RAF pilots
Brexit

MOD Losing Millions In Procurement Costs After Pound Difficulties, Analysis Suggests

Devaluation of the pound has cost the military over £1.7 billion in two years, according to a group campaigning for a second referendum.

RAF pilots

A report by 'People's Vote' says new aircraft could cost an extra £22 million each after a tough period for the pound (Picture: MOD).

The Ministry of Defence is losing hundreds of millions of pounds a year in procurement costs because of changes in the value of the pound since the Brexit referendum, new analysis suggests.

The devaluation of the pound has cost the armed forces more than £1.7 billion over the last two years, suggest findings by the People's Vote campaign, which calls for a second referendum.

The group compared the UK's average spend on military equipment imports over the last five years with the average exchange rate in 2017 and 2018, and the exchange rate just before the Brexit referendum.

The analysis suggested that a tough spell for the pound could mean F-35 fighter jets would cost an extra £22 million each.

Tory former defence minister Guto Bebb said it was "disastrous" that the MOD is being "forced to pay billions more for its equipment because of Brexit" in light of the analysis by the People's Vote campaign.

F-35B aircraft
The analysis suggests the F-35 fighter could cost more per aircraft (Picture: RAF).

Mr Bebb said: "No-one voted for our armed forces to be underfunded but that's exactly what has happened.

"In a time of increasing global tension, it is disastrous that the MOD is being forced to pay billions more for its equipment because of Brexit, especially given that there's already a funding black hole."

A MOD spokesperson told Forces News: "The MOD, like any responsible large organisation, takes appropriate financial precautions in all its procurement contracts.

"Our defence budget and equipment plan include built-in contingencies and we carefully monitor fluctuations in currency markets to mitigate against changing exchange rates."