or trade controls'.

No. 28, in the schedule, page 9, line 3, leave out `or transfer controls' and insert

`, transfer controls, controls on the provision of technical assistance or trade controls'.

No. 45, in the schedule, page 9, line 14, leave out `or'.

No. 46, in the schedule, page 9, line 14, after `which is,', insert

`the provision of technical assistance overseas which is, or the trade in controlled goods which are'.

No. 47, in the schedule, page 9, line 26, at end insert—

`(4A) This paragraph applies to the provision of technical assistance overseas of any description if it appears to the Secretary of State when the order is made that there is a risk of the provision of technical assistance overseas of that description might have any of the consequences mentioned in the following table.

(4B) This paragraph applies to the trade in controlled goods of any description if it appears to the Secretary of State when the order is made that there is a risk that the trade in controlled goods of that description might have any of the consequences mentioned in the following table.

(4C) The reference in sub-paragraph 4(B) to consequences of the trade in controlled goods includes a reference to consequences relating to the use of information recorded on or derived from the goods.'.

Jenny Tonge (Liberal Democrat, Richmond Park)

On the surface, this appears to be a complicated group of amendments; in fact, I have wrestled with them for a while. Our worry is that we are not covering a broad enough area. Therefore, the amendments add controls on the provision of technical assistance overseas and trade controls to the export controls and transport controls that are already stated. The purpose is to broaden the scope of the Bill. To see the point of it, we should look at the schedule. That is why amendments Nos. 45, 46 and 47 are amendments to the schedule, which also refers to the transfer of technical assistance and controls on trading in controlled goods.

Many speeches have been made on the transfer of technical assistance. It is an important matter, and it should not be swept under the carpet. I feel most strongly about the fact that the controls on trade in controlled goods have been omitted from clause 3 and the schedule, because they refer to my old friends brokering and trafficking. As shadow Secretary of State for International Development, I have seen evidence of the damage that the brokering and trafficking of arms causes in developing countries.

I want the changes to clause 3 and to the schedule of purposes to be considered together. They should include controls on the provision of technical assistance and on the trade in controlled goods. If they are omitted, the Government will be able to introduce more limited controls in secondary legislation—which we have not yet seen.

Although the orders imposing controls on the export of controlled goods from the United Kingdom and on the transfer of technology will be made for the purposes set out in the schedule, the Secretary of State will be at liberty to decide for what purpose controls will be introduced on brokering and the provision of technical assistance. The amendments aim to broaden the scope of the Bill and to tighten it. We fear that one of the Government's reasons for delaying the secondary legislation might be to make the purposes of the Bill more woolly than most of us would like.

Nigel Griffiths (Labour, Edinburgh South)

I believe that the amendments have been tabled with the intention of ensuring that orders made under clause 4 on controls on the provision of technical assistance overseas and clause 5 on trade in controlled goods may be made only in accordance with the purposes set out in the schedule. The Government are so far in agreement with the hon. Member for Richmond Park that we have already ensured that the Bill requires that orders made under clauses 4 and 5 may be made only in accordance with purposes set out in the schedule. However, I fully appreciate the complexity of the Bill, and I should like to explain the position.

Clause 3 does not apply to orders made under clauses 4 or 5 that cover technical assistance and overseas trade in controlled goods, because those clauses provide that controls can be imposed only in relation to goods or technologies that are themselves subject to control under clauses 1 or 2. I draw the Committee's attention to clause 10 (2) to (5), which expand the meanings of controlled goods and controlled technology for the purposes of clauses 4 and 5. Since goods or technologies can be made subject to control only under clauses 1 or 2 for the purposes set out in the schedule, it follows that the controls set out in clauses 4 and 5 can, in effect, be imposed only for the purposes listed in the schedule.

It might help if I quote from the Select Committee on Delegated Powers and Deregulation in another place on 25 April. Although that comment was made about the earlier draft of the Bill, the point that the Committee made still holds good. In paragraph 15 of the report, the Committee said of the powers in clause 4 that

``Clause 3 does not apply. This appears to allow the power to be used for any purposes but this is not the case.''

The report goes on to say that the definition of technical assistance limits the power to matters connected with controlled goods or controlled technology, saying that

``these terms are defined . . . as goods subject to controls under clause 1 and technology subject to controls under . . . clause 2.''

