Brexit has cost the forces over £1.5 billion over the last two years - People's Vote

Brexit has cost the forces over £1.5 billion over the last two years

The cash-strapped MoD is losing hundreds of millions of pounds every year in procurement costs due to Brexit, new analysis reveals.

Britain buys around $10 billion worth of foreign weapons every year and the collapse in the pound following the EU referendum in 2016 means it must pay more for every helicopter, vehicle and missile it buys from abroad in US dollars. For example, a Chinook helicopter that could have cost £149 million in 2016, would cost over £218 million if bought today. The UK is also committed to buying dozens of F-35 fighter jets from the US over the next few years, with the fall in the pound meaning we will have to fork out an extra £22,000,000 for each one. 

In November the National Audit Office warned that the MOD faces a £7 billion budget black hole in its armed forces equipment budget. Extra expenses due to Brexit in the billions of pounds are something the forces can ill afford, and under Theresa May’s Brexit deal, the unfavourable exchange rate looks set to persist for years to come.

Loss 2018*

Loss 2017*

Total Loss*

£691,000,000

£1,013,000,000

£1,704,000,000

 

*To the nearest million

 

 

Commenting, Guto Bebb MP, former minister for defence procurement and leading supporter of the People’s Vote campaign, said:

“No one voted for our armed forces to be underfunded but that’s exactly what has happened. In a time of increasing global tension it is disastrous that the MoD is being forced to pay billions more for its equipment because of Brexit, especially given that there’s already a funding black hole.

“The Prime Minister's 'deal' will do nothing to restore confidence in the pound and if her deal is passed we will be overpaying for years to come. The only way to sort this mess out is to take the decision out of the hands of politicians in Westminster and give it back to the people.”

Ends

 

/NOTES TO EDITORS 

Figures are based on the UK’s average spend on military equipment imports over the last five years for which data is available (2011-2015) being $10.76 billion (Source - World Military Expenditures and Arms Transfers 2017).

This is converted into pounds using the table below, and a comparison is made between the price in pounds at the average exchange rate in 2017 and 2018, and the exchange rate just before the Brexit referendum.

 

 

Recent (Early December)

2018 Average

2017 Average

22-Jun-16

Exchange Rate

1.27808

1.340447

1.288611

1.46662

SOURCE

LINK

LINK

LINK

LINK

 

Illustrative Examples

Number

Cost

Cost per unit

Price 2016

Price Now

Extra Cost

Source

Apache

38

$488,000,000

$12,842,105

£8,756,259

£10,047,967

£1,291,707

Flight Global

Joint Light Tactical Vehicles (JLTV)

2747

$1,035,000,000

$376,775

£256,900

£294,797

£37,897

UK Defence Journal

Chinooks

16

$3,500,000,000

$218,750,000

£149,152,473

£171,155,170

£22,002,697

UK Defence Journal

AIM-120D AMRAAM missiles

200

$650,000,000

$3,250,000

£2,215,980

£2,542,877

£326,897

UK Defence Journal

APY-10 radar system production kits

8

$46,000,000

$5,750,000

£3,920,579

£4,498,936

£578,357

UK Defence Journal

F-35B Fighter Jet

1

$123,000,000

$123,000,000

£83,866,304

£96,238,107

£12,371,802

Defence One