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Defence Procurement

We have to draw the review as broadly as possible. We must look at our whole spending programme, and look at it in the medium term, if we are to have good information that informs the next planning round. We want to draw those bounds as widely as possible and not exclude particular areas. That is not to say that any decisions have been taken that change our intentions towards Nimrod or towards any other programme. While we carry out the examination, we remain committed to working with industry in line with the defence industrial strategy. We need clarity of purpose, an open working relationship with industry and to retain operational sovereignty where appropriate. We are well aware that over the past few months the uncertainty about our future equipment programme has been unsettling. The equipment examination is designed to give us the clarity we need to move forward with industry, confident that we are heading in the right direction. There is no better example of how that relationship with industry can work successfully in practice than the naval sector. The maritime industrial strategy has allowed some very effective joint work between the Ministry of Defence and the UK shipbuilding industry, such as the alliance approach being used in the surface-ship support projects. That approach gives industry visibility of future workloads and allows it to plan ahead and adapt its capabilities to meet our requirements. It delivers value for money for defence, and at the same time it helps to ensure that we have a sustainable skills base in our country. The most recent contract that we awarded was a £9 million contract to Babcock Marine for the standard support period for HMS Monmouth. It will deliver a number of important enhancements to the ship, including an upgrade of her torpedo defence system. There has been a sustained period of investment by the MOD in the UK shipbuilding industry, amounting to £14 billion over the next 10 to 15 years. The recent announcement about the carriers was only the latest in a series of significant naval procurements. We are also bringing into service new Astute submarines, a class of submarine to provide for the future nuclear deterrent, and we are scoping the next generation of surface combatants. The future of our Navy, and of our naval industrial base, remains secure. But in reality, we do not have unlimited resources. We have to prioritise a range of competing requirements, focusing on the balance between current operations and future capability. That is why I can confirm that we have taken a decision not to take the option to order the seventh and eighth Type 45 destroyer. The six destroyers that are already on contract will provide a formidable capability. Those ships will be far more capable than we first envisaged, helping to mitigate any shortfall in overall capability. To take one example, their air defence system includes a multi-function radar that is able to track multiple targets and direct high-velocity and exceptionally agile missiles at speeds of up to mach 4. Such technological advances mean that the Type 45 will play a key part in the future force protection package for our high-value ships, such as the carriers. It has been a difficult decision, but to ensure our future naval capability and maintain the tempo of work for industry, we are bringing forward the future surface combatant programme, which is the long-term replacement programme for the Type 22 and Type 23 frigates. That decision will result in a steady rhythm of building in our yards—from the six Type 45s, through the future carrier programme and into the surface combatant programme.