The UK carrier programme flies backwards

Alexander Pannett 12.30 pm

On Thursday the UK government reversed plans to buy the conventional version of the F-35 fighter plane and instead opted for the vertical take-off and landing version.

A plane is needed for the prohibitively expensive carrier programme and in the 2010 Defence Review the Coalition had originally reversed the Labour government’s selection of the STOVL F-35-B, opting instead for the F35-C.

It has now back-tracked on this as Philip Hammond, the Defence Secretary, has claimed that the costs of building the catapult system needed to launch the F-35-C version have risen to £2 billion. Moving back to the F-35-B STOVL version would therefore save this money at a time when the MOD is facing a budgetary black hole of £38 billion.

The decision has been met with severe criticism, in that it removes deep strike capability from the carriers, which was the main reason for spending the billions needed to construct the largest ships in the Royal Navy’s history.

The lack of deep-strike aircraft and catapult systems will make it much harder to use the carriers in conjunction with the deep-strike US carriers or allow French fighters to use the carriers, undermining the major pillar of the new Anglo-French Lancaster House defence treaty.

Most importantly, the F35-B STOVL version is more expensive to buy and maintain than its F35-C variant. It faces its own budgetary concerns and the previous US Defence Secretary, Robert Gates, had threatened to cancel the entire F35-B programme. If this were to happen, the cost implications for the British government do not bear thinking about.

What is clear, is that a more expensive F35-B will mean less planes that the government can afford. The MOD has claimed that the money saved on the catapult system will mean that both carriers can be used rather than one being sold or mothballed as was envisaged in the 2010 SDSR. However, as the real cost of the programme will be the price of the planes at £150 million per F35-B so far, the saving of £2 billion on the catapults will at most pay for 12 aircraft. Not the 40 or so needed to operate an additional carrier.

Despite the above concerns, the major benefit of the decision to switch to the F35-B is that it will bring forward the date for an operational carrier to 2020, at least three years earlier than planned. Considering the recent bellicosity from Argentina, actions in Libya and tensions in Syria and the South China Sea, this crucial capability cannot come soon enough. There is no point waiting for the perfect weapon if the perfect time to use it has passed.

The loss of capability and operability with allies should be balanced against our short-term strategic requirements. In this regard the decision to select the F35-B has been a correct one. The catapult system itself may have led to further delays and costs and further setbacks may have ended the UK’s purchase of the F35 entirely having severe consequences for British aerospace industry which is a lead partner in the programme.

It is also highly likely that future deep strike capability will rely on drones armed with cruise missiles as these pose no risks of human costs. This is already happening in Yemen, Libya and Afghanistan. In which case the need for vast expenditure to ensure human pilots carry out deep strikes rather than cheaper drones may seem a very myopic measure. Whereas, for the foreseeable future, human pilots will remain far better than drones for ensuring air supremacy and protecting the Royal Navy’s surface combatants. Which is why the F35-B is still vital for this role.

The MOD is infamous for its cost overruns and delays, which means that any decision that brings an operational carrier into service sooner rather than later should be applauded. For that reason, this latest government U-turn was a wise one.

Unfortunately, that is not to say that the next one will be.

The Eagle and the Dragon

Alexander Pannett 7.07am

The recent prediction by the IMF that, using purchasing power parity, China will overtake the USA as the world’s largest economy by 2016 has left many fearful of the coming century.  In Hay-on-Wye, where I spent last weekend hiding from rain clouds, there was much talk of the impact China will have on the world as it exerts its new economic strength.  China will certainly change the dynamics of world power but behind its fearsome economic achievements lie some dangerous weaknesses that may prevent the Middle Kingdom from ever truly usurping America as the world’s foremost power.

China’s economic growth in recent years has been staggering.  By some measures, China is already the world’s largest consumer of energy and accounts for half of the world’s growth in oil demand.  The World Energy Outlook report has predicted that China’s energy demand would jump 75% between 2008 and 2035, contributing 36% to the projected growth in global energy use.

China’s neighbours have had much to worry about recently from the rising dragon.  China has built its first aircraft carrier and has already modernised its blue water navy with submarines and destroyers.  It is becoming much more assertive and has made bold territorial claims over the South China Sea, stretching as far south as the Spratly Islands near Brunei.  Chinese coastguard vessels routinely detain Vietnamese fishing boats in the disputed waters.  In 2010, a Chinese fishing vessel rammed a Japanese patrol boat off the disputed Senkaku Islands.  Japan’s refusal to release the Chinese captain led to China imposing a de facto ban on rare earth materials to Japan.

However, China’s impressive annual growth rates of 8% to 10% hide some very high environmental costs that are already starting to have a huge impact.  Years of unrestrained industrial polluting has wrecked the water supply, with rivers full of toxic metals and chemicals.  Agricultural land is suffering without access to safe water.  Increased water use has led to shortages and and desertification in north China.  This is particularly serious in a country that is already 30% desert.  More than half of China’s 660 cities suffer from water shortages, affecting 160 million people.  The tremendous cost of this worsening environmental damage has likely been unaccounted for in China’s headlong growth rate raising speculation that it is much smaller than currently forecasted.

Chinese economic growth is coming to the end of a cycle.  Global demand of cheap products cannot keep pace with the growth of China’s industrial output.  Whilst China’s middle class has exploded in size, domestic demand will not be enough on its own to maintain China’s current growth rates.  An even bigger problem is that there are simply not enough resources in the world to support a Chinese population that would have the same consumption levels of the American population.  The Chinese economy will need massive restructuring away from low end manufacturing if it is to deliver the wealth that will rival the United States.

China also has a huge, looming demographic crisis.  The one-child policy may have been successful in slowing Chinese population growth but it has meant that China will soon have a very large elderly population.  People above the age of 60 now represent 13.3% of the total population, up from 10.3% in 2000. In the same period, those under the age of 14 declined from 23% to 17%. This will create significant welfare costs for the government and will require younger workers to pay disproportionately for the costs.  This will further dampen economic growth.

The political structure of China is much weaker than the one party imagery would let outsiders believe.  Transfer of power between generations is conducted via a lengthy, Byzantine process of committees and personal loyalties.  It can often take five years for a new president to finally weed out their predecessor’s supporters from positions of power.  This does not leave much influence or time for a president to control the teeming multitude of 1.3 billion Chinese, let alone consider an effective and consistent foreign policy.  With growing calls for political reform, independence movements in Tibet and Xinjiang and anger over environmental and economic issues, there is much internal instability that hampers China’s ability to exert itself on the world stage.  It says much about the true fears of the Chinese leadership that for the first time in March 2011, China’s internal security spending trumped that of its defence spending.

Whilst China has certainly become an economic power and will be a future superpower, there are many structural flaws to overcome before it can be secure enough to exert its weight in global politics.  Considering its weaknesses, it will be hard pressed to usurp the USA as the foremost world power, even if its GDP becomes the largest on paper.  Besides, this is assuming that America will continue to grow at its recent negligible economic rates.  As the most innovative, capitalist nation on earth, with still unparalleled intellectual and economic resources, it cannot be long before the eagle answers the dragon’s challenge.

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