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United Kingdom Defence and Security Report Q4 2011
Business Monitor International, Sep 2011, Pages: 127
Business Monitor International's UK Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on UK's defence and security industry.
The UK's defence budget cuts, announced in 2010 as part of a wider policy of fiscal retrenchment to address the country's deficit, came under criticism by a defence committee in August 2011, The Wall Street Journal reports. The select committee, composed of lawmakers from the UK's major political parties, raised alarm that the cuts will undermine the UK military's capabilities, arguing that the armed forces are in danger of dropping below the size needed to deliver its commitments. They argued that cuts to equipment, particularly aircraft, will severely hamper the defence of British overseas territories, including the Falkland's Islands.
Heads of the British Army have also commented in August that they are concerned about the Britain's commitments in Libya putting extra pressure on an already overburdened force. In July 2011, defence secretary Liam Fox said that the NATO mission in Libya would cost in the realm of GBP130mn, with GBP140mn needed on top of this figure to replace munitions. There seem to be significant fears across the board that the UK will fail to meet its defence requirements between 2015 and 2020 when the cuts are implemented.
In total, the government is planning to slash defence expenditure by more than 8% as part of the government's plans to limit broader public spending. While the Ministry of Defence has been protected from the 20% cuts that have hit some other government departments, the armed forces are set for a significant squeeze which will have noticeable knock-on effects for UK defence contractors.
Meanwhile, in a further controversial move, defence secretary Liam Fox announced to the House of Commons in May 2011 that the government will be spending GBP3bn on preliminary work for new submarines. Spending on submarines is a difficult issue for the Conservative-Liberal Democratic coalition, which led the Ministry of Defence to announce a new study into alternatives. The Liberal Democrats are more sceptical of the benefits of Britain making significant investment into a new submarine fleet at a time when public spending is being slashed across the board.
Overall, the government said that spending on the renewal of the British nuclear deterrent is likely to cost between GBP20bn and GBP25bn, greatly above the original price tag of GBP11-14bn which had been estimated in 2006. The government, in a political concession to the Liberal Democrats, has agreed to delay any final decision on the Trident replacement until 2016, a year after the latest possible date for another general election.
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