Sooner rather than later in this new year, the May Government will have to come clean and announce further cutbacks in the UK’s defences and armed forces. With the slide of the dollar against the pound since June 24, the defence programme looks all but unaffordable, with as many holes in its projections as a Gruyère cheese.
From this year on, the huge amounts of equipment, maintenance and support, paid for in dollars, will cost between a quarter and a third more than was budgeted for a year ago. The assumption for many programmes was an exchange rate of $1.51 to the pound. It is now $1.22. This shoves up the price enormously of the 50 new Apache helicopters and the nine P-8A patrol aircraft ordered from Boeing for £6.5 billion last summer.
The slide in the pound makes the plans to buy an unspecified number of F-35 fighters for the new aircraft carriers all but unviable. Interestingly enough, Donald Trump seems to think that the $1.5 trillion F-35 programme may be unaffordable for the US too.
The present plans on the table are unaffordable at the new prices, particularly if you take the plan to renew the Trident missile system into consideration. By some estimates the whole package could cost £200 bill ion. It cannot all be done on a current budget of about £35 billion a year. (end of excerpt)
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