The Budget

Saw the underlying graph on Twitter this afternoon, a number of people pointed out that the green ‘other’ category includes the MoD’s budget.

So I thought I would reproduce it here and get the abacus out.

Defence Budget

Can someone check my maths?

The 2014/15 Other category is 8.7% of GDP against a total spend of 18% of GDP, the green category therefore represents a proportion of the whole equaling about 48%

Assuming the ring-fenced budgets of Education, NHS and International Development remain constant it is obvious that the remainder will have to make do with an increasingly smaller proportion of total public spending up to 2018/19, when things get slightly better. If those ring fenced budgets remain constant at about 9.3% then if the total in 2018/19 is 14.3% the green box drops from 8.7% to 5.2%.

If the relative proportions within the green box (Defence, Justice etc) remain the same and the other assumption remain valid then each is looking at a pretty large haircut.

The point is well made that you don’t spend percentages but Pounds so an increasing GDP and reducing percent of that may well result in no change to the actual money allocated to defence but with defence inflation at 2.1% in 2013/14, the actual amount available to spend may well be eroded by a combination of increasing defence inflation and decreasing percentage of GDP.

That said, I don’t think you need to be an economist, RUSI, or Mystic Meg, to see tough times ahead for Defence.

Doomed

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Mark McCall
Mark McCall
March 18, 2015 11:24 pm

Just a small note. You seem to have confused the 14/15 and 15/16 financial years at the start. it should read. “The 2014/15 Other category is 8.7% of GDP against a total spend of 18% of GDP, the green category therefore represents a proportion of the whole equaling about 48.33%.”

The correction follows through and we assume the “non-greens” stay about 9.3%. As a result if the total in 2018/19 is 14.3% the green box drops from 8.7% to 5.2%. This is a proportional drop (assuming all greens are cut equally) of~41%!!!!.

My first comment. Great blog.

This is clearly a disastrous drop and while there is a potential argument – there is no convincing argument that economic growth is going to radically outstrip defense inflation.

dukeofurl
dukeofurl
March 18, 2015 11:26 pm
The Limey
The Limey
March 18, 2015 11:34 pm

And this is exactly why welfare (discretionary public spending outside the DEL) needs to be cut. Despite popular perceptions, the vast majority of welfare expenditure is either housing benefit or pensions (of some form or another) and they are what need to be cut.

jedibeeftrix
jedibeeftrix
March 18, 2015 11:45 pm

hmmm, i’ll be damned!

wouldn’t a commitment to 2.0% be a real comfort right now, eh?

Martin
Editor
March 19, 2015 3:26 am

It gets worse when you consider that by far the largest budget in the other category is Pensions and Elderly benefit’s and those certainly won’t be cut.

I agree with Limy that Housing Benefit and Pensions are the two large budgets that need to be cut. All elderly benefits like the fuel allowance should be means tested for a start and the government should increase the retirement age by 1 year over the next parliament for everyone not just after 2030.

One hope me be that along with general inflation defence inflation is slowing a lot and the drop in fuel prices will be a particular boon for the services as they use so much.

If the Tory’s can meet their pledge of an inflationary rising budget with a 1% real terms increase in the equipment budget then things will be ok.

Personally I don’t see the need any longer for big cuts post 2015 other than the Tories desire to shrink the state for idealogical reasons. The deficit is still high but its shrinking on its own rapidly now. While 5% is unsustainable in the long term its not that bad as the economies growth and inflation take away well over half of it’s impact on total government debt.

Net debt at 80% may also be much more sustainable in the future as interest rates are likely to stay close to zero forever. Japan gets by servicing debt of over 200% of GDP. Also its worth noting that a very large chunk of that debt is owned by the Government through the BOE and is effectively being forgiven now that the BOE returns the interest payments.

Nick
Nick
March 19, 2015 5:31 am

TD

In absolute terms the other factor is that GDP fell a large % before 2009/10 and has slowly grown since then – probably no more that 4 % over 5 years – but is forecast to grow at an average of 2.3 % pa over the next parliament). Whilst the decline in spending over the next parliament is about the same % of GDP as over the last 5 years, in absolute terms the decline should be smaller.

However, as The Limey pointed out about 70 % of the welfare budget (c200 billion) goes on Pensions and aged related benefits (the winter fuel allowance etc)and this has been actively increased over the last parliament. Unlike most government sector pay rises (capped at 0 to 1 % pa) pensions have increased by a higher %. You have to think that this significant proportion of government spending wont decrease over the next 5 years and is more likely to be increased.

[by the way, as anyone who has spent in time inside an NHS hospital ward over the last 10 years as a patient or visitor, a large proportion of the NHS budget is spent on treated aged related illness.]

A significant part of the growth in spending here is due to the rapid increase in life expectancy since the 1970s. The demographic effect is slowing down which ought to me smaller year on year increases in spending eventually as the proportion of retired to active population stabilizes at the new run rate. This plus pension age is increasing will act to reduce the impact eventually. I have not seen any statistics on this though.

Given the factors outlined above, under a conservative government, you have to expect defence spending will therefore decrease in absolute terms by something similar to the last 5 years.

Given that Osborne’s 35 % of GDP target for government spending is ideological (such levels have not since a narrow gap between the end of WW1 and WW2 which was before there was anything like the welfare state of today – which is mostly pensions and healthcare dominated) and there is no public mandate for the implied reduction, you have to wonder whether it will be achieved.

One final factor, is that Labour and Lib Dem spending plans assume the deficit reduction on a slower pace (ie over more than 4 years). I have seen economic forecasts which show economic growth will be quite a lot faster than under Osborne forecast. Whilst Labour might not be as defence minded, it is less likely that the cuts will be as significant. In addition as defence is a “known” political weakness they are much more likely to hold up spending in any case. Plus they have a constituency to protect (ship building, BAe sites in the North and Scotland).

Nick
Nick
March 19, 2015 5:41 am

There’s quite a nice chart of govt spending % of GDP here

http://www.ukpublicspending.co.uk/uk_20th_century_chart.html

The thing that stands out to me is there was virtually no additional government spending to alleviate the 1930’s depression. This wouldn’t be politically possible today.

