Arms trade
Typhoon jets deal with Oman helps boost UK arms exports
Arms trade opponents criticise guaranteed loans scheme after defence exports reach £8.8bn
A Typhoon fighter jet. Photograph: Sean Gallup/Getty Images
Richard Norton-Taylor
British arms exports increased by more than 60% last year with a government guaranteed loan of £2bn enabling the Gulf state of Oman to buy a fleet of Typhoon fighter jets, according to official figures released on Thursday.
The loan to Oman accounted for nearly half the total guaranteed last year under the government's entire export finance guarantee fund.
In December the government negotiated a £2.5bn deal with the sultanate of Oman to supply 12 Typhoon fighters and eight Hawk jet trainers, both built by BAE Systems. The deal was hailed by the company as "an honour" and "excellent news".
Britain is currently negotiating the sale of 72 Typhoons to Saudi Arabia and 60 to United Arab Emirates. Oil wealth and a potentially hostile Iran have made the Gulf states an attractive export market for the Typhoon, formerly called the Eurofighter.
Other projects backed by guaranteed loans last year totalling £4.2bn included the purchase of intelligence equipment by Indonesia, support for the private equity fund JSA Holdings, based in the Cayman Islands, to buy Airbus aircraft, money to help deep sea-oil exploration off the coast of Brazil, and for a Siberian coal mine.
Under the Export Finance scheme, the government underwrites UK bank loans to countries buying British goods. Foreign governments often delay payment.
The projects were announced by the Department of Business, Innovation, and Skills. David Havelock, acting chief executive of UK Export Finance, said the projects benefited a large number of smaller companies who supplied big beneficiaries such as BAE Systems, Rolls-Royce and Airbus.
However, campaigners opposed to the arms trade attacked the loans and said many of the projects benefited governments with poor human rights records. Tim Jones, of the 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."
Kaye Stearman, from Campaign Against Arms Trade, said support for arms exports had 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."
British defence exports totalled £8.8bn last year, a rise of 62%, according to figures released by the UK Trade & Investment's Defence and Security Organisation.
The Typhoon fighter programme supported an estimated 8,600 jobs in the UK, with an estimated further 1,500 jobs dependent on export opportunities, the organisation said.
Britain captured 20% of the global defence export market, it said. Combined defence and security exports rose to £11.5bn in 2012.
A report by the Royal United Services Institute said British arms companies, and the manufacturer of the Typhoon in particular, would benefit from a "more energetic" relationship with the United Arab Emirates, at a time when the Gulf state wants to replace its ageing Mirage jets.
Britain granted arms export licences to Saudi Arabia worth almost £4bn over the past four years despite growing fears about the human rights record in the kingdom during the Arab spring.
Philip Dunne, the defence equipment minister, said: "The Ministry of Defence has continued to play a key supporting role in the promotion of defence equipment and services, recognising that defence exports make a significant contribution to the government's growth agenda."