Libya War Cost to Be ‘Tens of Millions’ of Pounds, U.K. Says

The cost of the U.K.’s military operations in Libya will be in the “tens of millions” not “hundreds of millions” of pounds, U.K. Chancellor of the Exchequer George Osborne told Parliament today.

Lawmakers “will understand that it is too early to give a robust estimate of the costs of the operations in Libya,” Osborne said in London. “The costs should be modest compared to some other operations, like Afghanistan, and the Ministry of Defense’s initial view is that these will be in the order of the tens of millions not the hundreds of millions of pounds.”

With the coalition in its fourth day of the campaign, the London-based Royal United Services Institute said it estimated at current rates the Libyan operation could cost 100 million pounds ($164 million) within four to six weeks, at a rate of around three million pounds a day.

For every hour in the air, the U.K.’s Tornado GR4 and Typhoon aircraft cost 35,000 pounds and 70,000 pounds respectively, a spokesman for RUSI said in a telephone interview. The figures are based on defense ministry figures from costs on the conflict in Kosovo.

The ministry figures lower costs, putting the extra spending at 4,897 pounds per hour for the Tornadoes and 3,875 for the Typhoon jets because manpower and equipment costs are already accounted for, according to an official who couldn’t be named under department ground rules.

Osborne also confirmed that Defense Secretary Liam Fox would not have to fund the campaign from his ministry’s over- stretched budget, saying it would be paid for out of central government funds.

“Whatever they turn out to be, the additional costs for operations in Libya will be fully met from the reserve,” Osborne said. U.K. spending on defense is set to fall to 8.7 billion pounds in the fiscal year 2014-2015, an 8 percent reduction over four years. Defense Procurement Minister Peter Luff said March 8 further cuts this year were in the offing.

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

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

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