You can certainly argue that current levels (c40% of GDP) are perfectly acceptable. The real need is to increase tax take from 36 % to 38 % to reduce the current year deficit below 3 %

monkey
monkey
March 19, 2015 6:55 am

The UK’s overall revenue yield
http://www.google.co.uk/url?q=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/405246/20150212_Janreceiptsbulletin.pdf&sa=U&ei=AmwKVcj2F4uxae2zgrgE&ved=0CAsQFjAA&usg=AFQjCNEshTkd7yXwhNsDeU58wgKa3OoUJw
A significant aspect of revenue yield was the increase of VAT from 17.5% ( ignoring Prudence Browns drop) to 20% (78.4bn in 2008-9 to 104.7bn in 2013-14 !) As VAT is on just about everything ( not necessarily at the full rate , domestic energy is much less) even on defence equipment sales I believe using more UK originator/manufacturer would recover more of their own spend along with cooperation tax , NI, income tax , business rates etc etc much as Chris has stressed the French do on their purchases , a more holistic approach . Also continuing for more UK content of overall non- UK purchases such as the F35 deal for kit we are at present unwilling to centrally fund the establishment of those capabilities. A recent post was the land launched SDB II being developed and tested in Sweden. This is a common occurrence, tiny little Sweden develops its own armour, SPA , Jet Fighters etc , what is the Swedish government doing to incentivise this ? Can the UK gov learn from them to get some of that over here . Soon thousands of jobs , correction hundreds of jobs will be used to complete the detail assembly of the (not)FRES SV , that should be the clever bit in terms of assembly. The tin work etc is being done in Spain , how hard can it be to rebuild that aspect in the UK? Can JCB/CAT build an extra fabrication line for FUTURE armoured box welding. Could British shipyards turn their hand to small metal box welding as opposed to 60,000 ton metal boxes?

Nick
Nick
March 19, 2015 7:16 am

Monkey

Of course we could. The auto industry shows that if you’re prepared to invest to build (or redevelop) a new state of the art assembly line, there is absolutely no problem at all. However, the government isn’t willing to be that investor and a commercial organization needs up front commitments (and the ability to manufacture sufficient volume) to make a return on its investment.

For cars, 80 % are exported; for ship building or AFV something similar would need to be true. European markets are closed (too many domestically supported manufacturers after the same few opportunities). Most BRICS want to do it themselves (Gripen, Rafale deals) anyway. That leaves the Middle East, much of Africa and South America. Outside GCC, these nations need funding deals to afford to buy. We don’t do that (France does of course. I would expect Germany, Spain and Italy would also). Worse for ship building it seems we build to a sec that only the UK or USA requires.

jedibeeftrix
jedibeeftrix
March 19, 2015 8:30 am

@ Nick – “Given that Osborne’s 35 % of GDP target for government spending is ideological (such levels have not since a narrow gap between the end of WW1 and WW2”

You’re out of day (only by a day), as planned spending will now drop to only 36% of GDP…. levels not seen since Gordon Brown was sticking pins in dolls of blair in the early noughties.

“You can certainly argue that current levels (c40% of GDP) are perfectly acceptable. The real need is to increase tax take from 36 % to 38 % to reduce the current year deficit below 3 %”

You might argue that 40% is perfectly acceptable, but the british electorate has never tolerated on any sustained basis taxation as a proportion of GDP greater than ~37% of GDP. Since i’m presuming your reference to 40% above is spending, not taxation, it’s worth pointing out that a good keynsian seeks to run a surplus at the peak of the economic cycle, providing a cushion for when we drop into the trough. Fixing the roof while the sun shines, is the adage in common use.

Chris
Chris
March 19, 2015 9:28 am

monkey, Nick – just 24 hours ago I wrote “there are few if any UK companies willing to invest in military projects as the market just doesn’t exist.” As MOD (or the wider Gov’t) steadfastly refuses to actively encourage UK industry by grants or alleviated tax or bureaucracy reduction or procurement favouritism, the chances of bright idea start-ups sustaining themselves to become robust major players and exporters will be much lower in UK than in more nurturing states.

I recall Maggie T proclaiming that under her watch the numbers of new start-ups had blossomed to vast numbers; what she didn’t say was maybe 70% failed by the third year, and of the total 1980s start-up boom probably less than 5% have become sturdy businesses. The same is happening now – much of the reduction in unemployment is in sole-trader enterprises or similar – the self-employed just as in Maggie’s day are being applauded by the Gov’t but not helped by them.

So the chances of a new company springing up to bring those simple basic manufacturing tasks back to the UK are very thin.

But what of existing businesses expanding into the defence world? I would say equally very thin, at least without Gov’t showing some commitment (no chance then). What if, as you say, JCB choose to set up a defence sector satellite? Under current MOD customs and practice they, the MOD, would take a sniffy look to verify it was up to their minimum standards, they would demand proof of compliance to a hundred and one procedures, standards, protocols and treaties, they would insist upon rights of regular audits, but they would still not buy from them unless they were cheaper than their favourite current suppliers (by some margin because new suppliers are risk-loaded in the bid assessments). OK maybe in JCB’s case the risk loading would not apply, as the company has a sound reputation for manufacturing tough machines already.

If on the other hand HMG nurtured and encouraged such patriotic intentions, assisted the company to meet the necessary conditions, put in experts to advise and guide, and then once established put some business their way then the likes of JCB, and indeed new eager start-up organisations, would embrace the defence sector which would ultimately be to the UK’s advantage.

In my opinion.

Martin
Editor
March 19, 2015 9:36 am

@ Jedi – given the average British punters preference is for European spending levels I think we have to stop trying to have US taxation levels. With the economy growing at pace the government can afford to start increasing tax because it’s unlikely outside of Defence that they will actually be successful in cutting anything else worth cutting.

Plenty of successful nations have a tax take at 40% of GDP or above.

The tax burden should also not just fall on the rich, raise basic and higher income tax as well as VAT and NI, scrap the license fee and save everyone £4 billion a year.

Ian Skinner
Ian Skinner
March 19, 2015 9:42 am

Worth noting that, on the Today programme this morning, Osbourne refused to commit to spending 2% on defence, despite being asked to do so on three separate occasions: cuts are inevitable.

jedibeeftrix
jedibeeftrix
March 19, 2015 9:48 am

@ martin – “given the average British punters preference is for European spending levels I think we have to stop trying to have US taxation levels. With the economy growing at pace the government can afford to start increasing tax”

Actually our spending is roughly about the same as the US right now (circa 40%), rather than 45% norm on zee continent.

But yes, there is a problem in that the electorate seem willing to part with only 36% and yet wants 40% in spending.

