U.K. Ministry of Defense Said to Agree on Budget Cut; May Be Less Than 10%

The U.K.’s Ministry of Defence reached agreement with Chancellor of the Exchequer George Osborne on budget cuts before an announcement next week, a person familiar with the negotiations said.

The person declined to provide details on the spending cuts or discuss which weapons programs would be affected. The reduction will be less than the 10 percent the government was seeking, the British Broadcasting Corp. said on its website today, without saying where it got the information. Replacement of Trident, the country’s nuclear-submarine deterrent, will be delayed, the Financial Times said.

The settlement ends 22 weeks of wrangling between Defence Secretary Liam Fox and Osborne’s Treasury. The ministry was originally asked to find budget reductions of as much as 20 percent, less than most other government departments. Osborne is due to set out details of reductions to most ministries’ spending on Oct. 20. A day earlier, Prime Minister David Cameron will publish the government’s review of its strategic defense capability, detailing cuts to weapons programs to help tackle the record budget deficit and redefine military needs for the post-Cold War era.

The country will delay the replacement of its Trident nuclear submarines by at least 12 months to save 750 million pounds ($1.2 billion) over four years, the Financial Times reported, without saying where it got the information.

Aircraft Carriers

The country’s aircraft carriers are also unlikely to have any working British jets for as long as eight years because the Harrier jump-jet will soon be decommissioned, the FT said. The ships will instead be used for helicopters and conventional Joint Strike Fighter jets, the newspaper said.

Army chiefs resisted plans to cut 7,000 troops, saying that could jeopardize operations in Afghanistan, the FT said. The government may still cut 5,000 soldiers, the newspaper said.

The dispute over the military budget has been the most public within Cameron’s coalition, with Fox dubbing it a “soap opera.” Fox told the premier in a letter leaked last month that deep cuts while Britain is at war in Afghanistan would hurt soldiers’ morale. Fox later described Cameron as his “strongest” ally. A spokesman for Cameron declined to comment on whether an agreement on cuts was reached.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.