The Royal Navy Discussions and Updates

[1805]

UK budget deficit as a % of GDP does not tell the story properly nor does the fact that we have the highest headline debt figure ever you should perhaps take a look at these charts:-

United Kingdom National Debt Charts

Puts it all into a proper perspective for me, you could argue that the historical record shows that things are not as bad as is being made out. While in cash terms defence spending is increasing it is/has been contracting as a % of GDP, it is bobbing along at just over 2.5%. It is also a fact that defence spending as a proportion of government spending is now less than 9% and any savings in defence will be minimal in the scheme of things. The key statistic seems to be %GDP on debt repayment Labour don’t seem to have got it as high as they have in the past.

I do however want to see good use of our resources but I would also like to see defence funding at between 2.75% and 3% of GDP which is in my opinion a reasonable amount (and get the value for money the Australians appear to be getting). I would also point out that the impact of large scale cuts on defence will be bad in the manufacturing sector that government wants to boost.

The Australian's spend about 1.8% of GDP. Our issue is current projects planned will bust the budget for a few years to come, so we have to cut just to get back to the start line.

I suspect eventually we will get to a little over 2% excluding the funding for Afghanistan. The debt figures are high when you take out the impact of WW2. Remember the Tories are not repaying debt, just cutting the level of increase (PSBR).

 

[StevoJH]

The Australian's spend about 1.8% of GDP. Our issue is current projects planned will bust the budget for a few years to come, so we have to cut just to get back to the start line.

I suspect eventually we will get to a little over 2% excluding the funding for Afghanistan. The debt figures are high when you take out the impact of WW2. Remember the Tories are not repaying debt, just cutting the level of increase (PSBR).

gf can correct me if i'm wrong.... But i'm not 100% sure that all Australian procurement is actually funded out of the defense budget itself. I have a feeling a lot of procurement is actually paid for using additional funds. Collins replacement and F-18F being examples.

 

[deepsixteen]

The Australian's spend about 1.8% of GDP. Our issue is current projects planned will bust the budget for a few years to come, so we have to cut just to get back to the start line.

I suspect eventually we will get to a little over 2% excluding the funding for Afghanistan. The debt figures are high when you take out the impact of WW2. Remember the Tories are not repaying debt, just cutting the level of increase (PSBR).

I know they do I still think 1.8% is insufficient for the UK as we are not just defending our homeland complete with bountiful natural resources we have to go and get them and therefore need power projection which costs. The start line is therefore much higher.

 

[deepsixteen]

gf can correct me if i'm wrong.... But i'm not 100% sure that all Australian procurement is actually funded out of the defense budget itself. I have a feeling a lot of procurement is actually paid for using additional funds. Collins replacement and F-18F being examples.

Sounds good I wonder what our % would be without procurement costs for the big ticket items?

 

[Locarnus]

UK budget deficit as a % of GDP does not tell the story properly nor does the fact that we have the highest headline debt figure ever you should perhaps take a look at these charts:-

United Kingdom National Debt Charts

Puts it all into a proper perspective for me, you could argue that the historical record shows that things are not as bad as is being made out. While in cash terms defence spending is increasing it is/has been contracting as a % of GDP, it is bobbing along at just over 2.5%. It is also a fact that defence spending as a proportion of government spending is now less than 9% and any savings in defence will be minimal in the scheme of things. The key statistic seems to be %GDP on debt repayment Labour don’t seem to have got it as high as they have in the past.

I do however want to see good use of our resources but I would also like to see defence funding at between 2.75% and 3% of GDP which is in my opinion a reasonable amount (and get the value for money the Australians appear to be getting). I would also point out that the impact of large scale cuts on defence will be bad in the manufacturing sector that government wants to boost.

The Australian's spend about 1.8% of GDP. Our issue is current projects planned will bust the budget for a few years to come, so we have to cut just to get back to the start line.

I suspect eventually we will get to a little over 2% excluding the funding for Afghanistan. The debt figures are high when you take out the impact of WW2. Remember the Tories are not repaying debt, just cutting the level of increase (PSBR).

I know they do I still think 1.8% is insufficient for the UK as we are not just defending our homeland complete with bountiful natural resources we have to go and get them and therefore need power projection which costs. The start line is therefore much higher.

1. Debt is a very complex matter and it would take years to understand/explain all interdependencies properly. But the main message of the current research would be (as so often), that the dosage is the most important part of it. Up to some point (wherever that may be), it is beneficial, then it starts to hurt more than it helps (ie toxic dosage), and this increases to a level where the toxicity becomes lethal. Where those thresholds are, is based on an awful lot of factors and subject to a lot of discussion.
But that a sustained budget (ie per anno) deficit of close to or even more than 10% of gdp is not (nearly) in the beneficial region anymore is scarcely contested by scientists.

