UK to scrap warships, military helicopters and fleet of drones to save money despite threats abroad

Published

5 months ago

November 20, 2024

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The UK will scrap five warships, dozens of military helicopters and a fleet of drones to save money despite growing threats from Russia and a war raging in Europe.

John Healey, the defence secretary, announced the dramatic move in parliament on Wednesday, saying it would save up to half a billion pounds over the next five years.

The defence secretary described the equipment being axed as “outdated” and said the “common sense” decision to retire them was long overdue.

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He signalled the decision was part of a plan to restructure and modernise the armed forces, which have already been significantly reduced in size following decades of cost-saving cuts, with new capabilities due to come online to replace the gaps.

“We face increasing global threats,” Mr Healey said in a written statement that was released at the same time as he addressed MPs.

“War in Europe, growing Russian aggression, conflict in the Middle East and technology changing the nature of warfare. As a result, defence needs increased resilience and readiness for the future.”

At the same time, though, he said the defence budget faced “serious financial pressures”.

He repeated a pledge that the government would set out a course to lift the defence budget to 2.5% of national income – but yet again without giving a date.

The defence secretary then spelt out what “difficult decisions” meant in reality.

“To ensure that Britain is kept secure at home and strong abroad in a changing world, defence needs to make changes too. Difficult decisions are required,” he said.

The weapons systems on the chopping block are:

• The Royal Navy’s two amphibious assault ships, HMS Albion and HMS Bulwark. They will be taken out of service at the end of the year – around a decade early in a blow to the ability of the Royal Marines to launch land assaults from the sea.
• A fleet of 17 Royal Air Force Puma helicopters, as well as 14 of the military’s oldest Chinook helicopters
• A fleet of 46 Watchkeeper drones – each worth about £5m – barely six years since they entered into service
• HMS Northumberland, a Type 23 frigate, which is in need of costly repairs and has already operated well beyond an 18-year out-of-service date
• Two large Royal Fleet Auxiliary ships, RFA Wave Knight and RFA Wave Ruler – vessels which carry fuel and supplies to enable the Royal Navy’s aircraft carriers to operate around the world.

Mr Healey also hinted that further cuts would follow.

“These will not be the last difficult decisions I will have to make, to fix the defence inheritance that we were left with,” he told MPs.

The announcement, while uncomfortable, is designed to be the least damaging way to reduce costs while retaining capability.

It comes ahead of a plan by the government to publish a sweeping new review of defence in the spring, which is being drawn up by an external team and is expected to recommend extensive changes across the army, Royal Navy and Royal Air Force.

The Ministry of Defence says that the equipment that is being axed – the term used is “accelerated retirement” – was selected because it is outdated and military chiefs need to focus finite money and personnel instead on the weapons systems most suited to modern warfare.

However, Russia’s war in Ukraine has demonstrated that old, outdated weapons are better than no weapons at all.

‘Wars of national survival’

Sean Bell

Military analyst

@BellusUK

Sky News’ military analyst offered his opinion on the announcement from the defence secretary.

Speaking on Sky News Today with Kamali Melbourne, he said: “There’s two things that jump out.

“There’s a reconfiguration going on in defence, it’s become a more dangerous world.

“For like 30 years defence has been about wars of choice, expeditionary wars, going out.

“So we’ve needed transport, we’ve needed landing ships to take people away.

“While the purists would say you need to wait for the Defence Review to conclude, it’s common sense that the direction of travel is less about wars of choice and more about wars of national survival, then you need to make every pound you spend focus on that.

“Therefore, if you’ve got some ships and equipment that’s just moribund and waiting, it costs you to keep that in dry dock and keep it maintained.

“[There’s] one thing that’s not being talked about… if you look at it from a grand strategic perspective, 6% of the defence budget is largely spent on the deterrent, the nuclear capability. We’re in the middle of a period where we’re changing and upgrading the capability and in broad handfuls, we’re spending another 6% to replace it.

“In addition, £3bn is coming out to go to Ukraine… so rather than 6% of the defence budget, it’s something like 18% that’s not available for conventional military capability in other words a significant cut.

“Somehow you’ve got to square the books.”

The Russian armed forces have relied heavily on old tanks, artillery guns and helicopters to fight after the weapons they used in the first weeks and months of the war were destroyed.

It takes years to build warships and helicopters.

Sir Keir Starmer will face uncomfortable challenges at the sight of amphibious assault vessels and Chinook transport helicopters being sold off or scrapped regardless of how old they are.

Yet it costs money to keep equipment in storage just in case it is needed.

Limited funds allocated to defence mean that military chiefs appear to have decided that scrapping weapons early is the least worst option.

The decision to scrap the British Army’s Mark 1 version of the Watchkeeper drone at a time when drones are such a dominant asset on the battlefield may also be tricky to defend.

However, the programme has been beset by delays, cost overruns and flaws.

The first Watchkeeper drones only started operating around 2018 – some eight years late.

They also struggle to operate in poor weather conditions – limiting their utility.

The rapid pace of evolving technology in drone warfare – where the development cycle is a mere six to eight weeks – means that the technology inside Watchkeeper, which was conceived of more than 14 years ago, may well be easily defeated in a fight.

It is understood that scrapping the aircraft means that the army will be able to focus money on developing new innovative drone capabilities.

Politics

Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Published

15 hours ago

April 6, 2025

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Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.

In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:

“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”

The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.

Dollar, US Government, Stablecoin — *Stablecoin market overview. Source:* *RWA.XYZ*

US government looks to stablecoins to protect US dollar

Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.

Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.

Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.

According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.

The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

Politics

CFPB likely to step back from crypto regulation — Attorney

Published

17 hours ago

April 6, 2025

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CFPB likely to step back from crypto regulation — Attorney

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Bitcoin Regulation, US Government, United States, Donald Trump — *Source:* *Russell Vought*

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

Nearly 400,000 FTX users risk losing $2.5 billion in repayments

Published

23 hours ago

April 6, 2025

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Nearly 400,000 FTX users risk losing .5 billion in repayments

Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.

Roughly 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.

FTX users originally had until March 3 to begin the verification process to collect their claims.

“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.

Nearly 400,000 FTX users risk losing $2.5 billion in repayments — *FTX court filing. Source:* *Bloomberglaw.com*

The KYC deadline has been extended to June 1, 2025, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.

According to the court documents, claims under $50,000 could account for roughly $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion — bringing the total at-risk funds to more than $2.5 billion.

The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.

Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.

How FTX users can complete KYC

Many FTX users have reported problems with the KYC process.

However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.

Impacted users should email FTX support (support@ftx.com) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.

FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.

The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.

While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.