The Arms Trade in Austerity Times

by Elliot Murphy

17 January 2016

Whilst some observers have taken to the broadsheets to proclaim a gloomy economic year, the immediate future looks rosy for one booming British industry: the arms trade. Elliot Murphy explores the current state of the industry, and the possibilities we have of resisting its devastating effects at home and abroad.

Aside from the production of food, the manufacturing of weapons is probably the oldest industry in history. As a business, the arms trade exists solely to profit from war and conflict. It boasts substantial political influence, emanating from financial contributions to political parties and relentless threats of job losses. It fuels the killings of combatants and civilians across the globe, not being moved in the slightest when these killings turn into human rights abuses. As documented in Richard Wilson’s 2006 book Titanic Express, a Burundian militia who killed his 27 year old sister Charlotte informed her that the reason she was being killed was because of “the white people supplying the weapons in Africa.” The sale of arms imposes a cycle of violence and debt on developing nations, which Western governments and investors are eager to profit from.

Britain’s particularly ruthless brand of arms trading has fuelled and legitimised a number of conflicts involving gross human rights abuses – including, as of 2 December, the Syrian war. Share prices immediately escalated after the Commons ruled by a deceptively large majority (not reflecting the bulk of public opinion, which was overwhelmingly opposed to air strikes) to join France and the US in their bombing raids on Raqqa and surrounding territory. Choosing to bomb Syria, as the French have done after the Paris attacks of November 2015, only serves to further provoke Isis and ensure the influx of further militants and refugees. This shouldn’t come as too much of a surprise given Sir Simon McDonald, Permanent Secretary of the Foreign Office, last year declared that human rights were “no longer a top priority.”

BAE Systems, Britain’s largest arms producer, enjoyed a surge in share prices; investor confidence also boosted in Thales, Finmeccanica and Airbus. While the media largely occupied itself with discussions of the blood-pumping drama of the Commons and the rhetorical quality of various speeches, in the peaceful corridors of Britain’s major weapons manufacturers no votes needed to be cast, and no debates needed to be won – David Cameron and Hilary Benn were doing their work for them.

Arms firms, like the Tory cabinet, see war not as a humanitarian and diplomatic catastrophe to be avoided, but rather as a unique and dependable business opportunity. Despite the recent estimate that 40% of corruption in all world trade comes from the sale of arms, ‘national security’ is continuously invoked by successive British governments to justify their strong ties to private arms firms. The arms trade is also virtually invulnerable to serious legal action: out of 502 UN arms embargo violations by states, firms and individuals, only two have led to legal action, and only one resulted in a conviction.

In October 2014, the UK government was accused of quietly weakening the restrictions on arms sales to ‘countries of concern’. This accusation came not from the Campaign Against Arms Trade (CAAT), Amnesty International or Human Rights Watch, but from the former Tory defence minister Sir John Stanley, chairing the Commons committee on arms export controls. 2014 saw £60m worth of arms being sold to countries of concern, largely because licence regulations were changed. Whereas previously states had to use British arms for ‘internal repression’ in order for sales to them to be barred (a law which was itself very loosely applied), today there instead has to be a ‘clear risk’ that arms will be used in violation of international law.

Adopting the typical state-corporate lexicon, ‘clear’ in this instance translates as ‘if we, and not you, deem it so’. Even though there are no clearer risks of violating international law than in selling arms to Israel to use in Gaza over the summer of 2014, or to Bahrain or Russia to use against peaceful protesters, the Cameron-Clegg coalition saw no need to clamp down on the free flow of military hardware. One of the reasons for Sir Stanley’s concerns was the £20m of military equipment sold to Saudi Arabia in the first six months of 2014 (according to the Department for Business, Innovation and Skills), and the £8m of arms licensed to Sri Lanka, which included assault rifles and shotguns. Sri Lankan security forces are regularly accused of raping and torturing detainees, and arms sales only stimulate these crimes and the island’s sectarian violence.