Nick
Nick
March 19, 2015 10:23 am

Jedi

The UK government has pretty much run a deficit of over 50 % of GDP for virtually all of modern times

see various graphs here:

http://www.ukpublicspending.co.uk/debt_brief.php

I think its fair to say the UK public hasn’t been particularly bothered about that nor that it has had a significant effect on personal wealth outside a few occasions (IMF bailout in the 1970s might be an example).

As you say 36/37 % of GDP in tax has been deemed acceptable level in the recent past. However, in less than 1 lifetime, there has been quite fundamental shifts in the UK (deindustrialization, different skill types, significant proportion of the population in education after 15, significant increase in life expectancy, significant increase in the number of years we’re retired). I am not convinced that we have (personally, at a society level or in the public/government covenant) really factored this in. So perhaps, we need to move our expectation of the “correct” level of taxation to a higher level (or accept that public provision of pensions and healthcare will be restricted).

I think we all appreciate that since 2008, public debt jumped from about 40 % to 80 % of GDP due to the banking crisis (largest bank bailout ever), collapse in tax receipts – from the financial sector in particular – and measures taken to avoid panic (eg Browns temporary VAT cut).

Looking at the graphs we were content to let a very considerable period pass by before paying off WW! or WW2 debt (peak debt was after 1945 btw). Why then is 9 years (Osborne’s actual plus current plan) between than 15 years ? (remember Osborne originally planned to do it in 5 years). In the content of long history of the UK, would 5 years running a deficit of 1 to 2 % of GDP higher than Osborne plan really be fundamental ?

Most economists believe that a deficit of 1 to 3 % of GDP is perfectly healthy in any case. To me that suggests, only a 1 to 2 % cut in government spending (c40 % to c38 %) would be reasonable if taxation was held at c36 % of GDP.

The government has funded this rapid incrase in public debt, by borrowing c40 % of GDP on long period debt at historically extremely low interest rates and is repaying higher rate older loans and replacing with much cheaper current debt. Current low interest rates are locked into the system for at least the next 10 years regardless of what interest rate rises happen. The cost of funding a much higher debt base today is probably lower in real terms than in the 1970’s and 1980s. Now is actually a good period to grow public dent relative to the recent past. we can afford to take our time to recover government finances after what is (in any one’s terms) the worst financial crisis since 1945.

This is a political choice. The real shame is that very few actually understand the choice they are making or the consequences on their own pocket. Pensions and healthcare costs aren’t going away; if you don’t contribute by taxation you will contribute by higher savings or suffer real poverty in retirement and be much more likely to day earlier than today. Most current retirees are actually wealthier than those of my generation (born 1960s) will be as it is due to the impact of pension changes already made over the last 30 years.

Nick
Nick
March 19, 2015 10:43 am

Chris

100 % agree with you. This government (and the last as well) strongly believes (or at least they say they do) in rebalancing the economy (which means growing exports and manufacturing), but they are passive and limit themselves to setting the landscape. By this I mean, heading towards 20 % corporate income tax rates, allowing offshore profits to be untaxed in the UK, planning law reform [although business rates is one very major area that hasn’t been touched. We cant do property taxes in the UK for some reason – probably too much oligarch wealth invested here].

However, their love of “off balance sheet” debt (PFI and PPP schemes) – as opposed to cheaper government secured loan finance – and short term pricing advantage from buying cheapest available rather than investing in the UK seem to count for more in practice.

sea_eagle
sea_eagle
March 19, 2015 10:57 am

Just a small point for illustration.

The budget forecast revenue for 2015/16 is £743bn of which 10% or £75bn is borrowed money.
On the spending side £35bn will be paid out in debt interest.

The total National Debt is £1.5 trillion and will continue to increase while there is an annual deficit over the life of the next parliament. The current interest rate paid on the debt is just 2.3% so any increase will add billions to the annual debt interest. No wonder the Bank of England is keeping base rate at 0.5%.

Martin
Editor
March 19, 2015 11:06 am

@ Nick – Totally agree, until recently no one would bat an eye lid about running a structural deficit of 1-3% of GDP. pas long as the economy is growing and debt to GDP kept in check all is well.

It’s also worth remembering that in 2000’s when UK debt dropped into the 30’s % of GDP that the financial system faced major challenges due to lack of government paper.

Nick
Nick
March 19, 2015 11:08 am

Sea Eagle

The BoE has no choice really. A rate increase would strengthen the pound (sucking in imports and reducing exports) against the Dollar and Euro (let alone anyone else). Balance of Trade deficit is already at record highs (and probably unsustainable). The economic growth would probably fall off quickly and we’d be back in crisis mode.

There’s a chart in here

http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/

which shows our annual interest cost remains reasonable level of GDP based on current plans notwithstanding the record absolute level of national debt.

Chris
Chris
March 19, 2015 11:15 am

Nick – ref changing society – there is another quite alarming change that has happened since the 70s. That is the reliance on credit. Before the arrival of Barclaycard and Access, with the exception of a mortgage, a personal loan on fixed terms or Hire Purchase, people saved for things they needed or wanted. Credit was tightly controlled and people were as a result careful with money and knew exactly how much (or how little) they had at any given time. I have a small number of watches that have been in the family since the 30s and they bear the pawnbrokers’ marks where to make ends meet these valuable items were temporarily exchanged for the money to meet the necessities of life. Not only did it create careful people but responsible people who took any form of debt very seriously – I have heard of an elderly tenant on a large estate (of the landed gentry type) who always paid his rent in person on the day it was due, but upon falling ill was found by the doctors to have no food in the house. None. But despite being in severe financial straits there was no question that he should not pay the rent.

Roll forward a decade or two and no-one cares if they have the money for new trinkets – credit is freely available, indeed sometimes hard to resist. Its not unusual to hear of people with greater debt on their collection of cards than their annual pre-tax income and yet they seem comfortable with it. Crikey I wouldn’t be. Add to that the outstanding student loan, the mortgage, the car finance, the buy now pay later holiday – life on the never never. At some point, all this accrued debt has to be cleared. While its a bit gruesome, you need to consider what happens when someone dies with the odd few hundred thousand pounds of debt, much of it uninsured? Is it written off? Is it passed to the benefactors (really inappropriate term) of their will? Do they become posthumously bankrupt and all their assets seized? Does the government reimburse the creditors? I don’t know, but wherever the debt goes it will have an effect on the nation’s finances.

The reason for bringing this up is to sort of rebalance the somewhat anti-pension arguments above. By and large the pensioners enjoying a comfortable retirement have lived as best they could within their means, and their contribution to the national debt is the pension from the Welfare State, one they paid into as required by the Gov’ts of the time. Up and coming pensioners have already contributed to the national debt by free and easy use of credit, encouraged by card companies, salespeople and governments alike because it adds to the feel-good factor. It would be interesting if depressing to try to work out the balance of impacts between long term generous pensions and long term unserviceable debt.

