Friday, August 27, 2010

Britain's largest defense industry organization wants Prime Minister to clarify the funding of replacements of British Nuke Subs

Britain's largest defense industry organization wants Prime Minister David Cameron to clarify the government's position on funding the replacements for Britain's Trident nuclear missile submarines.

In an Aug. 25 letter sent to Cameron and released to the media, ADS Chairman Ian Godden said recent official statements appear to call into question the government's commitment to the nuclear deterrent, and to suggest that the cost of the program, dubbed Successor, will fall on the Ministry of Defence and require cuts elsewhere.

It is "vital this confusion is cleared up as soon as possible," Godden wrote. "Uncertainty caused by the statements will be as unsettling for investors as it must surely be for our allies. A decision to move Trident renewals to the defense budget without a commensurate transfer of funding calls into question the integrity of the Strategic Defence and Security Review process and complicates the future funding of our conventional capabilities and our nation's ability to support its allies."

Godden said the issue was of such national significance that the aerospace, defense and security trade body was making the letter public.

Chancellor George Osborne and Defence Secretary Liam Fox are rowing over who should pick up the cost of building a new fleet of nuclear submarines for the Royal Navy. Osborne said the cash would have to be found in the Ministry of Defence budget. Fox argues the government should pick up the tab, as was pledged by the previous Labour Administration who lost power to the Conservative-Liberal Democrat coalition in May.

A government White Paper put the cost of Successor at 15 billion to 20 billion pounds, at 2006 prices. At its height, Trident spending would likely top 2 billion pounds a year.

The MoD's entire annual budget currently stands at 36.7 billion pounds.

The MoD recently completed a review of the Successor program to see where it could reduce costs. One of the options looked at was reducing the planned four-boat fleet to three.

The British government is scheduled to publish its defense review at the end of October along with the defense budget figures for the next four years. The MoD is bracing for a 20 percent cut over those four years, even as it faces an unfunded liability of around 37 billion pounds ($57.1 billion) over a decade, Fox revealed in a recent speech. Having to find the billions of pounds needed to replace the Trident subs would exacerbate the expected wide-scale cuts required by the military over the next few years.

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