When states buy UK arms, they are also simultaneously buying Britain’s silence on human rights issues. For instance, the British arms company Chemring was pressured to review its sales policy after CS gas it sold to Hong Kong was used against peaceful protesters in 2014. Since the austerity years of 2010 onwards, the UK has granted £180k worth of licences to Hong Kong. Responding to complaints about British tear gas being used, foreign secretary Philip Hammond excused the government’s licensing of the sales by pointing out that the Hong Kong police ‘could buy CS gas from the US’. The fact it was Britain, however, that bore responsibility was not addressed, and Hammond’s preference for hypothetical speculation over real-world discussion shone through against all other concerns raised.

Meanwhile, tear gas continues to be licensed to Saudi Arabia, Oman, Jordan and the United Arab Emirates, with ministers drawing few ethical implications from the Hong Kong case. On the morning of 23 September 2015, a UK-made cruise missile of the kind owned by the UAE armed forces was used to destroy a ceramics factory in Yemen, killing at least one civilian and injuring a number of others; an action of little consequence or interest at Whitehall. The MENA (Middle East and North African) nations have been intensely saturated by UK weapons, with the police, military and armed gangs owning any number of British armaments. The tragedy, then, is that though the cancelling of arms licenses and widespread divestment are of the utmost urgency, in its relation to the Gulf states the UK arms trade is in a similar situation visitors to Hotel California find themselves in: arms companies can check-out any time they like from the Gulf, but they can never really leave.

In Chemring’s annual report, the company states that it is “well-positioned to benefit from any sustained increase in demand as a result of the conflict in the Middle East.” Translated, this means the company is eager to profit from the death and destruction of Middle Eastern conflicts fuelled by its close allies, the Conservatives. Due to the commodity’s sparse geographic distribution, it is more difficult to steer clear of autocratic trading partners when it comes to Britain’s oil imports. However in the case of the arms trade, Whitehall has full control over the regimes it licenses weapons to. No legitimate argument of economic necessity can possibly be made when Britain licenses armoured vehicles and shotguns to authoritarian Gulf dictatorships as and when it pleases.

The case of the Israel-Palestine conflict presents another clear example of where commercial interests are placed above humanitarian concerns. Not only has Britain continued to arm Israel during the austerity years, but the Conservative government under Cameron has actively launched crackdowns on those attempting to stop the weapons flow. In early October 2015, the Conservatives began a clampdown on Labour councils boycotting Israel and the arms trade. Communities secretary Greg Clark stated that boycott, divestment and sanctions (BDS) campaigners cost British jobs and ‘poisoned’ community relations.

Clark equated boycotting an arms trade supporting an apartheid state with ‘the politics of division’. The £22bn per year defence industry was put at risk by these forms of social justice activism, Clark grumbled. In 2014, Leicester’s Labour council passed a motion permitting the boycotting of products from illegal Israeli settlements in the West Bank. The Conservatives painted this as divisive and anti-Semitic. In a briefing given the remarkable title ‘Dangerous Consequences of Hard-Left Policies’ they stated that BDS had the potential to fuel community tensions, even though conflating Judaism with illegal Israeli violence is of course itself a form of anti-Semitism.

All of this is happening at a time when a number of universities are building ‘partnerships’ with arms companies, effectively ensuring that public money is (indirectly) funnelled into their hands through research and development projects, specialised university modules for students, amongst other things. Despite the Daily Telegraph announcing ‘The End of the Austerity’ the day after George Osborne’s autumn statement, substantial defence funding and private arms firm subsidies remain secure. Universities, being major suppliers of budding engineers keen to explore technological frontiers, are a particularly strong source of support for the arms trade. When UCL was partnered with BAE Systems (before a successful campaign forced it to divest in 2009) it set up a special MSc degree in Systems Engineering Management to encourage students to develop the next generation of military and ordnance technology.

Portsmouth University also has strong ties with the arms trade. A Freedom of Information request in August 2014 from CAAT revealed that from 2011 the university had received £490k from BAE Systems and £23k from GKN Aerospace for ‘industrial consultancy and industrial research’. BAE Systems and Qinetiq are even working with the university and Portsmouth City Council towards the establishment of a new technical college in September 2017. Qinetiq specialises in the development of new military technologies such as ballistic missiles, and sold $1.2bn of arms goods in 2013. It maintains close ties with UK military research after its privatisation in 2001. GKN Aerospace, a partner of the university, sold helicopters and armoured vehicles to Indonesia during General Suharto’s twilight years in the late 1990s, while a subsidiary of the firm, FPT Industries, manufactured fuel tank systems for Indian ALH helicopters sold to the authoritarian state of Myanmar.

