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Old 6th Feb 2011, 10:37
  #11 (permalink)  
Lima Juliet
 
Join Date: May 2000
Location: UK
Posts: 4,336
Received 83 Likes on 34 Posts
Surely there must be economical cut off to the decision not to "buy abroad" or "COTS". Here is a very simple suggestion:

Total cost of R&D + equipment cost + unemployment costs <= total COTS buy

For example, if we look at some assumptions for MRA4:

Cost of 2,000 workforce on dole (£12k pa) over 15 years = £360M
MRA4 R&D and delivery of 9 aircraft = £3,600M
Total £3,960M or £3.96Bn

Total cost of 9x P-8 Poseidon (at $220M each or £140M) is £1.26Bn

Now I know that we will get VAT back (now 20%) and also there are things like National Insurance, and host of other offsets - so let's assume that 50% of the £3.96Bn makes it back into the country's finances. Then the MRA4 buy will cost us £1.98Bn.

The difference in costs is then £1.98Bn for MRA4 and £1.26Bn for P-8 => P-8 COTS is still £720M cheaper.

Now what would would £720M buy over 15 years? Well that's £48M per year which means that buying COTS would buy us 1,600 extra Nurses or 1,350 extra school teachers - which would significantly offset those on the dole's jobs at the start of this model!!!

So far, the money argument on buying British and paying through the nose for it makes no sense to me...

LJ
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