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New Aircraft Carriers

Volume 520: debated on Monday 13 December 2010

8. What assessment he has made of the value-for-money of the contract to build two new aircraft carriers for the Royal Navy. (29884)

The strategic defence and security review concluded that a carrier strike capability was needed for the future. The most cost-effective way of delivering that capability from around 2020 is to continue building both the Queen Elizabeth class aircraft carriers, fitting the operational carrier with catapults and arrestor gear to enable the use of the more capable carrier variant of the joint strike fighter.

I thank the Minister for that reply. Does he agree that it cannot have been right on the eve of a general election, weeks before we reached the certainty of the strategic defence review, for a large UK supplier to enter into a contract with the Government? It was very difficult to break, so it effectively prejudged the result of the defence review. Is the Minister happy that BAE Systems acted in good faith in this matter?

Cancellation costs are a very complex area. The contract for the aircraft carriers was related to the programme of work, agreed by the previous Government under the so-called terms of business agreement, to sustain the ability to design and integrate complex warships in the UK. Over the next few years, the QE class is providing that work load, with a Type 26 global combat ship taking over later in the decade. If we were to cancel the contracts for the QE class under TOBA we would need to provide replacement work, which would come at a cost, compounding the inevitable costs of cancelling the QE class ships, one of which is already well under construction. This brings us to the position so clearly outlined by the Prime Minister in the SDSR announcement. I would not point the finger of blame so much at BAE Systems as at my predecessor, who acquiesced in the delay of the carrier contract, which led to £767 million of increased costs in the last financial year alone, and a total of £1.56 billion over the life of the programme, making his peerage just about the most expensive in British political history.

As the Minister knows, the best way of obtaining value for money for the “cats and traps” is to fit them during the construction of both Queen Elizabeth and Prince of Wales. Can he update us on the progress made by his civil servants in discussing the issue with Babcock, and will he also tell us when he will report to the House on the final decision?

The hon. Gentleman has a habit of asking me questions that I cannot answer. No decisions have been made yet, although they are currently being made. However, I can reassure him that we are considering carefully which system of “cats and traps” should be fitted to the carriers. Once again, he has made a point very well on behalf of his constituents.

Two new aircraft carriers fitted with joint strike fighters will put Britain’s naval strike force in the premier league, but how can the Minister justify the absolute necessity in the longer term if he is prepared to accept no aircraft cover in the shorter term?

I am amazed that the hon. Gentleman has even asked that question. It is clear that we can accept the capability gap now to ensure that we have a truly capable carrier in the future—and it will be a truly capable carrier thanks to the decision to change the carrier variant, which will significantly enhance the power and projection of the vessel.