The British have traditionally been as much, if not more so, advocates of the Cult of the Rifleman as we Americans. L85 (for infanteers and such) was sporting x4 power scopes back when we thought the M16A2 with easy-adjust windage iron sights was new-fangled.
We were fitting L1A1s with the SUIT 4x scope a good few years before we introduced the SA80 with the SUSAT scope.
Having used both the L1A1 and the SA80 I would say the SA80 is a superb weapon, better than almost any other small-caliber infantry arm in the world, but that the L1A1 is essentially the better gun.
If you gave it a lightweight folding stock, cut the barrel down to 18" and gave it a flat-top reciever with an ACOG it would be lovely. Add to that a 25 round magazine instead of a 20 (30 is a bit big in my opinion) and a quick-attach supressor carried in a frog for CQB it would be even better. If we're really going for dream battle rifle, rechamber it in 6.8mm SPC or 6.5mm Grendel and give it a full 30 round magazine.
The MoD have looked at a number of weapons, comparing them to the SA80, including:
Steyr AUG
Diemaco C7/8 etc
FN F2000
SIG 55x
HK G36
AK74
Since only the SIG and the Steyr equalled or exceeded the SA80, I doubt we'll see any of those adopted - they're either inferior or offer little or no gain. I think it's possible but unlikely that we will see a return to a alrge caliber like .308. British army doctrine tends to involve rapid but accurate firing and a far greater use of full-auto than I have seen in almost any other western military. If you see footage of soldiers fighting in Iraq and Afghanistan, they are very often firing bursts of full-auto fire and hitting targets hundred of yards away - with a heavy weapon like the SA80 and a low-power cartridge like the 5.56, it's very effective.
On the other hand, soldiers in Afghanistan are shunning the SA80 in favour of machineguns and sniper rifles as it lacks the range or firepower to be effective in the vast open spaces of Afghanistan. whilst those in Iraq favour the rifle for its small size and easy portability, especially in vehicles. I dare say that any consultation will find troops in Iraq asking for "more of the same, but ambidextrous" whilst those in Afghanistan ask for a big bore rifle with a bipod and carry handle.
I know it's not a military arm, but I do like the look of the new Kel Tec rifle. It's bullpup which the MoD will like, it's .308 so those in Afghanistan will like it, it's ambidextrous and compact so those in Iraq will like it, and it can easily take optics which will please everyone. If they made a military spec version with a supressor for CQB, chambered it in 6.5/6.8 with a 30 round mag and put an ACOG on it, it really would be my choice*.
*This only on what I've heard and seen, I've never used one.
Oh and one last thing: there are a couple of UK arms manufacturers besides the small crop of high quality rifle and shotgun makers. Parker Hale are/were making a PDW (along with their civillian weapons). I forget but I think it was along the lines of a machinepistol with a folding stock in 10mm Auto. Accuracy International make the AW rifles obviously and there's also a company who make FN MAGs and Browning .50s under lisence, and (of all things) an MP5 in .308
On pistols:
Most issued are Browning HPs of WW2 vintage (or soon after). There's also some SIG P226s but they're mostly for special forces (20 round mag for the SAS
). The RAF still have some Walther PPKs in use!
Pistols are very rarely issued in the army though. The RAF issue them regularly, but Army Air Corps tend not to as far as I know, though some helo pilots kick up a fuss and nab one. High ranking officers carry them mostly for show, and military police have them most of the time. Squaddies never get them basically. Bootnecks get them for boarding operations sometimes.