|Defence deal will add two carriers
By Christopher Adams and Stephen Fidler
Published: July 18 2007 12:41
Britain is to gain two new aircraft carriers as part of a multibillion pound defence spending package being finalised by the Treasury and Ministry of Defence.
Ministers are hoping that a long-awaited announcement giving the final go-ahead to the carriers, estimated to be worth between £3.5bn and £4bn, will come before the House of Commons breaks for its summer recess next Thursday.
Approval of the carriers is expected to safeguard 10,000 jobs at shipyards across the country, including in Rosyth, close to Gordon Brown’s parliamentary constituency. But the prospect of France taking a big construction role in the project appears to be fading.
London and Paris have been discussing whether to deepen co-operation and looked at the option of sharing construction with French shipyards. However, senior Whitehall insiders expect only limited scope for sharing ship-building.
Talks will continue on shared procurement and support. One person familiar with the negotiations said: “We will only collaborate as long as it doesn’t delay progress and there are clear cost savings.”
BAE Systems and VT Group, which will take on the work in a risk-sharing alliance that includes Thales of France, Halliburton’s KBR subsidiary, Bab and the MoD, will merge their shipbuilding assets following the decision.
The merger would create a £1bn company with docks in Portsmouth and on the river Clyde in Glasgow. Some 60 per cent of the work on the carriers – by far the biggest warships to be built in Britain – will be shared between yards in Scotland and the south and north-west of England.
During prime minister’s questions on Wednesday, Mr Brown signalled that a decision was close. “I hope we will be able to make an announcement soon on the aircraft carriers.”
The future of the Royal Navy, he said, was best safeguarded by the levels of investment the government was putting in.
The MoD and the Treasury appear close to finalising the defence budget for the three years covered by the forthcoming comprehensive spending review. Mr Brown is expected to use the carrier announcement as evidence of the importance the government attaches to security and the fight against international terrorism.