CM - There's some industrial-base argument that you gain by buying into a 3000-aircraft program. In much the same way as the U.K. stopped building VC10s and Tridents and threw in its lot with Airbus, with the result that it made more money from commercial aviation and gained market share.
Of course, that all depends on whether you get to 3,000 aircraft - a distant and unlikely goal given that the acquisition and operating cost is no longer F-16-like, which was the business case at the start of the program.
I agree that the "it's free because of tax benefits" is bogus. You have to spend the money to get the money back, and just because your average tax burden is 39 per cent doesn't mean that 39 per cent of that particular revenue (which is in contract payments from LockMart and P&W) makes it back to HMG.