APPENDIX 8
Memorandum by the Campaign Against Arms
Trade
1. The Campaign Against Arms Trade (CAAT)
is working for the reduction and ultimate abolition of the international
arms trade, together with progressive demilitarisation within
arms-producing countries.
2. The aerospace industry is one which raises
major ethical and environmental questions and CAAT is disappointed
to see that these are not listed as being amongst those issues
your Committee expects to consider. Although yours is the Trade
& Industry Committee, nonetheless it is in the interests of
"joined up Government" that you should begin your deliberations
by looking at the impact of the products of the aerospace industry
on peace and security and on the environment.
3. In 2003, exports of "identified
defence equipment" from the UK totalled £992 million,
of which £734 million was military aircraft and parts. A
further £3,256 million was estimated by the Society of British
Aerospace Companies to have been received for "additional
aerospace equipment and services". It is surprising that
the Government cannot put in place commodity classifications which
allow it to produce official figures on this and be sure how much
military equipment is exported. Given the estimates, the products
of the aerospace industry therefore account for nearly 94% of
all the UK's military sales. (UK Defence Statistics 2004) According
to the Society of British Aerospace Companies, just over 50% of
UK aerospace production in 2003 was military.
4. It is the military side of the aerospace
industry which is of concern to CAAT. The production and possession
of armaments may not in itself cause conflict, but it can add
to insecurity, contribute to the escalation of violent conflict
and give tacit approval to repressive governments. CAAT believes
the products of the UK's aerospace industry have done this.
MAKING THE
WORLD LESS
SAFE
5. The idea that armed force and increased
military expenditure can address problems of insecurity in the
world today has been challenged most recently by the invasion
of Iraq. An action, which was allegedly to have made the world
a safer place, has instead seemingly encouraged more individuals
to resort to armed violence as well as killing, injuring and rendering
homeless countless civilians. It cannot now be seriously argued,
if it ever could, that launching high explosives from aircraft
does anything other than cause death and resentment.
6. In the 1980's, it was well known that
Iraq was engaged in a bloody war with Iran, that Saddam's human
rights record was appalling and, in 1988, that his forces had
gassed the Kurdish population of Halabja. However, whilst Iraq's
biggest arms suppliers were the Soviet Union and France, UK companies
sold radar, military vehicles and components. Throughout the decade,
British Aerospace was promoting its Hawks and other aircraft to
Saddam's regime. It exhibited its Hawk at the Baghdad arms fair
in 1989.
7. During the 1980's CAAT supporters wrote
to their MPs calling for an embargo on the sale of all military
equipment to Iraq. Such an embargo may not only have prevented
Saddam from acquiring some of the weaponry he did, it would also
have sent him a strong message that his behaviour was not acceptable
to the international community.
8. Unfortunately, CAAT's supporters were
not heeded, and the UK's major aerospace company was given support
by the UK government to court Saddam's murderous regime. The chance
for strong, but peaceful, action against Saddam was missed.
LESSONS NOT
LEARNT
9. This may appear to be old news, but the
Government and the arms companies do not seem to have learnt from
it. The quest for profits pushes the companies into exporting
arms and to see the death and injury of human beings as irrelevant
as long as their shareholders make money. The Government not only
acquiesces, but actually assists them in this.
10. Saudi Arabia is the biggest customer
for the UK's military aerospace products despite its appalling
human rights abuses. The rule of the Saudi royal family appears
somewhat shaky and the country is reliant on the skills of its
expatriate workers. The UK government should stop supporting the
Saudi royals and giving assistance to the UK aerospace industry
in its endeavours to sell there. The message currently being sent
to the people of Saudi Arabia is that the UK is backing those
who keep them repressed. Thanks to export credits, if the people
do topple the regime it will be the UK taxpayer, not BAE Systems,
who will foot the bill.
11. In Indonesia BAE Systems' Hawk aircraft
bought from BAE Systems were used to intimidate the people of
East Timor and Aceh. The UK government and aerospace industry
were again seen to be giving succour to Indonesian governments
and military with scant regard for human rights.
12. The UK government was prepared to amend
its export licensing criteria so that BAE Systems could export
Head Up Displays to the United States for incorporation into F-16s
bound for Israel where they would be likely to be used against
Palestinian people. At the BAE systems' AGM it was said that,
in the end, Israeli components were used instead, but nonetheless
the willingness to export once again shows the UK government and
aerospace industry on the side of those who disregard human life.
13. India has finally bought BAE Systems
Hawks after years of persuasion by the company and the UK government.
This official sales pressure sent very mixed messages to the Indian
government, particularly during times of tension with Pakistan.
India also has major development needs with many people without
clean water and sewerage.
14. Again, in South Africa, its Government
was persuaded, after intensive lobbying by BAE Systems and the
UK government that it should buy Gripen and Hawk aircraft despite
its needs for financial resources to tackle HIV and AIDS, the
housing crisis and many other necessary social programmes.
