As this is written, the UK Treasury has spent ￡37Bn on buying bank shares -equivalent to the entire annual UK defence budget (￡38Bn in 2008/09) and about three times what the Royal Navy (RN) expects to spend on its shipbuilding programme for the next 10 years (￡14Bn). The RN faces a renewed budget crisis as any hope that the Ministry of Defence's desperate pleas for additional funding have now been torpedoed by the collapse in the financial markets. Defence cuts and force reductions remain the order of the day for the government, regardless of risks being highlighted by former and current serving senior officers. Indeed the Defence Budget is likely to be particularly targeted by a nearly as desperate Treasury for a possible 'peace dividend' when UK forces withdraw from Iraq, perhaps as early as next year.
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