Chris
Chris
March 19, 2015 11:27 am

I should add that in 1997 in his first Budget Gordon Brown raided the pension funds in a big way. In one underhand action all the pension planning up to that point was rendered invalid; even had someone been careful and planned an adequate fund to be self-sufficient, the raid would have left the fund short. Much of the pension hole may be tracked back to this one callous decision – one that most people didn’t even notice let alone understand. And the man had the gall to dourly proclaim ‘prudence’? Euch.

Nick
Nick
March 19, 2015 11:48 am

Chris

Individual debt is about $1.4 trillion today of which about 90 % is mortgage debt (sorry I don’t have time to find actual sourced numbers). By definition, the vast majority of mortgage debt is fully covered (today) by property value. I once read that mortgages accounted for about 35 % of total UK property value. In most cases, I think it is safe to say that there will be no loss. Of course there is still c150 billion on other debt, a large proportion of which is unsecured. This chicken will certainly affect a minority of people at retirement.

Of course the real change is from looking at property as a place to live to an investment (or worse retirement pot). its definitely chicken and egg as property value increases with the availability of debt financing made worse by offshore money being parked in property. This is probably unsustainable as well in the medium term as a growing proportion of the population is priced out of property by the increase in personal debt/earnings ratio. It may be that Thatcher’s property owning democracy of the 1980 to today will turn out to be a blip.

Of course to retire, you have to convert the property asset into cheaper property – or rent or sale and lease back – plus cash to live on.

I think, that if we leave the trends as they are, we have a substantial risk of loosing the overwhelming personal gains from the real redistribution of wealth (which happened in the 1950’s to early 2000’s) and heading back towards a more wealth divided country of the pre-WW2 era. If you look, you can see the trend appearing across many different aspects of society. Whether you think this is a problem depends on your perspective (and perhaps age/social background).

Nick
Nick
March 19, 2015 11:57 am

Chris

On pensions, I am of the personal opinion that if you save out of post tax income for retirement, then that income shouldn’t be taxed at all when you retire. I can’t see any logic for double taxing this. I would argue the same for the state pension.

To implement, it may well mean that some of the tax incentives for pension saving need to be looked at and removed, although it is in our national interest to encourage pensions saving to reduce the retiree burden on the next generation.

I would abolish employee NIC and replace with a (single higher) PAYE rate. Removal of a real administrative burden for employers (and self employed) and elimination of some pointless government admin jobs at the same time. Governments like to talk about reducing red tape. As they say, talk is cheap.

Monty
March 19, 2015 12:05 pm

Defence spending plans for the next five years were formulated quite a while back. We know what the size of the Navy, Army and Air Force will be; we know what new kit they will get; and we know where they will based. It was made very clear that the plan would be fixed and not change before 2020. Top Brass were promised that economies made today would lead to a larger budget in the future. They didn’t like it, but what choice did they have?

As the economy recovers, GDP will increase while the Defence budget will stay more or less the same. What it means is that, even if the total percentage spent on defence shrinks below 2%, the plan and pre-agreed equipment budgets will remain the same. The reason the total percent spent on defence has fallen below 2% is because the economy has performed better than expected. That’s a good thing. In fact, had the economy under performed, so that the defence budget was closer to £% then the prospects of further cuts would be much more real than they are now.

It is one thing to stick to absolute spending levels pledged at the beginning of this Government’s term in office, for the sake of good housekeeping – which is laudable; but if the Government now intends to cut further, you have to ask how whether their threat assessment stacks up and how it will affect our ability to respond to any unpredicted or unexpected scenarios? If it is just a politically expedient area in which to reduce spending with no fallout, then it simply destroy’s the Government’s credibility.

Defence was cut on a basis that:
(a) the UK would not commit to any major expeditionary deployments like Iraq or Afghanistan, certainly before 2020, but rather focus on domestic defence (Reduced role to that of UK Border protection force).

(b) Implementing a capability holiday across certain key areas: no Nimrod MPA replacement, push out Tornado replacement, get rid of Harriers before a replacement acquired, refurbish and reduce tank and IFV numbers, delay FRES UV even further, no new long-range ATGW, push out Type 23 frigate replacement, reduce surface fleet numbers.

That’s all fine so long as it doesn’t become necessary to deploy overseas to protect ourselves from an existential threat before it arrives on our doorstep. Arguably, Russia’s aggressive stance in the Crimea has changed the threat scenario significantly by re-igniting old Cold War tensions.

The way I see it, Cameron promised that the UK wouldn’t fall below 2% and called for all EU and NATO to stick to a 2% level of GDP defence budget, but is now ignoring his own words. So he looks either stupid or dishonest. More important, I just don’t think the proposed economies are viable. The Army is a disaster zone in terms of manpower and equipment. The RAF needs new aircraft and the Navy needs more ships as well as the men and women to sail them.

Nick
Nick
March 19, 2015 1:03 pm

Monty

I agree with your analysis, but it looks like the promised increase in absolute spend will come after 2020. The question is therefore whether the current cost base (including the various equipment plans) fit into the reduced money pot (which the budget documentation suggests to be the case) over the next 5 years or not. This is absolutely unclear to me.

monkey
monkey
March 19, 2015 1:03 pm

@Nick
“I would abolish employee NIC and replace with a (single higher) PAYE rate”
Couldn’t agree more . The separation of National Insurance Contributions and Income Tax is a hangover from the past that complicates and distorts government revenue collection from individuals.

Repulse
March 19, 2015 1:47 pm

Monty – spot on. It’s not that the budgets are necessarily decreasing, but that they are not increasing inline with GDP. However, it does make Cameron look dishonest in my view after lecturing to other NATO allies.

The part that is increasing is the equipment budget by 1% pa.

If the MoD does need wiggle room then in my view we should be leveraging this to get maximum efficiency out of the salary / support / basing budgets.

A few ideas:
– Scrap Tornado as soon as the Typhoon has level of ground attack capability that is credible – spend more of the equipment budget to make this sooner than 2019.
– Replace the Albions with ships that require lower crew levels (e.g. something like the Mistrals).
– Scrap the Apache order and extend the capabilities of the Wildcats

e.g. Commonality and high automation / lower capabilities (where they can be sensibly gapped).

sea_eagle
sea_eagle
March 19, 2015 1:52 pm

@Nick & Monkey

Our tax system is long overdue for reform and simplification. The distinction between income tax and national insurance is largely illusory and has been used to hide increases in taxes.

