Orders of the Day — Export Control Bill

House of Commons, 24 June 2002.

John McDonnell (Labour, Hayes and Harlington)

On a point of order, Mr. Deputy Speaker.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

I shall take the point of order in a moment. Before the House considers the Lords amendments, I wish to draw its attention to an error on the amendment paper. Amendment (a) to Lords amendment No. 17 should read:

"Line 12, leave out from beginning to end of line 18",

not "line 17".

John McDonnell (Labour, Hayes and Harlington)

On a point of order, Mr. Deputy Speaker. Thank you for your leniency. Amendments were tabled in my name and the names of a number of my hon. Friends that expressed a certain position that had been debated previously in the House, and was the subject of an early-day motion with 300 signatories.

Ann Clwyd (Labour, Cynon Valley)

Three hundred and ten signatories.

John McDonnell (Labour, Hayes and Harlington)

I thank my hon. Friend for correcting me. I accept that those amendments have not been selected today, and that the Speaker has no responsibility to provide reasons for not selecting them. Mr. Deputy Speaker, will you none the less take back to him the view that there may well be a case for the publication of the advice provided to the Speaker on amendments, so that we can have transparency and openness and, perhaps, increased accountability about the selection of amendments process?

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

I know that the hon. Gentleman knows well how the House deals with these matters, and that it is not possible for me to comment on the selection of today's amendments. He has, however, put his thoughts on record for everyone to see and to read.

Clause 1 — Export controls

Nigel Griffiths (Labour, Edinburgh South)

I beg to move, That this House disagrees with the Lords in the said amendment.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss Lords amendment No. 17 and Government amendment (a) thereto, and Lords amendments Nos. 18 and 19.

Nigel Griffiths (Labour, Edinburgh South)

Given that the issues raised by amendments Nos. 1 and 17 to 19, and amendment (a) to amendment No. 17, are so closely related, it is sensible to address these amendments as a whole. I will, of course, explain the Government's position on each amendment, and explain why the Government propose to support amendment (a) to amendment No. 17, then amendment No. 17 as amended, and to agree with amendments Nos. 18 and 19. Indeed, I should add that amendment No. 1 covers ground very similar to the part of amendment No. 17 that we are proposing to change. As a result, when I discuss the unfortunate consequences of subsection 4 of amendment No. 17 as it stands, the House can take it that amendment No. 1 would have similar consequences.

This may sound a little complicated, but what I am proposing is in fact quite simple. I am asking the House to support the Government's original amendment to the Bill made in the House of Lords, through which the Government responded to concerns expressed in this House and elsewhere about the issues of guidance and of sustainable development.

I will explain in a moment why we think the House should disagree with Lords amendment No. 1 and support amendment (a) to Lords amendment No. 17. First, however, let me explain why the Government want to replace former clauses 7 and 8, which are now Lords amendments Nos. 18 and 19, with Lords amendment No. 17, as amended.

Former clauses 7 and 8 governed the operation of the export licensing process. They enabled the Government to publish guidance about matters to which regard might be had in the making of export licensing decisions, and the reasons that might be thought to justify particular decisions. The measure that replaces clauses 7 and 8 has a similar function, but we have made two significant changes.

Although we have no doubt that under the Bill as it left the House of Commons it would be possible for the Government to reject an export licence application solely on sustainable development grounds, the Government were very much aware of the depth of concern. We have addressed that concern first by strengthening the role played by guidance under the Bill, and secondly by putting beyond all doubt the Government's continuing commitment to sustainable development in the licensing process, together with all the other relevant consequences listed in the schedule.

First, let me explain how we propose to strengthen the role played by guidance under the Bill. The House will be well aware that the Government have always intended the important role currently played by the consolidated criteria announced to Parliament on 26 October 2000 to continue after the Bill becomes law. That is why clause 8 contained a reference to the consolidated criteria, and a similar reference is in the proposed new clause. The new clause, however, significantly strengthens the role played by the criteria under the Bill by making it a requirement for the Secretary of State to issue guidance about the general principles to be followed in the exercise of licensing powers, and by stating that the consolidated criteria constitute such guidance on general principles. The change will also ensure that if any Government in future wish to change the general principles on which the export control regime operates, they will be obliged to issue guidance stating what the new principles are, and to lay it before Parliament.

I am sure Members will agree that the changes are beneficial to the Bill, and I hope they will support Lords amendment No. 17 as amended and Lords amendments Nos. 18 and 19.

Tony Worthington (Labour, Clydebank and Milngavie)

Why was the Bill turned upside down as a result of our worries? Why did my hon. Friend not respond by simply reinserting "sustainable development" in the schedule, which is where it was in the draft Bill?

Nigel Griffiths (Labour, Edinburgh South)

That was discussed fully in the House of Lords. "Sustainable development" is now on the face of the Bill, which is what was recommended by my hon. Friend and others. We think that that is the right place for it, as does Lord Scott, who did not want it to be in the schedule.

Let me now explain why the Government believe the House should agree to the Government amendment to Lords amendment No. 17 and oppose amendment No. 1. The Government's original amendment, represented by amendment (a), introduced important changes. We proposed to make the reference to sustainable development explicit by including the text in amendment (a). The fact that that addition to the Bill has much more than merely symbolic significance is demonstrated by the Government's proposal to amend the Bill to say that future Secretaries of State must give guidance about

"the consideration (if any) to be given",

in the exercise of licensing powers, to issues related to sustainable development and to all the issues listed in the table in the schedule. Taken together with the change that I have already described, which will make it a requirement for the Government to issue guidance, amendment (a) will ensure that all future Governments are required to issue guidance on how they propose to consider sustainable development and all the relevant consequences listed in the schedule when exercising their licensing powers. The only way to change that would be by primary legislation.

Roger Berry (Labour, Kingswood)

Can my hon. Friend explain why the wording that the Government propose in their amendment is superior to the wording in the Lords amendment?

Nigel Griffiths (Labour, Edinburgh South)

The Lords amendment opens up an unfortunate loophole in terms of what its consequences would be, which I will come to in a moment, if my hon. Friend will bear with me. I will give way to him again if he wishes to pursue the point.

Liberal Democrat Members were concerned that the words in the amendment "if any" might allow a future Government simply to decide to ignore such important issues as sustainable development when considering export licence applications. I do not share their concern, but I do share their aim, which is why we tabled our original amendment.

The hon. Member for Twickenham (Dr. Cable) may still have some concerns. Perhaps he will still assert, as his colleagues in the House of Lords have asserted, that the Government's wording would allow a future Government simply to ignore relevant sustainable development issues. That is not so. I can assure the House that under the Government's original proposal, now represented by amendment (a), it would not be possible for a future Government simply to decide to ignore sustainable development or any of the schedule table issues by saying, "We have considered sustainable development and concluded that it has no place in the consideration of export licences." That would not meet the requirements of the clause proposed by the Government.

Ann Clwyd (Labour, Cynon Valley)

Since my hon. Friend prays Lord Scott in aid, does he also agree that Lord Scott is in favour of prior parliamentary scrutiny, a matter that the Government have obviously turned their face against?

Nigel Griffiths (Labour, Edinburgh South)

I am not sure that it is quite as straightforward as my hon. Friend states. Unfortunately, this debate is not about prior parliamentary scrutiny. I believe that measures on that were not ruled by the Speaker to be competent for debate today.

I have explained to the Opposition, and it was explained to the Opposition in the House of Lords, not only that their concern on this issue was unnecessary, but that what they have proposed instead would be profoundly damaging. Let me explain that in the light of the question that was put to me earlier.

In the House of Lords, it was explained that under the EU code of conduct and under the UK's consolidated criteria on arms exports, the Government have pledged that the criteria—I quote from the criteria here—

"will not be applied mechanistically but on a case by case basis using judgement and commonsense".

The effect of the Liberal Democrat amendments would be to make it impossible for the Government to use the judgment and common sense that we have promised to use.

All Governments need to be able to take justifiable—my emphasis on the word "justifiable" is deliberate—decisions that there is no need for sustainable development or indeed any of the other schedule consequences to be considered in certain cases. I believe that it is common ground in the House today that there are export licensing cases where it would not be relevant or appropriate to consider sustainable development: for example, the export of a single military vehicle to a developed country such as Canada. The same would be true of any relevant consequences. For example, it would not be relevant or appropriate to consider the regional stability implications of the export of a single parachute to France. I assure the House that even exports of single items still require consideration if the export is of licensable goods.

The effect of the Liberal Democrat amendments would be to impose a straitjacket on the administrative regime, forcing Government Departments to give some consideration to sustainable development and to every single schedule table implication of every single export, no matter how irrelevant certain implications might be either to individual exports or to categories of exports.

Norman Lamb (Liberal Democrat, North Norfolk)

Is it not the case that if the Government have their way, all they will have to do is consider the issue of sustainable development and, if they see fit, reject that criteria and move ahead to grant an export licence? Has that not happened under the existing consolidated criteria, with the authorising of a licence for the purchase of the air traffic control system for Tanzania?

Nigel Griffiths (Labour, Edinburgh South)

It is not true to say that Ministers could take a cursory look at sustainable development issues and then move on to grant a licence, or not, as the case may be. They must consider sustainable development implications and show that they have done so if there is any future inquiry or appeal against a decision. I do not believe that the hon. Gentleman has accurately summed up how this matter will be handled.

Roger Berry (Labour, Kingswood)

I am trying to get to grips with why the Lords amendments should be changed. They refer specifically to guidance stating that regard should be had to issues relating to sustainable development. Why could not that guidance specifically exclude, for example, certain exports to certain countries? I do not see what is wrong with the Lords amendments at all if the guidance is appropriate.

Nigel Griffiths (Labour, Edinburgh South)

Let me clarify it for my hon. Friend. Earlier, I mentioned a loophole; I should have made it clear that the amendments would make it impossible for the Government to give effect to certain international agreements according to their actual terms. These are the even more serious and damaging effects of the amendments, which would impose a brand new duty on the Government that could conflict with the Government's existing commitment—given to this House and to our European partners—to consider all strategic export licence applications against the consolidated criteria. This new duty would also take precedence over the EU code of conduct on arms exports, thus potentially requiring us to take an approach to licensing decisions within the UK different from that adopted in the rest of the EU.

Jenny Tonge (Liberal Democrat, Richmond Park)

For clarification, will the Minister define exactly what he means by sustainable development?

Nigel Griffiths (Labour, Edinburgh South)

Sustainable development is fairly clearly set out in our documents and is detailed in the annual report in terms of any licences that are granted or refused. There is no secret about how the Government analyse and assess sustainable development. The problem that we have with the amendments is that they would give us the obligation of a higher legal status than the consolidated criteria and the EU code. That would put us out of step with our EU partners and possibly make it impossible for the UK to abide by the EU code. That is the effect of amendments Nos. 1 and 17, unamended.

Tony Worthington (Labour, Clydebank and Milngavie)

I was interested to hear the Minister's response to the hon. Member for Richmond Park (Dr. Tonge). He said that what sustainable development would mean would be clear from the occasions when sustainable development was the ground upon which an export had been turned down. My information is that no export has ever been turned down on the ground of sustainable development.

Nigel Griffiths (Labour, Edinburgh South)

I think that my hon. Friend is wrong, and I hope to put on the record the number of such cases before the end of today's proceedings.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

Surely the acid test for the Bill, and for the efficacy of the various amendments, is simply this: is the Minister saying that, under the Bill as it stands, the Tanzanian air traffic control system export would not happen again?

Nigel Griffiths (Labour, Edinburgh South)

Each future case will be considered according to the available criteria and the prevailing circumstances. Ministers will take decisions on such cases and justify them.

Nigel Griffiths (Labour, Edinburgh South)

Such decisions are published in the annual report—another innovation that the Bill will establish as a permanent and necessary requirement.

Ann Clwyd (Labour, Cynon Valley)

My hon. Friend is offering to look retrospectively at licensing, but such a facility already exists. Our point is that it is no good having a retrospective look; we want prior scrutiny of contentious arms licences.

Nigel Griffiths (Labour, Edinburgh South)

My hon. Friend argues for prior parliamentary scrutiny, but she has not convinced me that a workable system exists; indeed, since I last came to the Dispatch Box my view was reinforced during a visit to Washington. The Chairman of the Trade and Industry Committee was critical of the prior scrutiny regimes in Sweden and in Washington, and I fully understand those criticisms.

Julia Drown (Labour, South Swindon)

The Minister said that the Lords amendment could be inconsistent with the European code of conduct on arms. Can he give an example of such an inconsistency, because it is not obvious?

