The UK Arms Industry

When campaigning against the arms trade, I’ve always found it interesting how few people disagree with the moral case we’re making. Discounting those few rare souls who see the production of weaponry, in itself, as a morally worthy activity, the general opinion tends to be one of resigned acceptance. That there is a demand for such weaponry is seen to be a sad fact of life and that supplying this demand benefits our economy an unfortunate boon. After all, if we didn’t do it, surely someone else would?

Yet the initial perception of inevitability demands examination. Certainly, leaving aside more utopian aspirations, we can accept armed conflict as a sad fact of global politics. Yet the vast industrial and commercial machinery which exists to service this demand is no such given. The arms industry is not just supported by government (as, perhaps, one might expect to happen with regards to any major industry) but is in fact subsidised to a rather considerable degree. The full extent of the subsidy is estimated to stand at up to £890 million per year. Given around 65000 people working in the arms trade within the UK, this roughly amounts of each job costing the tax payer over £13000 a year in subsidy. Until this year when, hopefully as a sign of things to come, Gordon Brown announced the decision to close it, the defence export service organisation (DESO) existed within Government solely to market and sell UK arms. Employing nearly 500 civil servants within the Ministry of Defence, the head of DESO was a post always filled by an arms industry executive with a portion of his salary ‘topped up’ by the arms industry. Could you imagine the outcry if the department of health had a similar organisation working within it at the taxpayers expense to promote pharmaceutical sale? Yet DESO was sadly indicative of the connections between government and arms industry and they extend far beyond it.

The Export Credits Guarantee Department (ECGD) uses £180 million of taxpayer’s money each year to underwrite arms deals abroad. If a foreign buyer fails to pay the British company supplying them, the ECGD (or, we could say, the British taxpayer) will cover the cost. Then the cost to the ECGD will be added onto the buyer nation’s national debt. 95% of the debt owed directly to the UK by developing countries comes from the ECGD. The tax payer is charged millions and developing countries impoverished, all in the name of granting the arms industry a commercial privilege denied to other industries and surely contrary to the conceptions of free trade which dominate international economics. There are numerous other means by which the tax payer ends up footing the bill of arms trade subsidies (research and development, distortion of MoD procurement, defence attaches) yet these are beyond the scope of the present article. What’s important is to note the extent to which the arms industry is not an unfortunate fact of life but is rather actively promoted and supported by the British government at the taxpayer’s expenses. Nor is it the cornerstone of the British economy it’s presented as being. Only 0.2% of total employment is within the arms industry and at the equivalent of over £13000 a year in subsidy per job that 0.2% represents a disproportionate drain on the public purse. Likewise, arms exports only account for 1.8% of total exports yet through £180 million incurred by the ECGD each year these too amount to a disproportionate drain on the government’s resources.

Many arms trade campaigners are arguing for nothing more radical than the end of these subsidies: the arms industry isn’t so central to the nation’s economic vitality that it deserves this cosseted pride of place. The arms industry should compete in the same way as other industries. The promotion of arms exports is not necessary. Nor, crucially, is it right. More than simply being bad public policy, these subsidies serve to fuel and industry that largely exists to produce products that kill people. Until the final closure of DESO, the British tax-payer’s money will be paying for the promotion of arms fairs to drum up demand amongst nations, many of whose populations go hungry while their leaders shop for arms. Certainly, you can say, if we didn’t do it someone else would. Yet take that moral logic and apply it to any other area and it rapidly seems obviously absurd. Promoting the arms trade doesn’t become the right thing to do simply because not doing it doesn’t make it go away.

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