Controls under clauses 1 and 2 are either imposed for the purpose in the schedule or are temporary controls under clause 3(2). A similar limitation applies to controls under clause 4. Given that the controls under clauses 4 and 5 are limited and can be imposed only in relation to goods or technologies that are, when exported or transferred, themselves subject to control under clauses 1 or 2, the amendments tabled by the hon. Members for Richmond Park and for Twickenham are no longer necessary. Moreover, the schedule is constructed on the understanding that, for all the reasons that I outlined, it need apply only to orders that impose export controls or transfer controls. The amendments would, therefore, require unnecessary and extensive revisions to the schedule and other parts of the Bill.

For all the reasons that I have given, I hope that hon. Members will not press the amendments that I listed.

Vincent Cable (Liberal Democrat, Twickenham)

May I pursue the Minister a little? For those of us who are not constitutional lawyers, the issue is a bit of quagmire. Our understanding of the clause is that the Minister can dilute the controls for technical assistance or brokerage. The export of goods is provided for under the schedule, but the Minister could apply a much looser regime to technical assistance if he was so minded. I want to be clear that we have understood that correctly, because the amendment is designed to rectify that omission.

I should say a little about why the issue is important. If the Minister is a Minister of good will who is determined to stop the export of unacceptable technical assistance to unfriendly and oppressive regimes—I am sure that that is his motivation—the issue is not a problem. However, a Minister who is otherwise minded could use the provisions differently. Let me give an example from my own experience, on which I drew on Second Reading.

In the mid 1970s, the Samosa regime in Nicaragua faced disturbances and the beginnings of the Sandinista uprising. The Labour Government of the time faced the issue of how to deal with the regime. Clearly, there was a reluctance to supply Samosa with weapons. However, a request came from the Nicaraguan authorities for the President's son to have military training in this country—he was to go to Sandhurst to make friends and contacts. The request went through, partly because it was seen as much easier to wave through a bit of technical assistance than it would have been to wave through equipment. One can see that the relevant provisions could be abused under a Government who wanted to treat fairly benignly overseas Governments who were perhaps questionable.

At the heart of the amendment is the issue of how we treat knowledge. If we go back to the Scott report, we find that the supergun was just a pipe, which is a completely useless piece of equipment unless it is accompanied by knowledge and transfer technology, which are more crucial. If legislation is laxer in its treatment of the transfer of knowledge than it is in its treatment of equipment, it is defective. According to one phrase, knowledge is sticky, tricky and leaky. Once one hands it over, it sticks and one cannot get it back again. If one hands over a piece of equipment, one can retrieve it and destroy it, but one cannot destroy knowledge. Knowledge is also tricky because it can be manipulated and developed, and it is leaky because it is easy to pass on. The control of knowledge and technology, which is what technical assistance is about, is, in many respects, much more crucial to arms export control than is the control of equipment per se. That is why we want to understand why the Government have such difficulty with our amendments. As we understand it, we are merely trying to upgrade the level of control over technical assistance and brokerage to the level that currently applies to equipment.

Nigel Griffiths (Labour, Edinburgh South)

Subsection (2) is intended to limit the range of goods or technologies that could be included in orders. The hon. Gentleman is right to say that it gives discretion to the Secretary of State to vary the orders. The controls under clauses 4 and 5 are subject to negative procedure and any change is fully reported in the annual report, which the Committee will consider later in its proceedings. None of that can be done and kept secret. It is likely to be the subject of public discussion and comment, and any Secretary of State would have to consider that.

Jenny Tonge (Liberal Democrat, Richmond Park)

I am sorry to intervene again, but I still do not understand—I find the subject very difficult—why paragraph 1 of the schedule mentions only export controls and transfer controls. Why are the other things, such as the transfer of technology and controlled goods, not mentioned? Why are only those two included?

Nigel Griffiths (Labour, Edinburgh South)

The transfer of technology is dealt with in clause 4, which we will shortly consider.

Jenny Tonge (Liberal Democrat, Richmond Park)

Yes, but why are such matters not included in the schedule? I appreciate that they are mentioned in the Bill, but they are not mentioned in the schedule, which makes one suspicious that there is a dark agenda somewhere.

Nigel Griffiths (Labour, Edinburgh South)

I can assure the hon. Lady and the Committee that there is a perfectly legitimate explanation. It is not necessary to list them in the schedule.

Vincent Cable (Liberal Democrat, Twickenham)

We are a little baffled by the procedural complexities in this area. There is no point in our proposing an amendment unless we have clarified the matter. We may well refer to the matter when the Bill is discussed on the Floor. There are some important issues of principle hidden away in the procedures, but we do not wish to press the amendments.

Jenny Tonge (Liberal Democrat, Richmond Park)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Pearson.]

