Tuesday, 3 November 2009

Bank Bailout MkII

I'm continually amazed by the size of the bank bailout and how easily these massive sums of money have passed everyone by.

This link shows that the government has decided to dump another £39.2Bn into a couple of banks. That is a seriously staggering amount of money!

One of my pet habits is referring to large sums of government money in terms of things that are simpler to understand, such as Chinook helicopters, which are desperately needed by our troops in the sandpit. Looking at the recent Canadian deal, they were able to procure 15
brand new Chinooks (including 20+ years of support and maintenance) for $3.4Bn. We could have bought (and supported) 300 heavy lift helicopters for the 'price' of this single bank-bailout. (OK, OK, add on pilot and training costs and you're probably down to 100, but this would be a capability equivalent to anyone in the world).

I remember Brown standing up in the HoC talking about how the number of helicopters has increased by 60% in recent months. This was an increase of Chinooks from 5 to 8. Of this 8, 2 have been shot down recently, putting us nearly back where we started.

I understand fully the need for a liquid and sustainable banking sector, really I do. However, when Brown claims there is nothing more that can be done to help our troops, he has to be lying.

"A penny spent on defence is a penny wasted" - Gordon Brown


  1. Alas the Canucks sold their first lot of Chinooks to the Dutch in the early nineties because "there wasn't any need for them" and had to cadge rides from the Dutch in Afghanistan - what a difference a war makes! Why bother to buy medium heavylift helis when an ex-RAF group offered to supply 25 Mil-17 helis designed for hot and high flying (didn't the Russians have some Afghan experience?) for £7million a month three years ago. The RAF/MoD trade union wouldn't have it and the Tories just wanted to bash the govt about not enough helis. The govt were happy to keep Westlands and Denmark happy by spending £186 million on six Merlins that still needed expensive upgrades. Don't worry, it's only our money. And to get round the heli shortage NATO contracted for some from a company that subcontracted to a rather dogy company that had questions about gun-running. One of there helis was shot down near Sangin on a food resupply mission. The problem is not inadequate funding but incompetent procurement driven by incoherent and overcomplicated equipment specs.

  2. Gallimaufry,

    Thanks for your comment.

    I agree that with defence (as with probably all areas of Government activity) the major issue lies with the inability to define the problem properly and plan what is needed to do something about it.

    Have you read the Gray report? Now it's actually been publically released, I found it a rather amusing but extremely cutting view on exactly what we're doing wrong in Defence procurement.

    This exercise here was purely intended to provide a different view of the new bailout (afterall, how much really is £40Bn?) in simple terms. It could equally have been 4 new aircraft carriers, 250 Typhoons or any other ridculous military purchase.

    It is unclear why we're using a small fleet of Ukranian (iirc) gun-runners for deliveries. It's even less clear why noone is being honest about us using them. I don't think you can always hide behind NATO.

  3. I think the supply chain for Wokkas is a bit too long for us to get 300 (or even 30) any time soon, but it certainly puts the government's deficit spending in perspective.

    Hadn't realised the Gray Report had been published - they certainly snuck that one out, didn't they? I've just grabbed a copy, so I guess that's my afternoon/evening gone!

  4. The King of Wrong,

    I can only assume it was released on a good day to bury bad news. I only realised when someone pointed me to it the day after it was released.

    Agreed that we couldn't get any Chinooks in service in any reasonable time-frame, but it's a fun way to think of these catastrophic sums of money.

  5. Yeah, looks like that was the week of the Legg Letters, so everything would have been buried under the MPs' expenses...

    I agree about the CH-47 as a good unit of price - and it looks like you've got a good measure of it, too, rather than recycling the "$20m" claim as Lewis Page does (that's for the bare airframe alone, doesn't include engines or avionics or comms, let alone support).