Tories flag up three defence projects for cuts

#1
Link

Francis Elliott, Deputy Policy Editor

George Osborne said today that a Conservative government would deliver a Budget within weeks of an election victory and appeared to hint that three major defence projects could be an early casualty.

The Shadow Chancellor revealed the plans for a snap Budget after insisting that cutting public spending would not choke off a recovery.

Mr Osborne said that Gordon Brown’s admission that cuts were inevitable amounted to a white flag and claimed that the Tories had “comprehensively" won the spending argument.

Anticipating the next front in the election battle, he said it was important that Britain’s economic policy did not repeat the mistakes of the past. Unless spending and debt were brought down rapidly any recovery would be short-lived and illusory, he said, adding that a Conservative administration was determined not to “pump up the bubble again”.

He cited three major defence projects – the Eurofighter, the A400 transport aircraft programme and the commission of two new aircaft carriers – when asked to identify specific areas where savings could be made, athough he stressed he was not in a position to know whether the contracts contained “break clauses”.

“The resources of an opposition are limited. I have probably 10 people working for me; there are about 1,000 people working for the Chancellor and the Treasury,” he told reporters after delivering his speech today.

“There are some things we do not know. I do not know the details of some of the major defence projects which have been the subject of speculation in the newspapers. I simply do not know what the break clauses are in the Eurofighter programme or the A400M or the aircraft carriers.”

Mr Osborne will know that by naming the programmes he will encourage speculation that he plans to cut them. The Times revealed earlier this year that the Shadow Chancellor was looking at ditching the A400M aircraft, a £2.7 billion programme that has been dogged by technical problems.

In his speech he dismissed the VAT cut – which was opposed by the Tories – as having had little effect in bringing Britain to the brink of recovery, claiming that low interest rates had been the key to limiting the recession.

Ensuring that interest rates were kept low would be an overriding policy objective of an incoming Tory administration, he said.

And he warned that just because Britain’s international credit rating had not yet been downgraded – which would make borrowing more expensive and drive up rates – did not mean that it would not happen.

Only after the Bank of England dropped its policy of quantitative easing would the money markets’ true appetite for UK government debt become obvious.

“The consequences of a loss of international confidence for a debt-laden economy like the UK would be truly devastating. Just because these risks have not yet materialised does not mean that they are not very real, and the lesson of the last two years is that facing up to problems in advance is much better than trying to clean up the mess when things go wrong," he said.

“International experience suggests that the moment of greatest danger may come precisely when growth returns and investors begin to re-assess the long-term sustainability of the public finances.”

Hinting that a Conservative government would seek to reduce the national debt at a faster rate than that promised by Alistair Darling, Mr Osborne said “tight fiscal policy” was needed to convince the bond markets to continue lending cheaply.

“Bank of England rate cuts are saving British households more than £30 billion a year in interest payments. That’s almost three times as big as the VAT cut, and at no long-term cost to the taxpayer.

"Government spending and debt-fuelled consumption were the principal drivers of growth during the boom – indeed the rapid growth of government spending accounted for two thirds of all net job creation. But that growth turned out to be an unsustainable illusion when the boom turned to bust.”

By contrast the Conservatives would seek to create the conditions for a “vigorous and sustainable recovery, led by private sector investment and exports, low interest rates and tight fiscal policy".
Presumably if one is saved they can then point to that as the Conservatives enduring commitment to defence?
 
#2
"athough he stressed he was not in a position to know whether the contracts contained “break clauses”. "


F**k me...! I'm not impressed by this f**kwit! How many times have people on here ALONE mentioned that Eurofighter is loaded with penalty clauses....
 
#3
You'd have to think A-400 would be the easiest to get out of, though what would replace it?
 
#5
I can't really comment on which is the technically better option, though they'd moan there was nothing in it for British industry if we bought C-130 & C-17 instead. I was thinking more that it'd be cut and replaced with nothing! But yeah, if they do cut these programmes, it'll show neither major party is serious about defence, in which case we might as well go the whole hog and cut back to just defending the homeland, IE a few inf bns, a few patrol ships and a couple of fighter squadrons, since theres no credible threat of attack on the homeland.
 
#6
So.

Cutting to the chase then.

Osborne has said:
Get rid of big ticket defence spending (which the public doesn't understand) irrespective of whether it is useful / required etc.

