Bob Ainsworth: MoD forced into ‘hard decisions’ by fall in sterling
The article looks at explores the impact the crash of sterling last year on the defence budget and also the FCO budgets. It includes the above video which contrasts the statements by Lady Kinnock and Gordon Brown.
According to the Times
The Defence Secretary admitted today that he was being forced to take hard decisions to ensure that the plunge in the pound’s value would not hinder the war in Afghanistan.
Bob Ainsworth said that the exchange rate was causing difficulties for both his department and the Foreign Office (FCO) as ministers were accused of drawing up a secret hit list of embassies to be closed.
The charge follows the disclosure yesterday by minister Baroness Kinnock of Holyhead that the FCO was facing a £110 million budget shortfall as a result of currency fluctuations.
Speaking at a display of upgraded kit for frontline troops, Mr Ainsworth said
that the budget for Afghanistan remained the “overwhelming priority”. However, he said: “It doesn’t take a genius to know that if the pound exchange rate changes then that gives us issues. It gives us difficulties and we have to deal with those difficulties.
With the pound having lost 20-25% against other major currencies this must mean we are going to have a very hard struggle in 2010 unless extra money is put into the budget, an unlikely event when according to such sages as Lord Mandelson we need to make cuts of 80 billion.
Also Gordon Brown, saviour of the world, has yet again not quite told the truth again. As the Times quotes this passage from the House of Lords.
“It is a fact that counter-terrorism and radicalisation projects in Pakistan and elsewhere have been the subject of these cuts that the Foreign Office has been obliged to make.” A fall in the value of sterling hits FCO spending as it makes the cost of its operations abroad — paid for in foreign currency — more expensive in relative terms.
Her comments provoked concern on all sides of the House. Even Baroness Royall of Blaisdon, a fellow minister and Leader of the Lords, said she had to “confess to my surprise”.
She said counter-terrorism funding in the Home Office was ring-fenced, adding: “So if it can be ring-fenced in one department, perhaps it could be ring-fenced in another department.” Labour’s Baroness Symons of Vernham Dean, a former foreign office minister and defence procurement minister, said Mr Brown’s statement yesterday — introducing a package of measures to improve security — and Lady Kinnock’s remarks did “not add up to a very coherent point of view”.
Yet again we have empty words and promises from Gordon Brown, who is again going back into his true La-La land mode and ignoring the facts.
Bob Ainsworth: MoD forced into ‘hard decisions’ by fall in sterling – contains video.









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