2. The defence expenditures as percentage of gdp should also be seen in comparison with other countries, as 1805 stated with the Australia example. With UKs current level of ~ 2.5% of gdp it is # 3 among NATO members (US 4.3%, Greece 3.6% and we all know their current status ).
If you want to compare it with eg Germany, who have much more world/sea trade then the UK, their level is ~ 1.3% of gdp.
Or compare it with Japan, they are an island as the UK, have some more imports and much higher exports, but without the cosiness of the european environment (where most of UKs trade goes to). But still they spend a mere ~ 0.9% of their gdp for defence and even as they are more than twice the size of the UK in terms of gdp and pop, the absolute amount of defence spending is much lower (~47''' $ compared to UKs ~69''' $).
Funnily neither Germany nor Japan sees the need for power projection on a level nowhere near the UK sees it (yes, I know, no oversea territory, but still a massive difference).

 

[deepsixteen]

1. Debt is a very complex matter and it would take years to understand/explain all interdependencies properly. But the main message of the current research would be (as so often), that the dosage is the most important part of it. Up to some point (wherever that may be), it is beneficial, then it starts to hurt more than it helps (ie toxic dosage), and this increases to a level where the toxicity becomes lethal. Where those thresholds are, is based on an awful lot of factors and subject to a lot of discussion.
But that a sustained budget (ie per anno) deficit of close to or even more than 10% of gdp is not (nearly) in the beneficial region anymore is scarcely contested by scientists.

Personally I don’t like running a deficit in my own life and I think that the country should try to operate on the same basis but surely you must acknowledge that the historical evidence seems to show that things while bad are not as bad as they have been in the past.

2. The defence expenditures as percentage of gdp should also be seen in comparison with other countries, as 1805 stated with the Australia example. With UKs current level of ~ 2.5% of gdp it is # 3 among NATO members (US 4.3%, Greece 3.6% and we all know their current status ).
If you want to compare it with eg Germany, who have much more world/sea trade then the UK, their level is ~ 1.3% of gdp.
Or compare it with Japan, they are an island as the UK, have some more imports and much higher exports, but without the cosiness of the european environment (where most of UKs trade goes to). But still they spend a mere ~ 0.9% of their gdp for defence and even as they are more than twice the size of the UK in terms of gdp and pop, the absolute amount of defence spending is much lower (~47''' $ compared to UKs ~69''' $).
Funnily neither Germany nor Japan sees the need for power projection on a level nowhere near the UK sees it (yes, I know, no oversea territory, but still a massive difference).

Take your point re Japan and Germany %GDP but you are not comparing like with like both countries have constitutional issues that impact on how they operate in the world. I am impressed with the value Australia seems to be getting for its spending as is Japan and was trying to get some attention for the UOR process which seems to be quite a success in the procurement world and could perhaps help defence to be more cost effective.

Oh and by the way I’m not ten and I do have a reasonable understanding of the complexity of the Present economic situation which our Government tell us they will have under control within five years.

 

[kev 99]

was trying to get some attention for the UOR process which seems to be quite a success in the procurement world and could perhaps help defence to be more cost effective.

I'm firmly of the opinion that the UORs process could have a very positive effect in shortening the length of time it takes to decide on and then procure new equipment for the MOD, if done right of course, no sense chucking the baby out with the bath water.

 

[swerve]

But that a sustained budget (ie per anno) deficit of close to or even more than 10% of gdp is not (nearly) in the beneficial region anymore is scarcely contested by scientists.
.

Er - yes. But the UK is not going to have a sustained deficit that large. And the British deficit is not, as you previously asserted, far worse than that of Greece. It is, this year, about as bad. But over any longer period (the last 5 years, the last 10, the last 15, the predictions for the next 5) Greece has a far worse deficit. That is why Greece has a much higher public debt than the UK. The sustained deficit is far worse in Greece.

 

[Locarnus]

Take your point re Japan and Germany %GDP but you are not comparing like with like both countries have constitutional issues that impact on how they operate in the world. I am impressed with the value Australia seems to be getting for its spending as is Japan and was trying to get some attention for the UOR process which seems to be quite a success in the procurement world and could perhaps help defence to be more cost effective.

Oh and by the way I’m not ten and I do have a reasonable understanding of the complexity of the Present economic situation which our Government tell us they will have under control within five years.

I think the main difference in spending for the UK (and with France having a similar defence spending / gdp with ~2.3%) is the willingness to maintain a not so foreign dependent military industrial complex compared to eg germany and japan. So the efficiency of money spend is lower.
I have to agree that this is based on the different understanding of military objectives, coming from the historical experiences, as you hinted. And that the those additional wanted capabilities call for higher spending ceteris paribus.
Both effects together are multiplicative. More effect needed, with lower efficiency, results in much higher spending.

