Try Red Pepper in print with our pay-as-you-feel subscription. You decide the price, from as low as £2 a month.More info ×
Times have changed. In the late 1970s, the British government controlled a nationalised company called British Aerospace. These days, its modern incarnation, BAE Systems, appears to control the government.
BAE famously – and successfully – campaigned to get a corruption investigation into its biggest contract, for the Saudi royal family, dropped. And now, with politicians scrambling to propose deep cuts to public services, it seems BAE’s big contracts are invulnerable. Former Tory Quentin Davies MP, now a Labour minister for defence procurement, said in August: ‘The defence review is the servant, not the master, of defence procurement … Under no circumstances will we be holding up any long-term programmes for the strategic defence review.’ In other words, regardless of the country’s needs or wants, we will keep shovelling billions of pounds of taxpayers’ money at BAE.
So how else has the arms industry changed in recent decades? During the cold war, military spending grew rapidly. The major Nato and Warsaw Pact countries had their own arms industries, producing weapons for themselves. In some countries the arms companies were state owned; in others they were privately owned but subject to government direction. So in Britain, the government picked Rolls Royce as the ‘winner’ to make military jet engines in the 1960s and backed its takeover of Bristol Siddeley. In 1977, several companies were merged into the nationalised British Aerospace.
At the end of the cold war, global military spending fell by about a third. This heavily influenced the shape of the industry we see today, prompting a wave of rationalisation. The US had more than 50 major arms companies in the early 1980s, but only five two decades later. In Britain, British Aerospace slowly took over other British arms companies. Its mergers and takeovers of GEC/Marconi, VSEL, Alvis and others means BAE Systems is now the only company in Britain making major weapons systems.
The rationalisation of the past 20 years has produced a clear hierarchy of arms production in the world. At the top are enormous companies, mostly American, which produce the world’s modern major weapons systems and survive mostly off the massive Pentagon budget. Beneath them is a long chain of specialist suppliers that produce the electronics, nuts, bolts and other parts that the major companies ‘integrate’ into the finished products. Other companies produce lower-tech weapons that can be bought cheaply by governments in the global South.
The emergence of this hierarchy has meant that the major companies source what they need from wherever the cheapest and best components are to be found. Hence the arms industry has become more globalised, with many more countries than previously hosting companies integrated into the international arms market.
Many governments buying weapons systems from the major companies now want access to the technology for companies in their own countries. So technology transfer and/or local production is now often a condition of major arms deals. For example, 42 of the 66 BAE Hawk aircraft being bought by the Indian government are being built under licence in India. Similarly the Saudi government wants some of its new Eurofighter aircraft to be made in Saudi Arabia rather than at BAE’s factory in Warton, Lancashire.
Pressure on military budgets has driven this process of globalisation. In an effort to keep costs down, many governments have opened up their procurement so that companies from all over the world can compete for arms contracts. This has enabled a more globalised supplier base, as companies are no longer necessarily dependent on their home governments for business. BAE, for example, earns more money from the Pentagon than it does from the Ministry of Defence.
Modern warfare involves high-tech weapons controlled by sophisticated communications and sensor systems, so increasingly the arms industry uses commercially-available systems, such as digital signal processors and microwave chip technology, in its hardware. Many mainstream technologies have become ‘dual use’ and many traditionally ‘civil’ companies have become suppliers to the arms industry.
The arms industry thus in many respects resembles other major manufacturing industries in our globalised world. Intense competition, the rapid pace of technological change, long supply chains and outsourcing are as much part of the arms business as they are any other.
Governments, knowing there is little real public appetite for high military spending, have tried to encourage and manage the rationalisation of the industry. In Europe the EU has been trying to create a European arms market to rationalise production. For instance, in 2005 there were 23 national programmes for armoured fighting vehicles in the EU. The European Defence Agency was created in 2004 to promote the rationalisation of Europe’s arms industries and create a counterweight to the big US arms companies. So far it has been unsuccessful.
During the cold war, in order to save money, countries often collaborated to produce weapons systems. For example, Britain’s Jaguar and Tornado aircraft were manufactured with other European countries. This sort of collaboration continues today. Britain’s latest jets, the Eurofighter and the Joint Strike Fighter, are made by consortia of countries, while the European agency OCCAR (the Organisation for Joint Armament Cooperation) manages some procurement on behalf of Belgium, Britain, France, Italy, Germany and Spain.
