My right honourable friend the Minister of State for the Armed Forces (Adam Ingram) has made the following Written Ministerial Statement.

In the defence industrial strategy (DIS) fixed-wing sector, the Ministry of Defence committed to negotiating with BAE Systems the terms of a long-term partnering agreement (LTPA) to help to sustain the key industrial skills and capabilities needed to support and upgrade the current and future aircraft fleet. The Ministry of Defence has today signed a foundation contract with BAE Systems as the first step towards delivering a full and legally binding LTPA by the end of 2007, subject to negotiations.

The foundation contract is intended to help to establish the key elements of the LTPA and inform the detailed negotiations ahead. It also incentivises BAE Systems to further transform its air sector business to ensure the efficient delivery of the key through-life defence industrial capabilities that the Armed Forces require.