Adjourned accordingly at nineteen minutes to One o'clock till this day at half-past Four o'clock.

Standing Committee B

Schedule - Purposes for making orders under section 1(1) or 2(1)

Richard Page (Conservative, South West Hertfordshire)

I beg to move amendment No. 42, in page 9, line 36, after `effect', insert

``damaging to the interests or security of the United Kingdom''.

I am speaking to my amendment a little earlier than I anticipated. It is self-explanatory. None of us would want anything to happen that would damage the interests or security of the United Kingdom. The point of the amendment is that the export of arms or technology should be prohibited if the interests of the United Kingdom and its allies might be damaged, but that they should not be prohibited if hostile or potentially hostile powers were fuelling regional or local conflicts to the detriment of British interests. The British Government should be free to export arms to parties or countries engaged in such conflicts. That should be possible without the prohibitions that the Government have made it possible to ignore, despite appearing to have embraced them. The amendment focuses on the Government's obligations.

What would happen if the European Union expressed a view contrary to the view that this country wanted to act on? The Minister worried my hon. Friend the Member for Aldershot (Mr. Howarth) earlier, when he referred to the possibility that EU direction could prohibit us from certain courses of action. Could the European Union block the consequences of the relevant provisions of the schedule, regardless of the course that the United Kingdom wanted to take?

On Second Reading, my hon. Friend the Member for Aldershot spoke about the number of jobs in our arms manufacturing business, the skills and expertise involved in it and its importance to the country's exports. I know that a number of hon. Members are concerned about the focus and direction of armaments sold overseas. However, we should have a strong armament business for the country's security.

Kevan Jones (Labour, North Durham)

Is the hon. Gentleman suggesting that other members of the European Community are not friendly states?

Richard Page (Conservative, South West Hertfordshire)

I am not saying that at all. In reply to an earlier question, the Minister indicated that actions that this country wanted to take could be either blocked or redirected by the European Union. I was alluding to that. I do not understand how the hon. Gentleman gained the impression that I was suggesting that another EU country might not be friendly. However, in certain circumstances any of them could take a view that we might find unhelpful or not in harmony with the aims of this nation.

I return to the point made by my hon. Friend the Member for Aldershot, who spoke about the importance of our arms manufacturing base, of exports and of jobs. Any Government forget at their peril that their primary task is to ensure the security of the realm. If they do so, they tread on dangerous ground. How the security of the realm might be affected is open to a wider-ranging debate than this. You would pull me up and redirect me, Mr. Benton, if I took that path.

If we have a strong and positive industry, correctly controlled by licensing, we shall correctly supply the type of equipment that may be used. Others, who might not be as ethical and responsible as we are, will be kept out. However, if we allow our manufacturing to become weak and we are unable—for whatever reason—to supply, less responsible and less ethical countries will enter the supply market and the controls will drift away.

The Secretary of State spoke on Second Reading about the horrific events in Africa. We all know the disastrous and undesirable consequences that flow from the fact that the world is awash with Kalashnikovs made by nations that do not have the controls that we have and given to nations without the responsibility that we have. We do not want to see our country so sidelined that the opportunity for such activity to occur is increased.

The amendment is self-explanatory. I hope that the Minister will agree that it should be incorporated into the Bill, or explain in detail where my points of concern are covered.

Nigel Griffiths (Labour, Edinburgh South)

The amendment would limit paragraph B of the table to adverse effects on peace, security or stability in any region of the world or within any country that would also damage the interests or security of the United Kingdom.

We see for the first time a key fault line between the parties. It is not over Europe. The consequences of the treaty of Rome and of the noble Baroness Thatcher's having signed the Single European Act in 1985 are well known to all of us, and we live and abide by them in terms of regulations and the like.

Gerald Howarth (Conservative, Aldershot)

May I place it on the record that my noble Friend was prepared to encourage members of her party at that time to sign up to the Single European Act because she was advised and was under the firm impression that it was designed to give effect to a single market in goods and services? It was then, of course, outrageously abused by our European partners, particularly by the European Court of Justice. However, I reassure the Minister that I voted against our signing that Act.

Nigel Griffiths (Labour, Edinburgh South)

I think that the whole Committee knows how easily influenced the noble Baroness was, what a weak person she was and how easily the wool was likely to be pulled over her eyes—I don't think.

