§ 6. Dr. Vincent Cable (Twickenham)If he will make a statement on the role played by his Department in the promotion of arms exports. [40902]
§ The Parliamentary Under-Secretary of State for Defence, (Dr. Lewis Moonie)The Defence Export Services Organisation, within the Ministry of Defence, is responsible for co-ordinating Government support to industry in promoting legitimate defence exports. Other areas within the Department provide assistance as required.
§ Dr. CableIs the Minister aware of the work done by senior economists in his Department, as well as by independent academics, that suggests that the economic benefits of such export sales are negative? In particular, is he aware of the York study's conclusion that if arms exports were cut by half within the life of a Parliament, the national income would be unchanged, and there would be a net gain of jobs from civil redeployment? In view of that, why are the Government promoting arms exports in highly inflamed situations, such as with the export of Hawks to the Indian subcontinent?
§ Dr. MoonieAn independent study by two leading academic economists and two MOD economists into the economic costs and benefits of defence exports was published on 11 December last year. The Government broadly agree with its findings. It concluded that, rather than being subsidised, defence exports represented a significant net benefit to Government and to the UK economy more broadly. The study reported that defence export sales averaged about £6 billion in 1998 and 1999, and supported almost 100,000 jobs, many of which are high-quality jobs in cutting-edge industry. Its conclusions suggested that the ending of defence exports from the UK would involve a one-off adjustment cost of between £4 billion and £5 billion, which is equivalent to about 0.5 per cent. of one year's gross domestic product. In addition, there would be a continuous net cost to Government of between £90 million and £200 million.