Nigel Griffiths (Labour, Edinburgh South)

I mean no disrespect to my hon. Friend or to the House, but I am reluctant to pluck hypothetical examples from the air. Our legal advice is clear: if the amendment were accepted, the new duty would take precedence over the EU code of conduct on arms exports. For the UK to take an approach to licensing decisions that differs from that taken in the rest of the EU would be highly damaging to the establishment not just of a concerted, EU approach to licensing arms, but to an international approach that ensures that we are controlling as best we possibly can the export of arms and related technology. We must also recognise that, if unamended, the amendments would have other effects.

John McDonnell (Labour, Hayes and Harlington)

Is my hon. Friend saying that the Lords amendment is unacceptable because it conflicts with prior commitments given at a European level, and that European agreements that we have entered into prevent us from taking sustainability into account in considering individual licence applications? If so, the entire debate on sustainable development being taken into account—in whatever form—under this legislation has been completely futile.

Nigel Griffiths (Labour, Edinburgh South)

No, I was not saying that. I was saying that the amendments could mean that we had criteria different from those that operate under the EU code of conduct, and that is what we are trying to avoid. I did not go into specifics because I did not want to pick up on a hypothetical case.

Hugh Bayley (Labour, City of York)

If the Minister wants to convince me that we should modify Lords amendment No. 17, he will need to convince me that the way in which the Government will determine whether sustainable development would be undermined or compromised by an arms export is rigorously defined. Do the Government intend to set out defined criteria in the public domain against which they will decide whether a particular arms export would compromise sustainable development? In other words, the Government need to go further than simply saying in general terms that they will exercise their judgment.

For instance, will the Government examine, as a test of sustainability, whether a particular export offers value for money or entails "productive expenditure"—to use a phrase from the rules of the Export Credits Guarantee Department—for a developing country? Those of us who have considered the Tanzanian case would say that it would not be termed a sustainable export if measured against value-for-money criteria or against—

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

Order. The hon. Gentleman has made his point.

Nigel Griffiths (Labour, Edinburgh South)

The clearest way to answer my hon. Friend is by reference to the annual report, to which I referred hon. Members earlier. Criterion No. 8 in the report makes clear the need for the compatibility of the arms exports with the technical and economic capacity of the recipient country, taking into account the desirability that states should achieve their legitimate needs of security and defence with the least diversion into armaments of human and economic resources. Subsequent paragraphs spell out clearly the approach that Ministers take—and under the Bill must take—when carrying out that assessment. That is the important point that we need to make about the amendments.

Hugh Bayley (Labour, City of York)

Will the Government publish a list of criteria that they will use in deciding whether sustainability is compromised? A set of such criteria is used in relation to export credits guarantees. Will the Government provide a similar list in relation to arms exports?

Nigel Griffiths (Labour, Edinburgh South)

The report makes the position clear, and I am sure that my hon. Friend will read it. There is a list of factors that are taken into account, including information from sources such as the United Nations Development Programme, the World Bank, the International Monetary Fund, and reports from the Organisation for Economic Co-operation and Development. Whether the proposed export would seriously undermine the economy or hamper the sustainable development of the recipient country will also be taken into account. I am sure that the House will accept that the answer will vary from country to country, depending on the level of development and the size of purchase proposed when the granting of a licence is considered.

The report also makes the other criteria clear and gives a clear description of what is taken into account and, by its absence, what is not. I am not sure that we would want anyone to add anything that is not already in the report. However, if my hon. Friend has a suggestion to add, the House will listen with interest.

Gregory Barker (Conservative, Bexhill and Battle)

I, for one, believe that sustainable development should be at the heart of all Government policy making. Nevertheless, is the Minister aware that numerous small arms manufacturers such as Manroy Engineering Ltd. in my constituency, which employs 40 people, will welcome the fact that he rejects prior parliamentary scrutiny? In rejecting the Liberal Democrat amendments, was any assessment made on the likely impact on job losses that would arise, given that, in certain cases, many small firms must already wait up to a year for the issue of a licence?

Nigel Griffiths (Labour, Edinburgh South)

No one has raised the implication for jobs with me; I have read no briefings about it and have not discussed it with ministerial colleagues or anyone else. I am concerned that the Bill provides for the proper scrutiny of licences and an effective regime to avoid the pitfalls that are highlighted by Lord Scott and others. I am afraid that I cannot answer the hon. Gentleman's question, although I recognise that he is voicing the concerns of his constituents and the defence manufacturer associations.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

The Minister referred to the criteria in the annual report. What effect, in reality, did the World Bank report on the Tanzania contract have?

Nigel Griffiths (Labour, Edinburgh South)

I am afraid that I did not catch the hon. Gentleman's question.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

What effect did the report by the World Bank, which was heavily against the export of the air traffic control system to Tanzania, have on the decision to export?

Nigel Griffiths (Labour, Edinburgh South)

I am not going into detail about the considerations that were made; I am simply justifying the Government's position on the amendments and the effect of the Bill. What the hon. Gentleman refers to is a matter for the Government of Tanzania.

I disagree with Lords amendment No. 1 because I am keen to avoid a costly mechanism that would oblige us to consider every issue in every case, whether it was relevant or not. At best, that could lead to confusion about taking particular licensing decisions, which could slow down the export licensing process and make it impossible for the United Kingdom to give effect to future international obligations according to their terms.

I do not believe that any of this is necessary. If it is the wish of the House that a future Government should not be able to choose to ignore issues such as sustainable development and human rights, the Government share that wish. That is why I want to assure the House once again that Government amendment (a) to Lords amendment No. 17 would not allow future Governments to ignore these important issues. The Government published a list of criteria in October 2000, setting out their position in detail. I hope that that helps answer the concerns expressed by my hon. Friend the Member for City of York (Hugh Bayley).

In conclusion, I urge the House to achieve our common goal and avoid the unnecessary and damaging effects of Lords amendment No. 1. I urge the House to support amendment (a) to Lords amendment No. 17 and amendments Nos. 18 and 19.

Robert Key (Conservative, Salisbury)

This is an extraordinarily important debate. I am conscious of the fact that we have only three hours in which to debate all the business this afternoon; I will therefore be brief, as we have many concerns to raise on the next group of amendments on academic freedom.

Let me say first what an extraordinarily successful exercise has been carried out by a large number of organisations and by the Quadripartite Committee, whose contribution has been extremely important in informing the judgment of the House. The Select Committee on International Development has also taken a very proactive role. I am very grateful for all that and for the briefing. Everyone who has spoken today—and most Labour Members present have already spoken—has expressed opinions that reflect the passionate concern of many thousands of people who care deeply about the state of millions of the most vulnerable people in the world.

As the right reverend prelate, the Lord Bishop of Manchester said in another place:

"If we are serious about halving world poverty, we need to strengthen our legislation regarding what should and should not be exported and imported, taking into account the purposes and outcomes of such exports and the consequences of granting licences for them."—[Official Report, House of Lords, 18 April 2002; Vol. 633, c. 1099.]

The House may recall that during Third Reading, I said:

"The House is owed an explanation of why the Government left out the paragraph on sustainable development from the table to the schedule."—[Official Report, 8 November 2001; Vol. 374, c. 414.]

On that occasion, the Minister stubbornly, and quite inexplicably, refused to give a rational explanation. He could have done so, but he failed to and that misjudgment had consequences: the official Opposition voted in favour of the amendment, when we might have abstained; and, in the other place, the Under-Secretary of State caused months of trouble for the Government, ending in their defeat on the issue on 18 April. Today, we are considering the Government's attempt to reverse that defeat.

I pay tribute to my noble Friend Baroness Miller of Hendon and other noble Friends for their persistence in harrying the Government. The quality of the argument in another place is often said to reflect favourably the time available for debate. It is certainly true that if Ministers fail to win the arguments, they may fail to win the votes—something that regrettably rarely happens in this place.

Since the Bill left us last November, several things have happened. First, as a direct result of the pressure on the Government, I was told in answer to a parliamentary question that the Cabinet Office was working with

"all Government Departments with an interest"—

to address—

"the need for clearer procedures for reaching decisions where sustainable development is an issue".

The Minister pointed out that the Government would be discussing procedures on how criterion 8—on sustainable development—of the consolidated criteria could

"most effectively be applied in assessing relevant export licence applications."—[Official Report, 20 June 2002; Vol. 387, c. 467W.]

That is an extremely important point and I wish that the Minister had dwelt on it during report and Third Reading.

Criterion 8 of the consolidated European Union and British codes sets out exactly how the process will be governed. It states:

"The Government will take into account, in the light of information from relevant sources such as United Nations Development Programme, World bank, IMF and Organisation for Economic Co-operation and Development reports, whether the proposed export would seriously undermine the economy or seriously hamper the sustainable development of the recipient country.

The Government will consider in this context the recipient country's relative levels of military and social expenditure, taking into account also any EU or bilateral aid, and its public finances, balance of payments, external debt, economic and social development and any IMF or World bank-sponsored economic reform programme."

That says much more than either the Lords amendment or any of the other amendments proposed so far.

As the Government said in another place that it was "absolutely mandatory"—I think those were the words of the Under-Secretary, Lord Sainsbury—for them to consider sustainable development where it was relevant to the export concerned, their reconsideration of how criterion 8 can most effectively be applied is a step forward. We welcome that.

We, too, have gone back to the beginning—to assess how the Bill and this debate measure up to the recommendations of the Scott report. In dealing with the question of the processing of export licensing applications, Lord Scott said that they should be processed

"expeditiously and with fairness to exporters".

We should not ignore the consequences of changing the wording of the Bill. We have been advised that it would have the effect—as the Minister has confirmed—of requiring the Government to consider sustainable development and every other issue covered by the table to the schedule whenever they exercise their licensing powers under the Bill. So the Government would have to consider every export covered by the schedule even if the implication is that that is clearly irrelevant to individual licence applications or categories of exports. The practical effect would be that all licence applications would have to be systematically assessed against all the consolidated criteria. That would be bound to cause substantial delay, to the detriment of the legitimate interests of the exporters and their employees, but would the delay be significant and what would be the impact on public finances?

It is has been assessed that, if the amendment stands, the number of export licences processed by the Department for International Development will increase from about 600 a year to 15,000. The Department currently employs 1.5 people to process existing applications, so there would be a 2,500 per cent. increase in the Department's work load in that respect. That would clearly have substantial work force implications, which would be amplified right across Whitehall. Only the Government can decide if that is acceptable and, furthermore, whether the Chancellor will pay.

Roger Berry (Labour, Kingswood)

Will the hon. Gentleman please tell the House the source of those statistics, which come as a surprise to some of us?

Robert Key (Conservative, Salisbury)

Yes, they come from a number of academics and the Defence Manufacturers Association. [Hon. Members: "Ah."] It is all very well for hon. Members to say, "Ah", but government is not just about listening to only one argument; all the arguments have to be listened to, which is precisely what we have done.

The Government are now floundering in a mess of their own making when it comes to sustainable development. They have listened and acted on concerns about the application of criterion 8 across Departments. We are concerned that, on reflection, the amendment goes much further than Lord Scott intended, so we will not seek to frustrate the Government's will in this matter.

Roger Berry (Labour, Kingswood)

I should like to express my gratitude to my hon. Friend the Minister for arranging a meeting with himself and officials after the debates on Report. A number of my colleagues and I had the opportunity to discuss sustainable development with him and how it might be dealt with in the Bill. I should like to thank him, first and foremost, for that opportunity. This is indeed an historic Bill, and I passionately support 99 per cent. of it. I also congratulate the Minister and his colleagues on ensuring that sustainable development has been included in the Bill. That is very welcome indeed. However, I confess to being at a total loss as to why the Government have tabled amendment (a) to Lords Amendment No. 17, and I shall explain why very simply.

Lords Amendment No. 17 is very clear. It states:

"guidance . . . must state that regard shall be had . . . to . . . issues relating to sustainable development".

The Government want to remove that and to replace it with the words:

"guidance about the consideration (if any) to be given"

to issues that relate to sustainable development. I have two problems with that, and I am clearly not in a minority of hon. Members in having that view. The first problem is that, pretty obviously, "to have regard to", as in Lords Amendment No. 17, constitutes a stronger obligation than the duty "to give consideration to", as in Government amendment (a).

At first blush, there seems to be an open and closed case that the Government are weakening the duty. However, the second and perhaps even greater problem is the inclusion of the phrase "if any", so a future Secretary of State could simply ignore sustainable development when issuing guidance on export licensing by the simple device that he or she would be required only to include

"guidance about the consideration (if any) to be given."

May I please emphasise that I do not suggest that the current Secretary of State would do that? I might be in enough trouble in a minute, so I shall not dig myself into that one as well, but a future Secretary of State could say, "No, I do not think that consideration should be given". It is clear from what my hon. Friend the Minister has said this afternoon that the Government do not want that to happen, but I simply do not understand why the Government want to include amendment (a).

