Arms Exports (Hansard, 3 May 2000)

§ 5. Dr. Vincent Cable (Twickenham)
What evaluation she has carried out of the impact of export credit guarantees on arms exports to developing countries. [119355]

§ The Secretary of State for International Development (Clare Short)
My Department commissioned a review by Dr. Valpy Fitzgerald of Queen Elizabeth house, which found that export credit guarantees could promote sustainable development in poor countries, but expressed reservations about the appropriateness of ECGD support for arms exports to developing countries. The position paper of my Department to the ECGD review argues that we should be willing to support arms expenditure when it is part of a responsible and properly accountable security sector that is needed to create the stability necessary for development—but only then. Copies of the review and the position paper have been deposited in the Library. I am grateful to the hon. Gentleman for drawing attention to them.

§ Dr. Cable
Is the right hon. Lady aware of the work of the Select Committee on Defence, which suggested that up to £250 million a year of taxpayers' money is provided in the form of subsidy for arms exports to developing countries through the ECGD? Does she regard that as a 136 useful additional flow of finance, or does she agree with the retiring director of the IMF that it seriously undermines development?

§ Clare Short
I agree that excessive arms expenditure undermines development, but countries need stability. When there is an over-bloated security sector or no order and peace, one cannot achieve development. Therefore, a properly sized and democratically accountable security sector is what developing countries need. There have been no ECGD-backed arms exports to HIPC countries or to countries eligible under the International Development Agency, the most concessional arm of the World Bank, in recent years and 80 per cent. of the ECGD cover for arms expenditure in developing countries goes to Saudi Arabia and Oman. We have improved the record, but the hon. Gentleman raises an important point. I hope that more hon. Members will take an interest in the review of ECGD, because we could tighten up and improve it.

§ Mr. Desmond Browne (Kilmarnock and Loudoun)
Does my right hon. Friend agree that the conflict in many developing countries is exacerbated by the activities of arms brokers, who ply their trade from the United Kingdom, largely in an unregulated fashion? Indeed, there is evidence to suggest that, dealing through Uganda, arms brokers from this country are providing arms to both sides of the conflict in the Congo. In the context of the Government's review, will my right hon. Friend ensure that the voice of those who wish to see such activity licensed in this country is heard loud and clear?

§ Clare Short
My hon. Friend raises an extremely important point. There have been worrying examples of arms brokers based in the United Kingdom brokering deals with disreputable sources for countries that do not need more arms. As I think my hon. Friend knows, the issue is under review. Unfortunately, I am not in a position to make an announcement this afternoon.

§ Mr. John Wilkinson (Ruislip-Northwood)
Do the Government take pride in their banning of ECGD credits for arms acquisitions by 63 of the poorest countries in the world? Of those countries, only Kenya has been a recipient of such credits over the past 13 years. Would it not be a much more ethical foreign policy for the Government forthwith to ban all exports of British armaments to Zimbabwe, which is using them in a civil war in the Congo?

§ Clare Short
As the hon. Gentleman knows, my right hon. Friend the Foreign Secretary will make a statement on Zimbabwe later this afternoon. He will probably have something to say of interest to the hon. Gentleman.
I take considerable pride in the fact that the Government have tightened up considerably on the previous Government's record. None of the 63 poorest countries is in receipt of ECGD cover, including Kenya. It did not get any such cover for arms purchases. We have declared that there will not be such cover in future. We are trying to get international agreements so that others will take up our position. I think that that is right, and I hope that the hon. Gentleman will support the campaign.