About the debt I didnt mean to offend. It was just based on my own impressions comparing my former knowledge about it as an interested and informed citizen and my current knowledge doing research on this topic for a while.

 

[Locarnus]

Er - yes. But the UK is not going to have a sustained deficit that large. And the British deficit is not, as you previously asserted, far worse than that of Greece. It is, this year, about as bad. But over any longer period (the last 5 years, the last 10, the last 15, the predictions for the next 5) Greece has a far worse deficit. That is why Greece has a much higher public debt than the UK. The sustained deficit is far worse in Greece.

Yes, the deficit wont be as large as it is now (12%). But it will be likely far worse then eg the 3% euro bound which was chosen after much discussion and for some good reasons at this level.

The deficit of UK is worse then the one of Greece, also considering that the Greece one is under higher pressure to go down and additional failings from the PIIGS would be paid by UK among others but not so much by countries like Greece.

Those are just two reasons why it remains to be seen whether the UKs or Greeces sustained deficit will be higher in percentage of gdp (would also rely on the development of the gdps).
Sure, the public debt is much higher in Greece because of the previous deficits, so it is not too dangerous for UK right now, but it certainly goes in the wrong direction and much too fast for my taste.

Also note the current deficits of other countries in Europe, UK doesnt look too healty in this respect.

So back to topic, meeting current and near future demands while retaining the option to react to possible larger threats within some years warning time (by preserving experience aso) would be the way to go. The mentioned delay of projects not necessary right now would be a way to go, and if the financial situation eases or a threat arises those can be resumed, but not now.

 

[1805]

Er - yes. But the UK is not going to have a sustained deficit that large. And the British deficit is not, as you previously asserted, far worse than that of Greece. It is, this year, about as bad. .

The way you said this is very fun, "don't worry its only as bad as Greece not worst!"

Joking aside I agree with you, the frightening thing was the rapid growth in PSBR, which was caused by continuing spending when tax reciepts had collapsed. Tax income will return and trimming spending will help the current spending.

The MODs issues are largely internally self inflicted by over spending in the same decade.

 

[1805]

I think the main difference in spending for the UK (and with France having a similar defence spending / gdp with ~2.3%) is the willingness to maintain a not so foreign dependent military industrial complex compared to eg germany and japan. So the efficiency of money spend is lower.
I have to agree that this is based on the different understanding of military objectives, coming from the historical experiences, as you hinted. And that the those additional wanted capabilities call for higher spending ceteris paribus.
Both effects together are multiplicative. More effect needed, with lower efficiency, results in much higher spending.

About the debt I didnt mean to offend. It was just based on my own impressions comparing my former knowledge about it as an interested and informed citizen and my current knowledge doing research on this topic for a while.

The defence equipment market has definitely become a "buyers" rather than "manufacturers" game. We need more than ever a clear strategy on what we want to make and why, and then buy the rest off the self. There remains the option to have local production.

The key on what to build should be focused around some or all:
- do we have the capability
- Can we from; internal demand or exports, achieve sustainable production
- It really is strategic to RN/UK

 

[swerve]

The deficit of UK is worse then the one of Greece, also considering that the Greece one is under higher pressure to go down and additional failings from the PIIGS would be paid by UK among others but not so much by countries like Greece.

Why do you keep repeating this nonsense? I have explained to you why the Greek deficit is worse.

Apart from the foolishness of claiming that a single year is all that matters, think about your own arguments. Why is Greece under greater pressure to reduce its deficit? Because it has a greater need to reduce it! Why would Greece not be called upon to help in any future rescues? Because its deficit is too great! You have put forward proof that you are wrong, & claimed that it proves you right. It's like saying that a beggar is richer than a man who is giving him money, because the beggar won't be asked for money by other beggars.

 

[Hambo]

Although possibly best posted under airforces or missiles, the following MBDA videoclip from Youtube perhaps gives an insight into the massive leap that FAA airpower may achieve over the next decade, if F35/something else start tofly CAP's off CV.

I believe F35 is going to be integrated with Meteor? If so this link provides some soft porn in terms of how well F35/Meteor may be able to protect the future fleet. The simulations towards the end of the clip show Typhoon and Grippen and E3 datalinked into a network, but the RN would see F35/Sea King ASAC/Sampson/Artisan in a network.

Although obviously a marketing vid with some hype, the potential that Meteor has to engage stealthy cruise missiles and UCAV's would be reassuring and might excuse the lack of T45 or other specialist airwarfare ships.

IF and its still an IF, the UK can afford to deploy such high spec systems at sea on a carrier, then we are about to see a revolution in the ability of the RN's strike power and ability to defend itself.

[nomedia]http://www.youtube.com/watch?v=DiinNwfNi1w&feature=fvw[/nomedia]

 

[Locarnus]

Why do you keep repeating this nonsense? I have explained to you why the Greek deficit is worse.

