As my hon. Friend knows, in February this year the Prime Minister announced the awarding of a contract for the demonstration phase of the Type 26 programme, valued at £859 million, to complete the detailed design for the ship and engage the maritime supply chain to procure essential long-lead items. This is an incremental programme and detailed discussions with the contractors continue. We intend to award a contract for the manufacture phase next year.
That is welcome news for many manufacturers and specialist engineers. Can my hon. Friend confirm that there is no danger of falling behind our manifesto commitment for a 1% plus inflation equipment plan for our defence, and that that will not fall victim to any deferring of expenditure referred to by the Defence Secretary?
The current contract is completely taken into account in the equipment plan, which, as my hon. Friend rightly points out, is due to increase by 1% a year in excess of inflation for each of the next five years, and we have planned for it to do so during the currency of the 10-year plan.