Examination of Witnesses (Questions 120
TUESDAY 10 NOVEMBER 1998
R HEATHCOTE AND
MR A MANTLE
120. Maybe I should put it this way. We had
Sir Brian Tovey in and there is a conspiracy theory which is that
you wish to police by means of encryption so that you then have
access to all kinds of information, that the controlling of electronic
communication because of the haemorrhaging of defence materials
out of the country by wire is the excuse being used for the introduction
of what could well be an intrusive anti-civil libertarian means
of spying on people's communications by wire. What would you say
(Mrs Roche) I would reject that completely. What we
are actually talking about here is basically a gap. We are not
talking about the technology itself, we are talking about the
method of transfer. May I repeat what I was saying to Mr Hoyle.
It would seem unreasonable to me that export controls control
the transfer of technology on a computer floppy disk but they
do not control it when you transfer the same technology by e-mail.
All we are doing with this is bringing the legislative framework
up to date. Having said that, it is difficult for us to give you
an exact category of how much information we are talking about
because it is simply impossible to judge it, if it is something
we do not control anyway, which is not covered by the licensing
regime. We do take very seriously both what the academic world
and what industry have said to us in response to the White Paper,
which is why it is a White Paper, so that we can gauge response
to it and we will look at this.
121. With respect, do you not think it would
be better expending energy on trying to get some kind of effective
policing of the brokering system and having proper licensing of
arms brokers? We keep hearing stories about, for example, a UK
firm which is exporting armaments to the Congo to both sides in
the war and using Bulgaria as the conduit. It may be that it is
difficult for you to police brokering, but I should have thought
it would have been easier to police brokering than to try to bring
some order and corridors into the ether in the way that you are
suggesting or the way that would be required if we have intangibles
(Mrs Roche) I think you need to do both. I do not
think the two are mutually exclusive. You are quite right to focus
on the question of trafficking and brokering. As you will know,
there is already control at the moment of trafficking and brokering
where there are embargoes subject to UN resolutions. What we have
proposed in the White Paper is to extend this to look at UK embargoes
and also embargoes as far as the EU is concerned. Indeed we take
the points you make very, very seriously indeed and we do want
to do something about it, which is why we have made the proposals
in the White Paper.
122. If, for example, evidence were to be provided
of arms sales to a country or the area of the Congo, is that covered
at the moment?
(Mrs Roche) The Democratic Republic of the Congo is
covered by an EU arms embargo. Yes, the new proposals contained
in the White Paper would deal with that.
123. It has been put to us that there should
be a system of licensing for arms brokers. I made the point that
in order to arrange the contracts for football players you need
to put down a deposit of £100,000. Do you not think we should
be establishing the bona fides of armaments brokers and traffickers
because it is a shady rather messy business? We have already seen
the great embarrassment which the administration in its broadest
sense was put to by the Sandline affair for example.
(Mrs Roche) As far as Sandline was concerned, that
certainly did not involve any DTI licensing.
124. That is why I used the word administration.
(Mrs Roche) The point I would make there, which actually
has relevance, is that it is always very difficult to police anything
when there is no licence application. May I just make a move onto
what you were saying there? A suggestion has been put forward
for a register of those involved in trafficking and brokering
and clearly we will look at that in the context of the White Paper.
Our initial feeling about this, although we want to look at it,
is that it is pretty difficult to do and pretty difficult to police.
Therefore we would want to concentrate our efforts on the route
of looking at countries which are subject to an embargo, whether
it be a UN one or an EU one or a UK arms embargo and concentrate
on these. I will not pretend that this is an easy area; it is
difficult, but certainly that is the way our thinking is going
at the moment.
125. I do not want to flog this too hard but
I do want to make this last point. If you have licensing or if
you have some form of effective regulation where the individuals
concerned are known to you and known to the public, then the good
positive people who operate above the law have nothing to hide.