In 2007 the NI threshold was £5205 and the Personal tax allowance £5225. For 2015/16 NI is £8060 and personal tax allowance £10600. So the NI rate has gone up £2855 (55%) and tax rate £5375 (100%).

Someone earning £10600 may pay no income tax but they will pay £305 in NI payments. Now include the government slice to pay for the people/systems to administer these complicated systems. Then there are the additional costs of returning money collected via various complicated tax credits/benefits/handouts.

Far better to let people keep more of their money in the first place, simplify the tax collection system and reduce the complexity of benefits. it would bring transparency to the actual rate of tax people are paying which may help drive a move to constrain government spending,

This does not include the wasted time and money for people to fill in the claim forms, pay accountants, check tax codes nor the costs to business to administer PAYE and NI.

It should be possible to introduce a sliding scale (as used in Singapore) or multiple tax bands (eg: 10%, 20%, 30%, 40%) which eliminate the multiple distortions in the marginal rates of tax people actually pay under the current overly complex system.

Repulse
March 19, 2015 2:28 pm

Another option for the RN to reduce manpower pressures would be to early retire 1 T23 early as well not extending the lease for HMS Clyde beyond 2018, and accept all three new OPVs into service. Ultimately the final numbers for the T26 can remain the same as the crew numbers are lower…

Chris
Chris
March 19, 2015 2:47 pm

sea_eagle – I heard once (maybe untrue) that Iceland overnight changed its typically complicated taxation & benefits system to a one-size-fits-all system of a generous tax-free allowance and blanket 15% on everything thereafter. No special exclusions, no conditional exemptions. Whatever was earned over the threshold was taxed at the single flat rate. Result was (if the tale is true) a reduction in taxation level generally for all levels of earning, the eradication of tax avoidance/evasion loopholes, and an increase in Gov’t revenue due to the loopholes vanishing and the reduction in effort expended in calculations/recalculations of tax due. No-one was exempt, everyone paid the same rates, no room for argument.

I do hope the tale was true.

WhitestElephant
WhitestElephant
March 19, 2015 2:57 pm

Add to that list the brutal and merciless merging and cutting of cap-badges. Fewer regimens with full strength battalions. Axe should fall hardest on the light infantry battalions, with Reaction Force units spared.

That would save a great deal of money, with the Army’s current expeditionary capability still in tact.

mickp
mickp
March 19, 2015 4:43 pm

“Another option for the RN to reduce manpower pressures would be to early retire 1 T23 early as well not extending the lease for HMS Clyde beyond 2018, and accept all three new OPVs into service. Ultimately the final numbers for the T26 can remain the same as the crew numbers are lower…”

A sensible suggestion and the politicians could spin it as an increase in hull numbers – 2 out, 3 in. Is it right we are still leasing Clyde? If we owned it, I’d slightly modify your suggestion by keeping Clyde in the UK and dropping off one of the B1 Rivers? Either way the divested boat could be directed at the UK Border Force as their ‘flagship’.

What would you do with the Albions? Is there anything that can be done by looking at Argus, the 3 Bays and the 2 Albions in the round and rationalising? Could the Albions be a better bet in the RFA than say Argus and a Bay? Or would you just scrap the Albions early?

Repulse
March 19, 2015 7:01 pm

@mickp: The lease of the HMS Clyde lasts until 2018 under a £59mn contract with BAE. My preference would be to use UK aid money to give it to a country that needs it. It will have been worked hard for 11 years without access to the same regular maintenance as the other current OPVs. Also, I see the Batch 1 vessels probably more versatile to explore MCM UUV & USV options.

I have been in two minds on the future of the amphibious fleet, on one hand what is the point to have anything larger than a raiding sized force if there is no Army clout behind it. Having said that, Russia’s increased ambitions and the threat around the Artic (and to a lesser extent the Falklands) probably means the ability to land a combined RM / Army battle group force of up to 5,000 is still required (with a 1-2 months notice).

Assuming that the latter is still required, and it is possible to for the RFA to operate the Albions (with reduced capabilities), my opinion is that the RN should go for an amphibious fleet consisting:

– 2 x 20k LHDs (Mistral class type ships)
– 2 x RFA Albion LPDs
– 2 x RFA Bay LSDs (e.g. sell one)
– 2 x RFS Solid Support Ships (in addition to the 2 need for the CVFs)
– 4 x Point Class

Also, I would scrap HMS Argus to provide crew for the Albions (along with the Bay sold). Medical facilities would be provided by the LHDs and SSSs, but no dedicated PCRS or aviation training ship.

John Hartley
John Hartley
March 19, 2015 7:12 pm

Hmm, this is a huge housing price bubble. How do those end again? Is that our GDP growth? That & Wonga loans? Back in the 1970s, the UK government & companies were broke, but small savers propped it up & saved the Country as well. Valerie Singleton did an item on “Nationwide” about it.
6 years+ of 0.5% base rate, has robbed savers of £130 billion. No wonder the bits of the economy they support are stagnant.
0.5% gives the BoE no cushion against shocks. If the Scots had voted for independence, base rate would have been forced up to at least 3.5%, even if the UK Gov & BoE did not want it. Once international market sentiment goes against you, you have no choice.

The Limey
The Limey
March 19, 2015 7:36 pm

– while the multiple tax rates, etc do cause some difficulties and distortions, I am afraid you have heard a vastly simplified version of the Flatrate story. In particular, most tax avoidance is not about rates, but about how profit chargeable to tax is defined. There is no simple way of doing that, and even with a flat rate the vast majority of tax avoidance strategies would continue.

@all- while I would in general agree on merging NI and IT, I believe there are some horrible nuances of EU law that make doing so potentially very expensive (related to posted workers, where liability to tax and social security are not the same). Failing a merger, I fully agree that the bands should be aligned and the definitions of chargeable amounts made the same.

