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Why the £167 Billion Figure Provided by Chrispin Blunt and Reuters (and the £205 Billion figure provided by CND) for the cost of Trident is Wrong

The £167 billion cost was calculated by Chrispin Blunt, originally reported by Reuters, and it's factually incorrect.

He calculated the figures by assuming that the UK would spend 2% of GDP on defense, and then assumes that Trident will consume 6% of the defense budget each year. He then adds 2.48% growth for GDP each year between 2020 and 2060.

This isn't how you calculate how much something is going to cost.

If a person with a £20,000 annual income buys a car, that costs £10,000, we might say the car costs 50% of the their annual income. If their annual income raises to £40,000, we say that the car now costs 25% of their annual income. We don't carry on claiming the car still costs 50% of their annual income and say that now the car costs £20,000 because their income has increased.

This is what Chrispin Blunt has done in his calculations, and it's simply bad mathematics.

income :

           

car cost :

               
                 

if you double income :

   

car cost doesn't change:

               
                   

Replace income with GDP, and car cost with Trident cost, and you'll see why increasing GDP does not increase the cost of Trident.

The cumulative effect of adding 2.48% growth year on year for 20 years, is to over exaggerated the cost of Trident by around 63%.



Here's a link to the Original Chrispin Blunt Reuters article which falsely claims Trident will cost £167 billion, and explains how the figures were arrived at, and you'll see it's exactly as I have described, and that it's wrong.

Why the £205 Billion Figure provided by CND is Also Wrong

The calculations done by CND include £142 billion for 'In Service Costs' which are based on Chrispin Blunt's figures (minus the cost of submarines), so they're wrong to start with. It then includes a whole bunch of figures added on top, which it is not in any way clear weren't included in the original figures anyway, so we can't tell they haven't been added twice.

Lets be clear about this. Either CND never made the slightest effort to check Chrispin Blunt's figures, or they simply don't care that they're wrong. What they have demonstrated here, is that they aren't interested in an honest discussion. They're just interested in throwing the biggest numbers they can at us, to try to sway public opinion in favour of something on which they made up, and closed their minds, in some cases more than thirty years ago.

So What Figures are Correct?

When making this argument, I often get asked "If that figure is wrong, what figure should we use", and the simple answer is "I don't actually know, I'm not involved in the procurement of nuclear weapons, but the obvious error in Blunts figures comes from the invalid year on year addition of 2.48% growth. Taken over 20 years that adds up to a 63% error, so you could perhaps just take 63% off his figures to get a better idea.

Even then, the idea that trident costs 6% of the defense budget every year is an oversimplification. It costs more in early years when being set up, than it does it later years when we're just looking at maintenance costs. If you want a more detailed look at the costs, you might like to take a look at The Trident Commission independent, cross-party inquiry to examine UK nuclear weapons policy, which does appear to be a reasonably independent examination of the subject and includes year on year costs.

And then accept that everybody is probably still guessing a bit.

Disclaimer: I'm not an economics expert, but I have a reasonable grasp of mathematics and economics having studied both as part of my degree course (which was in Computing and a very long time ago).

Corrections are always welcome if you've got better info than me.