War would cost UK at least £3.5bn, warns think-tank

A war in Iraq would cost the British taxpayer at least £3.5bn and that figure would soar with the use of chemical or biological weapons or if the conflict did not go to plan, a defence think-tank warned yesterday.

But while the British bill would rise by 40 per cent on that of the 1991 Gulf War, the cost to the United States would nearly halve, the International Institute for Strategic Studies (IISS) said.

The report concludes that Britain would make further contributions towards the annual £30bn cost needed to rebuild Iraq after a war and to an international peace-keeping force of more than 500,000, which would have to be based in the country for up to five years.

The estimated British cost far exceeds the £1bn war chest set aside by the Chancellor, Gordon Brown, last year, and would put enormous pressure on the Government's spending plans. Geoff Hoon, the Secretary of State for Defence, has declared that Britain would take part in any possible US-led action "irrespective of costs".

The 43,000-strong British task force being sent this time is 2,000 fewer than in the previous Gulf War, which cost Britain £2.5bn for a three-month deployment and six weeks of fighting. The extra billion on the future bill, the IISS says, comes from costlier equipment and inflation.

America, on the other hand, is expected to have a much smaller force than it sent to the Gulf last time and a cost reduced from £37.5bn to £20bn.

The report, called The Cost of Military Intervention in Iraq, bases its figures on a similar campaign to that of 1991, in which the Iraqi armed forces were easily defeated. But the IISS acknowledges that this time, with George Bush promising "regime change" and predictions of street fighting in Baghdad and Basra, the scenario could be very different.

Mark Stoker, a defence economist and one of the authors, said: "Issues such as urban warfare and the oilfields are impossible to predict and could lengthen any conflict and push up the costs. Whatever the outcome, any war in Iraq will be a costly affair for Britain and its taxpayers." The use of weapons of mass destruction by Saddam Hussein's regime would lead to a steep rise in human and material costs, the report says. Huge amounts would have to be spent on medical treatment and on decontaminating the affected areas and equipment.

Plans drawn up by the Pentagon envisage a "post-Saddam Iraq" being split into four zones, with Britain in charge of one. British troops and personnel are also expected to play a leading role in humanitarian operations, as they have done in Kosovo and Sierra Leone.

The cost of rebuilding Iraq would depend on how much the infrastructure was damaged during the war, the report says. If the oilfields were to survive, much of the repairs could be funded using oil revenues. But if they were to be set alight, millions of pounds would have to be spent on repairs, and they might not be operational again for years.

Iraq is paying for part of the last war through reparations. But that kind of levy is unlikely to be imposed on an Iraq "liberated" by American and British arms, the report says.