UK Commons Committees’ Inquiry Into
the Annual Reports On Strategic Export Controls
(Source : House of Commons Defence Committee ; issued Jan. 16, 2001)
 At their meeting on Wednesday 10 January, the four Committees making up the so-called “Quadripartite Committee” on Strategic Export Controls considered the Government’s December 2000 Response to their July 2000 Report, which rejected the Committees’ recommendation of a system of prior parliamentary scrutiny of arms export licence applications.

They also noted the debate on the Committee Report and Government Response held on 14 December 2000 in Westminster Hall.

The Committees decided to write to the Foreign Secretary, in advance of the public oral evidence session now confirmed for 4 pm on Tuesday 30 January.

It is intended that the session should cover this issue, as well as issues arising from the Government’s 1999 Annual Report on Strategic Export Controls and those which have arisen since. (ends)

Text of the letter to the Foreign Secretary:

Rt Hon Robin Cook Esq MP
Secretary of State for Foreign & Commonwealth Affairs
12 January 2001

The Committees met last week to discuss the Government’s Response of 9 December to their July Report and the debate held on 14 December in Westminster Hall, to which Peter Hain replied.

We cannot of course accept the proposition advanced in the very last sentence of the Response that there can be no role for Parliament in scrutinising the way in which Ministers propose to use delegated powers it has conferred on them. I have no doubt that Members will wish to raise this issue of principle in oral evidence with you on 30 January.

In the light of the almost universal support expressed in the debate for prior parliamentary scrutiny, and of the assurances given by Peter Hain that Ministers would be open to a more detailed set of proposals and would “examine very seriously any further proposals, representations or deliberations that emerge from the Committee”, we decided to see if there were any clarifications or modifications of the scheme for prior parliamentary scrutiny set out in our July Report which could meet the practical objections raised in the Government Response.

We propose to go through the objections as set out in the Response to our Recommendations 22 to 24, as set out on pages 10 and 11 of Cm 4872, paragraph by paragraph.

There can be no basis for the suggestion in the second paragraph that consulting a parliamentary committee prior to taking a Ministerial decision on a licence might cause legal problems. In paragraph 88 of our Report, we stated plainly that “responsibility for strategic export decisions will continue to lie wholly with the Government”. The statutory powers of Ministers are therefore unaffected by our proposals.

The fourth paragraph sets out the concern that the prior scrutiny system we proposed might lead to “considerable” delay, and thus undermine the competitiveness of UK industry in overseas markets. We have of course been very conscious of this issue, and in our Reports have been critical of the interminable delays which exporters too often experience at present.

We have however repeatedly stressed that it would only be in a small fraction of cases that Stage 2 notification would be required. For the vast majority of these, further factual information provided to the Committee while the applications were being scrutinised by the departments–for example, on end-user or quantity–would lead to the Committee “clearing” them as no longer requiring notification. That would leave a very small handful of licence applications of which the Committee would wish to be notified when it was intended to grant a licence.

Experience suggests to us, as it must to you, that such cases will also be among those which will have certainly have been examined for months rather than weeks, and that they will almost certainly be cases in which Ministers have been involved. In the case of the Zimbabwe aircraft spares, for example, the decisions took many months. The idea that in a few such cases a maximum extra period of 10 working days would make a difference is simply untenable. We are however happy to reiterate that, as is set out at para 88 of our Report, “national security and operational considerations may make it impossible for the Government to comply with the prior scrutiny procedure in every case”. What we are proposing closely parallels the terms of the so-called “scrutiny reserve” operated by the European Scrutiny Committee under the terms of a Resolution of the House.

The fifth paragraph deals with the question of the confidentiality of Stage 2 notifications. We stated that we hoped and expected that the Government would be able to be as open as the US Government in making notifications. While we support the principle of transparency as demonstrated by the US system, we accept that there are features of the US system which make comparison difficult, including the existence of a high value threshold in the US system. We recognised in paragraph 86 of our Report that there might be good reasons to make Stage 2 notifications in classified form. We would therefore be happy to undertake discussions with the departments concerned to reach agreement on how best to proceed.

We cannot however accept that the danger of damaging bilateral relations with a country can be sufficient reason not to engage in debate on the merits of exporting goods to that country, as suggested in the last sentence of the fifth paragraph. In the rare event of the Committee considering that a proposed licence was of such significance as to merit debate in Parliament, we do not think it can be seriously suggested that the sensitivities, real or imagined, of the intended recipient should weigh heavily in the balance against the need for democratic accountability for such important decisions.

The sixth paragraph seeks to protect “advice given to Ministers” and the details of interdepartmental discussion. You candidly admit that we did not ask for such material. It goes on to suggest that the Committee will need “access to sensitive and technical advice on the nature of the material covered” and detailed advice on the proposed destination or end user.

That is true to some extent. The operation of prior scrutiny would indeed depend on the development of a modus operandi on the supply of technical clarification of the material for which a licence is sought. Much of this is provided by the intending exporters, who have told us of their frustration at how little use seems to be made of it. The Committee would also of course seek on occasions to know the identity of the end-user; this hardly constitutes advice to Ministers. In both cases, there has been no evident problem with the provision of information on either the nature of the material or the end-user when we have sought it in the course of the past eighteen months.

We are grateful for the offer of confidential briefings, and will consider if there are areas where this might be of assistance, perhaps in the light of the oral evidence you are to give on 30 January.

