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New Defence Review, higher or lower?

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New Defence Review, higher or lower?

Old 23rd Sep 2022, 06:46
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Originally Posted by MPN11 View Post
Been there, seen that. The LTC concept was sound in parts, but open to money just falling through the cracks. If you had a low hline item in the right Budget at year-end it was open season for waste!
One of the best things about the LTC process was it required the Services to (a) know what they had, and (b) quantify what they wanted.

Lacking the first, one can't answer key Requirement Scrutiny questions, which will at best cause significant delay.

Lacking the second, one cannot cost the 'requirement', which tends to lead to a lack of funding, which is later misrepresented as a 'cost overrun' when actually the cost is fair and reasonable.



As an aside, the Defence Committee issued an interesting report yesterday recommending a return (although it didn't say 'return') to the system whereby one could take a contractor's past performance into account when considering a bid. (Now I wonder where they read that suggestion? Are they finally having a look at successful programmes?) When that authority was withdrawn (at roughly the same time as the demise of the LTC), it introduced enormous risks, which manifested immediately. Successful mitigation relied almost entirely on the programme manager having prior experience of the above Service HQ posts within the LTC process, or having managed programmes across every (e.g.) aircraft domain. Both were very rare. All these things are linked.

If the recommendation is accepted, the first logical step is to resurrect and reissue the hitherto mandatory procedures for doing this, which set out who the authority was vested in. The Services and DSA/MAA won't do this, as the authority is too low down the food chain. We can't have plebs doing important stuff! Another difficulty being (as a matter of policy) lack of SQEP. Perhaps more to the point, it would mean DSA/MAA having to rewrite many of the important (but incorrect) parts of the new Regulatory Set. And they, too, having SQEP.

It's all about people. Without the right people, implementing the correct regulations, there can be no solid foundations.
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Old 23rd Sep 2022, 10:47
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Originally Posted by Asturias56 View Post
It will be higher but then when the financial crunch comes in a year or so expect massive cancellations or delays
I think you need to shorten that timescale. Possibly weeks, not months.
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Old 23rd Sep 2022, 18:08
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Originally Posted by Frostchamber View Post
I'm no mathematician so happy to be corrected, but I think GDP would need to collapse by something like 25% in order for 3% of GDP not to represent a real increase in defence spending over 2.2%. By comparison, the 2008 financial crisis resulted in a GDP reduction of a little over 6%. Of course any GDP reduction would trim the size of the spending increase, but if my rusty o-level maths is anywhere near correct we'd be approaching Mad Max territory before it wiped it out completely.
Arguably, the bigger issue than GDP is the fall in the pound against the US dollar. THAT is really going to hurt our procurement power, given so much of it is pegged to the dollar.
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Old 23rd Sep 2022, 18:13
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Given the vast amounts of taxation income the new Chancellor has just given away, I would say "Lower" ... unless the Magic Money Tree in the garden of No. 11 is in fruit again.
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Old 24th Sep 2022, 11:46
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Originally Posted by MPN11 View Post
Given the vast amounts of taxation income the new Chancellor has just given away, I would say "Lower" ... unless the Magic Money Tree in the garden of No. 11 is in fruit again.
Agreed! The tories have just destroyed any chances of winning the next election and made a Labour Government an absolute certainty. They have spat in the face of struggling people and tanked the economy in 1 day. Well done Liz.

How do Labour government’s tend to treat the Forces? (Rhetorical question). Time to get used to a bare cupboard.
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Old 24th Sep 2022, 12:43
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I can't see any extra money being available for defence - it 's not even mentioned in all the hoo-hah over the new budget. Lower exchange rate, higher inflation, lower taxes = major defence review in 2025 under a Labour Govt. Voters have this odd habit of remembering "bonus for bankers" for a very long time
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Old 24th Sep 2022, 14:42
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Originally Posted by Baldeep Inminj View Post
How do Labour government’s tend to treat the Forces? (Rhetorical question). Time to get used to a bare cupboard.
No worse than the Tories. It wasn't Labour that scrapped Ark Royal and the Harriers, not to mention Nimrod MRA4 etc.

Seriously, if you look at which party actually cuts the armed forces you'd maybe be surprised.
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Old 24th Sep 2022, 14:52
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Originally Posted by Frostchamber View Post
I'm no mathematician so happy to be corrected, but I think GDP would need to collapse by something like 25% in order for 3% of GDP not to represent a real increase in defence spending over 2.2%. By comparison, the 2008 financial crisis resulted in a GDP reduction of a little over 6%. Of course any GDP reduction would trim the size of the spending increase, but if my rusty o-level maths is anywhere near correct we'd be approaching Mad Max territory before it wiped it out completely.
A lot of defence equipment is essentially priced in US dollars, much as oil and most major commodities are. In May 2015 when the Brexit referendum became law the GBP/USD rate was approx 1.55. It is now (23-Sep-2022) only 1.10. That is 0.45/1.55 = 29% reduction on what it was. This exceeds 25%, and to quote your own words is therefore a "max Max outcome" in the UK's ability to fund stuff priced in USD. The UK is reaping what Brexit voters have sown, and it is likely to get far worse before - if ever - it gets better. The defence budget implications ought to be obvious. At the same time the UK has seriously $%%^-off all the local partner nations with whom it has shared costs for the last 70-years, and is instead shopping around (quite successfully) for new partners to foot the bill in Australia and Japan (well at least initial indications are promising).

