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Nathan, spot on.
The UK's Defence role is now to influence "War among the People", to nick the phrase from Rupert Smith. Nuclear weapons have banished full-scale industrial war and to stay banished the first priority is the continuance of the nuclear deterrent which means other forces can then be organised along more modest lines. The aim of those forces is to influence a political outcome in some distant land. This implies intervention of one sort or another. It may be that often an off-shore presence is sufficient without any overt action. The timing for such a "nudge" may not necessarily be at the end of a political process but perhaps much earlier, the object being to encourage a situation to resolve into a desired outcome. More often than not that nudge will be done in partnership with other nations - but not necessarily. This last requirement to still act alone means that UK forces need to be balanced, but because they are not geared for industrial war they do not have to be large. How large they are depends on how much the nation is prepared to pay - and there's the rub, because the answer is "not much". The MoD, therefore, has to cut its cloth accordingly. Champagne taste and beer pocket doesn't work. But where does that leave the Navy? With its heavy bias towards expedition and its plans for the future, pretty close to an effective force for War Amongst the People, I would say.

In my view this is how the cloth should be cut - nothing too startling, mostly old chestnuts:
1. Clearly you need Trident because otherwise you have to tool up for an industrial war - and if you think Trident is expensive try doing that.
2. You need SSNs for many things - all important - but you need them most importantly so that you can build replacement Trident submarines when you get round to it. The drumbeat is 22 months for seven boats and wisdom has it that if you dip below that, skills vanish and bang go your Tridents. This may or may not be true but it is a sensitive issue and having lost skills once, I suspect (and hope) that prudence will win the day.
3. ASW is not dead but open-ocean ASW is. Many countries now have a small fleet of SSKs and in the future will have AIPs. All the skills of ASW need to be preserved but not a large flotilla of ships from which to practice them. In my view the eight 2087 T23s and 22 CSP Merlins are sufficient plus of course the odd SSN.
4. CVF is at the heart of everything and its rationale found in SDR still stands - perhaps more so.
5. CVF and an ARG need AAW escorts and the RN needs eight. The Admirals, despite a wobble, are adamant that anything less, prejudices the safety of task groups.
6. MCM should be addressed by a new generation of Patrol Vessels.

Where's the savings in that lot I hear you ask, given that large programmes are up for cancellation - where's the killer programme needed to balance the books? Well there isn't one; "that lot" represents the core requirements and it's irreducible. But I would suggest there is a way for a large programme saving to be made which allows the RN to offer up its bit and avoid having cuts forced on it by MoD in a less than ordered manner and in a way that might prejudice the integrity of its expeditionary stance.

Savings, I suggest, come from disposing of four T22s and five T23s - they are not core and in effect are now large and overly complex patrol vessels - some would say cannon fodder. The money saved is not killer stuff either but what you could buy with the ongoing "revenue" is the difference between T45 07 and 08 being built and not being built. For instance two more T45s on a long PFI is a considerable saving on upfront dosh and would represent a huge cut in immediate RN procurement costs. Clearly the revenue would not be sufficient of itself, but could be enough to deliver a large saving on the T45s by virtue of PFI - tantamount to a large programme cut. Similarly, patrol duties, flag flying and all the things the discarded nine frigates would have done could again be funded to some extent by a PFI in the shape of C3 as we have often discussed using revenue freed up from a retired MCM fleet. In fact they would be better at it and much cheaper to run.

Further with 16 major surface combatants all with room for Merlin and with already sufficient Merlin numbers to deploy to them, I would have thought a return to Strand 13 thinking and a Merlin-only fleet is not the worst thing in the world and reduces the need for Flynx purchases - assuming Flynx survives. But I am pretty agnostic on the helicopter front.