We believe—it is a distinct difference between us—that, because of possible concerns about peace, stability and security in other countries or regions of the world, it is right to be able to impose export controls, irrespective of whether it would be damaging to the United Kingdom's interests. The ability to impose export and other controls in order to avoid an adverse effect on the UK's national security is already provided for in paragraph A of the table. An amendment to provide for export controls to be imposed in order to avoid damage to the security of the United Kingdom is therefore not necessary.

The amendment also refers more generally to

``the interests . . . of the United Kingdom''.

We consider that all the interests of the United Kingdom for which it might be necessary or desirable to make orders that impose controls on exports or transfers are already covered in the table—including, in paragraph E, the risk that goods or technology might be used elsewhere in the world to carry out or to facilitate the carrying out of acts of terrorism or serious crime.

The hon. Gentleman may have in mind the reference in the consolidated criteria to the fact that

``the Government will . . . continue when considering export licence applications to give full weight to the UK's national interest'',

including the potential effect on the UK's economic, financial and commercial interests, the potential effect on the UK's relations with the recipient country, the potential effect on any collaborative defence production or procurement project with allies or EU partners, and the protection of the UK's essential strategic industrial base. However, those are considerations properly to be taken into account in the licensing decisions, rather than reasons for which export controls should be imposed on particular items of equipment. Therefore it is not appropriate to amend the schedule of purposes for which orders may be made under clauses 1 and 2. I hope that the hon. Gentleman will withdraw the amendment.

Gerald Howarth (Conservative, Aldershot)

I want to be sure that I am under no misapprehension. Paragraph B of the table refers to:

``An adverse effect on peace, security or stability in any region''.

I presume that an analysis of whether the export of technology into a region was ``adverse'' would be entirely a matter for the Government of the day, and that it would not be the subject of an order of the House.

Nigel Griffiths (Labour, Edinburgh South)

I can help the hon. Gentleman. He is right; of course it would be. That is why we are putting the annual report on a statutory basis; it will list key decisions and the criteria for reaching them, and ensure that they are open to public scrutiny.

Richard Page (Conservative, South West Hertfordshire)

I have often wondered about the reasons for the signing of the Single European Act, and I am grateful to my hon. Friend the Member for Aldershot for explaining how it came to pass. I confess that I did not know until now, but at my advanced age life has become a lot clearer.

I thank the Minister for his explanation of the amendment's effect. As my hon. Friend said, the word ``adverse'' is subject to the interpretation and judgment of the Government, and perhaps that is as it should be. I thank the Minister for his explanation and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Malcolm Savidge (Labour, Aberdeen North)

I beg to move amendment No. 10, in page 10, line 15, at end insert—

`Sustainable development

F. An adverse effect on:

(a) the economy of any country; or

(b) the sustainable development of the country to which the goods were exported, or the technology was transferred.'.

Joe Benton (Labour, Bootle)

With this it will be convenient to take amendment No. 31, in page 10, line 15, at end insert—

`Sustainable development

F. An adverse effect on the sustainable development of the country to which the goods were exported, or the technology was transferred.'.

ÌMr. SavidgeÌ: I warmly welcome the Bill. I am rather surprised at the Opposition's attack on it as being over-hasty. Five years has already elapsed since the publication of the Scott report, and nine years since the Matrix Churchill scandal. It is 10 years since it was pointed out that the law that we were working with was somewhat dodgy and more than 60 years since that law was passed, in 1939. The 1939 Act states that it was enacted because of the ``present emergency''. It was scheduled to expire when that emergency came to an end. I have, at times, had the feeling that Conservative Members live in a sort of time warp, but I am surprised that they are not aware that world war two ended quite a while ago. The Bill, rather than being over-hasty, is more than half a century overdue.

Gerald Howarth (Conservative, Aldershot)

It would be unfortunate if the hon. Gentleman were inadvertently to mislead others about the position of the Conservative party on the Bill. It is not that we consider it hasty in the sense that it was part of the Gracious Speech. It is over-hasty in the sense that the Government are seeking to rush it through in four or five days of sittings in Committee, divided by the parliamentary recess, when the real meat of the Bill—in the words of the hon. Member for Twickenham (Dr. Cable)—is in the orders, which have not been laid before the House.

Joe Benton (Labour, Bootle)

Order. Before the hon. Member for Aberdeen, North (Mr. Savidge) resumes his speech, I would like to draw his mind back to the amendment under discussion.

Malcolm Savidge (Labour, Aberdeen North)

I stand corrected.

