"Furthermore these deals were done outside of the UK, with foreign countries, so why should they be subject to UK law anyway?"
Bribery of foreign government officials by UK firms/citizens/others with a connection to the UK is an offence following the Anti-Terrorism, Crime and Security Act 2001. This in turn follows the UK's signing of the OECD Anti-Bribery Convention in 1998. And since then, it's done bugger all about it: http://www.oecd.org/document/8/0,3343,en_2649_34859_41515464_1_1_1_1,00.html In fact, the only country to have made any serious efforts to prosecute and prevent corruption of foreign officials is the US Department of Justice. Germany is far behind the US, and then everyone else is fair behind Germany. See Transparency International's Global Corruption Report and also their defence sector research for more: http://www.transparency.org/news_room/in_focus/2006/defence_sector
The issue is an important one for the UK which is why it should be subject to UK law: bribery of foreign officials is not just "a bit cheeky" or a tut-tut affair, it creates a serious risk to UK businesses, UK competitiveness and UK security interests. Every time a kickback is paid, it sustains a corrupt and repressive regime overseas that ignores the interests of ordinary people and creates exclusion and disharmony with the government; this isolation is exploited by extremists (of any description), which in turn endangers UK citizens/businesses/interests. Osama Bin Laden's (former?) appeal among the masses in the Middle East was partially the result of railing against corrupt and repressive regimes like Saudi Arabia: and any bribe paid by BAe to the Saudi government sustained that corruption and repression; and our previous failure to stop BAe doing that is now biting the UK in the arse.
"I'd rather BAE paid a bit of a bribe and a bunch of British workers kept their jobs rather than them taking a nice moral high ground and going bust."
It doesn't even work like that - the defence sector is a huge subsidy junkie in the UK and bribery always costs more than it was originally worth - speaking as someone who has investigated dozens of corrupt payments to foreign officials on behalf of a private/commercial employer, wherever there is bribery, there is also fraud against the company and tax evasion. It's not the nice moral high ground, it's enlightened self-interest.