Re:Dodgy Photograph and the article itself...
The reason for the 'dodgy photograph', and why the statement 'smaller off-the-shelf Hermes 450s from Israel' isn't exactly accurate is that Watchkeeper is actually based on a reworking of the Elbit Hermes 450 platform (the WK450).
Hence the quick Photoshop job. And why getting a couple of 450's early is good training.
I suspect the whole Welsh testing thing doesn't really involve much money, it's more likely about the suitability of the location for testing UAVS (e.g. the terrain) rather than anything else. I doubt much actual work will happen there, or many local jobs are involved.
Certainly it's better to site the testing in Wales than doing the flight testing around Crawley (the design and integration site), or around Leicester (where the things will be built). Both of which are privately owned, and have enough work from various defence contracts from different countries that Watchkeeper is a 'nice to have' program rather than keeping lots of people in otherwise non-existent jobs.
I think we've already had the Watchkeeper cost argument in another comments section. In this case it's definitely the avionics that are taking the cash - the platform is f*ck all. And given it's the avionics that actually provide the capability, and you couldn't fit them in a Predator, it sort of forces the decision. Plus you assume the Predator is actually worth having - I suspect some research would show it's actually too big, too expensive to maintain, and the real capabilities are nowhere near the hype: nothing unusual for most US sourced kit....
I will admit I got a bit lost towards the end of the article, it seemed to degenerate into a general rant about subsidising jobs and 'why not buy American?', and then about BAE. Which sort of diluted the whole point.
Oh, and BTW Lewis, I know you're a Navy bod but it's worth noting that A400M and C-17, while both transport aircraft, have very different roles and can't really be compared. The propellers vs. turbofans are a bit of a clue...
Disclosure: I have nothing whatsoever to do with any of the programs or companies involved in the above. I just know how to do some background research and not randomly rant about pork-barrels and the UK defence industry.