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Tuesday, 10 July, 2001, 16:39 GMT 17:39 UK
BAE, Vosper win destroyer order
Computer-generated image of a Type 45 destroyer
Type 45: BAE had pushed to get the entire order
The UK government has said a Royal Navy order for Type 45 destroyers is to be split between the shipbuilders BAE Systems Marine and Vosper Thornycroft.

BAE had earlier said it wanted the order for all 12 of the proposed destroyers otherwise it would slash jobs.

Announcing details of the project to parliament, Defence Secretary Geoff Hoon said: "We have developed a revised strategy which allocates work on the ships between the two shipbuilders for the whole class of Type 45 destroyers."

A 1bn deal was last December agreed with BAE for the first three ships. On Tuesday, Mr Hoon said the government was now committing itself to six.

"This larger volume of guaranteed work... will allow industry to make long-term investment decisions," he said.

Jobs safeguarded

He said Vosper would have a "significant role" in the project, with the order supporting "a steady level of 650 jobs well into the current decade".

Mr Hoon said the destroyer order would safeguard 1,200 BAE jobs on the Clyde in Scotland and 900 BAE jobs in Barrow-in-Furness, Cumbria.

He said he understood the company now had no plans to close any of its yards.

But, in a statement, BAE said the Type 45 order would have no significant impact on its short-term workload and it would therefore make redundant 1,000 workers on the Clyde and 150 in Barrow over the next six months.

Vosper, based on England's south coast, welcomed Mr Hoon's announcement.

It said it now had a stable workload and would be able to proceed with plans to invest in a new shipbuilding facility within the Portsmouth naval base.

Chief executive Martin Jay said: This revised procurement policy provides us with longer-term security and is another move to alleviating the peaks and troughs that are traditional problems in shipbuilding."

'Little incentive'

The Conservatives' defence spokesman, Iain Duncan-Smith, said the decision to split the order between the two shipbuilders signalled the end of competition in warship design and build contracts.

There was now little incentive for yards to improve performance, he said.

Mr Hoon said his aim was to ensure the best value for taxpayers' money.

"Competition is one way but not the only way," he said.

The first deliveries of the ships are due to be made in 2007.

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See also:

10 Jul 01 | Scotland
Shipyard axes 1,000 jobs
10 Jul 01 | Scotland
Ministers under fire over Clyde cuts
10 Jul 01 | Scotland
Unions pledge to fight yard cuts
03 Mar 01 | Business
BAE accused of 'demanding' contract
03 Oct 00 | Business
Shipbuilder warns of job losses
16 Mar 01 | Business
MoD keeps Vosper afloat
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