My hon. Friend suggested that the Lords amendment would fetter the Government's ability to make common-sense decisions—I think that that was the phrase that he used. I am all in favour of common sense, but I do not understand which common-sense decisions would be problematic. The example given by the Minister, which happened to be the same example given by Lord Sainsbury in another place, was the export of a single military vehicle to a developed country such as the United States of America. Clearly, as has been pointed out, that would not raise sustainable development issues.

As I understand it, therefore, the Government's concern, expressed by hon. Friend the Minister today and by his colleagues in the other place, seems to be that a range of decisions in relation to particular exports to particular countries would not be especially affected by the sustainable development criterion. That is why they wanted the phrase "if any" to be included. For the life of me, I do not understand why the Secretary of State cannot issue appropriate guidance on the sustainable development criterion indicating, for example, what exports to which sorts of countries would be considered. I assume that that is part and parcel of guidance. Nobody has ever argued that every good and service exported by the UK to every country in the world should be subject to an appraisal before an export licence is granted. Guidance is there to assist those making decisions to ensure that the Government's policy on arms export controls and other matters is implemented. The Lords amendment, which, in my view, is better than the Government amendment, would prevent sustainable development from not being considered when it is, in fact, relevant.

My hon. Friend said that the Government have had legal advice. He will know, as we all do, that Oxfam has also had legal advice from Matrix chambers. As this is a brief debate, I shall not waste the time of the House by quoting that advice, but it is contrary to what my hon. Friend has said and says that the Lords amendment is less unclear and stronger than the Government amendment, and that the problem that my hon. Friend has identified could be dealt with in the guidance issued by the Secretary of State. I am therefore at a loss to know the real reason why the Government want to amend Lords amendment No. 17.

I want to make a couple of brief points about guidance on sustainable development, as that is relevant to what will be the work of those responsible once this welcome Bill becomes an Act. I was delighted that, in March, my right hon. Friend the Foreign Secretary informed the Quadripartite Committee that the Cabinet Office is undertaking an exercise with relevant Departments in assessing criterion 8. I welcome the review of criterion 8, and I hope that it will address a couple of issues.

First, if one considers the consolidated criteria, they do not carry the same weight. The first four criteria take the form that

"the Government will not issue a licence".

For example, a licence will not be issued

"if there is a clear risk that the equipment will be used for internal repression".

The first four of the eight criteria state that the Government will not grant a licence if certain conditions are satisfied—for example, if it is incompatible with our international obligations, or if exports would

"promote or prolong armed conflicts or aggravate existing tensions or conflicts".

A current example of that springs to mind.

My point is that the principle of the first four criteria is that the Government will not grant a licence if a certain condition is satisfied, whereas the principle behind the sustainable development criterion—I am glad that it is being reviewed—is that the Government will "take into account" the effects. I hope that that duty will be considered further in the review that is being undertaken. It is slightly odd that the sustainable development criterion is of a different order of importance than the first four of the eight.

My hon. Friend the Member for City of York (Hugh Bayley) made the point that any realistic and productive assessment of the sustainable development criterion must involve assessing the extent to which arms exports represent value for money or productive expenditure. I shall say nothing about the Tanzanian controversy, but it obviously springs to mind. I want to stress that, as my hon. Friend rightly pointed out, in the case of the Export Credits Guarantee Department, the Government have already accepted the principle of a productive expenditure test. The ECGD's statement of business principles makes it perfectly clear that support for exports to developing countries must be given only when they will not harm sustainable development.

I spent a few happy moments this morning looking at the ECGD's website. Its business principles include:

"We will promote a responsible approach to business and will ensure our activities take into account the Government's international policies including those on sustainable development".

The wording gets stronger. The statement adds:

"ECGD will ensure that debt sustainability will be a prime determinant of the provision of its support for exports."

It specifically makes it clear:

"ECGD will . . . restrict cover for the poorest countries, to transactions which pass a productive expenditure test."

That is already Government policy in terms of what the ECGD does.

We should apply that same principle to arms exports. We should use the review of criterion 8 to raise the standards for sustainable development testing to those used by the ECGD. If we do not do that, Government policy on sustainable development will not remain joined up. For example, it would be ludicrous if the Government refused export credit guarantees because the productive expenditure tests had not been met at the same time as they granted a licence for arms exports. A key part of the review of criterion 8 is that it must be used to make the policies consistent. ECGD practice demonstrates that it is right in principle and possible in practice to test for the sustainable development impact when deciding whether to license arms exports. To support that argument, I point to the fact that the Government already do that.

I acknowledge that the Government have moved on the provision for sustainable development. When we debated the issue on Report, we were told that we did not need such a provision in the Bill because the matter was being dealt with through the criteria. At the meeting I had with the Minister, we were told that we could not put such a provision in the Bill because it would apply to every good that the country exported. We are now being told a third story—we can have such a provision in the Bill, but that the Government do not like the Lords amendment. I am not trying to be difficult and I certainly am not trying to be sarcastic, but I genuinely do not understand why the Government should want to amend the two sensible lines in the Lords amendment.

Jenny Tonge (Liberal Democrat, Richmond Park)

Does the hon. Gentleman agree that this whole debate is nonsense? The front page of the International Development Act 2002, which went through the House recently, contains a provision for sustainable development, and the Secretary of State for International Development considered that provision to be the most important in the Bill. Furthermore, the Prime Minister told us this afternoon that he has signed up to all the aims of the sustainable development conference to be held in Johannesburg in September. Is this debate not complete nonsense?

Roger Berry (Labour, Kingswood)

I am not sure that the debate is complete nonsense, but it is confusing. I believe that the Government are committed to sustainable development, and the International Development Act 2002 contains a definition of it. However, I do not understand the argument for amending the Lords amendment. I have explained why that would make the Bill weaker and that the Lords amendment would not stop the Government doing what they want to do. I have never before heard the argument that the Lords amendment might put us in breach of the EU code, and I am still awaiting further clarification on that. I cannot believe that it does, certainly not according to the legal advice that other organisations are receiving.

I am enthusiastic about this important Bill and the last thing I want to do is vote against my Government's amendment, but I cannot understand why they have tabled it. The Lords amendment is superior. I am sad to say that if the mystery is not explained before the end of the debate, I will not be in the same Lobby as my hon. Friend the Minister. I will deeply regret that and hope that he gives me a reason to be in the same Lobby.

Vincent Cable (Liberal Democrat, Twickenham)

I am in favour of the Lords amendments and against the Government's proposed changes. Like the hon. Member for Kingswood (Mr. Berry), I, too, am confused about how the argument is progressing. There have been several triple-reverse somersaults on how we should approach sustainable development. Unfortunately, the confusion is infectious. I had hoped that the same broad coalition that operated in the other place would be in action today. It comprised a large group on the Government Benches who shared the well informed scepticism that we have heard this afternoon and Members on the Liberal Democrat, nationalist and Conservative Benches.

I listened with mounting bafflement to the hon. Member for Salisbury (Mr. Key). Only a few weeks ago, the Conservative spokesman on international development questioned the Secretary of State for International Development. She said:

"The Secretary of State will be aware of the sustainable development amendment to the Export Control Bill, which was recently approved in another place. It was supported by Conservatives, Liberal Democrats and bishops, and might give the Department for International Development a greater say in such matters. I call on the right hon. Lady to have the courage of her convictions and tell the House that she will support the sustainable development amendment."—[Official Report, 25 April 2002; Vol. 384, c. 500.]

I do not know whether the hon. Gentleman outranks his colleague or has not consulted her, but he is taking a diametrically opposite point of view. I will not pursue that too much, but I hope that he will explain why for the past year or so his colleagues have said the opposite of what he now proposes.

Robert Key (Conservative, Salisbury)

I am grateful to the hon. Gentleman for giving me the opportunity to remind him of what happened in the Standing Committee in November and on Report and Third Reading when we made it clear that we might have abstained had we got a straight answer. We got the answer in the other place, the Government have moved on the issue and we have been back to Scott. I wonder whether the hon. Gentleman has read the Scott report if he thinks that the proposal conforms with what it recommended. That explains my position. For goodness' sake, it does no one any good if we never move forward in politics.

Vincent Cable (Liberal Democrat, Twickenham)

Perhaps the hon. Gentleman should have consulted his colleague because she made her remarks long after the illuminations that he describes emerged.

The more important issue is the Government's position on the matter, on which there have been several significant shifts, to which the hon. Member for Clydebank and Milngavie (Tony Worthington) referred with characteristic pithy accuracy. We started with a draft Bill. The Government accepted that the schedule of purposes should embrace the principle of sustainable development. That principle was fairly uncontroversial in the White Paper, the Green Paper and the draft Bill, but then it was changed.

The Bill went through the Commons and the House of Lords. However, at the last moment, to avoid putting words into the schedule of purposes, the Government explained that the schedule of purposes was not what it was originally supposed to be. They effectively turned the Bill on its head and are now defending amendments that relate to the language that should be used. Many of us who followed the Bill through its stages and who are interested in the Scott report find those amendments unsatisfactory.

I shall take up specific points. We are told that consideration will be given to sustainable development. That is the weakest language that one could find in this context. The other phrase which is much more controversial—the hon. Friend the Member for Kingswood (Mr. Berry) referred to it—is "if any". To critics of the Bill, that appears to give Ministers the option of not considering sustainable development. That is how it appears from the outside. 5.30 pm

The Government's view, which the Minister has restated, is that they could be involved in considering many extraneous issues such as trade with the United States or with France. He cited legal opinion to that effect. There are, however, alternative legal opinions. Matrix chambers is one of the most reputable set of barristers, and it makes the point that the Government's legal interpretation is bizarre. I do not want to read the legal language in great detail, but there is a key passage that needs to be put on the record. As for the problem of avoiding dealing with extraneous details, the lawyers say that it would be possible to disregard them

"even if these two words (if any) were omitted from the clause, on the basis that, in providing guidance about the consideration to be given to issues related to sustainable development in a particular type of case, the Secretary of State can determine the weight to be placed on such issues and may confirm that in certain types of cases such issues are not relevant and may be of little consideration."

In other words, if an application arrives on the Minister's desk relating to parachutes from Britain to France, he may simply say, "The sustainable development issue carries no weight, or minimal weight, in these circumstances. We will therefore not pursue that line of inquiry." It is an easy way of dealing with the problem. It is difficult to understand why a diametrically opposed legal opinion has been given on this important point. As the Government have changed their mind several times on the legal status of the Bill, I hope that they will give fresh consideration to the issue, which makes them look rather foolish.

We are talking not only about matters of legality but broader issues of principle. In essence, the Government are trying to tell us, "Trust us. We will interpret sustainable development in the right way at the right time. Providing that there is provision in the guidance, we will look after this concern." In principle, I am always willing to take the Government on trust. However, there are good reasons why we cannot do so in this instance. The first has been taken up twice by the hon. Member for Cynon Valley (Ann Clwyd). In her interventions she asks the highly relevant question why the Government chose to disregard the Scott report, and why the four Select Committees, with all-party consensus, recommended that individual applications be considered through parliamentary scrutiny.

The Government have rejected that approach. By doing so, they sacrificed one of the key safeguards to ensure that applications were properly considered. When the hon. Member for Salisbury intervened on me to say that the amendment is not compatible with the Scott report, that must be seen in conjunction with the fact that the Government have already rejected one of the central propositions of the Scott report, which was parliamentary scrutiny. Had there been that scrutiny, we would not be having the argument. It would not be necessary. It is because the provision is not in place that the relevant language needs to be written much more firmly and strongly in legislation. That is what the debate is about.

The second reason why we cannot trust government—I do not mean the present Government or the Minister—is the way in which the Tanzanian case was dealt with. That illustrated the weakness of the process of export licence applications in relation to development, in precisely the same way that the Matrix Churchill case illustrated the failures of the old regime. I know that my hon. Friend the Member for North Norfolk (Norman Lamb), who has done a great deal of work on the Tanzanian case, would like to talk about the issue at considerable length. However, I shall make a few points because the matter specifically illustrates the difficulty that Government have in dealing with development issues in export licence cases.

The importance of the Tanzanian case is that that was one example where the development argument was clearly set out, first by the World Bank and latterly by the International Civil Aviation Organisation, which examined the project and concluded roundly that it was not in the developmental interest. There was a specific and quantifiable test of sustainable development in the conditions set by the International Monetary Fund for the conditions of credit.

The story of the project, as many people know, is that Barclays bank, working together with BAE Systems, produced a project that appeared superficially to conform to the terms of the IMF definition of sustainable development. In other words, there was a 28 per cent. grant element in the loan. People have examined the project. My hon. Friend the Member for North Norfolk has much more detail than I have, and papers are becoming available. Questions are now being asked about how the project managed to satisfy that test of sustainability.

