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World News

UK delays replacing nuclear deterrent to cut cost

LONDON (Reuters) - Britain will delay spending to replace its Trident submarine-based nuclear weapons system as part of sweeping cuts to the defence budget to help reduce a record deficit, Prime Minister David Cameron said on Tuesday.

Cameron unveiled to parliament Britain’s first review of the armed forces since 1998 -- a raft of changes the government says will prepare the military for the future but which critics say will yield financial savings rather than good security strategy.

“This is not simply a cost-saving exercise to get to grips with the biggest budget deficit in post-war history. It is about taking the right decisions to protect our national security in the years ahead,” Cameron said at the start of his statement.

At stake in the review were multi-billion pound military hardware orders as well as Britain’s standing as a significant military power in Europe and capable ally to the United States.

Cameron said that the defence budget, which stands at 37 billion pounds ($58.39 billion) this year, would fall by 8 percent in real terms over four years.

The army would lose some 7,000 troops while the navy and the air force would lose 5,000 personnel each.

Most British government departments will face even steeper cuts, averaging 25 percent over four years, in a spending review whose details will be announced on Wednesday.

Cameron said Britain would retain its independent nuclear deterrent but modify the timetable and details of its renewal.

“As a result of the changes to the programme, the decision to start construction of the new submarines need now not be taken until around 2016,” Cameron said.

“We will save around 1.2 billion pounds and defer a further 2 billion pounds of spending from the next 10 years,” he said.

The decision on Trident shifts a sensitive political issue to the back burner. The Liberal Democrats, junior partners to Cameron’s Conservatives in the ruling coalition, will welcome the Trident decision as they oppose the system’s replacement.

Menzies Campbell, former leader of the smaller party, said the delay to Trident showed “Liberal Democrat views have prevailed”. The party wants to look at cheaper alternatives.

NO PLANES FOR AIRCRAFT CARRIERS

Cameron said that while the government would push ahead with a 5 billion pound order for two new aircraft carriers, one of them would be held “in extended readiness”, that is, mothballed.

“We will fit the ‘cats and traps’ -- the catapults and arrestor gear -- to the operational carrier. This will allow our allies to operate from our operational carrier,” he said.

The existing aircraft carrier, Ark Royal, and Harrier jets that are now in operation will be scrapped. That means Britain will have no carrier-based fighter aircraft for nearly a decade.

Shares in defence contractor Babcock extended losses to trade as much as 10 percent lower on Tuesday as one analyst pointed to worries over the impact of the cutbacks on its maintenance contracts with the British military. Other analysts questioned the extent of the impact and the stock retraced initial losses to trade down 5.5 percent at 1535 GMT.

A security strategy published on Monday aimed to convince critics that Britain’s defence review is driven by policy, not just the need to slash the deficit.

But the strategy’s focus on terrorism and cyber attacks conflicts with the decision to build both carriers. Ministers say it would have cost more to scrap the order than keep it.

Cameron reassured U.S. President Barack Obama in a phone call on Monday that Britain would “remain a first rate military power and a robust ally of the United States”, his office said.

Senior U.S. officials have voiced concerns that defence cuts by NATO members could go too far, weakening the alliance.

Additional reporting by Adrian Croft, Keith Weir, Estelle Shirbon, Kylie MacLellan; editing by Mark Heinrich

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