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Market Research Report

United Kingdom Defence and Security Report Q2 2009

Published by Business Monitor International Contact us : +1-860-674-8796
Published 2009/05 Content info Pages: 71
Product code BMI93920
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Abstract

The UK’s defence spending reached GBP33.5bn in 2008, representing an increase of 6% on 2007 figures.
Total defence spending, meanwhile, reached 2.4% of GDP in 2008. Over the 2009-2013 forecast period,
the government is planning to maintain defence spending, as reported by the Ministry of Defence, and
BMI estimates that total expenditure will reach GBP38.38bn by 2013. The extra resources allotted to
defence have allowed the purchase of two new aircraft carrier, the Queen Elizabeth and the Prince of
Wales, which are the largest vessels ever used by the Royal Navy. Meanwhile, the MoD is looking to
make savings of GBP2.7bn per year, which it will re-invest in Defence. According to a report from House
of Commons in 2008, British Military operations in Iraq and Afghanistan and the Balkans have cost a
total of GBP9.8bn. BMI warns that with British troops now set to leave Iraq, and public spending being
pressured by economic decline, the government may now begin cutting defence expenditure.
Meanwhile, defence firms in the UK will be boosted by news that the US is planning to sink more money
into the F-35 Joint Strike Fighter. Under the provisional US defence budget plan for 2010, US$11.2bn
will be put aside for procurement for the jet, compared to a figure of US$6.8bn in 2009. BAE Systems is
responsible for around 20% of the F-35. Meanwhile, UK firm Cobham, which designs the electronics to
enable the jets to communicate with each other, should also benefit.
Regarding the security situation, the threat of terrorism in Northern Ireland has reared its head again. In
early 2009 the Real IRA conducted an attack on a British army base in County Antrim. Two soldiers were
shot dead, making them the first British servicemen to be killed in Northern Island since 1997. Two pizza
delivery men were also injured in the attack. The leaders of Northern Irish Republican party Sinn Fein
denounced the attack, while a wave of public condemnation suggests that a return to widespread violence
is unlikely. However, according to police figures, paramilitary style attacks by dissident Irish republican
groups are rising. In 2008/09 there were 20 recorded incidences of punishment shootings, compared to 7
in 2007/2008. However, the long-term trend is positive. In 2001-2002, there were 190 punishment
shootings in Northern Island.
Meanwhile, In April 2009, 12 people were arrested in the UK, in connection with an anti-terror operation
in the North-West of the country. Of the 12, 11 are reported to be Pakistani nationals. The arrests came
after a serious breach of security by a senior police officer. Anti-terrorism chief Bob Quick was
photographed by the press on his way to a meeting with clearly visible ‘top-secret’ documents. The
arrests of the suspects were brought forward as a result of the unintentional disclosure. Bob Quick has
resigned from his position as a result of the incident. Prime Minister Gordon Brown has called for
Pakistan to do more to stamp out the threat of terrorism. It was thought that the plotters were planning
atrocities at major shopping centres such as the Arndale and Trafford centres in Manchester.#

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