Three hypotheses are being offered. The first is that the bank suddenly developed a fit of generosity and decided to give Tanzania, effectively, a grant of £10 million—a third of the value of the loan. That sounds to me highly implausible. The bank has not claimed credit for doing it, and its shareholders certainly have not been told, so it seems unlikely that it did that.

The second hypothesis is that the bank and BAE Systems fiddled the contract price and overstated the tender price by 30 per cent. so that they could then give a concessional loan. To do that, however, they would have had to engage in what amounts to fraud, with collaborators in Tanzania. We do not know whether that happened, but it seems highly possible that it did.

The third possibility is that the bank and/or BAE Systems were given a quid pro quo—"You sign this contract for the air traffic control system; we will give you access to banking or another arms contract"—involving, probably, illegal and covert relationships with senior Tanzanian civil servants.

We do not know what happened. It will emerge, because papers are coming out of the international organisations which are building up the story. One of the Select Committees of the House—I do not know which; it could be the International Development Committee, the Foreign Affairs Committee, the Treasury Committee or the Defence Committee—will get their teeth into it, and Ministers and their officials will be called to explain what happened, in precisely the same way as Ministers and officials were called to explain what happened in the case of Matrix Churchill. We shall then understand the dynamics of what happened in Government.

My understanding is that the Department of Trade and Industry, backed by the Ministry of Defence and 10 Downing street, enthusiastically supported the project. They were opposed by the Secretary of State for International Development and probably the Chancellor of the Exchequer, who saw it driving a coach and horses through his sustainable development work in relation to debt relief. The story will emerge, but the key conclusion is that the mechanisms of Government, as they operate at present, do not allow a proper test of sustainable development to take place, even when all the evidence is in front of them and is mobilised by Departments of State.

That is why it is absolutely fundamental that we have strong language in the legislation. If the Tanzanian case can occur under the present Government, far worse things can happen under other Governments. The legislation must be strengthened. That was the purpose of the amendment, and I urge hon. Members in all parts of the House to support it and to reject the weasel words that have been incorporated in amendment (a) to Lords amendment No. 17.

Tony Worthington (Labour, Clydebank and Milngavie)

I do not disagree with anything that was said by the hon. Member for Twickenham (Dr. Cable).

What a pity that we are having this debate today, given that the Bill was so welcome. It represents a major step forward and is slightly tarnished by the sustainable development aspect. It is still incomprehensible to me why we are in such a tangle on that issue. I praise the Department of Trade and Industry for its role during the mass lobby of Parliament last week, when it spoke to those who were calling for the poor to be looked after under the trade rules. At the heart of that day was the concept of sustainable development, and it was very good that the DTI, alongside other Departments, was making it clear that the Government's policy genuinely has sustainable development at its heart. Indeed, that goes back to what was said by the Chief Secretary in respect of the following announcement:

"Government Departments have been asked by the Chief Secretary to the Treasury to ensure that sustainable development issues are considered and reflected in their bids for the 2001 Spending Review".

That gave rise to a press release entitled "Sustainable Development at the Heart of Government Policy Development"—an approach that is very welcome and which we want to encourage.

There are other instances in the light of which today's debate is genuinely incomprehensible. On 11 January 2000, the Chancellor made a very important speech. In giving the Gilbert Murray memorial lecture, he called for Government policy to maximise the benefits of debt relief in poverty reduction and economic development by imposing sustainable development criteria. He said:

"Britain's export credits will only support productive investment that assists social and economic development and thus reduces poverty."

That is absolutely clear and it was very welcome. Hon. Members have referred to the consequence of that statement in terms of the Export Credits Guarantee Department. Seemingly, the oddity is that, although any rank and file export that goes to the ECGD must be justified by the test of sustainable development, something that is related to arms does not have to pass that test. As we seem to be getting towards joined-up government, it appears that somebody is undoing a link, which is very unfortunate.

The Secretary of State says that we take sustainable development seriously. That is the trusters' argument, but the case for the trusters is seriously weakened by two factors. First—this seems pretty much the crunch factor—no one has ever found an example of an arms export being turned down on the basis of sustainable development. I do not know whether the Minister has received information yet from other sources, but when I addressed a question about the matter to the Foreign Secretary in the Quadripartite Committee in March, he said, prompted by his officials, that there had been no cases in which sustainable development had been the ground on which an export was turned down. Unless something has happened since March—if it had, one would have expected the DTI to remember it—we are being asked to take seriously the assertion that sustainable development is at the heart of Government policy in the DTI, and in terms of export controls, even though there has never been an instance in which it was the reason for turning down an export. That is difficult to accept.

The second weakness in the argument has been the presence in the debate, perhaps for some malevolent reason, of the Tanzanian air traffic control system. If one had had to sit down in the past in a university seminar and devise a project that would fail a sustainable development test, one would have come up with this one. It is a beauty. One section of the Government had been giving debt relief to one of the world's poorest countries on the grounds that that debt was unsustainable, then along came another section of the Government encouraging it to take on £28 million-worth of debt for a civil air traffic control system that did not work and was described in the first International Civil Aviation Organisation report—I have not seen the second report, but I think that it is even more damaging—as being out of date and in need of extra equipment to make it work. One has to wonder how that can be classified as sustainable development.

The Government's response when BAE Systems came to them in 1997 should have been to acknowledge that their policy was not sorted out and that sustainable development was not at the heart of Government at that time. However, that did not happen. The project went through the strange procedure of being approved by the arms working party, which was virtually the same as saying, "You're licensed." I say that because of 4,000 to 5,000 applications a year, only about five were not licensed at the end of the procedure. It was almost unheard of for someone not to be given permission to move forward by the arms working party, which was composed only of officials from the Ministry of Defence and the Foreign Office, and had no representatives from the Department for International Development. The project was a mess, and it would not go through nowadays.

What puzzles me is that no Minister has been able to say that such a project would be caught by the Bill. It would be welcome to hear the Minister say that the Government are upgrading the sustainable development criteria so that such projects will be caught in future. It was a mess, with Cabinet Ministers quarrelling in public over the decision on whether the project was to go ahead at a time when the system had already been built and was resting in crates on the Isle of Wight. Such things happen. However, we need assurances that projects that so clearly infringe any notion of sustainable development will not be approved in future. It would be encouraging if the Minister could say that the Government recognise the need to strengthen the sustainable development criteria and that a project such as the Tanzanian air traffic control system would be caught by the Bill. I hope that he will address those concerns.

Tony Baldry (Conservative, Banbury)

It is a matter of regret that the Government have given so little time to the debate on Lords amendments to the Bill, which has been widely welcomed and on which there is broad consensus. We have only three hours and the Minister took the first half an hour in introducing the Government's response to the first group of amendments.

In respect of sustainable development, in May 2001 the Quadripartite Committee said that

"consideration should be given to putting on the face of the Bill assurances . . . that licensing decisions should have due regard to the general purposes for which controls can be imposed, as set out in the Schedule to the Bill".

I do not believe that the Committee envisaged that the Government would initially give sustainable development a strong profile in the draft measure, subsequently remove it when the Bill was first published and amend the measure to include it in another place. However, the language is rather ambiguous, and I shall briefly act as a boring lawyer and make a couple of boring lawyer's points.

I am a member of the Quadripartite Committee and I chair the Select Committee on International Development. The hon. Member for Clydebank and Milngavie (Tony Worthington) is a member of the latter, and many other members of it are or have been present this afternoon. We have tried to achieve the coherent application of criterion 8 of the EU's consolidated code of conduct for arms export, which ensures, especially in the developing world, that export licences are balanced with the recipient country's economic and poverty reduction policies. Consistent and balanced defence exports are therefore the watchwords.

The Government's assertions in the explanatory notes show that the basis for the latest status of sustainable development is clarifying

"the manner in which sustainable development issues are addressed".

It is not so much the "manner" in which sustainable development is "addressed" as the way in which it is expressed that is ambiguous in the Bill. It states that,

"guidance about the consideration (if any) to be given"

to sustainable development must be provided.

I have two anxieties about the status of such "consideration" of sustainable development. First, I am worried about the weasel wording of the phrase "to be given", which I suspect will mean that sustainable development is often considered but frequently ignored. The wording has not been amended to "have regard to", and the Bill will therefore not move us much further than the consideration that is currently given to criterion 8.

Let us consider a straightforward example. Hon. Members are more than aware of the further developments in the Tanzanian air traffic control debacle, and I shall not repeat them. However, hon. Members may be interested in the initial issues that surround the radar sale, not least the first International Civil Aviation Organisation's report to the World Bank. It was published in November last year, when the Government claimed that they took full account of sustainable development.

When the Select Committee on International Development invited the Secretary of State for Trade and Industry to give evidence on the Tanzanian case, she refused but reaffirmed in a letter to us on 17 December 2001,

"the Government's commitment to considering carefully the issue of sustainable development as defined in criterion 8."

If the Government were serious about carefully considering sustainable development, they would not have granted the Tanzanian licence after carefully considering the ICAO's previous submission to the World Bank, which stated that,

"the system, as contracted, is primarily a military system and can provide limited support to civil air purposes".

I understand that the Department for International Development considered the document to be sufficient ground for not granting the licence. The Department of Trade and Industry did not listen to those anxieties, and that demonstrates disingenuousness in the dealings in Whitehall.

In response to a written parliamentary question by me on 28 January 2002, the Under-Secretary of State for Trade and Industry stated:

"The Department of Trade and Industry's Export Control Organisation has received no representation from the International Civil Aviation Organisation on Tanzania's export licences."—[Official Report, 28 January 2002; Vol. 379, c. 66W.]

That statement, which implies that the Department had never seen the relevant ICAO document, contrasts sharply with the response of the Secretary of State for International Development to a question on 5 February 2002. It stated:

"When I received a copy of the letter of 8 November from the International Civil Aviation Organisation (ICAO) to the World Bank, I sent copies to the Department of Trade and Industry, the Ministry of Defence and the Foreign Office. I have since had discussions and correspondence with these Departments on the content of the ICAO letter."—[Official Report, 5 February 2002; Vol. 379, c. 918-19W.]

Not only is the Department of Trade and Industry's response to my parliamentary question somewhat disingenuous, it also reinforces the Department's ambivalent attitude to the "consideration" of sustainable development criteria. As other hon. Members have said, one sometimes has to be suspicious of Government collectively—not any specific Government, but the machinery of government.

That leads to my second worry about the Bill's weasel words on sustainable development status. The Bill contains the caveat phrase, "if any" about sustainable development. Doubtless it means that the Government can flagrantly disregard criterion 8 if they wish, while using wording to make such a dismissal of sustainable development almost impossible to challenge. Under such circumstances, how can the current status of sustainable development ensure coherent export policy? It simply will not.

There are no two better examples than the early stages of the Tanzanian export control licence application and the first case of defence exports to India. Let us consider the Foreign Secretary's recent evidence to the Quadripartite Committee. On 21 March, he said that,

"it is whether the proposed export would seriously undermine the economy or seriously hamper sustainable development of the recipient country. As with any other criteria, those have to be weighted in the round".

I believe that the Foreign Secretary is suggesting that we read "cost effective" for "sustainable development". Cost effective for whom? Can £1 billion-worth of defence spending be cost effective for a country that has increased its defence spending by 28 per cent. in the past two years? Defence spending of £1 billion by India is worth 10 years of UK bilateral development to India, which is our largest recipient of bilateral aid. I suspect that the money would be better invested in India's under-resourced health and education systems. How can the scale of such defence sales be within the capacity of a country that is the top recipient of the Government's bilateral aid?

Criterion 8 explicitly asserts that export licences should not be granted when that would be incompatible with economic capacity. That was clearly the case when Tanzania's economic stability already depended on the UK's recent writing off of £100 million in debt and richer countries' collectively writing off of $3 billion in debt.

As the Tanzanian case shows, it would be beneficial to developing countries if the phrase "if any" were removed. If hon. Members doubt that, I refer them to the Foreign Secretary's comments to the Quadripartite Committee, when he spoke of,

"careful consideration of whether the proposed export could seriously undermine Tanzania's economy or seriously hamper Tanzanian sustainable development."

Those sentiments echo those of the Secretary of State for Trade and Industry and should make us question whether "cost effective" means moneys for the UK or the recipient country.

Let me put the matter another way. I suspect that the conundrum is made no clearer than by the response of the Under-Secretary of State for Defence on 29 January to a written parliamentary question that I tabled. He said that when the Tanzanian case was initially assessed under the F680 procedure,

"sustainable development was not a specific factor taken into account . . . as . . . Tanzania did not include cost information, it would have been difficult to take any impact related specifically to the financing of the equipment into account."—[Official Report, 29 January 2002; Vol. 379, c. 218W.]

