Cost of Iraq war leads to cuts in MoD spending

The Government is to scale back its spending on warships and fighter jets, partly as a result of the huge cost of invading Iraq. The Ministry of Defence wants to save billions and has already warned defence companies to brace themselves for deep cuts. Analysts estimate that keeping 12,000 UK troops in Iraq will cost more than £4bn a year.

An official indication of the cuts is not expected until the end of the year, when the Government publishes its defence White Paper. This has been delayed because of the involvement of the Defence Secretary, Geoff Hoon, in the Hutton inquiry.

But senior industry sources have revealed that the most extraordinary cuts will be to two new aircraft carriers, which the MoD is controversially committed to buying from Britain's BAE Systems. The vessels will be shortened, making them each 10,000 tons lighter. Since there will be less space on the ships, the MoD is considering reducing its order for Joint Strike Fighter jets by up to 30.

MoD officials have also indicated that the requirement for the new Type 45 destroyer could fall from 12 to 10.