Liberal Democrat MP for Cambridge Julian Huppert lent his support this week to a bill in Parliament calling for radical reform to a government department accused of providing financial backing to companies involved in “controversial and destructive projects”.
The little-known Export Credits Guarantee Department (ECGD) is headed by Business Secretary, Vince Cable. It is alleged to have been involved in projects including the sale of weapons to Indonesian dictator General Suharto, the building of an overpriced power station in India that now lies dormant after producing electricity too expensive for the government to buy, and the construction of an oil pipeline across the Caucasus which, according to Huppert’s press release, “violated human rights’ rules”.
ECGD is the UK’s official export credit agency and is an important part of the government’s trade strategy.
It helps overseas buyers purchase goods and services from UK exporters by guaranteeing bank loans to finance those purchases.
Despite its low profile, ECGD backed £2.2 billion worth of private exports in 2009/10.
Labour MP, Lisa Nandy, yesterday introduced a Ten Minute Rule Bill in the House of Commons, which seeks “to prohibit the support of certain activities by the Department” and increase its level of transparency and accountability.
The bill was co-sponsored by Huppert along with Conservative Zac Goldsmith and Green leader, Caroline Luca and others.
Huppert said: “how can we allow a department to uses taxpayers’ money to underwrite arms deals and other projects which in turn exacerbate poverty, human rights abuses and climate change?”
Nick Dearden, Director of Jubilee Debt Campaign, condemned the Department’s role in the indebtedness of developing countries: “Ninety five per cent of Third World debt today owed to the UK stems from ECGD activities… this vital Bill would prevent similar projects being underwritten in future, and stop the ECGD from ushering in a new era of toxic debt in the developing world.”
A spokesman for ECGD defended the Department, saying Nandy’s allegations were “based on a misunderstanding or misconception of ECGD.”
He refuted the accusation of secrecy, saying: “As a government department, we are accountable to ministers and Parliament like everyone else.”
Michael Yoganayagam – Deputy News Editor