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Of Military Base Communications and Autumn Statements By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

70 ARS Refuels F-35As
Being the most important economic related event to have occurred in the UK this week I apologies that I have not been around to provide comment on the Autumn Statement. The reason for lack of comment is that for the past two days I have been engaged on a military base in the heart of Norfolk (RAF Marham) looking at, amongst other things, infrastructure development that is now well underway for the planned arrival, in a couple of years’ time, of F-35 Joint Strike Fighter.

Sadly, due to their being virtually no cellphone signal available at RAF Marham, and without any other means of communication being available to the outside world except landline, being unable to watch television or listen to the radio I did not even know what Mr. Hammond has said until the following day when I read the papers. Bad enough that one could not get emails, except when one was fortunate enough to hit a favourable spot on the base, but being unable to text or phone because of their being no available satellite signal in 2016 is to my mind nothing short of disgraceful. Norfolk and indeed, many other areas of the UK that are starved of mobile telephony communications that the majority of towns and cities have and take for granted, is a national disgrace. Our military deserve much better than this. Indeed, MOD military bases and areas around them should be prioritised by the phone companies for immediate investment and action. Phone companies including O2, Vodafone, BT plus all the others really ought to be shamed into recognising their failings and they have a duty to put the situation right. This isn’t the first time that I have found myself on an MOD base and struggled to find a mobile signal and given what I do, it probably won’t be the last. But just because the majority of MOD bases are located in rural locations should not be a reason for the phone companies to avoid placing sufficient masts in the area. Serving military personnel and their families, plus many civil servants and contractors who all work together extremely hard to ensure that UK defence is fit for purpose deserve a lot better than this. For once, I can avoid blaming Defence Infrastructure Organisation because the real fault here lies solely within the private sector phone companies. Neither is this the ‘fault’ of government or MOD either but undoubtedly the former needs to step in and ensure that mobile phone companies invest sufficiently to ensure that those who work in Army, Royal Navy and Royal Air Force bases are properly connected to the outside world. If they won’t do it voluntarily the Government and the Regulator should force them into action.

When I finally managed to read the Autumn Statement in the newspapers the following day I suppose that rather than being drawn to revised UK growth forecast of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021 I was drawn to confirmation that HMG is no longer seeking a budget surplus in 2019-20 although it remains committed to returning public finances to balance “as soon as practicable”. The great cartoonist MATT in the Daily Telegraph summed this up in his usual brilliant drawn humour taking the now infamous ‘Brexit Means Brexit’ statement and turning this into ‘Deficit Means Deficit’.

It’s Friday so I will be a touch less professional than I try usually to be and say that we have been treated ‘Forensic Phil’ to a veritable feast of intentions together with news that Debt will rise from 84.2% of GDP last year to 87.3% during this year and that this will peak at 90.2% in 2017-18. Oh…will it really….I very much doubt that 90.2% will mark the peak. Meanwhile the Office for Budget Responsibility (OBR) has forecast borrowing of £68.2bn for this year, falling to £59bn in 2017-18, £46.5bn in 2018-19, £21.9bn in 2019-20 and £20.7bn in 2020-21. That all sounds very nice if only I could believe it might be true. Placing considerable emphasis as he has on infrastructure investment, housing and transport spending is of course welcome but remember that because of process, planning and systems it may be five or six years before any of these schemes start.

The good news to take out of the Autumn Statement is that public spending as a proportion of GDP will be 40% as opposed to the 45% it was back in 2010. The Prime Minister has already hinted that she would like Corporation Tax (CT) to fall even further below the intended 17% that through previous budget statements it is planned to decline to in 2020/21 (CT is currently 20%) but I do wonder that with inflation forecast to rise and with vastly increasing amounts being poured into the nations drain – a euphemism for the National Health Service – and also there being no real tax increases announced by the Chancellor where all the money is going to come from. Silly me, of course we will borrow it won’t we and in the process keep pushing our national debt up and maybe over the £2 trillion mark.

I calculate that the annual cost of paying interest on our national debt this year will be around £45 billion, a figure that is almost exactly the same as the amount that we now spend on defence. The debt cost figure alone represents around one third of the £120 billion NHS budget and which is the largest single budget unit cost of Government, approximately half the total cost of the £85 billion education budget. Even if I live to see the budget deficit being brought down and the government books being balanced I wonder how they propose in a post Brexit arena to even begin thinking about paying what will very soon be £2 trillion of debt down

As to the £2.3bn housing infrastructure fund and plans to build 100,000 new homes in high demand areas plus the £1.4 billion to deliver 40,000 extra ‘affordable’ homes, the £23 billion planned for infrastructure spending I live in hope more than expectation in relation to ultimate delivery of benefits.

For all that I do commend the effort to increase UK productivity and in broad terms provided you are not into insurance, industry has little to moan about from the Hammond ‘Autumn Statement’. That is of course unless you happen to be a very small business on a special VAT scheme which Mr. Hammond appears to be abandoning meaning that your VAT bill will from next April be going up.

Last but by no means least, I and other are delighted that military charities will benefit from about £100 million of funding received from bank fines being handed over to them. This is excellent news but then, Philip Hammond was a former Secretary of State for Defence meaning he well understood the fantastic work that military charities do.

CHW (London – 25th November 2016)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon




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