Terrorism, cyberwarfare eyed in UK defence strategy

Terrorism and cyberwarfare will probably top a list of possible threats to Britain next week as the government seeks to justify major cuts to defence spending and purchases of military hardware.

Britain will on Tuesday unveil its first defence review since 1998, after outlining a national security strategy on Monday that will help the government to argue that the review is not purely a money-saving exercise.

The government is trying to reduce a record budget deficit, but at the same time retain Britain’s place as a strong military presence in Europe and a capable ally to the United States, which it has backed in conflicts in Afghanistan and Iraq.

Britain’s budget deficit is running at over 10% of national output, and the Ministry of Defence (MoD) budget of £36,9-billion ($59-billion) is set to be slashed by up to 10% over four years.

“The government will hope to push the point that the terrorist threat is a far greater one than being invaded in a traditional war to help justify equipment cuts,” said Howard Wheeldon, senior strategist at the BCG Partners brokerage.

The MoD already faces a deficit of £38-billion over 10 years according to earlier spending plans, and it is still not clear if the MoD or the Treasury will pay the £20-billion bill to replace Britain’s ageing Trident nuclear missile system.

Multi-billion pound hardware orders, including those for fast jets and aircraft carriers, are expected to be scaled back or delayed — moves that could shift Britain’s global military stance and have diplomatic and political consequences.

Cyberthreats and industry
Analysts expect a greater emphasis to be placed on terrorism and cyberwarfare, military cooperation with allies, and the ring-fencing of spending on British troops fighting in Afghanistan, perhaps to justify why cuts must be made elsewhere.

“The most interesting thing will be those areas in which more resources will be put, because they’re seen as more serious than they were a couple of years ago,” said Professor Malcolm Chalmers of the Royal United Services Institute think tank.

“One of the areas in which there’s certainly been an awful lot of discussion over the last year is cyberthreats.”

The United States this year appointed its first cyberwarfare general amid concerns that military, power grid and other computer networks could be hacked into as part of an attack.

Some firms are already positioning themselves to take advantage of more spending on intelligence and cybersecurity services. The British defence group BAE Systems last month acquired L-1 Identity Solutions’ US counterterrorism business.

Other opportunities for defence firms include stepping in to take over services cut back by the state, such as hardware maintenance and logistics, and partnering with the MoD to fund projects that the MoD might in the past have developed alone.

Analysts point to a collaboration between the MoD and the EADS-owned space and satellite firms Paradigm and Astrium to create the military’s Skynet 5 communications system.

The defence industry also expects a state push to boost exports by developing more adaptable, less specialised hardware, and to sell more existing technology abroad.

Cooperation and Afghanistan
The MoD is also expected to place more emphasis on pooling military resources with European allies.

“One of the main thrusts is going to be European defence cooperation … Money is tight everywhere, nobody’s got any spare cash,” said Charles Heyman, editor of The Armed Forces of the United Kingdom 2010-2011.

People briefed on SDSR talks say the MoD is keeping a £5,2-billion order for two aircraft carriers, which may leave no cash for planes for them or smaller vessels to escort them.

Heyman said the situation was ripe for collaboration with European partners, possibly France, to share the burden.

Prime Minister David Cameron is unlikely to cut funding for Britain’s 9 500 troops in Afghanistan, however. Britain is expected to withdraw by 2015, and officials are committed to supporting the army until then.

“That has implications for those parts of the armed forces which are not so heavily engaged in Afghanistan — they’re more likely to take reductions because of that,” said Chalmers, adding that fast jets and ships could be scaled back instead.

On Wednesday, the government will outline its Comprehensive Spending Review, which is expected to give more detail about defence spending cuts than Tuesday’s SDSR.

Given that negotiations over the review have continued until the last minute, analysts do not expect the SDSR to provide a complete guide to the shape of Britain’s military in the future.

“My sense of discussions I’ve had in the MoD and elsewhere is that it will set a framework for talks about force structures and other issues that will continue for quite a lengthy period,” said Derek Marshall, policy director at the defence and security industry association ADS. – Reuters

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