Keeping it British
The UK government’s traditional policy has been to maintain a British arms industry to give itself ‘military freedom’. If Britain relied on arms imports, so the argument goes, then supplier countries could get increased influence over Britain’s foreign policies. Promoting arms exports through subsidies and a dedicated government sales organisation enables longer production runs, bringing cost savings to the Ministry of Defence budget.
The government remains committed to guiding the development of arms production in Britain, and produced a defence industrial strategy as recently as 2005. But now the emphasis is on capabilities – in other words the know-how for certain ‘critical’ military technologies, such as submarine manufacturing.
The nature of modern arms production is such that British arms companies source many components from abroad to make weapons systems. Forty per cent of the value of Britain’s arms exports has actually been imported to produce the final exported product. In that sense Britain’s weapons are no longer all ‘made in Britain’. This makes it much more difficult to justify business-as-usual.
The government now recognises that with a globalised arms industry, the arguments for maintaining arms factories in Britain are weak. In the mid-1990s the Tory government decided to allow the sale of armoured vehicles to the vicious Indonesian army. The Ministry of Defence wanted the British Army to have more than one British armoured vehicle supplier and without the Indonesian deal the manufacturer, Alvis, would not have survived.
In June this year, the government announced its new armoured fighting vehicles sector strategy. It accepted ‘it is not necessary to retain industrial capabilities in the UK in order to achieve appropriate operational sovereignty. We plan to make greater use of the global market, particularly within the EU and Nato.’
This removes one of the major justifications for supporting arms exports. Previously it was argued that exports were needed because without them Britain could not afford to retain industrial capabilities in the UK. But if the government wants, for cost reasons, to buy weapons abroad, there is no need to maintain a domestic industry, nor promote arms exports. As so many parts of the weapons that are made in Britain are made from imported components anyway, it will make no difference to Britain’s military freedom of action.
The arms industry and jobs
Another major justification for arms exports is undermined by the fact that the arms industry is no longer such a significant provider of jobs. In the 1980s more than half a million people worked in the British arms industry, but only just over 200,000 do today. Only a minority of these workers work on export orders. In the mid-1990s 90,000 worked on arms exports, down to 55,000 today, making up around 0.2 per cent of the UK workforce and 2 per cent of manufacturing jobs.
Apart from the handful of places where there is still a high dependency on arms export jobs (Warton, Brough and Yeovil), the British economy would barely notice the loss of arms exports. The MoD’s own study on the subject in 2001 concluded that if arms exports were cut by half there would be no net loss of jobs.
Knowing this, industry likes to emphasise that arms industry jobs are highly skilled. BAE promotes this view. If we do not continue to subsidise and promote arms exports and arms production, the argument runs, these highly-skilled jobs will be lost forever. This is not inevitable, of course. It would be far better if the amounts currently spent on arms export promotion and subsidy were channelled into civilian high-tech sectors. What is required is the political will to effect the change.
However, while the government is slowly adapting to the reality of a globalised arms industry in its procurement policies, the structure of subsidies and arms export promotion set up decades ago is largely unchanged.
Promoting arms exports
The government has shut the Defence Export Services Organisation (DESO) and transferred most of it to UK Trade and Investment (UKTI). This was a positive development up to a point as it reduced the institutional power of the arms export lobby. But in other respects it is business as usual. Prior to DESO’s closure, UKTI’s industry specific trade promotion was undertaken by 129 staff. When the changes in UKTI are complete the arms industry will have 170 UKTI staff promoting its products – more than every other sector of the British economy put together.
UKTI now co-organises one of the world’s biggest arms fairs, Defence Systems & Equipment International (DSEi), with the event’s owner, Clarion Events. As usual, DSEi this year took place at the Excel centre in London’s Docklands. More than 1,000 companies and around one third of the world’s militaries (including Colombia, Angola, Saudi Arabia and both India and Pakistan) attended. This important selling opportunity for the global arms industry was organised and policed at the taxpayer’s expense. Government subsidies for arms exports also continue via export credits, substantial research and development spending, and the use of defence attachés and the armed forces to promote arms exports.