Apart from the foolishness of claiming that a single year is all that matters, think about your own arguments. Why is Greece under greater pressure to reduce its deficit? Because it has a greater need to reduce it! Why would Greece not be called upon to help in any future rescues? Because its deficit is too great! You have put forward proof that you are wrong, & claimed that it proves you right. It's like saying that a beggar is richer than a man who is giving him money, because the beggar won't be asked for money by other beggars.

1. I didnt claim that a single year is all that matters, I did claim that the current deficit of UK is worse than that of Greece.

2. Simply put, external pressure to reduce the deficit comes (among other things) because of a combination of public debt (which is caused by previous deficits) and expected deficits, where the expected ones are to some extend based on the current deficit. There is a threshold after which the pressure increases drastically.
Since UKs debt is only about half that of Greece the current dangers from a high deficit are not like the ones Greece is facing. It also means the current external pressure on Greece is higher for the same reason (among many others like EURO country).

3. About the help thing, whats worse, a eg ~14% deficit of a small country (also a net transfer receiver), or a 12% deficit of a large country (also a net transfer payer). Its much easier to "help" a small country than a large country...
And when you then consider that Greece is a EURO member and UK is not, you can imagine that the willingness of other € countries to help UK (also considering the ability, because UK is a large country as stated above) might be not as high as it is for Greece.

That said, if you dont agree about the "worse" part I m fine with it and I m not going to discuss it further since a) given the usual disunity in the economic scientific community this could take ages without reaching a conclusive end (because of the nature of econ) and b) the result of this specific discussion would be near meaningless for the Royal Navy topic.

 

[Troothsayer]

3. About the help thing, whats worse, a eg ~14% deficit of a small country (also a net transfer receiver), or a 12% deficit of a large country (also a net transfer payer). Its much easier to "help" a small country than a large country...
And when you then consider that Greece is a EURO member and UK is not, you can imagine that the willingness of other € countries to help UK (also considering the ability, because UK is a large country as stated above) might be not as high as it is for Greece.

Well this isn't really a financial forum but the exact opposite is pretty much true of what you said.

It is far easier for a large economy to handle a 12% defecit than a smaller economy because the larger economy will be able to buy gilts at lower prices. You're totally ignoring the fact that the UK's rating is AAA+ and Greeces is junk because the UK can service the debt and Greece cant.

And not being part of the Euro meant simply that Britain was able to deflate its own currency. Something Greece would love to have been in the position to do.

 

[Hambo]

BAE Systems

The Type 26 actually looks a fine looking ship, but although an eye stretch, is that only 16 VLS forward? That seems a bit light. 64 Camm or 8 Tomahawk/32 Camm? The rest looks ok, although the rear placed Phalanx on the dog kennel can only cover one side.

Yep, thats an attractive ship.

 

[deepsixteen]

BAE Systems

The Type 26 actually looks a fine looking ship, but although an eye stretch, is that only 16 VLS forward? That seems a bit light. 64 Camm or 8 Tomahawk/32 Camm? The rest looks ok, although the rear placed Phalanx on the dog kennel can only cover one side.

Yep, thats an attractive ship.

I agree that it looks good, is that a 127mm? It does apear to be only 16 VLS tubes and I still think a full size hanger would he best. I think that if it costs more than a FREMM the RN would be better with them as they at least have 32 VLS I am surprised that they didn't just copy the VLS section from the type 45..

 

[FluffyThoughts]

BAE Systems

The Type 26 actually looks a fine looking ship, but although an eye stretch, is that only 16 VLS forward? That seems a bit light. 64 Camm or 8 Tomahawk/32 Camm? The rest looks ok, although the rear placed Phalanx on the dog kennel can only cover one side.

Yep, thats an attractive ship.

Just found this resource at Secret Projects. If you click upon the top image - and can decipher the Spanish - it would appear that there are separate CAMM silos. [I think Grim has hinted at this before, but maybe that was somewhere else...?] So it's full-length silos * 16 plus ~48 CAMM, which I'm happy about.

 

[kev 99]

I agree that it looks good, is that a 127mm? It does apear to be only 16 VLS tubes and I still think a full size hanger would he best. I think that if it costs more than a FREMM the RN would be better with them as they at least have 32 VLS I am surprised that they didn't just copy the VLS section from the type 45..

So am I.

Just found this resource at Secret Projects. If you click upon the top image - and can decipher the Spanish - it would appear that there are separate CAMM silos. [I think Grim has hinted at this before, but maybe that was somewhere else...?] So it's full-length silos * 16 plus ~48 CAMM, which I'm happy about.

Remember this is still only a concept picture, there is nothing to say at this point if the finished article will look anything like this, unless of course you count it being a sensible design based on an existing platform.