In drafting the amendments that I have tabled, I have been influenced by the concerns expressed by various non-governmental organisations although, to pick up on a remark by the hon. Member for Aldershot, I would not claim to fit his description of the hon. Member for Richmond Park (Dr. Tonge): the NGOs' representative on earth. I notice, from reading the NGOs' statements, that they welcome not only the Bill, but the Government's attitude to the matter since 1997. They also welcome the opportunities for consultation that the Government have given.

The amendment expresses one of several residual concerns. It is largely a probing amendment because, although I believe that sustainable economic development is a vital issue, I am not sure that it sits neatly with the other issues determining the criteria for not accepting exports on the grounds of adverse effect. Those issues are national security; regional stability and internal conflict—the tragedy of the fatalities caused by civil wars; weapons of mass destruction; international law and human rights; and terrorism and crime. Sustainable development is in some ways qualitatively different from some of those issues.

However, sustainable development should be properly considered in dealing with export licences. I seek reassurance on that as a member of the Select Committee on Environmental Audit, and I am deeply conscious of the fact that the Government intend that sustainable development should be the underlying and overarching objective of all Government policy. That is supported by all parties in the House. In many cases third world debt builds up so tragically because of arms sales to countries that could ill afford it.

I will ask the Minister to reassure us that proper provision will be made for sustainable economic development in dealing with exports.

Ian Liddell-Grainger (Conservative, Bridgwater)

I take the hon. Gentleman's point. However, when he says technology, does he mean information technology? I am interested in a broader brief than merely weapons. I ask him to quantify the sort of goods that he means by sustainable development of a country.

Malcolm Savidge (Labour, Aberdeen North)

I am sorry, but I do not understand. The hon. Gentleman said that I used the word technology, but I did not. Oh! I used it in the amendment, which contains the words,

``or when the technology was transferred''.

I apologise; I thought that he was referring to what I said. I used that wording in the amendment because the Bill refers to the range of possible technologies. It refers to transfer via IT and technology of various forms, including military.

The main purpose of the amendment is to raise an issue that is part of Government policy. We want to reduce third world debt and to ensure sustainable development. I want assurances that the Bill and its application will adequately cover that.

I apologise; I shall have to be away by 5 o'clock.

Jenny Tonge (Liberal Democrat, Richmond Park)

This is probably the most important part of the Bill. Twice today I have been referred to as the NGOs' representative on earth. If we asked the NGOs about that, I suspect that they probably would not agree with that definition of my role. If the hon. Member for Aldershot were in his place, I am sure that he would say that I was about to address the bleeding hearts issues. Those issues affect people in developing countries, and disproportionately affect the women and children.

``Sustainable development'' is a terribly important phrase, and was in the draft Bill. For technical reasons, it has been removed, because some people think that the schedule of purposes now covers sustainable development. If so, why not say so? In the proceedings of the International Development Bill, all the Ministers pushed that phrase hard. Whenever I tried to make an amendment or talk about tied aid, for instance, I was told that sustainable development encompassed everything and had to be in the legislation. I was told that I need not worry because it was in that Bill. Everything was judged on sustainable development.

Why can the phrase not appear in this Bill? It seems as though the right hand does not know what the left hand is doing. Perhaps this is an example of non-joined-up government. The International Development Bill came from the Department for International Development, but this Bill has come from the Department of Trade and Industry. One of the big problems with the Government is the lack of joined-up government, which they talked about so much and put into practice so little.

Sustainable development means that every export—arms, technology transfer, technology assistance or whatever—must be assessed for the effect that it will have on the people and the economy of the relevant country. That means that one must not, for instance, cumulatively add to exports to a country. I am terribly sorry that we were not in our place at the beginning of the sitting.

Kevan Jones (Labour, North Durham)

The use of arms per se is not a sustainable course of action. If we were to agree to the amendment, it would limit the use of arms in defending the country to which they were exported.

Jenny Tonge (Liberal Democrat, Richmond Park)

I agree with the hon. Gentleman. Sustainable development can include the need for arms to defend a country. A good example at the moment is Rwanda, which is one of the poorest countries in the world and is just emerging from genocide and civil war. We condone the fact that it is spending money on arms because it needs to pursue and defend its interests in the Congo and the north of the country. Some poor countries need arms, and one must take that into account.

Cumulative exports to a particular country can affect its sustainable development, and that is why we will retable the amendments on Report. We must examine the debt that a country may get into because of spending on arms. We should examine the export credits that may be given for the export of arms to a country, and how the huge sums of money will be paid off, if they are ever to be. If a country is spending too much on arms, funds are diverted from health and education, which are the only two measures that will improve both the lives of people in the country and the country's economy. As we know, primary education, particularly for girls, is the factor that improves the economic performance of a country over the medium and long term more than any other. Many studies have shown that.

