The implications for the UK Exchequer of an ethical arms export policy

Abstract

For the UK, defence exports provide many jobs but critics point to the morality and human rights aspects of the arms trade. Recent speeches by the foreign secretary suggest that Mr Cook is acutely aware of the trade-off between a more ethical arms export policy and jobs in the defence industry. Recent research suggests that government subsidies for arms exports cost the UK taxpayer between £228 million and £708 million per annum. However, these figures ignore the Exchequer costs of the jobs lost as a result of the reduction in arms exports. This study uses information on the expected number of job losses, and the Exchequer cost per job destroyed, to estimate the employment costs to the Exchequer associated with a one-third reduction in UK defence exports. These costs are then subtracted from the subsidy savings to derive the overall net financial saving to the taxpayer for a one-third reduction in UK arms exports.