Where on earth is the "weighted in the round" consideration of criterion 8?

Jeremy Corbyn (Labour, Islington North)

Will the hon. Gentleman give way?

Tony Baldry (Conservative, Banbury)

No. The Government have provided scant time for the debate. The hon. Gentleman must make his own contribution. My hon. Friends on the Front Bench want to move on to other amendments, and the House has been given a pathetic amount of time for the debate.

Although the F680 assessment does not represent an approved licence, only a handful of the 10,000 or so applications that are assessed each year do not produce an export licence. Moreover, although the Ministry of Defence may assure us that the F680 procedure is being reviewed to allow for "consultation" with the Department for International Development on future assessments under it, we have to question whether "consultation" will mean as much as "consideration" in the Bill.

If the status of sustainable development is not affirmed early in the defence export process, it is imperative that "consideration" of sustainable development is undertaken as much as possible later in the licence process.

Much of the measure is welcome. The Government have somersaulted so often that it is difficult to know where they stand. I do not gainsay the comments of my hon. Friend the Member for Salisbury (Mr. Key). It is good news that sustainable development is included in the Bill. However, the jury is still out on whether the Government have any intention of ensuring that the true spirit of sustainable development is invoked in the measure's implementation. The test will come and we shall ascertain in due course whether the Department for International Development and other Departments are given a fair and reasonable say in defence export licensing. If they are not, Ministers can be confident that hon. Members from all parties will raise the issue again.

Ann McKechin (Labour, Glasgow Maryhill)

First, I want to assure the Minister of my support for the principal purposes of the Bill, which is welcomed on both sides of the House. The need for a modern, comprehensive approach to the control of exports—particularly arms—is overwhelming and long overdue. Recent events in Palestine and Kashmir have again shown the need for proper restraints to be in place.

We have also accepted that, in deciding our criteria, it is not sufficient simply to state that arms exports should not have an adverse effect on a region's peace and stability. In too many cases, countries have spent millions of pounds on expanding their armed forces and providing them with sophisticated weaponry, while making little investment in basic health and education facilities for their own citizens. Armed conflict may come at a later date, by which time the size and strength of military forces can lead to rapid and horrendous consequences.

That is why I also welcome the fact that the Government have now accepted that the principle of sustainable development should be an integral part of the decision-making process, particularly for exports to developing nations. In order to reassure our constituents, church groups and many non-governmental organisations about the Bill's ability to prevent abuses, I strongly urge the Government to consider accepting a definition of the concept that is both meaningful and capable of assessment.

Armed conflict remains the greatest hindrance to eradicating the scar of poverty from our world and preventing the unnecessary deaths of millions. In many cases, the global market in arms has led to increasing instability in conflict zones and, directly and indirectly, to the loss of life. Sadly, the United Kingdom has not been exempt from participating in this grim and tawdry business.

I note that, when the Bill was discussed in the other place, the Government agreed to review their criteria for sustainable development. It is vital that the definition of that concept is fully compatible with that used by the Department for International Development and by the Department of Trade and Industry's own Export Credits Guarantee Department—a case that has been eloquently stated today by my hon. Friends the Members for Kingswood (Mr. Berry), for Clydebank and Milngavie (Tony Worthington), and for City of York (Hugh Bayley). As my hon. Friend the Member for Clydebank and Milngavie correctly said, it would be absurd for an export licence for arms sales to be granted after an application for export credit had been rejected on development grounds, despite both processes claiming to have considered the impact on a country's sustainable development. The Export Credits Guarantee Department's own statement of business principles clearly states that exports must not harm sustainable development, and that includes having regard to debt sustainability. Any application to the Department for exports to the world's poorest countries must pass a "productive expenditure" test.

I had the privilege of serving on the Committee that scrutinised the International Development Act 2002. That measure provides the first legal definition of sustainable development, and I am surprised that the Minister did not mention it today. It states that such development must be

"prudent having regard to the likelihood of its generating lasting benefits for the population of the country".

Does the Minister not agree that it would be strange to have two Departments—or even two sections of the same Department—working with different definitions of the same concept at the same time? I trust that he will be able to give the House a commitment that his intention in the review is to achieve joined-up government and a definition that is as clear, comprehensive and unambiguous as that applied by other sections of the Government.

There is a great deal of support for the Bill, and it would be very sad if the Government were unable to offer a clear and comprehensive approach to sustainable development at the same time. That would not require any changes to primary or secondary legislation. A simple commitment from the Minister today would reassure many hon. Members that the Government are truly committed to sustainable development, and to one definition of that concept.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

I shall be as quick as I can, bearing in mind that other hon. Members wish to speak. Following, as I do, the hon. Members for Kingswood (Mr. Berry), for Twickenham (Dr. Cable), for Clydebank and Milngavie (Tony Worthington) and for Banbury (Tony Baldry), there is not a lot that remains to be said. I shall, however, make one or two points.

The sustainability issue appears to have gone in and out of the Bill like a squirrel going in and out of a hole in a tree. It seems strange that we are having this debate today, bearing in mind that the Bill has much to commend it. I understood the point made by the hon. Member for Kingswood when he rightly said that there is much in the Bill to support, and that he had difficulty understanding why we were having the debate. I share that concern; I cannot understand it either.

If we proceed this evening to overturn the Lords amendments, the Bill's provisions on sustainable development will surely be extremely weak. We would merely be placing a duty to give consideration— "if any"—to sustainable development. That would be an even weaker provision than that in the current system. The Government's original argument was that an explicit reference to sustainable development in the Bill was not needed because the Bill would give the Secretary of State the power to issue guidance.

In this context, the Bill referred specifically to the consolidated criteria that are used by the responsible Government Departments to determine whether individual export licences should be granted. I am thinking specifically of criterion 8, which covers sustainable development and was the subject of an exchange at the beginning of the debate. It is patently obvious to all, however, that the current system is insufficient, because of the decision to grant an export licence in the Tanzanian case. I shall not dwell on that example, because there are others here who are far better qualified than I am to speak on that issue. I shall, however, highlight one or two brief points.

As we know, the World Bank commissioned independent civil aviation experts to look into the Tanzanian deal, and its report has just been published. It has condemned the sale, describing the system in question as a complete waste of money. The experts concluded that Tanzania could have bought an off-the-peg system for about a quarter of the price agreed with BAE Systems, that the system actually purchased had "dated technology", and that Tanzania does not have an air force of its own anyway. We also heard about the debacle between the Department for International Development and the Department of Trade and Industry, a misunderstanding that leads us to think that government is not always joined up. If the Government are serious about sustainable development, the findings of the World Bank must surely be an embarrassment to them.

In The Guardian on 15 June, a DTI spokesperson said that the World Bank report would make no difference to the Department's attitude towards the deal. He also stated:

"We will not revoke the export licence because this report is not relevant to it."

I regret having to repeat those words, and when I take into account what the Minister says about the criteria now being urgently reviewed, I have to ask when that review will commence. If the gentleman at the DTI takes part in it, I do not hold out much hope for the future.

The ICAO report has been mentioned, and there seem to be 100,000 reasons why the Tanzanian debacle sets a bad example, as the hon. Member for Clydebank and Milngavie said earlier. I hope that the Government will reconsider their stance on this matter. I am another boring lawyer, but I do not intend to dissect the amendments. Suffice it to say that it is patently obvious to anyone, lawyer or layman, that the Government's proposals will water down the concept of sustainability. I regret that, but, whichever side of the argument one comes from, it is the obvious conclusion to draw. I repeat that there is much in the Bill to commend it, and it is regrettable that we are having this debate today.

Hugh Bayley (Labour, City of York)

We have had a fairly full debate, and I will try not to detain the House. I will simply say that I welcome the Bill. How different this is from what happened when the Conservatives were in power. I also welcome the Government's decision to make specific reference in the Bill to sustainable development. From time to time, during the short time that I spent on the Front Bench, I had to dream up reasons why the Government might, on reflection, change their position. One good reason for the Government deciding, when the Bill was in another place, to agree that sustainable development should appear in the Bill, was that when they first published the Bill and brought it to this House, the International Development Act 2002 was not on the statute book. For the first time, we now have a statutory definition of sustainable development. It would be rather curious if, a few months after agreeing on such a definition, we refused to apply it in relation to a further piece of legislation.

I strongly welcome Lord Sainsbury's statement in the other place that criterion 8, the "sustainable development" criterion, would be reviewed. I do not want to repeat the arguments that other Members on both sides of the House have advanced so cogently about the need to use the sustainable development tests relating to applications for export credit guarantees—for instance, the "productive expenditure" test, to give just one example in connection with arms sales.

I should mention, however, that another of the export credit guarantee tests concerns whether an export would be compatible with debt sustainability. That test should certainly apply to arms sales; omitting it would lead to the unjoined-up-government nonsense whereby one Department—the Department for International Development—can commit millions of pounds of Government money to writing off a developing country's debt, only for another Department to make a decision that creates a similar amount of debt.

Not just the working but the wording of criterion 8 needs to be reviewed. In particular, the Government should devise and publish a series of specific sustainability tests and apply them rigorously when considering whether the "sustainable development" criterion is being applied. I ask the Minister to comment on that when he replies. Indeed, I should like him to reflect on the points raised by my hon. Friends the Members for Clydebank and Milngavie (Tony Worthington), for Glasgow, Maryhill (Ann McKechin) and for Kingswood (Mr. Berry), as well as those I have raised. If he wants the House to go along with the Government's amendment, I hope he will be able to reassure us by saying that they intend to publish that series of tests allowing them to determine the question of sustainability.

Norman Lamb (Liberal Democrat, North Norfolk)

Several Members have described the Government's approach as incomprehensible, and have said that they are confused by the debate. I suspect that we should not be confused in any way. We all know, surely, that a battle is in progress at the heart of Government between those who want to pursue the concept of sustainable development and make it a binding test in all contexts of Government policy, and those in Government who are more interested in sustaining the British arms industry. That is what has happened with the Tanzanian scandal, and it is what is happening in the Bill. At present those in the Cabinet who want to sustain the British arms industry, even at the expense of sustainable development, are winning the argument. 6.15 pm

It is important for those of us who believe that sustainable development must be at the core of all Government thinking to keep challenging the Government. Their approach, and their amendment, will render any effective test of sustainable development meaningless. What they are doing represents spin without substance. It will look good on paper, but the Government will be able to evade the test whenever they need to. Moreover, it means that we will sustain this inconsistent approach across Government.

As my hon. Friend the Member for Richmond Park (Dr. Tonge) pointed out, the International Development Act 2002 now has at its heart a requirement that the spending of development assistance must meet the test of sustainable development and the alleviation of poverty. Many Labour Members have mentioned the approach of the ECGD. The work of that department must also meet the test of sustainable development—but when the Bill has been passed, if the Government have their way, they will ultimately be able to ignore sustainable development when granting export licences.

Export licence applications are currently considered in terms of the consolidated criteria. Many references have been made to criterion 8, and to the fact that it is under review and will be reformed. We know, however, that when the Government are in a corner they will ignore that criterion. We know it from the example of the Tanzanian air traffic control system. We know that what really drove the decision to grant a licence was the issue of jobs and the interests of the British arms manufacturer BAE Systems.

I want the Minister to answer a specific question. When the Department of Trade and Industry granted the export licence in December, did it know of the role of Barclays bank? Did it know that Barclays had apparently subsidised the deal? As my hon. Friend the Member for Twickenham (Dr. Cable) observed, here we have a commercial bank suddenly, in a fit of generosity, subsidising a totally inappropriate arms deal with a heavily indebted country. It is unbelievable. The Secretary of State for International Development has already alluded to corruption. Did the Secretary of State for Trade and Industry know the details when she reached her decision back in December?

As other Members have said, the really troubling aspect of the Government's approach today is that a decision such as that reached in the case of the Tanzanian scandal will be just as possible after the Bill has been passed. Consideration is a very weak test. It will be perfectly possible for the Government to demonstrate that they have considered sustainable development before rejecting it. No legal challenge will be possible, given such a pathetically weak test. The Government will be able to go on sustaining the arms industry, as they seem willing to do at present.

I want to say something about the interplay between the granting of an export licence and the preliminary clearance given by the Ministry of Defence. Again, sustainable development effectively goes out of the window. The MOD, bizarrely, has an opportunity to give preliminary clearance to an arms export that will later have to be considered by an entirely separate Department, the Department of Trade and Industry. Back in August 1997—just after the then Foreign Secretary had referred to a foreign policy with an ethical dimension—it gave preliminary clearance to an arms sale to Tanzania.

Before the export licence was granted last December, BAE Systems entered into a binding contract with Tanzania, with the support of Barclays bank. The equipment was largely built, and $15 million had already been paid. All that happened before the application for an export licence was made. No one can tell me that when the application was considered in December, sustainable development played any part in the decision that was reached—and that will still be so in similar cases after the Bill has been passed.

