To ask the Secretary of State for Defence what his policy is on the proposed Directive (a) COM(2007) 0766 on public procurement in the fields of defence and security and (b) COM(2007) 0765 on terms and conditions of defence-related product transfers within the EC; and if he will make a statement. (230244)

We share the Commission's desire for the creation of a more effective European defence equipment market that is open, transparent and competitive. We are working positively with the Commission and other member states to reach agreement on directives which would provide benefit to the conduct of defence business for all stakeholders while protecting the UK's strategic interests. A defence and security procurement directive also has the potential to improve British industry's access to European defence markets and to improve its competitiveness worldwide. The proposed terms of the transfers directive are consistent with the way in which the UK export licensing system currently operates.