We must address sustainability and sustainable development. It is crucial that those words appear in the Bill and I appeal to the Minister because I cannot see why that should not happen. If the phrase was added, everyone would feel much happier and would feel that the Department of Trade and Industry is interested in development and doing something about the world's poorest countries.

Joe Benton (Labour, Bootle)

Order. The hon. Member for Aberdeen, North has said that he wants to leave at 5 pm. May I prevail upon the hon. Gentleman to remain until the amendment has been dealt with?

Vincent Cable (Liberal Democrat, Twickenham)

I shall speak briefly so that I do not compromise the hon. Gentleman's timetable too much.

We support the good, appropriate amendment, which has two essential points: one is procedural and one about substance. The procedural point is that unless the concept of sustainable development is written in the Bill, it could be lost in future. If the concept is merely in guidance, it would be easy for future Governments and Ministers to lose it. I am sure that the present Government and Minister have no intention of losing it because we have an exceptionally effective Secretary of State for International Development who is respected by all parties. She fights her corner and is strongly committed to overseas development and will not lose any arguments in Whitehall. However, many Secretaries of State for International Development have been invisible and ineffective and, for the future, the Bill should be structured so that the development aspect would be effectively heard in any major arguments in Whitehall about big arms transactions.

My second point is about substance, and the intervention by the hon. Member for North Durham (Mr. Jones) was valid. My colleagues and I are not arguing from the standpoint that there are no such things as desirable arms exports or arms industries. In the past, many developing countries have been highly militarised and have developed successfully, for example Israel in its early years and South Korea. Developing countries, such as China and India, invest heavily in the arms business. One can argue at length about both countries, but they have substantial economic growth and arguably substantial social progress. There is no fundamental inconsistency between involvement in the arms trade and sustainable development. However, in general there are many reasons for believing that arms exports, especially in large volume, can compromise the development of many countries. As my hon. Friend the Member for Richmond Park said, the argument is not a bleeding hearts argument, but has been argued over the years by the International Monetary Fund, which is highly critical of the way in which developed countries implicitly subsidise and support their arms exports. It makes the point that, for many developing countries, importing arms is associated with the acquisition of debt and not a wealth-generating asset. It says that, of all the forms of trade in which developing countries can engage, the arms trade is the least productive from a development point of view. That is why the development issue should be made explicit in arguments about the relative merits of exports. The hon. Member for Aberdeen, North is right to want the amendment written into the Bill.

Richard Page (Conservative, South West Hertfordshire)

The hon. Member for Aberdeen, North has shown us the dangers of coming to a Committee with a set of opening remarks that one does not adjust according to the circumstances. His was a classic case. I say to him and to the Committee—I shall say it time and again—that Conservative Members are not against the Bill. We welcome it. We want it in place. In fact, when we were in government, the Conservative party set up the Scott inquiry. We have already expressed our regret that it has taken so long to reach this stage. We would have preferred the Bill to be debated in sequence, instead of fragmented for two or three months while we all go away with our bucket and spades. I look forward to our return to Committee in October.

I should have been happy to table amendment No. 10 or amendment No. 31. However, when I went to the Table Office, they had already been tabled. I did not see the point in overegging the pudding, knowing that those who had tabled the amendments would advance their arguments effectively. The NGOs have experienced such matters and their arguments, queries and worries must be properly taken on board. I am asking, how do the Government decide what is a balance between the requirement of security and the defence of the realm, and sustainable development of an economy to ensure that a country is driven forward and does not become an over-militarised state? Who will make that judgment?

We can all produce examples of when countries have suffered because the defence of the realm was not their first requirement and when other border countries had behaved in a wrong and, dare I say it, almost criminal fashion. Because certain countries had not been defended, we have seen their economy and any form of sustainable development put back years, if not decades. I should be interested to know how the Government will handle such matters. The NGOs make important points but, as I say about this country, the defence of the realm must be the premier objective.

Nigel Griffiths (Labour, Edinburgh South)

I take the amendments seriously. I shall deal with them in detail and, I hope, with clarify and brevity. The effect of the amendment tabled by the hon. Member for Twickenham would be to make a risk that exports of goods or transfers of technology of a particular description would have an adverse effect on the recipient country's sustainable development. It would make that risk a reason for which an order imposing export or transfer controls could be made.

