(Europa) The Royal Navy
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"Navy to 'lose two carriers' in cutbacks
By Michael Smith, Defence Correspondent
(Filed: 01/04/2004)

The Royal Navy is to lose two aircraft carriers after
Geoff Hoon, the Defence Secretary, lost his argument
with the Treasury, defence sources said last night.

The ships will be "withdrawn from operational service"
amid attempts to cut the defence budget. They will be
moored at Portsmouth before being sold, the sources
said.

"We will stand them down, which means they'll be held
in operational reserve," one said. "They are not going to
be scrapped, they can be up to full readiness within 50
days. In the long-term they will be sold but in the
short-term they could still be needed."

The two vessels to be withdrawn are Illustrious and
Invincible. Ark Royal, the newest of the carriers, is to
undergo routine maintenance. It will be kept on,
contrary to reports that it is to be permanently
mothballed.

The carriers are just the first of a series of cuts, the
sources said. A number of other pieces of equipment
will go as the MoD seeks to save up to £1 billion to
address cash problems caused by a new accounting
system and the Iraq war.

Despite assurances from the Treasury that the war will
be funded in full, the MoD had to borrow £500 million
from budget funds due to be paid out on the Eurofighter
programme to cover short-term costs.

The money was borrowed in the belief that the
Eurofighter programme would be delayed but there
were no delays and the MoD now needs to find the
money. The MoD dismissed any suggestion that two
carriers were to be removed from service. But the
sources said there was an urgent need to cut some
existing equipment to save new programmes.

Mr Hoon told the Commons Defence Committee
yesterday that "difficult choices have to be made
between existing equipment and equipment we will
need in the future."

He also refused to rule out any cuts in the number of
infantry regiments, amid widespread rumours that
Scottish regiments, including the Black Watch are to be
scrapped.

There would "inevitably have to be adjustments in
numbers" and to give "an absolute blanket assurance
would not make sense", he said. It also emerged during
the hearing that the new £200 million Defence Medical
Centre in Birmingham is to be scrapped.

Sir Kevin Tebbit, the head of the MoD, told the MPs
that this was "the result of a reprioritisation of defence
medical services" and not a result of the need to make
cash savings.

Discussions with the Treasury on the MoD's budget
shortfall were continuing, he said. However, defence
sources said that there was no sign of any new money
rather than a continued commitment to extra funding
announced two years ago and already taken into
account."
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