The Ginge
The Ginge
March 19, 2015 8:01 pm

Nice to see that good old nugget a flat tax rate raises its head. Lets do some simple maths. Under flat tax you earn £250k with a £10k tax free limit means you would pay £240k x 25% = £60,000 tax. Under the current system £10k tax free, next £30k x 20% = £6k, next £110k x 40% = £44k, the next £100k x 45% = £45k. Total tax paid £95k a saving for your very rich individual is a saving of £35,000. So who makes up that differance, well as 50% of the population earns £23k or less. So £23k pays income tax of £10k tax free, £13k x 25% flat rate = £3,250 whilst at the moment you would pay £2,600 or you pay £650 more tax or 2.6% tax rise. So the rich pay significantly less tax whilst the majority have to pay more, even on “average” wage at £36,000 the differance is flat tax £7,500 normal system £5,200 only those on higher tax bands earning more than £50,000 to break even or the top 35% get cheaper tax bills whilst the other 65% pays the price. Thanks for that paupers paying for millionaires benefits.

The Ginge
The Ginge
March 19, 2015 8:32 pm

Want to get rid of the deficit heres how you do it ;
1. Minimum wage to £8.5 or £17k for a 40hr weeks work. Outlaw zero hour contracts so people can plan 1 job or 3 partime jobs to work 40hrs.
2. Cut working tax credit completely saving £30 bn.
3. Build 500,000 council houses on mod and local government land. IE RAF Odiham slap bang in the SE etc. Cost £50k a house which equals a cost £25bn at an interest rate of 2% over 30yrs at a cost of about £1.5bn a year. Halfing the housing benefit bill saving net about £10bn.
4. Leave EU save £12bn.
5. Scrap dfid save £12bn.
Thats about £64bn saved leaving a deficit of about £30bn which is easily about 1% of gdp giving you maybe another £10bn for defence because as long as you deficit is below the economies long term growth rate at abiut 2.3% in real terms its shrinking.
Ain’t hard you just have to think out of the box and give up political dogma of no more council houses etc.

IXION
March 19, 2015 8:47 pm

Ginge.

Can I vote for you……

Jackstaff
Jackstaff
March 19, 2015 9:14 pm

,

Ref: The Ginge, seconded.

Chris
Chris
March 19, 2015 9:30 pm

Ginge – sometimes its better to be nice to those you rely on. When the Labour Gov’t in the late 70s created a 99p in the pound tax band for the super rich, the super rich left. The same happened in France, as Wiki reports: A 2006 article in The Washington Post titled “Old Money, New Money Flee France and Its Wealth Tax” pointed out some of the harm caused by France’s wealth tax. The article gave examples of how the tax caused capital flight, brain drain, loss of jobs, and, ultimately, a net loss in tax revenue. Among other things, the article stated, “Éric Pichet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.” So reducing the tax burden on the wealthy has the potential to increase total revenue, if the very wealthy believe they are not being “squeezed until the pips squeak” – I think that was the Labour mantra of the time. But I accept there will be some who might care less about total revenue (without an increased burden on those of us you labelled paupers) than they care about class war. The point was that the tax-free allowance was much greater than it had been before, and the tax rate much higher than it was before. No doubt someone did the sums to work out the right taxation curve such that all things being taken into account (tax bands, benefits, allowances, whatever else was income related) the new tax curve best fitted the older more complicated system. But like I said it was a tale I was once told and I have yet to find evidence this change really happened (not that I’ve spent time looking I will admit).

jedibeeftrix
jedibeeftrix
March 19, 2015 9:41 pm

@ sea_eagle – “Far better to let people keep more of their money in the first place, simplify the tax collection system and reduce the complexity of benefits. it would bring transparency to the actual rate of tax people are paying which may help drive a move to constrain government spending,”

Hell yes.

jedibeeftrix
jedibeeftrix
March 19, 2015 9:45 pm

More generally, it is possible to greatly simlify the tax system without flat taxation on IT, tolly’s tax guide practically needs a loggy train of its own to get to the publisher each year!

Makes me long for the merger of IT and NI with the following bands:
0 – NMW= 0%
NMW – 3.3x NMW = 33% (from £12,500)
3.3x NMW – 10x NMW = 41.5% (from £41,250)
10x NMW – infinity (and beyond) = 50% (from £125,000)

No ifs, no buts. no exemptions, and no tapers.

mickp
mickp
March 19, 2015 10:01 pm

@ the Ginge, and all – re your simple maths, agreed but the issue is the ‘very rich’ and won’t pay all that £95k tax due to exploitation of legitimate tax avoidance loopholes. Close all the loopholes, eliminate most of the reliefs, no differentiation between CGT and income tax rates and then you could probably employ a flat rate that the ‘rich’ would end up paying more than they do now. Needs a lot of modelling though. Downside of tax simplification is what to do with the vast army of now unemployed highly paid tax advisors! (I am not one!).

mickp
mickp
March 19, 2015 11:11 pm


“Assuming that the latter is still required, and it is possible to for the RFA to operate the Albions (with reduced capabilities), my opinion is that the RN should go for an amphibious fleet consisting:
– 2 x 20k LHDs (Mistral class type ships)
– 2 x RFA Albion LPDs
– 2 x RFA Bay LSDs (e.g. sell one)
– 2 x RFS Solid Support Ships (in addition to the 2 need for the CVFs)
– 4 x Point Class
Also, I would scrap HMS Argus to provide crew for the Albions (along with the Bay sold). Medical facilities would be provided by the LHDs and SSSs, but no dedicated PCRS or aviation training ship.”

I think that might be a bit optimistic but I’d like to be proven wrong. I feel we will soldier on with the Albions for a while yet.

I see one Bay going in SDSR 15. I think we will run two Albions and 2 Bays with Argus soldiering on. Ultimately (possibly sooner than expected) Albions replaced by small LHDs (like Mistrals if not exactly them), 2 Bays replaced by two larger RFA LPDs with hangers, and hopefully Argus replaced by some sort of variant on Mars SSS (or a Karel Dorman type vessel) out of DFID budget. Normal combined task group jogging of a CVF, Mistral and ‘Bay 2’ would the ability to land a commando ‘plus’ for raiding / port holding ops until the cavalry arrived on the points. Wouldn’t that combination mean we were essentially providing an at sea MEU capability with enhanced fast air? – i.e. recognising we are really operating an ARG+ rather than a CBG-? Of course CVF could operate without the amphibs and say 24 F35 and ASW package in a more conventional carrier role but not quite at CBG levels in terms of strike. So either MEU or ‘Sea Control’ type ops – is that a bad thing, isn;t it quite flexible capability?

Repulse
March 20, 2015 8:57 am

@MickP: My thought is that we cannot continue with the single RFTG structure and therefore we need to have separate CBG and ARG entities – as you want to keep you CBG mobile and far out to sea.

I can see a real need for a CBG which could be combined with small scale over the horizon raiding capability – though this would not need LPDs or LSDs in my view.

