ABSTRACT
The UK is one of the world’s major arms industries. It supplies a comprehensive range of conventional, nuclear and advanced technology military equipment for its national armed forces. These have a world military role with the capability of extended overseas military operations. Some equipment is imported, especially from the USA. The UK is also a major arms exporter. The chapter defines the industry and reviews what is known and what is not known about the industry. It reviews the available data, including its size measured by sales and employment and the regional distribution of defence jobs. The industry comprises a small number of large firms often forming domestic monopolies or oligopolies, mostly privately-owned. BAE Systems is the dominant firm. Both competitive and non-competitive defence contracts are described. UK defence industrial policy prefers open competition in the global market and its contribution to UK prosperity. Company data are used to assess industry performance, based on BAE and Rolls-Royce. Exports are used as a measure of international competitiveness. Industry future prospects will depend on new technology and continued rising costs leading to fewer new types and shorter production runs.
