The economic impacts of restricting UK arms exports

Although the Cold War is over, the dangers of international armed conflict remain. Multinational talks about restricting the arms trade stalled in 1992. If they resume, what should the British attitude be towards participation in a multilateral agreement to limit arms exports when such exports apparently make a significant contribution to the UK economy? Sensible public debates and choices need information on the likely economic impacts of alternative scenarios. This paper examines the likely effects of a one‐third reduction in the value of UK arms exports. It finds that between 13,333 and 40,000 jobs would be lost and that of those that remain in the labour force over half will find new work within a year. The South‐West would be the worst affected region losing 0.3 per cent of all jobs; defence sales would be cut by between 3 and 8 per cent; aerospace output would be cut by between 5 and 9 per cent , and total exports would fall by 0.5 per cent. There would be initial adverse effects but, over time, resources would be re‐allocated to other industries and regions.