In promoting the Government amendment, the Minister seemed to make great play of the alleged loophole—the fact that if the Lords amendment remained in place, the provision would be inconsistent with the European consolidated criteria—but in answer to an intervention he seemed, as I understood him, to make it clear that we would not be in breach of any legal obligation to Europe. If the Lords amendment were agreed, we would have a system that better protected the interests of sustainable development, and that is what the Government are seeking to throw out. They should be ashamed.

Roger Casale (Labour, Wimbledon)

This seems the right moment in our proceedings to put on the record my support for the Government's decision to put sustainable development back in the Bill. That was the right decision. It cannot have been an easy decision, not least because they had previously removed it. It opens the Government to potential criticism and attack on their overall approach, so it was a courageous decision, too.

I am delighted that sustainable development is back in the Bill. The reason why the Government appeared to be reluctant to put it back has come out in the debate; I use the word "appeared" because I do not believe that they were truly reluctant. There was no lack of commitment to sustainable development. Indeed, how could anyone, let alone a Labour Government committed to tackling poverty at home and abroad, be against that admirable goal?

It is all too clear that there is a conflict—many hon. Members have referred to it—in the day-to-day business of Government, and in the pressures from different Departments, such as the Department of Trade and Industry, the Ministry of Defence, the Treasury and the Department for International Development. Those elements clearly came to a head in the Tanzanian air traffic control issue. We saw a lot of rather sanctimonious nonsense in the press about that at times.

Unrealistic expectations were voiced about how the Government should have acted. The Government were in a difficult position, because they had to try to square the circle and bring together the legitimate needs of different sectors represented by different Government Departments. What we need is not an approach to international development or trade issues that privileges one particular Department—whether that be the Department for International Development, the Department of Trade and Industry or the Ministry of Defence—but a coherent overall approach, a coherent strategy on making decisions about matters such as the Tanzanian air traffic control issue, which takes all the relevant considerations into account.

At the heart of that strategy must be the concept of sustainable development. Not only do we need a concept of sustainable development in the Bill, but it should be defined in the same way for each Department, so that it can act as a golden thread that joins the work of different Departments.

At the same time, we must recognise that sustainable development definitions are subject to change. Twenty years ago, we had the Brundtland definition of sustainable development, which emphasised reconciling social and economic development with the environment. Today there is a much stronger emphasis on tackling poverty and building democracy in developing countries as a way of ensuring that development in those countries is sustained over time. We must recognise that we cannot simply open the Oxford English dictionary and find a definition of "sustainable development". It is a contested concept. The notion of sustainable development that we are anchoring in the Bill today will be subject to change over time.

For that reason it is important to understand that in the application of that concept to practical everyday politics there needs to be a certain degree of flexibility and adaptability. None the less, I am delighted that the concept is back in the Bill, because the whole aspiration and thrust of the Bill is to change dramatically the approach to the control of export licences, which was long overdue, and to put it on a completely new footing with new principles at its core. I hope that the concept of sustainable development is robust enough to link the work of different Departments. I wish the Government luck, every success, and, I hope, support from reasonable-minded people who will not use that concept as a rod to beat the Government over the head with in years to come.

Jeremy Corbyn (Labour, Islington North)

Briefly, because I know that other hon. Members want to raise other issues on the Bill, I shall make three points. First, can the Minister say what is happening to the review of criterion 8, when he expects that to be published, and how it will be published for us?

Secondly, it must be plain that sustainable development has to be among the criteria for arms exports. The Tanzanian fiasco points that up, as do many others; one only has to look at the arms sales that have traditionally been made around the world to the most odious regimes presiding over the greatest poverty and abuses of human rights. The two often go together.

I cannot understand why we have got ourselves into the incredibly arcane debate about whether this or that version of sustainable development is in Bill. I would like to hear from the Minister a clear answer to the effect that sustainable development will be central to the considerations, and that the Department for International Development will have an opportunity to take part in that review. It would not have to review every document, as the hon. Member for Salisbury (Mr. Key) seemed to claim, but at least it would have a say in the general criteria, and would therefore influence the decisions that were made.

Thirdly, I regret that the amendment in the name of my hon. Friend the Member for Hayes and Harlington (John McDonnell) and others was not selected, because this whole debate clearly underlines the case for proper effective parliamentary scrutiny of arms exports. Many of us have spent many years being very concerned about the fact that the arms export industry in this country is heavily subsidised, about the damage that it does to the economies that purchase arms from us, and about the fact that regimes that have no regard whatever for human rights buy arms claiming that they will be used to defend their country against external aggression, and then use them simply for internal oppression.

Those problems are at the heart of the concerns that many people have. I hope that when the Minister replies, he can convince us that the many people who are campaigning on the issue are right, that the Government have heard them, and that they will be serious about controlling arms exports. I no longer hear talk of proposals for an arms conversion industry. Perhaps this is the time for the Minister to bring those proposals forward again.

Nigel Griffiths (Labour, Edinburgh South)

With the leave of the House, I shall respond to some of the points and, I hope, reassure the House, including my hon. Friends. May I start with my hon. Friend the Member for Islington, North (Jeremy Corbyn)? On the first question that he put to me, the Government recognise the need to consider how criterion 8 can be most effectively applied in assessing relevant export licence applications, and we have agreed that there is a need for clearer procedures in Whitehall for reaching decisions when sustainable development is an issue. The Cabinet Office has been tasked with facilitating an interdepartmental discussion of the issue involving all the Departments with an interest. That discussion continues, so the Government are not currently considering a change in the policy.

The Government have already published details of how they consider, and will consider, sustainable development both now and under the Bill. The consolidated criteria published in October 2000 represent the Government's policy now, and will continue to represent it under the Bill. That is made clear by subsection (8) of the new clause to be inserted by amendment No. 17. We have a definition appropriate to that—one agreed with all our EU partners. Definitions and criteria relating to other issues and other circumstances are simply not relevant here.

I remind the House, especially the hon. Member for North Norfolk (Norman Lamb), that the Bill says that the Government must have regard to the guidance. It will not be possible simply to ignore sustainable development, as I think he mistakenly stated. The use of the words "if any" does not mean that a future Government could simply decide not to address the issue of sustainable development, or indeed any of the issues listed in the table referred to in the schedule.

The hon. Member for Twickenham (Dr. Cable) implied that it would be fairly straightforward for advisers or Ministers to pass swiftly over obviously irrelevant considerations, but that fundamentally misunderstands the nature of primary legislation. A duty for the Government is not there to be applied or ignored according to the view of the Government of the day as to what is or is not relevant. That is the attitude that the Bill is designed to prevent, and we have taken care to draft our proposals in such a way that the Bill allows common-sense decisions to be taken, but only where they can be justified. The Liberal Democrat amendments would make it impossible for common sense to apply, and would encourage the absurdity of the box-ticking approach that we are seeking to avoid.

The hon. Member for Twickenham mentioned the Scott report and claimed that it made a recommendation on prior scrutiny. However, the Scott report never mentioned prior scrutiny. It spoke in favour of scrutiny orders, which are provided for in the Bill.

I repeat that if sustainable development were in the schedule, that would empower the Government to control the export or trade of pretty well any goods of any kind, since almost any goods have the capacity to have an effect on the sustainable development of a recipient country. This would be a massive extension of the Government's ability to impose controls.

My hon. Friend the Member for Clydebank and Milngavie (Tony Worthington) mistakenly believes that only Foreign and Commonwealth Office and Ministry of Defence officials consider F680 inquiries. I can assure him that Department for International Development officials are involved in every case in which it is necessary to consider criterion 8 of the consolidated national and EU code.

Tony Worthington (Labour, Clydebank and Milngavie)

Will the Minister give way?

Nigel Griffiths (Labour, Edinburgh South)

I will not prolong our proceedings. I gave way generously earlier, and my reward was to be accused of delaying things and spending too much time at the Dispatch Box. I am sure that my hon. Friend will find a way of coming back to the issue.

As there has been an allegation of wrongdoing and criminal activity on the part of BAE Systems, I want to put clearly on the record the fact that the Government have no evidence that the deal was in any way corrupt. We are committed to working with our international partners and the business community to ensure that there is effective action both here and abroad to tackle the problem of corruption, as the OECD convention on combating bribery of foreign public officials and the Anti-terrorism, Crime and Security Act 2001 make clear.

Norman Lamb (Liberal Democrat, North Norfolk)

Will the Minister give way?

Nigel Griffiths (Labour, Edinburgh South)

I will not give way to the hon. Gentleman, whose hon. Friend the Member for Twickenham made serious allegations about Barclays and BAE Systems. I do not know if he intends to repeat them outside this House, but I would caution against it.

I hope that I have given a justification for rejecting amendment No. 1 and supporting the motion standing in the name of my right hon. Friend the Secretary of State.

New Clause

After Clause 3

Nigel Griffiths (Labour, Edinburgh South)

I beg to move, That the House disagrees with the Lords in the said amendment.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss Lords amendments Nos. 3, 4 and 6, and the Government motions to disagree thereto, and Lords amendment No. 16.

Nigel Griffiths (Labour, Edinburgh South)

Hon. Members may be aware that extensive discussion took place in the House of Lords on the Bill's possible impact on the activities of scientists and academics. To address those concerns and make clear their position on these important issues, the Government tabled their own amendment—Lords amendment No. 16—which protects academic freedom. Opposition amendments Nos. 3, 4, 6 and 10 were passed with the same aim, but they would introduce several highly damaging loopholes. For instance, if they were accepted we could not prevent the transfer abroad of research into the development of torture equipment technology.

I shall explain how the Bill and amendment No. 16 provide protections to ensure that the Bill cannot be misused to damage academic freedoms. I shall also explain the damaging consequences of the Opposition amendments, in the hope that hon. Members will agree to their being overturned.

The academic community has acknowledged its concern not about the controls that the Government plan to introduce through the Bill, but about whether a future Government could misuse the powers in the Bill. Baroness Warwick, chief executive of Universities UK, stated during a debate in the other place that, after discussions with the Government, UUK was convinced that they in no way wanted to impinge on academic freedom by way of the Bill. Universities UK was nevertheless keen for the protections for academic freedom in secondary legislation under the Bill to be backed up by a statement in the House that the Government intended to protect academic freedom in that way. Lord Sainsbury made such a statement in the other place, and I can happily give the same assurance here today.

There are already strict limits on how the Bill's powers could be used. They can be used only to control exports or transfers required by our international obligations on military equipment and technology and on exports or transfers that could have serious consequences, such as contributing to weapons of mass destruction programmes, or human rights abuses. In spite of that, Universities UK and others, including parliamentary colleagues, requested that a clear commitment to academic freedom be set out in the Bill. In response, the Government introduced Lords amendment No. 16. That makes clear that the Secretary of State, when making secondary legislation under the Bill, must avoid unreasonable restrictions on putting information in the public domain or communicating material already in the public domain.

Although the amendment does not use the words "academic freedom", it goes to the heart of what academic freedom is about. It protects freedoms for all, not just for members of the academic community, including freedoms to publish, or otherwise make publicly available, research and to communicate it to students and others. That reflects the fact that scientific and other research is carried out far more widely than just in the academic world. Therefore the rules applying to such research should apply equally to all undertaking it—a matter of some concern, I understand, to the hon. Member for Salisbury (Mr. Key).

Under the amendment, any order under the Bill that attempted to place an unreasonable restriction on publication or communication could be opposed in the courts. We have tested the effect of the amendment on a list of scenarios sent to us by Universities UK which illustrated the kind of situation that universities were concerned about. The answers to those scenarios illustrate—I hope—that the Bill will not, and could not, be used to damage academic freedoms. The details are available in the Library. The Government are nevertheless willing to continue working with Universities UK and others to consider any remaining concerns or proposals they may have in relation to the Bill.

The Government amendment, Lords amendment No. 16, also ensures that any controls introduced under the Bill can be kept in line with our obligations under international regimes, such as the missile technology control regime and the Wassenaar arrangement. That is because it will enable us to keep the exemptions for information in the public domain contained in secondary legislation in line with the international concepts and definitions used.

The Opposition's amendment, Lords amendment No. 10, sought to protect academic freedoms, but unlike the Government amendment, it would also create very damaging loopholes in the Bill. I shall explain what those are. First, subsections 1(a) and (b) of the amendment would establish in secondary legislation an immutable exemption for information in, or being placed in, the public domain, unless the transfer was related to weapons of mass destruction or required by international treaty obligations. Because that exemption could not be adapted except by primary legislation, Lords amendment No. 10 would prevent the UK from complying with its commitments to voluntary export control regimes such as the Wassenaar arrangement and the missile technology control regime, if those agreed any change to the definition used, as they might do. As the House will know, those international regimes form a crucial part of global efforts to combat proliferation of conventional and non-conventional weapons, and it is therefore essential that the United Kingdom be able to meet its commitments to those regimes.

