Scotland business

MoD signs £859m Type 26 warship development deal

Type 26 frigate Image copyright BAE
Image caption The demonstration contract will support the development of the new Type 26 frigate

The Ministry of Defence (MoD) has signed an £859m initial development deal for the next generation of Royal Navy warships to be built on the Clyde.

The move will "support progression" towards the manufacturing phase of the new Type 26 Global Combat Ship.

The UK government said the contract would safeguard 1,700 UK jobs, including 600 in Scotland, at both BAE Systems and its supply chain.

The news came as Prime Minister David Cameron visited BAE Systems at Govan.

The Type 26's manufacturing phase is expected to begin in Glasgow in 2016.

The first frigate is due to enter service in the early 2020s, with the class of ship expected to remain in service until 2060.

'Substantial investment'

The UK government said the deal would involve about 30 companies in the maritime supply chain and enable investment in essential long-lead items, including equipment such as gas turbines, diesel generators and steering gear for the first three ships.

Mr Cameron said the contract represented a "substantial investment" in the shipbuilding industry.

He added: "Investing in these warships will ensure we continue to keep our country safe, at home and abroad.

"As part of our long-term economic plan, we're not just building the most advanced modern warships in the world - we are building the careers of many young people with apprenticeships that will set them up for life."

'Proud heritage'

BAE Systems chief executive Ian King said: "We have a long and proud heritage of delivering complex warships in the UK and today's announcement is a significant endorsement of the government's commitment to sustain this important national capability.

"Through the Type 26 programme, we are transforming the way we design and manufacture naval ships with innovative new technologies, leading-edge processes and modern infrastructure.

"New ways of working ensure we can continue to deliver the highest quality equipment at the lowest possible cost and compete effectively for future UK and international orders."

David Hulse, national officer of the GMB union, said: "This announcement is very good news in that it secures the future of the Clydeside shipyards and the skilled workforce and will enable the company to provide a substantial number of much-needed apprenticeships."

Shadow defence secretary Vernon Coaker said: "Following this Tory-led government's substantial delay in approving this contract, it is now crucial that the programme runs on budget and on time."

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