Get rid of the VAT cut - which has certainly had an impact - but a larger impact for poorer families.

Don't allow additional spending - so cuts all round in front line services

Use interest rates to help the economy - is he talking about bringing those decisions back in house? What, after they did SUCH a good job with them last time?

Rely on the "markets" (read - rich bankers and financiers who screwed us this time, last time, and pretty much every time before that) to pull us out of the mire.


Good. Good to see that the tories have learned their lessons.

Christ on a fcuking bike
 
#7
Kitmarlowe said:
F**k me...! I'm not impressed by this f**kwit! How many times have people on here ALONE mentioned that Eurofighter is loaded with penalty clauses....
Indeed. I was under the impression that most of tranche three was simply being flogged on to the House of Saud anyway?

The Navy pawned half it's surface fleet on the understanding that it would get the carriers in return, cutting them is a clear betrayal of trust.

Apparently Liam Fox is not impressed either:

Dr Fox is critical about cutting “programmes willy nilly on the basis of the cost”. He has likened such efforts to reducing weight by “removing your liver”.
 
#9
Father of a close friend just retired from senior position in the defence industry tells me the carrier project is so loaded with penalty clauses that it's almost armour-plated. It would be almost as expensive to back out as it would be to build the things.

I speculate that two will be built but one will be sold. Pure speculation though.
 
#12
Krek_Brizzle said:
Father of a close friend just retired from senior position in the defence industry tells me the carrier project is so loaded with penalty clauses that it's almost armour-plated. It would be almost as expensive to back out as it would be to build the things.

I speculate that two will be built but one will be sold. Pure speculation though.
The reality of fixed price contracts and penalty clauses is they are simply point to negotiate on.

There is only 1 shipbuilder in the UK now, BAe

So if the Tories wanted to cancel CVF (which I think is a good idea) they simply trade the CVF for the FSC which is ultimately a larger and much more lengthy contract.

Either that or they play hardball, scrap DIS and say we will buy from the best manufacturer regardless of its country of origin. That would put the sh1tters right up BAe etc and bring them back to the negotiating table where they would have their penalty clauses rammed right up their arrses

Remember, the customer is always right
 
#13
Strait_Jacket said:
Kitmarlowe said:
F**k me...! I'm not impressed by this f**kwit! How many times have people on here ALONE mentioned that Eurofighter is loaded with penalty clauses....
Indeed. I was under the impression that most of tranche three was simply being flogged on to the House of Saud anyway?

The Navy pawned half it's surface fleet on the understanding that it would get the carriers in return, cutting them is a clear betrayal of trust.

Apparently Liam Fox is not impressed either:

Dr Fox is critical about cutting “programmes willy nilly on the basis of the cost”. He has likened such efforts to reducing weight by “removing your liver”.
I quite like Fox - I can see him resigning if the next defence review doesn't go his way.
 
#14
Krek_Brizzle said:
Father of a close friend just retired from senior position in the defence industry tells me the carrier project is so loaded with penalty clauses that it's almost armour-plated. It would be almost as expensive to back out as it would be to build the things.

I speculate that two will be built but one will be sold. Pure speculation though.
In aircraft carrier's, if you have one you have none, as the MN are learning. 1 AC is IMHO, dangerous, as it gives the illusion of capabilty without actually giving it.

If one is all the RN's going to get, I'd say **** it and buy a few more SSN's.
 
#15
we may be broke but we need to look at capability first then cost.
BAE 146 you are having a laugh :roll:
you could make it a viable military frieghter but then I could pass long drag if given a week to do it in :twisted:
 
#16
GB Plc has no money so sooner rather than later the wheels are going to come off, so lets make sure the day to day commitments are sorted with choppers and boots on the ground, big stuff has to get cut back and culled, it's priorities not wish lists!
 
#19
pimpernel said:
GB Plc has no money so sooner rather than later the wheels are going to come off, so lets make sure the day to day commitments are sorted with choppers and boots on the ground, big stuff has to get cut back and culled, it's priorities not wish lists!
Doesn't that beg the question how important is Afghanistan to us really? And do we want our entire defence capability so focused on afghanistan we can't do anything else? Don't get me wrong, we need more infantry and more support helos, but don't we need other capabilities as well? Will the services maintain a united front or will they start selling each other out for their own slice of the pie?
 

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