British lion claws a king-sized stake in the world's arms bazaar

Defence exporters bounce back to their destructive best as Russia suffers a post-Cold War sales slump

Britain's defence exporters achieved a record last year, capturing a quarter of the pounds 20bn world market for arms, defence equipment and services, including training and support. The pounds 5.1bn Britain earns from defence is almost as much as it derives from financial services.

As the global market for defence equipment and services decreases, Britain is netting an increasing share.

The pounds 5.1bn of business achieved by British companies represents 25 per cent of the world market, compared with 19 per cent in 1995, 16 per cent in 1994 and 20 per cent in 1993, and putting Britain back as the world's second-largest defence exporter after the United States.

Defence exports are therefore of enormous importance to Britain. The Ministry of Defence said they contribute to the maintenance of 360,000 jobs in the industry.

In addition to the jobs, the relationships connected with military supplies enable British to punch above its weight in diplomacy and maintain special relationships in certain areas, particularly the Middle East, in the view of the Government. Next month Britain will be heavily represented at an arms fair in Abu Dhabi, to be attended by James Arbuthnot, the Minister for Defence Procurement.

Last year two deals alone were worth pounds 1bn. In November, British Aerospace did a pounds 500m deal to sell 40 Hawk combat trainer aircraft, plus simulators and a 25-year support contract. In the same month, in another pounds 500m deal, Qatar agreed to buy GKN Piranha armoured troop carriers, Short Starburst surface-to-air missiles, small warships from Vosper Thornycroft, and about a dozen Hawk aircraft. The Hawk has been outstandingly successful, and has been sold to 13 countries.

Arms exports are the responsibility of the Defence Export Services Organisation, headed by Charles Masefield. It was established in 1966 following a report by Sir Donald, later Lord, Stokes, to co-ordinate the activities of British defence companies. Lord Stokes recommended that a closely-knit organisation be established to handle British arms sales and help British firms to secure overseas sales. He also recommended that future overseas market considerations be taken into account when buying new British defence equipment, something which has become even more important since the end of the Cold War. The world defence export market has halved in size since the end of the Cold war, but is still huge.

At pounds 20bn a year, it is equivalent to the total amount of coin and notes in circulation in Britain.

It is difficult to separate the market for military equipment from services, as the two usually go together in packages consisting not only of jets, corvettes or tanks, but of support, training and simulators. However, figures from the Stockholm International Peace Research Institute and the US Arms Control and Disarmament Agency indicate that arms make up about two-thirds of the total - $23bn (pounds 14.3bn) in 1995. Of the pounds 5.1bn exported by British companies last year, two-thirds was related to aircraft and the rest to land and sea systems.

However, the growing importance of simulators and computer systems mean there are increasing opportunities for sales in that area, too, not directly connected with specific weapons systems.

Developed nations account for more than 90 per cent of world arms exports. The Soviet Union was the second-largest exporter until its break-up in 1991, when Britain moved into second place. Briefly surpassed by Russia, it returned to this position last year.

The biggest arms-importing region is the Middle East, with Saudi Arabia the largest importer since the Gulf war, followed by Egypt and Turkey. East and South East Asia and the Pacific Rim is the third- largest arms market, and is of increasing interest to European and North American defence firms. Military spending is expected to increase in proportion to the expanding economies of the region, and many analysts fear that an arms race there could get out of control, with simmering tension in the Korean peninsula, between China and Taiwan, over the Kurile, Paracels and Natuna islands. Many potential disputes are over resources or driven by environmental considerations, like the dispute in Papua New Guinea.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power