Public money is consequently funnelled into arms firms not just through the usual means of subsidies, but also through university engineering and technology departments. The only things which students learn as a result of this process is how to make a killing off the back of a well-educated, unpaid labour force: the students and researchers themselves. In fact, not only is this labour force unpaid, but thanks to the introduction of and dramatic rise in tuition fees university students are effectively paying thousands of pounds to enter these private research appendages. The price of admission is high, and the effects on conflict zones and human rights abuse levels worldwide are significant. Academic departments offering students industrial placements are woefully tight-lipped when it comes to the ethical credentials of the firms they send (or, more appropriately, export) their students to; nor do they notify students about the results and ethical implications of their work for the firms.

Just as climate change can be used to present the case for a socialist, anti-austerity politics (as Naomi Klein powerfully argues in This Changes Everything: Capitalism vs the Climate), so too can the arms trade be used as a pivot around which anti-imperialist, anti-racist and green policies can be explored. The cases for such policies continue to mount in this respect.

Recently, the University of Liverpool Friends of Palestine society and CAAT groups led a successful campaign to pass a motion to implement a BDS policy. A primary motivation behind the campaign was the university’s links to BAE Systems and Qinetiq, with CAAT claiming that the University of Liverpool gave £17.5m in funding to military projects from 2001-06. Activists only have a certain amount of time, energy and money to invest in campaigns, so tactics need to be chosen carefully and soberly. The reason why the arms trade should be a primary target is because it links together a wide number of disparate issues, from the Israel-Palestine conflict to the human rights abuses of the MENA dictatorships to the contemporary austerity complex, exposing as it does the myth that government efforts to protect corporate profits are beholden to the needs of ‘balancing the books’.

There are a number of ways to proceed at this point. Disrupting recruitment events at universities, for instance, ensures that arms firms waste their resources, ultimately to the point that they will reconsider visiting a campus. When companies put up stalls at fairs and fresher events they often end up spending around £1k for the stall itself, £200 handing out products and literature, and £800 paying staff and covering travel costs. When so many arms fairs rely on sleek presentation to distract students from the end result of selling sniper rifles to the Bahraini police, it becomes just as vital for activists to target the style, and not just the content, of the messages conveyed to students. Anything from staging a die-in to leafleting next to a stall to actively dismantling it can send an important, alternative message to the arms firm in question and the students who see photos of the direct action on social media. Undermining the sleek, cool business activities of arms firms is in keeping with the judgement of the author China Miéville, who points out that while evil is often “the most banal Eichmann,” it is also very often “a party-goer; boisterous; braying; a frat alumnus; a bully who loves being a bully; a successful professional, lip-smacking at the misery of those s/he hurts; and one who is increasingly happy to cop to that enjoyment, to proclaim it, to perform it.”

In an extensive study of defence exports, Neil Cooper at the University of Plymouth explained that “the British [military-industrial base] has had a negative impact on economic growth by variously depressing investment, diverting scarce Research & Development sources, and/or by imbuing key economic sectors with a corporate culture antipathetic to innovation, low-cost production and competitive marketing.” He concluded that “far from promoting a virtuous circle of benefits based upon the efficiency of the British defence industry and enjoyed by all, UK defence exports arguably promote a vicious circle of disadvantage from which only the arms traders benefit.”

This viciousness is also imposed on other nations, such as when Indonesia defaulted on its debts in 1998 after having spent huge sums on Hawk jets from BAE Systems and armoured vehicles from Alvis. Because such sales were guaranteed by Britain’s Export Credits Guarantee Department (ECGD), the ECGD paid these firms the guarantee, which between 1998 and 2004 amounted to £645m. The total debt is still to be paid off, with Britain insisting that Indonesian development be subservient to corporate profits.

But the benefits Cooper describes are also recouped by those in power who support or promote arms firms. Thomas Docherty, MP for Dunfermline and West Fife, once claimed: “It is important that we continue to have exports around the world and that the Ministry of Defence sees part of its role as maintaining the business model for companies such as BAE Systems and Babcock.”

