New shipyard contracts top £1bn

Over 2,000 jobs could be created by the ship contracts

Three UK shipyards have secured Ministry of Defence orders worth more than £1bn combined.

The two roll-on, roll-off ferries being built at Belfast's Harland and Wolff yard will be worth more than £800m for UK firms and will help to secure up to 600 jobs for Northern Ireland.

Swan Hunter on Tyneside has won an order for two new amphibious landing ships, the construction of which will create 1,000 jobs.

Two other such craft will be built at BAE Systems' Govan yard on the Clyde. That order will be worth £300m.

These developments represent good news

Geoff Hoon

The work will safeguard more than 800 jobs at the Clydeside yard and about 200 more off-site.

The new business is also a lifeline for the Belfast yard which last month made half of its 1,200 strong workforce redundant because of a lack of work.

Prime Minister Tony Blair, who was in Belfast as the announcement was made, said: "These ships will be a vital part of giving the British armed forces the strategic capability they need in the future."

Defence Secretary Geoff Hoon announced the contracts to the House of Commons on Thursday.

'A real lifeline'

"These developments represent good news for our Navy and Marines, good news for our shipyards and very good news for Britain," he told MPs.

He described the Govan deal as "a real lifeline" for the Scottish shipyard.

Mr Hoon's speech came at the start of a Commons debate on defence procurement.

The Strategic Defence Review revealed the need to be able to move British forces quickly to trouble spots overseas.

The contracts are a boost to struggling shipbuilders

That review identified the need for six roll-on, roll-off ferries to transport equipment.

The new craft are not expected to enter combat areas.

Mr Hoon said that EU rules meant the UK Government was not allowed to direct that all the ships be built in the UK.

In addition to the two being built at Harland and Wolff, another other four will be built by the Flensburger yard in Germany.

Mr Hoon said: "This contract is worth around £950m in total. Of that, 85%, over £800m, will be spent in the UK, in Britain's interests...and in helping to sustain UK jobs at Harland and Wolff."

Under the proposed Public Finance Initiative contract, the ships will be available for commercial use while not needed by the MoD in a deal leaving Andrew Weir Shipping responsible for maintenance and management.