Ted Rowlands MP

Background Material :
Excerpts From Committees’ Report Of July 2000 (HC 467)

(Source : House of Commons Defence Committee ; issued Jan. 16, 2001)

22. In our view, the authority to export arms is of a different degree of sensitivity to the other types of Ministerial casework. There can be few decisions of greater potential impact on the conduct of foreign relations, and on the lives of many people overseas, than decisions as to whether to permit weapons made in this country to he put into the hands of overseas governments and their forces. The nation as a whole feels an exceptional degree of engagement with such decisions. There is understandable anger when it is found that British made weapons have been used to oppress or terrorise people, or to endanger the lives of our service men and women or civilians (paragraph 80).

23. The case for some “real-time” prior scrutiny of licensing of arms exports is significantly reinforced by our examination of the Zimbabwe licences. If Government is to be judged on the exercise of its powers, this can best be done on a continuous basis rather than months or years after the event. We are convinced that accountability demands that Parliament is engaged in scrutiny of arms export licences before as well as after their grant. Prior scrutiny should he designed to ensure that Parliament has a voice in matters of such crucial importance before final decisions are taken. Issues of such importance warrant democratic involvement (paragraphs 27 and 81).

24. The four Select Committees that make up the Quadripartite Committee have concluded that strategic exports by their very nature justify the establishment of a system of prior parliamentary scrutiny, and that such a system should be put in place forthwith. We have made a detailed examination of the systems in place in the only two countries who, to our knowledge, currently operate them, Sweden and the USA. The prior scrutiny system we have proposed will, we believe, contain a much stronger element of prior scrutiny than the Swedish system and will be more comprehensive, more streamlined and more transparent than the US one.
Our proposed system poses no threat to either the commercial confidentiality or the competitiveness of British companies. It would introduce no delay of any significance in the granting of export licences. It would not impede in any way the immediate granting of export licences when these are needed in times of crisis or to meet imperative national security requirements.
Furthermore, it can he operated by the existing Select Committees making up the Quadripartite Committee, and can he brought into being without either Resolutions of the House or changes to the Standing Orders.
We recommend acceptance of our proposals by the four Secretaries of State in time for the new system of parliamentary prior scrutiny of strategic exports set out in this Report to commence as from the beginning of the next Session of Parliament (paragraph 90).

(end of excerpt)

Background Material:
Excerpts From Government Response Of December 2000 (CM 4872)

(Source : House of Commons Defence Committee ; issued Jan. 16, 2001)

1. The Government has given careful consideration to the Committees’ recommendations on prior Parliamentary scrutiny of all the 12,000 or so individual export licence applications for military and dual use goods received each year. The Government has concluded that they could not be made to work without causing significant damage to the competitiveness of UK exports and without having a materially adverse impact on the efficiency and effectiveness of the export licensing process. The Government stands by its conclusion in the 1998 White Paper on Strategic Export Controls that such scrutiny would not be right and would moreover cause delays and risk breaching the confidentiality of UK exporters and their legitimate overseas customers.

2. Involvement of the Committees in the taking of decisions under the existing legislative powers is in any event problematic, in that an extra element would be introduced into the process. This might generate doubt as to whether the decision had been taken properly in accordance with the powers conferred by Parliament.

3. The Government has taken steps to enhance the effectiveness of retrospective scrutiny of licensing decisions in line with our overall desire to improve transparency and accountability in this field.

4. The Government does not agree with the Committees’ view that their proposed system of prior scrutiny would not introduce significant delays in the granting of export licences. About 57 per cent. of SIEL applications were processed within the 20 day target period in 1999, and considerable effort is being devoted to improving performance. Where Stage 2 notification was required, the Committees’ system would add at least 10 days, ie half as long again when compared to the 20 day target.
The Government would clearly need to consider the Committees’ views carefully, and dialogue between the Committees and Government might in some cases be desirable. The additional delays might therefore be considerable.

5. The Government is confident that the Committees are able to protect information given to them in confidence. However the Committees have said that they would expect Stage 2 notifications to be made in unclassified form and that they would want to issue a Special Report, for possible debate, on some Stage 2 notifications. Exporters are advised not to enter into contracts before obtaining an export licence so any publicity before a licence is issued could alert potential competitors, either in the UK or overseas, and thereby risk the loss of the contract.
The Government shares the concern of exporters that publicly releasing information on applications could encourage competing suppliers to intervene. Another confidentiality concern is that premature publicity of an overseas Government’s requirements may harm their legitimate security interests. Finally, there is a real risk that a detailed debate about the merits of exporting particular goods to a particular destination might damage bilateral relations with the country in question.

6. The Government would reiterate the need to protect the confidentiality of material such as advice given to Ministers and the details of interdepartmental discussion, as stated in its response to the Committees’ previous report. While the Committees did not specifically ask for access to such material, the Committees are likely to find it difficult to take an informed view on the merits of particular applications without access to sensitive and technical advice on the nature of the material covered by an application, or the detailed advice available to ministers on, for example, the proposed destination or end user.

7. The Government is committed to transparency primarily through the publication of the Annual Reports on Strategic Export Controls. The Government will also continue to provide the Committees with additional information on request, and is pleased that the Committees have found this information useful.

8. The Government would also like to offer the Committees confidential briefings on general policy considerations, for example on small arms policy. This would give the Committees greater understanding of and input to the thinking on policy which informs the licensing process.

9. The Government would also like to point out that when new primary export control legislation is introduced, as proposed in the 1998 White Paper, this will provide Parliament with the opportunity to debate the whole field of export controls and licensing powers including delegation of powers and the form of Parliamentary scrutiny. The Government’s view remains that there is no role for advance scrutiny of individual casework decisions, which are quintessentially matters for ministerial decision in accordance with delegated powers conferred by Parliament.

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