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Shifting sands of spending.

POLITICAL expediency and the unpredictable nature of war makes defence one of the hardest sectors for business and in particular SMEs to plan for.

* In December last year, under pressure from MPs, the Government cut one squadron of Harrier jump jets and closed RAF Cottesmore -where BAE systems had a maintenance and support contract -to fund 22 new Chinook helicopters to support soldiers in Afghanistan. The company's shares fell the day the cuts were announced.

* With a likely change of Government and an upcoming spending review, a big question mark hangs over the biggest ever aircraft carrier project for the British Navy. Already seven years behind the schedule, the question remains whether an incoming Government will veto the work -much of which is underway in the North-east.

* However deep the spending cuts, urgent operational requirements (UROs) are likely to be a feature of the military budget for at least the next five years. In the case of one SME working on reinforced army vehicles, UROs have boosted turnover from pounds 9m to pounds 47m since 2005.

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AT WORK: A British Army soldier on a training exercise in Afghanistan
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Title Annotation:Business
Publication:Evening Gazette (Middlesbrough, England)
Date:Apr 6, 2010
Words:190
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