December 10, 2012
The UK’s Ministry of Defence said on Monday it has awarded a £1.2 billion ($1.92 billion) submarine contract to British defence contractor BAE Systems.
BAE Systems will design and manufacture the submarine HMS Audacious, the fourth of seven nuclear-powered submarines being built for the Royal Navy.
The deal comes after Chancellor George Osborne told all government departments on Wednesday that they would see budget cuts of 1 percent in 2013-14 and 2 percent the following year.
The MoD also confirmed that a further 1.5 billion pounds has been committed to the remaining three submarines in the class, a move which it says will safeguard 3,000 jobs in Cumbria in the north of England.
“Our ability to commit an additional GBP1.5 billion for boats five, six and seven underlines the benefits of a balanced budget and fully funded equipment programme that gives our Armed Forces greater certainty,” Defence Secretary Philip Hammond said in a statement.
The MoD has been hit particularly hard in the austerity drive under Britain’s coalition government, with plans for the army to be cut to 82,000 personnel by 2020.
Talks broke down in October this year for BAE Systems to join forces with Airbus parent EADS, in what would have been the world’s largest defence and aviation merger.