Clive - you posit a bald statement that nations would not get weapons from BAe if they approached the company to use them against its own people "in acts of terrorism". That will never happen (directly approaching to put down your own), so your statement is neither here nor there.
When, pray tell, is the use of weapons against one's own people anything but genocide? Does it matter that they are against you, that they protest, riot, or even rebel violently? Does a government have the right to send up its warplanes, as Libya has done, and strafe its own people? In its eyes, yes, it does. Who sold them the weapons? The technology? Who trained the pilots, the ground crews and the support personnel? Who the hell do you think? You think they cobbled all that armour together in a little garage in Tripoli? Of course they didn't - but equally, Libya wouldn't have told any of the arms vendors that it might like to use its planes one day against anyone who dissented, that it wouldn't be averse to blasting its own small towns to rubble to maintain governmental control. But if you don't think there's always a tacit understanding between vendor and purchaser that the goods might be used inwardly as well as outwardly offensive or defensive, you're in La-La Land.
Your own statement is wishful thinking, as of course plenty of countries have used British-supplied armoury against their own people. Who the hell do you think supplied Zimbabwe's military, for one poxy example? The RAF itself flew bombing/strafing sorties in the Middle East against dissidents a few decades ago - the British Govt. hadn't yet then got the natives' training in place at the time, but now it has, you can look forward to all sorts of insurrections being blasted by Made in England armour.
We've just participated in a huge weapons show and signed up more Middle Eastern countries to fighter jets and land armoury. You cannot be that innocent-minded that you don't think some of that is bought as a silent threat to keep would-be dissent in line.
Grey: most of the world stinks of hypocrisy so badly, I'm surprised we can still breathe. I don't suppose it was ever any different, other than as new countries were revealed, they were eventually colonised/overrun, and duly corrupted as they emerged, so that it seems that nowhere is free from its stink.
I think the issue of flogging arms to various countries is like selling a bunch of yobs Doc Martens boots. You know they're yobs, but they're useful to you (or you hope that at some point they will be), so you sell them the gear. Later, you hear they've kicked in the heads of some guys who stood up to them, using the boots you sold them. Is it your fault? Is it theirs? Is it the fault of the guys who got kicked, knowing how their assailants were booted up and that they were likely to get hammered?
We wander off into philosophising here, for which I'm ill-educated and equipped with just a tiny brain, but your answer, as the vendor, would be "Well, if I didn't sell them the boots, someone else would." So you dodge responsibility on the grounds that the boots would've been sold, anyway. Just happened to be you this time. The boots' buyers would say they had no intention of using them against anyone - they're just comfortable and hard to wear out. But they got yelled at and they retaliated. If they hadn't been yelled at, there'd have been no need to kick in any heads.
Unfortunately, the kicked-in heads can't reply, because they're dead. So, clearly, it's their fault, and they should've known better.