A photograph on the front page of the UK print edition of today's Financial Times shows the bow of the first of the Astute class submarines about to launch, with the Union flag and the BAE corporate logo displayed with equal billing. It is almost a charicature of the idea that the military-industrial complex lies at the heart of Britain's "deep state" (see Who's in charge?).
Carne Ross is right to say that we should not regard the story of possible corruption between BAE and the Saudi government episode as an aberration. And the story goes beyond BAE, Saudi Arabia and few other countries. For a little more substance see Michael Hopkins on Business, BAe, and politics, but the whole story goes far beyond BAE, of course.
One relatively minor and dated anecdote about Iron Britannia is that annual reports for the ECGD up to about 1999 were still showing on their books substantial credits (hundreds of millions of pounds) that had been extended to Saddam Hussein some years before (if I recall correctly from my research for an internal report that was a basis for Exporting Pollution from Greenpeace back in 2001).