Oct. 19 (Bloomberg) -- Prime Minister David Cameron will say today that the U.K. will order fewer, cheaper planes for one new aircraft carrier and station only helicopters on another to cut costs, two people familiar with the plans said.
Announcing the results of a defense review to lawmakers in London, Cameron will say one ship, HMS Prince of Wales, due to enter service in 2019, will be redesigned with a catapult and arrester-wire system, the people said. That will enable it to take carrier-variant Lockheed Martin Corp. F-35 Joint Strike Fighter aircraft, rather than a more expensive version that can take off over a shorter distance and land vertically.
“That gives us a whole new capability,” Defense Secretary Liam Fox told BBC Radio 4’s “Today” show. “The design of the carriers that we have would not have allowed the American navy to land on our carriers, nor the French navy. Interoperability with our allies seems to me a priority.”
Cameron called President Barack Obama yesterday to say the U.K. will “remain a first-rate military power and a robust ally of the United States,” the premier’s spokesman, Steve Field, told reporters in London today. U.S. Secretary of State Hillary Clinton and Defense Secretary Robert Gates said last week they were concerned the spending squeeze might damage NATO.
The first new carrier in service in 2016, HMS Queen Elizabeth, will carry no planes, only helicopters, and may be mothballed once the Prince of Wales begins operations. With existing Harrier jump jets being withdrawn, Britain will be left without the ability to launch carrier-based plane strikes for 10 years.
The people declined to say how many F-35s would be ordered instead of the 140 the previous Labour government said it hoped to buy. Fox said there were long periods in the past when Britain was unable to fly planes off carriers.
Cameron’s announcement will also set out details of cuts to other weapons programs to help tackle the record budget deficit and redefine military needs for the post-Cold War era. Chancellor of the Exchequer George Osborne will outline reductions in other ministries’ spending tomorrow.
The dispute over the military budget has been the most public within Cameron’s government, 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 morale. Cameron intervened personally on Oct. 16 to make sure the defense ministry had a budget with which it could work.
The addition of the catapult system to the Prince of Wales will cost several hundred million pounds, said the people, who declined to be identified because the results of the review are not yet public.
The carriers are being built by a group including BAE Systems Plc, Babcock International Group Plc and Thales SA at a cost of 4.9 billion pounds ($7.8 billion).
Cameron will say that HMS Ark Royal, a carrier launched in 1981, will be decommissioned immediately. Another, HMS Illustrious, will carry helicopters until 2014, when it will be decommissioned and its crew transferred to the Queen Elizabeth.
From 2017, the crew of HMS Ocean, a helicopter landing platform, will transfer to the Prince of Wales to get it ready for service and Ocean will be decommissioned. The Prince of Wales will only have catapult-launching facilities from 2020, the people said.
Conservative lawmaker Douglas Carswell said the defense cuts “mark a milestone” in Britain’s “decline” as a military force.
‘Belgium With Nukes’
“We have the third or fourth largest military budget in the world, we are the sixth largest economy, yet we’re reduced to the status of being Belgium with nukes,” Carswell told Sky News television today.
A decision about the future of the Queen Elizabeth, including the possibility that it may be sold, will be made in 2015. The carrier may be mothballed once the Prince of Wales goes into operation in 2019, the people said. Another possibility would be to fit it, rather than the Prince of Wales, with catapult equipment before a sale of either carrier.
The overall Defense Ministry budget is being cut by 7 percent to 8 percent, a person involved in the discussions said two days ago. That represents a victory for Fox after Osborne asked for reductions of as much as 20 percent.
The U.K. will also press ahead with building the remaining ships from an order to London-based BAE for seven Astute-class hunter-killer submarines, the people said.
A decision on replacing the Trident submarine-based nuclear-missile system will be delayed until after the next election in May 2015, the people said. BAE and Rolls-Royce Group Plc are among the project’s contractors.
“I’ve always believed that we should have the Trident program, and I’ve always believed in continuous-at-sea deterrence,” Fox said. “Neither of those have changed.”
Cameron will also announce that the Royal Air Force’s fleet of Tornado jets will be kept in service because they are needed for the current mission in Afghanistan, the people said.
QinetiQ Group Plc said today the defense ministry has terminated the first phase of its training program in Wales with immediate effect, leading to costs for the company of 37 million pounds.
London-based QinetiQ fell as much as 13.2 percent and was down 3.3 pence, or 3 percent, at 107.3 pence at 12:33 p.m. in London.
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