Subsection 1(c) of Lords amendment No. 10 would exempt from control any and all information transferred in the course of academic teaching or research unless the transfer was related to weapons of mass destruction or involved military technology. That would exempt anyone engaged in academic research and teaching from controls on the transfer of technology capable of causing the consequences listed in the schedule to the Bill, such as human rights abuses, internal repression or facilitation of terrorism or serious crime. It would therefore permit an academic to contravene the Government's 1997 ban on export of equipment and related technology about which we have had evidence that it has been used in torture—by sending overseas research results on how to make, for example, electric shock batons. It is unacceptable in the Government's view that any one group should be automatically exempted from our export control regime in that way. The all-party Quadripartite Select Committee agreed with that view in its report on the draft Bill, stating:

"We see no case for complete exemption of academic activity from export controls".

The effect of subsection 4 of amendment No. 10 would be to require the Secretary of State to misuse licensing powers granted to her under EU law. Subsection (4) of the amendment would require the Government to grant licences under directly applicable EU provisions in such a way as to exempt academic activity in certain areas from control. However, the European Union dual-use regulation currently in force states that licence applications under it must be considered against the European Union code of conduct on arms exports. The amendment would therefore make the Secretary of State subject to conflicting duties under national and EU law. Moreover, the regulation already includes specific exemptions from control for information in the public domain and for basic scientific research, and it is not open to member states to attempt to alter those.

Lords amendment No. 4, also tabled by the Opposition, would remove clause 2(2)(c) and 2(2)(d) from the Bill. The Opposition suggested in the other place that those clauses could be used to require overseas students to obtain licences to study in the UK. Let me assure the House that that is simply not the case. The Bill could not be used to license overseas students' presence in the UK. However, the powers that amendment No. 4 would remove are crucial if we are to have a comprehensive export control regime. Those powers would give the Government the power to impose controls on transfers of technology within or into the UK where the technology transferred was intended for use outside the UK.

Without those powers, we would have a huge loophole in the Bill. Let me explain why. As well as being exported physically or electronically, technology can in effect be exported through communications in person, either in the UK or overseas—for example, an expert going overseas and providing training there could be effectively exporting technology. The European Union joint action on provision of technical assistance to weapons of mass destruction programmes requires us to control such transfers of technology by UK persons overseas that are destined for use in WMD programmes. But exactly the same transfer of WMD-related technology to exactly the same person with links to a WMD programme could be made entirely within the UK, with the intention that the recipient would then use that technology overseas.

It would be absurd if a licence was needed for the overseas transfer, but not if the same transfer took place in the UK. Equally it would make a nonsense of the controls if they could be evaded by a UK person overseas transferring technology into the UK in the knowledge that the receiver intended to take that information and use it overseas. That is why we have proposed to introduce controls on such transfers within and into the UK. However, we recognise that regulating these types of transfers is difficult, so we have made it clear that these controls will apply only to the areas of greatest concern—namely, weapons of mass destruction and related missile programmes.

We need clause 2(2)(c) and 2(2)(d) of the Bill if we are to have effective controls against the proliferation of weapons of mass destruction. Indeed, our proposals in this area were strongly supported by the all-party Quadripartite Committee, which pointed out that

"non-proliferation is arguably the most important single issue in strategic export controls".

The Committee went on to describe the proposals in its report on the draft Bill as "profoundly significant".

The Government have made every effort to address the academic community's concerns about the Bill. We believe that Lords amendment No. 16 strikes the correct balance between the need to protect the freedom of academics and others engaged in teaching and research and the need for an effective export control regime. I urge the House to accept the amendment and to overturn Lords amendments Nos. 3, 4, 6 and 10.

Robert Key (Conservative, Salisbury)

This is an important group of amendments and we have only a little over half an hour in which to have a coherent debate. I shall do my best to be speedy. The Minister is profoundly mistaken to think that the academic community will be in any sense reassured by what he has said and what his colleagues said in the other place. There is a misunderstanding about why the academic community is concerned. The current regime of export controls was introduced in 1939, and for many years it applied only to physical goods. Although technology could be transferred electronically by telegraph from the 1840s, by telephone and fax from the 1870s, and by radio from the 1900s, no attempt was made to do so.

Some years ago the Department of Trade and Industry started applying export controls to manuals for weapons as well as to weapons. That caused a certain amount of grumbling, and served no obvious purpose other than to make work for the civil service. The DTI, however, has never lacked powers against genuine arms exporters. If a company successfully argued in court that controlling manuals was ultra vires, it would no doubt get hammered on its other licence applications. The problem is that these powers have often been used erratically. For example, the Canadian army was refused an export licence for flails for use in mine clearance in Bosnia. Apparently, the DTI saw the word "mine" and froze. That led to the Scott inquiry, after which something had to be done.

During the 1990s, the United States National Security Agency tried to tighten the regulation of civilian cryptography. In the last months of the first Bush Administration, it pitched the clipper chip—a new standard for encryption with the feature that the National Security Agency would hold a master key. Thus US business could get the benefits of strong encryption, but if it were abused by criminals, the National Security Agency would be able to defeat it. George Bush senior and his Cabinet were hostile; they thought that it was bureaucratic empire-building and would cause them all sorts of trouble. Once President Clinton was elected, however, the pitch was repeated and got a warmer reception. Vice-President Al Gore took on the role of directing cryptography policy in the Cabinet. His efforts to sell the clipper chip were hampered by the availability world wide of encryption software that can be downloaded from many academic and other websites. Why should people pay $100 for encryption that the United States Government can break when they can get free software that they cannot break?

Cryptography is now used in a large number of systems as the glue that holds things together. It is found in every personal computer, in web servers, browsers, banks' automatic teller machines, car door openers, electricity meters and even one-armed bandits. As the USA tried to retain export controls on the technology, it waded deeper into trouble.

United States law, unlike English law, allows export controls to be applied to intangibles such as software downloaded from websites. There were furious battles in the United States about whether encryption software was the constitutionally protected academic speech of the professor who wrote it, to which the answer was "Yes, sort of", and whether it could be exported printed in a paper book, to which the answer was "Yes." People printed software on T-shirts that said, "This T-shirt is a munition." Companies such as Microsoft then poured money into civil liberties groups, annoyed that European encryption software firms were establishing markets close to them. Eventually, in the run-up to the 2000 election, Vice-President Gore caved in and removed most of the controls on the export of encryption software.

Before new Labour came to power, it adopted a strong position against the regulation of cryptography. Once it was in power, the line changed. The Government started putting out proposals for cryptoregulation that eventually, after much opposition and watering down, led to the Regulation of Investigatory Powers Act 2000. At the same time, consultation was started, and accelerated after the Scott report, on modernising the export control regime. A Green Paper came out in 1996 and a White Paper in 1998; the latter recommended the introduction of controls on transfer of technology by intangible means.

The best reference on this is the Trade and Industry Committee report of 10 December 1998 on strategic export controls. It took a critical view of the White Paper's line on intangible controls—paragraphs 37 to 42 are the key. The Committee found that the Government had no clear idea of the extent of the problem that the provisions sought to address, that there were grave doubts about the practicality of the proposals and fears for their consequences, and that there would be significant economic consequences such as the increase in costs of post-sales software maintenance and the support of online instructions manuals.

The Committee noted severe worries about the effects on the operation and standing of United Kingdom higher education. It recommended that intangible export controls, if introduced, should be limited to weapons of mass destruction, and that the Government should not agree to an extension of the European Union's dual-use regime, whose aim was to bring exports of dual-use goods outside the EU under harmonised control.

The Government's reaction was to encourage the EU to put through a dual regulation in 2000 which, on the face of it, extended controls on the export of dual-use goods from the EU to intangible transfers. The legal view taken at the time by the universities was that this regulation had no force in criminal law because it would take primary legislation to introduce a new criminal offence, namely, conveying information to foreigners without the permission of Government. DTI officials claimed that the regulations did indeed have criminal force, but when pressed for an explanation of which Act would be used to prosecute, they were unable to help.

None the less, the DTI went ahead and started implementing dual-use controls on the community of arms manufacturing companies that it regulates. For such a company, a direct legal challenge could have unpleasant consequences. The view of the Defence Manufacturers Association at the time was—and, for all I know, still is—that the regulations also applied to tens of thousands of other companies which were, for example, incorporating cryptography in all sorts of products and exporting them while blissfully unaware of the alleged new legal situation. The DTI did not educate the companies which were now supposedly subject to licensing.

The Bill gives the Government almost arbitrary powers to regulate intangible exports. Officials say that it will be used sparingly. However, the EU dual-use regulation, which they will at last be able to enforce, will itself prevent, for example, technology transfers relating to cryptography outside the EU. Other technologies on the dual-use list include a very large part of what the Ministry of Defence considers to be high tech and thus a great deal of what interests universities.

Officials have been telling two different stories to academia. To Universities UK, they said that the Bill will be used to take powers to license the teaching of certain subjects to certain students. In public—and in Parliament—Ministers denied that that was the case. Lord Sainsbury tried to finesse the issue by saying loudly and often that the licences would be needed not by the students, as the Opposition had said, but by the professors teaching them. That is pure casuistry, as the students' name would also appear on the licence. Universities UK, whose chief executive is Baroness Warwick, did not push the issue.

Ministers say that the needs of academia will be met by exemptions covering pure science and information being put in the public domain. Yet the current arrangements for research grants for the Engineering and Physical Sciences Research Council require applicants to describe their proposal's "relevance to beneficiaries". Thus a pure mathematician wanting to do work on elliptical curves will describe it as being highly relevant to cryptography, which is the key enabling technology for electronic commerce, thereby putting his head in the noose.

One academic told me that in 1997 he worked with scientists in Norway and Israel to develop cryptographic software for a competition run by the United States Government to find a replacement for a 1970s-generation encryption standard. DTI officials told him that in future, once they had intangible export controls in place, such an exchange would require a licence. As a result, the research would not get done. The conditions likely to be attached to such licences will not be acceptable to many universities or individual academics. Yet now we see Ministers equivocating as to whether a licence would be needed. In a letter to Baroness Warwick, Lord Sainsbury says that

"it is likely that exchanges of the type described above would be authorised under the Open General Export Licence for Cryptographic Development."

Yet that relates to commercial development and thus appears to exclude free software; it needs a formal agreement, which must be registered; it excludes Chinese nationals; it has an onerous record-keeping burden; and it excludes cryptanalysis. No really useful scientific work on ciphers can be done without cryptanalysis. It is like trying to design aeroplanes without either a wind tunnel or computational fluid dynamics codes with which to test the designs.

Ministers claim that placing information in the public domain will make it exempt. That means that if I were to invent a global positioning system jammer that rendered US smart munitions ineffective, I could put the design on my web page so that the Taliban could download it and build it.

However, if I were to give a talk at a closed conference—a NATO conference, for example—I should need to obtain an export licence, not only for the talk but for any slides that I wanted to e-mail in advance to the conference organisers. Such a provision would also interfere with academic-industry collaboration, as we would appear to need licences to attend progress meetings. Perhaps all the problems will be sorted out in time—but certainly not tonight or by the Bill.

Control on the export of goods mainly affects trade. Important though the freedom of movement of goods may be, it is easy to understand the prior claims of public policy on national security. As restrictions on trade threaten jobs, the resulting tension between the requirements of national security and of the economy tend naturally to produce the necessary checks and balances on the export control power.

Control over the export of ideas is radically different, however. Freedom of expression is a fundamental human right and gives way much less readily to the claims of the state. Moreover, the natural checks and balances that affect decisions on trade are lacking, as blocking a research project will not normally produce job losses or other evident short-term economic effects. The extension of control from the export of goods to the export of intangibles is thus a radical step with serious implications; it is not merely the closing of a tiresome, recently discovered loophole in existing controls.

Export control over goods applies straightforwardly to goods being exported; ideas are far harder to control. The difficulty of the attempt to impose control on the export of ideas leads to fears of evasion and thus to subsections 2(c) and 2(d) of clause 2 giving power to impose control over the transfer of ideas—not their export but their exchange inside the UK. It is true that the power is qualified by the words

"(but only where there is reason to believe that the technology may be used outside the United Kingdom)".

That is no help at all, however, as Universities UK has plainly told the DTI.

