Lengthy conflict could cost British taxpayers £5bn

A prolonged war in Iraq could cost Britain more than £5bn – including a £1m bill for taxpayers every time a cruise missile is fired against Saddam Hussein's forces.

The Treasury insisted last night that Gordon Brown's spending plans were robust enough to withstand the impact of a conflict. The Chancellor has so far set aside only £1bn for the cost of war, meaning he would have to dip into the Government's emergency reserves again if Britain joined a US-led onslaught on Baghdad.

Expenditure of £5bn would be equivalent to about 2p in the pound on the basic income tax rate or to a 7 per cent boost to the nation's health spending.

The last Gulf War cost the country the equivalent of £2.5bn to £3bn at today's prices, but much of the bill was picked up by allies including Japan and Germany. Whether other nations would be prepared to follow suit this time is in doubt.

The Treasury's contingency fund has come under pressure in recent years to help to meet the costs of military action in Bosnia and Sierra Leone and from cushioning the impact of the foot-and-mouth epidemic. In addition, British expenditure on military action in Afghanistan has reached £600m and continues to rise.

With 40,000 servicemen and women heading for the Gulf, the bills are already starting to mount.

Military chiefs have had to order 20,000 pairs of boots and 90,000 sets of jackets and trousers, as well as gloves, socks, thermal fleeces and sleeping bags. In addition, they will need medicine and field hospitals to cover the cost of illness and injury.

Professor Keith Hartley, an expert on conflict costs from York University, said an operation similar to the 1991 Gulf War could approach £3.5bn. He said: "The economic dimension of any UK involvement in a war with Iraq cannot be ignored. Governments have the unenviable and difficult task of including the economic dimension alongside military, political, legal and ethical aspects in reaching a final conclusion."

¿ Downing Street announced yesterday that Sir Nigel Sheinwald, Britain's ambassador to the European Union, would move to No 10 to become Tony Blair's foreign policy adviser.

THE ARMS BILL

¿ Adapting Challenger 2 tanks for desert conditions: £90m

¿ Chartering and moving ships to the Gulf: up to £8,000 each

¿ Firing Tomahawk cruise missiles: £800,000–£1m each

¿ Running a Tornado bomber: £25,000/hour

¿ Hiring air transporters: £160,000 each