Vince Cable criticised over £2 billion arms loan to Oman

Accused of shoring up regime threatened by Arab Spring

Vince Cable’s Business Department has backed £2 billion of loans to the dictatorship in Oman to buy Typhoon fighter aircraft. The absolute monarchy in Oman has strict repressions on human rights; any dissent faces harsh repression and the legal system is highly personalised with limited due process.

The revelations come in UK Export Finance’s annual report, part of the Department for Business which backs loans for overseas buyers of UK Exports, released today (20 June 2013).[1] The annual report also reveals that the UK government has backed:
•    £4.2 million of loans to Indonesia for intelligence equipment. Indonesia still owes the UK government £350 million for loans, mainly arms sales, to past dictator general Suharto.
•    £1.1 million of loans to the Pakistan Navy for a Hovercraft. Pakistan is in the midst of a debt crisis already, with government foreign debt payments over 20 per cent of export revenues this year
•    £4.6 million of loans to London Mining Company for an Iron Ore mine in Sierra Leone, without conducting any assessment of the social, environmental and human rights impacts

Of 139 projects announced by UK Export Finance in their annual report, only 4 have had any assessment of their impact on human rights and the environment.

Tim Jones, Policy Officer at Jubilee Debt Campaign said:
“It is outrageous that the UK government is guaranteeing loans for arms sales to a repressive regime in Oman. By allowing this dodgy deal in his department Vince Cable has helped shore up a regime threatened by the Arab Spring.

“The UK is loading Indonesia and Pakistan up with more debt for equipment which is useless at best, and could be used for human rights abuses. Vince Cable should not be using taxpayers money to back global business deals without caring what the human rights and environmental impacts are.”

Kaye Stearman from Campaign Against Arms Trade said:
“This report reveals that support for arms exports has ballooned from 1% to 47% of Export Credit business. This is a return to the bad old days, where arms companies like BAE Systems are effectively offered another massive taxpayer subsidy to export their deadly products to repressive governments and areas of tension and conflict. It is shameful that the government is prioritising support for industries which export repression and destruction around the world.”

In autumn 2012, a parliamentary inquiry by the All-Party Group on Business and Human Rights recommended that the government make human rights and environmental standards apply to all loans, impose penalties on companies that violate standards, consult on a prohibitions list for arms and conduct an audit into the debts owed to UK Export Finance.[2]

Other deals revealed in the annual report include:
•    £147 million for deep-sea oil drilling off the coast of Brazil, and £54 million for a Siberian coal mine. The Coalition Agreement says that UK Export Finance will stop “supporting investment in dirty fossil-fuel energy production”,[3] a commitment which has been continually broken
•    £15 million to a private equity fund based in the Cayman Islands to buy Airbus aircraft

£2.3 billion of debt is owed directly to the UK government on previous such loan deals which governments or companies have defaulted on. This include loans to Indonesian dictator General Suharto to buy tanks and fighter aircraft, loans to Iraq’s Saddam Hussain for military equipment and a chemical weapons factory, loans to Generals Sadat and Mubarak in Egypt for military equipment, and loans to Robert Mugabe in Zimbabwe for police Land Rovers, used in internal repression.

The Liberal Democrats have a policy to “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.”[4]

Tim Jones, policy officer at Jubilee Debt Campaign, said:
“Vince Cable and the Liberal Democrats have refused to audit debts owed to the UK government. Instead of doing what they promised, they have demanded that Indonesian, Iraqi and Egyptian people repay loans which directly fuelled human rights abuses.”

For more information and interviews contact Tim Jones on +44 20 7324 4722 or +44 7817 628196


[1] https://www.gov.uk/government/news/uk-export-finance-support-

[2] http://appg-icr.org/2012/12/03/parliamentary-committee-backs

[3] HM Government. (2010). The coalition: Our programme for government. http://www.cabinetoffice.gov.uk/sites/default/files/resources

[4] Liberal Democrats. (2010). Accountability to the poor: Policies on International Development. Policy Paper 97.

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