@mund: well, the ‘they would just be bought from somewhere else’ argument applies to anything (drugs, slaves,…). In fact it applies less to arms, becase arms sales are driven by
(a) massive high-level purchases, driven by politics and corruption
(b) the need to be as well-armed as your neighbours.

So: BAE &c bribe and cajole countries into buying huge weapons systems, often much larger than they originally planned.

The history of this kind of thing is pretty well-documented – you can look at Europe at the end of the 19th century, or the middle east over the past ~50 years, and it’s clear that weapons manufacturers have been expanding their markets, not just meeting existing demand.

That’s called an externality. Which means we can carry on selling the guns provided we have a pigou tax no higher than the value of the damage caused.

But,

In employment terms, that puts it roughly on a par with kebab shops. Moreover, the skills of these workers are directly transferable to socially useful applications, and could be better used elsewhere.

Let’s be honest, if you’re employed by the defence industry, you are probably not motivated by ethics, so why wouldn’t you follow the money to America, Israel, or Germany?

Also, I’d quite happily put down £900bn in subsides, if I thought it would generate £10bn in sales… (though surely such a profitable business shouldn’t rely on hand-outs…)

But, on the whole, I agree that we shouldn’t be indulging in such insidious business. Why is it that Britain cannot use such entrepreneurial spirit elsewhere? Say in new energy technologies or in non-fossil based transport? If you were to offset these technologies against energy imports, I’m sure they could be just as profitable.

£10billion from a 60,000 workforce, or £166,000 per head, suggests it contributes more to the UK economy than kebab shops.

And at what price innocent human lives, ended with UK manufactured weapons?

arms manufacturers picked up state subsidies of about £990m, enough to build ten hospitals.

Will the Tax Payers Alliance be looking into this use of tax money I wonder…?