Business

What a carrier-on!

BBC business editor Robert Peston on defence spending

When I ask senior military, as I did last night and last week, to construct plausible scenarios in which Britain's giant new supercarriers would be essential for the defence of the realm, these admirals and generals looks slightly embarrassed.

When pushed, they mention the possibility of two great powers (not Iran) turning into serious enemies of the UK.

I won't mention the names of those countries (though you'll guess which they are), because those same military leaders hastily add: "of course we'd be insane to even think about going to war against them; we should be building permanent enduring alliances with them; and if we did find ourselves at war with them, the carriers would probably be sunk in five minutes".

As for cyber-attack and more conventional terrorism identified yesterday by the government in its national security strategy as the thoroughly modern threats we need to protect ourselves against, the carriers are about as much use as a bazooka would be for killing wasps.

In the end, the leaders of our armed forces - or at least those outside the navy - concede that they don't really need or want these two 65,000-tonne floating monsters, HMS Queen Elizabeth and HMS Prince of Wales, the joint cost of which was estimated at £3.9bn as recently as July 2008 and is now well over £5bn. If they end up costing less than £3bn each, it will be little short of a miracle.

But, as you'll doubtless know from the agonised leaks about all of this, the contracts for the carriers were apparently written in such a way that it would have been more expensive to cancel them than to press ahead.

So the military is behaving a bit like a five-year old which originally asked for a bike for its birthday, but on the big day has decided that a Wii would be better. It is putting a brave face on the whole disaster, but can't really hide its disappointment.

In the run-up to the publication of today's defence review, David Cameron was asked by the chiefs to consider negotiating the substitution of frigates for the second carrier. However, when the PM consulted the navy on this apparently sensible option, the navy told him that the available frigate wouldn't do everything it would want it to do.

So under pressure from the navy, Mr Cameron agreed to press ahead with the second carrier.

So we'll end up with these vast floating platforms - each the size of three football pitches - which will carry only helicopters for the first few years. And when the planes for them are ready, the ones on deck will be very expensive American-made Joint Strike Fighters, not European/UK aircraft (Mike Turner, chairman of Babcock, argues that "marinising" the Eurofighter would have been a better bet for British industrial development).

Is there no case for the carriers? Well there is an old-fashioned Keynesian one, that constructing them will safeguard and create vast numbers of British jobs in the private sector. Plainly they provide very valuable work for BAE Systems, Babcock and Thales UK.

But the government can't really make this case with much conviction, since it argues that part of the point of cutting other large lumps of public expenditure is to create economic space for the private sector to flourish.

The one enduring mystery is quite how this astonishing mess was engineered. If ever there was a time and place for a formal investigation - by the National Audit Office - of who decided what and when, well some have argued to me that time is now.‬‪

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

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