S41
Would never have categorised you with the treasury goons in any case - your arguments are always logical and informed, even if we differ from time to time.
However, I don't believe that the SDR98 cost was anywhere near the figures you quote. The real problem has been the continual in-fighting, largely driven by the in-year DEL cap that has led to the barking decisions to push projects to the right, with the known consequences (additional navel-gazing, increased cost), compounded by the conduct of two largely unfunded wars where despite cyclops' protestations, spending in real terms was at best flat at worst in decline. That's not due to Bob, it's largely due to Gordon, as evinced by Hoon the Loon in his evidence to the Iraq inquiry.
Add to that a significant overhead cost (IiP, diversity, Data Protection act to name but a few) that won't go away and it's difficult to argue with a treasury case that our budget is f8cked. However, that in itself is not an argument for cuts - surely it's an argument for proper strategic debate, along the lines of your point iii, with some sort of pause in the axe to get the house in order.
I fear that Dannatt along with Soames (read back a few years and there's a consistent message) has spun a yarn that Dave n George are keen to buy - including the myth about Scottish shipyards - Portsmouth, Appledore, Merseyside, Derbyshire and Tyneside are all contributing significantly. Hopefully Fox gets it and is not grandstanding, but based on the editorials, it's a faint hope.
There must be a case for re-examining the the DfID budget (£12Bn pa) which is the great hope for soft power, but in reality is more likely to be borrowing money we haven't got to put in the pockets of political leaders who couldn't generate it legally.