It is the shady ones who are then by definition caught in the
net although they may not even register. We know that but it is
sometimes to the advantage of government to have these shady operators
so that dirty work can be done on behalf of governments. Could
this not be the reluctance to have a proper system of licensing
and regulation, that it is very convenient to have some of these
shady dealers round and about if particular purposes have to be
(Mrs Roche) No, I have to say to you that I would
reject that completely. Of course we will look at the suggestions;
we will look at any suggestion which has come forward in the White
Paper process. That is what the process is about. My concern and
our initial concern so far is purely on the practicalities of
126. What are the practicalities?
(Mrs Roche) If I may say so, your very question to
me suggested some of the difficulties. You get some people registering
who want to be very open about it, but you get lots of people
who would not register at all and how on earth do you police that?
This is why, if we are in a situation where we want to concentrate
resources, and we are talking about a situation again not just
ourselves but we are talking with other Member States in the EU
and also in the United Nations, is it not better for countries
to concentrate their resources to deal with trafficking and brokering
where there are regimes or countries which are subject to an embargo.
If you are dealing in an area which is pretty complex and very,
very difficult to police anyway, that strikes me as the area in
which we ought to focus our efforts and that is why we came to
the opinion that we did in the White Paper. As I said to you before
at the beginning, we are in a process of evaluating and considering
very, very carefully all the suggestions which have been put to
us by industry, the academic world and the NGOs in this area and
we will look at everything very carefully indeed.
Chairman: That is helpful because certainly
one of the arguments which you have already put forward in defence
of the delay which has occurred is the need to consult. One would
hope that in consulting and viewing things you might actually
pick up some of them and this might be one of them.
127. May I touch on the costs of the proposals
in the White Paper? You have estimated that the total effect of
the proposals is to need one more DTI staff and £0.5 million
for Customs. Mr Prest, who led the Defence Manufacturers' Association
actually said he sniggered when he read the DTI's estimate. How
realistic are those figures? It seems a bit polarised.
(Mrs Roche) What we would say on this is that those
are certainly our figures; those are certainly the figures we
estimate. It is difficult to say overall because we do not know
what we are going to end up with as a result of consultation.
As I have already said in answer to the Chairman and others, clearly
the responses which we have received and our consideration of
them will frame our approach to the legislation and clearly we
shall need to look again at the regulatory appraisal of that.
We shall certainly note what he says.
(Mr Mantle) There is not a lot I can add to that except
that of course that those estimates do relate to what we are proposing
to do. If one were going to do other things like regulating brokers
then those estimates would have to be very considerably revised
because we are not through the White Paper, in the sense of the
whole compendium of proposals, putting new massive regulatory
burdens on this particular area of industry.
128. Has the Treasury said you had better not
go above a certain level?
(Mrs Roche) I have not had any approaches.
129. Not in that respect. The annual report
is awaited with almost bated breath. Could you give us some idea
how transparent this process is going to be? I am sure you are
aware there is a rustling in the undergrowth of select committees
as to how we will handle your annual report. Certainly we should
like to think that when we get down to going over the detail there
may well be licences and other things which we would want to look
at. Are you relaxed about making this information available to
parliamentary committees or committee with the information being
(Mrs Roche) As far as the annual report is concerned,
the Foreign Office lead on the annual report. Without pre-empting
the content of the annual report, what we will see is more of
an understanding of the process and what has been done, particularly
because people will be able to see by category of equipment what
has been licensed. Your other question related to parliamentary
scrutiny of the licence procedure itself. On that clearly we will
look very, very carefully as to what the responses have said to
us as part of the White Paper procedure. If you look at licences,
we are talking about a situation where we get something like over
12,000 a year. It will be very difficult to come up with a process
by which those individual licences could be subject to parliamentary
130. I was not talking about individual ones,
I was talking about where there could well be areas of contention
which emerge in the report. There may well be ones which some
members of an all-party committee might well feel should have
been granted and would like to get the reasons why not. It is
not the 12,000, it is perhaps the 37 which might be a cause for
dispute and of those 37 it might only be eleven.
(Mrs Roche) It would be a brave Minister who would
pre-empt what a select committee may or may not want to do. The
thing I have to say without divulging the contents of the annual
report is that clearly the annual report will be published and
perhaps when you and your colleagues see it you will make your
Chairman: Thank you. This is perhaps one of
the rare occasions when a member of a select committee was asking
a hypothetical question about questions which might be asked in
the future. Perhaps we should save the benefit of that for ourselves
until then. Thank you very much. I am sorry for the delay in calling
you this morning, but thank you for the fulsome replies.