The question is that do we need a ARG capability – as I say I’m more in two minds than I was previously as the threat level from Russia in the Artic is higher. We either have no ARG because we do not want to get involved in offensive ops (I’m not convinced on the need for a peacetime ARG for defence) or we have one scaled on our ambitions. The fleet above is based on a Falklands style op, but half that (held at a lower readiness) would also be an option.

ArmChairCivvy
ArmChairCivvy
March 20, 2015 9:09 am

Nick, in your later posts you have pretty much covered my point, but repetition does no harm

“The thing that stands out to me is there was virtually no additional government spending to alleviate the 1930’s depression. This wouldn’t be politically possible today.”

In those days the Chancellor was seen as an accountant… You know, make the left hand side and the RHS equal, and job done. Any policy making was left to the BoE (even those actions would have been more like rescues rather than any long-term targets).

It saddens me to see the same mindset dominant (OK, the Bank has come a long way, them excepted).

Amyas Morse is not my hero (wasn’t he close to GB, another anti-hero?), but I would like to to put in a recent quote from him (as close as I can remember it):

“In many areas the gvmnt’s programmes look like radical surgery… Without knowing where the heart is!”
– defence no exception. Should be remembered the +1% in the precious review was a bribe to get the Services swollow the Deterrent starting to bite into their Business As Usual kit budget.
– another botched “quickie” review and I will adopt an EMU strategy (head in the sand & thinking it will be alright) instead of commenting

ArmChairCivvy
ArmChairCivvy
March 20, 2015 9:19 am

I think the ARG+ description hit the nail on the head.

Now, as for the Arctic, those two nice Mistrals are ice-strengthened… A deal, on the cheap?
– out of Putin’s 4 new Arctic bdes, two have not been spotted, one on the Kuola Peninsula is a redesignation and the only new one (in Kantalahti) is building up very slowly (you can tell by the pace of construction; they don’t live in tents)
– only one of the RM Commandos is Arctic trained? Won’t fill two Mistrals

mickp
mickp
March 20, 2015 12:03 pm

. I share your wavering over the need for an ARG however on balance with increased threat levels, I think it remains an important core capability. I think LHDs to replace the Albions is essential as it gives us the ability to deploy a separate ARG with helo capability. I appreciate the Albions were essentially designed as North Sea taxis but 6 LPDs (incl Bays) without hangers was a really poor decision. With Ocean around it works but notwithstanding the ability of CVF to accommodate helps, troops and kit I would want them way over the horizon. Ice strengthened Mistrals with a modestly improved defensive kit would tick the LHD requirement. Supported ultimately by 3 or 4 RFA manned docks (essentially a Bay 2 with hanger)

The Ginge
The Ginge
March 20, 2015 12:16 pm

Dear Chris
The point of my comment was that a flat tax only benefits those earing excesive amounts of money. It does not benefit those in my example earning below £50k. I fully agree that you need to be realistic on what people will pay in Income Tax. Hence why I did not suggest increasing the tax rates that we have at the moment. But it is quite funny that whilst on those earning more than £150,000 we couldn’t possibly ask them to pay more than 45% tax, from this year onwards as the first graduates who have paid the £9,000 fee structure will if they get a job with a wage exceeding £43,000 will be asked to pay 49% made up of the 40% Income Tax plus 9% loan repayment Tax.
The fact is as outlined in my second post last night it is easy to resolve the issue on the spending side if Politicians vanity projects are put to one side (eg Dfid). On the income side if both companies and private individuals paid the tax as envisaged by Parliment then income to the Government would be of a sufficient level to fully fund the NHS, Defence etc. There are some simple steps you can take to achieve this
1. Companies are assesed on Gross Turnover and reported Gross (before they write of for example property depreciation against income even though they haven’t in reality lost a penny) profit to the Stock Market. An assumed profit from which the 23% Tax will be tacken.
2. Small Turnover self employed/companies put on a form of PAYE again based on invoiced turnover per month.
3. Those earning more than £100,000 subject to yearly audit and assesment. This includes looking at spending patterns and life style. IE If you’ve just bought a £10m house, installed a £5m swimming pool in it and just spent £500,000 on new cars this year you are not earning £100,001 honest Gov. An implied Income can be calculated and Tax calculated by HMRC based on that implied income.
4. Non Dom status removed. If you spend more than 3months in the UK all your income is subject to UK Taxation. I am sorry Russina Oligarch but if you want to live in London where you don’t needed an armoured bodyguard team to go to the shops, or you Childen don’t need to be guarded against Kidnapp 24/7 or you don’t have sewage running down the middle of the road you have to pay for it. If you don’t like it leave, it might just reduce London Housing Costs if they do.
5. An enforced personel reponsability law that makes Tax Avoidence illegal with a minimum sentance of 5yrs in Prison for both the person whoose tax affairs are illigal and their advisor/accountant who designed and run any tax Avoidance Scheme, eg Jimmy Carr and his accountant. To be clear we will enforce what Parliments inteneion was not the exact word or comma in the tax law writen by a civil servant.
6. Simplify personel taxation law to help with 5.

Because unless the payment of income tax returns to its historic levels you can forget about RFTG’s, CBG’s etc because as I have been saying for sometime on this and other forums there won’t be no money to pay for didly squit.

Chris
Chris
March 20, 2015 12:34 pm

Ginge – understood. Although you might want to revise your point 5 a bit – tax avoidance is entirely legal based upon the rules HM Treasury sets – things like ISAs and pension AVCs and as of this week savings (no tax on 1st £1000 interest) – all of these are to some degree avoidance measures. Evasion on the other hand is already illegal and measures are being taken to close down the more ludicrous loopholes such as Starbucks UK coffee house chain declaring itself a business located in the Netherlands and Switzerland for the purposes of tax. Evasion (both outright criminal hiding of earnings and the wildly extravagant corporate dubiously legal tax-haven avoidance schemes) is nasty and entirely reprehensible. Avoidance might be seen as being careful with earnings to eke out a percent or two extra earning retention.

Midlander
Midlander
March 20, 2015 4:43 pm

Chris points to a key issue, about the tax engineering, which means not much tax take into the public purse and gives us the deficit and spending squeeze.

There is a lot of research across US tax and academic communities about “9999” meaning 9% revenue tax on companies, 9% tax on Incomes and 9% tax on net wealth, and 9% VAT with no ifs or buts. The idea being that no amount of tax engineering will really change anything and you provide clarity, incentives and stability for everyone to invest, work.