The amendment tabled by my hon. Friend the Member for Aberdeen, North would have the same effect, but, in addition, it would make a risk that exports of goods or transfers of technology of a particular description would have an adverse effect on the economy of any country, a reason for which an order imposing export or transfer controls could be made. I do not regard arms control as a bleeding heart issue. As my right hon. Friend the Secretary of State said so movingly on Second Reading, we see the matter as a bleeding men, women and children issue.

An important aspect of the consolidated criteria for arms exports is, of course, the obligation under criterion 8 of the United Kingdom legislation, derived from the European Union code of conduct on arms exports, to take into account whether a proposed export would seriously undermine the economy or seriously hamper the sustainable development of the recipient country. We have always made it clear that our national criteria and the EU code of conduct on arms exports, which we played a key role in drafting, accepted in full and consolidated last autumn, would remain the basis for export licensing decisions.

Phyllis Starkey (Labour, Milton Keynes South West)

Why, if that EU code of conduct remains the basis, can it not be incorporated into the Bill?

Nigel Griffiths (Labour, Edinburgh South)

It is a matter of clarity and convenience. Obviously the Bill reflects the codes that we consolidated, but we are treating this code as published guidance under the Bill that the Government must take into account when making licensing decisions.

Jenny Tonge (Liberal Democrat, Richmond Park)

Surely the EU code of conduct is not legally binding. It is advisory, and the Government can be advised by it, but it is not binding. However, if it were incorporated into the Bill it would be binding.

Nigel Griffiths (Labour, Edinburgh South)

Even if a future Government tried to withdraw guidance continued under clause 8(4), the EU criteria would continue to apply until specifically altered by the EU in its common foreign and security policy formation. It would therefore remain a relevant consideration for a Government to take into account. Indeed, if it were ignored, a judicial review of a licence ground refusal could conceivably result.

Jenny Tonge (Liberal Democrat, Richmond Park)

The Minister must realise that much argument resulted when the Government gave permission for the repair of guns for Morocco, which borders Western Sahara. That contravened clause 8 of the European code of conduct, and nothing happened as a consequence. The provision is not legally binding.

Nigel Griffiths (Labour, Edinburgh South)

I shall not refer ex tempore in Committee to a particular case. Under the Bill, the consolidated criteria are to be treated as published guidance that the Government must take into account in making licensing decisions. The Bill confirms and underlines the status of consolidated criteria, all aspects of which are important. Criterion 8 derives from the EU code of conduct on arms exports, and we are firmly committed to it. Hon. Members want to prevent a future Government from withdrawing from consideration of sustainable development as part of the export licensing process. They are ignoring the fact that we signed up to the EU code of conduct. We shall not withdraw from it, and a future Government will have to be bound by clause 8(4). The EU criteria will still apply unless the provision is altered or withdrawn by the EU, and I see no prospect of that. The amendment is therefore unnecessary, and I invite my hon. Friend the Member for Aberdeen, North to withdraw it.

Malcolm Savidge (Labour, Aberdeen North)

I thank my hon. Friend for his assurances on the EU code of conduct, although I ask him to consider whether the Government would make the matter slightly more explicit in the Bill. Given his assurances, I beg to ask leave to withdraw the amendment.

Jenny Tonge (Liberal Democrat, Richmond Park)

I seek your advice on procedure, Mr. Benton. The two amendments are similar, and we do not want to withdraw ours.

Joe Benton (Labour, Bootle)

The two amendments are grouped together. The hon. Member for Aberdeen, North asked leave to withdraw his amendment, but I am advised that, because I allowed the hon. Lady to speak, I must put the Question on the amendment to the Committee.

Amendment negatived.

Vincent Cable (Liberal Democrat, Twickenham)

I beg to move amendment No. 32, in page 10, line 15, at end insert—

`Diversion

F. A risk that the equipment will be diverted within the buyer country or re-exported under undesirable conditions.'.

The amendment draws attention to the problem of weapons diversion and would include that in the Bill. The problem is generally acknowledged by those who have examined the arms export trade. In respect of major strategic weapons and Iraq, it is widely recognised that Jordan, probably unwittingly, was used as a destination for illicit Iraqi weapons, and case studies have been conducted by hon. Members into other abuses. For example, the Chairman of the International Development Committee spent some time inspecting the abuses that occurred as a result of the British investment in the Philippines that was used to evade controls and trans-ship weapons to Indonesia. As an example of brokerage, in the past week we have seen Burkina Faso used as a preferred destination for weapons that were subsequently diverted to Liberia and Sierra Leone. The diversion of weapons is a recognised phenomenon that the export control system should take into account. The amendment will help that process.

