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Defence in the UK

The incentive to be innovative will come from the contract, which says that in return for a long-running relationship over the life of the product, the partner will deliver cost savings to the MOD, through the savings that it makes by driving down costs, by bringing about cost reductions and by ensuring lean manufacture. What happened in the past under the fixed-price system was that if the price went down, and the company made cost reductions and used lean manufacture and new ways of working, the company got all the cost savings, and nothing went back to the MOD. Risk-sharing and benefit-sharing are the benefits that will come out of the system of partnership working. I will not miss this chance to make my final point about Portsmouth naval base: it must be the home port for the carriers, and that adds weight to the argument that we must keep the base open.