Our response

Egypt/debtor countries is/are not disputing the amounts owed in relation to export contracts that were entered into in good faith by British exporters.’

• Egyptian people are calling for the debt to be audited and cancelled. JDC is working closely with the Popular Campaign to Drop Egypt’s Debt to share identify where this dictator debt came from.
• It is impossible to say now what the position of any future – hopefully democratic – government will be.
• It would be very difficult for any government to publicly call for debt cancellation as they fear the reaction of international financial markets – but that doesn’t mean that the debt is a just one.
• UK exporters would not lose out from debt cancellation – the exporters have already been paid.
• At the time these loans were made the UK government knew Egypt would struggle to repay the loans, but they chose to make them anyway to promote the British national interest.
  
  

Egyptian debt does not include ‘sums related to the supply of military aircraft, helicopters, tanks or missiles’.

• The government has previously claimed that it is impossible to say where Egypt’s debt came from as ‘Details of the goods or services supplied under the individual contracts are no longer held” It is therefore surprising that Vince Cable has managed to make such specific claims.
• Even if it is true that the debt is not the result of these kinds of military hardware, that does not rule out other types of equipment – in fact Ed Davey clarified in parliament that the loan “includes export contracts relating to the supply of communications equipment e.g. telephone and radio sets, to the Egyptian Government for use by the armed forces”.
  
  

Debt forgiveness is a responsibility of the Paris Club, not the UK government. The Paris Club restructures debt to a sustainable level as part of an IMF agreement and economic reform programme. The UK considers that by acting collectively, the Paris Club overcomes problems that would otherwise inhibit the achievement of a sustainable solution if debt restructuring were undertaken on a bilateral basis.

• If the UK wants to cancel more debt owed to it than agreed by the Pars Club, it can – the UK has done this before for Heavily Indebted Poor Countries.
• The Norwegian government, also a member of the Paris Club, decided to unilaterally cancel export credit debts, like those owed to Uk Export Finance, which it judged to have resulted from lending which ‘had limited importance as development aid’.
  
  

UK Export Finance has a duty to the taxpayer and a statutory responsibility to recover debts

• A transfer from the Department for International Development or the Treasury would ensure that UK Export Finance met its legal requirement to avoid a shortfall in debt repayments.
• Cancelling Egypt’s debt cost the UK government the equivalent of 13p per person in the UK per year over 12 years.
• Even if every single debt in the ECGD was found to be unjust (which is presumably unlikely) and was cancelled, this would only cost £1 per person, per year, over the next 17 years.
• The government has no plans to restrict the exports that UK Export Finance can support, provided that the financial risks are acceptable and they conform with the UK Export Finance Act and international obligations it must follow.
  
  

UK Export Finance conforms to OECD standards on i) sustainable lending, ii) bribery and iii) environmental, social and human rights impacts

• The OECD standards are extremely weak: no checks are carried out on projects of less than £10 million. This ‘don’t ask, don’t tell’ policy means that the UK Export Finance is free to back projects which might involve forced or child labour.
• Many projects which have had serious environmental, social and human rights impacts have been backed by Uk Export Finance under these rules.
• Most countries have standards that go beyond the UK’s – 23 out of 30 export credit agencies check all projects for forced labour.
  
  

Defence exports are only supported if Export Control Organisation of BIS is willing to issue an export licence. In doing so it takes account of a number of factors, including international relations, security and human rights.

• The UK’s Export Control Organisation is extremely weak. In 2010 of 26 countries identified by the UK Foreign Office as ‘countries of concern’ in respect to human rights, 16 were approved for arms export licences by the UK.
• UK Export Finance makes information about its operations and the business it supports publicly available under the UK’s Freedom of Information Act and in accordance with the Government’s transparency policies.
• UK Export Finance does not provide any information of where debts owed to it come from. Uk Export Finance frequently replies that “Details of the goods or services supplied under individual contracts are no longer held”.
  UK Export Finance provides a list of most of the loans it has backed the previous year in its Annual Report, but some of these are over a year old when they are reported, and some are not disclosed for reasons of ‘commercial confidentiality’. This means that there is no opportunity for UK citizens, or those in the recipient country to have any ability to hold UK Export Finance to account before potentially damaging projects are backed.
  
  

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