First, if the power can be used whenever technology may be used abroad, it can be used in practically every case, because any communication or publication of information may lead to its being used abroad. Secondly, if the power is used to impose controls that apply where

"there is reason to believe that the technology may be used outside the United Kingdom",

leaving it to the publisher or communicator to judge at his or her peril whether the control applies, the risk will be too high for many people. It is certainly obvious that there is always reason to believe that technology taught to foreign students may be used outside the United Kingdom, and therefore a clear power is needed to impose controls and licensing requirements on such students.

Two exemptions are needed to secure academic freedom; one relating to the public domain, and the second relating to the, in essence, private processes of research before publication. The public domain exemption divides into two elements: first, material already in the public domain and, secondly, the publication of the results of research that puts that material into the public domain. There should be no power to impose control on either of those processes.

The Minister disclaims any intention of imposing such controls, and points to the exemptions in the existing controls. Exemptions in present controls exist by grace and favour of the Minister. It is essential that they should be entrenched in primary legislation. Academic research involves much collaboration and communication between researchers. It is not made public as the research proceeds, and much of it may never be published. We all know about the false starts and rough drafts on the back of an envelope that are, in essence, private; their communication would not be protected by a public domain exemption. If the preliminary results are shared with research students, that may take place in seminars that are not open to the public, and would thus be equally unprotected by a public domain exemption.

What is required is an exemption for communications made in the ordinary course of academic research and teaching. The Minister referred to an exemption in existing controls for "basic scientific research", but there are two flaws. The first is that such exemptions are far too important to be left to secondary legislation. The second is that "basic scientific research" is far too narrowly defined, by being limited to exclude work with practical application. The Minister's Department insists that research grant applicants explain their work's "relevance to beneficiaries", thus ensuring that applicants classify their work in such a way as to take it outside the "basic scientific research" exemption.

The Minister offered a justification for not including the existing exemptions in the Bill: the definitions of "public domain" and "basic scientific research", which are used in the exemptions, are derived from international agreements and might be changed when those agreements are revised; and it would be inconvenient if he had to promote primary legislation to reflect those changes in UK law. Such an explanation fuels the very fears that he is trying to allay. The very purpose of pressing to include those exemptions in the Bill is to make it as hard as possible for them to be removed or changed. The mere fact that the Minister or his officials might agree with one or more of their counterparts abroad that it would suit them to remove or narrow down the exemptions should certainly not be enough to enable them to effect that change in UK law. Academic freedom is far too important to be exposed to dilution through horse-trading between Governments. It is far from reassuring that a Minister with responsibility for science should apparently put his own legislative convenience above the importance of academic freedom.

Lords amendment No. 4 deals with internal transfers, or imports, of technology, not its export, which is what the Bill should be limited to. The provisions would expose to control academic teaching and collaborative research within the UK—especially the teaching of foreign students—and also the publication in the UK of research work undertaken in this country or abroad.

The only justification offered for the provisions is that they will prevent evasion by foreigners visiting the UK to obtain controlled technology; but that justification is wholly inadequate. If transfers are made in the UK for the purpose of sending information abroad, in breach of controls, the parties involved are guilty of conspiracy to commit breaches of the controls and can be prosecuted accordingly. The powers are far too wide for that purpose.

There have been controls on the export of goods for many years, without any equivalent extension for controls on their transfer within the UK "to prevent evasion": the supposed loophole does not exist. It is unnecessary to prohibit the transfer inside the UK, as export by a foreigner is controlled—that is sufficient. It is no answer to say that a foreigner can carry the technology abroad inside his head.

Controls on intangibles such as technology should apply to the equivalent of controlled documents: the UK argued successfully for that very principle to be reflected in the EU dual-use regulation, where article 2 defines "export" as including

"transmission of software or technology by electronic media, fax or telephone to a destination outside the Community; this applies to oral transmission of technology by telephone only where the technology is contained in a document the relevant part of which is read out over the telephone, or is described over the telephone in such a way as to achieve substantially the same result."

It is clear that what should be controlled are not general ideas or the results of education or training, as they are inevitably capable of being carried inside the recipient's head, but the electronic equivalent of technical documents. The foreigner visiting the UK to obtain controlled technology must thus breach export controls to send it abroad, and would be caught by controls imposed under (2)(a) or (2)(b), without (2)(c) or (2)(d) being necessary.

There are enormous problems with Lords amendment No. 10. It relates to protection of what is already in the public domain or is being published. Subsection (1)(c) deals with unpublished information being exchanged in the course of teaching or research. Subsection (2) makes it clear that there would be no conflict with the secrecy provisions under the Patents Act 1977, or with obligations under the Official Secrets Act 1911 or similar obligations.

Weapons of mass destruction and their associated missile programmes are a special case. Subsection (l)(c) ensures that controls can still be applied to unpublished information in the case of teaching and research; and subsection (3) tracks the special provisions applicable under article 4 of the dual-use regulation in respect of exports outside the European Community, thus avoiding any apparent conflict between the Bill and the regulation.

Lords amendment No. 16 relates to clause 7 which is inadequate to protect academic freedom for three reasons. First, it leaves the Minister to decide the matter; all he has to do is to take into consideration the need to do so. When a Minister claims that national security and so on override academic freedom, the courts almost never interfere.

Secondly, the clause gives no protection to anything to which the general public have no access. That may include the contents of lectures—so far as they are not previously published—and will certainly include all pre-publication interchanges between academic researchers. Thirdly, it fails to impose any duty on the Minister to grant licences under the dual-use regulations.

So the whole proposition is not founded on reality and it involves a misunderstanding of the academic world in this country. Defence manufacturers agree that there should be an equality of approach. They are not asking to be exempt from certain controls, and they are keen that academics should not be exempt from certain controls. The Bill has not got the right balance, but Lords Amendment No. 10 has, and I very much hope that the Minister will bear that in mind because we shall certainly disagree with him if he presses the matter to a vote.

Alan Howarth (Labour, Newport East)

In considering these amendments, we seek to reconcile two imperatives, which, if not in contradiction, are certainly in tension. Of course we need to prevent the transfer of knowledge that would assist terrorists in pursuing their aims, as well as those who seek to develop weapons of mass destruction. As a member of the Intelligence and Security Committee, I certainly do not understate the importance of that. Equally, however, we need to protect academic freedom.

Those who have expressed their anxieties in relation to academic freedom—notably, Universities UK and Save British Science—are not opposed to the Government's legitimate aim of preventing the transfer of technology for use in terrorism or mass destruction, but they are, as I am, critical of the very loose drafting of the clauses that relate to those matters.

I believe that the proponents of both sides of the argument are acting in good faith. Of course the Government want the universities to thrive if only because they know how important that is to our economy, and the Government encourage our universities to attract foreign students and academics to study and carry out research in this country.

It is genuinely difficult to reconcile those two imperatives and to find effective means to regulate the exchange of information and ideas, of intangibles. Universities have expressed the concern that activities that are routine in the global academic community—collaborative research, exchanging and debating ideas through e-mails and holding international conferences—could be put at risk under those provisions.

Hon. Members ought to express our thanks to Members of the other place—unreformed though it may be—for their vigilance in the interests of academic freedom. It might have been possible for Ministers who are members of the Government's legislative programme committee to have noted the possible threats to academic freedom when the Bill was originally proposed. It may have been possible for hon. Members to have observed the same things earlier in our proceedings. The Quadripartite Committee at any rate took evidence from Universities UK, drew the Government's attention to those issues and expressed its hope that a better balance might be struck.

It is not the first time that their lordships' House has been more vigilant than we have been in regard to academic freedom. Some 10 years ago, when the Further and Higher Education Bill was proceeding through Parliament in the winter of 1991 to 1992—I have to confess that I was the Minister responsible for the clauses on higher education—the Treasury, to my embarrassment and anger, insisted on intruding into the Bill a "he who pays the piper" clause, so enabling the Government to exercise some direction and restraint on academic activity. At the time, a number of peers—in particular, Lord Beloff and Lord Renfrew—made some very fine speeches in support of the principle of academic freedom. They were thorns in our side as the Government, but they were absolutely right to make those points.

Academic freedom matters profoundly, and Governments should be more careful of it than they are. As my hon. Friend the Minister has noted, the EU dual-use regulation removes certain discretion from the Government, but that does not mean that they should not be extremely careful in exercising their discretion. There is too much instrumentalism in Whitehall's approach to higher education and Governments are not customarily sufficiently tender towards academic freedom and academic sensibilities. No one, however, as far as I am aware, is impugning the good faith and good sense of the Ministers who are responsible for the Bill.

After all, my right hon. Friend the Secretary of State for Trade and Industry was a director of the National Council for Civil Liberties in a previous incarnation. She certainly cannot be indifferent to considerations involving academic freedom. The Minister for Science and Innovation, Lord Sainsbury, is passionate about supporting science in our universities. My hon. Friend the Minister has two universities in his constituency, and no one is more diligent in keeping lines of communication open to his constituents, so he does not underestimate those considerations.

Having made those points, I must say that it is profoundly undesirable that we should have primary legislation on the statute book that a future Government could construe illiberally, so severely damaging academic freedom. Of course there are differences of interpretation about the significance of the drafting of the relevant clauses and amendments. I certainly do not agree with some of the more lurid accounts that have been expressed in previous parliamentary proceedings, but I attach considerable weight to the testimony of Lord May of Oxford, the Government's former chief scientific adviser and an immensely distinguished scientist, who said:

"We need to be especially careful about how we limit academic freedom. The exceptional circumstances need to be spelled out clearly and carefully, and not in sweeping general terms . . . I support the spirit of this group of amendments."—[Official Report, House of Lords, 18 April 2002; Vol. 633, c. 1119.]

I understand that the lawyers who have advised Universities UK have expressed the opinion—although in terms perhaps a little milder than those just used by the hon. Member for Salisbury (Mr. Key)—that clause 2, as drafted, may give the Government the right of prior review of scientific publications and that clauses 2 and 3 might give officials the power to require that foreign research students should be licensed and that the present voluntary vetting system should be made compulsory. They suggest that clauses 2, 3 and 4 would threaten routine academic activities in a variety of ways through the power to impose export and trade controls on intangibles—matters such as software, e-mails, presentation slides, manuals and training programmes. They also express a broad concern that the definitions in the Bill

"are so wide that essentially all science and technology falls within it."

So their lordships passed amendment No. 10, which is, of course, deficient. The Minister powerfully explained its inadequacies, but the underlying principles are right: the Government should unambiguously affirm in the Bill their commitment to academic freedom, any exceptions should be specific and the safeguards for academic freedom should be clearly stated in primary legislation. Correspondingly, the Government introduced Lords Amendment No. 16, and we should be appreciative of that. However—this is a legitimate concern—it is loosely drawn and there are respectable fears that it could be too weak in its application.

Lord Amendment No. 16 states that the Government

"shall have regard to the need to avoid any unreasonable restriction".

I had hoped that the Government would do rather better and draft a clause that would be more stringent and better focused in its effect. The Secretary of State will be left with a great deal of discretion. We are told that the European convention on human rights, which is incorporated in our domestic law, would provide further safeguards, but as Lord May observed, that is a cumbersome and protracted remedy. However, no better clause has been tabled. I am a little surprised, given the extent of academic concern about this issue, that academic lawyers have not been able to propose a preferable version, but we will have to live with Lords Amendment No. 16.

In conclusion, I ask my right hon. and hon. Friends to add whatever safeguards they can to the existing provisions on affirmative procedure, and to requiring modifications to the schedule to be exposed in draft. I was very happy to hear my hon. Friend the Under-Secretary reaffirm today the Government's commitment to maximise academic freedom. I hope, however, that the Government will introduce a formal statement that would be justiciable and further case studies to demonstrate exactly what their intention is. The orders will need to be tightly drawn with maximum specificity and minimum scope.

In preparation of the orders, I hope that my right hon. and hon. Friends will undertake to confer with the Secretary of State for Education and Skills and with UUK. I welcome the Government's express willingness this evening to continue to work with UUK.

The scope for parliamentary scrutiny of orders is always too flimsy, but Parliament must do its best to retrieve its failures in relation to the measure and to seek whatever opportunities that it can to put further stakes in the ground in defence of academic freedom.

Nigel Griffiths (Labour, Edinburgh South)

With the leave of the House, I shall respond briefly in the 60 seconds that are left to me. I thank the hon. Member for Salisbury (Mr. Key) and my right hon. Friend the Member for Newport, East (Alan Howarth) for their thoughtful points.

The amendment has been considered in great detail in the House of Lords, and, in the spirit with which it has been raised by Baroness Warwick and others representing the universities, in terms of the need to ensure that we do not do anything to impede or attack academic freedoms.

I assure the House that the Bill will not, in practice, affect the regulation of cryptography in so far as that is controlled by the European dual-use regulations. Cryptography on an open website, however, would be in the public domain, and, therefore, would not be subject to control. We also want to control the fact that a professor who knowingly transmits information to any particular—