Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 155 - 159)

TUESDAY 20 APRIL 2004 (Morning)

CAMPAIGN AGAINST THE ARMS TRADE

  Q155  Chairman: Good morning, Miss Feltham. You have been before this Committee before, I think.

  Ms Feltham: No.

  Q156  Chairman: You have given us evidence but you have never appeared?

  Ms Feltham: Only written before.

  Q157  Chairman: That is right. Maybe we could try and establish where you come from. Would it be right to say that your view is that the British taxpayer should not subsidise the export of arms and other military equipment and therefore the ECGD should not provide services in this sector?

  Ms Feltham: That is absolutely true. We certainly do not believe the taxpayer should be subsidising the export of arms, and one of the big subsidies is export credits, so we would very much like to see those credits stopped for arms. We have no opinion on whether or not they should continue for other goods.

  Q158  Mr Evans: I have read your submission with growing incredulity, I hasten to add. You say things like you seek an immediate end to government assistance for the export of military equipment—this would include cover for the construction of military bases—and you would like the UK Government to set an example to its overseas counterparts by taking this action unilaterally. Can you imagine what would happen if we were to do this unilaterally. Would you not expect that the ones that would really love that would be the French, the Germans and various other countries who would be giving support for its manufacturers and Britain simply would not?

  Ms Feltham: Obviously we would like to see the export credits stopped by other Governments too. In fact we worked through ECA Watch with our French and German counterparts and others there, but there are several good reasons why the UK should take a lead and obviously it would be better if it was not unilateral, it was multilateral, but unilaterally Britain is exposed, the United Kingdom is exposed to huge risks for its military equipment, export credits. For instance, if—and it is certainly not entirely out of the question—the Saudi Arabian Government was overthrown, there is about one thousand millions worth of export credits supporting military goods to Saudi Arabia that would end up being paid for by the British taxpayer. So that is a bad risk. Then, I think, rather than taking the lead in ending export credits on arms exports, the UK Government is almost taking the lead in the other direction. We know, because the South African finance minister had an affidavit to a court there where somebody is challenging a huge arms deal with South Africa—we know from his evidence to that court—that hugely favourable terms were offered by the ECGD and the Swedish export credit department to underwrite the export package—hugely favourable terms—and he said markedly preferential rates. Research in the United States says that that deal led the US to give better export credit deals for proposed military exports to Poland than would have been the case. They were so afraid of the British ECGD pushing more and more and giving better rates for military exports that the others followed suit.

  Q159  Mr Evans: But these are legal items. Basically it does not matter that you say you prefer for it to be multilateral, you are prepared to go unilaterally, but it does put British companies at an enormous competitive disadvantage?

  Ms Feltham: Well, so be it. We are basically against arms exports.


 
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