Matthew Lynn Matthew Lynn

Does Britain still need an arms industry?

The fiercer the fighting for our boys in Basra and Helmand, the more important you may think it is that Britain has a thriving arms industry to supply them. The reasons that this isn’t so can be summed up in one Arabic phrase which translates, ironically, as ‘dove of peace’: Al Yamamah.

The fiercer the fighting for our boys in Basra and Helmand, the more important you may think it is that Britain has a thriving arms industry to supply them. The reasons that this isn’t so can be summed up in one Arabic phrase which translates, ironically, as ‘dove of peace’: Al Yamamah.

The fiercer the fighting for our boys in Basra and Helmand, the more important you may think it is that Britain has a thriving arms industry to supply them. The reasons that this isn’t so can be summed up in one Arabic phrase which translates, ironically, as ‘dove of peace’: Al Yamamah.

Over the past 20 years, Saudi Arabia has paid tens of billions of pounds to BAE Systems under a deal negotiated by the British government called Al Yamamah. The Saudis got a lot of expensive kit that goes bang. Many people believe bribes were paid. Last December Tony Blair ordered the Serious Fraud Office to drop its investigation ‘in the national interest’, but in June the tougher US Justice Department announced its own investigation. Expect Al Yamamah to be back in the news in the autumn, but there’s a more interesting question than whether a little baksheesh helped the deal along. Does Britain really need an arms industry at all — or at least one that consumes so much government energy and taxpayers’ money, and exposes the nation to so much embarrassment? Or is it the last relic of a 1960s balance-of-payments-obsessed industrial policy?

If anything good comes out of Al Yamamah, it might be that the gentlemen from Whitehall dealing with the gentlemen from the desert will finally realise that what makes modern Britain prosperous is nothing to do with making fighter jets and bombs.

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Matthew Lynn
Written by
Matthew Lynn
Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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