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THE CALM BEFORE THE STORM – MORE MoD CUTS

26 Apr 06. There is noticeable quiet surrounding the MoD at the moment. Sources close to BATTLESPACE suggest that a PR Moratorium has been imposed prior to the Local Elections to prevent any Bad News slipping out with regard to Project cancellations and/or cuts that would affect the Labour Vote, particularly in Scotland, labour’s Heartland. Rocked by the recent Dunfermline win by the Lib Dems, Labour doesn’t want any more upsets.

As Mr Blair reels from disaster to disaster ranging from Cherie’s expensive hair care (I would suggest that she had grounds to sue given the outcome after £7k+), to John Prescott’s affair (! Enough said) to Patricia Hewitt’s NHS gaffe and now Charles Clarke’s release of 1000 foreign criminals into the community (more money for the lawyers), his hair is receding and greying at a fast rate; at least he let his house in Connaught Square, although the Standard reported that two houses had sold at the £2.9m and £3.7m range when he bought his for a reputed £3.75m!

On top of this he has Gordon Brown snapping at his heels to become PM and a looming NHS Budget deficit to plug. Blair’s babes are known for their dislike of anything to do with Defence so cuts in the defence budget are the best way to plug holes in the budget and pay for the wars in Iraq and Afghanistan.

So what is to go?

The first clue comes from that excellent publication, DEFENCE NEWS ANALYSIS. In the latest issue (Issue 0616, 24 Apr 06) it runs a piece on Type 45 Destroyers: Programme Progress. First of Class HMS DARING was launched on 1 Feb 06 and is expected to join the Fleet in May 2009, having received an initial load of ammunition in October 2008. Second of Class HMS DAUNTLESS is due to be launched in April 2007, prior to entering service in 2010. Construction of the third and fourth of Class, HMS DIAMOND and DRAGON, has started. The approved Type 45 programme is for six ships, from a planned Class of eight.

DNA comments that as at 31 Mar 05, the forecast cost of the first six of Class was £5,896m (compared with £5,475m at Main Gate in July 2000). The original “Class of 12” became “a Class of up to 12” and then “a Class of eight” before the current “Class of up to eight”. An order for the seventh and eighth of Class is still awaited.

We point our readers to the statement ‘still awaited.’ BATTLESPACE understands that CDP Sir Peter Spencer used the Easter holiday to discuss the possible cuts in the programme from 8 to 6, much to the ire of the MoD Main Building, many of whom were on holiday! Giving a cost of £982.67m each, this would give a saving of £1965.34m, a tidy sum.

In addition to saving money, such cuts that would affect the Glasgow Yards of BAE and VT, in particular would speed up the slimming-down process required by the MoD for warship yards. BAE reportedly denied our story that this would result in the closure of Yarrow and Govan and a move to Rosyth given the investment in the Govan Yard. However this news would undoubtedly lead to a rationalisation to one. In any event, if the investment was in plant, this could easily be moved to Rosyth. We also understand that another Scottish source suggested that our readers do not hold their breath on the CVF ships being built! A Conservative Government would undoubtedly cancel these.

Another Scottish source went as far to suggest that rumours circulating in the Kinloss area have suggested further problems with the Nimrod Programme that could result in outright cancellation of this programme, saving many millions. We have pontificated on many occasions about Nimrod but BAE has always said that the MoD investment in the Programme and the fact that the Support Contract has been signed would preclude any cancellation. We have always suggested that Boeing would willingly step in with a good offer of its 737 MMA Maritime Patrol Aircraft bought by the U.S. and being looked at by Canada and Italy.

Next on the list is FRES where our sources suggest further delays to 202

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