15. Even in the UK, with urgent need for
spending on health, education and transport infrastructure, "white
elephant" products of the aerospace industry such as the
much delayed and over budget Eurofighter Typhoon are still supported
by the Government.
NOT AN
INDUSTRY TO
BE PROUD
OF
16. The military aerospace industry is not
one people in the UK should be proud of—and many are not.
An opinion poll by BMRB International in November 2004 showed
the 44% of those surveyed said the UK should not sell military
equipment to any other country whilst 35% disagreed.
17. Major sales by the military aerospace
industry are now greeted with protests and even the press has
admitted that they are "controversial". Most churches
and many charities now have their investments in funds which exclude
BAE Systems and other arms companies, and individuals are increasingly
turning to ethical pension and other funds which do likewise.
A SUBSIDISED TRADE
18. Despite their unpopularity, the UK's
military exports as a whole are heavily subsidised by the taxpayer.
Since 1995, five studies have estimated the overall net costs
of this support. These are World Development Movement's Gunrunners
Gold: How the Public's Money Finances Arms Sales (1995); Stephen
Martin's `The subsidy saving from reducing UK arms exports', Journal
of Economic Studies, 26:1 (1999); the Oxford Research Group and
Saferworld's The Subsidy Trap: British Government Financial Support
for Arms Exports and the Defence Industry (July 2001); Malcolm
Chalmers, Neil Davies, Keith Hartley and Chris Wilkinson's The
Economic Costs and Benefits of UK Defence Exports (York: University
of York Centre for Defence Economics, 2001); and CAAT's Arms Trade
Subsidies Factsheet (CAAT, May 2004).
19. Estimates vary, mainly because of different
approaches to calculating the subsidy that is due to research
and development spending as well as export credits, but four show
that exports benefit from considerable net subsidies after taking
into account any benefits to the Exchequer—between £228
million and £990 million a year.
20. Even the report from the University
of York Centre for Defence Economics, whose authors included two
Ministry of Defence economists, concluded that:
"The significance of our results for
the wider debate about defence exports is twofold.
Firstly, they suggest that the economic costs
of reducing defence exports are relatively small and largely one-off.
Secondly, as a consequence, they suggest that
the balance of argument about defence exports should depend mainly
on non-economic considerations."
21. BAE Systems and the Defence Industries
Council (DIC) both commissioned Oxford Economic Forecasting to
undertake surveys which were published in 2004. BAE Systems' was
on the company's contribution to the economy whereas the DIC's
was on the economic "benefits" of military exports.
These surveys have, rightly, been questioned.
22. For example, BAE Systems' tax contribution
of £1.1 billion is mostly made up of income tax and National
Insurance paid by employees—this would be paid whatever
job they did—and the DIC survey includes "induced"
employment. This is employment supported by the spending of those
employed in military exports, but, again, whatever job a person
has (or does not have) that person will still need to make purchases.
JOBS
23. CAAT acknowledges that a refusal to
grant export licences or reduction in public subsidy for military
aerospace would probably result in the loss of arms export jobs.
However, The Employment Consequences of a Ban on Arms Exports,
(September 2002), produced for CAAT by Ian Goudie of Defence &
Aerospace Analysts, found that employment dependent on the export
of military equipment accounted for only 0.3% of total UK employment
and that the jobs were concentrated in the South East, South West
and North West of England.
24. However, as the South East and the South
West have almost full employment, only a few individual localities
are particularly dependent on military aerospace exports. Ian
Goudie felt that specific assistance programmes directed at finding
work for these often highly skilled workers, might require additional
funding, but this one-off cost would be much less than the estimated
annual cost of subsidising military exports.
A CIVIL INDUSTRY
25. Whilst opposing the military aerospace
industry, many CAAT supporters would be happy for their taxes
to fund research in the civil aerospace field, particularly cleaner
and quieter aircraft, which would facilitate travel, but would
reduce the associated environmental costs.
26. A wholly civil aerospace industry might
well attract more young engineers and scientists since many, who
contact CAAT, are reluctant to join an industry which currently
has many products they see as unethical.
NEED FOR
AN INDEPENDENT
INVESTIGATION
27. When your Committee held an evidence
session on the Aerospace Innovation and Growth Team (IGT) report,
CAAT made a submission which emphasised the lack of independence
of the IGT as it was dominated by the aerospace companies. These,
unsurprisingly, did not ask the fundamental questions as to the
desirability of the industry's products.
28. CAAT suggested then that the Government
should conduct a thorough-going public investigation into the
aerospace industry, including its impact on peace and security
and the environment, and look at alternative ways the resources
enjoyed by the industry could be used. CAAT argued that the future
of the industry was too important for the debate to be left solely
to those who work for it. This remains CAAT's position.
November 2004
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