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: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.