Well, as I understood it the money for the chinook buy was the offset for shelving the mil involvement in UK SAR. But the SAR-H project now appears in tatters (see other thread on rotorheads for that gossip) so the cancellation of the chinook buy is because HMG needs to purchase shiny new helicopters (cheap S92s from cancellation of SAR-H contract) to replace the ageing Sea Kings. Protecting ones own shores & people from floods etc. will win more votes in the long run.
With UK forces out of the sand by 2015 any more heavy lift is a waste of money anyway as it wont be available in time

and when has any govt really concerned itself about what might be next around the corner
Whats left of Merlin/Chinook will stay RAF & the RN will be re-branded coastal command & will take on UK SAR in the S92 because it doesn't have any ships to go to sea on.
This defence review stuff is easy really