For the UK, with a very low tax take on big multinationals “who do a Starbucks”, you can fund a lot more defence budget off this now and going forward. We would be more attractive than Switzerland too.

Far too radical to be realistic, but worth mentioning…

monkey
monkey
March 20, 2015 5:31 pm

An article in the Independent last year.
http://www.google.co.uk/url?q=http://www.independent.co.uk/news/uk/politics/tax-avoidance-treasury-minister-dismisses-absurd-warning-that-hmrc-is-too-cosy-with-accountancy-giants-8588945.html&sa=U&ei=g1YMVaS2KpeLaIfLgoAF&ved=0CA4QFjAB&usg=AFQjCNHu1tuN1vo9tf5kw8MagKK_9MJfVA
A Parliamentary committee criticized the Treasury for using the BigFour accountancy firms as advisors on existing and new tax legislation ,implying they may be biased , as if! , and not work as hard for the UK population as for their private clients.
The Treasury minister declared it rubbish saying that the UK benefited from the BigFour going abroad advising clients to invest here. Yes , clients like Starbucks, Google etc who trade here but don’t pay tax here based on advice from the BigFour.
This cosy relationship , often senior Treasury Civil Servants and Ministers get directorships with these firms including ex- Chancellors, needs to end. The Tax bible , Tolleys , grows and grows each year getting ever more complex . The more words there are the easier it is to weedle between them , if there is one set of books that need burning its the tax law books.

Chris.B.
Chris.B.
March 20, 2015 5:44 pm

Just a small point but ISAs are not tax avoidance, they’re tax mitigation. The difference is that mitigation involves behaving in the manner which government intended with the tax break e.g. they want people to save money so they give a tax break to ISAs, they want companies to invest in plant and R&D so companies can claim tax relief for these. Tax avoidance occurs only when people manipulate the tax system in a manner that was not intended by parliament e.g. setting up shell companies to create artifical losses etc.

DavidNiven
DavidNiven
March 20, 2015 7:17 pm

Germany To Boost Defense 6.2% Over 5 Years

http://www.defensenews.com/story/defense/policy-budget/budget/2015/03/20/germany-budget-defense-spending-increase-nato-terrorist-merkel/25073443/

‘The German government under Chancellor Angela Merkel has approved plans to increase defense spending by 6.2 percent over the next five years — an extra €8 billion (US $8.5 billion) by 2019.’

And another country is beefing up defence

Sweden To Boost Submarine Fleet

http://www.defensenews.com/story/defense/international/europe/2015/03/19/sweden-boosts-sub-fleet-suspected-russian-incursion/25024225/

‘Last week the government announced a 6.2 billion-kronor hike in defense spending largely focused on upgrading its capacity to detect and intercept submarines’

DavidNiven
DavidNiven
March 20, 2015 7:22 pm

Italy Beefs Up Air, Naval Presence in Med

http://www.defensenews.com/story/defense/international/europe/2015/03/19/italy-beefs-air-naval-presence-central-med/25025257/

“Following a worsening of the terrorist threat, dramatically demonstrated by yesterday’s events in Tunisia, an increase in our air and naval deployments in the central Mediterranean has become necessary,” Defence Minister Roberta Pinotti told the parliamentary defence and foreign affairs committee.

trackback

[…] brings us neatly to a follow up from this week’s budget and the short post a few days ago, the snappily titled Public Accounts – Forty-Seventh Report Major Projects […]

McZ
McZ
March 21, 2015 3:19 pm

The additional €8b in the German Federal defence budget are for fixing the worst gaps and procurement messes. This includes NH-90, whose naval version is not allowed to fly over water currently. Or replacing painted broomsticks on the Boxer MRAV with functioning guns. It may also include some A400M pimping, to keep Airbus happy. All this after years of managing the armed forces like a turd.

The in-development ASW equipment was cut (in Swedish: delayed indefinitely) from the Swedish Visby class in 2012. Not needed, they said. A year and a half later, Crimea was russified and sub incursions seem to become the new normal.

Really, politicians and the top brass public servants have no imagination or foresight.

Chris
Chris
March 23, 2015 11:37 am

ChrisB – I note the nuance between mitigation & avoidance but the effect is the same, by taking an entirely legal option with otherwise taxable wealth, the tax payable is reduced.

McZ – the defence sector has been a nightmare for decades, and the lack of foresight of the public servants is intentional and institutionalised. An example from close to home. I have some fine designs which would suit the Army nicely. I took them to the Army trials team and they were interested, thought they looked workable, could see some utility (and advised where designs needed revision) but said they had no influence on what MOD chose to buy. I wrote to the decision makers at Main Building and they said there was no Requirement – unless a capability was deemed lacking they could not initiate a new Requirement, perhaps the designs might answer current requirements? I went to DE&S and saw appropriate people who thought the designs were possibly adequate but their process prevented them engaging with small enterprises on large programmes, had I considered putting the designs forward for concept technology demonstrator trials? I phoned DSTL’s Centre for Defence Excellence (twice just to check) but they saw no value in design, they were only interested in new technology. I met with DSTL proper, they thought the designs looked useful to the Army and would be a good thing to put into current competitions, but DSTL themselves were after technology not design. I wrote to decision makers in DE&S referencing the suggestion from their own scientists that the designs ought to be at least considered, and was again told the process barred MOD from dealing with a small player; my best option was to join one of the competing teams to get ‘some of my ideas’ into their bids. I went to a fine company (not really in the military field) and their one question of note (I paraphrase) was ‘what firm customer interest is there in these designs?’ – the response that there was vague interest but nothing firm wasn’t enough for them. I haven’t been to banks for business loans because without solid customer interest there would be no cash; I wouldn’t choose to go to investment houses for all the reasons discussed earlier. I had also contacted appropriate people in Westminster who for the most part said it was MOD business they didn’t affect, although some were polite and interested. As a result, I know industry think the designs are sound, the User thought they’d be useful, DSTL thought they were realistic and suitable, but no-one is prepared to take the first step. There is just no way in (unless you are a big company that the MOD thinks adequate to be a supplier).

monkey
monkey
March 23, 2015 3:35 pm


If you were to achieve the goal of selling your designs to the UK Gov how many directorships can you offer down the line for :-
A. Ex- Army types
B. Ex- MoD types
C. Ex- DSTL types
D. Ex- DE&S types
E. Ex- MP’s
Thought so. :-(

Chris
Chris
March 23, 2015 4:31 pm

monkey – its a good job the UK is such a modern meritocracy…