UK Cuts Likely less than Expected

LONDON — Although the U.K. defense
industry is still bracing for
significant program cuts when the
government’s strategic and spending
review is revealed next week,
there are growing indications the
calamitous reductions once feared
will not materialize.
At one point, defense industry
representatives were bracing for
cuts in defense spending well above
20% of current outlays, but recent
indications are that the figure will
be less severe. A cut in spending of
10% or less is now expected, several
industry officials say.
But a senior industry representative
warns that this does not mean
critical program cutbacks will not
Finoccur.
Speaking at the C onservative
Party congress recently, Prime Minister
David C ameron said “some big
changes” are ahead.
Defense Secretary Liam Fox gave
little indication of what may be cut.
However, he did affirm the Trident
nuclear submarine replacement
program would be funded (Aerospace
DAILY, Oct. 7).
Industry officials also now expect
the aircraft carrier shipbuilding
program may survive unscathed,
partly because the cost of canceling
the two vessels would be too high.
However, if both are built, the U.K.
is considering holding the second in
reserve, thereby reducing the need
to fully equip and crew the vessel.
One of the implications is expected to be a cut in the
planned purchase of Lockheed Martin F-35s from the
138 currently planned for the Royal Air Force and Royal
Navy. The program is called the Joint C ombat Aircraft
in Britain.
Another program identified as potentially vulnerable to
cuts has been the Nimrod MRA4 maritime patrol fleet. But
a military official involved in the project expresses confidence
the program will survive, with an industry official
adding it would be hard to believe the aircraft would not
be fielded given the billions of pounds sunk into its development
phase.
Top government officials in the National Security C ouncil
have been convening to try to finalize where the cuts
should fall. That includes what elements of the existing
fighter force, the Tornado GR4 and Harrier fleet, to draw
down early.
Even if there are indications the scale of the budget
reduction will be less than first feared, that is
not to say there is not still anxiety in the sector. Britain’s
large Unite union is warning the U.K. could lose
more than 16% of its defense workforce as a result of
planned spending cuts due to emerge. The union cites
an Oxford Economics study that suggests “that cuts of
26% would lead to potentially over 55,000 [job] cuts
in the U.K.”
“The Tory-led coalition wants to raze the U.K. defense
industry to the ground,” says Unite’s national officer for
aerospace and defense, Bernie Hamilton. He added that
“tens of thousands of job cuts in some of Britain’s most
deprived regions will have tragic consequences. These
skilled manufacturing jobs won’t get replaced.”
The union figures suggest that a spending reduction
of 10% would mean the loss of 18,878 defense industry
jobs and another 15,314 in the supply chain. A cut of 20%
means a total of 55,230 jobs would disappear, around
30,492 directly in the defense industry and 24,738 in the
supply chain.