https://www.poundsterlinglive.com/history/GBP-USD-2015

https://www.theguardian.com/uk-news/...-pound-crashes
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Old 24th Sep 2022, 16:13
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"Seriously, if you look at which party actually cuts the armed forces you'd maybe be surprised."

people forget it was the Labour party that started the atomic weapons programme, took us into Korea and built Chevaline on the quiet
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Old 24th Sep 2022, 18:37
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Originally Posted by petit plateau View Post
A lot of defence equipment is essentially priced in US dollars, much as oil and most major commodities are. In May 2015 when the Brexit referendum became law the GBP/USD rate was approx 1.55. It is now (23-Sep-2022) only 1.10. That is 0.45/1.55 = 29% reduction on what it was. This exceeds 25%, and to quote your own words is therefore a "max Max outcome" in the UK's ability to fund stuff priced in USD. The UK is reaping what Brexit voters have sown, and it is likely to get far worse before - if ever - it gets better. The defence budget implications ought to be obvious. At the same time the UK has seriously $%%^-off all the local partner nations with whom it has shared costs for the last 70-years, and is instead shopping around (quite successfully) for new partners to foot the bill in Australia and Japan (well at least initial indications are promising).

https://www.poundsterlinglive.com/history/GBP-USD-2015

https://www.theguardian.com/uk-news/...-pound-crashes
The exchange rate has little to do with Brexit, pp, it has to do with spending versus production, and the fact the usd is the reserve currency.

so please amend your europhillic drivel.

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Old 24th Sep 2022, 18:44
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Originally Posted by Marly Lite View Post
The exchange rate has little to do with Brexit, pp, it has to do with spending versus production, and the fact the usd is the reserve currency.

so please amend your europhillic drivel.
The pound tanked against the dollar after Brexit, and its just getting worse. https://www.bloomberg.com/news/artic...vote-hit-chart
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Old 24th Sep 2022, 19:24
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Originally Posted by melmothtw View Post
The pound tanked against the dollar after Brexit, and its just getting worse. https://www.bloomberg.com/news/artic...vote-hit-chart
The pound may have tanked after Brexit. All market based trading incurs emotional responses. But the fundamentals are the same, spend more than you earn = currency debasement.

if you like a little research, look at a chart of the euro v the usd. You’ll soon learn Brexit is irrelevant.
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Old 24th Sep 2022, 20:54
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Originally Posted by Marly Lite View Post
The pound may have tanked after Brexit. All market based trading incurs emotional responses. But the fundamentals are the same, spend more than you earn = currency debasement.

if you like a little research, look at a chart of the euro v the usd. You’ll soon learn Brexit is irrelevant.
After 7-years and the change of 4-prime-ministers it would seem the markets disagree with you, hence 29% reduction in the value of sterling vs USD. I note the Cons were in the driving seat the whole time, so it surely was not a change of party that did the deed. Brexit seems increasingly culpable for the trainwreck that is the UK over that period.

Anybody managing the defence budget in that time, or the one to come, will be under no illusions as to the consequences.

Anybody denying these facts is obviously feeling rather uncomfortable that the penny is dropping out there in voterland.

(For completeness GBP/EUR was 1.40 in May 2015, now 1.13 as of 23-Sep-2022. That is 0.27/1.40 = 19% reduction in GBP vs the EUR in the same time the GBP declined 29% against USD. The direction of travel is pretty clear.)
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Old 24th Sep 2022, 21:31
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Please take any further discussion of Brexit to Jet Blast.
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Old 25th Sep 2022, 07:06
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Originally Posted by SamYeager View Post
Please take any further discussion of Brexit to Jet Blast.
Sadly Sam, Brexit will play a large part in the next defence review, which is the subject of this thread. We all wish it wasn't so.
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Old 25th Sep 2022, 08:44
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I'm no fan of Brexit but I really don't think it has impacted the defence budget. We've all remarked for years how amazing it is that Defence never gets a mention in normal politics and especially at budget time. What has hurt UK defence is an overall lack of cash and some awful examples of managing projects
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Old 25th Sep 2022, 12:08
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Hopefully, the F35 order will be honoured and sped up. Maybe an increase in Typhoon numbers and another first line aerodrome opened. To have only three main operating bases, Lossie, Marham and Conningsby is a disgrace and surely limits capability. Cottesmore could be reopened amongst others.

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Old 25th Sep 2022, 13:39
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Re Labour, it was notable that post Ukraine invasion they were pushing HMG to up defence spending and emphasised that any increase would be supported by them - indeed they criticised the govt for not coming forward with an increase this year. Of course words are cheap when you're in opposition, but I'd agree with others that it's not simply a case of "Tories good, Labour bad" when it comes to defence spending. The Cameron administration was particularly bad.
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Old 25th Sep 2022, 16:05
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I hate all the political rubbish that is spouted in the Military Aviation section BUT for all you know-alls I think you'll find that the £ was almost at parity with the US Dollar in the early eighties( 1980s ). Way way before Brexit.
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Old 25th Sep 2022, 16:31
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Brian

And the last time I went to France before Brexit (2011) I got €1.06 to the £.

BV
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