Big projects survive defence cuts

British manufacturers stand to benefit from billions of pounds of orders following this week’s Strategic Defence Review. Although defence spending will be cut by £685m a year by 2001-2, a number of major programmes have been given the go-ahead. The decision to order two 30-40,000 tonne aircraft carriers for £8bn could create thousands of jobs […]

British manufacturers stand to benefit from billions of pounds of orders following this week’s Strategic Defence Review.

Although defence spending will be cut by £685m a year by 2001-2, a number of major programmes have been given the go-ahead.

The decision to order two 30-40,000 tonne aircraft carriers for £8bn could create thousands of jobs at GEC Marine’s VSEL shipyard in Barrow-in-Furness, which claims to be the front-runner for the contract.

But a British Aerospace insider said it will also bid to become prime contractor. ‘Team BAe’ includes BAe Defence Systems (formerly Siemens-Plessey) and naval electronics firm BAeSEMA.

Two new logistic landing ships were also announced estimated to be worth £200m to the yard that wins the contract as was the intention to lease four container ships and four C17-size transport aircraft.

VSEL has been given the go-ahead to build two more Astute class hunter-killer subs, worth £1.3bn, despite the decision to cut the number of hunter-killer submarines from 12 to 10 in five years’ time.

But the decommissioning of five Type 22 frigates, one Type 42 destroyer and three minehunters will cut refit opportunities for the Rosyth and Devonport dockyards.

Nuclear warheads on Britain’s Trident subs will also be cut by a third, from a planned 300-plus to fewer than 200. The last seven missiles will not be bought. This means fewer warheads are needed from the Atomic Weapons Establishment, but the AWE has a full workload dismantling old weapons.

While plans to buy 232 Eurofighter planes are unchanged, present frontline forces will be cut by 23 offensive support aircraft (Harriers and Jaguars) and 13 air defence aircraft (Tornado F3s).

GKN-Westland will see a net decline in expected work following the decision to order no more Merlin anti-sub helicopters but to buy ten Lynx Mk8 anti-sub helicopters.

Britain is to develop a battlefield reconnaissance vehicle (Tracer) with the US for £420m. Two teams, from BAe and Vickers, and GEC-Marine and GKN, are chasing the project.