The British defence industry has enjoyed a sustained boom since the invasion of Iraq four years ago. “Shock and Awe” rolled out on March 20, 2003, and since then the share prices of defence companies have far outstripped the rest of the stock market.

The FTSE 100 has risen 59 per cent since that date, but stock in Chemring, which makes missile counter-measures, has risen at more than ten times that rate – 609 per cent. The share price of BAE Systems, Europe’s largest defence company, has risen 225 per cent. Ultra Electronics, which makes battlefield information technology systems, has enjoyed a 156 per cent rise and VT Group, which builds and maintains warships, one of 187 per cent.

Symon Hill, a spokesman for the Campaign Against Arms Trade, said: “We think that most of the British public will object to the idea that these companies are profiting from war. While Iraqi civilians and British soldiers are dying, there are companies profiting from it.”

Accusations of making money from war are seen as unfair by the businessmen who run Britain’s defence industry. While the industry in the United States is loaded with former generals and admirals, British executives tend to be engineers or entrepreneurs. They are not career soldiers and get frustrated when they are presented as warmongers.

David Price, chief executive of Chemring, said: “Being able to protect people is morally right and the idea that we are trying to defend our troops when they are deployed is an important one. We owe them the best protection there is. We are not profiting by selling to both sides of a war. In reality we are benefiting from selling to people who are trying to stop the fighting.”

Accusations of profiting from war also ignore the nonIraq factors that have driven the defence industry in recent years. One is the steep rise in the oil price, which has given Middle Eastern countries money to spend on equipment – and also reason to be fearful of resentful neighbours.

The share prices and profits of British defence companies have risen also because they are now better managed. Smaller companies such as Chemring and Ultra have moved fast to introduce high-technology solutions to battlefield problems and have been rewarded for their investment.

Meanwhile, at BAE Mike Turner, the chief executive, has sought to weed out the problems that made the company famous for massive budget overruns and project delays. Scott Babka, defence analyst at Morgan Stanley, said: “A couple of years back nobody thought it could make money in the UK but management have turned the business around.”

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