UK may axe carriers, Trident safe -defence source

* Scrapping orders for two new carriers would save billions

* No plans to scale back Trident nuclear missile system

* Tornado combat planes seen retired by 2020

By Mohammed Abbas

LONDON, Aug 19 (BestGrowthStock) – Britain may cancel one or both of
its planned new aircraft carriers to cut costs but there are no
plans to scale back the country’s nuclear deterrent, a senior
Ministry of Defence source said on Thursday.

The source, speaking on condition of anonymity, told Reuters
Britain’s ageing fleet of 106 Tornado fighter planes would be
retired by 2020, five years before they are due to leave
service.

There were no plans to scale down a new fleet of Trident
nuclear missile-carrying submarines, whose 20-billion-pound
($31.27 billion) cost has led to a dispute between the Ministry
of Defence (MoD) and the Treasury over who should pay.

The MoD faces a 37-billion-pound shortfall over the next 10
years, and analysts expect a cut of up to 20 percent in the
ministry’s budget by 2015, part of a government drive to slash
spending to reduce a big budget deficit. The MoD’s core budget
this year was 36.9 billion pounds.

Britain’s military has complained of a strain on resources
and personnel from fighting wars in Afghanistan and Iraq.
The previous Labour government gave the go-ahead in 2007 for
two new aircraft carriers, which would be the largest ships ever
to sail with the Royal Navy, at a cost of 5.2 billion pounds.

“We could have one, two or no new aircraft carriers … All
options are on the table. That does not mean we are leaning
towards one particular option, but none should be considered as
too radical,” the MoD source said.

JOBS AT STAKE

Work is under way on the carriers, preserving about 10,000
jobs at British shipyards, according to media reports.

The MoD is conducting a sweeping review, due to report in
October, of Britain’s future military needs and ways to provide
capability more cheaply. The decisions on where to cut will be
made by mid-September, the MoD source said.

Defence Secretary Liam Fox has accused the Labour government
of spending beyond its means on expensive military equipment.

The Queen Elizabeth class carriers, due to enter service in
2016 and 2018, are being built by a consortium including BAE
Systems (BAES.L: ), Babcock International (BAB.L: ) and Thales
(TCFP.PA: ).

The MoD source said one area where cuts were not expected
was replacing Trident, whose renewal is due in the early 2020s.

The MoD source scotched media and think tank reports that
the system could be scaled down to save money, by using fewer
submarines for example, or reducing their patrols.

“There’s no way Trident will be scaled back further … It’s
current capability will be maintained,” the MoD source said.

British media reports say retiring the Tornado fleet early
could save 7.5 billion pounds. Britain also has 45 Harrier
aircraft, which are also expected to be phased out by 2020.

“The current plans are to retire the Harrier and Tornado
jets by 2020,” the MoD source said, partly because the jets were
nearing the end of their useful lives and partly to save money.

The aircrafts’ capabilities would instead be at least partly
replaced by new Typhoon and Joint Strike Fighter aircraft.

Britain has ordered 160 of the 70 million-pound Eurofighter
Typhoon combat planes, but analysts say it may scrap plans to
buy an additional 48.

Made by Britain’s BAE, Italy’s Finmeccanica (SIFI.MI: ) and
European aerospace group EADS (EAD.PA: ), the consortium has said
cancelling orders would cost thousands of jobs and analysts have
said this could incur a hefty penalty.

The MoD source said an option being considered was to go
ahead with the full order and sell off surplus older versions of
the aircraft. Oman has said it intends to buy an unspecified
number of the planes from Britain. [ID:nLDE6310CS]
(Editing by Andrew Dobbie)

UK may axe carriers, Trident safe -defence source