The UK government claims to exercise a responsible arms export policy and to be committed to considering sustainable development concerns in arms export licensing. Yet in December 2001, it granted BAe Systems a licence for the sale of a £28 million air-traffic-control system to Tanzania, one of the world's poorest countries. This export failed the conditions of UK export guidelines in three major ways. This article explores why the government ignored its commitments, arguing that the relationship between Labour and the arms industry lies at the heart of UK export policy. A critical analysis of the development agenda shows that the issue is not simply to get the government to stick to its declared commitments, difficult as this is, as the neo-liberal development agenda promoted by the Labour government is itself fundamentally flawed. Assessing the effectiveness of NGO activity on UK arms export issues thus requires an interrogation of their vision of sustainable development as well as their critique of government actions.