Observations on arms sales
After more than 40 years of promoting British weapons makers, the government's controversial arms sales division - the Defence Export Services Organisation (DESO) - is expected to be disbanded after a Treasury review concluded that taxpayers should no longer subsidise an "anachronistic" department with too much influence in Whitehall.
Documents released under the Freedom of Information Act offer an insight into the world-view of a body which spends £15m yearly helping British arms firms to sell around £5bn of equipment to countries ranging from Colombia to Saudi Arabia.
They reveal that in March, behind the closed doors of the Queen Elizabeth II conference centre, senior members of the defence industry attending DESO's annual symposium were briefed on how factors as diverse as climate change and nuclear terrorism are set to create new opportunities for the arms trade.
DESO's director, Malcolm Haworth, touched on how the price of oil "can significantly affect our business", with high prices recently benefitting key markets, especially in the Middle East. Haworth also noted that the American defence budget was growing - "Exactly the right environment for those seeking opportunities in the US."
Overall, Britain captures about 20 per cent of global arms exports, largely through Saudi sales, although market share has been under pressure due to rival campaigns by France, Israel, the US and, increasingly, Russia. But Haworth reminded listeners of the ace in the UK arms trade's hand: Britain's military.
"The internationally respected performance of the British armed forces reflects well on the equipment they use and is a competitive advantage that we should aim to exploit," he said.
He listed future threats to the UK arms trade, including competition from China and public pressure from NGOs such as the Campaign Against the Arms Trade, which he warned in his presentation, "Changing Strategic Context", could lead to a fall in government support. But conspicuous by its absence was any mention of Britain's biggest ever weapons contract - BAE System's al-Yamamah deal with Saudi Arabia. DESO, which runs the deal for the Saudis in return for 2 per cent commission, stands accused of approving £1bn in secret payments from BAE to the Saudi Prince Bandar.
DESO's head, Alan Garwood, was questioned by the Serious Fraud Office before its probe into al-Yamamah was abandoned and is expected to rejoin his old employer BAE in September.
In his address, he said: "It's time to be proud to be British. Let's bang the drum, wave the flag, however you want to put it, for what we stand for and what we do so well."
That drumbeat could be silenced soon if the proposals launched earlier this year at the Treasury are acted upon. Pressure to extract value for the taxpayers' pound may prove a more powerful argument than ethically inspired opposition to DESO.
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