I would be surprised if the amendment presented a problem. In international trade policy there are many examples of rules of origin being used to track ultimate destinations. There are complex rules of origin in trade policy on imports when Governments, including ours, are in protectionist mode. There are rules about exporting textiles to the European Union, which require the exporting countries to produce certification to demonstrate that the full content of clothes, for example, was produced in the country of origin and has not been trans-shipped. Such schemes are commonly employed in the generalised system of preferences, where exporters must produce certificates that demonstrate that the origin is genuinely in the manufacturing country.

The principle of tracking trans-shipments and using proper certification processes to stop abuse is common on the import side of trade. All we are asking is that the importance of the problem of trans-shipment and abuse of origin, particularly in the case of armaments, should be recognised and taken into account as an important part of the export control process.

Nigel Griffiths (Labour, Edinburgh South)

The amendment would insert into the schedule a reference to the risk that equipment will be diverted within the buyer country or re-exported under undesirable conditions. The wording of the amendment reflects criterion 7 of the consolidated national and EU criteria, and the hon. Gentleman may have proposed the amendment to ensure that the risk of diversion remains a key consideration in export licensing decisions.

I hope that I can explain why the amendment is inappropriate and unnecessary. The schedule describes the purposes for which orders imposing export or transfer controls can be made. Under clause 3(6), licensing decisions must have regard to the possible consequences of exports or transfers of the kind mentioned in the table mentioned in paragraph 4 of the schedule. The function of the schedule is to govern the making of orders that specify classes of goods and technology subject to export controls. No quality inherent in a particular item of equipment or technology can make it likely to be diverted to undesirable end use. That is why it is inappropriate to include a reference to diversion in the schedule to govern the purposes for which particular items of equipment can be brought under control in orders made under clauses 1 and 2.

However, I assure the Committee that the risk of diversion within a buyer country or an undesirable re-export to another country is and will remain a key consideration in our export licensing decisions. We always made it clear that our national criteria and the EU code which we consolidated last autumn would remain the basis for export licensing decisions. Clause 8 makes it clear that the consolidated criteria are to be treated as published guidance under the Bill and that the Government shall have regard to that guidance in reaching licensing decisions.

The Bill confirms and underlines the status of the consolidated criteria, all aspects of which are important. The Bill does not change the status of particular criteria. In the light of that assurance and my explanation why the amendment to the schedule would be inappropriate, I hope that the hon. Member for Twickenham will withdraw it.

Vincent Cable (Liberal Democrat, Twickenham)

I hear the Minister's comments and I acknowledge that the Government are aware of the dangers of trans-shipments and the abuse of export controls. Our aim was merely to strengthen the commitment by inserting it directly into the schedule. I accept the Minister's assurance that the mechanisms in place will meet the objective. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That this schedule be the schedule to the Bill.

Gerald Howarth (Conservative, Aldershot)

I asked earlier in whose power it lay to define whether a transfer or export would have an adverse effect on peace. Paragraph 4(4) states:

``This paragraph applies to technology of any description if it appears to the Secretary of State when the order is made that there is a risk that transfer of technology of that description might have any of the consequences mentioned in the . . . Table''

set out in paragraph 4(5). Will the Minister tell us whether consideration has been given to the possibility of judicial review? The Secretary of State is rightly left with the power to determine what lies within the national interest and what would have an adverse effect on peace and security in any region. I have no problem whatever with that. However, we live in an increasingly litigious society. Did the Minister's officials advise him about the likelihood of challenges? I would deprecate any challenge, on the grounds that the buck stops with the Government.

Nigel Griffiths (Labour, Edinburgh South)

The question is pertinent. The Bill may well result in an increase in legal challenges to export licensing decisions. For the first time legislation will make clear the purposes of export controls. Clause 8 provides guidance on how the powers should be used. Inevitably, greater transparency will follow from the introduction of the new systems, as will greater visibility of the Government's policy and decisions. I hope that that clarifies and confirms the hon. Gentleman's point.

Mr. Howarth: I am not sure whether the Minister has confirmed or denied that he received specific advice on the possibility of a challenge under the judicial review procedure.

Nigel Griffiths (Labour, Edinburgh South)

I explained succinctly to the Committee the detailed advice that is available to me as a Minister.

Question put and agreed to.

Schedule agreed to.

Further consideration adjourned—[Mr. Pearson.]

Adjourned accordingly at twenty minutes past Five o'clock till Thursday 19 July at half-past Nine o'clock.