How Britain has become a world leading manufacturer
of the products of war
By Matt Kennard
on 20 Oct 2017
Britain is a country of 65 million people, the 21st most populous
nation in the world, with the 9th largest economy in the world based on
GDP (PPP). Yet it is the second largest exporter of arms in the world.
How did this happen? How does Britain, a small island with very little
in the way of an industrial base, lead all European countries in the
number of surveillance and cyber warfare companies registered within
its shores? Why is it home to the largest number of private military
and security companies in the world? How did Britain become the go-to
country for despots around the world who want to ‘tool up’?
The answers to these questions goes back to a relatively little-known
element of the Thatcher Revolution in 1980s Britain. The story of
Thatcher’s confrontation with the unions and the industries they
represented is well known. Thatcher emerged victorious and replaced a
manufacturing base with the “Big Bang” in the City of London, which
drew capital looking for a ‘liberal’ regulatory environment from around
the world. London and the country as a whole is still feeling the
consequences of that revolution to this very day.
But Thatcher wasn’t an industrial arsonist. There was one industry that
she promoted to unprecedented levels: the arms industry. During her
tenure, the British economy was given a massive boost from the sale of
military hardware, and the Iron Lady spent a large portion of her
overseas trips trying to sell British arms to foreign governments.
In 1985, for instance, Thatcher negotiated what is still the largest
arms deal in history. The Al-Yamamah deal would see Britain sell
fighter jets, missiles and ships to Saudi Arabia worth £42bn. The deal
was, though, riven with accusations of corruption and bribery. The
extent of such may be never fully known: two National Audit Office
reports on the Al-Yamamah have been suppressed because of apparent
“national interest” concerns. Mark Thatcher, Margaret Thatcher’s son,
also stands accused of making millions of pounds in “commissions” from
Thatcher rapidly expanded the markets for British arms exports, but
this program had always been a bipartisan affair. In fact, it was
Harold Wilson’s Labour government which set up the Defence Export
Services Organisation (DESO), an organisation meant to mobilise civil
servants and arms industry executives in a coordinated campaign to sell
British wares around the world.
What it means, today, is that the UK stands as the second largest
exporter of arms in the world, according to the UK government itself.
According to the Department for International Trade and its Defence and
Security Organisation (the modern version of Wilson’s DESO) in the
decade from 2007 to 2016 “the UK successfully retained its position as
the second largest defence exporter globally. The UK is also Europe’s
leading defence exporter ahead of Russia and France.”
Since the Thatcher era, however, warfare has changed markedly.
Technology has changed how wars are fought, while the adversaries have
splintered and uncoupled from the state. But Britain has maintained its
pre-eminence in the industry, nimbly moving on to dominate the cyber
sector and private military sector in turn, thanks both to the
relationships and capacities offered by the conventional arms industry
that already exists but also to a light-touch regulatory environment
that was fostered during the Thatcher era. No subsequent government
since she stepped down as Prime Minister in 1990 has wanted to restrict
the industries of violence from having maximum power on the world stage.
The UK’s existing arms industry and the government’s ability to promote
it has made the UK a global hub for companies working on the cutting
edge of the new cyber warfare. According to Privacy International, the
UK has 104 surveillance companies producing technology for export — to
foreign governments and corporations — headquartered in the country.
That number is more than double the number of companies of the next
European country, France, which has 45 companies headquartered
Privacy International, the NGO working on privacy rights, has written:
“The UK government … promotes exports abroad through the UK Trade and
Investment Defence and Security Organisation, for example, proactively
assisting surveillance company Hidden Technologies to access markets
abroad by providing advice and introducing the company to potential
The UK has significantly more surveillance technology companies
registered in its borders than anywhere in the world outside the US.
This technology is being exported, with government approval, to some of
the repressive regimes in the world.
The UK’s role in the US War on Terror from 2001 until today has given
the war industries another fillip. Many of the PMSCs in the UK were set
up by former soldiers in the British military who left service after
fighting in Afghanistan and Iraq and wanted to make significantly more
money in mercenary work. As Dave Allison, chief executive and founder
of Octaga, a Hereford-based PMSC, says: “I left the forces after
serving time with the parachute regiment and the special forces. I saw
a distinct gap in providing security to corporate and private
clientele, the various big companies out there that were doing it, it
was all basically being driven on price, and we wanted to offer them
something a little bit different, something bespoke. We cater for
various clientele, from television and film industry, to corporate,
government, and private high net worth (HNT) individuals, so it’s
really broad spectrum of services we do, we do the physical side, the
consultation side, and we do the technical side.” He says business has
been roaring since they set up in 2001.
But like the conventional arms industry, these companies are shrouded
in secrecy, something the government has no interest in ending. A large
reason for the attractiveness of the UK as a destination is that these
companies – and those producing conventional arms and surveillance
technology – are left alone by government and the media. Sam Raphael, a
senior lecturer in International Relations at Westminster University
and author of a report on PMSCs in the UK, says that “this is a world
where very little is known about what’s going on, no-one is publishing
data on this. The government is not publishing lists of PMSCs which are
operating, PMSCs themselves if you look on their websites… it (is) just
This combination of learned skills in warfare, liberal regulation, the
lucrativeness of mercenary work, and Britain’s global-facing heritage
has meant that, today, the UK is the world’s leading centre for PMCS.
According to the Sié Chéou-Kang Center at the University of Denver, the
UK has by far the largest number of PMSCs headquarted in-country
So this is 21st Century Britain. A country that has decided to
unshackle itself from the regulatory authority of the European Union is
one that has also established itself as a leading exporter of
instruments of warfare. It is an industry that inherently cannot
flourish under the scrutiny of human rights lawyers, and so it is that
the industry remains opaque and often impenetrable. Surveillance system
producers, mercenary groups, arms industries flourish in the dark.
It’s time to expose to the sunlight the British industries of war – and
the people that enable them.
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