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Cameron Announces £1.1 Billion in New Defense Spending

Jul. 14, 2014 - 03:45AM   |  
By ANDREW CHUTER   |   Comments
Britains Prime Minister David Cameron said the government would use unspent funds from last year's budget on the programs. Here, he speaks speaks during a visit to officially open the Williams F1 new Advanced Engineering facility near Wantage in Oxfordshire on July 11. (Kirsty Wigglesworth / AFP)
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Farnborough International Airshow

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FARNBOROUGH, ENGLAND — British Prime Minister David Cameron opened the Farnborough International Airshow on Monday with an announcement that the government will spend £1.1 billion (US $1.8 billion) on defense equipment using unspent money from last year’s budget, but declined to commit a future government to retaining defense budget levels at 2 percent of gross domestic product (GDP).

The announcement of spending on surveillance, special operations forces, cyber, active electronically scanned array (AESA) radars and other equipment got the weeklong event off to the start it needed after the non-appearance so far of the Lockheed Martin F-35.

But the refusal to guarantee Britain would stay at, or above, 2 percent of GDP for defense spending after the next general election in 2015 holds out the possibility of continuing constraints on budgets here.

“We will obviously have a spending review whoever the government is in 2015.We have set out our budget overall to 2016 and it will have to be examined at the time, but we meet the 2 percent and we recognize how important that is,” Cameron told reporters at the show.

Current British defense spending at £33 billion hovers just above the 2 percent target set by NATO for member states. Britain is one of only four NATO nations that meet the target.

The Chancellor of the Exchequer though has already given notice that government spending overall will have to take another hit in any 2016 spending review in order to reduce Britain’s debt problem. The Defence Ministry has not been exempted from that.

Last week, Defence Secretary Philip Hammond warned an audience of senior military personnel and industry executives at a conference in London that further significant cuts to the defense budget could not occur without having “meaningful consequences.”

Whatever the outcome of the long-term spending deliberations after next May’s general election, the mini spending spree announced by Cameron Monday will take forward some important capabilities for the military and industry here.

The British are using unspent money from last year’s defense budget to fund the programs announced at Farnborough.

Cameron said it was like spending new money. “What normally happens is that departments that don’t spend the money usually hand it back to the Treasury. The reason this isn’t happening this time is because we have assessed the budgets carefully and because the [overall] budget deficit has come down and crucially we have got rid of the £38 billion black hole in the defense budget, because of that prudence we can now spend some more money on important capabilities,” he told reporters.

The Conservative-led coalition government had to cut £38 billion in unfunded commitments when it entered office in 2010 as well as invoke an 8 percent budget cut of its own, causing substantial reduction in personnel numbers and capabilities.

Details of how the £1.1 billion is being spent are scarce for the moment, but Cameron committed to retaining Raytheon Sentinel R-1 and Shadow R-1 reconnaissance and intelligence gathering aircraft until at least 2018.

That’s a reprieve for the business-jet based Sentinel, which was slated to be cut at the end of the Afghanistan campaign in the 2010 strategic defense and security review.

The King Air-based Shadow R1 was purchased as an urgent operational requirement for Afghanistan, but the prime minister’s announcement appears to signal that capability is being added to the military’s core equipment program.

Aside from the surveillance and intelligence boost, the government has also finally committed to adopting the AESA radar being developed for the Eurofighter Typhoon fighter by the Selex ES-led Euroradar.

The actual contract remains to be signed by the British, German, Italian and Spanish governments behind the Typhoon program, but Cameron’s public commitment to the program signals it is set to advance to the production contract stage.

British Defence Procurement Minister Philip Dunn told Defense News in an interview this month that he hoped to have the deal signed by the end of the year.

A development version of the AESA radar, vital for Typhoon’s export prospects in the Middle East and Asia, made its public debut at the show Monday installed in a British test aircraft.

The AESA commitment was part of a £300 million package of projects that included purchase of an ice patrol ship previously leased from the private sector, funding toward a £120 million study into a Anglo-French future unmanned combat air system and force protection and other enhancements for British forces operating in the Arabian Gulf.

The remaining £800 million pledged by Cameron will go on intelligence, surveillance and cyber capabilities.

Cameron said he expected the next strategic defense and security review to follow the same broad lines set out in the 2010 version, although with the defense budget now under control, the process should be less painful. ■


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