Yesterday at Liberal Democrat party conference strong policy to reform the government’s Export Credits Guarantee Department (ECGD) was adopted.
The policy set out to “increase [ECGD and UKTI] support to low-carbon sectors, and [withdraw] fully from supporting all fossil fuel-related sectors, including legislating, if necessary, to modify these agencies’ remits.”
Maddy Evans, ECGD campaigner for Jubilee Debt Campaign, said
“It’s great to see the Liberal Democrats continuing to commit to reforming the ECGD, a department controlled by Vince Cable. Now it’s time for Vince to follow through on what his party are telling him by reforming this department which leaves countries saddled with huge debts, often for projects which were hugely destructive for the people of the country concerned”
This week the conference has been the focus for campaigners who are calling for a new era of sustainable and responsible lending for the Export Credits Guarantee Department. The department, controlled by Vince Cable, is responsible for 95% of the debt owed to the UK by developing countries. The exact origin of many of these debts is unexplained.
Campaigners welcomed the new policy, but continued to call for the Liberal Democrats to fulfil their existing policy on reforming the department which includes:
– Auditing the UK’s overseas debts, and invalidating any debts which were run up by reckless lending to dictators
– Stopping the support of arms sales through the ECGD
For more information please contact Jubilee Debt Campaign on 020 7324 4722
1. Jubilee Debt Campaign is the UK coalition campaigning for cancellation of unjust and unpayable poor country debts. For more information see: http://www.jubileedebtcampaign.org.uk.
2. The Export Credits Guarantee Department (ECGD) is the UK’s export credit agency, reporting to the Department for Business, Innovation and Skills. It provides insurance and guarantees to UK exporters entering ‘risky’ markets. Traditionally 75% of ECGD support has been given to arms, aerospace and carbon-intensive industries. In the event of an ECGD financed company not being paid by the relevant importing party, it is able to recover its project costs from the ECGD. The ECGD may then try to recover the total sum paid from the government of the recipient country – in effect it will become debt which that government owes to the UK Government. In this way developing countries have accumulated significant quantities of bi-lateral debt.
3. Developing countries owe over £2 billion of debt to the ECGD, but almost nothing is known about how these debts were created – despite many of them arising from deals with some of the world’s most notorious dictators. This is more than 90 per cent of the debt owed directly by developing countries to the UK government. Most recently Egypt has joined the list of countries whose dictators have left power, but whose debts to the UK still remain. The ECGD cannot or will not say what the vast majority of this debt is owed for. We know that part of the £450 million ECGD claims from Indonesia relates to the controversial sale of Hawk jets to General Suharto in the 1990s, because it provoked a storm of protest at the time.
4. In 2010 the Liberal Democrats took the important step of adopting party policy to conduct an audit of UK government debts: “We will conduct our own audit of all existing UK government and commercial debts, ruling invalid any past lending that was recklessly given to dictators known not to be committed to spend the loans on development.” The party also adopted policy to end “export credit support for military goods”.