‘Maintaining business models’ here refers, as usual, to the violation of market principles in favour of subsidizing private firms; BAE Systems is the world’s third largest arms firm, with $27bn in total sales for 2013. The close relationship the British state has with the arms trade stems from the fact that when many arms firms were created in the post-war period they were “intimately involved in the military ambitions of their host country,” and were usually state-owned and “inseparable from the county’s own armed forces,” as Nicholas Gilby writes in his No-Nonsense Guide to the Arms Trade. Due to the large costs involved in the production of weapons and military vehicles, the arms trade has seen a number of consolidation operations over the decades. After British Aerospace (BAe) acquired the military parts of GEC/Marconi, the submarine firm VSEL and a number of other companies, it was renamed BAE Systems. This was after BAE was created in 1977 as a nationalised firm comprised of several arms companies.

The issue of government subsidy is a major one for anti-arms trade campaigners. It is also a good lesson in how Britain’s state-capitalist economy operates, in contrast to state pronouncements. Britain supports its arms trade through funding export promotion, which often takes the form of diplomatic visits to or from potential client states, paid out of the government’s pocket. Britain’s Defence and Security Organisation, which exists to promote arms sales, is part of UK Trade and Investment and gets far greater funding than other UKTI sectors. Even though the arms trade is responsible for only 1.5% of UK exports, the estimated £200m annual export credit guarantees paid by the ECGD is greater than any other export insurance. The delivery of arms, in comparison to other exports, is of the highest importance for Whitehall’s business and strategic goals.

Together with the Indonesian case, and many other similar examples, the evidence suggests that the British government acts as the arms trade’s bulldog, protecting its assets and defending its interests. At a time when the Tories are forcing Britain’s last surviving miners into unemployment (a job which requires a highly specialised skill set) it requires an extremely dark sense of humour to approve of the standard argument that the arms trade needs to be subsidised to keep its 300,000 workers employed, considering that the skills of these workers are widely applicable in a number of industries given their general engineering backgrounds. Although even this figure is an exaggeration according to Ian Prichard of CAAT: “It includes all the ancillary services connected with defence, such as the people looking after the defence estates. The actual defence industry workforce is, maximum, 215,000, and could well be 30,000 or 40,000 less.”

Unethical sales are in violation of UK law, and also violate the EU Common Position on Arms Exports of December 2008 under which member states shall “deny an export license if there is a clear risk that the military technology or equipment to be exported might be used for internal repression.” Arms firms also enjoy tax loopholes in the Netherlands. Since the Commons is (currently) far from willing to discuss the possibility of banning unethical arms sales, and since the unusually relaxed rules surrounding licensing arms to states with poor-to-horrendous human rights records have proven ineffective, I launched a petition proposing that unethical transactions should be heavily taxed. Such a tax should apply regardless of whether or not it was known at the time of sale if the items were likely to be used in human rights violations. This would be relevant to cases such as the Second Intifada, in which the Israel Defense Forces used armoured personnel carriers produced from Centurion tanks that were sold to them by Britain between 1958 and 1970, despite Israel assuring Britain they would never be used in the Occupied Palestinian Territories.

While extensive documentation of state-corporate crimes is essential, the ethical consequences of the arms trade are not wholly obscure, and it usually doesn’t take much encouragement for public anger about these issues to mount; as Samuel Johnson said, “men more frequently require to be reminded than informed.” Only mass and persistent protest, and not purely spectacles involving  constant invited speakers and intellectual reflection, will stop the state-corporate arms trade nexus from fuelling conflicts worldwide and directing tax payer’s money away from ethically responsible investments, serving to remind Britain of its grossly blood-stained and corrupt role in the world.

While the headlines currently focus on political betrayals, free votes and angry Commons speeches, this distracts from the unfortunate fact that such political wrangling is how many of the world’s major conflicts are funded. The likelihood is that in a few decades time, when the flags of Isis have been burned, even the most straight-laced media commentators are going to look back at this moment, observe the rapid economic expansion of the major arms firms and the chaos they help to cause, and ask why we didn’t do so much more to stop them.

Photo: Paul Shaw/Number 10/Flickr

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