This is special treatment that civil organisations do not receive because of a WTO clause about ‘security exemption’. According to WTO rules, it is acceptable for the UK government to subsidise the sale of an unnecessary military air traffic control system to Tanzania (worth £28 million), yet it is forbidden for Tanzania, one of the poorest countries in the world, to subsidise and protect its own domestic food industry.

A recent report provided by the MoD, at the request of the House of Commons’ Defence Committee and authored by two economists from the MoD and two academics, concluded that “the economic costs of reducing defence exports are relatively small and largely one-off”. As a consequence, “the balance of argument about defence exports should depend mainly on non-economic considerations”.

MoD = Ministry of Defence, FCO = Foreign Commonwealth Office, DESO = Defence Export Services Organisation, ECGD = Export Credits Guarantee Department, HMG = Her Majesty’s Government

Defence Export Services Organisation (DESO)

The DESO, currently within the MoD, plays a key sales promotion role in support of the UK defence industry (net subsidy £16 million). It acts as a 'buy British' lobby within the ministry itself, but its influence extends far beyond this to the promotion of the British defence industry abroad. In addition, the use of British personnel to promote British exports is common, and includes army units to demonstrate equipment, non-military embassy assistance to marketing, official ministerial visits and defence attachés advising on British equipment (subsidy £53 million). Recently, a former employee of BAE Systems was appointed Head of DESO.

This active promotion of the arms trade clearly exposes as false the idea that our arms trade is merely ‘supply and demand’ orientated, because DESO exists to push for extra arms sales.

Export Credit Guarantee Department (ECDG)

Currently, the ECGD exists "to help exporters of UK goods and services to win business, and UK firms to invest overseas, by providing guarantees, insurance and reinsurance against loss." The criteria for assessing potential business are purely financial. This can result in projects, including military ones, which have a negative impact on development, the environment, human rights and security being supported. Arms exports absorb resources that poor countries might otherwise use for productive civil projects.

Facts about the ECGD:

• The ECGD is part of the Department for Trade and Industry (DTI).

• It guarantees that companies and banks involved in export deals will not lose out if the overseas government does not pay or makes a late payment.

• It charges a premium and aims to break even, BUT in the last resort, any shortfall is covered by UK taxpayers.

• BAE Systems has received far more cover for its exports than any other company - 61% of the cover awarded to the top ten companies.

• Arms companies need Export Credit Guarantees for their wares. Without them, many arms deals would be far too risky.

Following the 1988 cease-fire in the war between Iraq and Iran, the ECGD considered that the UK needed to be in a position to take advantage of what was expected to be a rebuilding of the Iraqi economy, and that export credits should be provided.

On 21^st June 1990, just before Iraq invaded Kuwait, the then Secretary of State for Trade and Industry, Nicholas Ridley, told Prime Minister Margaret Thatcher that the ECGD’s exposure in Iraq was £1 billion.

After the 1991 Gulf War, Iraq was certainly not going to pay its debts, and the ‘Sunday Times’ reported on 7^th July 1996 that the ECGD had persuaded several UK banks to issue 25 writs claiming more than £400 million from the Iraqi government. At that time, the UK government confirmed that about £26 million was outstanding in respect of equipment with a military application, particularly communications equipment, the export of which was underwritten between 1987 and 1990.

This experience with Iraq clearly shows both the financial risks and the dubious morality that is inherent in the underwriting of arms exports to military dictators.

The Defence Diversification Agency (DDA)

The Labour Party’s 1997 Election Manifesto included a commitment to extend military industry’s expertise “to civilian use through a defence diversification agency”. The DDA started operating at the end of 1998 under the auspices of the MoD’s Defence Evaluation and Research Agency (DERA). Unfortunately it has been more concerned with the exploitation of civil technology for military use than the converse.

'He will judge between the nations and will settle disputes for many peoples. They will beat their swords into ploughshares and their spears into pruning hooks. Nation will not take up sword against nation, nor will they train for war any more.' -Isaiah 2 v 4

SPEAK’s arms trade campaign

We will be focussing on Prime Minister Tony Blair as he has been a key figure in the promotion of arms sales. Our campaign will be looking at how the UK arms trade - and government support of it - is fanning the flames of conflict world wide, thereby creating more refugees, undermining sustainable development, increasing levels of child mortality, etc.

So… we want to ask Tony Blair to ‘END GOVERNMENT SUPPORT AND PROMOTION OF THE ARMS TRADE’ and will be asking him to use his influence to call for:

• a full and open assessment (by the UK government) of their policy of subsidising military exports, including the social and economic effects of these subsidies on both the UK and recipient countries.

• the list of countries, to which the ECGD cover for military exports is banned, to be extended, notably to more than just the highly indebted poor countries, but also to other countries with development concerns.

• a reduction, and eventually an end, of government support of the arms trade through DESO (i.e. DESO should be closed).

• more help for industry to move from military to civil production. The Defence Diversification Agency (DDA) in the MoD should be given adequate resources to allow it to make a major contribution to the demilitarisation of the UK economy.

As with our Trade Justice campaign, SPEAK’s arms trade campaign will be multi-dimensional to reflect a holistic faith:

Socio-economic – to express our concerns to our government about its active support and promotion of UK arms exports and to campaign for an end to this support (as above).

Educational – to raise awareness of both the economic and development costs of the arms trade, to the UK and recipient countries.

Theological – to explore a theology of peace and develop an understanding of the Biblical mandate for being peacemakers.

Philosophical – to question the widespread assumption that the arms trade is beneficial to the economy. Developing positive alternatives to our culture of violence, and moving towards a culture of peace, both internationally and locally.

Spiritual – to encourage repentance for our nation’s frequent resort to violence before exhausting other possibilities. Recognising Jesus as the source of our hope for justice, peace and reconciliation.

Discipleship – to disciple the Church about what it means to have peace as a central value, and about the issues surrounding the arms trade.

Lifestyle – to encourage radical and alternative lifestyle choices, such as ethical investment.

For more info and prayer and action suggestions, check out <www.speak.org.uk> and keep an eye out for SPEAK’s new arms trade booklets and other resources – coming soon!

SOURCES:

‘The Subsidy Trap’, Paul Ingram, Oxford Research Group www.oxfordresearchgroup.org.uk

‘Stop Shelling Out’, Campaign Against Arms Trade www.caat.org.uk

‘The Big Mistake: The Full Cost of the Arms Trade’, Alan Storkey www.mcdpolitics.org