Argentina’s "Falklands debt" goes to the heart of our unethical foreign policy

The government should remember our shameful role in arming the junta.

The anniversary of war should be a time for learning the lessons of history - particularly when the injustice of a war continues to this day. Some documents exposed by Jubilee Debt Campaign this week expose a cynical approach to British foreign policy which should shock both British and Argentine citizens.

Argentina’s outstanding debt to the UK is £45 million. This week we have uncovered how much of this debt was run-up. In the years leading up to the Falklands War the British government was flogging one of the most unpleasant dictatorships in the world British weapons. 

A military coup in 1976 brought a wave of terror to Argentina. The ‘dirty war’ which the coup ushered in was a period of state terrorism in which as many as 30,000 people were killed or ‘disappeared’. Political parties and trade unions were banned, whilst religious groups had to apply for approval from the state.

The British government at the time was well aware of the nature of the regime in Argentina. In a document from Foreign Secretary David Owen to the Ministry of Defence in 1979, Owen describes the junta as a “regime whose human rights record is worse than Chile, and which could come close to a confrontation with us over the Falklands.” Pinochet’s Chile faced sanctions at the time, as a result of a policy made by the then government at the previous election. But Argentina faced no such restrictions. 

Owen understood the problems with selling weapons to Argentina, but concluded that “it is not possible to achieve complete consistency in our approach to this problem and that to attempt to do so would impose unreasonable constraints upon us.” As a result Argentina was sold two Type 42 Destroyers, two Lynx helicopters and twenty-two Sea Dart missiles.

These weapons sales - and likely a variety of other military equipment sold - were backed by an effective loan from a British government department called the Export Credits Guarantee Department. Indeed, such a good client was the Argentine junta, that in October 1979 the British raised the amount of loans it could back to Argentina from £100 million to £500 million to “provide room ... for the potential arms contracts.”

Both the destroyers and Lynx helicopters were used in the invasion of the Falklands - one of the Lynx’s was the first Argentine aircraft to land on the Falklands after the invasion. Indeed when the Falklands War was underway, Argentina should still have been paying the British Government for weapons being used against British soldiers.

These issues were aired - including in parliament at the time. What’s worrying is that the replies received are exactly the same replies received by arms campaigners today: when Lord Averbury asked whether it was “unwise to sell military weapons of any kind while the Falklands’ problem remains unresolved?” he was told “the government takes into account the use to which the equipment might be put”.

After defeat in the Falklands Argentina’s military junta was kicked out of power in the 1983 elections. Through the 1980s the economy suffered from the huge foreign debt the government inherited, which led to stagnation and increases in unemployment and poverty. Many argued it was a classic case of ‘odious debt’ and the new government should simply refuse to pay the sorts of debts owed to the UK. Indeed a famous court case in 2000 found that loans to Argentina under the dictatorship were part of "a damaging economic policy that forced [Argentina] on its knees through various methods ... and which tended to benefit and support private companies - national and foreign - to the detriment of society".

In order to keep paying this odious debt, Argentina's governments accumulated ever more debt. New loans repay old debts. By the 1990s, courtesy of advice and bail-out packages from the International Monetary Fund the economy entered a crisis and - after five governments in two weeks over Christmas 2001 - defaulted. The improvement both in the economy and Argentina’s democratic model improved significantly - no thanks to the so-called international community.

What should worry us today is that David Owen was not alone at the time - or indeed since - in placing the interests of the arms industry ahead of being a good global citizen. Owen, like many others after him, expressed ‘reservations’ about some of the arms sales, but in the end narrowly perceived economic and strategic interests won out.

The UK has spent years arming dictators and the debts ‘owed’ to this country can be linked back with some of the worst regimes of the last 40 years - General Suharto of Indonesia, Hosni Mubarak in Egypt, Saddam Hussein in Iraq, not to mention the royal family of Saudi Arabia. At the centre of these deals was the Export Credits Guarantee Department, now rebranded as UK Export Finance and under the stewardship of Vince Cable’s Department of Business.

In opposition, Cable regularly railed against the sorts of deals done with the Argentine junta, and his party promised in power to audit such debts and cancel those deemed reckless. It’s surely difficult to imagine a more reckless loan that one which supported arms sales to Argentina in the late 1970s. The government should use the Falklands anniversary not to wave flags, but to remember our own shameful role in arming an atrocious regimes around the world and make some efforts at recompense - for the lives of British and Argentine soldiers lost. 

