BAE warning on UK defence budget

BAE employs about 40,000 people in the UK

The head of defence giant BAE Systems has said the company could consider leaving the UK if military spending ever fell below a "reasonable level".

Mike Turner told the Financial Times he did not "see any prospect" of that, but "you would have to be concerned" if defence became a low priority.

BAE has just signed a �2bn deal to supply UK armed forces with ammunition.

Mr Turner also spoke about "the bloody allegations" surrounding a Saudi arms deal in the 1980s.

The company was accused of making illegal payments to Saudi Arabian officials, something it has always strenuously denied.

In 2006, a Serious Fraud Office investigation into the deal was halted over fears it would threaten national security.

Mr Turner, who retires as BAE chief executive this week, told the newspaper the company had never done anything illegal and "does more due diligence on advisers than any other defence company in the world".

BAE has tapped into the lucrative US defence market in recent years, prompting speculation that it could move its headquarters stateside.

"I hope it doesn't come to that," Mr Turner said.

But he said he feared the government was "not giving the priority to defence that is needed" - something which could lead to Britain losing its "say in the world" and to BAE having to consider its future.

BAE employs about 40,000 people in the UK.

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