§ Lord Hylton
asked Her Majesty's Government:
What is the estimated annual cost of promoting and assisting exports of military goods; how many United Kingdom jobs are sustained by arms exports; and whether the resulting cost per job could be better used elsewhere. [HL341]
§ The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean)
A number of government departments, including the MoD, FCO and DTI, contribute to the Government's policy of maintaining a strong defence industry through promoting legitimate sales of UK defence products overseas. While no central record exists of the cost of implementing this objective across government, the net operating cost of the Defence Export Services Organisation, which co-ordinates government-wide support, is estimated at £12 million in the financial year 2000–01. Against this, MoD estimates that defence exports save the defence budget about £400 million per year. These savings come from spreading the fixed overhead cost of the UK's own equipment requirements over the longer production runs generated by defence exports, from the sale of surplus military equipment to overseas governments and from royalty receipts on exports of equipment developed using public money.
In addition, defence related exports sustain an estimated 90,000 jobs out of 345,000 in the defence industry. The benefits generated by defence exports thus far outweigh the cost to government of their support.