Nick Dearden is the director of Jubilee Debt Campaign

Relatives of victims wait to hear the sentences of 30 leaders of the last dictatorship. Photograph: Getty Images.
Photo: Getty
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Unite stewards urge members to back Owen Smith

In a letter to Unite members, the officials have called for a vote for the longshot candidate.

29 Unite officials have broken ranks and thrown their weight behind Owen Smith’s longshot bid for the Labour leadership in an open letter to their members.

The officials serve as stewards, conveners and negotiators in Britain’s aerospace and shipbuilding industries, and are believed in part to be driven by Jeremy Corbyn’s longstanding opposition to the nuclear deterrent and defence spending more generally.

In the letter to Unite members, who are believed to have been signed up in large numbers to vote in the Labour leadership race, the stewards highlight Smith’s support for extra funding in the NHS and his vision for an industrial strategy.

Corbyn was endorsed by Unite, Labour's largest affliated union and the largest trades union in the country, following votes by Unite's ruling executive committee and policy conference. 

Although few expect the intervention to have a decisive role in the Labour leadership, regarded as a formality for Corbyn, the opposition of Unite workers in these industries may prove significant in Len McCluskey’s bid to be re-elected as general secretary of Unite.

 

The full letter is below:

Britain needs a Labour Government to defend jobs, industry and skills and to promote strong trade unions. As convenors and shop stewards in the manufacturing, defence, aerospace and energy sectors we believe that Owen Smith is the best candidate to lead the Labour Party in opposition and in government.

Owen has made clear his support for the industries we work in. He has spelt out his vision for an industrial strategy which supports great British businesses: investing in infrastructure, research and development, skills and training. He has set out ways to back British industry with new procurement rules to protect jobs and contracts from being outsourced to the lowest bidder. He has demanded a seat at the table during the Brexit negotiations to defend trade union and workers’ rights. Defending manufacturing jobs threatened by Brexit must be at the forefront of the negotiations. He has called for the final deal to be put to the British people via a second referendum or at a general election.

But Owen has also talked about the issues which affect our families and our communities. Investing £60 billion extra over 5 years in the NHS funded through new taxes on the wealthiest. Building 300,000 new homes a year over 5 years, half of which should be social housing. Investing in Sure Start schemes by scrapping the charitable status of private schools. That’s why we are backing Owen.

The Labour Party is at a crossroads. We cannot ignore reality – we need to be radical but we also need to be credible – capable of winning the support of the British people. We need an effective Opposition and we need a Labour Government to put policies into practice that will defend our members’ and their families’ interests. That’s why we are backing Owen.

Steve Hibbert, Convenor Rolls Royce, Derby
Howard Turner, Senior Steward, Walter Frank & Sons Limited
Danny Coleman, Branch Secretary, GE Aviation, Wales
Karl Daly, Deputy Convenor, Rolls Royce, Derby
Nigel Stott, Convenor, BASSA, British Airways
John Brough, Works Convenor, Rolls Royce, Barnoldswick
John Bennett, Site Convenor, Babcock Marine, Devonport, Plymouth
Kevin Langford, Mechanical Convenor, Babcock, Devonport, Plymouth
John McAllister, Convenor, Vector Aerospace Helicopter Services
Garry Andrews, Works Convenor, Rolls Royce, Sunderland
Steve Froggatt, Deputy Convenor, Rolls Royce, Derby
Jim McGivern, Convenor, Rolls Royce, Derby
Alan Bird, Chairman & Senior Rep, Rolls Royce, Derby
Raymond Duguid, Convenor, Babcock, Rosyth
Steve Duke, Senior Staff Rep, Rolls Royce, Barnoldswick
Paul Welsh, Works Convenor, Brush Electrical Machines, Loughborough
Bob Holmes, Manual Convenor, BAE Systems, Warton, Lancs
Simon Hemmings, Staff Convenor, Rolls Royce, Derby
Mick Forbes, Works Convenor, GKN, Birmingham
Ian Bestwick, Chief Negotiator, Rolls Royce Submarines, Derby
Mark Barron, Senior Staff Rep, Pallion, Sunderland
Ian Hodgkison, Chief Negotiator, PCO, Rolls Royce
Joe O’Gorman, Convenor, BAE Systems, Maritime Services, Portsmouth
Azza Samms, Manual Workers Convenor, BAE Systems Submarines, Barrow
Dave Thompson, Staff Convenor, BAE Systems Submarines, Barrow
Tim Griffiths, Convenor, BAE Systems Submarines, Barrow
Paul Blake, Convenor, Princess Yachts, Plymouth
Steve Jones, Convenor, Rolls Royce, Bristol
Colin Gosling, Senior Rep, Siemens Traffic Solutions, Poole

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.