The British engineering company Rolls-Royce has struck its biggest ever deal with the Ministry of Defence with a £9bn contract to make nuclear submarine reactors for the Royal Navy.
Dubbed Unity, the eight-year contract is aimed at protecting 4,000 jobs and creating more than 1,000 others, as well as bolstering national security and the economy.
The contract will see Rolls Royce deliver design, manufacture and support services to nuclear reactors to power the UK’s submarines.
It is estimated it will save more than £400 million for the Ministry of Defence over the term of the contract by making delivery more efficient and offering incentives to produce more for no increase in cost, including on work such as the building of powerful Dreadnought Class vessels.
Defence Secretary John Healey said the agreement showed that defence can be used as “an engine for growth” and a commitment to Britain’s nuclear deterrent as “our ultimate insurance policy in a more dangerous world”.
Mr Healey will announce the deal between the MoD and Rolls-Royce submarines Ltd, worth approximately £9 billion, on a visit to the company’s nuclear production facility in Derby on Friday.
He said: “This investment in Britain’s defence will deliver a long-term boost to British business, jobs and national security.
“In line with our Plan for Change, this deal with Rolls-Royce, a historic British success-story, will support high-skilled UK jobs who equip the thousands of submariners that keep us all safe. We are showing defence can be an engine for growth, while also driving better value for taxpayer money.
“National security is a foundation of our government’s plan for change, and this is a clear demonstration of our commitment to the UK’s nuclear deterrent, which is our ultimate insurance policy in a more dangerous world.”
The Tories backed the agreement but urged the Government to get “back on track” with the pledge to increase defence spending to 2.5 per cent of gross domestic product (GDP).
Labour has committed to setting out a path later this year towards reaching the target while the previous Conservative administration had promised to meet it by 2030.
Shadow defence secretary James Cartlidge said: “It’s vital that we continue to invest in the nuclear enterprise, and I welcome this news, building as it does on work under the previous Conservative government.
“The threats facing Britain are only growing and evolving, so it’s more important than ever Labour gets back on track with our plans to get to 2.5% defence spending – not least so that can continue to support the defence nuclear programme.”
This article was amended on the day of publication. An earlier version inaccurately conflated Rolls-Royce Holdings PLC with Rolls-Royce Motor Cars.