Implications for campaigners
So what are the implications of these changes for campaigners? Some may feel that the jobs arguments are harder to make in a severe recession with unemployment rising rapidly. Yet even in this context the arms industry will still make up only a tiny proportion of Britain’s jobs and exports.
The new era of austerity also makes it easier to chip away at the arms industry’s undeserved privileges. It makes no sense to waste large sums subsidising the arms industry when more constructive alternatives exist. Why should the arms industry benefit from the support of 170 civil servants promoting its wares, when the rest of the British economy has only 129?
The globalisation of the arms industry means the lines between civil and military production are much more blurred than they were. This makes it easier for the arms industry and government to make arms exports appear innocuous or even respectable. But it also means there are more companies in the supply chains, and this means more potential targets on which to put pressure.
Nor should we lose sight of the wider picture. After the USA, China and France, no country spends more on the military than Britain. Over the last decade the British government has decided to add a great deal to the nation’s armoury. If all goes to plan, Britain will in a few years field two large aircraft carriers, an upgraded nuclear deterrent, new fleets of jet fighters and much more besides.
The question of military procurement is tangled up with a wider question about what Britain’s proper role in world affairs should be. Should we carry on our recent tradition of being the junior partner in American military adventures (which is what all this new equipment is for) or do something more progressive? The right answer to this question would produce a more constructive approach to world affairs – and deal the arms industry a heavy and welcome blow at the same time.
Nicholas Gilby is the author of the new No-Nonsense Guide to the Arms Trade, published by New Internationalist
Top 10 arms companies by arms-related revenues, 2008
1 Lockheed Martin $39.550 billion
2 BAE Systems $32.667 billion
3 Boeing $31.082 billion
4 Northrop Grumman $26.579 billion
5 General Dynamics $22.854 billion
6 Raytheon $21.552 billion
7 EADS $16.207 billion
8 L-3 Communications $12.159 billion
9 Finmeccanica $10.219 billion
10 United Technologies $ 9.976 billion
Source: Defense News Top 100 for 2008
Nick Dowson looks at the new wave of co-ops and community groups where people are building their own truly affordable homes
Hsiao-Hung Pai meets people affected by the fire, and finds sadness and suffering mixed with a continuing wariness of the official investigations
Chris Williamson MP, winner of the election's tightest marginal, Derby North, and recently reappointed shadow minister for fire services, talks to Ashish Ghadiali about Jeremy Corbyn, the housing crisis and winning from the left
The Corbyn-supporting group is preparing for another election at any moment, writes Adam Peggs – and now has the potential to create powerful training initiatives, union links and party reform efforts
’We believe in you. We are with you. We will never forget.’ Grenfell solidarity sweeps East London in mass banner drops from housing estates
Michael Calderbank profiles Jeremy Corbyn's new supporters in parliament
The Democratic Republic of Congo (DRC) continues to witness devastating political violence, but the world refuses to act. Ishiaba Kasonga and Serge Egola Angbakodolo ask why?
When fire safety has become a privilege for the rich, it’s time to stop austerity and fund emergency mass works to raise standards immediately, writes Jane Shallice
Interview: Queer British Art
James O'Nions talks to author Alex Pilcher about the Tate’s Queer British Art exhibition and her book A Queer Little History of Art
Cable the enabler: new Lib Dem leader shows a party in crisis
Vince Cable's stale politics and collusion with the Conservatives belong in the dustbin of history, writes Adam Peggs
Anti-Corbyn groupthink and the media: how pundits called the election so wrong
Reporting based on the current consensus will always vastly underestimate the possibility of change, argues James Fox
Michael Cashman: Commander of the Blairite Empire
Lord Cashman, a candidate in Labour’s internal elections, claims to stand for Labour’s grassroots members. He is a phony, writes Cathy Cole
Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part
Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper
Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s
Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach
Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.
Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite
Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead
Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee
Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power
The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced
India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya
North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero
The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava
France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati
This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help
PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank
Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media
I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to
We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS
Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank
Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland
Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones
The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya
The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.
An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now
The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee